Through a Davos Darkly
- January 25, 2014
The world looks different from Davos. Its lofty snow-covered peaks invite reflection and contemplation, as Hans Castorp, the protagonist of Thomas Mann’s The Magic Mountain once found, when he went to a clinic there to recuperate from tuberculosis and found himself part of a spiritual elite serenely contemplating a European civilization that was drifting towards disaster.
Looking down from those high altitudes, Castorp and his companions inhabited a seductive and rarefied world of high culture and ideas far above the ongoing trainwreck taking place down below. Today that experience is still possible in concentrated form for the politicians, CEOs, millionaires and billionaires, bankers and showbiz types who assembled for four days of debate and discussion at the World Economic Forum in Davos.
Instead of Castorp’s clinic, delegates at the Golden Egg hotel can pay an average ticket price of only $40,000 and $500,000 for particular fringe conferences to discuss the great problems and challenges of our time, washed down with meditation classes from Goldie Hawn. Here you can experience some real Joseph Heller-ish moments, whether it’s David Cameron defending his viciously anti-immigrant policies against a poster that reads ‘Committed to Improving the State of the World’; or that indefatigible ‘anti-poverty campaigner’ and tax evader Bono criticizing the rich for tax evasion.
As well as lots of high-level chunter you can also attend the Napster party or an event called ‘ A Day in the Life of a Refugee: Exploring Solutions for Syria’, billed as “a powerful simulation…of the struggles and choices that refugees are making to survive”.
Simulations are about as close as many of the people here are ever likely to come to the world that you and I inhabit. Because it probably hasn’t escaped the attention of you less well-heeled folk out there that millions of people across the world have not been doing well during these bleak years of financial crisis and deficit-fueled austerity.
Enforced pauperisation, savage cutbacks in welfare services, the destruction of social programs, layoffs and mass unemployment, wage cuts and wage stagnation, zero hour contracts and other forms of precarity and insecurity – these have been some of the remedies that national governments and global economic institutions have forced down the throats of so many countries during these bleak five years.
In that same period the banks and financial institutions that brought the financial system to the brink of collapse were first ‘saved’ through taxpayer-funded recapitalization programs, and have since gone to recover everything they lost and more. In 2012 the richest ten percent of earners in the United States earned more than half the country’s total income – the highest total since records began. That same year the 1,000 wealthiest people in the UK also saw their combined wealth rise by £414 billion, according to the Sunday Times.
This happy outcome may explain we have begun to hear more optimistic pronouncements from the IMF, the World Bank, the EU and national governments about ‘green shoots’, and ‘corners turned’ and the ‘worst is behind us’ The tone at Davos has also been cautiously upbeat. Growth is once again in sight. Recoveries are in the air and CEOs are once again confident enough to invest.
But the wise men and women of Davos cannot be accused of looking at the world entirely through rose-tinted spectacles. For the conference is also an occasion for the publication of the World Economic Forum’s 2014 Global Risks report, which outline possible reasons for caution and even pessimism.
The report lists a number of possible ‘systemic risks’ that include water shortages, liquidity and fiscal crises, rising youth unemployment, geopolitical conflict, global pandemics, major escalation in organized crime, ‘lack of trust’, and ‘ideological polarization.’
The new Oxfam report Working for the Few has just reported that the wealth of the one percent of richest people in the world amounts to $110 trillion, 65 times more than the bottom half of the world’s population, and that 85 individuals own the same as 3.5 billion people. In the US, the report notes that 95 percent of financial growth since the crisis went to the top one percent of the population, while the bottom 90 percent became poorer.
These staggeringly skewed statistics are a grotesque obscenity, and they didn’t just happen by chance. Oxfam notes a process of ‘political capture’ in which wealth has persistently shifted towards the rich since 1980, with the collusion of governments who have ensured that ‘laws and regulations are now designed to benefit the rich’ through ‘financial deregulation, skewed tax systems and rules facilitating evasion, austerity economics.’
In other words we are talking about a deliberate transfer of wealth towards the already wealthy, at the expense of everything that might come under the broad rubric of the common good. Yet proving once again that satire will always lag behind the 21st century, this gathering of some of the richest people and companies on the planet – most of whom have been beneficiaries of these developments – is also concerned about the effects ‘severe income disparity,’ which has supposedly become a major theme of the conference.
The Davos ‘global risks’ report notes that ‘anti-austerity movements and other protests give voice to an increasing distrust in current socio-economic and political systems’ and that ‘ widening gaps between the richest and poorest citizens threaten social and political stability as well as economic development.’
This threat to ‘social and political stability’ is clearly more worrying to the Davos delegates than inequality itself. Can we expect the summit to support income redistribution? Social programs funded through higher taxation? Perhaps the complete reorganization of the economic system to favour the least well-off? An organized transfer of wealth towards the poor rather than the rich? Raising the minimum wage?
Not exactly. In fact Bill Gates actively opposes raising the minimum wage, on the grounds that it is bad for (his) business. But as Thomas Mann once observed ‘There are so many different kinds of stupidity, and cleverness is one of the worst’, and the Davos summit contains many clever people who even if they are not too bothered by the impact of inequality on those at the sharp end of it, nevertheless sense that it might actually threaten the system that they have all done so well out of.
The report worries that rising populism and a general disenchantment with politicians might lead to ‘ an era of greater economic pragmatism and national self-protection’ that would ‘increase inter-state friction and aggravate a global governance vacuum.’
They’re right. But that vacuum has been evident for some time, and watching Blair, Gates and the astonishingly self-regarding Bono linking arms in a kumbaya moment, it’s difficult to avoid the conclusion that Davos is a symbol of such vacuity rather than an antidote or a cure for it.
But behind the posturing and the self-regard, perhaps these would-be saviors can sense the dangerous tremors beneath the surface of this scandalously unjust and mismanaged world that they helped create, and worry that one day they will have to descend like Hans Castorp from the magic mountain, and fly away in their private jets to find that there is nowhere safe for them to land.