World Economic Forum Founder: Capitalists Have 'Sinned'

Klaus Schwab, who heads the brainstorming session, wants to talk about creating jobs and resetting the moral compass of the world's business and political community.

DAVOS, Switzerland (AP) — Capitalism is out of whack, the founder of the World Economic Forum says, welcoming critics' ideas of how to fix it — even those camped out in protest igloos near his invitation-only gathering of global VIPs.

This anti-big money mood is surprising territory for a man who embraces free markets and whose livelihood consists of bringing world CEOs and political leaders together for elite brainstorming sessions.

Klaus Schwab is also unusually downbeat, his trademark optimism tempered by global economic turmoil and public unrest ahead of this year's forum.

"We have unfinished business and we have to act fast," he told The Associated Press in an interview Tuesday ahead of the forum's Wednesday opening.

"I'm a deep believer in free markets but free markets have to serve society," he said in Davos, a ski resort tucked away deep in the Swiss Alps. He lamented excesses and "lack of inclusiveness in the capitalist system."

"We have sinned," he said, adding that this year's forum will place particular emphasis on ethics and resetting the moral compass of the world's business and political community.

Schwab said the forum had invited members of the Occupy protest movement camped in igloos in Davos to a session on the sidelines of the forum this week on reforming capitalism.

Protest organizer David Roth told the AP his group hadn't decided yet whether to accept. He said the event appeared to be a "staged self-criticism" by forum organizers. His group had suggested a debate at a neutral venue instead.

Thousands of Swiss soldiers and police have been shoveling snow to erect a 'ring of steel' against unwelcome demonstrators hoping to gatecrash the meeting. Some 3,500 soldiers are on hand to provide security to the VIPs, who include German Chancellor Angela Merkel, British Prime Minister David Cameron and nearly 40 other world leaders.

President Barack Obama will not be coming, but his Treasury chief Timothy Geithner will be there along with some members of Congress.

Half a dozen demonstrators appeared briefly Tuesday outside the security perimeter, daubing the snow with anti-capitalist slogans. Police checked their IDs but allowed the protest to go ahead.

"Everybody who could make a constructive proposal is very welcome. We need new ideas," Schwab said.

He did note a general aversion to allowing too much anti-capitalist fervor to reach Davos.

"I also emphasize that Davos is a place for dialogue. ... The participants are usually reluctant to be confronted with people who are not open to dialogue and just want to serve their own sometimes one-sided interests," he said.

He warned that an "intergenerational conflict" could be looming as governments compromise future spending to pay today's debts.

"People feel it's a difficult time. They are irritated. There is, they feel, a lack of future perspective," he said.

Schwab also urged that more attention be paid by leaders and governments alike to jobs — saying Davos participants should focus on "talentism" instead of capitalism — and said leaders must work harder to win public trust.

Schwab has watched the world transform in the 41 years that he's nurtured the forum and turned it into one of the world's leading economic gatherings.

While China, Brazil and other developing economies remain robust, the United States and Europe are still struggling with financial issues that erupted in the credit crunch of 2008, including high unemployment. That contributes to a feeling that the world's economic problems are worse than leaders meeting at Davos in previous years had foreseen.

"We were too optimistic (last year)," Schwab acknowledged.

Meanwhile, scientists at the Swiss Institute for Snow and Avalanche Research are keeping a close watch on the nearby slopes, lest all the heavy snow they are carrying pose a risk to Davos and its high-profile visitors.


Frank Jordans contributed to this report.