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.

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