The Great Reset – a very detailed explanation

The Great Reset explained – in this article we showcase the work of author Michael Rectenwald and the Mises Institute – featuring Rectenwald’s extensive review of The Great Reset.

The Great Reset Part I: Reduced Expectations and Bio-techno-feudalism

The Great Reset is on everyone’s mind, whether everyone knows it or not. It is presaged by the measures undertaken by states across the world in response to the covid-19 crisis. (I mean by “crisis” not the so-called pandemic itself, but the responses to a novel virus called SARS-2 and the impact of the responses on social and economic conditions.)

In his book, COVID-19: The Great Reset, World Economic Forum (WEF) founder and executive chairman Klaus Schwab writes that the covid-19 crisis should be regarded as an “opportunity [that can be] seized to make the kind of institutional changes and policy choices that will put economies on the path toward a fairer, greener future.”1 Although Schwab has been promoting the Great Reset for years, the covid crisis has provided a pretext for finally enacting it. According to Schwab, we should not expect the postcovid world system to return to its previous modes of operation. Rather, alternating between description and prescription, Schwab suggests that changes will be, or should be, enacted across interlocking, interdependent domains to produce a new normal.

So, just what is the Great Reset and what is the new normal it would establish?

The Great Reset means reduced incomes and carbon use. But Schwab and the WEF also define the Great Reset in terms of the convergence of economic, monetary, technological, medical, genomic, environmental, military, and governance systems. The Great Reset would involve vast transformations in each of these domains, changes which, according to Schwab, will not only alter our world but also lead us to “question what it means to be human.”2

In terms of economics and monetary policy, the Great Reset would involve a consolidation of wealth, on the one hand, and the likely issuance of universal basic income (UBI) on the other.3 It might include a shift to a digital currency,4 including a consolidated centralization of banking and bank accounts, immediate real-time taxation, negative interest rates, and centralized surveillance and control over spending and debt.

While every aspect of the Great Reset involves technology, the Great Reset specifically entails “the Fourth Industrial Revolution,”5 or transhumanism, which includes the expansion of genomics, nanotechnology, and robotics and their penetration into human bodies and brains. Of course, the fourth Industrial Revolution involves the redundancy of human labor in increasing sectors, to be replaced by automation. But moreover, Schwab hails the use of nanotechnology and brain scans to predict and preempt human behavior.

The Great Reset means the issuance of medical passports, soon to be digitized, as well as the transparency of medical records inclusive of medical history, genetic makeup, and disease states. But it could include the implanting of microchips that would read and report on genetic makeup and brain states such that “[e]ven crossing a national border might one day involve a detailed brain scan to assess an individual’s security risk.”6

On the genomic front, the Great Reset includes advances in genetic engineering and the fusion of genetics, nanotechnology, and robotics.

In military terms, the Great Reset entails the creation of new battle spaces including cyberspaces and the human brain as a battle space.7

In terms of governance, the Great Reset means increasingly centralized, coordinated, and expanded government and “governmentalities,” the convergence of corporations and states, and the digitalization of governmental functions, including, with the use of 5G and predictive algorithms, real-time tracking and surveillance of bodies in space or the “anticipatory governance” of human and systems behavior.8

That being said, “the Great Reset” is but a coordinated propaganda campaign shrouded under a cloak of inevitability. Rather than a mere conspiracy theory, as the New York Times has suggested,9 the Great Reset is an attempt at a conspiracy, or the “wishful thinking”10 of socioeconomic planners to have corporate “stakeholders”11 and governments adopt the desiderata of the WEF.

In order to sell this package, the WEF mobilizes the warmed-over rhetoric of “economic equality,” “fairness,” “inclusion,” and “a shared destiny,” among other euphemisms.12 Together, such phrases represent the collectivist, socialist political and ideological component of the envisioned corporate socialism13 (since economic socialism can never be enacted, it is always only political and ideological).

I’ll examine the prospects for the Great Reset in future installments. But suffice it to say for now that the WEF envisions a bio-techno-feudalist global order, with socioeconomic planners and corporate “stakeholders” at the helm and the greater part of humanity in their thrall. The mass of humanity, the planners would have it, will live under an economic stasis of reduced expectations, with individual autonomy greatly curtailed if not utterly obliterated. As Mises suggested, such planners are authoritarians who mean to supplant the plans of individual actors with their own, centralized plans. If enacted, such plans would fail, but their adoption would nevertheless exact a price.

The Great Reset Part II: Corporate Socialism

The Great Reset, if its architects have their way, would involve transformations of nearly every aspect of life. Here, I will limit my discussion to the economics of the Great Reset as promoted by the World Economic Forum (WEF), as well as to recent developments that have advanced these plans.

As F.A. Hayek suggested in his introductory essay to Collectivist Economic Planning, socialism can be divided into two aspects: the ends and the means.1 The socialist means is collectivist planning, while the ends, at least under proletarian socialism, are the collective ownership of the means of production and the “equal” or “equitable” distribution of the end products. Distinguishing between these two aspects in order to set aside the question of the ends and to focus on the means, Hayek suggested that collectivist planning could be marshalled in the service of ends other than those associated with proletarian socialism: “An aristocratic dictatorship, for example, may use the same methods to further the interest of some racial or other elite or in the service of some other decidedly anti-equalitarian purpose.”2 Collectivist planning might or might not run into the calculation problem, depending upon whether or not a market in the factors of production is retained. If a market for the factors of production is maintained, then the calculation problem would not strictly apply.

The collectivist planners of the Great Reset do not aim at eliminating markets for the factors of production. Rather, they mean to drive ownership and control of the most important factors to those enrolled in “stakeholder capitalism.”3 The productive activities of said stakeholders, meanwhile, would be guided by the directives of a coalition of governments under a unified mission and set of policies, in particular those expounded by the WEF itself.

While these corporate stakeholders would not necessarily be monopolies per se, the goal of the WEF is to vest as much control over production and distribution in these corporate stakeholders as possible, with the goal of eliminating producers whose products or processes are deemed either unnecessary or inimical to the globalists’ desiderata for “a fairer, greener future.” Naturally, this would involve constraints on production and consumption and likewise an expanded role for governments in order to enforce such constraints—or, as Klaus Schwab has stated in the context of the covid crisis, “the return of big government”4—as if government hasn’t been big and growing bigger all the while.

Schwab and the WEF promote stakeholder capitalism against a supposedly rampant “neoliberalism.” Neoliberalism is a weasel word that stands for whatever leftists deem wrong with the socioeconomic order. It is the common enemy of the Left. Needless to say, neoliberalism—which Schwab loosely defines as “a corpus of ideas and policies that can loosely be defined as favouring competition over solidarity, creative destruction over government intervention and economic growth over social welfare”5—is a straw man. Schwab and company erect neoliberalism as the source of our economic woes. But to the extent that “antineoliberalism” has been in play, the governmental favoring of industries and players within industries (or corporatocracy), and not competition, has been the source of what Schwab and his ilk decry. The Great Reset would magnify the effects of corporatocracy.

Nevertheless, the aims of the WEF are not to plan every aspect of production and thus to direct all individual activity. Rather, the goal is to limit the possibilities for individual activity, including the activity of consumers—by dint of squeezing out industries and producers within industries from the economy. “Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed.”6

As Hayek noted, “when the medieval guild system was at its height, and when restrictions to commerce were most extensive, they were not used as a means actually to direct individual activity.”7 Likewise, the Great Reset aims not at a strictly collectivist planning of the economy so much as recommends and demands neofeudalistic restrictions that would go further than anything since the medieval period—other than under state socialism itself, that is. In 1935, Hayek noted the extent to which economic restrictions had already led to distortions of the market:

With our attempts to use the old apparatus of restrictionism as an instrument of almost day-to-day adjustment to change we have probably already gone much further in the direction of central planning of current activity than has ever been attempted before….It is important to realize in any investigation of the possibilities of planning that it is a fallacy to suppose capitalism as it exists to-day is the alternative. We are certainly as far from capitalism in its pure form as we are from any system of central planning. The world of to-day is just interventionist chaos.8

How much further, then, the Great Reset would take us toward the kinds of restrictions imposed under feudalism, including the economic stasis that feudalism entailed!

I call this neofeudalism “corporate socialism”—not only because the rhetoric to gain adherents derives from socialist ideology (“fairness,” “economic equality,” “collective good,” “shared destiny,” etc.) but also because the reality sought after is de facto monopolistic control of production via the elimination of noncompliant producers—i.e., a tendency toward monopoly over production that is characteristic of socialism. These interventions would not only add to the “interventionist chaos” already in existence but further distort markets to a degree unprecedented outside of centralized socialist planning per se. The elites could attempt to determine, a priori, consumer needs and wants by limiting production to acceptable goods and services. They would also limit production to the kinds amenable to the governments and producers who buy into the program. The added regulations would drive midsized and small producers out of business or into black markets, to the extent that black markets could exist under a digital currency and greater centralized banking. As such, the restrictions and regulations would tend toward a static caste-like system with corporate oligarchs on top, and “actually existing socialism”9 for the vast majority below. Increasing wealth for the few, “economic equality,” under reduced conditions, including universal basic income, for the rest.

The Coronavirus Lockdowns, the Riots, and Corporate Socialism

The covid-19 lockdowns, and to a lesser extent the leftist riots, have been moving us toward corporate socialism. The draconian lockdown measures employed by governors and mayors and the destruction perpetrated by the rioters just so happen to be doing the work that corporate socialists like the WEF want done. In addition to destabilizing the nation-state, these policies and politics are helping to destroy small businesses, thus eliminating competitors.

As the Foundation for Economic Education (FEE) points out, the lockdowns and riots have combined to level a one-two punch that is knocking out millions of small businesses—“the backbone of the American economy”—all across America. FEE reported that

7.5 million small businesses in America are at risk of closing their doors for good. A more recent survey showed that even with federal loans, close to half of all small business owners say they’ll have to shut down for good. The toll has already been severe. In New York alone, stay-at-home orders have forced the permanent closure of more than 100,000 small businesses.10

Meanwhile, as FEE and others have noted, there is no evidence that the lockdowns have done anything to slow the spread of the virus. Likewise, there is no evidence that Black Lives Matter has done anything to help black lives. If anything, the riotous and murderous campaigns of Black Lives Matter and Antifa have proven that black lives do not matter to Black Lives Matter. In addition to murdering black people, the Black Lives Matter and Antifa rioters have done enormous damage to black businesses and neighborhoods, and thus to black lives.11

As small businesses have been crushed by the combination of draconian lockdowns and riotous lunacy, corporate giants like Amazon have thrived like never before. As BBC noted, at least three of the tech giants—Amazon, Apple, and Facebook—have appreciated massive gains during the lockdowns,12 gains which were abetted, to a lesser extent, by riots that cost 1 to 2 billion in property damages.13 During the three months ending in June, Amazon’s “quarterly profit of $5.2bn (£4bn) was the biggest since the company’s start in 1994 and came despite heavy spending on protective gear and other measures due to the virus.” Amazon’s sales rose by 40 percent in the three months ending in June.

As reported by TechCrunch, Facebook and its WhatsApp and Instagram platforms saw a 15 percent rise in users, which brought revenues to a grand total of $17.74 billion in the first quarter.14 Facebook’s total users climbed to 3 billion in March, or two-thirds of the world’s internet users, a record. Apple’s revenues soared during the same period, with quarterly earnings rising 11 percent year-on-year to $59.7 billion. “Walmart, the country’s largest grocer, said profits rose 4 percent, to $3.99 billion,” during the first quarter of 2020, as reported by the Washington Post.15

The number of small businesses has been nearly cut in half by the covid-19 lockdowns and the Black Lives Matter/Antifa riots while the corporate giants have consolidated their grip on the economy, as well as their power over individual expression on the internet and beyond. Thus, it would appear that the covid lockdowns, shutdowns, partial closings, as well as the riots are just what the Great Resetters ordered, although I am not hereby suggesting that they did order them. More likely, they have seized the opportunity to cull from the economy the underbrush of small and medium-sized businesses in order to make compliance simpler and more pervasive.

In the end, the Great Reset is merely a propaganda campaign, not some button that globalist oligarchs can push at will—although the WEF has represented it as just that.16 Their plans need to be countered with better economic ideas and concerted individual actions. The only reasonable response to the Great Reset project is to defy it, to introduce and promote more competition, and to demand the full reopening of the economy, at whatever peril. If this means that smaller-scale producers and distributors must band together to defy state edicts, then so be it. New business associations, with the aim of foiling the Great Reset, must be formed—before it’s is too late.

The Great Reset, Part III: Capitalism with Chinese Characteristics

The title of this essay represents a play on the Chinese Communist Party’s description of its economy. Several decades ago, when China’s growing reliance on the for-profit sectors of its economy could no longer be credibly denied by the CCP, its leadership approved the slogan “socialism with Chinese characteristics” to describe the Chinese economic system.1 Formulated by Deng Xiaoping, the phrase became an essential component the CCP’s attempt to rationalize Chinese capitalist development under a socialist-communist political system.

According to the party, the growing privatization of the Chinese economy was to be a temporary phase—lasting as long as a hundred years according to some party leaders—on the way to a classless society of full socialism-communism. The party leaders claimed, and still maintain, that socialism with Chinese characteristics was necessary in China’s case because China was a “backward” agrarian country when communism was introduced—too early, it was suggested. China needed a cap­italist booster shot.

With the slogan, the party was able to argue that China had been an exception to the orthodox Marxist position that social­ism arrives only after the development of capitalism—although Marx himself deviated from his own formula late in life. At the same time, the slogan allowed the CCP to confirm the ortho­dox Marxist position. China’s communist revolution had come before developed industrial capitalism—an exception to orthodox Marxism. Capitalism was thus introduced into China’s economic system later—a confirmation of orthodox Marxism.

Stripped of its socialist ideological pretensions, socialism with Chinese characteristics, or the Chinese system itself, amounts to a socialist-communist state increasingly funded by capitalist economic development. The difference between the former Soviet Union and contemporary China is that when it became obvious that a socialist-communist economy had failed, the former gave up its socialist-communist economic pretenses, while the latter did not.

Whether the CCP leaders believe their own rhetoric or not, the ideological gymnastics on display are nevertheless spectacu­lar. On its face, the slogan embeds and glosses over a seemingly obvious contradiction in an attempt to sanctify or “recommu­nize” Chinese capitalist development as a precondition of full socialism-communism.

However, the Chinese slogan does capture an essential truth about communism, one that is either unrecognized or unac­knowledged by the CCP and denied by Western Marxists. Con­trary to the assertions of communist leaders and followers, and even contrary to the claims of many who oppose it, socialism-com­munism is not essentially an economic but rather a political system.

Once in power, socialist-communist leaders recognize that given their control over resources, they have effectively become the new owners of the means of production (whereas, as Lud­wig von Mises suggested, consumers effectively hold the power of economic disposal in free markets2). In attempting to implement a socialist-communist economy, they recognize that, in the absence of prices, large-scale industrial production requires supervisory decision-making. Likewise, decision-making is not democratic in the sense promised by socialist-communist ideologues. Decision-making must be centralized, or at least bureaucratized, to a great extent. Democratic decision-making is precluded by state-owned and controlled production and distri­bution.

Socialism-communism is a political system in which resource allocation is commanded by the state and thus effectively controlled by the state leaders, the real ruling class. The latter retain control through ideology and force.

As opposed to a fully implemented economic system, socialism-communism is always only a political arrange­ment. This is why socialism-communism can be combined with “capitalism” under such forms as “state capitalism”3 or corporate socialism. Its economic pretensions will be jettisoned as capitalist development is introduced and cleverly rationalized, as in Chi­na. If such pretentions are maintained for long, they will wreck society, as in the former Soviet Union. In either case, the social­ist-communist leadership will learn that wealth production re­quires the accumulation of privately held capital—whether they understand why or not.

Enter Corporate Socialism

A socialist-communist sequel is coming to a theater near you. Some of the same old characters are reappearing, while new ones have joined the cast. While the ideology and rhetoric sound nearly the same, they are being put to slightly different ends. This time around, the old bromides and promises are in play, and a similar but not identical bait and switch is being dangled. Socialism promises the protection of the beleaguered from the economically and politically “evil,” the promotion of the economic interests of the underclass, a benign banning of “dangerous” persons from public forums and civic life, and a primary or exclusive concern for “the common good.” China’s “One Belt, One Road” initiative4 may hang the takers in Africa and other underdeveloped regions as if from an infrastructural noose. A different variety is on the docket in the developed world, including in the US.

The contemporary variant is corporate socialism, or a two-tiered system of “actually existing socialism”5 on the ground, coupled with a parallel set of corporate monopolies or would-be monopolies on top. The difference between state socialism and corporate socialism is merely that a different constituency effectively controls the means of production. But both depend on monopoly—one the state and the other the corporate monopolization of the economy. And both depend on socialist-communist ideology of democratic socialism, or, in a recent variant, “social justice” or “woke” ideology. Corporate socialism is the desired end, while democratic socialism and woke capitalism are among the means.

China is the model for the economic and political system being promoted in the West, and the Great Reset is the most forthright articulation of that system—although its articulation is anything but perfectly forthright.

The Great Reset represents the development of the Chinese system in the West, only in reverse. Whereas the Chinese political elite began with a socialist-communist political system and implemented “capitalism” later, the elite in the West began with “capitalism” and is aiming to implement a socialist-communist political system now. It’s as if the Western oligarchy looked to the “socialism” on display in China, and said, “yes, we want it.”

This explains many otherwise seeming contradictions, not the least of which is the leftist authoritarianism of Big Tech. Big Tech, and in particular Big Digital, is the ideological communications apparatus for the advancement of corporate socialism, or capitalism with Chinese characteristics.

The Chinese characteristics that the Great Reset aims to reproduce in connection with Western capitalism would resemble the totalitarianism of the CCP. It would require a great abridgement of individual rights—including property rights, free expression, freedom of movement, freedom of association, freedom of religion, and the free enterprise system as we understand it.

The Great Reset would implement the political system in much the same way as China has done—with 5G-enabled smart city surveillance, the equivalent of social credit scores, medical passports, political imprisonment, and other means of social and political repression and control.

In the end, socialism with Chinese characteristics and capitalism with Chinese characteristics would amount to the same thing.

  • 1.Ian Wilson, “Socialism with Chinese Characteristics: China and the Theory of the Initial Stage of Socialism,” Politics 24, no. 1 (September 2007): 77–84.
  • 2.Ludwig von Mises, Socialism: An Economic and Sociological Analysis, 3d ed. (New Haven, CT: Yale University Press, 1951), pp. 37–42.
  • 3.Western Marxists employ the term state capitalism to exclude the Soviet Union and China from the category of socialism-communism. They thereby reserve, in their own propaganda, at least, the hallowed terms social­ism and communism for the never present, always receding, and just-over-the-horizon ideal.
  • 4.Alexandra Ma, “The US Is Scrambling to Invest More in Asia to Counter China’s ‘Belt and Road’ Mega-Project. Here’s What China’s Plan to Connect the World through Infrastructure Is like.,” Business Insider, Nov. 11, 2019.­structure-project-2018-1.
  • 5.“Actually existing socialism” is a “[t]erm used in the former communist countries to describe them as they really were, rather than as the official theory required them to be. Its use was largely ironical, and more or less confined to the writings of dissidents.” Palgrave Macmillan Dictionary of Political Thought, by Roger Scruton, 3d ed. (New York: Macmillan Publishers, 2007), s.v. “Actually existing socialism.” Credo Reference.¬ly_existing_socialism/0?institutionId=577.

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