The 2,000 or so of the global elite (0.00003 per cent of the world’s population) who meet at the World Economic Forum (WEF) are the Davos Men, a term coined by political scientist Samuel P Huntington. They exchange views, coordinate strategies and shape policy, captured by the paparazzi and adoring media.
The average age of participants is a little above 50. They are predominately male: fewer than than 20 per cent are women. They represent around 1,000 organisations from 100 countries, although the largest proportion will be from Western Europe and North America.
The cost of attendance is high, although it is rarely your own money and it is tax-deductible. The fee structure is reminiscent of Groucho Marx’s attempt to purchase a racing guide in A Day at the Races.
The WEF must invite you to Davos, which requires payment of a fee. Then there is a basic ticket, which buys admission to general sessions. Additional fees elevate the participant to Industry Associate level, which allows participation at private sessions. Businesses pay a large sum to become Strategic Partners, which allows multiple attendees (important people must be seen with their entourage). There is the associated cost of travel, accommodation and entertainment of associates and clients. All this must be an acceptable standard, which does not embarrass the attendee.
The quality of the intellectual talent and power present is usually not the reason for attending. World leaders, central bankers and policymakers rarely provide major insights or insider information, choosing studied caution in their utterances. Participants also regularly skip sessions other than the ones where they want to be seen.
In reality, it is a networking opportunity. Most Davos devotees would relate to philosopher Isaiah Berlin’s observation that “there are 567 people in the world and I know all of them”. Participants hope to build their Rolodex. Speed-dating allows face time with clients, regulators, politicians and peers compressed into a few hyper-efficient days.
Firms can promote views beneficial to their business and financial interests in a seemingly benign environment. It may allow access to leaders that would be difficult outside of Davos. In 2006, using his network, US magnate Stephen Schwarzman arranged to meet Chancellor Angela Merkel to counter German hostility toward private equity locusts. Blackstone (Schwarzman’s firm) subsequently purchased a stake in Deutsche Telekom.
The exclusivity of the WEF creates a form of reverse snobbism. Pimco’s former co-chief investment officer Mohamed A El-Erian very publicly rejected invitations to the event, penning an article entitled “Why I Won’t Go to Davos”. El-Erian argued that he preferred more efficient time management and meetings with less time pressure and greater focus.
Other luminaries who are not Davos devotees include Warren Buffett and Apple CEO Tim Cook. Google founders Larry Page and Sergey Brinand Facebook chairman Mark Zuckerberg are also not regulars. Non-attendees argue that Davos does not have a significant impact.
The real reasons for attendance are subtler. Some feel obliged to attend as their peers or customers do. For others it is an antidote to the insecurity or loneliness of leadership. For this group, Davos is like AA providing the opportunity of advice and counsel from equals. Financial Times columnist Gillian Tett once quipped that it was “a self-help group for the global elite”.
Davos’s attraction is proximity to wealth. John Kenneth Galbraith could have had Davos in mind when he noted: “Nothing so gives the illusion of intelligence as personal association with large sums of money. It is also alas an illusion.”
Exclusivity is important. Access is limited to people whose adoring and uncritical media profiles promote their purported genius and ability to walk on water. This obviates the sheer inconvenience of having to put up with other people who are not of the requisite calibre. The special can associate only with special others who understand them. The Black Swan author Nassim Nicholas Taleb likened the WEF to “chasing successful people who want to be seen with other successful people”.
There is also a certain frisson, supplied by selected intellectuals, performers and artists. But it can result in confusion with celebrities wanting to be intellectuals, intellectuals wanting to be celebrities, and business leaders wanting to be both celebrities and intellectuals.
Davos also provides the opportunity to differentiate your own standing within the elite. Did you fly commercial or on your own private jet? Where are you staying? Does your driver have a sticker allowing door-to-door pick up service? Did [insert name of rock star/world leader or statesmen/scientist] attend your soiree?
But, like all such experiences, it is deeply unsatisfying, although few will admit it. Boris Johnson, when Mayor of London, saw Davos as “a constellation of egos involved in massive mutual orgies of adulation”.
Ultimately, the real problem is that it reinforces the global elite’s deep insecurity and fears. Steve Case, founder of AOL, told author David Rothkopf: “You always feel like you are in the wrong place in Davos, like there is some better meeting going on somewhere in one of the hotels that you really ought to be at. Like the real Davos is happening in secret somewhere.”
Satyajit Das is a former banker. His latest book is 'A Banquet of Consequences' (published in North America as The Age of Stagnation to avoid confusion as a cookbook). He is also the author of Extreme Money and Traders, Guns & Money
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