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.

They had concluded that the richest four hundred Americans, whose average wealth was $6.7 billion, had seen their effective tax rate cut by more than half since 1962—from 54 percent to 23 percent. Over the same period, those in the bottom half, who earned about $18,500 a year, had seen their tax burden increase, from 22.5 percent to 24 percent.

In sidestepping the tax collector, Davos Man effectively privatized the gains of the Chinese bonanza, while sharing the proceeds with his fellow shareholders through dividends and soaring stock prices.

In Denmark27, when the typical breadwinner in a family of four lost their job, they could count on 88 percent of their previous income six months later, thanks to unemployment benefits and other social programs. In the United States, the same family had to find a way to survive on 27 percent of their previous income.

Denmark collected taxes worth about 45 percent of its annual economic output. In the United States, the government was operating with tax revenues worth less than 25 percent of its economy.

It was not globalization that was to blame for the despair in Granite City. It was the way the gains had been apportioned—not by acci...

“Then I touched the clothes,” Nesi continued. “The fabric was very bad. Then you looked at the price, and you could see that it’s less than half of what you would pay in any other shop, and you could see that the Western world is finished.”

Economic inequality was nowhere near19 the levels in the United States or Britain. France delivered comprehensive national health care to every citizen. Only Denmark, Sweden, and Belgium20 spent a larger share of their economies on social welfare programs for working-age people.

validate every suspicion about Macron: he was a tool for international finance; the President of the Rich selling out the public interest by funneling national savings to Davos Men.

When a baby is born in Sweden, the parents are guaranteed 480 days of leave, to be divided between them. That policy, combined with government-provided childcare, has enabled Swedish women to work2 at higher rates than in nearly any other country.

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?

In Sweden, government officials like to say that they protect people, not jobs.

The billionaires had walked away with much of the bounty in a deft bit of economic redistribution—from the bottom up.

Never one to allow principle to stand in the way of an opportunity to ingratiate himself with power, Klaus Schwab lauded Trump for his signature accomplishment.

We can either have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can’t have both. —U.S. Supreme Court Justice Louis Brandeis, 1941 Chapter 16

The norm over the last four decades was Davos Man using his money to purchase influence over the political sphere, crafting rules that allowed billionaires to keep more of their earnings. It was private equity kings like Schwarzman stripping the health care system, and Amazon applying its market power to squash competitors while exploiting workers. What

normalcy set a low standard for change in terms of transcending the conditions that had nurtured Trumpism—that would, if left unchanged, produce further grievance that could be exploited by another opportunistic politician offering tribalism as the response to real problems.

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?

the fall of 1983, a trio of researchers in Belgium had forged a collective around discussion of an idea they called allocation universelle. Three years later, they held an international conference that drew five dozen participants, including the British economist Guy Standing.

By 2000, wages throughout American retail23 had been reduced by $4.5 billion a year as a result of Walmart driving down pay and decimating competitors. This was a neat transfer of wealth from working people to shareholders—one justified by the benefits for the consumer. Shoppers needed those low prices, because they were increasingly working at places like Walmart. A feedback loop of diminishing living standards for American workers turned Walmart’s founders into the richest family in the land.

“In other words25, the potential harms to competition posed by Amazon’s dominance are not cognizable if we assess competition primarily through price and output. Focusing on these metrics instead blinds us to the potential hazards.”

“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.”

Since 1980, the share of all income5 in the United States that has flowed to those whose incomes are in the top 1 percent has nearly doubled, growing from 10 percent to 19 percent. Over the same four decades, the share received by those in the bottom half has dropped from 20 percent to 13.5 percent.

Many of the world’s most meaningful problems are, at root, issues of unfair economic distribution. Human beings have developed extraordinary capacities in our brief time on earth.

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.

Society has been so poisoned by bitterness and grievance that governance sometimes seems impossible.

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 i...

We have not had free markets. We have had markets manipulated by the most powerful interests for their profit at society’s expense. We have had welfare for billionaires and rugged individualism for everyone else.

Davos Man’s greatest triumph has been insinuating into public discourse the notion that anyone who opposes his monopolization of wealth is antibusiness, as if forcing Schwarzman and Bezos to pay higher tax rates than their secretaries would be akin to turning suburban subdivisions into people’s communes. That idea must be revealed for what it is—not merely a lie, but the foundational lie for the pillaging of capitalism itself. History never ended, but history needs to be reset. Capitalism must be reshaped