Davos: end of a political love affair?
Analysis: The theme of this year’s forum was ‘Globalisation 4.0’, a reference to the social disruption of automation. But as Ben Chu explains, ordinary people around the world are still grappling with globalisation’s earlier versions.
No Theresa May. No Donald Trump. No Emmanuel Macron. No Xi Jinping. No Narendra Modi. No Justin Trudeau.
Davos 2019 was notably light on the political leader front.
Together these no-show leaders represent countries that account for around half of the global economy and 40 per cent of the planet’s population.
True, there were specific reasons for most of the major non-appearances at the World Economic Forum in the Swiss Alps.
Theresa May has the parliamentary Brexit stand-off to contend with. Donald Trump is mired in government shutdown politics. Macron has the Gilets Jaunes protests and terrible poll ratings to grapple with. Xi is dealing with a rather alarming growth slowdown in China.
Yet there’s always a domestic crisis somewhere in the world, always a reason for some leader or other to pull out. But to lose such an array of political heavyweights will have been a blow to the forum’s founder, Klaus Schwab, who introduces the top politicians personally in the main hall in a style that even a medieval courtier might have considered over the top. Yes, the new far-right Brazilian president, Jair Bolsonaro, came to Switzerland. But that will have been scant consolation.
Political leaders have generally turned up in Davos to make the case for inward investment. And that’s what Bolsonaro did, albeit rather unconvincingly.
They have generally seen the potential benefits of foreign investment as outweighing the potential political cost of appearing at such a conspicuous festival of wealth and elitism.
Yet we live in an age of populist anger. Has the cost-benefit analysis now changed? Is staying away now safer than going?
George Osborne was a Davos devotee in his time as chancellor, never passing up a chance to get snow on his shoes. And he returned again this year in his new capacity as a newspaper editor, giving a television interview, framed by those white peaks, in which he described MPs flirting with no-deal Brexit as like players of Russian roulette.
Never mind the argument, the reaction to Osborne’s comments focused on where he was saying it from. This was widely seen as an own goal for the soft Brexit cause. Didn’t we have here an out-of-touch “globalist”, a “citizen of nowhere”, trying to thwart Brexit on behalf of his rich friends?
A Davos radio interview with Roland Rudd, the wealthy business PR man and chair of the People’s Vote campaign (not to mention brother of Amber), was similarly received. So was Tony Blair’s sermon from the Alps on the need for a new referendum. “Are Blair, Osborne and Rudd secret agents of the Leave campaign?” goaded the Guido Fawkes website.
The toxic Davos meme wasn’t just a British phenomenon. Canada’s Trudeau stayed away this year after getting criticised at home for the £400,000 cost of his appearance last year.
Of course, Davos has always been more about business than politics. And Professor Schwab and his team can take some comfort from a typically strong representation from the worlds of commerce and finance. Tim Cook of Apple went for the first time, with the gay CEO even lunching with the homophobic Bolsonaro. Perhaps a Davos unification to stand alongside Mandela and De Klerk and Arafat and Peres.
The theme of this year was something called “Globalisation 4.0”, a reference to the social disruption of automation and artificial intelligence. But it’s globalisation 1.0, 2.0 and 3.0 that’s causing dissatisfaction: low taxes on the wealthy, de-industrialisation, the erosion of social safety nets, weak wage growth, high inequality. These are not new challenges.
In this sense, perhaps the most telling moment of the conference came when the multi-billionaire Dell founder Michael Dell was asked on a panel about the recent suggestion from the Democratic congresswoman Alexandria Ocasio-Cortez that top US marginal tax rates should be raised to 70 per cent.
“Name a country where that’s worked, ever,” shot back Dell.
The answer, calmly supplied by an economist sitting next to Dell, was: “The United States.” The top US rate was well over 70 per cent in the 30 years after the Second World War and these were also decades of strong and socially inclusive growth. That history is apparently news to the billionaires of Davos.
Davos attendees tend to be comfortable focusing on new problems; problems that seem to require technical, rather than political or redistributive, solutions. But millions of people around the world are more interested in older problems. While the Davos blind spot remains, one senses that the World Economic Forum’s political toxicity levels will not soon drop.
No Theresa May. No Donald Trump. No Emmanuel Macron. No Xi Jinping. No Narendra Modi. No Justin Trudeau.
Davos 2019 was notably light on the political leader front.
Together these no-show leaders represent countries that account for around half of the global economy and 40 per cent of the planet’s population.
True, there were specific reasons for most of the major non-appearances at the World Economic Forum in the Swiss Alps.
Theresa May has the parliamentary Brexit stand-off to contend with. Donald Trump is mired in government shutdown politics. Macron has the Gilets Jaunes protests and terrible poll ratings to grapple with. Xi is dealing with a rather alarming growth slowdown in China.
Yet there’s always a domestic crisis somewhere in the world, always a reason for some leader or other to pull out. But to lose such an array of political heavyweights will have been a blow to the forum’s founder, Klaus Schwab, who introduces the top politicians personally in the main hall in a style that even a medieval courtier might have considered over the top. Yes, the new far-right Brazilian president, Jair Bolsonaro, came to Switzerland. But that will have been scant consolation.
Political leaders have generally turned up in Davos to make the case for inward investment. And that’s what Bolsonaro did, albeit rather unconvincingly.
They have generally seen the potential benefits of foreign investment as outweighing the potential political cost of appearing at such a conspicuous festival of wealth and elitism.
Yet we live in an age of populist anger. Has the cost-benefit analysis now changed? Is staying away now safer than going?
George Osborne was a Davos devotee in his time as chancellor, never passing up a chance to get snow on his shoes. And he returned again this year in his new capacity as a newspaper editor, giving a television interview, framed by those white peaks, in which he described MPs flirting with no-deal Brexit as like players of Russian roulette.
Never mind the argument, the reaction to Osborne’s comments focused on where he was saying it from. This was widely seen as an own goal for the soft Brexit cause. Didn’t we have here an out-of-touch “globalist”, a “citizen of nowhere”, trying to thwart Brexit on behalf of his rich friends?
A Davos radio interview with Roland Rudd, the wealthy business PR man and chair of the People’s Vote campaign (not to mention brother of Amber), was similarly received. So was Tony Blair’s sermon from the Alps on the need for a new referendum. “Are Blair, Osborne and Rudd secret agents of the Leave campaign?” goaded the Guido Fawkes website.
The toxic Davos meme wasn’t just a British phenomenon. Canada’s Trudeau stayed away this year after getting criticised at home for the £400,000 cost of his appearance last year.
Of course, Davos has always been more about business than politics. And Professor Schwab and his team can take some comfort from a typically strong representation from the worlds of commerce and finance. Tim Cook of Apple went for the first time, with the gay CEO even lunching with the homophobic Bolsonaro. Perhaps a Davos unification to stand alongside Mandela and De Klerk and Arafat and Peres.
The theme of this year was something called “Globalisation 4.0”, a reference to the social disruption of automation and artificial intelligence. But it’s globalisation 1.0, 2.0 and 3.0 that’s causing dissatisfaction: low taxes on the wealthy, de-industrialisation, the erosion of social safety nets, weak wage growth, high inequality. These are not new challenges.
In this sense, perhaps the most telling moment of the conference came when the multi-billionaire Dell founder Michael Dell was asked on a panel about the recent suggestion from the Democratic congresswoman Alexandria Ocasio-Cortez that top US marginal tax rates should be raised to 70 per cent.
“Name a country where that’s worked, ever,” shot back Dell.
The answer, calmly supplied by an economist sitting next to Dell, was: “The United States.” The top US rate was well over 70 per cent in the 30 years after the Second World War and these were also decades of strong and socially inclusive growth. That history is apparently news to the billionaires of Davos.
Davos attendees tend to be comfortable focusing on new problems; problems that seem to require technical, rather than political or redistributive, solutions. But millions of people around the world are more interested in older problems. While the Davos blind spot remains, one senses that the World Economic Forum’s political toxicity levels will not soon drop.
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