The World Economic Forum’s annual celebration of global capitalism once represented the inevitable arc of human progress. No longer.
- By Gillian TettGillian Tett is U.S. managing editor of the Financial Times and author of The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers.
This month, Davos Man will come out to play. January is when the World Economic Forum (WEF) holds its annual conference at a Swiss mountain resort to “improve the state of the world.” More than a business meeting for 2,500-plus globetrotting academics, executives, politicians, and lobbyists, it is a tribal celebration for leaders who worship a holy trinity of ideas: capitalism, globalization, and innovation. In a 2004 essay, Samuel Huntington, who popularized the term “Davos Man,” described this breed of humans as “view[ing] national boundaries as obstacles that thankfully are vanishing.” (And, yes, more than 80 percent of attendees at the WEF conference are male.)
This year, though, something extraordinary is happening. While previous reports of Davos Man’s death have been greatly exaggerated, a revolution is now brewing against his rosy ideals — a revolt that is likely to spread in 2017 and send shock waves through the global economy.
One portent, ironically, is in the annual survey of global experts that the WEF conducts. Traditionally, when participants have been asked to cite the biggest risks to global stability, they’ve pointed to dangers like climate change and fiscal crises. In recent years, however, the issues topping the worry list have been income inequality, migration, and interstate conflict. Those answers partly reflect tangible facts; income inequality has risen in many Western countries, and geopolitical tensions are high. However, the results also expose an existential problem for Davos Man: Trust in the elite is crumbling fast.
Take a look at a different survey that Edelman, the public relations group, releases every year. It asks people around the world which institutions they trust. In the immediate aftermath of the 2008 financial crisis, overall trust in business and government declined. The number has gone back up, yet last year, only 53 percent of people said they trusted business. A mere 43 percent said the same of government.
Most striking and important is the gap between informed and mass populations. Four years ago, it was just nine percentage points. In 2016, the disparity was 12, the highest ever recorded by the survey. Informed groups were bullish, but mass populations reported trust levels below 50 percent. They also said they were more likely to trust people like themselves than a CEO. When 2017 results are released, I suspect the gap will have widened even more.
For other signals of revolution, look no further than the ballot box. Despite numerous exhortations from the likes of International Monetary Fund officials and U.S. President Barack Obama, voters in the United Kingdom could not be persuaded to reject Brexit. “Today, too many people in positions of power behave as though they have more in common with international elites than with the people down the road, the people they employ, the people they pass on the street,” Teresa May, the new British prime minister, declared a few months after the vote in what rings as a recrimination of Davos Man. “But if you believe you are a citizen of the world, you are a citizen of nowhere. You don’t understand what citizenship means.”
Then came the U.S. presidential election. Elites were so sure Hillary Clinton would win that PaddyPower, a betting platform, paid out “winnings” to people who had gambled on the former secretary of state’s future before ballots were even cast. The confidence was driven partly by Clinton’s polling numbers, but it also reflected a collective disbelief that voters would ever choose the crude nationalism displayed by Donald Trump’s campaign.
Of course, voters did. And while Trump is nominally a Republican and certainly ranks in the wealthy set, his worldview has proved directly opposed to that of Davos Man: The president-elect wants to erect trade barriers, reduce immigration, and meddle in corporate decisions. He does not just want to “Make America Great Again.” He wants to put America, himself, and his allies first.
Similar ideas are spreading across continental Europe. In December, 59 percent of Italian voters rejected a set of constitutional reforms proposed by Prime Minister Matteo Renzi, forcing him to resign; as with Brexit, this seemed to represent a howl of rage against globalization. When voters went to the polls in Austria the same day that Italians did, they chose between a right-wing populist and a former Green Party chief. Centrists, who had dominated the country’s politics in the recent past, were knocked out in an earlier vote. The Netherlands has Geert Wilders. France has Marine Le Pen. Nationalists are getting louder and more popular in Germany, too.
What could send the pendulum swinging back toward the surety of progress — toward everything Davos Man represents? It would require slashing income inequality; making governments more transparent, deft, and accountable; curbing migration flows; boosting economic growth and employment; making corporate giants and banks less powerful; and narrowing the information gap between elites and everyone else. That’s a wildly tall order, though. Don’t bet on it happening anytime soon — not when the Middle East is slipping deeper into conflict, advancing technology continues to wipe out swaths of middle-class jobs, people keep being uprooted by disasters and shrinking opportunities, and aging populations make it hard to unleash dynamic growth.
At the very least, the elites who fall under the banner of Davos Man can take a small collective step by showing more humility: a recognition that they do not have exclusive rights to — nor are they always right about — the future. As Tony Blair, former prime minister of the United Kingdom, noted during a December conference in Washington, D.C., leaders must take seriously the unease of their citizens. “People are insecure and anxious,” Blair said. “They see their communities and societies around them changing.”
Turkeys do not vote for Christmas, as they say, and elites are never going to reject the promise of globalization, in 2017 or any other year. But to stop the trust gap from widening and the ballot-box revolt from spreading and getting nastier, they need to use their resources, including their swanky gathering in the Swiss Alps, to talk hard truths. Otherwise, Davos Man may face a frosty death.
In the meantime, he should brace for a turbulent year. We all should.
A version of this article originally appeared in the January/February 2017 issue of FP magazine. Subscribe to FP Premium for 20% off now!
Illustration by Matthew Hollister