Until Omicron forced a late change of plans, the World Economic Forum was expected to hold its annual meeting in person in Davos, Switzerland this coming week.
That was to be the context for the release of Davos Man by Peter S. Goodman, a New York Times reporter, on Tuesday.
The book is a pointed critique of the Forum and US CEOs—including Marc Benioff, Jeff Bezos, Jamie Dimon, Larry Fink, and Stephen Schwarzman—who are part of the class of globe-trotting billionaires which political scientist Samuel Huntington dubbed Davos Men.
It’s an impressively detailed recounting of the reordering of conventions of American capitalism by its uncontested contemporary winners—financiers and corporate chieftains—over the past four decades.
The rapid shifting of money and power from workers to the executive class since the early 1980s has been well documented—but Goodman additionally shows how, despite their “stakeholder capitalism” rhetoric, profit-seeking CEOs stripped privatized healthcare systems of resources that would have allowed the US and other countries to better weather the pandemic, and profited directly from the global crisis. He also connects their “relentless plunder” directly to the rise of populist, nativist politicians including Donald Trump, as voters are manipulated to think immigrants or the media are to blame for their loss of standing rather than private equity firms and multinationals who worsened jobs or shifted them overseas.
Goodman repeatedly blames what he calls “the Cosmic Lie,” or as he puts it “the alluring yet demonstrably bogus idea that cutting taxes and deregulating markets will not only produce extra riches for the most affluent, but trickle the benefits down to the lucky masses—something that has, in real life, happened zero times.” (p. 9)
His diagnosis, ultimately, is that billionaires have successfully used their wealth and related political influence to dramatically reduce taxation and evade the taxes in place, thereby hobbling government’s financial ability to support its citizens. Davos Man then deploys philanthropic dollars—representing a miniscule fraction of the taxes he has sidestepped—to “cast himself as a concerned global citizen, while pervading the idea that his continued victories are a requirement for society to achieve any wins at all.” (p. 8)
In that vein, Goodman memorably quotes Salesforce founder Marc Benioff as saying, “In the pandemic, it was CEOs in many, many cases all over the world who were the heroes.”
Goodman follows in the footsteps of other critics of Davos and Davos Man over the years, including Lewis Lapham, the longtime Harper’s editor whose small 1998 book The Agony of Mammon incisively lampooned the Forum gathering. Anand Giridharadas’s 2018 Winners Take All importantly similarly argued that the global elite’s talk about changing the world in places like Davos serves to preserve the status quo that benefits them.
While polemical, Davos Man is a very readable, extensively reported explanation of the various junctures over the past 40 years that have led us to this point of extreme wealth and inequality, and systemic and democratic frailty. Goodman has a dry humor, as when recounting the absurdities of Davos, including the pervasive hierarchy and attendees’ persistent feeling that they’re always missing out on something more interesting somewhere else. He also relatively successfully demonstrates the impact of Davos Man’s excesses on individual people, such as ER doctor Ming Lin and Amazon warehouse worker Christian Smalls, both fired after whistleblowing about a lack of pandemic protections.
One blind spot is that by focusing on the very wealthiest, Goodman doesn’t acknowledge other contributors to the economic inequality he decries. Those include the top 10% to 20% in terms of income, the upper middle class who Richard Reeves has labeled “dream hoarders” for their success at passing their status to children to the detriment of others’ economic mobility.
Near the end of the book, Goodman discusses potential remedies for the problems he chronicles, arguing at length in favor of universal basic income.
“We can run global capitalism in a way that preserves its capacity for innovation and prosperity without handing all the rewards to Davos Man,” he writes. “What capitalism lacks is an inherent mechanism that justly distributes gains. That is the responsibility of government, operating under a democratic mandate.” (p. 404) Goodman also makes the case for higher worker wages, government job guarantees, tougher antitrust enforcement, and a wealth tax.
To be sure:
- Parts of Davos Man cover ground well trod by the dozens of books about economic inequality published over the last decade. The core argument mirrors Winners Take All, though extends and updates it.
- Billionaires are a big part of the problem, but “dream hoarders” and others bear responsibility—and are hypocritical—as well.
- Climate change, a crisis the billionaires’ practices and businesses are worsening, gets little attention in the book. The solutions Goodman proposes to Davos-Man-related problems—which focus on redistribution—don’t address the environment.
- Goodman can stretch the title conceit thin, as when he contends that “Davos Man was not big on introspection that conflicted with the bottom line” and “what Davos Man supposedly cared most deeply about was channeling his intellect and compassion toward solving the great crises of the age.” (p. 22-23)
Memorable anecdotes and facts:
- In 2020, as many as 500 million people descended into poverty, while billionaires’ wealth grew by $3.9 trillion globally and their philanthropic contributions fell to nearly a decade low.
- Social programs provide a Danish head of household in a family of four with 88% of their income six months after losing their job, while in the US the equivalent is 27%.
- Wall Street paid out $27.5 billion in bonuses to employees for 2018, more than triple the compensation for every full-time minimum-wage worker in the US.
- TeamHealth, a large emergency room staffing agency owned by private equity, paid its doctors based on how much revenue they generated per patient.
- Of the 650,000 Paycheck Protection program loans worth at least $150,000 that were distributed, only 143 Black entrepreneurs received loans of that size.
- Davos Man “is a rare and remarkable creature—a predator who attacks without restraint, perpetually intent on expanding his territory and seizing the nourishment of others, while protecting himself from reprisal by posing as a symbiotic friend to all” (p. 5)
- “The capitalism since hijacked by Davos man is not really capitalism at all. It is a social welfare state run for the benefit of the people who need it least; a sanctuary for billionaires in which systemic threats are extinguished with taxpayer money, while commonplace calamities like joblessness, foreclosure, and the absence of health care are accepted as the rough-and-tumble of free enterprise.” (p. 12)
- “The United States had employed a Rube Goldberg contraption, with Mnuchin’s slush fund funneled through Jamie Dimon’s bank, and Larry Fink’s firm buying bonds on behalf of the Fed, allowing Steve Schwarzman’s private equity empire to borrow for free. All of this was supposed to trickle down through the rest of the populace.” (p. 276)
- “The real sources of broad, socially beneficial economic growth are the same elements that achieved success during the first three decades after World War II—public investments in education, health care, and infrastructure.” (p. 387)
- “Many of the world’s most meaningful problems are, at root, issues of unfair economic distribution.” (p. 402)
- “Reclaiming power from Davos Man requires no insurrection or revolution of ideas. It demands the thoughtful use of a tool that has been there all along: democracy.” (p. 406)
The bottom line is that Davos Man is a well researched and lively explanation of how the global economy works, and the turning points that have enabled profiteering by the ultra-rich while undermining societal and democratic institutions.