Davos 2: Will simple-minded populism prove far worse than the hubris of the elite”?
Gideon Rachman in the Financial Times writes: “Although the delegates at Davos this week, fuelled by champagne and canapés, will do their utmost to pretend that it is business as usual, the fact is that the world view epitomised by the WEF is under attack as never before”.
He adds that Davos epitomises the “globalism” that the incoming US president and his political advisers are pledged to destroy.
A few days later, Martin Wolf, also in the Financial Times, opens with a reference to Davos Man – a term invented for a class of people he despised.by Samuel Huntington, the late political scientist, who attended the annual meetings of the World Economic Forum in Davos. He argued that they “have little need for national loyalty, 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 elite’s global operations”.
Wolof continues, “Core beliefs of the Davos creed have been global co-operation and economic globalisation. But faith in the latter was shaken after the global financial crisis of 2007-09. The ratio of trade to global economic output has stagnated since then, after doubling between the early 1970s and 2007 . . . it reflects shifts in policy: the post-crisis re-regulation of finance has had a pronounced home bias, with reduced support for cross-border activities. Trade liberalisation has stalled, while some studies already show a rise in protectionist measures . . .
The enthusiasm with which many of the elite seized opportunities to avoid paying taxes was disgraceful
“As has happened so often before, hubris led to over-reach. Davos people underplayed the role of legitimate and potent states in underpinning the global system. They forgot the need for the successful to recognise their responsibilities to the societies that had made their success possible. They ignored, above all, the obligation to share the gains of globalisation with its losers. The enthusiasm with which many of them seized opportunities to avoid paying taxes was disgraceful . . .”
Wolf warns: “Make no mistake: Mr Trump could bring down the temple of world trade. If he were to impose punitive (and unjustifiable) tariffs on Chinese imports, the EU is likely to follow suit in order to protect its producers from a surge of Chinese imports. China would then feel obliged to retaliate. The system of trade rules could collapse. So, too, could the very idea of a co-operative global system”.
He concludes: “Yes, policymakers should have paid more attention to what was happening to ordinary citizens, but the simple-minded populism now on the rise will soon prove far worse than the hubris of the Davos elite”.
Posted on January 16, 2017, in Vested interests and tagged Davos elite, Gideon Rachman, Martin Wolf, protectionist measures, simple-minded populism, tariffs, Trade liberalisation, World Economic Forum. Bookmark the permalink. Leave a comment.