The Humiliation of Davos Man
Jan. 15, 2024 6:27 pm ET
Davos, Switzerland
It’s that time of year. Corporate chieftains, policymakers, NGO warriors, journalists and intellectuals are heading to the Swiss Alps for the 54th annual meeting of the World Economic Forum. If the delegates are serious about this year’s theme, “Rebuilding Trust,” some hard conversations lie ahead.
On both the far left and the far right, conspiracy theorists see the WEF and its allies as an all-powerful network successfully imposing a nefarious agenda on the rest of the world. This reading gets Davos exactly wrong.
The real scandal of Davos isn’t that it’s taking over the world. It’s that it’s failing. The Davos agenda—a global security order, an integrated world economy and progress toward objectives including decarbonization, gender equality and the abolition of dire poverty—is controversial in some quarters and on some points but is neither secret nor particularly nefarious. But far from imposing this agenda on a captive world, the Davos elites are wringing their hands as the dream slowly dies.
Last year was another tough year for the Davos agenda. Russia’s war in Ukraine ground on, with Moscow holding an edge in what looks like a war of attrition. The Middle East erupted into chaos, with shipping disrupted in the Red Sea as the conflict escalates and expands. Relations between China and the West continued to deteriorate, with the Taiwan election results pointing toward further tensions in the coming year.
Conflict is bad for free trade, and the breakdown of the global security order is undermining the economic integration at the heart of the Davos agenda. The rift between China and the West is driving a decoupling on both sides. With both the European Union and the U.S. introducing restrictions on imports aimed at limiting the effect on domestic manufacturing of low-wage, low-regulation production in China and elsewhere, the goal of free trade recedes further into the distance every year.
Unsurprisingly, both the World Bank and the International Monetary Fund are forecasting a slowdown in global economic growth. Predicting that global trade flows will be only 50% of the average in the pre-pandemic decade, the World Bank warns that the 2020s could be a lost decade for the world economy, with poor countries hardest hit.
As war spreads and the global economy slows, chances for progress on the Davos social agenda are fading. Topics like the energy transition and gender justice, however worthy and important, drop down the priority list when countries are waging or preparing for war. The number of desperate refugees, currently estimated at 114 million, inexorably grows. Violence against civilians accompanies the rising tide of war. Under these circumstances, human-rights groups and other social campaigners must focus on humanitarian crises rather than existing social problems.
Given this background, the Davos hills are alive with the sounds of failure. Davos conversations that used to be about how to take advantage of the level global playing field that U.S. presidents and allies sought to build after World War II and 1990 have shifted. The question now is how companies, and countries, can manage the risks of a disrupted world order. How do you manage supply chains in an era of U.S.-China rivalry? How do you adjust to the effective closing of the Red Sea, and perhaps the Strait of Hormuz, by Iran and its proxies? How does your country manage its security policy in a world where U.S. power seems to be waning and the comfortable assumptions of the past no longer hold?
The meeting’s “Rebuilding Trust” theme acknowledges that something has gone wrong. That is a good start, but it doesn’t go far enough. Lying Russian propagandists and Chinese attempts to influence American opinion are problems that need addressing, but people aren’t losing trust in their leaders because disinformation has muddled their brains. They are losing confidence because they sense that the establishment’s approach to the chief problems of the day isn’t working.
This isn’t, at its core, a crisis of trust. It is a crisis of competence. Why would voters expect an “expert class” that was so wrong for so long about Russia, China, Iran and Covid to know how to cope with a challenge as difficult and multifaceted as the energy transition? Why would they trust European and American politicians who are failing so woefully to handle massive illegal migration to manage the rise of artificial intelligence?
“The emperor has no clothes!” is the cry of populists everywhere. To render this message ineffective, Davos Man doesn’t need image consultants and disinformation specialists. He needs to get dressed.
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Appeared in the January 16, 2024, print edition as 'The Humiliation of Davos Man'.
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