While Nigel Farage spoke at our 2019 WEC in Rome, he said he came because our events were the “alternative to Davos.” For years Schwab and I have been on opposite sides of the table. The stark difference between myself and that of Klaus Schwab boils down to the divergence in economics between Adam Smith and Karl Marx. Smith approached the subject from the realization of not knowing how the economy functioned.
He embarked upon a path of discovery and came upon his monumental revelation of the invisible hand. Innovation can only come from the frontlines, and that is the individual who witnesses an opportunity to create something to fill a need. That can never be the role of government and the movie “Mr. Jones” illustrated that central control. Communism could not produce enough food so Stalin stole it from the Ukrainians, causing 7 million to die all to pretend communism did not fail.
That came to a head with the famous 1959 Kitchen Debate where Nixon showed that the innovation that raised the living standards of the people came only from those of the frontlines — the people. This idea of material “equality” and focusing only on that aspect dehumanized society and deprived it of innovation from the people. This became the stark difference between Smith and Marx, which to this day distinguishes even me from Klaus Schwab.
It was the academics who rejected the idea of laissez-faire and the invisible hand and took the position that they could improve society by manipulating the people. They took the position that the government held the power to control the economy at will. This became the “New Economics” or Keynesian Economics, which even Keynes admitted he was wrong before he died…
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