#112 The Great Reset

By D. Arnott | February 17, 2022
the christian economist dave arnott

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#112 The Great Reset

The World Economic Forum is attempting “The Great Reset”, after learning of problems with the US capitalist economy.  Christians believe in two: When Christ came, and when He returns. In-between them, we do the best we can in a fallen world.

 

In Christianity, we believe in two Great Resets: The first was when Jesus came to earth, Emmanuel: God with us.  We believe Jesus was fully man and fully God.  The second reset will be when Christ returns.  In the “in-between times,” we seek gradual improvements in the condition of humanity, knowing we can’t find perfection.  “Utopian plans are not in our wheelhouse,” is one of the defining statements of the book I wrote with Sergiy Saydometov, titled Biblical Economic Policy.  

The specific phrase “Great Reset” came into general circulation over a decade ago, with the publication of a 2010 book, The Great Reset, by American urban studies scholar Richard Florida.  

Four years after Florida’s book was published, at the 2014 annual meeting of the World Economic Forum, Klaus Schwab declared: “What we want to do in Davos this year . . . is to push the reset button”—and that’s what is now meant by the term “The Great Reset.”

What do they want?  Well, they intend to “reset” the economy so it serves everyone better.  Hmmm, let’s look back at history.  Has anyone tried that before?  Lenin promised that with Communism, the nation’s wealth would serve the proletariat, instead of the bourgeois.  That didn’t work out so well.  Hugo Chavez was praised by US loud mouths Sean Penn, Oliver Stone, and Michael Moore when he captured the industries of Venezuela, promising the wealth of the nation would serve the people, not the owners of the corporations. 

Oh, by the way, one of the guys attending the Davos Economic Forum many years ago asked himself why we didn’t have a Christian version, so he started it.  I’m a member of the Christian Economic Forum.  Here’s the website.  

 

Markets Work

In my introductory Econ lecture this week, I covered some of Gregory Mankiw’s Ten Principles of Economics.  One of them is “Markets are usually a good way to organize economic activity.”  I tell my DBU students, “When you hear the “beep” at the check-out counter at Wal-Mart, someone just voted.  And if it’s Hunt’s Ketchup in the 24-ounce bottle at $2.35, they voted for the brand, the size and the price.  The next time you shop, if it’s Heinz ketchup in the 36-ounce bottle for $3.35, it will be because your fellow shoppers voted for it.  Ok, I realize it’s not a totally free market, and fallen people are continually trying to put their thumb on the scale, but generally, in free markets, the products and services we receive are determined by almost a perfect democratic vote of your fellow consumers.  The Davos crowd doesn’t like free markets.  They don’t like it when “everyone votes” because the outcome is inequality.  I deal with inequality in podcast #6 titled Jesus Distributed the Gospel Unequally.

So the Great Reset, as defined by the Davos bunch, is a power play.  Those of us who live in relatively free-market economies have voted for the production and distribution of services in a very democratic way.  But they don’t like the outcome of the vote. 

In a very good article in Imprimis, published by Hillsdale College, Michael Rectenwald states, “While approved corporations are not necessarily monopolies, the tendency of the Great Reset is toward monopolization—vesting as much control over production and distribution in as few favored corporations as possible, while eliminating industries and producers deemed non-essential or inimical.”  Mr. Rectenwald is correct.  The Great Reset is a power play.

 

Stakeholder Capitalism

The Davos crowd favors stakeholder capitalism, which involves the behavioral modification of corporations to benefit not shareholders, but stakeholders—individuals and groups that stand to benefit or lose from corporate behavior.  The idea of Stakeholder Capitalism probably deserves a full podcast, but let me analyze it in one minute.

Under free-market capitalism, what prevents corporations from serving whomever they want? 

  1. Owners: In free-market capitalism companies are free to pay higher dividends to the owners. 
  2. Customers: In free-market capitalism, companies are free to lower costs if they want to enrich customers.
  3. Employees: In free-market capitalism, companies are free to pay their employees higher wages.
  4. City: In free-market capitalism, companies are free to overpay their property taxes to local entities.
  5. State: In free-market capitalism, companies are free to overpay their state income tax.
  6. Federal: In free-market capitalism, companies are free to overpay their federal income tax.
  7. Social groups: In free-market capitalism, companies are free to make donations of any size, to any philanthropic group of their choice.

So, which of these freedoms are the World Economic Forum nanny-staters out to impinge?  And why do these freedoms bother them so much?  Look, it’s really simple. The Davos folks think they know better how to distribute goods than the market.  Where does that kind of moral righteousness come from?  Who made them “King for a day,” or the God of the economy?

Who do they think they are?  Are they really saying that THEIR ideas are so good, that they want to FORCE corporations to follow their stakeholder capitalism model?  Aren’t corporations free to do that now?  So, the Davos crowd wants to take away that freedom!

Quoting Mr. Rectenwald in Imprimis again, “stakeholder capitalism entails corporate cooperation with the state and vastly increased government intervention in the economy.”  This suggestion is hardly worth my time, but I’ll refer you to podcast #76 titled Central Planning Still Does Not Work,” where I decry US presidents who have praised the fake development of Communist China. 

 

 

Capitalism is Not Perfect

You can display types of economies at the end of a simple spectrum.  This diagram shows Socialism on the left end, and Free Market Capitalism on the right.  In pure Socialism on the left end, the state entirely owns the means of production and distribution.  Christian economists don’t approve of that system, because we believe fallen people who control the system would favor themselves at the expense of others.  In pure Free Market Capitalism on the right end, production and distribution would operate with no state laws nor restrictions.  Guess why Christian economists don’t favor that?  For the same reason: Fallen people who own the companies would favor themselves at the expense of others.  So you see, the fallen nature keeps us from either end of the spectrum.  Fortunately, no society is totally at either end.  All economies move along this spectrum from left to right.  Consult my podcast #58 Why the US can’t be Socialist like Sweden for more details.  But for today, let’s just agree that countries move left to right, based on the type of government they have.  For a ranking along this spectrum, I will refer you to the Index of Economic Freedom, at Heritage.org. 

 

In their book COVID-19: The Great Reset, Klaus Schwab, and Thierry Malleret define the Great Reset as a means of addressing the “weaknesses of capitalism” that were purportedly exposed by the COVID pandemic.  Yes, there are weaknesses of free-market capitalism.  That’s an easy straw-man to throw accusations at.  In his book titled Redeeming Capitalism, Kenneth Barnes claims he can fix it also.  All these “fixes” for Capitalism are simply movements to the left on our diagram, toward Socialism.  Again: There’s no perfect system.  I appreciate these folks trying to improve capitalism.  But I wonder what the book would look like that was titled, “Redeeming Socialism.”  What effect would The Great Reset have on the economy of Venezuela?  In my lifetime, they were the third richest country in the western hemisphere, and still today, they have more oil and gas reserves than any country in the world.  Yet, one-third of the population has fled because there is not enough food on the shelves.  I wonder how Klaus Schwab would reset the Venezuelan economy?  Certainly, he would move it toward the Free Market Capitalist end of the spectrum, wouldn’t he?  I find it interesting that these guys are always trying to improve the best economies of the world, instead of the worst.  Has Davos sent a team to Havana or Caracas?  What advice would they give in Pyongyang, North Korea, the capital of one of the poorest countries in the world?  Isn’t that where the help is needed?  Why are they always trying to reform the most successful economies?  Wouldn’t their efforts realize greater results by reforming the least successful?

No system that is executed by fallen people will be perfect.  As Christian economists, we must simply look at both ends of the spectrum, and determine which end is more aligned with the Scriptural intent.  A Christian economist is driven by two, sometimes colliding ideas: Christians are concerned about the means.  That is, how does the Bible instruct us to produce and distribute goods?  And, economists are mostly concerned about the ends.  That is, which system has the best outcome?   It is quite clear that a relatively Free Market Capitalist system is both in line with Biblical instruction, and it has a better outcome for the poor, who we are called to serve. 

 

Economic Humanism

The Great Reset is promoted as a response to climate change. I think we will look back in 2040 and say, “Politicians in 2020 promised to change the weather!”  And we’ll all laugh out loud.  There’s really not much constraint on humanism these days.  I discuss it in podcast #21 titled Economic Humanism.  Politicians are claiming they can change the weather and put a chicken in every pot.  Well, they can’t.  We live in a fallen world, but many people deny it.  

The Great Reset intends to limit freedom.  That’s because the Davos crowd does not like the power of the individual, which is so central to the Christian belief system.   Klaus Schwab goes so far as to cheer developments that aim to connect human brains directly to the cloud for the sake of “data mining” our thoughts and memories.

In my little book Economics and the Christian Worldview, I make the statement, “Most economic myths stem from a denial of the fallen nature.”  Humanists deny the fallen nature when they try to make things perfect.  They can’t.  

 

Conspiracy

I’ve always had a defense mechanism for conspiracies about a small group of people who are controlling the world.  From the Bilderberg group to the New World order to the Knights of the Templar.  I think it’s a mental condition, but that’s just me.  A terrorist who held hostages at a Synagogue in Colleyville, Texas recently believed that a Jewish cabal of some kind controlled the world’s economy.  But now, the Davos guys are admitting it.  They are screaming, We WANT to control the world’s economy!  And we’re supposed to let them?  It’s like a bad Saturday Night Live skit that came to life.  Why should we let a small group of egotistical humanists control our economy?  Does anyone believe they could do it better?  Does anyone believe they are not fallen, and would not seek their own self-interest?

Mr. Rectenwald writes in Imprimis, “The Great Reset’s corporate stakeholder model overlaps with its governance and geopolitical model: states and favored corporations are combined in public-private partnerships and together have control of governance. This corporate-state hybrid is largely unaccountable to the constituents of national governments.”  Talk about a conspiracy?!  And, they’re doing it out in the open!  Why reasonable people would fall for this charade is just beyond economic rationality.  

In our book, Biblical Economic Policy, Sergiy Saydometov and I found ten Commandments of Economics.  The first is “People should be free.”  The Great Reset attempted by the World Economic Forum violates that Biblically endorsed freedom.  

As Christian Economists, we should always be looking for something better, but not for perfection.  That’s the point of this podcast: We can make things better, but no human “reset” has ever made it perfect, and it won’t until Christ returns with the second great reset. 

 

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