Klaus Schwab is an engineer and economist and the founder of the World Economic Forum (WEF). Schwab is a proponent of left-of-center economic policies, particularly “stakeholder theory.” He is the author of the “Davos Manifesto” and the ideas behind the “Great Reset,” a controversial proposal to use the COVID-19 pandemic as an opportunity to structurally overhaul the world economy.

Early Childhood and Education

Klaus Schwab was born in Ravensburg, Germany in 1938 to Swiss parents. His family was monitored by the Gestapo and his mother was once arrested for speaking the Swiss-German dialect. Near the end of World War II, his family moved back to Switzerland, but later returned to West Germany. Schwab has always been a German citizen and is the only member of his immediate family without Swiss citizenship. ¹

Schwab pursued degrees while working throughout the 1950s and 1960s. After graduating from high school in Ravensburg in 1957, Schwab earned two degrees from the Swiss Federal Institute of Technology including a doctorate in engineering, two degrees from the University of Fribourg including a doctorate in economics, and a master’s in public administration from Harvard University. ²

Career

In 1958, Klaus Schwab began his career by working at numerous engineering and manufacturing companies. In 1963, he became assistant to the director-general of the German Machine-Building Association. In 1967, Schwab became a managing board member of Sulzer Escher Wyss AG, a Switzerland-based manufacturing company. In 1970, Schwab left the private sector. ³

In 1972, Schwab entered academia as a professor of business policy at the University of Geneva. He remained in this role until 2003 when he transitioned into an honorary professor. ⁴

From 1993-1995, Schwab was a member of the United Nations High-Level Advisory Board on Sustainable Development. From 1996-1998, he was vice-chairman of the UN’s Committee for Development Planning. ⁵

Schwab was formerly a member of the steering committee of the Bilderberg Meeting, a member of the global advisory board of the University of Tokyo, a member of the Royal Academy of Morocco, and chairman of the advisory board of the Genevea School of Economics and Management. Schwab is a founding member of the Climate Leadership Council. ^{6 7}

World Economic Forum

In 1971, Klaus Schwab founded the European Management Forum, which would eventually be known as the World Economic Forum. With support from the Commission of the European Communities (a predecessor organization to the European Commission under the later European Union, Schwab organized a conference in Davos, Switzerland attended by hundreds of executives from major Western European companies, primarily to discuss the theory of “stakeholder capitalism” as an alternative to traditional business models. These annual conferences served as a meeting for business and political leaders over the following 50 years to discuss major economic and political events, including German reunification, the end of the Cold War, the end of South African apartheid, the aftermath of 9/11, and the 2008 Great Recession. ⁸

The Great Reset

In June 2020, the World Economic Forum announced its 50^th annual conference, which was entitled the “Great Reset.” The WEF laid out ambitious plans to “reshape the world” after the COVID-19 pandemic. Critics, including voices from the mainstream media as well as far-right and far-left conspiracy theorists, have framed the Great Reset as an attempt by international elites to enhance their power over the global economy, either due to misguided benevolence or nefarious conspiracy. This critique has been encapsulated by the term “Great Reset,” which is now used as a general concept for elites seizing power during a time of crisis. ⁹

The Great Reset proposed an array of policy suggestions to fix alleged systemic economic and political problems said to be revealed by the COVID-19 pandemic with a “symbiosis between people, planet and profit,” as contrasted with a singular focus on profit. Supposedly, social problems are primarily caused by private actors exploiting and consuming finite common resources which create externalities to the planet’s detriment. Thus, WEF’s Great Reset program calls for numerous measures which expand the authority of governments and multi-national government organizations to regulate the economy and change the legal system. ¹⁰

A major component of the Great Reset is a concept known as the “fourth industrial revolution,” originally coined by Schwab. ¹¹ This proposed fourth industrial revolution is driven by a fusion of technologies to create productivity breakthroughs, including robotics, artificial intelligence, 3D printing, and energy storage. The Great Reset argues that this revolution will be as disruptive to economic and political order as previous industrial revolutions, and therefore world leaders should use the pandemic to introduce legal and social reforms to smooth this new transition. ¹²

WEF Succession Controversy

In 2003, former Costa Rica president José María Figueres Olsen became the first CEO of the WEF, succeeding Schwab in his leadership role. ¹³ The following year, Olsen resigned following revelations that he had accepted $900,000 in previously undisclosed consultancy fees from French telecommunications company Alcatel in violation of WEF rules. ¹⁴

Government Funding Controversy

Klaus Schwab and the World Economic Forum have been criticized for receiving funding from the Swiss government. In 2021, the Swiss government announced it was paying $2.7 million for security for the WEF despite the organization having hundreds of millions of dollars in cash reserves. Schwab has been criticized for earning an income around $1 million per year despite his criticisms of high executive pay. ^{15 16}

Stakeholder Capitalism

In 1971, Klaus Schwab described “stakeholder capitalism” to the World Economic Forum, a business theory that prioritizes “stakeholders” over “shareholders.” In standard modern economic theory, businesses exist for the sake of their owners (or shareholders for corporations) who invest their wealth on expectation of returns; stakeholder theory expands the understanding of business beneficiaries beyond shareholders to all individuals impacted by a particular business, including its employees, customers, suppliers, individuals impacted by environmental effects, and so forth. ^{17 18}

In 1973, attendees of the WEF’s annual conference drafted and signed a “code of ethics” for businesses based on stakeholder theory. The code would later become known as the first “Davos Manifesto.” The code begins: ¹⁹ The purpose of professional management is to serve clients, shareholders, workers and employees, as well as societies, and to harmonize the different interests of the stakeholders.

For the 2020 annual conference, Schwab wrote the “Davos Manifesto 2020,” which updated the original manifesto’s principals. The first part of the code was updated to state: ²⁰ The purpose of a company is to engage all its stakeholders in shared and sustained value creation. In creating such value, a company serves not only its shareholders, but all its stakeholders—employees, customers, suppliers, local communities and society at large. The best way to understand and harmonize the divergent interests of all stakeholders is through a shared commitment to policies and decisions that strengthen the long-term prosperity of a company.

The update especially expanded corporate responsibility, into broader social aims: ²¹ A company is more than an economic unit generating wealth. It fulfils human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives. Executive remuneration should reflect stakeholder responsibility.

 

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10. Schwab, Klaus. “Now is the time for a ‘great reset’.” World Economic Forum. June 3, 2020. Accessed March 8, 2022. https://www.weforum.org/agenda/2020/06/now-is-the-time-for-a-great-reset/.
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13. “José María Figueres Olsen.” EAT Forum. Accessed March 8, 2022. https://eatforum.org/person/jose-maria-figueres-olsen/.
14. “WEF director resigns over undeclared fees.” Swissinfo.ch. October 29, 2004. Accessed March 8, 2022. https://www.swissinfo.ch/eng/wef-director-resigns-over-undeclared-fees/4171240.
15. “„Zu hohe Managergehälter sind nicht mehr sozial verträglich“.” Faz.net. January 20, 2013. Accessed March 8, 2022. https://www.faz.net/aktuell/wirtschaft/weltwirtschaftsforum/wef-gruender-schwab-zu-hohe-managergehaelter-sind-nicht-mehr-sozial-vertraeglich-12031146.html.
16. “Snarling approval of WEF funds from the Council of States.” SRF. June 11, 2021. Accessed March 8, 2022. https://www.srf.ch/news/schweiz/geld-fuer-sicherheit-am-wef-knurrende-zustimmung-vom-staenderat-zu-wef-geldern.
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18. Schwab, Klaus. “Why we need the ‘Davos Manifesto’ for a better kind of capitalism.” World Economic Forum. December 1, 2019. Accessed March 8, 2022. https://www.weforum.org/agenda/2019/12/why-we-need-the-davos-manifesto-for-better-kind-of-capitalism/.
19. ^[1] “A Partner in Shaping History The First 40 Years 1971-2010.” World Economic Forum. 2009. Accessed March 8, 2022. https://www3.weforum.org/docs/WEF_First40Years_Book_2010.pdf.
20. Schwab, Klaus. “Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution.” World Economic Forum. December 2, 2019. Accessed March 8, 2022. https://www.weforum.org/agenda/2019/12/davos-manifesto-2020-the-universal-purpose-of-a-company-in-the-fourth-industrial-revolution.
21. Schwab, Klaus. “Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution.” World Economic Forum. December 2, 2019. Accessed March 8, 2022. https://www.weforum.org/agenda/2019/12/davos-manifesto-2020-the-universal-purpose-of-a-company-in-the-fourth-industrial-revolution.