Clueless in Davos
As it always does this time of year, my inbox is filling up with messages of a certain kind. They all begin with: “I’m here in Davos” and then, in an intellectual form of name dropping, proceed to mention key words and phrases such as Geopolitical Risk, G-Zero World, and Rise of Regions. This, of course, sounds really heavyweight and important. But I am not fooled. Nobody knows what those words mean. The only purpose is inform me that the sender is among the elect glitterati who get invited to the World Economic Forum’s annual meeting in Davos.
You have to hand it to Klaus Schwab, the founder and CEO of the Forum. He’s the greatest showman since P.T. Barnum. Short, bald, and unimposing, he is what you envision when someone says “gnome of Zurich.” Yet, despite his anti-charisma, Schwab has managed to persuade a large number of the world’s top CEOs, politicians, academics, media stars, and bureaucrats that they have to be in a cramped, second rate hotel in a cold Swiss village with mediocre skiing and food every year during the bridge weekend between January and February. Indeed, he has not only convinced these people that they have to be there, he has them begging him for invitations and prime spots on the program.
Of course, it’s a combination of competitive vanity and convenience that makes it all work. Glitteratus A begs for an invitation because he/she can’t stand the thought of not being there if Glitteratus B is there. The fact that many are there then makes it easy to do in a few days a lot of business with each other that without the meeting would take weeks or months. So, for organizing a nice party for them, the glitterati each pay Schwab anywhere from $50,000 to several hundred thousand dollars. I told you he’s the best since Barnum.
The theory of Davos is that Davos man is setting the agenda for and leading the charge toward a fully globalized system of international relations. It is at the annual meeting that the Masters of the Universe divine the alignment of global forces and develop the marching orders that will guide them through the year after they descend from the mountain.
The reality is quite different. At the Davos meeting in 1997, Southeast Asia was designated the most dynamic region in the world. Only three months later, the Asian financial crisis that became a global crisis was triggered when Thailand effectively fell into bankruptcy. None of the seers and whiz kids at the annual meeting had even hinted at the possibility of such a development. And when the crisis struck, the Davos men running each of the concerned countries could not develop an agreed response. Indeed, the Asian Davos men/women totally rejected the solutions imposed upon them by the European and American Davosers.
Similarly, at the Annual Meeting of 2008, none foresaw the bailout of Bear Stearns, the failure of Lehman Brothers, or the collapse of real estate markets in the United States and Europe. Nor in 2010 did the Davos elite foresee the need that quickly arose in the spring for a huge stability fund to deal with the financial crisis of Greece and other peripheral European countries. In short, Davos man has consistently proven clueless and unable to set an agenda with regard to the global developments on which he is supposed to be the expert.