The Party of Davos | The Nation


The Party of Davos

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The world's movers and shakers are convening once again in January at the annual World Economic Forum in Davos, the posh ski resort nestled in the Swiss Alps. Attendance is invitation-only, enforced by police barricades, razor wire and the latest high-tech military hardware to guard against terrorists, protesters and curious local citizens.

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Jeff Faux
Jeff Faux is the founder and now Distinguished Fellow at the Economic Policy Institute. His latest book is The...

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Some 2,000 people will show up to discuss the world's problems as defined by those who own and manage the great global concentrations of wealth (Microsoft, Citigroup, Siemens, Nestlé, Nomura Holdings, Saudi Basic Industries, etc.). Their guests include prominent political leaders, international bureaucrats, academics, consultants and media pundits--with a few NGO and labor union officials sprinkled along the edges to demonstrate diversity.

Davos is not the place for secret conspiracies. More than 200 hovering journalists will dispatch to the world's citizens breathless accounts of the chatter and charm of the masters of the economic universe. Davos is rather the most visible symbol of the virtual political network that governs the global market in the absence of a world government. It is more like a political convention, where elites get to sniff one another out, identify which ideas and people are "sound" and come away with increased chances that their phone calls will be returned by those one notch above them in the global pecking order.

Americans are of course prominent members of this "Party of Davos," which relies on the financial and military might of the US superpower to support its agenda. In exchange, the American members of the Party of Davos get a privileged place for their projects--and themselves. Whether it's at Davos, at NATO headquarters or in the boardroom of the International Monetary Fund, heads turn and people listen more carefully when the American speaks.

"Davos Man," a term coined by nationalist scholar Samuel Huntington, is bipartisan. To be sure, Democrats tend to be more comfortable with the forum's informal seminar-style and big-think topics like global poverty, cultural diversity and executive stress. Bill Clinton goes often, and Al Gore, John Kerry, Robert Rubin, Madeleine Albright, Joe Biden and other prominent Democrats are familiar faces. Republicans generally prefer more private venues. George W. Bush, of course, doesn't do anything unscripted. But people like Dick Cheney, Newt Gingrich, John McCain and Condoleezza Rice have all worked the Davos circuit.

That the global economy is developing a global ruling class should come as no shock. All markets generate economic class differences. In stable, self-contained national economies, where capital and labor need each other, political bargaining produces a social contract that allows enough wealth to trickle down from the top to keep the majority loyal. "What's good for General Motors is good for America," Dwight Eisenhower's Defense Secretary famously said in the 1950s. The United Auto Workers agreed, which at the time seemed to toss the notion of class warfare into the dustbin of history.

But as domestic markets become global, investors increasingly find workers, customers and business partners almost anywhere. Not surprisingly, they have come to share more economic interests with their peers in other countries than with people who simply have the same nationality. They also share a common interest in escaping the restrictions of their domestic social contracts.

The class politics of this new world economic order is obscured by the confused language that filters the globalization debate from talk radio to Congressional hearings to university seminars. On the one hand, we are told that the flow of money and goods across borders is making nation-states obsolete. On the other, global economic competition is almost always defined as conflict among national interests. Thus, for example, the US press warns us of a dire economic threat from China. Yet much of the "Chinese" menace is a business partnership between China's commissars, who supply the cheap labor, and America's (and Japan's and Europe's) capitalists, who supply the technology and capital. "World poverty" is likewise framed as an issue of the distribution of wealth between rich and poor countries, ignoring the existence of rich people in poor countries and poor people in rich countries.

The conventional wisdom makes globalization synonymous with "free trade" among autonomous nations. Yet as Renato Ruggiero, the first director-general of the World Trade Organization, noted in a rare moment of candor, "We are no longer writing the rules of interaction among separate national economies. We are writing the constitution of a single global economy." (Emphasis added.)

On the board of many transnational companies, Ruggiero has been both trade and foreign minister in the Italian government of right-wing businessman Silvio Berlusconi. He is now the chair of Citigroup's Swiss subsidiary. His fellow authors of the Davosian constitution have similar résumés, tracking careers that flow easily across borders and between public and private sectors. After just stepping down as German chancellor, Gerhard Schröder has become board chair of a Russian company building a gas pipeline that Schröder himself had negotiated while in office. And so it goes.

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