The scandal over the alleged corruption of the founder of the World Economic Forum (WEF) in Davos would be just an anecdote were it not another example of what has happened recently with many international institutions. The Financial Times reveals that the WEF founder faces accusations of manipulating the organization’s analysis to gain favour with governments.
For years, many of us have watched with sadness as an important forum like Davos shifted from being a centre for debate and confrontation of ideas in defence of free enterprise to becoming a loudspeaker for the most interventionist ideas, the most damaging statism, and a whitewasher of authoritarian governments, spreading the destructive ideas of inflationism, socialism, and wokeism— which, in reality, are all the same.
Davos went from being a forum for debate to a congregation for repeating interventionist dogmas and whitewashing a single, extractive mindset; those who defended economic freedom, attractive taxes, and control over public spending were gradually ostracised. We have heard enthusiastic applause for those demanding more taxes and greater assaults on job creators, and one-sided debates in which all participants repeated clichés and words like “resilience” and “sustainability” as Trojan horses for predatory statism, where the idea of creating value and wealth was repudiated.
Do you remember the aberration of “you will own nothing and be happy”, abandoning profit generation as a goal, or the suggestion that coffee cultivation should be banned because it contributes to climate change? With phrases like “equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, and natural resources”, the most absurd and obsolete collectivism was being sold.
It hasn’t just happened in Davos. This week, Scott Bessent, the U.S. Treasury Secretary, confronted the International Monetary Fund (IMF) and the World Bank, exposing their complicity in selling the flawed products of socialist interventionism.
“The IMF and the World Bank have enduring value, but their mission has drifted off course.”
It was very frustrating to see how these institutions whitewashed the constant increase in the weight of governments in the economy, confiscatory taxes, and inflationism through fiscal and monetary excess. They have forgotten their role as guarantors of economic logic, defenders of wealth creators, enforcers of fiscal responsibility, and enforcers of tax prudence. Instead, they became increasingly permissive with authoritarian, exploitative, and wasteful governments.
Bessent stated:
“The IMF has suffered from mission creep. The IMF was once unwavering in its mission of promoting global monetary cooperation and financial stability. Now it devotes disproportionate time and resources to work on climate change, gender, and social issues.”
Just like other institutions, such as the European Central Bank, which also set climate change as a goal while abandoning its true aim of price stability, they focus on cosmetic and ideological issues unrelated to monetary policy, financial stability, and fiscal responsibility, as these are matters for government social policy. Moreover, many of these supposed social concerns only serve to hide the whitewashing of a constant increase in government excesses, uncontrolled spending, debt, and rising taxes.
Bessent added:
“The International Monetary Fund should be a brutal revealer of the truth. Instead, it is ‘whistling past the graveyard.’”
This statement from Bessent mirrors the perception of any freedom defender in many of the IMF’s reports: it acquiesces as governments push their countries, companies, and self-employed workers towards financial ruin.
Do you remember the IMF’s 2020 call to “do whatever it takes and keep the receipts”? Governments happily rushed to spend without control, printing money recklessly, leaving poverty, inflation, runaway debt, and suffocating taxes in their wake. However, in 2024, when over seventy countries were spending uncontrollably due to elections and the public debt was rapidly increasing, the IMF declared a strategy of “safe but slow growth: resilience with divergence”. Incredible.
Regarding the World Bank, Bessent stated:
“The bank should no longer expect blank cheques for vapid, buzzword-centric marketing accompanied by half-hearted commitments to reform.”
If the institutions that should guarantee financial stability, economic logic, fiscal responsibility, and business growth focus on disguising fiscal and monetary imbalances or ignoring attacks on private property, financial and monetary stability, or free enterprise in countries with totalitarian regimes and interventionist governments, they cease to fulfil their functions and become the orchestra on the Titanic.
It is time to abandon propaganda, excuses, and cosmetics. It is time to stop whitewashing interventionism and recover the essential role these institutions play in preserving and strengthening growth. It is time to stop justifying wasteful governments and return to defending businesses and wealth creators.
We cannot forget the importance of the IMF, World Bank, ECB, or WEF as guarantors of economic and financial stability and monetary soundness.
Their work is essential. Do not forget it. They must return to defending what creates wealth, reduces poverty, and improves the lives of citizens: business growth, the free market, economic freedom, and fiscal and monetary prudence. Their association with predatory authoritarian governments has led to a significant loss of their former prestige.
If Davos, the IMF and mainstream economists had been half as blunt about China and other nations’ tariffs and trade barriers in the past decade as they are today about US trade policy, we would not need forced negotiations to level the playing field.
Dear institutions: It is time to remind the world that progress comes from saving, economic freedom, and prudent investment, not from political spending, debt, and monetary inflationism. The great institutions have much to contribute, but they must know they face two alternatives: recover their mission as defenders of fiscal and monetary responsibility and economic freedom or disappear.