In secret meetings in tiny rooms, the rich plot to get even richer
I have an idea for a particularly mediocre film. The plot runs thus: a bunch of rich white men gather in an Alpine hamlet. There’s a schlubby bald Chicagoan, a Parisian banker in a suit lush enough to eat, and the obligatory Belarusian with a PhD in physics and a dentist keen on gold crowns. It’s an odd set-up, but apparently innocuous. With this much cash flying about, busted film stars and semi-retired pop singers swoop in. Journalists write amusing sketches about the post-prandial piano-man who plays Billy Joel for tipsy millionaires.
But away from the gluhwein and the gabfest, the real action is slowly revealed. The businessmen summon prime ministers and presidents to secret meetings in tiny rooms, where they order the lives of the billions consigned to the plains below – and so make themselves even richer. The title for this not-so-thriller? Well, I rather fancy Plutocrats’ Paradise.
Perhaps you think my scenario is too crass to be credible, yet a far cruder version is about to unfold: it’s called Davos.
More than 2,500 business executives and bankers will converge on the highest town in Europe for the annual World Economic Forum. For the next five days, Davos will, it’s safe to say, boast more millionaires per square foot than anywhere else on the planet. A guest list leaked on to the web this weekend included 680 company chief executives, and a plethora of bankers: seven from Citigroup alone, six each from Goldman Sachs, JP Morgan and Deutsche Bank. David Cameron is on the list, along with 36 other sitting prime ministers. Naturally, Tony Blair and Gordon Brown are both popping in (the WEF organisers subsequently sent me an updated list, which I am hoping the Guardian will publish online).
To record the event, reporters will be allowed partial access; while phalanxes of ski-jacketed TV presenters are on hand to conduct interviews and provide pensive cutaways.
The summit’s notional purpose is to allow heads of businesses and of state to mull over the future for the world economy. The theme of this year’s conference is “Resilient dynamism” which, true to Davos form, is a title that would make equal sense, or nonsense, the other way round (other classics of the genre include 2011’s “Shared norms for the new reality”).
All that thought-leadership might make executives feel as expansive as a costly cigar, but the sessions on “de-risking Africa” aren’t what justify the £45,000 price tag for basic membership and entrance (figures from a New York Times article that WEF guided me to). As participants acknowledge, the real business lies in private sessions with industry peers and amenable politicians, and access to those starts at around £98,500.
And this is what makes Davos so fascinating: it is the most perfect case study of how the practitioners of free-market, globalised capitalism give the public one explanation for what they are doing and why, while privately pursuing the complete opposite. On the one hand there is an event attended by Sharon Stone, Bono and a slew of tame academics (14 Nobel laureates this week alone), the message being “we’re open to anyone”. On the other hand, there are those secret meetings, off limits to anyone not in the £100k club. It is both a reputation-laundry service, and the most shadowy backroom-dealing house. From its inception, the whole point of Davos has been to promulgate the gospel of free-market fundamentalism. In his brilliant book, The Agony of Mammon, Lewis Lapham describes how business-school academic Klaus Schwab convened the original summit in 1971 for top European managers interested in the secrets of American entrepreneurship and “freeing commercial enterprise from the bondage of government regulation”. A grand, globalist ideology has since been wrapped around that trunk of class interest, but without it the entire enterprise would never have got off the ground.
Grasp that and you grasp what’s wrong with the argument the Terry Leahys and the Bob Diamonds make for their extreme wealth. Look, the line runs, we work bloody hard for it; we’re worth it. And it’s true: unlike previous generations of the ultra-wealthy, many of the modern super-rich work for a living, in running major businesses or in finance (although the Davos guestlist still includes plenty of sheikhs and royals). But that doesn’t mean they truly earn the millions they claim.
Take a look at who’s in the Davos set. Last spring, two American academics, Jon Bakija and Brad Helm, and a US Treasury official, Adam Cole, published the most comprehensive analysis yet of the richest 0.1% earners, based on tax returns. Of these top dogs, nearly two in three were top corporate executives and bankers. And the story in both those professions has not been of brilliant returns to shareholders or vast improvements for society, but of wealth extraction and lobbying politicians, Davos-style. In particular, the tale of modern high-finance is of generating transactions, whether in corporate mergers or sub-prime mortgages and then skimming off some of the cash.
Earlier generations would have known what to call this Davos set of wealth extractors and rip-off merchants. Andrew Sayer, a Lancaster professor working on a book to be called Why We Can’t Afford The Rich tots up the terms: Ruskin referred to such wealth as illth, the liberal JA Hobson as “improperty”. Only now, the top 0.1% are able to conceal what they’re up to in plain sight. Which brings you back to my film.