Why #Davos Matters

Or, a Brief History of the Global Political Economy

If you planted a baby monitor at a frat party, you’d be hard pressed to find missives more self-congrulatory, smug, drunk with freedom…and more detached from reality. Every year, my Twitter feed, and yours, gets taken over by a blizzard of messages from the snowy hillsides of Davos, Switzerland.

So what is Davos, really? Is it good for us, bad for us, neither, both? In this short essay, I’m going to suggest that it’s the Frat Party at the End of the World. A carefree vista from which leaders look nobly forward to the green vistas of the glimmering future…while the world marches furiously backwards into the past. Thus, all civilized people should be a faintly perturbed, a little disturbed, and eye-rollingly amused by the grotesque circus that it’s become.

Here’s why.

Davos is illegitimate. “Your Eminence! Your Excellence!!! My fellow CEOs and Hedge Fund Managers!! Let’s go fix the world!!”. Davos would have us believe that it is a noble institution altruistically concerned with fixing the world. Whether or not that’s true (I’ll get to that in a moment) is besides the fundamental point. No one asked the suits and beancounters of Davos to fix the world.

Let me explain why that matters. At the end of World War II, under the guidance of John Maynard Keynes, the world’s then leaders created a series of institutions designed specifically to fix the world — in the very real sense of preventing a gigantic war of atrocities from ever happening again. These institutions still exist today: the World Bank, the IMF, and the UN. Whatever you may think of them, here is the fact: they are democratically legitimate institutions. Countries elect their leaders from the parliamentary leaders that people have elected. They have not just a mandate — but a democratically legitimated mandate — to fix the world. That is precisely why they have: they have been responsible for the tremendous, historic, and miraculous declines in global poverty, mortality, inopportunity. Which, incidentally, is why you would be very foolish to adopt the internet leftist line that “the UN and the IMF are ruining the world, dude!!” — for by that illogic you are no different than the suits at Davos.

Davos reflects the breakdown in global liberal political order. One in which the role and tasks of democratically legitimate institutions have been usurped by unelected illegitimate ones: corporations, banks, lobbyists. And in that sense it is not just a silly circus, but a foolish one. For Davos delegitimizes the very idea that it pretends to stand for: that we should have a world which democratically legitimate institutions can be designed to fix. That is a shame, because that idea is the truly world-changing one.

Davos is pointless. What happens when a democratically illegitimate institution tries to fix the world? It doesn’t. There hasn’t been a single example in history of an illegitimate institution changing the world for the better. Go ahead, geeks,: furrow your brows and think of one. You can’t. Why not? Because the incentives simply don’t exist. Unaccountable institutions end up hijacked by the power hungry and the ruthless. That’s not to say that the power hungry and ruthless don’t end up powerful at legitimate institutions: sure they do. But at least their power serves a point.

Davos doesn’t have one. For the simple fact is that while Davos has been growing, the world has been getting precisely worse along all the dimensions which Davos would have us believe that it is nobly attempting to improve it. Dimensions such as inequality, climate change, middle class opportunity, economic stagnation have increased as Davos grows more powerful. That’s not a magical coincidence brought about by the wand of the super cute unicorn fairies. It’s stark evidence of all the above. Illegitimate institutions do not change the world for the better, because they cannot.

So what is the point of Davos? Nothing. Apart from marketing, spin, and partying, maybe, which are, by themselves, pointless. Which brings me to my final point.

Davos is a bridge back to the future. Let’s examine the underlying philosophy of Davos for a second. What kind of value system does it take believe all the above — that illegitimate institutions with no greater social purpose should be valued above legitimate, carefully negotiated political institutions? To believe in all the above, you cannot believe in democracy, freedom, constitutionality. For you have already surrendered the idea that people should and must have inalienable rights, the freedom to exercise those rights, and the arenas in which to adapt and renew and negotiate those rights. Thus, you cannot truly believe in the idea of progress. Without which, in modernity, is to believe in nothing at all.

So what do you truly believe in — and what are the effects of your beliefs? Let me explain. Stay with me now, for I will explore now a set of dense and interconnected ideas.

In prehistory, in most societies, the leaders of the most powerful tribes would meet once or twice a year to discuss their concerns — which invariably revolved not around progress or prosperity or plentitude — but staying in power. Let us examine the difference between prehistory and modernity closely, for I wish here to make a subtle but crucial point.

For the leaders of prehistory, progress and prosperity and plenitude were indeed important, too. They didn’t merely meet to discuss chopping people’s heads off. But prosperity and progress were proximate goals — not ultimate goals. That is, progress and prosperity were instruments by which monarchs and feudals lords would stay in power. Power itself was the ultimate goal, and progress and prosperity were merely one means, among many, to its end. And when prosperity is subordinate to power, the powerful can make themselves not merely rich — but hereditary, dynastic kings.

The great political innovation of modernity is to reverse precisely that relationship. No longer do we admit leaders for whom power is the ultimate goal, and progress and prosperity merely the proximate goal: just one means to its end. Indeed, the entire point of constitutions and democracy is to prevent the prehistoric political relationship in which prosperity serves power from occurring, or at least, to limit it from occuring. The central political innovation of modernity was to ensure that it is power which serves progress and prosperity, not progress and prosperity which serve power. Today, we call it liberal or constitutional democracy, and it is one of humankind’s greatest creations.

Thus, to truly believe that Davos can and should fix the world is precisely equivalent to believing in feudalism. That prosperity should serve power — not power progress. Why? When prosperity serves power, what happens — ultimately? Prosperity is concentrated amongst the most powerful — not distributed amongst the powerless. To the point that it ends up residing not just in a meritocratic elite — but in a hereditary one. Prosperity ends up superconcentrated not just in a class of super rich — but in a dynastic caste system through which its perpetually reproduced. That is where the global economy appears to heading again, today — right back to the premodern future. And Davos isn’t standing in its way: Davos is a bridge right back to prehistory.

Therefore.

Davos matters. But not for the reason the people at Davos suppose. Davos matters because it’s very growth is an existence proof of the decline of global political order. An illegitimate institution which hopes to replace legitimate ones is itself an absurd disproof of the idea of fixing the world, for its very existence contradicts it. Davos itself is a sign that we are indeed regressing through the golden age of liberal democracy, and into a darker and more troubled age that resembles premodernity.

Davos might give soundbite-happy lip service to the cause of human progress and human potential, and it’s attendees and speakers might even be truly hopeful about and concerned with both. But the unfortunate truth is that its effects are very different. It does not amplify and improve human progress and potential. By delegitimizing democracy, by undermining global political order, by discrediting the idea that the real economy should have true autonomy, not just the power of progress, but power over its own progress, Davos cripples and ruins its very own noble aspirations to a better future. It is the Frat Party at the End of the World — one celebrating the decline of global order, while the globe marches backwards in history right back towards prehistory.

Please do not read this as a condemnation, nor a jeremiad. It is neither. It simply an analysis, of history and what it took from us, and modernity, and what it gave to us, which all reasonable people should be able to understand, and to reflect upon. I do not wish to say that the people at Davos are bad people. I know many of them, and they are good, hopeful, optimistic people. Perhaps, in the end, that is precisely the problem.

Umair
London
January 2016