The decline of Davos

The Week
The decline of Davos

The World Economic Forum at Davos that took place last week was titled “Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution.” For participants and observers, the event was quite ambiguous. The Week reports in its article The decline of Davos that it wasn’t that simple, even though world political leaders still positively treated major business.

The World Economic Forum at Davos used to be a welcoming retreat for "fat cats in the snow," said Lionel Laurent at Bloomberg. But even against the backdrop of lavish parties and 1,500 private jets, this year's attendees could sense that "hostility against the international corporate elite is finally hitting the political mainstream."

Several of the world's top leaders chose to stay away to concentrate on dealing with unrest on their home turf, said Gideon Rachman at the Financial Times. In the heyday of globalization, "the international political leaders who gathered in Davos generally had similarly positive attitudes to big business and high finance." These days, it is not that simple.

President Trump, who was lauded last year by business leaders after a big tax cut, pulled his entire delegation while he continued to navigate a partial government shutdown. He wasn't alone. British Prime Minister Theresa May remained in London after barely surviving a no-confidence vote in Parliament over Brexit. And China's Xi Jinping was struggling with his country's slowest growth in 28 years.

The most telling absence at Davos was French President Emmanuel Macron, said Stacy Meichtry at The Wall Street Journal. A year ago, Macron stood as the quintessential Davos Man — a former investment banker and unabashed champion of globalization. But anti-government protests sparked by Macron's introduction of fuel taxes to combat climate change have forced him to change his tone. The absence of one of Davos' darlings was a "sign of how quickly the fires of populism can engulf world leaders." After stepping up at Davos last year as the rare leader to promote international cooperation, "he has since become a cautionary tale of what can happen when a globe-­trotting leader takes a finger off the pulse of the street."

Those who did ­arrive at Davos were greeted with an annual report by the development charity OxFam showing that the world's 26 richest people now own as much wealth as the poorest half of humanity, said Larry Elliott at The Guardian. The wealth of those billionaires increased by 12 percent in 2018, while the wealth of the world's poorest people fell by 11 percent. That made 2018 another year in which the "rich had grown richer and the poor poorer."

Every winter, Davos "provides an informal checkup on the health of global capitalism," said Evan Osnos at The New Yorker. The prognosis isn't good. This year the talk of Davos is a 22-page missive from hedge fund magnate Seth Klarman, who warns that "constant protests, riots, shutdowns, and escalating social tensions" mean it's no longer business as usual for the world's elite. The many reasons for anxiety include the prospect of a chaotic Brexit and a widespread loss of faith in capitalism. The problem with Davos, though, said Michael Hirsh at Foreign Policy, is that those who gather there will never pay genuine attention to the warnings. That's because they're "often the very people who represent the problems" with untrammeled globalization. Without its political headliners, Davos is shaping up as a gathering "of the very rich, the very powerful, and the very clueless."