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Influence without authority - that's the power of the World Economic Forum. Join us as we break down how Davos shapes global narratives and why it matters! From the end of the Schwab era to controversial invitations, we're examining how this elite gathering wields soft power through legitimacy and access. Is it a dialogue platform or something more significant?
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00:00Francine caught up with the president of the World Economic Forum, Klaus Schwab.
00:04He is anything but optimistic.
00:06Welcome to WatchMojo, and today we're breaking down everything you need to know about the World Economic Forum.
00:11I am indeed joined by Larry Summers from a Treasury Secretary, professor at Harvard University,
00:16now along with George Soros, founder of Soros Capital.
00:19Number 10. Why Davos Matters at All.
00:21Trump calls for new leadership in Iran.
00:24The Ayatollah has accused the president of being behind the country's massive demonstrations.
00:28Right now, the death tolls from protests in the country have surpassed 5,000.
00:33That's according to an Iranian official.
00:35And this is happening as Mr. Trump prepares to attend the World Economic Forum in Davos, Switzerland, later this week.
00:41The World Economic Forum has no formal authority, but authority isn't the only form of power.
00:47Davos shapes narratives, normalizes actors, and elevates ideas that ripple outward into policy, financial markets, and media.
00:54I'm amazed how the narrative has changed, like, oh, now we have low inflation.
00:57It's the same it was at the end.
00:59That's not bad, though.
01:00It's not getting worse.
01:01But my point being, I think he has messaging he needs to do that is going to be tough to do at Davos.
01:06The annual meeting, held each January in Davos, Switzerland, gathers a uniquely concentrated mix of political, corporate, and civil society leaders.
01:15That concentration is why the forum is defended as useful and criticized as unaccountable.
01:20When Davos confers legitimacy, the effects travel far beyond Switzerland.
01:25Scrutiny isn't hostility.
01:27It's a proportional response to influence.
01:29Understanding how Davos works is the first step toward understanding why its decisions matter.
01:35The president is expected to highlight these new tariffs, his desire to take over Greenland and possible U.S. involvement in Iran while he's in Davos.
01:43It's a busy week for our president.
01:44What do you think his overall message to the world will be?
01:47Well, I don't think we should be too surprised, Henry, if we're treated to a kind of greatest hits of the president's spurious claims.
01:57Number nine, the end of the Schwab era.
02:00We need a paradigm shift.
02:03We must rebuild trust.
02:05And that's actually the theme of our meeting.
02:08We have to rebuild trust.
02:10Trust in our future.
02:12Trust in our capacity to overcome challenges.
02:15And most importantly, trust in each other.
02:20Klaus Schwab founded the organization that became the WEF after launching the European Management Forum in the early 1970s.
02:28Over five decades, he acted as its figurehead, championing ideas like stakeholder capitalism and global cooperation.
02:35His departure in April 2025 marked more than a personal exit.
02:39The World Economic Forum has confirmed they're investigating former chairman Klaus Schwab after his seemingly abrupt resignation on Monday.
02:47An anonymous whistleblower sent a letter to the organization and accused Schwab of misusing forum funds and resources.
02:53The Wall Street Journal first reported the news.
02:56Founder-led institutions often face moments of reckoning once their architect steps aside.
03:01Structures of governance that were once implicit must suddenly stand on their own.
03:05For the WEF, this transition landed amid growing skepticism toward elite institutions.
03:11It heightened attention on how decisions are made and how standards are enforced.
03:16Schwab and his wife have denied all allegations and Schwab plans on filing a lawsuit against whomever wrote it.
03:21Schwab is a proponent of the Great Reset, which is essentially a reshaking of the world order that involves things like ESG initiatives and stakeholder economies.
03:31Number eight, where the real influence happens.
03:34It's not a formal international organization in the way we think of, say, the UN or going to a meeting of alliance members of NATO or something like that.
03:41And yet it is a clearly a significant meeting of what you might call globally influential elite coming from a variety of backgrounds.
03:51Despite the attention on main stage panels, Davos runs on proximity.
03:56Side events, private meetings, and invitation-only dinners create dense networks of interaction between CEOs, public servants, and NGO leaders.
04:05It's hardly a secret that the annual meeting draws thousands of participants, precisely for access.
04:10The WEF's partner structure reinforces this, placing corporate and institutional members closer to agenda-setting spaces.
04:17None of this requires secret coordination.
04:20It's simply how elite convenings work.
04:22Access leads to alignment.
04:24Alignment becomes consensus.
04:26And consensus shapes policy and corporate strategy long after the snow melts in Switzerland.
04:31It is something that has come up repeatedly.
04:34Obviously, the idea that at a moment of populist frustration with politics, that it is a risky proposition for a prime minister, for any politician to go to what seems like a cushy gig, again, to be present with the global elite.
04:51Number seven, a platform is a judgment.
04:53It's going to be a quick one.
04:54We have time for maybe one or two questions today, but I'll turn it over to the secretary.
04:57Good. Good to be here today.
05:00It's an honor to represent the U.S. delegation on behalf of President Trump.
05:04It's been a busy year, and the president will be here on Wednesday and Thursday to sum up the year, talk about his thoughts going forward.
05:13The WEF often emphasizes that it does not endorse the views of its speakers, but platforms are judgments by design.
05:21Davos is invitation-driven, panels are curated, session titles, participant bios, and framing all signal institutional approval, regardless of disclaimers.
05:31The forum's own language reinforces this, describing Davos as a gathering of leaders shaping global priorities.
05:37I don't know anything about the president's letter to Norway, and I think it's a complete canard that the president will be doing this because of the Nobel Prize.
05:45The president is looking at Greenland as a strategic asset for the United States.
05:51We are not going to outsource our hemispheric security to anyone else.
05:56That framing assigns a level of status.
05:59When controversial figures appear without strong contextual framing or challenge, the message travels far beyond the room.
06:06In elite spaces, symbolism is substance.
06:09Who is welcomed, when, and how often communicates values more loudly than any neutrality statement.
06:15How concerned are you about retaliation?
06:17Excuse me, about the Europeans, this question.
06:20I think it would be very unwise.
06:22Number six.
06:23Why this invitation crossed the line?
06:25Iran's supreme leader has, for the first time, acknowledged the rising death toll during protests in the country, accusing Donald Trump of inciting the unrest.
06:34Human rights groups claim more than 3,000 people have been killed since demonstrations against the regime began.
06:42Iranian Foreign Affairs Minister Abbas Aragji was scheduled to appear at Davos on January 20, 2026.
06:48Aragji's invitation triggered widespread backlash due to the ongoing political crisis in Iran.
06:54On January 19, 2026, the WEF backtracked and confirmed that Aragji would not attend.
07:00That sequence matters.
07:02The controversy wasn't about whether the forum ultimately reversed course.
07:06It was about the initial signal.
07:08For critics, scheduling a senior Iranian official during an active crackdown blurred the line between engagement and normalization.
07:15For many observers, especially in the Iranian diaspora, timing and optics melted together.
07:20Even withdrawn invitations leave reputational footprints, particularly for institutions whose power lies in signaling legitimacy.
07:28We have come to the point where people are just fed up with this regime.
07:31They are saying death to the dictator.
07:34They want to liberate themselves.
07:36And their demand for freedom is met with the most brutal reaction by a regime that is waging war on its own citizens.
07:43Number five, dialogue versus legitimization.
07:46In a world of rapid change, complexity, and growing division, no single individual, company, or institution can solve global challenges alone.
07:57Real progress requires trust, dialogue, collaboration, and the courage to act together.
08:04The WEF frequently frames Davos as a space for dialogue, even centering recent meetings around the idea of, quote, a spirit of dialogue.
08:13That's the charitable case.
08:14Engagement can lower tensions and open channels that isolation cannot.
08:18For more than 50 years, the World Economic Forum has been a catalyst for collaboration when it mattered most.
08:26Though we are best known for our annual meeting in Davos, Switzerland, a week where global issues take center stage,
08:33our work continues year-round through hundreds of meetings, dialogues, and public-private partnerships across every region.
08:41But context is crucial.
08:43Dialogue without challenge, framing, or consequence risks becoming legitimization.
08:47Elite platforms don't operate in a vacuum.
08:50Timing, format, and tone shape perception.
08:54When controversial figures appear without sustained scrutiny, the signal can outweigh the substance.
08:59The forum's mix of public panels and invitation-only sessions further complicates this,
09:03because not all engagement is equally visible or accountable.
09:07In settings built on symbolism, neutrality isn't the absence of judgment.
09:11It is a judgment in itself.
09:13Today's challenges are too urgent and too interconnected for anyone to solve them alone.
09:20At the World Economic Forum, we connect leaders to make sense of global challenges and move the world forward together.
09:28Number four, the Soros question.
09:31You can't be, you can't validate the theories.
09:37You can only falsify them.
09:40So the two ideas were directly contradictory, and I sided with Popper.
09:47Precision matters here.
09:49The WEF was founded and led for decades by Klaus Schwab.
09:52It is not run by the Soros family.
09:54What is factual?
09:56George Soros began his philanthropic work in 1979, and the Open Society Institute, which later became the Open Society Foundations, was established in the early 1990s.
10:07Open Society is listed as a WEF partner and has participated in Davos events.
10:13That places it inside the broader NGO philanthropy ecosystem that critics often label, quote, globalist.
10:19Financial markets are upset right this minute, they are upset, and the authorities are not taking the right steps in dealing with it because there is a very serious problem of counterparty risk.
10:34The mistake is turning influence into ownership.
10:37Serious scrutiny examines how private wealth interacts with elite platforms, not imaginary chains of command.
10:43Getting this distinction right strengthens criticism rather than diluting it.
10:47You know, I think that we really have to be careful here in, you know, in this nostalgia for a time, you know, for a time past, because a lot of the reactions we're seeing in society are actually reactions to positive, to positive things like, you know, like equality for women, you know, and, you know, and greater diversity, which come with that clash.
11:12Number three, why everyone is talking past each other.
11:15You know, it's easy to get all paranoid conspiracy theorists about the WEF, say, and maybe there's some utility in that, but, you know, I don't think anybody's sitting at Davos going, well, we got to scrap 7 billion people.
11:28Public debate around Davos often breaks down fast.
11:31On one side, critics portray the forum as a secretive puppet master controlling global affairs, a framing that collapses complexity into conspiracy.
11:39On the other, mainstream coverage frequently focuses on celebrity attendees, buzzwords, and carefully managed access, leaving deeper structural questions unanswered.
11:49The result is a credibility gap.
11:51How is it not going to be that the policies that you craft stemming from that narrative are colored by the belief that there's far too many people?
11:59Serious evidence-based criticism gets lost between exaggeration and deference.
12:04This doesn't serve the public, and it doesn't serve the institution either.
12:08Forums that rely on influence rather than authority depend on trust.
12:12That trust erodes when legitimate scrutiny is dismissed as fringe or softened into lifestyle coverage.
12:18The space for sober, factual critique shrinks, and polarization fills the void.
12:23They stand for a Malthusian zero-sum game of scarcity, privation, and top-down centralized control.
12:31And with the technology that we have now, I wouldn't recommend that we do that.
12:39Switzerland's Sontag Zeitung newspaper has obtained some of the preliminary findings of an internal investigation the WEF had into Klaus Schwab.
12:47So far, they are reporting he is accused of inappropriate remarks to younger members of staff, misusing funds, and manipulating WEF research.
12:56The WEF entered a period of heightened scrutiny in 2025.
13:00On April 21st, founder Klaus Schwab announced he was stepping down as chair and board member, quote,
13:06with immediate effect, citing his age as he entered his 88th year.
13:11That transition alone marked the end of a defining era.
13:13But attention intensified in August 2025, when whistleblowers alleged financial irregularities and a toxic internal work culture.
13:22The accusation about misusing research relates to the WEF's 2017-2018 Global Competitiveness Report,
13:29which ranks countries on their productivity and their long-term prosperity.
13:32While the forum later said investigations found no material wrongdoing, the episode still carried weight.
13:38Institutions that champion transparency and accountability are judged by how they handle internal stress tests.
13:44Leadership transitions expose whether values are structural or symbolic.
13:49For critics, this moment sharpened long-standing questions about governance, oversight,
13:54and whether the WEF holds itself to the standards it promotes globally.
13:58I am very straightforward in my opening address explaining that we have to look at the possible consequences of the financial and economic risks
14:13that we face for several years at a difficult time.
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14:34Number 1. The Legitimacy Test
14:37The World Economic Forum doesn't pass laws or enforce treaties, but it trades in legitimacy.
14:42Since its founding in 1971, its annual meeting in Davos has functioned as a reputational amplifier,
14:49signaling which leaders, ideas, and institutions belong inside the global consensus.
14:54That influence isn't accidental.
14:56The WEF openly describes itself as a platform for leaders to shape long-term priorities,
15:01which means access itself carries meaning.
15:04Invitations, panels, and even photo ops communicate credibility to markets, media, and policymakers.
15:10That's why consistency matters.
15:12When the forum's choices appear to clash with its stated values,
15:16neutrality stops sounding principled and starts sounding evasive.
15:19For an institution built on soft power rather than formal authority,
15:23credibility isn't optional.
15:25It's the product.
15:26Did we answer your questions about the WEF?
15:29Is there anything we missed?
15:31Be sure to let us know in the comments.
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