Davos is a corporatist racket

by Daniel Hannan This will be the last time anti-globalisers […]

by Daniel Hannan

This will be the last time anti-globalisers protest at the World Economic Forum in Davos. From 2016, the ministers, chief executives, columnists and assorted quangocrats who gather at the Swiss resort won’t see so much as a stray dreadlock: eco-protesters say the meeting is no longer worth picketing.

You can see why they might feel conflicted. Davos is a place where powerful people pick up consultancies and directorships and international posts. Left-wingers rightly resent this.

What they see, in Marxist terms, is a gang of rentiers coming together to devise new means to live off the sweat of the workers.Against a background of dazzling, empty slopes – there are no skiers, because every chalet has been hired by an NGO or a multi-national – the few hatch schemes against the many.

Yet, when it comes to free markets, Davos Man is often on the same side as the Lefties. He derives most of his income, directly or indirectly, from state patronage. If he is in the private sector – and he is more likely to be a lobbyist, politician or bureaucrat than a businessman – he’ll be an instinctive monopolist, keen to persuade ministers and officials to raise barriers against his potential rivals. (I say “he”, though his female equivalent can also be found stalking the conference rooms in her sharp trouser suit.)

Some Lefties, in short, may finally be grasping the difference between being anti-business and being anti-market. Others refuse to see any distinction, insisting, with a kind of mulish narcissism, that if A and B both separately disagree with them, then A and B are, to all intents and purposes, indistinguishable.

For the record, most Right-wingers heartily dislike the Davos racket. The only reason we don’t demonstrate in the slush alongside the Occupy crowd is that most of us have jobs. We know in our bones that Davos Man despises us and our values. As Samuel Huntingdon once put it, the delegates “view national boundaries as obstacles that thankfully are vanishing, and see national governments as residues from the past whose only useful function is to facilitate the élite’s global operations.”

All right, you say, but surely it’s useful for powerful people to exchange ideas and learn from each other’s mistakes. Well, yes; but this lot rarely seem to learn. Whatever the problem, their preferred solution is always to establish a global bureaucracy staffed by people like themselves. Obviously, they don’t put it like that. “The stability of the global economy” is a much prettier phrase than “a juicy public sector post for me”.

It’s like an Ayn Rand novel, where lobbyists reach cosy arrangements with each other in elliptical language. Remember the way she described members of a company board? “Men whose careers depended on keeping their faces bland, their remarks inconclusive and their clothes immaculate”. That’s Davos.

If only these men really were as clever as they thought. Or, to be more precise, if only their cleverness translated into making good decisions. In fact, Davos Man consistently gets the big calls wrong. In the 1970s, he was for prices and incomes policies. In the 1980s, he was for the ERM. In the 1990s, he was for the euro. In the 2000s, he was for the bank bailouts.

A whole academic discipline has grown up to explore why bright, educated people make these errors of judgment. One theory is that, being bright, they over-value their hunches. Put a large group of such people together, so that their hunches become self-reinforcing, and you get the disastrous groupthink to which experts are prone.

The World Economic Forum would thus be a dodgy enough event even if all its members were disinterestedly seeking to advance human happiness. But, of course, most of them are doing no such thing. Surrounded by power and patronage, delegates naturally line one another up for jobs – jobs paid for, more often than not, by taxpayers.

A mild aversion to cliché has, until now, held me back from quoting Adam Smith’s most famous aphorism. But, in the context of the World Economic Forum, nothing else will do: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Yup. And free-marketeers want no part in it.

Source: CapX


The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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