The Brief – Money on our minds

The Brief is EURACTIV's evening newsletter.

Does money influence the way we think and act, even unconsciously? Nobel laureate Daniel Kahneman believes so and few places on Earth contain more reminders of money and power than the World Economic Forum (WEF) in Davos.

Referring to research conducted by psychologist Kathleen Vohs, he explains that people who have been exposed to reminders of money (from words to screensavers with dollar bills) were more “independent” and “selfish” compared to those untouched by these associative triggers.

Now, cross over to the Swiss Alps and the mountain town of Davos.

In front of the cameras, panellists will talk about how to improve national outputs or avoid cohorts of jobless citizens due to automation. Behind closed doors, global CEOs will close multimillion-dollar deals, politicians will fight to attract foreign investment and entrepreneurs will seek to seduce venture capitalists, all in an atmosphere fuelled by fancy cocktails and attendees bragging about partying like rock stars.

So is the money-primed Davos audience more independent and selfish than the average man on the street?

Some clues have come from Klaus Schwab, the man responsible for bringing 70 heads of state and government and some of the most powerful businessmen to the Swiss resort.

When he introduced this year’s edition, the founder and executive chairman of the WEF called for “new models for cooperation that are not based on narrow interests but on the destiny of humanity as a whole”.

While millions of citizens across the world have lost their jobs and/or houses because of the crisis, bankers and CEOs barely noticed the great recession.

Not only that, the Forum blames economists and policymakers for contributing to this inequality by their “excessive reliance” on GDP as the main metric to measure the economy over social equity indicators.

The result has been “missing out on a virtuous circle in which growth is strengthened by being shared”, a report published by the forum today said.

Meanwhile, billionaires’ wealth increased by an annual average of 13% since 2010, six times faster than the wages of ordinary workers (2%), alerted Oxfam in another report ahead of Davos.

The victory of Donald Trump, the UK’s exit from the EU and the protests against globalisation sparked serious concerns among the global elite last year.

But the bullish economy has this year trashed any attempt at action.

As a result, on the tenth anniversary of the Lehman Brothers crash, all the “systemic challenges”, including inequality, populism and nationalism, have intensified, the forum warned in its risk report before the gathering started.

The result? Uncertainty, instability and fragility continue to run free.

This year not only represents a landmark anniversary since the biggest crisis in three generations. The protests of May ’68 in France should also serve as a powerful reminder of what could happen if the status quo continues to be justified as the result of forces (globalisation, automation, capitalism) beyond anyone’s control.

If those who control the world of politics and finance fail to tame these wild horses, those left behind, including ordinary workers and young people, will eventually decide to fight for their fair share of the cake, just as they did fifty years ago.

Popular revolts are hard to predict because you never know what may be the trigger.

For some, the revolt in France started when former MEP Daniel Cohn-Bendit reproached French minister François Missoffe for his omission of sexual relations among students in his white paper on youth.

This time around, the fuel is ominously awaiting a spark.

Salaries have been falling around the globe since 2012, warns the International Labour Organisation. Although disparities between countries are decreasing, inequality within nations has increased since the early 1990s, when globalisation picked up speed, especially in advanced economies.

This year’s Davos forum will be a lot about visions and narratives, as Trump and Europe promise to clash over their versions of globalisation and multilateralism. But words and well-intended speeches are no longer enough. Bold actions are needed to prove that money is not the only thing on their minds.

The Roundup

Poland hopes that its new foreign minister will be able to find some common ground with the Commission over the Article 7 procedure after he met with right-hand of Juncker Frans Timmermans on Sunday.

The other member state in the EU executive’s bad books, Hungary, might have to delay expanding its nuclear power plant after neighbouring Austria said it would take the Commission to court after Berlaymont HQ signed off on the controversial project.

It’s the 55th anniversary of the landmark Elysee Treaty and we might be on the cusp of a reboot of Franco-German relations. Germany might soon have a government to make those kinds of decisions after the Socialists narrowly supported continuing in earnest with coalition talks.

There were protests all over Europe at the weekend. Romanians braved the cold streets of Bucharest to march once more against government corruption. Greeks turned out in the north of country to rally over the ongoing Macedonia name row.

The co-chair of the Davos World Economic Forum warned EURACTIV Editor-in-Chief Daniela Vincenti that greed remains the primary economic engine of the world. Keep up to date with all the developments from the Swiss Alps this week with our liveblog.

Malta’s energy isolation is costing the island nation an arm and a leg in import costs, while Britain’s post-Brexit green protections look in severe doubt, according to environmental groups.

Common Agricultural Policy has never been the UK’s favourite EU pillar so what will a future ‘UKAP’ look like? Check out our roundup of the year to come in farming policy.

Look out for…

Davos kicks off properly tomorrow. The Economic and Financial Affairs Council meets. Commission officials have to convince MEPs that its list of priority energy projects is up to scratch.

Views are the author’s

Subscribe to our newsletters

Subscribe