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Economy

'Davos Man' is an angry, powerful look at economic inequality

Davos Man: How the Billionaires Devoured the World, by Peter S. Goodman
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You may never have heard the name "Davos Man," but you know who he is.

The term was coined by the late political scientist Samuel Huntington to refer to a subset of affluent attendees at the World Economic Forum's annual meeting in the Swiss town of Davos — postponed from its January date this year due to the COVID-19 pandemic.

In his new book, Peter S. Goodman describes these people as "those so enriched by globalization and so native to its workings that they were effectively stateless, their interests and wealth flowing across borders, their estates and yachts sprinkled across continents, their arsenal of lobbyists and accountants straddling jurisdictions, eliminating loyalty to any particular nation."

Goodman, who writes about economics for The New York Times, does not like Davos Man. At all. And his new book does an excellent job explaining why — it's an angry, powerful look at the economic inequality that's been brought into sharp relief by the COVID-19 pandemic.

Goodman's book focuses on five Davos Men. There's Marc Benioff, the founder and CEO of tech company Salesforce, and a proponent of so-called "stakeholder capitalism," a supposedly kinder, gentler brand of capitalism that purports to care about more than just profits. ("They would prefer that polar bears not succumb to heatstroke, and that homeless people be housed somewhere," Goodman explains, with barely concealed skepticism.

And then there's Jeff Bezos, the Amazon founder and one of the world's most famous multi-billionaires. Bezos' company exists, Goodman writes, due to several factors, including "amassing monopoly power and applying it to crush competitors; relentlessly squeezing workers for productivity; and gaming the tax system to avoid surrendering money to the government."

The first part of Davos Man explains how our economic system — a flawed one, he argues — has allowed billionaires to amass their wealth, while the second part focuses on how the ultra-rich used the COVID-19 pandemic to line their coffers to an even greater extent: "If the agony of 2020 had demonstrated anything it was how the rich could not only prosper but profiteer off everyone else's suffering," Goodman writes.

One way billionaires profited from the pandemic was the CARES Act, the bill that expanded unemployment benefits and sent relief checks to millions of Americans. So far, so good, Goodman writes, "but as the political price for this aid for regular people, every Davos Man was invited around the trough." The act also contained a $170 billion tax cut that benefitted real estate developers, as well as billions of dollars in aid for huge companies including Boeing.

That money, defenders of unfettered capitalism would argue, would eventually benefit more than the C-suite executives of the companies. That claim is what Goodman calls "the Cosmic Lie: the alluring yet demonstrably bogus idea that cutting taxes and deregulating markets will not only produce extra riches for the most affluent, but trickle the benefits down to the lucky masses — something that has, in real life, happened zero times."

It goes without saying, perhaps, that Davos Man is a very angry book. Goodman refers to Davos Man as "a predator who attacks without restraint" who has earned his wealth "by warping the workings of democracy" and "employed the mechanisms of democracy to sabotage democratic ideals." His descriptions of the rich and their enablers drip with contempt: former Treasury Secretary Steven Mnuchin "resembled a comic book version of a rich guy, his perpetual smirk conjuring images of silk pajamas," and he compares Bezos to "a modern-day Louis XVI holed up inside the palace."

Anger, however well placed, can prove exhausting to readers, but Goodman is careful not to overplay his hand. He leavens the book with occasional humor: When Mnuchin was forced to address the snapping up of loans for small businesses by large corporations, the secretary "adopted the mien of a person offended to have discovered gambling in Casablanca." And Bezos, called to a hearing in the Capitol in 2020, "had sought to avoid the committee like a man putting off a trip to the urologist."

And crucially, Goodman doesn't succumb to despair. While he seems bearish on the odds that President Biden will enact meaningful financial reforms, he seems somewhat hopeful when it comes to the long-term chances of basic income, job guarantees, and wealth taxes, while allowing that "reducing economic inequality [is] exceedingly difficult as a political objective." (This is one of the rare understatements in the book.)

Davos Man isn't likely to change the minds of the most hardcore defenders of our current economic system, but there's not much that will, and it doesn't seem like that's Goodman's goal, anyway — his book is intended for lay readers who might not be familiar with just how huge the wealth gap has grown, and continues to grow. It's a powerful, fiery book, and it could well be an essential one.

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