Davos Man

by Peter S. Goodman

If the agony of 2020 had demonstrated anything it was how the rich could not only prosper but profiteer off everyone else’s suffering. By the end of the year, the collective wealth of billionaires worldwide had increased by $3.9 trillion, even as their philanthropic contributions fell1 to their lowest level in nearly a decade. Over the same year, as many as 500 million people descended into poverty, with their recovery likely to take a decade or more.

Widening economic inequality, intensifying public anger, and threats to democratic governance have all resulted from the depredation of Davos Man—an unusual predator whose power comes in part from his keen ability to adopt the guise of an ally.

The term Davos Man was coined in 2004 by the political scientist Samuel Huntington. He used it to describe those so enriched by globalization and so native to its workings that they were effectively stateless, their interests and wealth flowing across borders, their estates and yachts sprinkled across continents, their arsenal of lobbyists and accountants straddling jurisdictions, eliminating loyalty to any particular nation.

“That is the magic of Davos,” a former Forum executive told me. “It is the largest lobbying operation on earth. The most powerful people gather together behind closed doors, without any accountability, and they write the rules for the rest of the world.”

The shape of our economies is not the product of happenstance. It is the result of deliberative engineering by the people who constructed the system in the service of their own interests. We are living in a world designed by Davos Man to direct ever-greater fortune toward Davos Man.

You already know that the billionaires have triumphed comprehensively, amassing unprecedented wealth along with defining influence over the course of modern life. What we need to understand is how they have pulled it off—by warping the workings of democracy. Davos Man’s monopolization of the fruits of global capitalism is no accident. He has insinuated into our politics and culture what we may call the Cosmic Lie: the alluring yet demonstrably bogus idea that cutting taxes and deregulating markets will not only produce extra riches for the most affluent, but trickle the benefits down to the lucky masses—something that has, in real life, happened zero times.

The Robber Barons of the late nineteenth century—industrialists like Andrew Carnegie, and financiers like J. P. Morgan—were by and large satisfied with their wealth as an end in itself. Davos Man’s appetite for affirmation operates on a different level. He is not content with owning homes the way that most people own socks. He pretends that his interests are the same as everyone else’s. He seeks gratitude for his exploits, validation as the product of a just system in which he is a guardian of the public interest, even as he devours all the sources of sustenance. He argues that his own prosperity is a precondition for broader progress, the key to vibrancy and innovation.

In this book, I will argue that Davos Man’s relentless plunder is the decisive force behind the rise of right-wing populist movements around the world. Typically, journalists explain such political shifts by pointing to recent events that have been exploited for electoral gain by fearmongering politicians who tap into nostalgia and nationalist sentiments—an influx of immigrants, the loss of status for a privileged group. But the full causes are deeper, stemming from grievances that have built up over decades as Davos Man has pillaged the gains of capitalism, depriving regular people of basic economic security. This has laid the ground for politicians who weaponize fear and foment hate, while prescribing incoherent solutions to legitimate social problems.

For the first three decades after World War II, American-led capitalism spread the gains of economic growth widely and progressively. But the capitalism since hijacked by Davos Man is not really capitalism at all. It is a social welfare state run for the benefit of the people who need it least; a sanctuary for billionaires in which systemic threats are extinguished with taxpayer money, while commonplace calamities like joblessness, foreclosure, and the absence of health care are accepted as the rough-and-tumble of free enterprise.

Worldwide, the ten richest people5 are collectively worth more than the economies of the poorest eighty-five countries combined.

A public health emergency has laid bare the vulnerabilities at work around the globe, creating an opportunity for the public to override the usual machinations of Davos Man.

Taking on Davos Man requires an understanding of the beast. Consider this book a guided safari through Davos Man’s unbounded terrain. We will track five key specimens—Bezos, Dimon, Benioff, Schwarzman, and Fink—while paying special attention to the United States, the United Kingdom, Italy, France, and Sweden. This study does not fully encompass the world, focusing by design on the United States as the largest economy and the primary architect of (what is left of) the liberal democratic order, along with its leading postwar allies and an oft-celebrated social democratic paragon: Sweden.

In entrusting the presidency to a reality television star famed for groping women, dog whistles to white supremacists, multiple bankruptcies, and open contempt for international institutions and trade agreements, the American electorate had effectively mandated the destruction of the status quo. Trump was promising to blow up globalization, avenging the long-term marginalization of enraged white men in the middle of America whose living standards had slumped.

Throughout my prior career—working first as a freelancer in Southeast Asia, then as a junior reporter in Alaska, later as a Shanghai-based correspondent for the Washington Post, and eventually as a national economic writer for the New York Times—I have centered my reporting on people who have suffered the consequences of Davos Man’s depredation. I have written about families who have lost their homes to foreclosure in Florida and California, workers whose wages have eroded from Ohio to England, landless laborers enduring feudal poverty in the Philippines and India. I am used to operating in places where CEOs are scrutinized as potential sources of harm—a stark contrast to Davos, where billionaire executives are celebrated as benevolent agents of progress, with journalists frequently complicit in the narrative.

Indeed, for most participants, much of the Davos experience consisted of not really grasping what the hell was going on, while nursing the sense that more interesting things were surely happening to more connected people somewhere else.

Under Davos Man’s logic, the wealthy are magnanimous, so unions are an unnecessary intrusion on business, and taxes represent money seized by the government; money that could otherwise be showered on the fortunate people who would benefit from his philanthropic undertakings. This was an idea that went back to Carnegie and the rest of the Robber Barons, whose grandiose public works projects—libraries, museums, concert halls—were proffered as societal compensation for their lopsided share of the economic gains, and their violent suppression of labor uprisings. Davos Man had updated this logic by denigrating government. Public sector bureaucrats would predictably squander taxpayer dollars through inefficiency and lack of discipline, the billionaires argued. Whereas they could efficiently target their philanthropic pursuits at clearly defined missions. Having earned their money through the rough-and-tumble of the competitive marketplace, they were tightly organized and nimble, making them better able to engineer impact with their money. Through this framing, Davos Man deftly rendered his discretionary dollops of generosity as recompense for grand-scale tax evasion.

A compact though oddly charmless village, Davos sat in a valley surrounded by arresting peaks. In Victorian times, it had served as a sanitorium for people suffering tuberculosis, and later as a haven for intellectual debate.

Despite the outward appearances of glamour, attending the Forum has become a supreme and unending torment of logistical hassles, astonishing costs, and physical deprivation—exhaustion, dehydration, hunger, and angst. But this is also central to the experience, a feeling of overwhelming befuddlement tinged with elation that you are somewhere that is supposed to signify your own importance in the momentous sweep of history—a ridiculous yet highly effective means of motivating people to keep showing up.

The core activities of the Forum—the sober speeches and panel discussions—have long been eclipsed by the extracurricular events that dominate Davos outside its official auspices. Regular participants at the Forum boast about having attended zero panels and never setting foot inside the Congress Centre—a cynical mark of sophistication.

Amazon’s astonishing scale reflects its unrivaled success in utilizing crucial elements of the global economy—not least, the explosion of international trade in the decades after World War II. But Bezos’s near-limitless wealth alongside the desperation of his workers provides a potent illustration of why globalization has come to be depicted as a malevolent force in many countries, a sentiment exploited by political movements offering fake solutions to very real problems.

To Friedman, the market was sacred. Left to its own devices, it would determine the best use for investment more efficiently than any bureaucrat or do-gooder interest group. He laid down the intellectual infrastructure for Davos Man, deploying the parlance of economic theory to give license to unmitigated greed. Executives could justify no end of abominable behavior—poisoning the air, accelerating climate change, firing American workers, and moving production overseas—on the grounds that not doing these things amounted to ripping off shareholders. Maximizing profit was not merely okay; it was a moral imperative.

The year after China joined the WTO, Walmart, the American discount retailing giant, moved its global procurement center to the Chinese boomtown of Shenzhen, relying on surrounding factories to fill its stores with thousands of items, from electronics and Christmas ornaments to office furniture and tools. As Walmart’s sales grew, its stock price soared, turning its founders, the Walton family, into the richest clan in the United States, boasting a fortune estimated at more than $136 billion.

“This isn’t the world that our fathers in World War II wanted us to live in.” But indicting trade and globalization for the deprivations in American factory towns was like blaming the weather for tearing the roof off your house, rather than the contractor who had built it with shoddy materials. The ultimate culpability fell on Davos Man. He had rigged the system to ensure his further enrichment, while depriving working people of a commensurate share of the gains.

In knocking down this straw man, Blackstone was highlighting Davos Man’s tendency to present false binary choices as a defense of the status quo. We could either have American billionaires cozying up to China’s leaders while extracting investment or we could cut ties.

In short, Amazon has helped sort the contemporary world into winners and losers—those positioned to enjoy the utility of its unparalleled distribution network, and those harmed by its market supremacy.

Decades before Davos Man pursued his global pillaging, his forebears were perfecting the technique in Italy. Their looting of the public coffers has weakened the state’s ability to respond to crises like the pandemic, while limiting investment that could produce a more vibrant economy.

Italy had never recovered from the 2008 global financial crisis—the result of Davos Man’s reckless gambling in the casino den of international banking. Grand-scale tax evasion and European prohibitions on deficit spending combined to starve the economy of capital, yielding stagnation.

Famously bureaucratic and prone to philosophical dickering over its mission, the E.U. typically took forever to make decisions, even in the face of dire emergencies. It was like an air traffic control center still debating what radio channel to use as a jumbo jet plunged toward the ground.

Little examined was how the Brexit campaign was the work of a rogue subset of Davos Men in the hedge fund world who aimed to escape Europe as a means of getting out from under regulations. They were willing to undermine the national interest in pursuit of their own gains.

To a degree, a spirit of volunteerism did flow from austerity. Public libraries came to depend on the donated labors of concerned citizens, who eventually outnumbered paid staff. Schools began serving breakfast as well as lunch, cognizant that students in poor households were showing up unfed. Parents swapped hand-me-down school uniforms. But celebrating this sort of collectivism as part of the Big Society was akin to setting your house on fire and then reveling in the community spirit as your neighbors came running to help extinguish the blaze.

As British voters went to the polls in June 2016 to decide whether to remain in the European Union, austerity was not on the ballot, but its impacts framed the question.

The real story of how Brexit came to dominate British life was similar to how Trump had ridden the anger of steelworkers into the Oval Office, putting him in position to shower billionaires with tax cuts. It was a rebellion of the dispossessed against Davos Man, whose gluttony had yielded austerity, one fomented by a subset of Davos Men who sought the freedom to resume the recklessness that had started all the trouble.

In seeking to turn France into a refuge for Davos Man, Macron threatened the habitat for all.

Firing workers in France was costly and time-consuming, involving lengthy severance and legal processes. This made hiring employees akin to marrying them. If the relationship proved unfulfilling, divorce entailed expensive agony, giving French employers commitment phobia. They increasingly tended to rely on contract and temporary workers, which kept joblessness high and wages low.

The unions were almost comically disinterested in discussing how to create jobs. When I posed the question to Manu Blanco, a board member of the CGT, one of France’s largest unions, he suggested that the workweek be shortened from its current thirty-five hours so that more people could share in the existing labor. Only in France could a union boss suggest that the solution to not enough work was to work less.

But then Macron overreached, staking his political capital on bestowing a handsome gift to Davos Man. He delivered on his promise to eviscerate the wealth tax, effectively lowering it by 70 percent18—a measure that was expected to cost the state 10 billion euros over the first three years.

The wealth tax had been designed to soften the impact of the country’s broader refashioning. It had been instituted in 1982 by France’s first Socialist president, François Mitterand, as a means of bolstering social programs. Ever since, it has served as a prop in depictions of France as antagonistic to affluence, exhibit A in the stereotype that France was run by beret-wearing beatniks who saw anyone donning a gray suit as an enemy of the people. Macron argued that scrapping the tax on everything except real estate would advertise that France was eager to welcome foreign capital.

Americans tend to view our own winner-take-all system as the genuine form of capitalism, while dismissing the Nordic variant as nanny state socialism. But this is backward. Capitalism as practiced in the United States has been hobbled, not promoted, by the nation’s minimalist social safety net. How many laid-off steelworkers might be able to train for more productive careers if a year of college did not cost as much as a BMW? How many startup companies never come into being because Americans are dependent on employers for health care, making people afraid to try something new?

Bank robbers plotted getaways; private equity magnates pursued exits.

Schwarzman and the rest of Blackstone’s executive ranks treated their slice of the winnings as so-called carried interest—accountant vernacular for income taxed at barely half the rate as that paid by suckers in other trades.

Schwarzman and his fellow Davos Men were not satisfied with mere wealth. They demanded that society ratify their privilege as morally sound. Schwarzman enjoyed the hedonistic pleasures of a maharajah while claiming standing as an everyman.

“As we look at the current situation in Europe, we’re basically waiting to see how beat up people’s psyches get, and where they’re willing to sell assets,” Schwarzman had told a Goldman Sachs conference in 2010. “You want to wait until there’s really blood in the streets.”

Yet the notion that Trump’s war on the global elite set him up for a hostile reception at the Forum mistook Davos Man’s animating priorities. Trump had arrived in the Alps having dramatically improved the part of the world that mattered most to billionaires—their bulging piles of money.

Trump’s embrace at Davos laid bare the sham at the heart of the Forum, the idea that it was dedicated to the noble concerns filling out its mission statement—“the global public interest,” “the highest standards of governance,” and “moral and intellectual integrity”—rather than the self-interested aspirations of the people paying the bills.

Republicans liked to present themselves as guardians of the public purse, soberly acting out of fiscal propriety in contrast to Democrats, whom they accused of showering money on people who preferred welfare to jobs. Trump’s tax cuts revealed the hollowness of this pose. Republicans sounded the alarm about deficits when the conversation centered on elements of no interest to the Davos Men who financed their campaigns. Public debt was presented as the reason that the United States could not possibly afford the same sort of national health care that was somehow manageable in nearly every other developed democracy. Yet there always seemed to be plenty to spend on tax cuts for billionaires.

McConnell was a legend in Washington—a dedicated practitioner of constituent service, with the caveat that his constituents were energy companies, financial institutions, defense contractors, and pharmaceutical concerns. Over a Senate career that was well into its fourth decade, he had catered relentlessly to the interests of Davos Man while extracting the lifeblood of American democracy—campaign cash.

Davos Man had spent decades deploying lobbyists and lawyers toward weakening the hand of the state, eviscerating regulations, and deactivating traditional antitrust concerns. The credulous embrace of the Business Roundtable statement highlighted the magnitude of his success. The billionaires had altered the view of business in the popular imagination, refashioning themselves as a source of vitality and good, in contrast to the supposed incompetence of government and other impediments to progress. The Roundtable statement contained the implicit notion that Davos Man could be trusted to do right by everyone, magnanimously making needed adjustments. Society did not require regulators and rules interfering with business to protect public interests like clean air or fair competition. No back-and-forth with labor unions was necessary to ensure adequate pay. The executives were benevolent masters of their domain, their virtues beyond reproach, so any counterbalancing interest could be dispensed as gratuitous impediments to their dynamism.

This was Davos Man’s standard mode. Even as Dimon campaigned for stakeholder capitalism via the new mission statement, he and the rest of the Business Roundtable endorsed share buybacks as a means of “making capital markets efficient”—finance-speak for using money to sate investors, rather than wasting it on wages.

If the last half century of American capitalism had proven anything, it was that one special stakeholder—the shareholder—could prosper spectacularly at the direct expense of everyone else.

Benioff insisted that his focus on doing good could not simply be fodder for press releases, or his employees would see through it. They would go elsewhere, gravitating toward companies that were genuinely infused with social purpose. This was reminiscent of Milton Friedman’s argument that we need not worry about racial discrimination in the workplace, because the free market would prevent it. Companies that limited their access to talent would be punished. American capitalism had since demonstrated that companies could survive—could, in fact, wildly enrich their shareholders—while neglecting to make their workforces remotely representative of society.