As the wealth gap and economic inequality widen across the globe, populations are leaning towards far-right governments with nationalist agendas while doubling down on outdated beliefs about immigration, race, class and so on. This book takes an expansive view of these trends and places the blame squarely on the heads of the super-rich class comprising heads of states, business magnates and companies gunning for market monopolies.
Peter S. Goodman, global economics correspondent for the New York Times, shows how these entities are systematically pillaging at an almost incomprehensible scale. He calls them Davos Man, a term coined by the political scientist Samuel Huntington. Their modus operandi are to evade taxes, privatise large swaths of economies, redistribute the money to shareholders and prioritise profits above all else including health, livelihood, survival and climate breakdown.
The book focuses on five representative Davos Men whose rise has been made possible by bleeding dry the very society that they come from. These are Jamie Dimon, chief executive of JP Morgan Chase, Jeff Bezos of Amazon, Marc Benioff and his company Salesforce, Steve Schwarzman, co-founder of Blackstone, a “so-called private equity” company, and Larry Fink with BlackRock, a tentacle of Blackstone. Goodman focuses on their activities in the US, UK, Italy, France and Sweden.
They perpetrate what he calls the “Cosmic Lie” – the idea that the more the rich have, the more they will spend and the more it will trickle down to the masses. Goodman destroys this myth with withering outrage.
Take Steve Schwarzman, who co-founded Blackstone alongside Peter G. Peterson, previously CEO of Lehman Bros.They built a portfolio of foreclosed homes which they turned around on the market and leased back to individuals who had lost their homes in the 2008 economic recession in the first place. They got university endowments, medical institutions and pension funds to trust them with their savings. When Blackstone incurred losses, one state had to hand over one billion dollars to “bolster its teetering pension system” Some of this money came from cutting support for public schools.
The book also shines a light on “stakeholder capitalism,” where wealthy business leaders virtue signal their concern for “improving the state of the world,” while decimating resources. For example, Larry Fink of BlackRock writes letters in favour of protection against climate change but the company owns shares in oil and gas and votes against restrictions on them.
Goodman is scathing in his assessment of Davos Man’s tactics, which include fighting for lower taxes on the wealthy and then lobbying against anyone who takes a stand against them. Led by Dimon, JP Morgan Chase kept billions in tax cuts. Wall Street’s collective bonuses were triple the earnings of all minimum wage workers that year. Note that Jeff Bezos headquartered Amazon in Seattle where the company is required to pay sales tax ““only on orders delivered to people in states where the company had physical operations.” By tracking these developments, Goodman is extremely effective at dispelling the narratives that immigrants and minorities are to blame for decimated economies. The value of austerity that is being pushed in cultures and governments has more to do with the fact that Davos Man was thieving riches and leaving so little for the rest that austerity became a necessity. “Less public spending spelled less need for taxes – which meant more for Davos Man.” The age of austerity means losing local community centres, homes, jobs, fire stations, police stations and more. “The strife and inequality will create more opportunities for political movements that employ scarcity as a springboard to hate, stoking fear of ethnic and religious minorities in an electoral strategy.”
Marc Benioff’s company Salesforce (prominently advertised during Formula 1 races) provides a cloud-based software that enables businesses to tracks customers. Benioff’s company was delivering personal protective equipment during the pandemic by putting in orders to factories and galvanising his resources for shipments. Goodman asks why the world had to depend on charity from a software-making company in a global crisis. By engaging in various forms of legal tax evasion, he is thereby refusing to give back to the public care systems.
Davos Man is a term for those attending the World Economic Forum, but would they not exist if the forum was permanently cancelled? The gathering is a symptom of the larger issue. Recently, as the World Economic Forum kicked off again, a group of millionaires there protested in favour of being taxed more at the World Economic Forum, calling themselves the “patriotic millionaires.” Meanwhile, governments and companies are establishing practices to counter the forces that enable businesses to create monopolies in markets and wealth.
One may need to take a break after each chapter so as to not drown in its relentless horrors. Goodman explores alternative solutions that offer a ray of hope – the concept of universal basic income, or how communities can design agreements that enable local businesses to source materials from other local businesses and commit to spending their proceeds within the community as well as hiring and training from within the community as well. He ends, thankfully, on a hopeful note, but this feels rather unconvincing after the bleak picture he has hammered in.