The Davos elite’s dismissal of the left disguises their fear

Business leaders know that the free market isn’t working for the majority but continue to resist the transformative change needed.  

NS

Sign Up

Get the New Statesman's Morning Call email.

The assorted dignitaries assembled at Davos are aware that they are living through an era of political and economic turmoil. How business leaders should respond to climate change, automation and populism are the defining debates at this year’s World Economic Forum. Behind the scenes, many are also asking how China’s economic slowdown, Donald Trump’s trade wars and Brexit might affect the global economy in 2019.

Thankfully, elites are also using their time at Davos to develop solutions. “Global challenges require global responses,” says a UN spokesperson. Building “inclusive growth” requires that “both governments and businesses [play] equally important roles,” says the chief executive of Ernst & YoungWe need to “join hands together” to support “the youth,” says IMF head Christine Lagarde.

Phrases like “international cooperation”, “inclusive growth” and “public-private partnership” are part of a unique lexicon, familiar to Davos-goers. This is the language of the corporate boardroom, the international organisation and the NGO. To many, it seems quite convincing. After all, who could be against responsibility, cooperation or inclusivity?

The problem with this language is that much of it is empty verbiage. International cooperation could mean governments and NGOs working together on human rights, or major banks working together to undermine financial regulation. One business might see its environmental responsibility as complete divestment from fossil fuel companies, whilst another might see it as installing recycling bins in corporate headquarters. To some, inclusive growth might be taken to mean higher wages, whilst to others it might mean lower taxes.

The reason the Davos discourse is so manipulable is that it is wholly apolitical. It is based on the idea – often sincerely held – that rigid ideologies are increasingly unfit for a modern, dynamic and globalised world. Today’s problems will be solved by public and private partners working together across national borders, looking objectively at the issues and developing evidence-based solutions to promote the common good.

But what no one will admit is that there is no such thing as the global common good. The policies needed to address the most urgent international issues – climate change, inequality and nationalism – are policies that will hurt the interests of the global elite. Instead of corporate social responsibility, international cooperation, and inclusive growth, we need a green new deal (as advocated by the Democrats’ Alexandria Ocasio-Cortez), controls on capital mobility and enforceable corporate and financial regulation.

In other words, instead of letting business leaders take their private jets to Davos to discuss how to tackle climate change, we should be expropriating those private jets and recycling the parts.

For decades, those assembled at Davos have used their keynote speeches to preach the benefits of leaving these challenges up to the market – in other words, of leaving it up to them. They allied themselves with governments in the world’s most powerful states, which then refused to stand in the way of the business of profit-making, and settled for taxing the winners in order to compensate the losers. And for a while, it was easy to believe that they were right – free markets do make everyone better off.  

The problem for today’s Davos-dwellers is that the 2008 financial crisis exposed their narrative as false. We left them in charge of the global economy, and they broke it, fantastically enriching themselves in the process. It is now clearer than ever that elites do not assemble at Davos to protect the common interest, but to protect their class interest.

Rather than trusting the experts, voters are increasingly looking to politicians such as Jeremy Corbyn and Ocasio-Cortez for genuine alternatives to the free market consensus (a recent YouGov poll found overwhelming public support for left-wing policies in the UK, Europe and, increasingly, in the US).

But at Davos, these politicians are treated with derision. A room full of billionaires scorned the idea of a 70 per cent tax rate on incomes over $10m, as proposed by Ocasio-Cortez. Tony Blair was bemused by the notion that he and his political contemporaries might bear some responsibility for the state of the global economy today.

Whilst they may express disdain, what the Davos elite are really feeling is fear. The majority of working people in the world’s most powerful countries are no longer feeling the benefits of free market capitalism, and socialists are the only ones providing answers. If these politicians are elected, elites might lose some of their wealth but, far more importantly, they would lose all of their power.

Should Corbyn and Ocasio-Cortez take control, the Davos-goers of the future may well find themselves travelling to Switzerland by bus.

Grace Blakeley is the New Statesman’s economics commentator and a research fellow at IPPR.