Opinion

Felix Salmon

Why the irrelevance of Davos is good news

By Felix Salmon
January 27, 2014

No crisis can last forever, and the main lesson I’m taking from the 2014 World Economic Forum is that, at least as far as the world’s elite are concerned, we’ve finally put the financial crisis behind us. There are still a lot of things to worry about, of course, both political and economic. But this was by far the least economically interesting Economic Forum I’ve been to.

Now admittedly I’ve been coming to this conference during extremely interesting times. My first WEF was in 2008, when the credit crisis was top of mind; in all of the conferences since then, the unquestioned center of the proceedings has been the various conversations — formal and informal, public and private — between all the financial-sector bigwigs who attend. Finance ministers, central bank governors, bank CEOs — this was their conference, and it was important because they controlled the levers at the heart of all the world’s major economies.

Last year, I got a brief glimpse behind the curtain when I made it into an invitation-only discussion of monetary policy. The intellectual firepower in the room was absolutely astonishing: great central bankers of the past and present; Nobel laureates in economics; policymakers with decades of deep immersion in the issues at hand. The level of discussion was unremittingly high, and it was clear that everybody in the room was getting real value out of it.

This year, by contrast, economic issues were pretty much an afterthought. Sure, the central bankers and finance ministers all still turned up, and had the meetings they always have. But no one seemed to care. There was dutiful discussion of tapering, for instance, but it was clear that no one’s heart was really in it.

Similarly, while there has never been any shortage of heads of state at the WEF, and while there have even been quite a few foreign ministers in attendance, the reason for the big-name politicians’ presence has always been clear: they want the support of the international economic community. As a result, the job of any given president at Davos is pretty simple: give speeches, appear on panels, take bilateral meetings — and push a simple message at every opportunity. My country is open for business, we welcome investment, our civil society is strong, the opportunities are amazing.

This year, that changed. Two heads of state were in the spotlight — Shinzo Abe, of Japan, and Hassan Rouhani, of Iran. In both cases, the narrative diverged subtly from the economic focus so familiar to the Davos elite. Questions of Abenomics took a back seat to concerns about the new Japanese prime minister’s belligerence, and whether he might be moving towards a real conflict with China. And Iran, of course, is always a political issue first, with economic questions coming a distant second.

At the same time, there was a real urgency in Davos about two national disasters — Syria and Ukraine. Davos is endemically optimistic: its entire raison d’être is for leaders to come together with the purpose of making the world a better place. But this year provided the exception to the rule. Never have I seen a consensus in Davos, on any subject, as grimly pessimistic as I saw with respect to the probable course of both Syria and Ukraine. And so, for all that US foreign minister John Kerry was dashing around holding meetings and giving speeches, there was a real undertone of futility at Davos 2014.

After all, there’s no way that an annual four-day World Diplomatic Forum, held in some remote ski resort, could ever gain momentum. Davos, at its best, is a schmoozefest: it’s a place where CEOs from all over the world can get to know each other socially, and reassure each other that they think the same way and can do business together. For that kind of thing, a series of short meetings and well-lubricated “nightcaps” is perfect. But international diplomacy runs on a very different schedule, and in any case the big-name politicians are the one group which still gets to retain a cordon of aides, preventing the kind of serendipitous mingling at which Davos excels.

This year, as the Davos center of gravity shifted from the economic to the geopolitical, it seemed if anything less relevant and important than ever. Davos is fueled by talk, the more vapid and platitudinous the better. Such talk has real value, to the talkers: it’s a way of creating weak social bonds (which are actually more important than strong social bonds), and it helps to create the illusion that we’re all closer together than we are in reality. (One of my first Davos Moments, back in 2008, involved a 20-minute conversation in a shuttle bus with a very likable ayatollah.)

In the world of international diplomacy, on the other hand, the big personalities already know each other — or have made a tactical decision that they don’t want to. Talks can drag on for months or years, and positions are fought fiercely. There are no problems here that 20 minutes of meditation, or a boozy encounter at the Salesforce party, are likely to solve. As we learned in 2011, the institutionalized shallowness of Davos is incapable of providing any kind of constructive engagement on genuinely salient geopolitical issues.

The irrelevance of Davos is, arguably, good news: it’s a sign that the economic crisis is over, at least if you’re a member of the 0.01%. And the WEF was never designed to be any kind of replacement for the UN: it can’t be faulted for the intractability of the Syria crisis. In fact, Davos 2014 was in many ways the most honest WEF that I’ve been to. Business was conducted, friendships were cemented, and countless panels were convened on matters of Global Importance, mostly featuring men in suits who were a little bit vague about what exactly they were expected to contribute. Seen up close, there was a lot to learn; seen at a distance, it was basically a formless smudge.

Davos 2014, then, was all very fun and busy for the people who made it up the alp. But there was no reason whatsoever for anybody outside Davos to care what was going on. And that’s exactly how it should be. Don’t be fooled by the huge amount of media coverage the conference receives: most of it simply comprises the work of journalists trying to justify their junket. But this year more than ever, Davos was like any other conference: it had value only to the people who attended. Let’s hope (because none of us wants another global economic crisis) that it stays that way.

Comments
8 comments so far | RSS Comments RSS

Davos is relevant to the millions of average Americans who lost their jobs and homes to the wealthiest in the world through criminal investing behavior. The American silent majority is about to roar in the next elections. Below is a link to a movie worth watching, The Company Men. It was an award winner at the Sundance Film Festival in 2010 and is available on Netflix. The vast majority of Americans now understand how and why the inequality was allowed, and who allowed it, and the ingenuity of average Americans will save us from the insatiably greedy corporatists through things like true employee-owned companies where predatory investors are not in the equation and profits are shared equally by all employees.
http://en.wikipedia.org/wiki/The_Company _Men

Posted by njglea | Report as abusive
 

LOL! Good to hear that the world’s elite have put the financial crises behind them.

Now what about the rest of us?

Are you going to keep promoting Communism and pretend that it doesn’t create more inequality than any other system?

Posted by BioStudies | Report as abusive
 

excerpt: “The irrelevance of Davos is, arguably, good news: it’s a sign that the economic crisis is over, at least if you’re a member of the 0.01%.”

I would argue that it’s quite the opposite of good news for those who are not part of the 0.01%. We glance around and see the new status quo, an unfortunate side-effect of unchecked criminal activity that the SEC and civil courts have finally and reluctantly deemed to have been civilly illegal.

A new singular truth, a new paradigm has taken form:

Mortal people (as opposed to corporate “personhood”) who commit financial crimes for personal gain and simultaneously for the benefit of corporations will henceforth be subject only to fines that can be comfortably recompensed by the corporation.

A corporation could conceivably live forever, so the cost of crimes commited on their behalf can be amortized into oblivion.

Having achieved legal personhood and virtual legal invulnerability, these corporations have become neophyte Demigods.

Very bad news for mere mortals, indeed.

Posted by breezinthru | Report as abusive
 

> great central bankers of the past and present
Bankers created the problem, taxpayers had to pull the car out of the ocean and the motor still won’t start. Every single major bank has been found to be a criminal enterprise in some form or another and the only thing that happens is they get fined a small percentage of their illegal profit. The American congress is certified 100% fascist. Yea Mr. Salmon everything is just fine for the trash screwing the rest of us.

Posted by UScitizentoo | Report as abusive
 

“As far as the world’s elite are concerned… ” Goodonya Felix, they also keep calling me with their opinions, I too wonder if they can be completely trusted.

Posted by Colmery | Report as abusive
 

No crisis can last forever, and the main lesson I’m taking from the 2014 World Economic Forum is that, at least as far as the world’s elite are concerned, we’ve finally put the financial crisis behind us…………….

oh right,they must have forgotten about the Emerging Market FX crisis, various nations in mass upheaval, China’s liquidity crisis front-and-center, and growth hopes around the developed and emerging world collapsing.

sure, everything is great!

Posted by Loucleve | Report as abusive
 

The ‘elite’ are so far removed from the realities of real life – they wouldn’t have a clue if it smacked them right in the face.

Posted by Overcast451 | Report as abusive
 

Did you post something on this? Where’s the link?

“Last year, I got a brief glimpse behind the curtain when I made it into an invitation-only discussion of monetary policy. … The level of discussion was unremittingly high, and it was clear that everybody in the room was getting real value out of it.”

Posted by dedalus | Report as abusive
 

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