Davos Man: the billionaires who looted the world's economies

"Davos Man: a member of the global billionaire class that controls the majority of the world's wealth".

In his new book, New York Times global economics correspondent Peter S. Goodman contends that those billionaires have spent the past fifty years systematically looting the world's economies, starving societies of much needed tax revenues, profiting from the Covid-19 pandemic and de-stabilising democracy, all under the guise of a new, more socially conscious form of capitalism.

Goodman calls it one of the most monumental heists in human history; the systematic transfer of wealth from ordinary people to the billionaire class.

He's written a book about the it: Davos Man: How the Billionaires Devoured the World.

He steals the term 'Davos Man' from political scientist Samuel Huntington who coined the phrase in 2004 to refer to participants at the World Economic Forum in Switzerland.

He uses it instead to refer to a group of businessmen that would have the world believe a “cosmic lie” – the idea that when the economy is organised around sending more wealth to the people who already have wealth, we all somehow benefit. It is the intellectual basis of trickledown economics.

A massive redistribution of wealth from ordinary people to a global billionaire class over recent times has been the fruit of a process initiated decades before now, Goodman says. 

“We didn’t get here by accident," he says. "That’s the primary take away I hope readers will receive from this book. We got here through the systematic manipulation and corruption of our democracies, through lobbying, rewriting of tax rules and dismantling of the pubic infrastructure by this group I call Davos Man, by transferring the proceeds to himself.”

Democratic institutions have been disarmed in part by an ideological onslaught, he says. Theories of trickledown economics have been deeply embedded by the insinuations of think tanks and access journalists, he says.

These inculcate citizens with the idea that this forms the basis of a just and prosperous society.

The success of this can be measured in the way captains of the tech and finance industries have been lionised. 

One of the main characters looked at in Goodman's book is CEO of tech Silicon Valley Salesforce,Marc Benioff, who said at Davos last year, 'the CEOs are the heroes of the pandemic’.

“He wasn’t talking about frontline medical workers, people delivering our packages, or processing our food," Goodman says.

"We’ve saved the world with our vaccines and our finance, not for profit but to save the world. That is a phrase used by the billionaires to protect themselves from the exercise of democracy, through things like progressive taxation and anti-trust enforcement and labour bargaining.”

Goodman says Davos Man sells the idea that if we mess with the economic status quo, we end up with a wrecked economy like North Korea’s. It’s a fallacy and lie exposed by the Nordic country’s mixed economic model, which provides wealth for all, Goodman argues.

With the advent of tech it has become easier for tech giants to manipulate and mislead the public to the contrary, he says.

The contrast between the claims and the reality is stark, particularly when we look at the tech giants, he says.

“Let’s look at Amazon. In the first phase of the pandemic it allows workers to labour in the US with no protective gear whatsoever. They had no hand sanitiser, no medical gowns, no masks and yet Bezos was writing open letters ‘dear Amazonians, thank you for your sacrifice. You’re essential workers, at least you know you’re protecting other people by sending out for-profit the same goods'. He’s denying warehouse workers and when there was a labour uprising he actually sacks the leader and accuses him of violating quarantine, in Staten Island, New York.

“And when there’s a good enquiry on this in the US, Amazon produces fake television news segments that are designed to seem like the real thing. Interviews with happy Amazon workers, all sorts of explanations as to the elaborate lengths which the company is going to protect its workforce and they distribute these to local television operations across the US, many of which actually broadcast them as the genuine article.”

Monopolisation of these industries means the notion of competition in the US capitalist economy has collapsed, he says.

This was no coincidence either. Goodman says this was facilitated by theories coming from scholars like jurist Robert Bork at Chicago University, which was a traditional hotbed of Friedman economics.

“He introduces this concept in the 1970s, that so long as consumers are not immediately harmed – and he defines that by prices going up – by a merger or corporate undertaking in general, then the government should just get out of the way and embrace all mergers. It’s just businesses looking for scale and it will make them more efficient and will allow them to better serve consumers and society.”

Such sentiments smoothed the way for Google and Facebook to buy rival companies up and then put them out of business. Google could also reduce its prices to put competitors out of business and then find a way to raise prices again, he says.

Along the way all of these companies have gained monopoly power without violating this Borkian standard.

Meanwhile the US anti-trust drive has been eviscerated during past decades.

Progressive taxes have also become a thing of the past, with government unable and unwilling to stop avoidance.

Goodman says this is partly about global money finding jurisdictions who will engage in tax avoidance as a kind of development strategy. The other part is simply that corporates have lobbied successful to reduce taxes and use a multiplicity of legal loopholes to avoid paying.

“If you look at the United States, it’s a question of simply lowering tax rates," he says.

“There's an abundance of loopholes. I focus on Steve Schwarzman, he’s the world’s largest private equity magnate, who’s worth about $35 billion. Most of his income comes to him in the form of various partnerships which have much lower tax rates than the highest income tax rates. There’s a lot of complexity to this, but in the big picture it’s quite simple – wealthy people have a million ways to avoid taxes and for everybody else it’s automatic. You get your pay check and your taxes are held automatically.

“If you boil this down and look at the way we taxed Americans in the first three decades after the second world war and then you compare it to the way we’ve taxed Americans since. If you stuck with the former way of distribution the bottom 90 percent of income holders would have 47 trillion dollars, which they don’t have. That’s according to one study.”

In avoiding tax these big billionaire entities rob the public purse of being able to fund essential public works, as well as finance health and social services.

This is enabled by a political class who get themselves elected into power, with help from corporate money and ideological cover from economists pushing the Davos Man agenda. Goodman names the Clintons as a prime example.

“One of the gifts of Davos Man as a species of human and his enablers is that they are able to forge these narratives that are very self-serving and then internalise them to the point of I think the word belief has to be used.

“Let’s just take George Osborne, the chancellor of the Exchequer of Britain under the coalition government that comes into power led by David Cameron in 2010. George Osborne is a guy who spent his entire life at elite prep schools, drinking societies at Oxford, engaged the sort of high jinx that would get most people into trouble, but not if you are accustomed to a certain type of privilege. He’s used to his own kind.

“He internalises this idea that wealthy people are the solution to all of life’s problems and the coalition government in 2010 they buy for the bankers who delivered the great financial crisis and obviously not just in Britain alone, but in the US and around the world. At the same time, they cut taxes on the wealthiest people and then they gut of the social safety net – it’s the era of austerity.

“He gave all sort of lectures about ‘we’ve lived beyond our means’ as if he’s like the sober dad taking the credit card back from the drunken teenagers who’ve been boozing it up on his tab.

“The result of this is there’s much less support for those who lose a job, who need help with housing, the National Health Service doesn’t keep pace with inflation and people notice that services are really diminished and Britain goes through a decade where the average wage earner sees their wages diminished in real terms while the bankers get bailed out and don’t get any punishment at all. And the result of this, I argue in the book, is Brexit.

The irony of Brexit is that it makes life worse for precisely the people who are hurt by austerity, Goodman says.

“There’s loads of explanations for Brexit – it’s a nativist response to scarcity, austerity, nostalgia, demonising of immigrants, which is a pattern we find across the developed world when there’s scarcity. We never blame the Davos Man who did the pillaging.

“Osborne is a classic enabler, who goes on to work for a bunch of investment banks, for Blackrock led by Larry Fink the world’s largest asset manager, a company that manages $US10 trillion of pension funds and other giant pools of money. Blackrock was helping Emmanuel Macron, another Davos enabler who comes into office with his mandate to lower wealth taxes – this is how we get the Yellow Vest movement. He also increases petrol taxes on ordinary people. Osborne goes to work for Blackrock because he’s advising Larry Fink on how to carve his way into the French pension system and make it operate like a casino than a boring source of retirement savings for regular people.”

For Goodman Davos Man and his political class don't care about our future and don't want to share wealth, regardless of their claims of being humanity's saviours.

Our only hope lies in asserting basic democratic accountability, he says.

 “We need to revive our democracies. We don’t need to confiscate anybody’s wealth. We don’t need a revolution. We can praise Jeff Bezo for giving us Amazon. We can praise Pfizer for giving us Covid vaccines and demand a say in how the gains are distributed through basic progressive taxation, anti-trust enforcement. We need rules that enable Labour movements to bargain collectively."