Trumpism and the Davos Man

For the Western establishment, modern China is both an exotic political success case that flouts the wisdom of liberalism, as well as a testimonial to the ability of the Bretton Woods system to lift entire nations and fold them into the international community.

The global elite now openly admires authoritarian capitalism.

Photograph by Robert Scoble.

Of all the surreal aspects of Donald Trump’s behavior, perhaps the most confusing is what it actually takes to be considered his enemy—and what happens when you become one. Trump built his campaign on militant nationalism. “Americanism, not globalism, will be our creed,” the President-elect said when he accepted the Republican nomination. His election caps a year in which globalization came directly into the crosshairs of populism all over the world. But if Trump and his ilk are Americanists, Brexiters, the Front National and the Alternative für Deutschland, what has happened to the boosters of globalism—the so-called globalists? Once the target of anti-globalization protesters, in Seattle and Genoa, the “Davos Man” is now the target of elected officials.

The short-term result has been unctuous, false humility. In the days following the American presidential election, some of the most prominent globalists stepped forward to declare that globalization bears significant responsibility for the current populist resurgence. Barack Obama, one of globalization’s chief evangelists, acknowledged the day after the election that “Globalization combined with technology, combined with social media and constant information has disrupted people’s lives . . . A manufacturing plant closes and suddenly an entire town no longer has what was the primary source of employment.” New York Times columnist Thomas Friedman made these high-level criticisms more personal: “When the two most important things in your life are upended—the workplace and community that anchor you and give you identity—it’s not surprising that people are disoriented and reach for the simplistic solutions touted by a would-be strongman.” Niall Ferguson, meanwhile, highlighted the cognitive dissonance of the globalist class. With a blithe lack of self-consciousness, he told CNNMoney that “establishments generally underestimate how much they’re hated, particularly if they’re cut off from contact with regular people. I think there’s a worldwide backlash against globalization—and it’s economic discontent, a backlash against immigration, a backlash against free trade.”

After the initial shock, however, came the think pieces seeking to calm globalist fears about the end of globalization. Financial Times columnist Martin Wolf concluded that “the forces in favor of global trade remain quite strong. Even Mr. Trump might lack the ability or the will to thwart them altogether.” His thinking was that China’s ascendance in the international economic architecture would force the West to be pro-trade. Both Wolf and Friedman quickly pointed out, as well, that those most likely to lose under Trump’s economic policies were the members of the white working class who had voted him into power. Behind these assessments is a lingering undertone of disdain and disbelief: a sense that the crisis is ultimately to be ridden out, and that “these people”—the angry populists who rejected the establishment—will somehow be convinced to go away.

This is not entirely wrong. The conflict between Trumpism and globalism is overstated, not least by Trump himself; but also by the people who feared him leading up to the election. Many of the people picked for the administration, or likely to work with it, are not only perfectly fine with free trade, but are boosters of it. Secretary of Commerce nominee Wilbur Ross, Secretary of State nominee Rex Tillerson, and Goldman Sachs veterans Steve Mnuchin and Gary Cohn—the probable future heads of American economic policy—are all beneficiaries and defenders of the current global economic system. It seems unlikely that Trump will directly undermine the World Economic Forum (the organization behind Davos), the Aspen Institute, or the think tanks, consultancies, and conferences that make up the cottage industry of global thought leadership. For starters, massive tax cuts for the wealthy are more likely to inflate the fortunes of the small base that keeps this industry going.

But this highest stratosphere of prestige is not simply bound together by money. Davos represents a very specific global ethos directly at odds with most of Trumpism. We’ve seen and will continue to see changes in the emphases and nature of global thinking as globalists look for clever ways to do business with the incoming US President and survive upcoming power shifts across the world system.

It’s a relief for the globalists that Trump will not be attending the World Economic Forum in Switzerland this week. Attendees will, instead, have the chance to convene with another illiberal, but friendly, face: Xi Jinping, the first Chinese president to appear at Davos. His scheduled visit, announced soon after Trump’s victory, will provide both a refresher course in how to be pragmatic and a much-needed affirmation that Valhalla still stands.

Insofar as anti-establishment ethno-nationalists truly mean what they say about elites, they have a worthy target in Davos Man. A genuinely novel outgrowth of the age of neoliberalism, globalization “thinkers” were the organic intellectuals of the globalist class, a new power elite. The precursors to the current generation of writers and institutions were business-intellectuals like Peter Drucker, and midcentury conferences like the Aspen Institute, which exuded a sheen of intellectualism designed to appeal to the wealthy. But the era of hyper-globalization that begun in the 1980s and 1990s demanded different, more worldly offerings for the rapidly growing globalist class. It was during this time that the World Economic Forum came into its own and TED was founded. These organizations catered to the aspirations of the national elites to gather and become global elites.

The Bretton Woods Conference set out a post-World War II vision for collective peace and prosperity through mandatory economic interconnectedness and the free flow of capital and trade. Established a few years later, the European Economic Community laid the groundwork for the eventual founding of the European Union in 1993. As barriers to international economic relations were breaking down, institutions and professions of influence had to globalize their perspectives as well. Compared to the super-rich during the late 19th century, the first time commerce came close to creating a globalist class, the Davos caste confronted problems far more complex that only an increasingly small group of people would be qualified to tackle. For that task, it needed new intellectual modes.

Modeled not on think tanks but business consultancies, the intellectual infrastructure of the Davos caste smoothed the way for current and former government officials and businesspeople to dialogue without losing the appearance of impartiality. Consultancies like Kissinger Associates and the Eurasia Group offered expensive advice to companies seeking to disrupt industries in emerging markets. And it is worth remembering that the day-to-day work of institutions that host high-altitude conferences is to churn out white papers and policy recommendations. Their nostra had a sheen of authenticity because of actual experience negotiating more favorable trade deals, implementing climate change initiatives, or dealing with any global problem of choice.

Soon the Davos set, always spuriously intellectual, developed into a complex network into which actual historians and intellectuals were being drawn. Figures like Francis Fukuyama and the aforementioned Ferguson—trained as scholars—were paid top dollar for empty and often reactionary prognostications about the future of civil society, war, empire. It was not just independent organizations like Davos and Aspen. Top universities such as Harvard, Stanford, and Yale began to host affiliated think tanks that welcomed fellows like Fareed Zakaria and Samantha Power, members of the globalist intellectual class who work outside of academia. For the length of their tenure, the fellows at these university arms are essentially paid speakers, rather than scholars and teachers.

Finally, Arianna Huffington brought the Davos model to the media. The annual gatherings sponsored by the WorldPost (an offshoot of the Huffington Post), Forbes, Foreign Policy, and other magazines have become legitimate must-attend events. These publications host “big ideas” panels, where their journalists can engage in dialogue with VIP guests, many of whom sponsor the events. The overall result is an amalgam of business, politics and media that is at once vacuous and incredibly powerful and influential.

While it’s easy to see how this establishment structure could provoke an uprising, two developments over the last decade have made it especially susceptible. First, the rise of technology encouraged the globalist class to emulate the fantastical, world-changing perspectives of Silicon Valley’s boy geniuses. Second, the rise of China revealed the Davos crowd’s latent admiration for illiberal forms of government. Deemed outsiders when they first arrived at Davos, tech entrepreneurs and the Chinese elite now take pride of place in Vanity Fair’s annual “New Establishment” issue. (Last year, the most exclusive party at Davos was thrown by Alibaba CEO Jack Ma.) Though they represent a small slice of the universe, tech and China have been deemed the future and have become the focal point for people with globalist leanings, leading to their further isolation from the circumstances that affect most people throughout the world.

Viewed through a Davos lens, technology is nothing less than the most efficient (and glamorous, now that it has proven its billionaire-making abilities) way to solve age-old globalization friction points. Google is a platform for accessing and organizing all the information fit to be on the internet. Facebook facilitates human connections that were previously costly or impossible. Uber, WeWork, Airbnb and similar companies that make up the sharing economy enable people to earn a living on their own terms, seemingly independent of local economic conditions. Virtual reality will eventually allow you to be present anywhere in the world from the comfort of your own home base.

Meanwhile, the technology space is also stepping into roles previously occupied by governments. Despite the Paris Agreement on climate change passed earlier this year, policy initiatives have not done as much for energy neutrality as, say, Tesla or BYD. Elon Musk dreams of a solar panel on every rooftop and a giant tube that will transport large groups of people over long distances at hyper-speed, an energy-efficient replacement for airplanes. And with healthcare costs continuing to skyrocket, Silicon Valley is conditioning people to program their bodies for longevity. The success of these ideas has encouraged a “startup” mentality among the globalist class: always aim to change the world in unexpected, disruptive ways.

China’s rapid growth has inspired a similar taste for unconventional ideas. For the Western establishment, modern China is both an exotic political success case that flouts the wisdom of liberalism and a tribute to the ability of the Bretton Woods system to lift entire nations and fold them into the international community. Since the success of the Beijing Olympics in 2008, Davos has been particularly fond of borrowing authoritarian capitalist ideas for the West’s political reform agenda.

A typical contemporary example is the Berggruen Institute. Founded by Nicolas Berggruen, a billionaire who made his fortune by investing seed money from his art collector father into distressed companies, and Nathan Gardels, editor-in-chief of the WorldPost, the Institute hosts mini-Davos gatherings year round, all over the world. While the think tank tackles many governance issues, Berggruen and Gardels are personally invested in designing the “perfect” political system for the world. Their 2012 book Intelligent Governance for the 21st Century argues that the ideal government for Globalization 2.0 is one that is a “hybrid, ‘mixed constitutional’ template of ‘intelligent governance’ that seeks to incorporate the proven best practices of [the US and Chinese political systems]—competent government guided by cool deliberation and talent married to the self-correcting qualities of democratic feedback and accountability.” Essentially, this government amounts to a combination of Chinese meritocracy through the civil service, the dual houses of British parliament, and an executive insulated from the pressures of direct democracy. Meanwhile, the people can participate through social media. (This was back when Weibo, China’s Twitter, held the promise of being able to effect change from the grassroots. The government cracked down on Weibo the following year.) Prominent members of the Davos caste, Berggruen and Gardels have arguably done the most (outside of China itself) to promote the soft power of the country’s autocratic system.

While much is made by globalization boosters of the democratic benefits of globalization, the preference for overriding the franchise in favor of markets is the more firmly held principle. Parag Khanna, one of the stars of the globalist firmament—who at a book event I attended claimed globalization was his “middle name”—put out Connectography a couple of months before Brexit, and Trump’s nomination. Since he arrived on the scene as a wunderkind with his first book The Second World: Empires and Influence in the New Global Order, Khanna has become a top chronicler of the coming total globalization, an ambition he made clear in his second book, How to Run the World: Charting a Course to the Next Renaissance. Connectography completes the trilogy by claiming trade treaties and internet fiberglass cables are the key to a country’s prosperity. “Connectivity is nothing less than our path to collective salvation,” he writes.

Khanna’s primary examples are Singapore and Dubai. If these business-friendly locales have an identity, it is comprised of utmost devotion to the profit motive, competence, and the new. The people who have found their (semi-permanent) homes in these global cities are typical of those who have benefited most from globalization. They have entrepreneurial ability, a strong educational background, and capital or other assets. They have survived the increasingly flexible, and therefore unprotected, global labor markets. Khanna admires their casteism, “In the West, people have evolved a false piety; they are uncomfortable acknowledging their comfort with this new medievalism. In Dubai (and Singapore), they are not.”

If these ideas seem unfamiliar, it’s because they have not gained much traction in the real world in their original state. In fact, most of the intellectual output from globalist organizations doesn’t directly translate into policy initiatives. Rather, they argue the future to set the terms of the present. They reinforce the globalist ethos of policymaking. The ideas that have reached implementation focus on realizing the vision of a globalized, hyper-technological, enlightened utopia with just the right amount of illiberalism to make it happen. But to whom does such a future belong? A staunch globalist would say that it belongs to everyone, since, by definition, everyone will be touched by the welfare benefits of this bright utopia.

The community feeling among the globalist class has strengthened over time. Their expensive annual conferences are first and foremost, “a place you should go if you’re really looking to reach a wide audience of influencers in a very short period of time,” Jennifer Risi, managing director and head of media at public relations firm Ogilvy Media Influence, said in interview with CBS on the eve of the 2016 Davos. She continued: “It’s a place where you can walk into anyone: heads of state, celebrities, world business leaders. That’s why people go—for the access and to make deals.” Ideas on how to make globalization work set the backdrop for the high-stakes dealmaking—and provide an opportunity to show your “A-game, or else” in the words of foreign policy expert Ian Bremmer.

Not that this business mentality is completely cynical: the attendees genuinely believe that when the most important and influential people in the world are in the room, they will be able to come up with the best ideas and coordinate among the most important stakeholders (themselves) for implementation. In the off-season, Davos and the Aspen Institute both host smaller gatherings of discrete groups of globalists—such as young professionals, health care experts, strategy professionals in businesses, and the like—to offer as many chances as possible to convene. For example, at the Aspen Institute Business and Society Leaders Forum in June, sustainability experts from Qualcomm, Toyota, Nike, Chevron, and other multinationals discussed corporate responsibility with Aspen scholars. Qualcomm proudly announced on the company’s blog that the experts discussed “the importance of scenario planning for today’s and tomorrow’s challenges, the role of business model innovation for sustainability in an ever-changing environment and the significance of doing business with a purpose.” In other words, nothing got done.

The real objective of the globalist class is to measure one another and make sure they are not behind the market. Meetings have gotten more frequent and the ideas less concerned with reality. That leads precisely to the justified accusation that these people are out of touch. The urgency of the current populist movement stems from a recognition that this condition is structurally self-enforcing. Nothing short of its own disruption would make a difference.

The raison d’être of the globalist class has always been, unsurprisingly, the global economic system. For them, it is not merely a way of life, but the guarantor of world peace and prosperity. Until Trump, the US was the leading arbiter of this vision, at least in rhetoric, if not in practice. (A large part of the reason economists are not too concerned about Trump’s anti-trade rhetoric is that the US has never a been a particularly open trading system.) With Trump threatening to withdraw the US, the globalist class needs another champion to continue their work. They have one in China.

From Beijing’s perspective, the irony of succeeding the US in this respect is almost too perfect. Its relationship with the international community was best epitomized by President Xi Jinping’s visit to Seattle in late 2015. Kicking off a tour of the US, the two-day stop in Seattle focused on cementing deals between Chinese and American technology companies. Former Secretary of Treasury Hank Paulson led a CEO roundtable with executive attendees to further facilitate the cross-country economic dialogue. Smiles were tight all around, since the visit followed a summer of heightened cyber-espionage from China. On the political front, China was embroiled in territorial disputes in the South China Sea, which the US commented on in support of its allies in Asia-Pacific. So it has gone since China’s opening up to the West in the late ’70s: at once a poster child for global economic cooperation and a rogue nation that operates outside international norms.

Since President Xi took office, that dual identity has become even more pronounced. In many ways, 2016 was a banner year for China’s emerging status as a legitimate global superpower. In April, it was instrumental in pushing through the Paris Agreement to combat climate change. In September, its currency, the renminbi, joined the IMF’s basket of elite reserve currencies alongside the US dollar, the British pound, the euro, and the Japanese yen. It is currently locked in a legal battle with the US and EU at the World Trade Organization for recognition as a market economy, a designation that is more a mark of prestige than an opportunity for significant economic gain. To get to this stage, China had to work within the existing Bretton Woods structure. Ascension to the WTO in 2001 meant virtually limitless export markets, while a voice at the IMF offered influence on how to achieve global financial stability.

On the other hand, it has become clear that President Xi’s exhortations to realize the “China Dream” and resist nefarious Western influence are not mere rhetorical flourishes. China has continued its land reclamation projects in the South China Sea, ignoring an international ruling that it was violating the Philippines’ sovereign territory. It has quietly kicked off infrastructure development projects across Asia as part of its One Belt, One Road initiative to bring more countries into its sphere. At home, strains of the Cultural Revolution can be heard: in national mandates to curb Western teaching in universities, in an aggressive crackdown on human rights activists and lawyers, in nationalist education for Buddhist monks. Perhaps most worrying of all, President Xi has indicated he may not step down after his customary ten-year term is up.

Judging by the rapturous reaction when it was announced he would attend Davos this year, the globalist class is not going to focus on these worrying aspects. According to Kerry Brown, a former Australian diplomat to China, “[Xi’s] attendance at Davos would be looked at as a sign that China is starting to fill space being potentially vacated by the US under Trump.” In other words, China is now heir apparent to the responsible stakeholder role.

Since his election, Trump has given Beijing plenty of opportunity to demonstrate that it is worthy. When he called Taiwan’s president, the first time a US President or President-elect has done so since the US reestablished ties with mainland China, the Foreign Ministry blamed Taiwan, diffusing a potentially explosive situation. The taking of a US water drone in the Pacific a few weeks later, though, was an indirect signal that Beijing’s military position was not to be underestimated. And when Trump blithely called for a nuclear arms race, Beijing responded that it “stands for and advocates the full prohibition and destruction of nuclear weapons.”

What Beijing represents that Trump does not is stability, belief in the global system, and faith in science. Given the bewilderingly rapid shifts in Trump’s policy positions, it’s impossible to say if he definitely hates globalization or wants to make an enemy of the tech industry. It’s incredibly hard to predict where he will go, and it’s clear, regardless of his views, that he does not have any regard for norms. That uncertainty is lethal for the globalist class.

China is also looking to carry forward faith in technological progress and governance by enlightened elites. There’s the $360 billion committed to combating climate change and the virtual reality and robotics technology that is miles ahead of what Silicon Valley has produced. China has a state-owned venture capital fund with $300 billion in capitalization; another fund was established this year with $30 billion in seed money. Beijing has even floated the idea of a national social media network wherein your actions are constantly visible to and critiqued by others. It’s a future out of a Black Mirror episode (literally), but it’s also on the cutting edge of tech thinking.

This past summer, Joshua Cooper Ramo, one of the most respected China hands and vice chairman of Kissinger Associates, published The Seventh Sense. Currently the most popular book among executives, according to an informal McKinsey & Company survey, The Seventh Sense argues that a mastery of networks will determine future success. Given that technologically driven networks already grant power to ISIS cadets, Bernie Sanders supporters, and old international alliances alike, we should learn to play the game. The alternative is to fall behind: “Even now the networks of our age are starting to shuffle us into ‘convergence clubs’ and ‘divergence clubs,’ just as the Industrial Revolution once split the world. You’re not wrong to be wondering: Which camp will I be in?”

Ramo was the first to give the China Model intellectual legitimacy in the West when he described it as the “Beijing Consensus,” a competitor to the “Washington Consensus” for economic development. The global elite now openly admires authoritarian capitalism: allow a limited space for private enterprise, but the state owns the commanding heights and keeps tight control over the levers of the economy. Above all, Asianists agree that good governance requires some form of technocracy. The contrast with the West first became especially stark after the 2008 financial crisis, when China moved swiftly to enact countercyclical spending measures, resulting in new construction and infrastructure projects everywhere. Meanwhile, the US and Europe slid into chronic political gridlock and apparent decline. During Trump’s candidacy, Asian cheerleaders such as former Singapore Foreign Minister Kishore Mahbubani and Eric X. Li, a VC and vocal China exceptionalist, wrote op-eds in the American press declaring their superiority. After Trump’s election, they have nervously observed the President-elect’s incendiary foreign policy positions towards Asia.

To do business in the age of Trump means giving in to a latent desire for another form of illiberalism. In a symbol of the current polarization, the globalist class will only double down on its existing values because they still believe in the inevitability of their vision. Contrary to the hopes of those who thought they had an ally in the anti-Trump elite, a democratic winter is about to descend. Those who are in the best position to stop it won’t—because they don’t have to.

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