Just What Do the Angry Masses Want From Davos Man?

The A-Listers gathering this week for their annual powwow can’t help but imagine that Trump and Brexit are about economics when it’s obviously something much deeper.

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U.S Secretary of State John Kerry appears on a large video screen at the World Economic Forum in Davos, Switzerland, January 17, 2017.
U.S Secretary of State John Kerry appears on a large video screen at the World Economic Forum in Davos, Switzerland, January 17, 2017.Credit: Michel Euler/AP
David Rosenberg

These are trying times for the world’s A-Listers. The wining, dining and schmoozing at Davos – the annual conclave of the masters (and mistresses) of the universe – is as luxe as ever as is the aura of power,  wealth and celebrity. But the real action will be occurring on Friday 6,700 miles to the west when Donald Trump is sworn into office.

The rise of the new populism, with Trump and Brexit serving as the evil poster boys, is typically framed in economic terms. Developed economies have failed to deliver rising standards of living, job security and the economic equality that the middle and lower classes expect. This is certainly true. Median income in the world’s 26 most developed economies fell 2.6 percent from 2008 to 2013. A report by Oxfam this week revealed that eight of the world’s wealthiest people (alas, three of them Jews) have as much wealth as the bottom 50 percent of the globe. Even the rest of the 1 percent has to angry about that.

Yes, the populist right doesn’t like immigrants and expresses regressive views on the status of women and gays, but this is dismissed by the global A-Listers and the chattering class as primitive racism by people sublimating their legitimate economic grievances with gratuitous hatred and a wistful longing for a time when men were men.

To their credit, the Davos class is trying to grapple with the phenomenon. The World Economic Forum, the organization that runs the conference, issued a report this week that examines which countries have done the best at generating inclusive economic growth over the last five years. Instead of looking at increases in gross domestic product, the WEF report takes in a wide range of figures, such how much GDP has grown per person, the extent of income inequality, rising productivity, and the size of public debt, to name a few.

It also comes up with a few ideas how to improve things and, interestingly, one of them strikes at the heart of the Davos class’ interest, namely free flows of capital across borders, which the study correctly says is the source of recurrent financial crises that damage economies. 

However, there’s no escaping the underlying assumption of the report and its authors that it’s economics at the foundation of the developed world’s political malaise. They’re wrong. 

One way of illustrating that is to look at who comes out on the top of the WEF’s rankings. Ignoring the micro-states on the list, Norway is No. 1 followed by Switzerland, Denmark, the Netherlands and Australia. Further down the list is Germany at 13, France at 18, Britain at 21, the U.S. 23 and Israel 25.

Yet not is all is well for the top performers. In nearly all these countries, the voters are restless. Rightist parties that fundamentally challenge the verities of the Davos class – globalization, liberal social mores, multiculturalism – are on the rise in nearly all of them. Norway’s top ranking is helped by a nice nest egg in the form of an $885 billion sovereign wealth fund created with oil profits to serve a population of just five million, but the anti-tax, anti-immigrant party Progressive Party is doing very well in the polls ahead of elections this year.

A poll by Edelman, a public relations concern, released this week shows that the developed world’s problems isn’t just about pocketbook issues. In 28 countries where people were asked, loss of faith in the system was overwhelmingly present among people in Europe and North America, including some of the best performers for inclusive economic growth. Respondents’ chief fears were topped by corruption and globalization but the other top five were eroding social values, immigration and the pace of innovation. The institutions least trusted isn’t business but media and government.

The Davos class is confused. Why are Brexit and Trump voters backing things that run against their own economic interests? After all, global trade brings them cheap products, the welfare state gives them an economic safety net and barring immigrants at the border will slow the growth of labor forces threatened by low birth rates.

What is obvious is that the people backing the populist right have concerns that aren’t mainly economic. They want a return to the social solidarity of the kind measured in national terms. When they walk into their local café or into a college classroom, they want to see a roomful of their fellow Americans or fellow Swedes, not a cacophony of genders, sexual orientations, races, religions and hyphenated ethnic identities. They blame the elites for taking away their national identity.

This attitude can and does easily slip over the red line into racism and sexism, but it doesn’t have to. Liberal democratic societies can encompass everyone, but they have to square themselves with the fact that people are social animals that want to live in an environment of people who share their values, culture and lifestyle. That’s the real challenge facing the Davos class.

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