What is The Great Reset and why are economists scared?
The Great Reset
A plan conceived by Klaus Martin Schwab, founder and executive president of the World Economic Forum, supported by high-profile personalities and dignitaries such as Prince Charles of Wales and Canadian Prime Minister Justin Trudeau. The framework of the 2020 pandemic crisis has brought an outburst of criticism, alleged plots and conspiracy theories that leave the most ironclad skeptics breathless, as The Great Reset addresses a couple of fiscal policies, economic and social order questions that make many orthodox and powerful people tear their clothes off, and goes beyond, have lined up enthusiasts, environmental movements, celebrities, high dignitaries and politicians, making it a utopia of ideals.
The phrase "Don't let a good crisis go to waste" strong words used by Schwab and once uttered by Winston Churchill, in the framework of the darkest days of the Second World War have left millions stunned and enraged, reforms in fiscal order and environmental regulations, change in economic metrics, and even revisions to educational curricula converge in the so-called stakeholder capitalism and merge with possible ideological connotations, hidden agendas, secret cliques and domination plots for the establishment of the new world order.
Like any radical proposal, any threat to the status quo brings passionate followers and fierce detractors, trying to maintain the right balance between the two perspectives, I will accommodate both points of view, always with an objective basis based on current news and information. So, let's get to know more about this proposal called The Great Reset, its creator and the institution it represents, those who support it, what has been added, its failures and its strong criticisms, without leaving aside those conspiracy theories behind the Great Reset, which, even though by the majority qualified as assertions without arguments, do not cease to attract attention.
Klaus Schwab and the World Economic Forum
klaus Martin Schwab his name is simply brilliant, he is in theory the creative mind behind the Great Reset, his extensive academic background includes an Economics Degree from the University of Freiburg, Germany, an Engineering degree from the Public University (ETH) Zurich, a Master of Public Administration from the John F. kennedy School of Harvard, a PhD in Engineering from the Swiss Institute of Technology and his PhD in Economics from the University of Freiburg. He served for 31 years as Professor of Business Policy at the University of Geneva and is still a distinguished professor. Today, at 82, he has received 17 honorary doctorates, but beyond his academic career, Klaus is masterful in his speech and spectacularly capable. Since 1971 he has been able to orchestrate a whole series of financial and logistical resources to make Davos a small Alpine town in Swiss Graubünden, the epicenter of one of the most important congregations in the economic, political and business world. The World Economic Forum, is the creation of klaus, an international NGO that brings together some 3,000 active members, including CEOS from large corporations, billionaires, political leaders, contemporary aristocrats, religious leaders, media representatives and owners, celebrities, senior academics and representatives of other NGOs.
Here comes one of its main critics, the WEF is as we see, a very exclusive club and it is not free, the subscription or stratified membership begins with about 52 thousand dollars at individual level, and according to the degree of protagonism or participation that is sought in the different organized events, year after year this quota can reach the 500 thousand dollars in the Strategic Partner level. The majestic event lasts about five days in Davos, it takes place annually in the last week of January, it is not uncommon to see there former presidents like Bill Clinton, Mohammad Khatami, Tony Blair, Felipe Calderon, Juan Manuel Santos, or current leaders like Donald Trump at the meeting in January 2020, or Xi Jinping in 2017. Although Davos is not the only epicenter of this elite congregation, recently the WEF has organized similar events in Brazil, India, China and the United Arab Emirates, although they are more regional in nature.
The agendas of these events are varied, but generally surround the environmental problems and their solutions to social inequality and wealth gaps, alternative economic models, global health, the future of work and education. Since the decade of the 90s and with certain deterioration towards the last years, the WEF has been object of simultaneous protests in the main cities of Switzerland, led by activists who consider this, a meeting of fat cats in the snow, out of step with the social and economic realities of the towns. In this environment and in May 2020, Klaus Schwab together with the sustainable markets initiative, led by Prince Charles of Wales, presented to the world The Great Reset, which will be one of the main topics in the agenda scheduled for 2021, which will be held in an atypical way in Singapore the second week of May and not as usual in Switzerland, for obvious reasons of health security.
It was not at all easy to reveal the merely economic and strategic aspects of the plan, since perhaps not very much to its benefit, different supporters and NGOs have put their contributions, and have turned it more than a simple economic plan, into an inflated list of utopias, dismantling initiatives such as support for alternative arts, sustainable architecture, demilitarization and independent media. However, I am left with a list of five fundamental economic purposes of Klaus proposal, which I will try to explain below.
- The redirection of the fiscal stimulus.
It is well known that strong economies such as Japan, the United States and some members of the European Union, have appealed to the mechanism called quantitative easing, to generate and introduce into the economy, billions of dollars in fiscal stimulus and social burden. Schwab maintains that a good part of this flow of money in organic, should finance public works of community benefit, such as new forms of ecological mass transport, wind energy or subsidies for solar energy. To his radical approach, he proposes that governments put a good part of this inorganic money into the construction of new pieces of green infrastructure and thus achieve their objective of injecting the masses of money into the economy, in the form of paychecks to workers, contracts to contractors and commissions to architects and engineers, with the great difference that they will leave something that will provide utility and social benefit for the coming decades. There is talk mainly of promoting green works and technologies in this way, and although it sounds like a luxury initiative, to achieve this it is necessary to tender for works, draw up projects, select and approve proposals and start construction, which can represent many months and even years before workers and contractors can be paid, in the meantime people will continue to be unemployed, starving and increasing the social burden. Nevertheless, it is an option for discussion and consideration.
- Technology-oriented education.
One strand of the plan proposes increased public and private investment in technology education and the revision of training plans, so that the world's new workers will be more proficient and attuned to an industry focused on new technologies, alternative energy, environmentally friendly technology, logistics development and online business. We are talking about an education that is oriented to these new and reformulated fields, beyond this we are talking about the celebration of a new social contract, in which we all have a part based on interconnection and digitalization, the reestablishment of educational models and the way of doing business. Now, when you start talking about re-establishing educational and social contracts, you are addressing a radical social agenda.
- Promotion of investment in alternative technologies.
This point is quite clear and has an important support from many leaders, it is about the promotion of long term investments in sustainable and environmentally friendly industries, based on the reallocation of a percentage of the government funding or subsidy to sustainable green energies, tax breaks and financial stimulus for any initiative directly or indirectly linked to green energy sources, electric cars, solar panels and wind towers; there is also talk of the creation of an onerous tax on carbon emissions of any kind, money that can be collected as income to be used for the edges of the plan or in the best case scenario, it will encourage companies to invest in lower emission alternatives to avoid this cost.
- Change in economic and financial metrics.
What if corporate executives could actually say that they are operating, not to make a profit for the benefit of their shareholders, but on behalf of some higher social ideal, such as greater environmental commitment, social investment responsibility or greater employee involvement? This is perhaps one of the most direct questions to capitalism exposed in the great reset, and one that gives room to think about Marxist or socialist edges of the plan. Added to this controversial point is the proposal to deploy a new set of macroeconomic indicators, in place of the traditional ones such as the GDP. In Klaus Schwab's perspective, GDP as a macroeconomic indicator receives much more attention than it should, and could be replaced by metrics such as collective net worth.
- Greater environmental commitment.
Here we speak of greater impositions and restrictions on companies that have benefited from the financial bailouts of governments, assuming the possibility of imposing the tax on wealth and promoting policies that urge the corporate and government plan to build more green infrastructure, we speak of a new legal and ethical framework that forces companies to adopt new technologies and environmental ethics, and is another point that leads one to think that The Great Reset could violate basic principles of capitalism, such as respect for private property and distribution of wealth.
The debate and confrontation, at least on the political level, was taken to another level in countries as Canada, when its Prime Minister Justin Trudeau made a speech in mid-September supporting some ideals of the great restart, this is the closing of Trudeau's speech:
"This pandemic has provided an opportunity to restart, this is our chance to accelerate our pandemic and post-pandemic efforts, to re-imagine economic systems and global challenges such as extreme poverty, inequality and climate change."
Opposition leaders in that country, such as conservative Congressmen Pierre Poilievre and Erin O`Toole, immediately reacted.
"Global financial elites are trying to redesign economies and societies for the sole purpose of further empowerment, citizens must fight the global elites and their takeover. I invite those who share my concerns to sign a petition asking the government to protect our freedom and end the plans to impose the great reboot".
This was Poilievre's invitation that won over 80,000 Canadian signatures in just 72 hours. Congressman O'Toole's words were brief and forceful.
"It is hard to believe that anyone would look at the carnage caused by Covid-19 and see an opportunity, this is not the time for a massive and risky experiment to reinvent the economy".
Beyond the controversy, O'Toole's speech is more a modern-day debate about how to manage a post-pandemic world and what issues governments should focus on.
Let's talk about the shortcomings and criticisms of the plan. First of all there is the way in which the plan was presented by the WEF, it is a rhetoric via videoconference in two parts that adds up to a little over two hours, a speech that would exasperate the most enthusiastic of economists, since it does not address the issue in a forceful way. To the relief of many, there is the book Covid-19: The Great Reset, by Schwab and his friend and WEF collaborator Thierry Malleret, launched in July. Although it is more of a 280-page narrative about the changes that will be needed to create a more inclusive, resilient and sustainable world in the future.
In second place there is the publicity, the merely economic argument is little addressed directly in the traditional media, to embellish it a little the magazine 'Time' gave a support to the WEF creating a page to help explain the idea, dividing the proposal in several articles under the authorship of its main supporters. There you will find aristocrats, ex-presidents, actresses, cellists, businessmen, partners; but more serious of Schwab and Kristalina Georgieva, of the WEF, there is not a strong movement of economists supporting it, or at least talking about the economic aspects. Each one inside or outside this circle, all members of the WEF, add a series of ideals and initiatives to the plan, which make it unrealistic.
In essence, a major realignment that redirects government and public resources toward sustainable energy infrastructure and quality technology education is not necessarily a bad thing, but the way it all sounds more like a romantic and disjointed wish than a real plan to make something happen. This is the opinion of economic analyst John Mauldin, for Forbes:
"We agree that capitalism has gone astray and needs some adjustments, especially in the area of influence management and lobbying for government favors, but, renewing all aspects of our societies and economies sounds ominous, especially coming from the WEF, the people who nominally run the world economy. This is most likely another example of rich and powerful elites, with apparent efforts to help the masses and in the process become even richer and more powerful".
Three months before the WHO's declaration of a global pandemic, the WEF, the Bill and Melinda Gates Foundation and the Johns Hopkins University Center for Health Security organized a drill called Event 201, an October 2019 press release from the official website explained its purpose, a multi-media pandemic exercise involving government political, public health and global business leaders from key industries in the response to pandemics, and for economies and societies to remain active during a severe and rapidly transmitting intercontinental outbreak. What is curious is the great similarity with the situation that began in Huanan (Wuhan) a few weeks later, the most horrifying almost viral conspiracy theories since last November 2020 speak of the possible intentions of the high elite that promotes the Great Reset to take political and economic control of the world, establishing a totalitarian regime of a highly technological Marxist nature and with it establishing a new world order.
The most chilling accusation is that the virus was intentionally launched to create the conditions that would facilitate the restart of the world's governments. Some videos on social networks label the WEF and the high elite that support it, as a clique that is using the crisis as a weapon to implement its own model, one that will make them richer and more powerful. For many analysts and award-winning journalists, and such a conspiracy lacks reliable evidence, the truth is that the book Covid-19: The Great Reset, can be seen as a roadmap for the new global world order, since the pandemic crisis of 2020, has proved to be a catalyst, and many changes have taken place.
The Great Reset may be just a list of great things that governments are expected to implement someday, but whether we like it or not, we are seeing a huge change in everything. From how we live, to how we do business, to how we earn our money, to how we invest or spend it, and a variety of other aspects of our daily lives, that have changed a lot in this 2020. The 2020 pandemic crisis has fundamentally changed the way we conduct our daily lives, changed the way we are educating our children and youth, changed the demand for almost anything that can be digitized, almost completely destroyed industries such as recreation, hospitality, travel, and catering, and widened the gap between rich and poor.
Many of these consequences were going to happen anyway, like taking a class via teleconference, shopping online versus going to a mall, or working from home versus going to an office. So it's likely that the ship has sailed and we are on it, that we are already living a Great Reset, one that will stay with us and is no longer moving in its direction, long before a great social economic plan could even be considered feasible.
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