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‘Book review: How the Billionaires Devoured the World’

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‘Book review: How the Billionaires Devoured the World’
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This year’s World Economic Forum in Davos, Switzerland was both unusual and familiar. It was unusual in that it was held in June rather than in January and took place against the backdrop of the seemingly endless pandemic and Russia’s brutal invasion of Ukraine. Both events have jolted the international system and complicated the narrative of steady and inexorable progress in a globalized world. The Forum was familiar in that the conference generated seemingly endless feature stories about the importance of Davos by the business press and featured lofty expressions of the virtues of “stakeholder capitalism” by corporate executives.

Peter S. Goodman, global economics correspondents for the New York Times, has written a wonderful book about Davos—the Forum, its ethos, and especially the people who dominate and embody it.

Davos Man: How the Billionaires Devoured the World (Custom House, 2022) is insightful, entertaining, informative, and scathing. Goodman examines three important and related issues: the rise of the Davos Man billionaire class; the surge in income inequality across the world; and how income inequality is distorting global politics, fueling angry populism from both the right and left.

Goodman has had a stellar career in journalism, reporting from Southeast Asia, Japan, China, the United Kingdom, and the United States. He has worked for the Washington Post, Huffington Post, International Business Times, and, on two occasions, The New York Times. In addition to Davos Man, Goodman wrote a book about the 2008 financial crisis called Past Due: The End of Easy Money and the Renewal of the American Economy.

Davos Man, according to Goodman, is a “member of the global billionaire class that controls the majority of the world’s wealth. A rare and dangerous predator who attacks without restraint—expanding his territory and seizing the nourishment of others—while he deftly assumes the guise of empathy and generosity, lulling his prey into submission.”

Goodman describes the World Economic Forum as a spectacle that “at once horrified and mesmerized. The contrast between the Forum’s noble packaging and its crude reality was surreal.” Goodman argues that the corporate leaders who come to Davos are adept at offering sweeping visions of a soaring world economy propelled by the private sector. However, he says these executives shrewdly and ruthlessly exploit the international economic system for their personal benefit and the profits of their firms.

Goodman’s book focuses on five executives who exemplify Davos Man: Jamie Dimon, CEO of JPMorgan Chase; Marc Benioff, founder of Salesforce; Stephen Schwarzman, CEO of Blackstone Group; Larry Fink, CEO of BlackRock; and Jeff Bezos, founder of Amazon.

To take one example, Goodman’s depicts Bezos as a hugely skilled and ruthless businessman who has amassed a personal fortune of more than $200 billion. He has opulent homes in Manhattan, Washington, D.C., and Beverly Hills and, of course, has a Gulfstream jet transport him around the world. Goodman says that Bezos has built a state-of-the-art distribution network that connects factories and warehouses with hundreds of millions of consumers. Staggering profits flow to Bezos at the same time that Amazon’s rank-and-file employees struggle with low wages and difficult, even dangerous, working conditions.

Bezos, Goodman declares, is “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.” 

Linked to the rise of Davos Man is the surge of income inequality. Goodman calculates that in the last 40 years, the wealthiest 1% of Americans gained $21 trillion in wealth while households in the bottom half have seen their wealth fall by $900 billion. Since 1978, total compensation for corporate executives has risen by more than 900% while wages for the typical American have grown by just 12%.

This inequality, Goodman charges, is significantly the result of Davos Man exploiting the economic and political system for his own benefit. He has found ways to avoid paying taxes, circumvent government regulation, and stymie anti-trust enforcement. The rise of economic inequality has allowed Donald Trump and other populist leaders to exploit the anger and fear of the working class. “Over recent decades, the billionaire class has ransacked governments by shirking taxes, leaving societies deprived of the resources needed to combat trouble…This has laid the ground for politicians who weaponize fear and foment hate, while prescribing incoherent solutions to legitimate social problems.” 

Goodman argues that remedies to lessen inequality are easy to design on paper but are hard to enact because of the political power of the Davos Man. “As a question of policy, reducing income inequality is not terribly complicated. It’s just exceedingly difficult as a political objective. The government needs to reapportion wealth so that ordinary people regain a meaningful stake in society. But those who possess wealth have mastered how to use it to manipulate democracy, preventing a fair distribution,” he writes.

Goodman says a plausible policy agenda to address inequality includes a guaranteed basic income, increasing the minimum wage, a more progressive tax system, and building a stronger safety net with robust health care and retirement programs.

He attacks “the Cosmic Lie” that rising wealth for Davos Man trickles down to workers, arguing that “cutting taxes on the wealthy has provide disastrous for the vast majority of ordinary people.” He proclaims the “Big Truth” that broad economic growth and rising incomes come from public investments in education, health care, and infrastructure. 

Goodman believes the United States has reached a pivotal and tenuous time. 

“The inequalities that defined the American economy—the legalized tax evasion, the structural racism, the erosion of labor power, and the growing impossibility of paying bills on typical wages—were realities that long predated Trump. They would not be fixed by his removal from the White House. The movement that had propelled him to power was the continuation of forces that had been operative in the American sphere for decades.”

Goodman posits that we may have reached an inflection point in which the stark consequences of inequality have become so evident that they trigger “a full-on reckoning with the structural deficiencies of the global economy.”

He says President Biden’s struggles to enact policies that address income inequality may be very consequential. “If he fails to follow through, the consequences could be potentially profound. The Biden years could raise expectations for fair redress before giving way to familiar disappointment, as wages stagnate while billionaires add to their winnings. That could wind up fertilizing the ground for an updated, more sophisticated version of Trump…Trump is gone, but Trumpism might yet have a bright future.”   

This is an important, provocative, and sobering book. Goodman argues that unless income inequality is addressed “the very concept of democracy is endangered.”   

 

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