Davos Man

How the Billionaire Class Devoured Democracy

Peter S. Goodman

• Publisher: Custom House
• Year: 2022
• ISBN:
  9780063078321
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

A San Francisco Chronicle Bestseller • An NPR Best Book of the Year

The New York Times 'sGlobal Economics Correspondent masterfully reveals how billionaires' systematic plunder of the world—brazenly accelerated during the pandemic—has transformed 21st-century life and dangerously destabilized democracy.

" Davos Man will be read a hundred years from now as a warning." —Evan Osnos

"Excellent. A powerful, fiery book, and it could well be an essential one."—NPR.org

The history of the last half century in America, Europe, and other major economies is in large part the story of wealth flowing upward. The most affluentpeople emerged from capitalism's triumphin the Cold War to loot the peace, depriving governments of the resources needed to serve their people, and leaving them tragically unprepared for the worst pandemic in a century.

Drawing on decades of experience covering the global economy, award-winning journalist Peter S. Goodman profiles five representative "Davos Men"—members of the billionaire class—chronicling how their shocking exploitation of the global pandemic has hastened a fifty-year trend of wealth centralization. Alongside this reporting, Goodman delivers textured portraits of those caught in Davos Man's wake, including a former steelworker in the American Midwest, a Bangladeshi migrant in Qatar, a Seattle doctor on the front lines of the fight against COVID, blue-collar workers in the tenements of Buenos Aires, an African immigrant in Sweden, a textile manufacturer in Italy, an Amazon warehouse employee in New York City, and more.

Goodman's revelatoryexposéof the global billionaire class reveals their hidden impact on nearly every aspect of modern society: widening wealth inequality, the rise of anti-democratic nationalism, the shrinking opportunity to earn a livable wage, the vulnerabilities of our health-care systems, access to affordable housing, unequal taxation, and even the quality of the shirt on your back. Meticulously reported yet compulsively readable, Davos Man is an essential read for anyone concerned about economic justice, the capacity of societies to grapple with their greatest challenges, and the sanctity of representative government.

Part I
Global Pillage

The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.

—Adam Smith, The Theory of Moral Sentiments, 1759

I believe there are more instances of the abridgement of the freedom of the people by gradual and silent encroachments of those in power, than by violent and sudden usurpations.

—James Madison, speech at the U.S. Constitutional Convention, 1787

Chapter 1
“High Up in the Mountains”
Davos Man in His Native Habitat

January 2017

Days before Donald Trump was to be inaugurated president of the United States, a parade of extravagantly wealthy people descended on a village perched high in the snow-encrusted peaks of the Swiss Alps.

As they approached the Congress Centre in the middle of Davos, many fresh from the cabins of private jets, they confronted an impediment to their customary freedom of movement: a security check.

There was Eric Schmidt, the former executive chairman of Google, surrendering his Android phone for inspection. Jack Ma, whose Chinese e-commerce company, Alibaba, had yielded a personal fortune worth some $22 billion, was emptying his pockets before entering the complex.

Michael Dell, whose company once revolutionized laptop computers, plunked his device onto a conveyor belt that rolled it into an X-ray machine, just like the schmucks flying commercial out of LaGuardia.

Jamie Dimon, chief executive of JPMorgan Chase, whose toxic investments brought minimal scrutiny from regulators before the last financial crisis, submitted to an obligatory inspection of his overcoat.

This exceedingly privileged slice of humanity had arrived in Davos for an annual five-day pilgrimage known as the World Economic Forum.

The Forum is overseen by a nominally nonprofit organization that has made it an essential assembly place for those most consumed with making money.

In its half century of existence, the Forum has turned itself into an indispensable stop on the traveling circuit of the global elite—corporate executives, heads of state, management consultants, venture capitalists, hedge fund managers, and public intellectuals—plus a handful of Hollywood celebrities, musicians, and artists, along with academics, activists, and teeming hordes of journalists. Every January, a crowd numbering about three thousand jams the town, displacing the skiers who normally predominate. Attendees roam from earnest seminars on climate change and the future of work held inside the Congress Centre to dinners and cocktail parties thrown at surrounding hotels by global banks and technology giants.

This year, Davos Man was grappling with an unfamiliar sensation—not fear exactly, but a soupçon of concern that people on the rest of the planet were increasingly prone to questioning the justice of his station. What had begun nearly two decades earlier as an inchoate movement against globalization, a series of unruly protests dominated by young people decrying the World Trade Organization, had burgeoned into a multigenerational revolt against the establishment in countries far and wide.

Trump was the most obvious manifestation of the uprising. Though the billionaires in Davos were quietly salivating over the wealth-enhancing implications of American democracy coming under the control of one of their own—or, at least, someone who played a billionaire on television—they were also cognizant that his ascension reflected public outrage over what they represented: a gluttonous cabal that had seized the gains of globalization while leaving most people poorer and increasingly anxious.

The United States was the primary architect of the post–World War II liberal democratic order, which had worked magnificently for the sorts of people who flocked to Davos. In entrusting the presidency to a reality television star famed for groping women, dog whistles to white supremacists, multiple bankruptcies, and open contempt for international institutions and trade agreements, the American electorate had effectively mandated the destruction of the status quo. Trump was promising to blow up globalization, avenging the long-term marginalization of enraged white men in the middle of America whose living standards had slumped.

The people who mattered most in Davos—the corporate chieftains and finance masters—generally saw through Trump’s displays of nationalist brio as a political charade, while focusing on the tax cuts and other perks attainable under his presidency. But they betrayed a smidgen of concern that the active empowering of angry people who blamed the wealthy for their troubles was a story that could play out unpredictably, with potentially unpleasant consequences.

Britain was six months into its fractious divorce with the European Union. Brexit, as this bewildering process was known, represented an assault on another pillar of the global economy and the liberal democratic order. Many of the same forces that had put Trump in the White House had helped produce Brexit.

As the Forum began, the organizers had taken these developments as the cue to educate participants on the pitfalls of widening economic inequality.

The bare facts of Davos Man’s triumph were impossible to dismiss.

A half century earlier1, the chief executive officer of the typical publicly traded American company had earned twenty times as much as the average worker. In the years since, the gap had widened exponentially, lifting the CEO’s compensation to 278 times that of the rank-and-file.

Tax policies written by Davos Man for his own benefit had enhanced the divide.

A pair of University of California at Berkeley economists2, Emmanuel Saez and Gabriel Zucman, tallied up all the taxes that Americans paid, from federal, state, and local income taxes to sales taxes and capital gains on investments. They had concluded that the richest four hundred Americans, whose average wealth was $6.7 billion, had seen their effective tax rate cut by more than half since 1962—from 54 percent to 23 percent. Over the same period, those in the bottom half, who earned about $18,500 a year, had seen their tax burden increase, from 22.5 percent to 24 percent.

The occupants of executive offices were surrendering a smaller slice of their incomes to the tax authorities than the people who scrubbed their palatial private bathrooms.

In Britain, the average worker3 was earning less than they had a decade earlier.

The official theme for this year’s Forum was “Responsive and Responsible Leadership.” If the agenda was any indication, Davos Man had become aware that his propensity to rig the system had caused ill feelings. There were sessions on “Ending Corruption,” “Ending Executive Pay,” and “Inclusive Growth.” Sheryl Sandberg, chief operating officer of Facebook—the social platform whose algorithms and pursuit of advertising revenues had turned it into a mass purveyor of fake news that fueled social fury—was to take part in a panel discussing “A Positive Narrative for the Global Community.”

Generally, Davos Man was not big on introspection that conflicted with the bottom line. He was mostly annoyed that inequality was even a topic, given that it clashed...