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Has a Davos backlash begun?

The Alpine ski resort of Davos, where the World Economic Forum is taking place. (Photo by Jeff J Mitchell/Getty Images)

The Alpine ski resort of Davos, where the World Economic Forum is taking place. (Photo by Jeff J Mitchell/Getty Images)

January 23, 2019   4 mins

It’s Davos time again! The five-day global-elite’s festival of self-importance has kicked-off in luxurious fashion at the ski resort in Switzerland; the rich and powerful are again competing for public and media attention as they toast their good intentions. But this year, is the fat-cat backlash coming?

Established back in 1971 as a not-for-profit foundation, and headquartered in Geneva, the World Economic Forum has, as its mission statement, “to improve the state of the world”; it characterises itself as “independent, impartial and not tied to any special interests”.

Right now, though, it feels like that motivation is rather misplaced: wouldn’t it be far more useful for the state of the world to have an organisation that promoted the special interests of the majority of its inhabitants?

In order to talk ‘mission’, every year, about 3,000 participants “from every sphere of influence: business, government, civil society, academia, arts and culture, and media” descend upon Davos “to discuss how to build a better version of globalisation”. Interestingly, equitable participation isn’t a hallmark of that better version. Just one in five participants are women. The best represented regions are the ones with the largest share of global wealth and power, notably; Western Europe, North America and Asia.

The WEF gives no breakdown of the individual, organisational or collective corporate wealth of their participants. But, then, to do so might only highlight the extent of a purpose-defeating disparity. For Davos is where the wealthy and powerful gather to talk about everyone else. And, as Oxfam International’s latest report notes, the top 26 billionaires on the planet have stockpiled riches equal to that of the poorest 3.8 billion people combined. In contrast to the wealth increase for the tip-top of the financial food chain – the number of global billionaires has doubled since the 2008 financial crisis – the wealth of the world’s poorest citizens dropped by 11% last year.

Indeed, though the snow up in the Alps is bright and sparkly, and the alcohol top-shelf, the economy beyond the ski slopes and fancy chalets is one of gathering clouds. While, last year, attendees were fairly enthusiastic about the global economic outlook and their political fortunes – this year, not so much.

Davos, of course, will maintain the status quo of pomp and circumstance despite the political turmoil surrounding Brexit, the bi-partisan hostility infusing the US government shutdown, the uncertainty of upcoming EU elections, and the looming global economic slowdown. Its tone-deafness, though, will be starker than usual.

World leaders such as the German Chancellor, Angela Merkel, Brazil’s new president, Jair Bolsonaro, and the Chinese Vice President, Wang Qishan, will be in attendance, clapping each other on the back. They will hobnob with business luminaries such as Microsoft co-founder Bill Gates and JPMorgan Chase & Co. Jaime Dimon, of JPMorgan,  will be there – even though his firm, the largest bank in the US, missed analysts’ fourth quarter earnings expectations and is predicting more trouble for the economy ahead. (It was subsidised by a government bailout, cheap rates courtesy of the Federal Reserve, and lawyers that are adept at settling fraud-related investigation penalties.)

There is, however, a growing list of non-attendees. These include President Trump and, as of last week, mindful of the federal shutdown and how it would look if they were to turn up to the Swiss shindig, the rest of his delegation. Theresa May and the French President, Emmanuel Macron are also mired in problems in their own nations and know that no amount of Davos discussion can solve them.

It’s all a rather different scenario from last year, when, in his keynote speech, Trump declared: “To be successful, it is not enough to invest in our economy – we must invest in OUR PEOPLE.” He also said: AMERICA IS OPEN FOR BUSINESS AND WE ARE COMPETITIVE ONCE AGAIN.” (Those capitals are courtesy of the WEF’s website transcript of President Trump’s 2018 address.)

These words ring rather hollow today: under Trump’s direction, using a loophole that enabled him to bypass congressional approval under the guise of national security, the White House went on to slap a host of tariffs on US trade partners that has sent the global economy further into a tailspin. In addition, the US government has been shut down for nearly five weeks, as the President and the Democratic party duke it out over a $5.7 billion stalemate regarding a wall between the US and Mexico, shirking responsibility to pay federal workers in the meantime.

But it’s not just America. So much else has become less secure in the world. Last year, Macron delivered an hour-long overture, shaped as an ode to France’s resurrection. It was met by a standing ovation. This year, following the gilets jaunes rebellion in the streets of Paris, his popularity continues to dive.

A year ago, Theresa May was skating on dangerously thin Brexit ice, with people deserting the hall before she’d finished her speech. This year, she’s crashing through it. What point Switzerland?

Meanwhile, economic growth everywhere is declining. Original European Central Bank forecasts for Eurozone economic growth in 2018 were at 2.4%, but now the World Bank says that growth slowed to 1.9% in 2018 and that it will decline to 1.6% in 2019. We are all dealing with a less certain year ahead.

So at what point will the Davos mob realise that their stated aspirations and world-improving diatribes are nothing more than posturing in the face of their own shortcomings?

Part of the problem is that it’s not only empty posturing. There’s also powerplay afoot. Most of the WEF’s funding flows from the world’s most elite businesses. These multinational corporations can join as members or partners depending on how much they are willing to shell out. Fees range from about £50,000 to £500,000. Most of them include a seat at Davos for the CEO, but there’s an extra fee thrown in for Davos participation.

The companies on that rarefied guestlist have no problem paying exorbitant fees. They include Goldman Sachs, Deutsche Bank, Citigroup, and HSBC holdings – banks which have been recipients of the taxpayer and central bank largesse, despite engaging in such nefarious business practices as money laundering, rigging markets and committing fraud.

But these corporate fees that underwrite the non-business participants, the ones who can’t afford the hefty price for access that include leaders from civil society, the arts, young global leaders, media leaders, and technically, the heads of state and ministers. And it is here that the Davos ethos really does come unstuck: if corporations are paying for public leaders to attend, then the power relationship is clearly skewed in their favour.

If these gilded elites truly wanted to change the world, they might start by realising that the world is rightly sceptical of all that they do. It’s pointless suggesting they might fly economy and sit in the audience while real people discuss the state of their world – but that would be more in line with the stated intentions of Davos. Or at least, it might inject a little more honesty into events and give it a relevance it is so sorely lacking.

Nomi Prins is a journalist and former international investment banker. Her new book, Collusion: How Central Bankers Rigged the World, explores the rise of the role of central banks in the global financial and economic hierarchy

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3 years ago

Where to begin?! That is the simple truth of the matter.
We look back with curious amusement/shock at the archaic notion of aristocratic monopolies and their disgusting excess and lavish expenditure. However the media lauds the new elites for their wealth and industrious nature because they publicly conform to the neo-liberalisms of the prevalent *ideology*. This was much the same as displayed by the aristocratic elites to the church and wherein were lauded as ‘defenders of the *faith*’ and anointed by God.
Modern capitalism often expounds the works of the Scottish Enlightenment philosopher / proto economist; Adam Smith for their guiding principles. However were one to actually read the Wealth of Nations it is quite clear that this apocryphal tale warns of the potentials for greed / corruption if the free market is allowed to run without clear regulatory and moral oversight.
The alignment of the *powerful* with *ideology / faith* is as old as civilisation itself. It invariably masks the wanton greed and hegemony of the few over the many. In many ways it is the very essence of the darker side of human nature. Invariably the need to cloak this in a more pious and pure motivation is endemic. Terms such as faithful, enlightened, progressive and woke being a few examples.
One of the more pervasive methods in these control mechanisms is the needs to mobilise malcontents and angry individuals who you can manipulate to achieve your goals of hegemony. Hence the long history of pogroms, inquisitions and persecution of those who do not align or present an alternative viewpoint. It is the great irony of our times that the adherents of the new politically correct ideology eschew and decry the oppression of the 20th Century; Stalinist, Nazi, Maoist thought police while indulging in the very same behaviours.

Throughout time the alignment of Academia / Ideology / Media / Elites have sought to bend the will of the people for their own nefarious goals. It is simply the way of humanity. Simply transpose the above for Church / Religion / Bible / Aristocracy and the correlation is clear. Even pre-history is replete with similar patterns of shamans, holy men, druids etc. Propaganda and Power walk hand in hand. Ideology is their path.

Another basic tenant of ideology is the suppression of obvious truths which are deemed contrary to the needs and wants of elites. To have a ‘bad man’ do bad things takes opportunity, to have a ‘good man’ do bad things takes ideology / religion. The vilification and dehumanisation of the non-conformist is step one. The expedient of re-education is step two usually swiftly followed by the persecution of same. For those who find these actions unsettling the great refrain of “for the better good of all” is the usual soothing panacea for those of conscience who may be tempted to ‘break ranks’.

However as such I note a word of caution: All of these regimes end the same way, division breeds polarisation and ever increasing levels of alienation which in turn ends in violent revolution from the silent majority (who invariably then; over time become the new elites). Just ask the Chinese capitalist / communists. To behold the leader of a one party Communist state laud the virtues of Liberal Capitalism borders on the farcical. To see those same guardians of free trade applaud and venerate this should create a great sense of unease in all of us.

Of course the contemporary media who are either owned by those self-same corporations or Ideologies (or both in a marriage of convenience) are utterly complicit in these distractions. *Bread and Circuses*.

Are you enjoying the Circus? yes, and the bread is lovely I bought it online! 

N.B: For those readers who are confused and are wondering my own particular standpoint; the simple truth is I am neither left nor right, I am a humanist and centrist. I watch with weary acceptance the repetition of the same patterns which have governed our past and will no doubt be repeated in the future.