Introduction
On 31 January 1999, United Nations (UN) secretary-general Kofi Annan gave a speech at the World Economic Forum’s (WEF) annual conference in Davos, Switzerland where he announced the creation of the UN Global Compact, an initiative which sought to give business actors a greater role in governance, and which now includes more than 24,000 participants spread across 160 countries.Footnote 1 In his speech Kofi Annan announced that the Global Compact was the realisation of his hope for ‘a creative partnership between the UN and the private sector’ because ‘without their know-how and resources, many of the objectives of the United Nations would remain elusive’.Footnote 2
The Global Compact was a symbolic milestone in global governance because it highlighted the rise of business authority. First, with the Global Compact, the UN officially recognised business actors as legitimate, unique, necessary global governance actors. This explicit recognition marked the institutionalisation of a new model of governance that puts business actors at the core of global governance. Second and relatedly, with the Global Compact, the UN consecrated the WEF not only as the privileged mediator between public and private actors, but also as the designer of ideal governance models. This further encouraged states and international organisations (IOs) to defer to the WEF’s networks, ideas, concepts, and indicators to govern. The reliance by states and IOs on Schwab’s concept of the Fourth Industrial Revolution to justify their policies is the latest illustration to date of the WEF’s authority.Footnote 3
The concept of ‘global governance’ emerged in the 1990s, in response to structural changes such as globalisation and the rise of non-state actors.Footnote 4 Yet discussions of the complexification of the exercise of supranational authority have tended to obscure the fact that one class of non-state actors – business actors – has gained significantly greater authority in the past half-century compared to other types of actors.Footnote 5 Business actors have been empowered relative to both states and intergovernmental organisations’ regulatory power and workers’ bargaining power.Footnote 6 Globalisation has increased the likelihood that states and IOs will defer to business actors, who in turn leverage their expertise to tilt policymaking towards their own interests.Footnote 7 But the fact that states and IOs decide to defer to business actors suggests that this is a question not only of power but of authority. Authority is the legitimate power to act and further societal interests, where legitimacy refers to the normative belief that the participation of an actor or institution is justified.Footnote 8 Business authority is in this sense puzzling to the extent that profit-seeking actors end up being recognised as governance leaders who further societal interests. So, how have business actors gained authority in global governance?
In this paper, we argue that business actors construct their authority by engaging in specific legitimation practices that are recognised by other global governance actors. We show how the increasingly central role of business actors in global governance stems not only from their possession of key resources such as money, technology, or expertise, but also from the diffusion of new business-centred ideals of governance. We explain how business actors diffused specific discourses, beliefs, and norms of ‘good’ governance that were accepted and even promoted by other global governance actors. Such a recognition of the legitimacy of new business-centred models of governance not only normalised the participation of business actors in global governance but legitimised their leadership as well.Footnote 9
We leverage theoretical tools developed by Pierre Bourdieu to analyse the construction of business authority in global governance. In line with existing literatures, we argue that the rise of business authority is not merely the result of the intrinsic attributes of agents or of exogenous structural factors such as technical or ideological change, but of specific legitimation practices that make the participation of business actors in global governance intelligible, legitimate, and authoritative.Footnote 10 Understanding the rise of business actors requires a more thoroughgoing engagement with how business actors come to be viewed as necessary and legitimate entities of global governance and how discourses of governance come to be recognised as ideal models. Bourdieu’s account of the (mis)recognition of the possession of capital as authority (symbolic capital) is particularly helpful in highlighting how business authority is constructed. In particular, we emphasise how actors who possess cultural capital are best positioned to construct authority.
We expand on Bourdieusian theories of global governance, however, by showing how authority construction cuts across fields of governance. Namely, we argue that the construction of business authority is enabled by the interactions between the micro-level of individual action, the meso-level of fields, institutions, and organisations, and the macro-level of structures.Footnote 11 Rather than solely focusing on the actions of specific communities of practice within a given field of action,Footnote 12 we focus on the practices by which business communities leverage broader structural changes to produce discourses that construct their authority across fields. We highlight the role of the cultural capital of specific individuals (Klaus Schwab) and organisations (the WEF) as well as larger structural changes (globalisation, technical change) in the successful diffusion of symbolic discourses of governance across fields. We argue that cultural capital works as symbolic capital to the extent that it persuades public global governance actors to adopt business-centred models of governance, legitimise the structural empowerment of business actors, and grant them authority. Thus, by framing practices as both shaped by structural changes and producing structural effects, we tie the micro, the meso, and the macro levels together.
This paper is divided into three parts. First, we reconstruct and critique the literature that theorises business authority as a subset of the broader rise of private authority in global governance. Second, we introduce and revise the Bourdieusian framework of fields and capital to theorise the conditions of possibility and processes through which business authority is constructed in global governance. Third, we introduce the WEF as a useful example of how the accumulation and strategic leveraging of cultural capital, combined with the expansion of economic and technological capital in particular, has resulted in a positive feedback loop that constructs both the WEF’s own authority and that of its business partners. Leveraging interpretive methods, we demonstrate that business authority was recognised by other governance actors with examples drawn from a wide variety of sources, including reports from the WEF, its partners, and international organisations, international meeting agendas, and government white papers. We conclude by summarising our contribution to the literature.
Business authority as private authority in global governance
Scholars have thematised the rise of business actors in world politics within the broader context of the rise of non-state actors and the emergence of a ‘global governance’ system.Footnote 13 Global governance is commonly defined as the ‘exercise of authority across national borders as well as consented norms and rules beyond the nation state, both of them justified with reference to common goods or transnational problems’.Footnote 14 The multiplication of non-state actors such as firms and transnational advocacy groups on the international stage has changed the way in which authority is defined. The concept of global governance suggests that the competition over authority takes place not solely between states over well-defined issues, but among various powerful actors across complex networks with diverse centres, levels, and concerns.Footnote 15 This complexification of the ways in which supranational authority is exercised led scholars to shift the focus from anarchy in ‘the’ international system to various forms of hierarchies across different political orders.Footnote 16
The literature provides three major explanations for the rise of business-as-private actors in global governance: technical change, their specific attributes, and the diffusion of (neo)liberalism. First, by lowering the costs of communication, technical change in digital technologies from the 1960s onwards has been deemed responsible for the rise of private actors – multinational corporations in particular.Footnote 17 The influential theorist of global governance James Rosenau stated that technical change was ‘the most powerful of the exogenous dynamics’ behind the change from a state-centric system to a global governance system.Footnote 18 Yet the fact that private actors gained power does not explain why and how they gained authority.
Authority involves power, but also legitimacy and connection to public interests, which can derive from social position, connection to broader ideals and principles (such as justice), and successful legitimation practices.Footnote 19 Explaining private authority with technical change alone obscures the fact that the translation of power into authority is itself a political process that involves both the deployment of legitimation practices by authority-seeking actors and the recognition of their legitimate capacity to act by other actors. Although technical change can affect legitimation practices, the connection remains unclear.Footnote 20
The second major argument for the rise of business-as-private authority suggests that authority stems from the possession of specific attributes or resources. Just like IGOs’ authority stems from their bureaucratic attributes,Footnote 21 business actors too possess attributes, such as financial and legal capabilities or specialised knowledge of the market, that other actors lack and that automatically translate into a specific kind of (market) authority.Footnote 22 Similarly, epistemic communities are endowed with epistemic authority, advocacy groups with moral authority, etc.Footnote 23 The attributes of each actor allow them to make specific claims of legitimacy (e.g. in terms of procedure or performance) that make them authoritative in a given context.Footnote 24 It is because states and IOs lack these attributes or resources that they defer to business actors to fill in global governance gaps in negotiating market-based regulation, setting up technical standards, or designing financial instruments.Footnote 25
Although looking at actors’ attributes is indicative of their power, explaining business authority with their attributes lacks both conceptual clarity and explanatory power. It lacks conceptual clarity because it suggests that authority necessarily stems from specific attributes rather than from the dynamic, social, and recognised relationship of deference between a superordinate actor and a subordinate one.Footnote 26 Recognition and deference are not automatic: they depend on the belief that specific attributes grant the actor who possesses them the legitimate capacity to perform particular functions. Moreover, focusing on attributes lacks explanatory power because it does not account for the energy and resources spent by global governance actors to legitimise themselves. The function of legitimation is precisely to obscure considerations such as suboptimal or inappropriate participation that would trigger resistance.Footnote 27 Business actors who primarily pursue profit maximisation need to conceal these motives behind claims of furthering the public interest to gain their ‘social license to operate’ in global governance. To understand how business actors gain their authority, we need to move beyond the notion that global governance is structured by the public/private dichotomy with a priori determined claims of authority and instead shed light on the actual processes of legitimation and recognition.
Finally, scholars argue that (neo)liberalism has triggered the rise of business actors in global governance. The promotion of neoliberal policies (e.g. financialisation, privatisation) by key IOs such as the International Monetary Fund and the World Trade Organization under the Washington Consensus encouraged public actors to defer to firms to govern the economy.Footnote 28 Through financialisation, neoliberal organisations have enabled the globalisation of supply chains and decreased states’ and workers’ bargaining power vis-à-vis multinational corporations and their shareholders,Footnote 29 while liberalism in general has created a logic of deference from governments to markets.Footnote 30 Financialisation has also fuelled the rise of private organisations such as the International Organization of Standardization and the International Accounting Standards Board as key global governance actors able to steer technical change.Footnote 31
Yet, while business actors gained power through neoliberal policies, this power needed specific legitimation discourses to be converted into broad-based, publicly recognised authority. To understand this conversion of power into authority, we need to further examine the production of discourses that make neoliberal globalisation intelligible, legitimate, and promoted as a way to further societal interests.Footnote 32 Only by tracing actual legitimation practices can we understand how the power and influence of business actors gained via processes such as financialisation were transformed into the legitimate licence to participate in and lead global governance.
In sum, technical change, intrinsic attributes, and neoliberalism each provide compelling but incomplete and often overly deterministic explanations for the rise of business actors in global governance. The literatures on legitimation and ‘liquid authority’ have moved away from these overly deterministic claims, but they remained centred either on IGOsFootnote 33 or on micro-legitimation practices within a specific field of governance.Footnote 34 This came at the expense of the effects of broader discursive and structural changes on legitimation practices.Footnote 35 Our account develops these ideas via an account of (1) the forms of capital (rather than attributes) that characterise business power, (2) the construction of specific business networks that span across fields, and (3) the specific discourses that enable business actors to successfully claim authority in global governance.
A multi-level Bourdieusian account of business authority
From system, regimes, and attributes to fields, practices, and capital
In the past two decades, IR scholars have increasingly turned to Pierre Bourdieu’s work to understand how actors gain authority in international politics.Footnote 36 Unlike schematic understandings of authority, wherein authority derives automatically from static attributes (public/private, business/state, etc.) or exogenous structural shocks (technical or ideological change), the Bourdieusian approach seeks to analyse the conditions under which certain features are (mis)recognised as authoritative in specific areas of action. Bourdieu theorises these spheres of action as fields, organised around objects such as health, trade, or security.Footnote 37 In each field, actors ‘compete with each other to be recognized as authorities on what is to be governed, how, and why’.Footnote 38 Within a field, actors compete for recognition, in the process both gaining authority and (re)shaping the field of competition itself.Footnote 39 Thus, in contrast to the international macro-system of global governance divided up into already-defined regimes, issue areas, and types of actors,Footnote 40 from a meso-field perspective, the existence and meaning of a given governance area is subject to contestation via the competition of actors for authority.
Bourdieu conceptualises these contests for authority as a competition over the valuation of power resources, what he refers to as capital, the ‘specific forms … of what is valued and what provides power’ within a field.Footnote 41 The distribution of different forms of capital shapes the positions and relations of actors within each field: the more of a relevant and valued form of capital an actor possesses, the more power that actor has in the field and the more effectively they can influence it.Footnote 42 Thus actors compete to make the capital that they possess within a field relevant and important, thereby gaining authority in addition to power.
Fields and capital have co-constitutive relationships, as the unequal distribution of capital within a field shapes the field’s logic and structure, while, conversely, the functioning of the field reproduces the power and effects of capital.Footnote 43 Because the significance attached to a given form of capital may differ across fields, the processes through which certain forms of capital become authoritative varies field-to-field. In other words, for Bourdieusian scholars, the construction of authority is generally field-specific.
Yet crucially for our argument, the construction of authority often has governance impacts beyond the confines of one specific field. Fields are not closed and bounded social spaces, but always related to one another through the ability of actors to move between them and the ability of structural elements to change a multitude of fields. This remains untheorised in Bourdieu’s own work; as Gil Eyal remarks, ‘while Bourdieu is quite rigorous in identifying fields he does not do the same thing with the distinction between fields themselves’.Footnote 44 The boundaries of fields are porous and certain actors, practices, and meanings often cut across them: for example, public–private partnerships and privatisation – the transfer of functions from states to firms – are practices that have increased across various fields of global governance, including health, security, and regulation.Footnote 45
So, how do the macro-level of structure and meso-level of fields interact? As discussed in the previous section , the globalisation of supply chains enabled by the microelectronics revolution and neoliberal policies promoted the multiplication of non-state actors – multinational corporations in particular – on the international stage. Such a multiplication of non-state actors paralleled the emergence of fields of governance oriented around complex global issues such as climate change and global health and the perceived inability of state actors such as governments and intergovernmental organisations alone to solve these problems.Footnote 46 In this context of the proliferation of global governance issues, there were opportunities for business actors to strategically participate in emergent issue fields, to leverage their existing expertise and construct their authority within these fields. The discursive legitimation of the privatisation of governmental functions in these fields then justified privatisation in other fields. These discourses led to the construction of private actors as more authoritative not just in a particular field, but in general, at the macro-level of global governance.
Thus, although we agree that the construction of this private authority did to an extent depend on the specificity of each field, we contend that structural changes and discursive shifts affected these processes of authority construction across fields.Footnote 47 However, despite a few exceptions,Footnote 48 the Bourdieusian literature in IR has restricted itself to the analysis of the micro-level of actors and the meso-level of field-specific phenomena failing to theorise how changes within a field can have spillover effects on other fields.Footnote 49 They have thus neglected to explain the macro-level changes (such as the growth of cross-field privatisation) emerging from these spillover effects.
Although he argues that there are a multiplicity of forms of capital, Bourdieu and his interpreters in the global governance literature focus on three main forms – economic, cultural, social capital – as well as one specialised form: symbolic capital.Footnote 50 In the next section, we outline the basic forms of capital in relation to business actors and highlight an additional form of capital, technological capital,Footnote 51 that is particularly helpful in theorising the growing influence of business actors in global governance. We then explain how Bourdieu’s concept of symbolic capital makes his framework particularly well suited to understand the processes of business authority construction because symbolic capital is central to the (mis)recognition of capital as legitimate, thereby making it authoritative.
Business actors’ forms of capital: The case of Big Tech’s economic, cultural, social, and technological capital
The possession of relevant forms of capital allow actors to gain power and authority depending on how different forms of capital are valued within a field and, as we argued in the previous section, across fields. But capital is itself merely a power resource: it only functions as a source of authority when it is valued and construed as legitimate within or across fields. In a Bourdeusian formulation, it would be wrong to assume that business actors such as firms and business associations are empowered because they de facto possess specific kinds of capital than other actors such as governments lack. Instead, business actors compete with other actors to ensure that the capital that they do possess is valued and construed as powerful. In this section, we use Big Tech companies (Google, Amazon, Microsoft, etc.) as a helpful illustration of how forms of capital possessed by business actors are transformed into business authority.
The main objective of capitalist firms is to build means of production that maximise an economic capital that will be ‘directly convertible into money and may be institutionalized in the form of property rights’.Footnote 52 Big Tech’s economic capital stems not only from the fact that they are among the richest companies in the world, but also from the fact that their products are protected by intellectual property rights and related trade sanctions.Footnote 53 Big Tech companies are able to convert their economic capital into cultural capital, defined as the practices and knowledge that confer social status and power by being seen as rare and valuable.Footnote 54 Big Tech are among the biggest investors in the research and development (R&D) of emerging technologies, which attracts skilled engineers and grants companies a form of cultural status that they can leverage to legitimate their participation in global governance.Footnote 55 Individuals working for a Big Tech also enjoy a form of social capital by virtue of belonging to a specific group.Footnote 56 Being a member of the Big Tech network provides one with key relations and opportunities to connect with other groups, participate in global governance fora as privileged interlocutors, or even create competing fora.Footnote 57
Furthermore, the ownership of key technologies and the ability to access and redesign them constitute a technological capital that is not fully reducible to other forms of capital – a point that Bourdieu’s under-theorisation of technology and technical change did not grasp.Footnote 58 In fact, global governance is a technologically mediated social world that relies on specific technologies such as indicators, maps, reports, computers, telephones, satellites, and so forth,Footnote 59 whose value isn’t fully explained by economic or cultural capital. As we later explain with the case of the Fourth Industrial Revolution, identifying technological capital is important because it highlights how business actors who control key technologies such as datasets and computational infrastructures benefit the most from positive symbolic framings of the power of technology – a point that Romele did not consider.Footnote 60
As this latter point suggests, however, economic, technological, cultural, and social capital alone are not sufficient to explain the construction of authority. As we have explained, authority is earned through social recognition by relevant peers. That is, business actors such as Big Tech must be seen as legitimate to advance societal missions. This is why symbolic beliefs and discourses articulating what business actors are, represent, and do matter to the construction of their authority. We now turn to symbolic capital which represents for Bourdieu a very specific kind of capital and explain how it serves to construct business authority in general.
Capital, symbolic capital, authority
Bourdieu defines symbolic capital as ‘the form that the various species of capital assume when they are perceived and recognized as legitimate’.Footnote 61 Symbolic capital allows forms of capital within a field ‘to be unrecognized as capital and recognized as legitimate competence, as authority exerting an effect of (mis)recognition’.Footnote 62 Symbolic capital naturalises a basic form of capital as legitimate, and thereby authoritative, in a field. In the Bourdieusian framework, the authority of actors in a field is social, because it ‘draws upon symbolic power and is dependent upon the recognition of other agents’ who take pronouncements and interpretations by an actor or class of actors for granted as authoritative on a subject.Footnote 63 Figure 1 shows the process by which forms of capital go unrecognised through symbolic capital and become authoritative within a particular field.
Simplified representation of the conversion of capital into (business) authority.
All forms of capital can assume the guise of symbolic capital. But Bourdieu argued that cultural capital is uniquely ‘predisposed to function as symbolic capital “because” the social conditions of its transmission and acquisition are more disguised’ that those of other forms of capital.Footnote 64 Unlike economic capital, for example, which primarily allows for material appropriation (of goods, of ownership of a corporation, etc.), cultural capital allows for symbolic appropriation (of knowledge on a subject, of taste, etc.) and is more directly connected to the (mis)recognition of capital as legitimate.Footnote 65 For example, as Ole Jacob Sending explains, in the 1970s a number of actors including the Rockefeller Foundation leveraged their existing cultural capital in the realm of population control to reshape the policies of global health governance and undermine the authority of the World Health Organization.Footnote 66 The Rockefeller Foundation’s cultural capital functioned as symbolic capital because it allowed the Foundation to be (mis)recognised as an authority in fields related to population control, like health. This authority allowed the Rockefeller Foundation to transform the field of health governance in ways that benefited itself and other actors like the World Bank.
In Sending’s example, the Rockefeller Foundation plays a specific role in constructing the authority in one field of governance. By focusing on one actor in one field, Sending is able to provide detailed information about the process of authority construction. Yet, as the global governance literature has explained, the rise of business authority is a structural change in international affairs, not a field-specific one. Thus, in the next section, we emphasise the role of the World Economic Forum (WEF) in constructing business authority across fields of global governance.
The construction of business authority: The role of the WEF’s cultural capital in the legitimation of transnational business networks
As mentioned in the introduction, the creation of the UN Global Compact at Davos was a symbolic milestone because it institutionalised the participation of business actors in global governance and recognised the WEF as the leader in public–private coordination. Today, examples of business authority and business leadership abound: the appointment of Melinda Gates and Jack Ma as co-chairs of the UN’s High-Level Panel of Digital Cooperation; the self-regulation of social media platforms by Big Tech; the everyday deference of governments to consulting firms such as McKinsey on design policies; the role of the Gates Foundation in global health; the governance of standards by private institutions like the International Accounting Standards Board.Footnote 67 Although each of these examples have particular histories, they all show that business actors not only participate in global governance but occupy central and influential leadership roles across fields under the banner of multistakeholderism, as we will discuss in the next section.
The empowerment of business actors stems in part from structural changes such as technical change, the globalisation of supply chains, and financialisation. Big companies possess economic, social, cultural, and technological resources that, as capital, are rare and valuable. Yet business actors also need to justify the global benefit of their empowerment to avoid any backlash by regulators or civil society and legitimise their actions in global governance. In this section, we highlight the role the WEF plays in producing these justifications. More precisely, we analyse the reproduction of the WEF’s cultural capital and the role of this cultural capital in diffusing discourses that legitimise the power of business actors at the structural level (i.e. that acts as symbolic capital across fields).
Why is the WEF a powerful business NGO?
Designated a non-governmental organisation (NGO) by the Swiss Host-State Act in 2015 and leveraging Switzerland’s aura of neutrality,Footnote 68 the WEF has positioned itself as an apolitical mediator between the public sector and the private sector across governance fields (e.g. finance, trade, environment, health, technology), presenting itself as the International Organization for Public–Private Cooperation. This position is officially recognised by the UN, which launched the Global Compact at Davos, often considered the largest multistakeholder governance initiative in the world.Footnote 69
Yet the WEF is first and foremost a business organisation. Although its Board of Trustees include ‘outstanding leaders from business, politics, academia and civil society’, its members are ‘global enterprises that have been selectively sought by the [WEF] for their innovative business models, market influence, industry disruption, regional impact, corporate citizenship and visionary leadership’.Footnote 70 The most influential members are the 100 strategic partners who provide funding and are deemed ‘the driving force behind the Forum’s programmes’.Footnote 71 They include Big Tech such as Huawei; Big Pharma such as Novartis; and other large companies such as Credit Suisse, Nestlé, and Coca-Cola. Moreover, the WEF has itself created its own business networks, notably through the worldwide dissemination of its ‘Centers for the Fourth Industrial Revolution’.
The WEF is commonly positioned in the global governance as merely a forum of discussion that cannot itself make legitimate claims of authority and as a result is typically excluded from datasets of IOs and supranational authority.Footnote 72 The WEF does not design constraining international laws or standards like IOs such as the International Telecommunication Union (ITU). Owing to its attributes as a business-oriented NGO with no state-based mandate and little constraining power, the WEF is often reduced to a mere ‘transnational elite club’ with little independent ability beyond that of its membership.Footnote 73
In actuality, the WEF is an increasingly central global governance actor, one with authority to influence a staggering variety of governance areas, from gender equality to development to peace.Footnote 74 The WEF is socially recognised as a meaningful, multistakeholder, global actor: world leaders participate in the forum every year; the UN launched its Global Compact in Davos; investment banks trust WEF information about financial risks; big businesses fund and partner with it; and diplomatic issues have even been resolved at Davos. As Geoffrey Pigman argues in his comprehensive account, the WEF ‘is a private institution, composed of a membership of private sector entities, yet through its own efforts it has acquired a public identity and a measure of power and influence in the global public sphere’.Footnote 75 Yet the WEF has secured authority in spite of being a private institution.
Given that the WEF does not operate like many other IOs by creating constraining laws or standards, then how can we conceptualise its unique position and power as a global governance actor? Bourdieu’s theory of capital is useful to answer this question. Big business actors often possess capital that is relevant to the performance of governance functions and that states and IOs lack. Yet, even if these firms possess such capital, they struggle to be recognised as governance authorities that work toward the public good. As we have explained earlier, the possession of cultural capital is particularly helpful to produce influential legitimation discourses and reshape symbolic structures across fields. In fact, cultural capital is less easily identifiable than economic, social, or technological capital, which makes it uniquely ‘predisposed to function as symbolic capital’.Footnote 76
In the following section, we theorise the WEF’s power to construct business authority as deriving from a positive feedback loop between the consolidation of its own cultural capital and the expansion of the capital of its business partners by positioning this capital as necessary for the effective functioning of global governance in general. As a result, the WEF seeks the hybridisation of the public–private nexus in governance regimes, blurring the lines between corporate and public governance, further enmeshing private business actors in previously public government areas, and giving business actors wider influence and even leadership in governance and regulation. Following Bourdieu, we unpack the WEF’s cultural capital as being (1) embodied by its elite participants as well as by its founder and executive chairman, Klaus Schwab; (2) institutionalised through the Global Compact; and (3) objectified in its reports, indices, and concepts.Footnote 77 We thus show how the WEF reproduces its cultural capital and leverages its business members’ capital and worldwide presence to diffuse its discourses, reshape symbolic structures, and construct business authority across fields of global governance.
Constructing business authority through symbolic capital: The case of multistakeholderism and the 4IR
Embodied cultural capital: Davos’ elites, Klaus Schwab, and multistakeholderism
First, the WEF constructs business authority by associating its partners with the global elite, thereby promoting their status as key global governance actors and granting them the possibility to shape global governance agendas. In its embodied state, cultural capital refers to the practices and knowledge that, by being learned, cultivated, and bodily expressed, confer social status and power.Footnote 78 At the individual level, things like clothes, items, performance, charisma, taste, or even reputation can function as cultural capital in its embodied form.
On the one hand, the WEF’s cultural capital is embodied by the performative gathering of famous, selected, elitist participants in the annual meeting at Davos, Switzerland. At Davos, business leaders meet policymakers, Nobel laureates, and royalty. This theatrical performance makes the WEF an ‘exclusive and closed arena’, an ‘arena of discretion’ that invites ‘the right people to talk about the right topics’.Footnote 79 By attending even the most selective meetings of Davos, business leaders convert their market power (economic capital) into a source of rare and valuable knowledge and power. Their economic and technological capital becomes symbolic capital to the extent that it is ‘unrecognized as capital and recognized as legitimate competence’.Footnote 80 As owners of rare knowledge and elite-meeting participants, business actors can then influence the beliefs and agendas of policymakers. Thus, the WEF’s cultural aura encourages business leaders to be part of the global elite, develop their social capital, create business ties across global governance fields, and possibly expand their economic capital and political power.
On the other hand, the WEF’s cultural capital is embodied by its leader, Klaus Schwab, who uses his academic background and publications to position himself as a leading theorist of management and governance. Shortly after the creation of the Global Compact, Kofi Annan claimed that Klaus Schwab had been ‘ahead of us all in seeing the power and the logic of globalization’.Footnote 81 For this reason, the UN recognised Schwab as a key theorist of multistakeholderism – the now-dominant paradigm of governance that posits that problem-solving is most effective when all the stakeholders participate in the process.Footnote 82 Through the WEF, Schwab’s theories became central to multistakeholderism, first in management theory in the 1970s and then in the area of global governance in the 1990s.Footnote 83 As we now further explain, Schwab’s cultural capital served to diffuse specific ideas of multistakeholderism across global governance fields that centred the role of business actors.
Institutionalised cultural capital: Business-based multistakeholderism in the Global Compact and beyond
Second, the WEF constructs business authority by altering the symbolic structures of global governance and legitimising the shift from multilateral practices to business-centred ones. In its institutionalised state, cultural capital indicates an official kind of recognition, like holding an academic degree. It is a ‘certificate of cultural competence which confers on its holder a conventional, constant, legally guaranteed value with respect to culture’.Footnote 84 Schwab’s cultural capital, for example, was institutionalised by the national medals of honor, honorary doctorates, and awards that he received such as the French Legion of Honour and the Japanese Grand Cordon of the Order of the Rising Sun.Footnote 85 Similarly, by creating the Global Compact in Davos, the UN Secretary General (himself imbued with cultural and social capital through his position at the top of the central global IO) has granted the WEF with such a certificate: an official recognition that it is the best organisation to establish communication between so-called public and private actors and make global governance supposedly more democratic and efficient.Footnote 86
In fact, at the turn of the century, IOs came to be seen as overly technocratic for multiple reasons.Footnote 87 The multistakeholder model of management/governance, which included all the relevant actors from governments through firms to civil society, became progressively seen by many as the democratic solution to this legitimation crisis.Footnote 88 The inherent multi-actor and multilevel aspect of multistakeholder governance represented the possibility to combine non-state actors’ local knowledge of the market, better identify global public needs, better coordinate local and translocal behaviors, and fulfil the ‘global governance gaps’ supposedly left open by multilateralism.Footnote 89
Yet, for Schwab, multistakeholder governance was not primarily conceived in democratic terms. As a former chief of the UN Center on Transnational Corporations explains, the paradigm of ‘multi-constituency consultations’ became progressively replaced by the corporate paradigm of ‘multistakeholder arrangement’ within IOs.Footnote 90 This change was not only linguistic but organisational as well: while the multi-constituency model centred on government–civil society cooperation, Schwab’s model defined relevant stakeholders around the already-existing projects of firms.Footnote 91
In Schwab’s view, business actors are conceptualised as diffused and powerful governance actors who possess (economic, social, cultural, technological) capital that states, IOs, and civil society groups lack, entitling business actors not only to participation but leadership in governance. In the WEF’s model of multistakeholderism, workers and local communities affected by business projects are often reduced to providing feedback and deciding between resisting firms or granting them with a ‘social license to operate’.Footnote 92 Stakeholders are thus defined based on their ability to help firms in maximising their capital and spreading across fields, while nonetheless developing their corporate social responsibility, as defined by the Global Compact.Footnote 93 As John Ruggie explains, the Global Compact represented a new form of governance based on ‘learning networks’ and corporate social responsibility rather than ‘regulatory hierarchical bureaucracies’.Footnote 94
By recognising it as the best architect of a new form of governance through the Global Compact, the UN granted the WEF cultural capital and promoted Klaus Schwab’s business-led theory of multistakeholderism. In fact, as the Secretary-General’s speech at Davos in 2000 confirmed, the Global Compact’s multistakeholder approach centred business actors in particular, thereby legitimising them more than other ‘private’ actors such as NGOs, workers, or civil society groups, who often are underrepresented in multistakeholder initiatives.Footnote 95 Although the legacy of Schwab is not made explicit, we can see the centrality and leadership of business actors in the global governance initiatives that explicitly embrace multistakeholderism, e.g. the UN’s High-Level Panel on Digital Cooperation; the GAVI Vaccine Alliance (which was signed at Davos), etc. The WEF’s cultural capital and the capital of members like Big Tech and consulting firms thus combine to shape the definition of ideal forms of governance.Footnote 96 This symbolic capital is then further diffused through objects such as books, reports, and indicators.
Objectified cultural capital: Reports, indices, and (Fourth Industrial Revolution) discourses
Third, the WEF constructs business authority by spreading objects like reports and indices that shape the discourses and practices of global governance. In its objectified state, cultural capital is materialised in artefacts. Put differently, embodied cultural capital is to people what objectified cultural capital is to objects and media.Footnote 97 At Davos, for example, the use of holographic badges and exhibits of Microsoft’s mixed-reality technologies signal the WEF’s access to seemingly futuristic and quasi-magical technologies.Footnote 98 At Davos, the WEF presented its Global Collaboration Village, an extended-reality environment created with Accenture and Microsoft designed to facilitate ‘real-time decision-making and collaboration’ and anticipate the ‘future of strong public–private cooperation.’Footnote 99 Thus, the technological capital of firms like Microsoft and Accenture reproduces the cultural capital of the WEF, which presents itself as a holder and disseminator of rare knowledge and power.
Although it is not clear whether the WEF has gained authority (rather than just prestige) through such a theatrical performance, global governance actors have definitely deferred to the WEF’s reports and indices to design and assess their policies. Artefacts such as the WEF’s Global Competitiveness Reports and Index have shaped how powerful actors assess, anticipate, and govern risk and competitiveness.Footnote 100 This deference can be seen in the use of WEF competitiveness indicators in states’ and IOs’ white papers, website, and reports.Footnote 101 Even powerful actors such as the European Commission recognise the WEF as a legitimate source of knowledge to define competitiveness and build indices.Footnote 102 Similarly, the WEF’s risk framework has influenced large international initiatives such as the UN’s Agenda 2030 and New Urban Agenda.Footnote 103 This is in part due to the uniqueness of the WEF’s Executive Opinion Survey (EOS), which provides micro-level data about the perception of business executives from across 140 countries regarding their economic environments.Footnote 104
Like other economic indicators, the WEF’s indices rank states, shape investors’ decisions, and encourage governments to reform themselves in anticipation of future rankings.Footnote 105 Deemed ‘highly comprehensive’ by the World Bank, the WEF’s Index conveys complex information through simplified numbers and aggregates.Footnote 106 Such indicators are ‘seductive’ because ‘they claim to stand above politics, offering rational, technical knowledge’.Footnote 107 This is especially true in complex environments where states and IOs, lacking the appropriate capital to make sense of the world, tend to defer more to the expertise of business actors – consulting firms in particular – thus empowering them.Footnote 108 In these contexts, the WEF appears as an epistemic authority that objectively evaluates each country’s prospects for growth.
In 2016, Klaus Schwab tied ideas of good governance to a novel concept that has diffused worldwide and across sectors, including in the discourse of states,Footnote 109 IOs,Footnote 110 and influential companies.Footnote 111 In the uncertain context of rapid technical change in artificial intelligence (AI) and biotechnologies, Schwab coined the concept of the ‘Fourth Industrial Revolution’ (4IR) in a book-length treatise, cited around 23,000 times and translated into 30 languages.Footnote 112 Put simply, the 4IR discourse suggests that we are facing a dramatic and inevitable moment of technological change that is radically different from the three previous industrial revolutions (steam/mechanisation; electricity/mass production; microelectronics/automation) and is ‘disrupting almost every industry in every country’.Footnote 113
Yet, although the existence of technical change and its potential to affect the global economy is undeniable,Footnote 114 the notion of a fourth industrial revolution – i.e. of a radical break in the evolution of technical systems – has been contested by economists of innovation and technological paradigms.Footnote 115 The main argument from these scholars is that the recent integration of digital technologies remains within the paradigm of the Third Industrial Revolution.Footnote 116 For these reasons, scholars have suggested that the notion of a Fourth Industrial Revolution is ideological, disseminated strategically by ‘those seeking to mobilize political, social and economic forces to secure their position of dominance’.Footnote 117 The notion that humanity is facing a fourth industrial revolution is thus a debated hypothesis, not a scientific fact.
But despite the lack of a scientific basis, the concept of the 4IR already diffuses, not only as an informative concept for states and IOs to frame their purpose, but also as a benchmark to steer the successful transformation of the business world.Footnote 118 The lack of scientific basis for an inherently uncertain process that is technical changeFootnote 119 opens opportunities for Klaus Schwab who expresses three certainties that he links together: (1) the diffusion of the 4IR technical systems is inevitable (rather than steered by the owners of technological capital such as Big Tech); (2) this diffusion will inevitably disrupt the world (rather than call for a stronger regulation of technical change to minimise disruption); (3) global governance must adapt to these inevitable disruptions by adopting a business-centred multistakeholder model that privileges technology leaders relative to, say, technology workers.Footnote 120 By shaping the symbolic meaning of technical change as deterministic and inevitable, the WEF fixates the meaning of a yet uncertain phenomenon, thereby reifying and legitimising Big Tech’s technological capital. Through the worldwide presence of the WEF’s partners – in particular consulting firms who have ties to both public and private organisations – this discourse is then tailored to and diffused in each field of global governance.Footnote 121
In sum, the WEF engages in various practices to build its cultural capital and reshape the knowledge base, norms, and values of global governance in a way that constructs business authority in general. As Figure 2 illustrates, the WEF leverages its privileged access to the knowledge of consulting firms, the technologies and technical expertise of Big Tech, and the social relations of these actors to design reports that are either generalFootnote 122 or tailored to a specific field of governance (micro-level).Footnote 123 These reports are then taken up by other global governance actors in a given field, which reshapes the latter’s logic and autonomy (meso-level). Through the diffusion of firms and ‘centres of the 4IR’ across the globe, the WEF is in position to provide recommendations, fixate meaning, and construct its authority and that of business actors across fields (macro-level). It is thus able to reshape the knowledge base, norms, and values of global governance in favour of business authority.
From business capital to business authority in global governance.
Conclusion
In this paper, we have argued that business authority does not simply stem from specific, schematic attributes of business actors or structural changes: it is constructed through strategic yet contestable practices and discourses that diffuse across levels. Our account of multi-level meaning fixation in favour of business authority solves two problems in the literature. First it addresses the fact that the literature on the structural empowerment of business actors has not sufficiently focused on the contextual, field-specific, and discursive legitimation. Second, it addresses the issue among Bourdieusian scholars who have focused so much on these field-level practices that they have generally ignored the broader forces that both shape and emerge from legitimation practices. As we have argued, even if authority construction is field-specific, business actors still leverage structural changes to deploy their strategies of authority construction and conceal their profit-seeking motives behind claims of democratic governance across fields.
By highlighting how business authority is constructed by actors such as the WEF, we have generated novel insights for global governance theory. First, we have shown how business actors leverage different forms of capital to produce strategic symbolic discourses such as multistakeholderism and the 4IR that fixate the meaning of complex global governance problems and legitimise the power of business actors. Second, by linking different forms of capital across different levels of analysis, we have explained that growth of business authority derives from a positive feedback loop between the WEF’s construction of its cultural capital and the expansion of the capital of its business partners in fields of global governance. Third, by theorising the WEF through its forms of capital, we have demonstrated how this underappreciated governance actor plays an important role in legitimising business authority.
Finally, we conclude by highlighting two fruitful avenues of future research. First, in this paper, we necessarily highlighted specific business actors (WEF, Big Tech, McKinsey) at the expense of others. Future research should study in more depth how business communities differ from one another and how they deploy their capital both within and across fields to influence governance. By studying the diversity of interactions between business actors and other actors, these additional studies can lay the ground for a more comprehensive account of the hybridisation of the public–private nexus of governance.
Second, future research should pay attention to how business actors maintain their authority in global governance in response to attempts to delegitimise them. The WEF and its business partners have long been a target for pushback from anti-globalisation activistsFootnote 124 and populists,Footnote 125 most recently via far-right conspiracy theories surrounding the WEF’s ‘Great Reset’ proposal for economic recovery after the Covid-19 pandemic.Footnote 126 When business actors like the WEF gain power and attention, they provide space for backlash and delegitimation; in line with our argument, business actors engage in legitimation practices precisely because they want to minimise this backlash. Additionally, the rise of populism does not necessarily result in the contestation of business authority: actors like Elon Musk and Donald Trump position themselves as able to efficiently govern on behalf of ‘the people’ because they are businessmen.
Video Abstract
To view the online video abstract, please visit: https://doi.org/10.1017/S0260210525100922.
Acknowledgements
We would like to thank Jennifer Mitzen, Cameron Macaskill, Alexander Thompson, Benjamin McKean, Inés Valdez, and the participants of the Research in International Politics workshop at the Ohio State University as well as the participants of the 2023 OSU Political Science writing seminar for their comments and advice.
Open access
