Stakeholder Capitalism Ch.10: Governments and special interest groups

In a series of blogpost, I’m reflecting on the book Stakeholder Capitalism, written by Klaus Schwab with Peter Vanham.

We’re nearing the conclusion of the book. But first, we have to read about the role of communities in chapter 10, which is both about national governments and special interest groups.

Chapter 10 was, IMHO, less thought out than the two previous chapters. Separation of functions (between politics and economical thinking) needs more attention. Also the case of New Zealand as an example of good pandemics management is probably not generalizable; indeed acting hard and fast help when you’re on an island, but the mainland approach taken by e.g. Sweden is working reasonable for long-term management. Furthermore, special interest groups getting a seat on the table might enhance bureaucracy, lobbyism, democratic deficits, attention-whoring (Woke-ism) and so on, while it might fall short on real representation. It is not clear to me how the model reduces complexity.

The stakeholder factor in pandemics management

In case of emergency, you have to respond fast, for which you need a trained and coordinated body and mind. That’s why today’s martial arts often attract people who look for such full-spectrum exercise. I’m not just saying this to stimulate people to play outdoors, but also to bridge it with New Zealand’s handling of COVID-19, which is taken as an example in chapter 10.

My home country’s institution for pan-/epidemics control, the RIVM, did not respond fast. While Wuhan was already in lockdown, they still considered the new virus “not very contagious”. The institution did suffer budget cuts and maybe from lack of training; in the past, they did great, including the development of vaccines and training scenario’s. Indeed, when fighting off a pandemic, you have to deal with many stakeholders. For example, have a look at their 2003 training video The Chinese flu.

New Zealand, however, quickly moved to a slegdehammer approach, including strict border control and a full lockdown. This helped to contain the virus in a few months, with some damage to the economy but the damage was only for a short period.

The authors link this fast response to the fact that New Zealand had, just over a year earlier, implemented their Living Standards Framework dashboard, a kind of compound metric similar to metrics proposed by the WEF to supplant the GDP.

The authors also note that, according to some researchers, governments with female leaders seemed to do better (Supriya Garikipati and Uma Kambhampati, 2020). This resonates with the threads of Wokeness throughout this book, so let’s do a quick lookup on those names:

• From Kambhampati’s profile page: “I have also worked on women’s empowerment and well-being including women’s labour market participation, life satisfaction as well as nutritional adequacy.”
• From Garikipati’s profile page: “My key research interest is in evaluating the interplay between economic policy and gender. My work examines the impact of public policy interventions on the socio-economic wellbeing of girls and women living in developing countries using an intersectional approach. […] to draw out the intersectionality between various institutional influences like patriarchy, caste and other power structures. […] I have also contributed to India’s menstrual health policy by delineating a role for informed choice in improving the inclusivity and sustainability of menstrual interventions.”

Let’s say “exactly what I expected”. I’m disappointed, however, that the authors didn’t include a reference to Glaciers, gender, and science: A feminist glaciology framework for global environmental change research in their book. I’ll stop here, and advise some reading on gender “science” and feminism from the author Camille Paglia.

The Swedish approach was also mentioned, in negative terms, maybe because Sweden doesn’t do heavy lockdowns and their policy is created by a male, Anders Tegnell. In fact, Sweden has some of the best medical scientists of the world, which is paying off as we speak. Read: Sweden Saw Lower Mortality Rate Than Most of Europe in 2020, Despite No Lockdown. Sweden shows the real “all of society” approach by not ruining small shops, civil society and so on.

Of course the sledgehammer approach will work when you are quick and early, and when you have strict border controls, like when living on an island. In most other cases, Sweden’s approach probably better handles virus mutations and long-term endemics. A large part of their population now has natural herd immunity.

I’m a bit “engaged” on this topic as I followed courses on immunology, pathology and epidemiology at the medical faculty, and wrote about bioweapons for a political science course. Let’s agree that COVID-19 has a big impact on all of us, especially on the mental plane. Fear might be more damaging than the virus itself. Such fear is definitely not a good foundation to push a stakeholder model. The forced model will break down then society calms down.

National governments and basic needs

The chapter continues with the importance of four needs that affect nearly everyone: education, health care, housing, and digital connectivity. The authors have added digital connectivity as an additional basic need, which, in my opinion, is a valid qualification in the information age.

All those needs could also be met by free markets without government involvement, as is often argued. Also government-provided education often develops quality issues. But if you strife for a level playing field, with optimal human resource utilization for the whole country, you need a government to organize this.

To show a successful example, they describe Singapore’s systems for education, health care, and housing using six pages. Its makes a convincing case. Especially the interplay between the government and businesses is interesting.

New Zealand is also given as an example, probably to promote the metrics approach. The four “Kiwi” capitals are interesting, even if one doesn’t like the metrics approach for companies. In fact, such metrics might be more fruitful for governments than for companies, as governments are in the business of balancing conflicting interests.

Special interest groups

NGOs, consumer right groups, modern labor unions and advocacy groups are mentioned for their role as stakeholders in society.

Specifically, they mention Andrew Yang of Humanity Forward. He calls for data property rights. Also he proposes that when you share your (personal) data, you should be compensated. These are interesting ideas which fit in with earlier concerns about the role of Big Tech and social media as explained earlier in the book.

The authors also call for modern unions, given that many (and growing) employees work on a freelance basis, or depend on their reputation on a platform. This makes sense in order to organize the employee stakes. Although some companies might not like unions, they also have a long-term interest in a stable working relationship with their employees.

Finally, some advocacy groups are mentioned. Like a magical spell, threads of Wokeness emerge again in the book. It’s interesting how Black Life Matters is presented, neglecting the many blacks who don’t want to have anything to do with BLM. Also LGBTQ groups are mentioned – I remember a friend of mine, a homosexual, much disliking such groups that “represented” him. The authors say:

[E]veryone in a leading position should seek to converse with these newly emerging civil society groups. They are often led by new generations of citizens and workers, whose concern will only grow over time and whose pulse is, therefore, closer to the future direction of any society.

Conversing with such self-appointed representatives is a sure way to give yourself a skewed view on society, further increasing polarization. There is already a system to know current concerns, called “elections”. Whatever civil society group, journalists of politicians sponsored by e.g. the Soros-funded Open Society Foundation is trying to shape the future is of little interest to a real stakeholder model. In fact, such polarizing groups ruin it, and active mechanisms should be in place to protect a stakeholder model against such meddling. When looking at WEF metrics, it might be too late already.

Moving towards a democracy-driven continuous metrics design could maybe alleviate some of these dangers. A few modernizations of democracy were already proposed by the authors in chapter 8, so that might be a good fit.

Intermezzo – a word on complexity

This morning I watched the first lecture of the famous and historical MIT introductory course on Computer Science: Structure and Interpretation of Computer Programs (SICP). If you’ve got a spare hour, please watch this first lecture; I advise you to download the video and also the subtitles as the audio quality is low.

In reality, computer science is not about computers and it’s not a science either. It’s about processing information, about procedures, and about black-boxing – about organizing processes and information. Complexity can be disastrous. That’s why strong borders exist between domains and layers. I’m not sure whether the stakeholder model also has such strong modularization. The application of these principles is described by Herbert Simon in his book The Sciences of the Artificial (1969).

I’ve ordered the SICP “Wizard book” in order to learn Scheme LISP as an exercise in structured thinking and meta-programming – my next project after finishing the review series on Stakeholder Capitalism. LISP is hardly used today, but was used a lot in the field of Artificial Intelligence, so it will probably be fun and interesting. I’ll own nothing, but I’ll be happy 😉

Soon, I’ll finish this review series on the conclusion of the book. Maybe I’ll merge the review posts into one PDF after reorganizing and editing the text.

If you want to follow my adventure with this book, just follow this weblog or check my twitterfeed or Facebook timeline with the hashtag #wefbookclub or the mention @WEFBookClub for the next few weeks. You might also order the book, and maybe even join the WEF Book Club on Facebook, so you can make this a participatory experience for yourself.

Also check the index page of my review series that I will update as I add blogposts on this subject.

Deze blogpost werd in december 2022 overgezet van WordPress naar een methode gebaseerd op Markdown; het is mogelijk dat hierbij fouten of wijzigingen zijn ontstaan t.o.v. de originele blogpost.