Davos Man

by Peter S. Goodman

Part of why individuals like Benioff could crow about giving back was because of how comprehensively they had taken to begin with. They had benefited from public goods financed by taxpayers—the schools that educated their employees; the internet, developed by publicly funded research; the roads, the bridges, and the rest of modern infrastructure, which enabled commerce—and then deployed their lobbyists, accountants, and lawyers to master legal forms of tax evasion that starved the system. They had transferred wealth from the public to themselves by rewriting the tax code in their favor, leaving government too weak to protect the populace from the pandemic. And now they were deploying their resulting resources in the service of charity while demanding adulation.

Jeff Bezos also signed the Business Roundtable statement, committing to allowing “each person to succeed through hard work and creativity and to lead a life of meaning and dignity.” As the ink on his signature dried, Bezos carried on with the same cutthroat version of capitalism that had made him the wealthiest person on earth.

Unlike in the United States, where the vulnerabilities of a world-class medical system could be pinned directly on monied interests, Europe’s tragedy was the result of a host of overlapping elements and policy decisions, with the blame less easily affixed to individuals. Throughout Europe, national health care systems were the rule, ensuring that anyone could access medical care—a stark contrast to the United States. But the common backdrop was scarcity, the result of Davos Man’s success in limiting his tax burden, combined with the injection of the profit motive.

Decades of widening inequality, immigration, and cuts to public services had torn at the fabric of the European Union, giving life to extremist parties that courted votes by attacking the institution. The pandemic appeared to have strengthened European solidarity while demonstrating the merits of European-style social democracy.

Austerity was no random faith. It was the complement to the Cosmic Lie, a value system promoted by the affluent people who benefited from it. Less public spending spelled less need for taxes—which meant more for Davos Man. And what public spending was required to pacify a restive populace could be paid for by the sacrifices of others—ordinary wage-earners, especially younger people. Austerity might go dormant for a while, but it was never fully dead.

Across Europe, part of the explanation for the lethality of COVID-19 was indeed that health care services had been diminished to finance tax benefits for Davos Man. But structure was also a powerful element. When the interests of Davos Man seized primacy in the policy conversation, that relegated other concerns to secondary status. You could have the best-trained doctors, the most formidably equipped medical facilities, and access to the most advanced medicines and still fail to mount an effective response to a public health crisis.

Between 2006 and 2015, eighteen large American pharmaceutical companies distributed 99 percent of their profits13 to shareholders via dividends and purchases of their own shares. The $516 billion they collectively lavished on shareholders exceeded the $465 billion they dedicated to research and development.

Milligan, whose compensation that year exceeded $15 million, was asked about controversy over Gilead’s pricing of hepatitis drugs. He acknowledged trouble, but cast it as a messaging problem—not the result of an exploitative business model. “We didn’t deal with it well,” he said. “We didn’t talk about it enough.” This was a classic Davos Man maneuver, minimizing his role in human suffering by confessing to communications mishaps, or a misunderstanding. This rendered greater communication the solution to all problems—an implicit affirmation of the very activity he was engaged in. He struck a pose of candor and even capitulation, accepting blame for the lesser crime of poor word choices, while diverting attention from far more serious issues of patients dying for a lack of affordable medicines.

That humanity could so quickly formulate lifesaving vaccines was nothing short of miraculous. That Davos Man would largely dictate who gained access was alarming. It all but guaranteed that the world would emerge from the pandemic more unequal than ever.

AstraZeneca announced that it would forego profit for as long as the pandemic endured. But Pfizer continued to pursue the same model that had supplied its CEO, Albert Bourla, with a pay package reaching $21 million in 2020. The company charged as much as the market would bear. Bourla was another signatory to the Business Roundtable’s stakeholder capitalism pledge. Yet his company was catering to shareholders above any sense of civic responsibility.

Covax had been launched by Gavi, an immunization alliance forged at Davos in 2000 along with the World Health Organization. It was supposed to function as a global clearinghouse for vaccines, a rational arbiter of the world’s needs, ensuring that the most critical populations in every country—the elderly, the infirm, frontline medical workers—received immunization first. It was engineered to prevent the very scenario that was unfolding: young, healthy people in the United States and Britain gaining full vaccination even as medical caregivers in sub-Saharan Africa and South Asia continued to treat COVID-19 patients without inoculation. Covax never had a chance. Governments from Washington to London to Tokyo bypassed the queue to buy doses for themselves directly, while American and European pharmaceutical companies cashed in on their creations by selling to the highest bidder. That reduced Covax to something smaller and less promising, though still vital—an essentially charitable operation that aimed to deliver vaccines to countries that could not afford to buy doses on the open market. Promised contributions from donor nations fell woefully short, even as Covax issued a flurry of announcements laying out impossible distribution targets.

“The only reason why we have vaccines right now was because there was a vibrant private sector,” Bourla, the Pfizer CEO, said in early 2021, leaving out another key reason: publicly financed research. “The vibrancy of the private sector, the lifeblood is the IP [intellectual property] protection.”

The year before the pandemic, migrant workers worldwide2 had returned a record $554 billion to their home communities. That sum was more than three times the amount distributed to poor countries by official development agencies. But as the pandemic destroyed jobs, these remittances were shrinking. Countries in South Asia and sub-Saharan Africa were suffering declines of greater than one-fifth. This was a major reason why as many as 150 million people were at risk of falling into a state of extreme poverty3, and why 265 million were on the brink of life-threatening levels of malnutrition4—roughly twice as many as the year before.

As research, experience, and common sense made clear, the best way for debt-saturated poor countries to grow was frequently to secure forgiveness from creditors on a portion of their loans. For lenders, such agreements were not charity, but rather the product of a hardheaded calculation. If governments were stuck with impossible debts, they ran the risk of defaulting. If they gained relief, they could invest in infrastructure, education, health care, and other spurs to development that would allow them to earn money needed to meet their obligations.

By June 2018, Macri was forced to turn to the IMF for a rescue package—something like asking your former kidnapper if you could crash for the night.

Fink’s brand was his rigorous analysis and discipline. In a world of charlatans and crowd followers, he presented himself as that rare figure who did the math and reckoned with the variables. But his performance in Argentina challenged that reputation, revealing him as a Davos Man who had been mesmerized by a president who had catered to his preconceptions. “His team didn’t do their job,” Stiglitz told me. “They bought into Macri, and the myth that Macri created, without doing their homework. Rather than admitting that they made a bad call, they blamed Argentina.”

The inequalities that defined the American economy—the legalized tax evasion, the structural racism, the erosion of labor power, and the growing impossibility of paying bills on typical wages—were realities that had long predated Trump. They would not be fixed by his removal from the White House. The movement that had propelled him to power was the continuation of forces that had been operative in the American sphere for decades. Reagan had begun the push to dismantle government and distribute the savings via tax cuts, turning trickle-down into the central principle of economic policy. Successive administrations representing both parties had denigrated social welfare spending and catered to the shareholder class while tolerating inequality as the by-product of prosperity. Clinton had celebrated the restorative powers of cutting budget deficits, while affirming the logic that innovation required unlimited rewards. He and Obama had centered their economic designs on finance and technology, allowing Davos Man to add zeros to his net worth. They had relegated antitrust law to the history books. George W. Bush had sacrificed government on the altar of the tax-cutting gods, further gutting social programs. Davos Man had not been some accidental beneficiary of this ideological shift. He was its driver, financing campaigns, deploying lobbyists and lawyers who promoted the Cosmic Lie, while demonstrating his supposed benevolence via philanthropy and pledges for stakeholder capitali...

The Biden years might raise expectations for fair redress before giving way to familiar disappointment, as wages stagnate while the billionaires add to their winnings. That could wind up fertilizing the ground for an updated, more sophisticated version of Trump—someone who would pursue the traditional Republican goals of deregulation, tax cutting, and the dismantling of government while packaging this as a spur to growth; someone who would speak empathetically to the working class while serving the needs of the plutocrats; someone who would indulge the language of compassion, while solidifying the prerogatives of the privileged people who financed campaigns. Trump is gone, but Trumpism might yet have a bright future.

The global economy appears certain to emerge from the pandemic in a more unequal state. Here is the central problem as the world contemplates life after a public health disaster made more lethal by the predation of Davos Man: how can democratic societies attack inequality when democracy itself is under the control of the people who possess most of the money? Absent a sudden urge on the part of billionaires to voluntarily participate in the equitable redistribution of wealth, how can communities take on entrenched economic injustice? How can they promote the sort of economic growth that holds the potential to broadly improve living standards? These are enormous questions with no obvious answers. But solutions have to be explored. The alternative is to accept the continued degradation of democracy.

One night in March 2012, Brown went to a local pub with Neil McInroy, who headed a research institution called the Center for Local Economic Strategies, based less than an hour away in Manchester. The institute was focused on so-called community wealth building, designing ways to keep wages, tax revenues, and savings cycling through local economies.

Among the people who advised Matthew Brown in Preston was an American named Ted Howard. The founder of a nonprofit called the Democracy Collaborative, Howard was a believer in the power of cooperative companies to create jobs at livable pay, even in the face of Davos Man pushing wages lower. He and his colleagues had launched a series of cooperatives in the United States, among them a laundry service based in a low-income neighborhood in Cleveland. The company paid wages that were adequate to finance a middle-class standard of living, including health care and profit sharing. It had secured a contract to wash linens for the Cleveland Clinic, gaining this work not through charity, but via a competitive bidding process. As a cooperative, it merely had to break even. Freed from the compulsion to hand dividends to shareholders, it could afford to pay workers enough to cover their expenses while still winning business from rivals.

Howard’s idea had taken inspiration from the Mondragon Group, a collection of cooperative businesses in the Basque region of Spain that was the workplace for more than seventy thousand people, making it one of the ten largest employers in the country. The group owned one of Spain’s largest grocery chains, a bank, and factories that exported auto parts and other components around the world.

Rather than trying to persuade Congress to finance expanded social service programs, money could be found to boost low-income communities by redirecting corporate funds that were already being spent. The reservoir of cash was potentially vast. American hospitals and health care providers collectively expended more than $780 billion a year. They managed investment portfolios stocked with $400 billion, and they employed more than 5.6 million people. Even a slight tweak to how they directed their funds could have enormous consequences.

Approaches like the Preston model and the Healthcare Anchor Network were clever adaptations to a system that was deficient—a meaningful place to start. They would keep what wealth existed inside communities, rather than sending it away to Davos Man. But lifting people out of poverty on a mass scale and restoring middle-class security would require something more comprehensive—a mechanism to transfer wealth from Davos Man to everyone else.

We need not engage in some progressive version of the Cosmic Lie—pretending that these investments will pay for themselves—to justify spending what it takes. We simply need to avoid falling for the usual deficit-spending fearmongering that comes from Davos Man collaborators like McConnell, forever ready to extend the next tax cut for billionaires while crying poverty when the subject is help for regular people. But the job guarantee confronts far tougher political obstacles than basic income. It involves the creation of a large-scale bureaucracy, while substantially increasing the role of the state in regulating pay. Basic income removes bureaucracy. Instead of forcing people to satisfy complex rules for individual aid schemes—from housing vouchers to subsidized childcare—it entails simply handing everyone a regular sum of money and allowing them to decide for themselves how to use it. This feature has been central to basic income’s appeal; the element that has allowed it to gain credibility across the political spectrum over centuries.

Paine posited that every person was born into the world with what he referred to as a “national inheritance”—the nourishment provided by the natural sphere. Private property ownership denied some people access to the soil, which limited their ability to feed themselves.

Paine was no progenitor to Marxism. His loyalties were firmly with the wealthy cultivators of the soil. But he argued that everyone was entitled to a regular allotment of money as recompense for the disruption of national inheritance. It had to be paid universally, “to every person rich or poor,” so as “to prevent invidious distinctions.”

In its modern-day incarnation, basic income has gained currency as a malleable approach that can be tailored to widely divergent conceptions of society. Progressives like Standing envision it as a means of emancipation from the meaninglessness of low-wage work. People stuck in minimum wage jobs at fast-food restaurants could gain freedom to abandon the fryolator, going home to play with their children, make music, and dig vegetable gardens. Labor advocates embrace basic income as a way to increase bargaining power, enabling workers to refuse jobs at poverty-level wages. Liberals envision basic income as a way to remove the stigma of public assistance. Instead of relying on food stamps at the grocery store while suffering the judgmental gazes of other shoppers—Shouldn’t she buy spinach instead of frozen pizza?—poor people would receive the same steady support as everyone else. Conservatives, like the political commentator David Frum, are drawn to basic income for its simplicity, viewing it as an all-in-one replacement for the tangle of overlapping social welfare programs that are already on offer. And Davos Man favors universal income as a means of unburdening himself of moral responsibility for profiting off technology that threatens jobs.

Basic income was a catch-all phrase that meant different things depending on who was using the term. It could clearly be designed to bolster economic security, allowing people to live happier, healthier, more prosperous lives. It could improve working conditions, boost wages, and limit vulnerabilities to commonplace misfortunes like car trouble along with global disasters like pandemics. But in the usage that had gained the greatest political traction—the one embraced by people like Benioff—it was an allowance proffered as justification for the status quo, a payment that indemnified Davos Man for having prospered at the expense of people in need, a substitute for billionaires submitting to meaningful sacrifices like progressive taxation.

In the usual account of American history, the Boston Tea Party of 1773 was a revolt against unjust taxation. A faraway monarch in England unfairly squeezed his colonial subjects through exorbitant taxes. In protest, patriots ransacked an incoming shipment of British tea, hurling it into Boston Harbor. But the Tea Party was really an uprising against monopoly power. The patriots were enraged that the British Crown had allowed the East India Company to sell tea directly to the American colonies, instead of working through a network of local distributors.

The glorification of the unhindered market and the denigration of regulatory authority was insinuated into the workings of American democracy by a band of true believers headquartered at the University of Chicago—the hothouse for neoliberalism.

The ending was far from clear. For the moment, critics of monopoly power appeared to have momentum. But Davos Man was skilled at drawing strength from attacks on his power, using them to project the appearance of change, while carrying on with business as usual.

“I hear people talk in the language of participation and justice and equality and transparency, but then, I mean, almost no one raises the real issue,” Bregman said. “Tax avoidance. The rich just not paying their fair share. I mean, it feels like I’m at a firefighter’s conference and no one’s allowed to speak about water.”

In the central pretense of Davos, everyone was Committed to Improving the State of the World, so every problem reflected complexity, or the elusiveness of solutions—but certainly not gluttony on the part of the people in the room. Bregman was accusing the billionaires of hypocrisy on a scale responsible for mass poverty and despair—a striking breach of decorum. Invited inside Davos Man’s lair, he was lecturing the inhabitants on their failure to live up to their own lofty rhetoric.

Not content to exaggerate his altruism, Dell indulged a corollary of the Cosmic Lie: he was against taxes reaching 70 percent not because he preferred to keep his money but out of social concern. “I don’t think it would help the growth of the U.S. economy,” Dell said. “Name a country where that’s worked. Ever.” This was clearly intended as a rhetorical question, but the panelist seated to his left, the economist Erik Brynjolffson, immediately blurted out an answer. “The United States,” he said. “From about the 1930s through about the 1960s, the tax rate averaged about 70 percent. At times, it was up as high as 95 percent. And those were actually pretty good years for growth.”

As a question of policy, reducing economic inequality is not terribly complicated. It’s just exceedingly difficult as a political objective. The government needs to reapportion wealth so that ordinary people regain a meaningful stake in society. But those who possess wealth have mastered how to use it to manipulate democracy, preventing a fair distribution. Davos Man has consistently defeated efforts to increase his tax burden by deploying variants of the Cosmic Lie—arguing that wealth trickles down, that attempts to tax and redistribute it destroy incentives for entrepreneurs to invest and hire.

When the government applies its money toward ensuring that people are healthier, better educated, and able to move about and communicate with one another, the entrepreneurial world can then deliver the vibrancy that Davos Man loves to celebrate. The result is innovation and new businesses that hire people, purchasing goods and services from one another, as the economy expands. But public education, health care, and infrastructure require money. Davos Man has looted national treasuries, leaving governments in most major economies chronically underfunded. That has left them short of the resources needed to promote growth, which has enhanced the value of other strategies to win votes, such as demonizing immigrants. This is a structural reality that cannot be solved with sexy ideas about the next technological breakthrough, or lectures to working people about their need to retrain themselves to seize the day. It will not be fixed by waiting for Davos Man to deliver on his promise of stakeholder capitalism, or whatever fresh branding he applies to demonstrate his sensitivity. Narrowing inequality requires tinkering with the formulas that determine who receives the benefits of economic growth. It’s in good measure about the tax code.

Jeff Bezos has long earned a base salary of $81,840 a year—roughly as much as the typical California elementary school teacher. His extraordinary wealth comes from the shares he owns in Amazon, a roughly 10 percent stake that was worth more than $160 billion at the end of 2020. Even as those shares increased by more than $100 billion over the previous two years, that appreciation resulted in no taxes. Bezos was liable only when he sold stock and turned his paper increase into money, triggering capital gains taxes. And even then, Bezos and the rest of the billionaire class have managed to shrink their tax burden. Since the early 1980s, Congress—spurred on by corporate-financed lobbyists—has dropped the highest capital gains tax rates from 35 percent to 20 percent.

Over the course of my journalism career, I’ve frequently been struck by how people tend to view economics in fatalistic terms, accepting the notion that unfathomable wealth alongside mass scarcity is essentially inevitable, and beyond the power of democracy to alter. To pass as a sophisticated person in the twenty-first century often seems to require being resigned to the futility of controlling the forces operating across borders—the capital flows, the technology, the multinational corporations. It means accepting the triumph of Davos Man over the public interest. But that is not really sophistication; it is cynicism. Deference to the inevitable supremacy of the billionaire class amounts to a renunciation of our historical legacy, a failure to realize that humanity has been here before.

The point is not that the billionaires are puppeteers in a master conspiracy; it is that Davos Man thrives amid confusion, conflict, and suspicion. The billionaires exploit governance that is compromised by discord and dysfunction as an opportunity to profiteer absent the usual checks and balances. But democracy is itself a powerful tool—a system of governance that guarantees nothing and is forever vulnerable to being hijacked by organized interests, yet contains within it the mechanism by which the public can realize its own interests.

Davos Man would have us believe in the false binary choice at the heart of his grift—that we either accept globalization as we have known it for decades, or we throw in our lot with Luddites operating in the thrall of backward ideas. This frame is not only false but dangerous. It invites those who have not shared in the benefits of globalization to demand its opposite—nationalism, nativism, parochialism, and ignorance. If globalization run by Davos Man for the betterment of Davos Man gives way to the destruction of globalization and the pursuit of tribal interests, the world will be poorer, more violent, and less able to summon the cooperation needed to solve the most complex problems, from pandemics to climate change.

Global capitalism is indeed the most advanced form of economic organization. It promotes the inspiration and exchange of groundbreaking ideas that have extended and improved life. It produces more wealth, which is a hell of a lot better than the alternative. What capitalism lacks is an inherent mechanism that justly distributes the gains. That is the responsibility of government, operating under a democratic mandate. That Davos Man has convinced us to believe otherwise, accepting horrific levels of inequality as part and parcel of modern times, has imperiled faith in the legitimacy of democracy itself. The resulting anger has tapped into the worst aspects of human nature, supplying oxygen to hate-inspired movements, while giving rise to fantastical conspiracy theories. Facts and science have been devalued.

The idea that the defining characteristics of human experience—where we live, how much health care we receive, the quality of our schools, and the abundance of food on our tables—should be entrusted solely to the unsentimental workings of the market will, with any luck, one day look as insane as burning witches at the stake or applying leeches to attack disease. That this idea achieved the status of truth among broad slices of the populace amounts to a form of collective madness. But it did not gain command of the policymaking levers by accident. This thinking was promoted by people in charge of money, spread by academics compensated by finance companies, and disseminated by a public relations machine working for multinational corporations.

When people are deprived of the material for stable lives, they take refuge in traditional privileges—tribal identities, and fantasies of glorious futures enabled by reclaiming what they view as theirs. They become susceptible to simplistic explanations peddled by demagogues who weaponize democracy itself. The result is chaos, anger, and instability. No one wins except the people who have already won.

Democracy has been warped by the billionaire class, its workings tilted toward private islands, offshore bank accounts, and secret meetings in Davos convened to plot the next insider deal.

Reclaiming power from Davos Man requires no insurrection or revolution of ideas. It demands the thoughtful use of a tool that has been there all along: democracy.

Sissi Cao, “Billionaires Made Record Profit, Donated Record Lows in 2020,” Observer, January 5, 2021, https://observer.com/2021/01/billionaires-philanthropy-record-low-2020-bezos-elon-musk.

Matt Bruenig, “Top 1% Up $21 Trilion. Bottom 50% Down $900 Billion,” People’s Policy Project, June 14, 2019, https://www.peoplespolicyproject.org/2019/06/14/top-1-up-21-trillion-bottom-50-down-900-billion.

Lawrence Mishel and Julia Wolfe, “CEO Compensation Has Grown 940 Percent Since 1978,” Economic Policy Institute, August 14, 2019, https://www.epi.org/publication/ceo-compensation-2018.

Carter C. Price and Kathryn A. Edwards, “Trends in Income from 1975 to 2018,” Rand Corporation, https://www.rand.org/pubs/working_papers/WRA516-1.html.