Davos Man: How the Billionaires Devoured the World, with Peter S. Goodman

NIKOLAS GVOSDEV: Good evening, everyone, and welcome to this edition of The Doorstep book talks. I am your co-host, senior fellow at the Carnegie Council Nick Gvosdev. I think you will enjoy our talk this evening.

We often speak about the impact of world events on the doorstep of average people, but tonight we're going to pull the curtain behind rooms that we may know about and in some cases don't know about, where decisions, policies, and trends that will end up affecting all of us at the doorstep are decided and ruminated.

With that, I will turn to my c-ohost, Tatiana Serafin, to introduce our guest and our book for this evening.

TATIANA SERAFIN: Thank you, Nick, and welcome to Peter Goodman, author of Davos Man: How the Billionaires Devoured the World. I devoured this book, by the way, a most excellent book. Peter joins us from The New York Times, where he is a global economics correspondent and has been able to really take a look at what is going on in the world in terms of what I like to say "#followthemoney"—where is the money, who has it, and who's controlling it, especially in these days of increasing inequality in terms of wealth disparities, income disparities, and health care disparities. We can go on and on. Peter has written this excellent book—also written during a pandemic—and had a lot of time to research and look at what was going on with the wealthiest 1 percent, especially during the pandemic, when they got richer and the average person at their doorstep got poorer.

We will go into a host of all of these issues, but first I want to welcome you and thank you for coming on to The Doorstep, Peter, and welcome to our audience. Please join us in conversation, put your questions in the chat, but we are going to start off with the genesis of this book, Peter.

The genesis, of course, I think in part, was you going to Davos every year and seeing many of the characters that you talk about in the book, whether it be billionaires, politicians, or hangers-on, and seeing how they operated and how they talked. Tell us a little bit about your experience at Davos and what led you to write this book in this particular moment.

PETER GOODMAN: First of all, thank you so much for having me. Thanks for the introduction, Tatiana, it is great to join you, Nick, and thanks to the Carnegie Council for putting this together.

Strangely enough this did not start as a Davos book or even a billionaire book. It began as a sort of exploration of what was happening to what we call the "liberal democratic order." I was living in London. I moved there in 2016 and covered Brexit and then found myself writing about Trump and the international trade war. I was spending time in places like Italy, Sweden, France, and Germany, where there were to varying degrees the embrace of right-wing extremist parties. I found myself asking, what's going on?

I had been going to Davos for years, and it always struck me that the billionaire class at Davos was engaged in this very self-serving exercise under the banner "committed to improving the state of the world," which is an incredible irony given that anybody who goes to Davos—this is the billionaire class, heads of state, occasionally Hollywood celebrities—is by any measurement the ultimate beneficiary of the status quo.

I began to see these two things as connected as I started to look for a way into the story of scarcity. That was what I found about the rise of right-wing populism. There was always this systematic transfer of wealth from the bottom up that had happened gradually over decades so it was almost invisible, and then something would happen more immediately, like an influx of immigrants in Sweden, an influx of immigrants in Italy, or Trump comes along and is a kind of political opportunist, diagnosing the breakdown of the American middle-class bargain and blaming China, blaming immigrants. Brexit was really this nativist response to years of austerity and the downgrading of wages in Britain.

I started to realize that at Davos—it always seemed sort of silly that you would have the wealthiest people on earth discussing earnestly things like inequality: "Oh, how will we solve it? That will be so difficult"—while they are laying out these win-win solutions. "Davos Man"—this term that Samuel Huntington coined in 2004 to describe people who go to the World Economic Forum and whose wealth is so complex that it stretches across jurisdictions—doesn't really care about any ideology, doesn't feel any particular allegiance to a nation, but Davos Man is wedded to this idea that all problems are communications problems, they are problems about finding the right words of sensitivity to describe things, to pledge commitment toward progress that is always down the road, and there is never any sacrifice, which is a way of preventing regulation, a transfer of wealth, and collective bargaining, the things that we actually need to deal with inequality.

That is when I realized that the billionaire class was the sort of dark matter of my story of how the world became so enraged and embroiled with conflict, and then I realized that I needed to explore Davos Man as a species, as this sort of separate species who posits himself as our friend, as our savior really, and that makes him the ultimate predator because he is ultimately trying to cater to his own bottom line while pretending that his interests are collective interests. Then I picked five characters.

My five leading characters are: Jamie Dimon, the CEO of JPMorgan Chase; Marc Benioff, who is the CEO of a Silicon Valley company called Salesforce; Larry Fink, who is the world's largest asset manager—this is a guy who now manages $10 trillion worth of assets around the world; Steve Schwarzman of course, the CEO of Blackstone, the world's largest private equity magnate, worth $35 billion; and last and certainly not least, Jeff Bezos, who hasn't been going to Davos lately but is the ultimate Davos Man in that he has managed to amass greater and greater wealth while arguing again and again, most recently when he blasted himself off into space in the middle of the pandemic, that his story, his triumph, is really the story of human progress.

TATIANA SERAFIN: Certainly, since you left Bezos at the end, he was in the news for potentially having a Dutch bridge have to come down because his yacht has to get through. I don't know if you saw that story.

PETER GOODMAN: Oh, yes. That would have cracked my book. What an incredible symbol. We're in the midst of a pandemic. Rotterdam, this Dutch port, is the largest port in Europe at a time of chaos relating to Brexit, relating to the global supply chain disruption, and now—though Bezos is presumably going to pay to move this bridge out of the way so that his $500 million, 400-foot yacht can get clearance to the sea—here are people in Rotterdam whose days consist of having calls and meetings on Zoom to figure out how to move the bridge out of Bezos' way while he of course is presenting himself as an example of "the human triumph." That is some Davos Man behavior right there.

TATIANA SERAFIN: This Davos Man—I think there's a huge indictment, as you are intimating, for what they are taking from us and what the result is. Davos Man—and I read this in the book—"equals shrinking public budgets equals fight over resources equals," what you intimated, "racism," attacks against immigrants, attacks against other, and discontent in society. So many things traced back up to Davos Man.

What is the culpability? We are here at Carnegie Council for Ethics in International Affairs. How do we even get to talk about ethics in this picture? Where is the ethics in this picture?

PETER GOODMAN: Well, we should be careful with the treatment of ethics. One of the things I get into deeply in the book is this concept of "stakeholder capitalism" that is now championed by people like Marc Benioff and Larry Fink and the founder of the World Economic Forum, Klaus Schwab, this idea that: "Milton Friedmanism is behind us. Companies are no longer organized to just maximize profits and return those profits to shareholders." Now they are catering to "stakeholders"—that is a big word with Davos Man—like labor, never labor unions but labor, local communities, and the environment. Oh, the environment is a stakeholder. In fact, Marc Benioff once said, "The planet is a stakeholder." We can be very relived to hear that.

There are issues around corporate governance, which is really this kind of preemptive—it's a protection against the exercise of democracy toward things like progressive taxation, anti-trust enforcement, and workplace regulations. It's the billionaires basically saying: "Hey, we've got this. We'll take care of this."

The pandemic provides the first big test of these new statements of stakeholder capitalism, most famously declared by the Business Roundtable, this Washington lobby that in the summer of 2019 declared directly: "Milton Friedmanism is dead. We have 180 CEOs who signed this pledge around stakeholder capitalism." They include Jeff Bezos along with Benioff and Larry Fink. Then Bezos adds to his wealth during the course of the pandemic by building out his e-commerce empire while his employees, left very much behind on Earth, labor in his warehouses with no protective gear, no hand sanitizer even, to say nothing of masks and gowns while the managers are off-site and protected but the rank-and-file still working.

When there is a labor uprising led by an African American guy named Christian Smalls, who has spent basically his career—he's a guy from Newark—working in warehouses for mostly white managers, he is actually fired for violating quarantine, which is an incredible irony given that he wants everyone to be quarantined until the plant can be deemed safe, but he wants paid sick leave, and Amazon doesn't offer paid sick leave because Bezos's company has lobbied aggressively over the years to avoid paid sick leave.

You ask about culpability. This is not some sort of puppeteer conspiracy I am laying out. I am talking about things that have happened gradually, almost to the point of being invisible, like climate change, where nobody really cares about a fraction of a millimeter increase in a waterway somewhere until there is a big storm and suddenly there is a flood.

Well, we're in that flood now. That's the pandemic. We now see the consequences vividly, if we hadn't seen them before, of entrusting more of our health care systems to private equity magnates like Steve Schwarzman, to have our workplace standards set by people like Jeff Bezos, and to have the flows of money dominated by people like Jamie Dimon. It's not that it's this conspiracy, it's that they have used their wealth to employ lobbyists the way most of us hire people to clean our homes if we're fortunate enough to do that.

Amazon alone has a hundred lobbyists in Washington, DC. They have written the tax code. They have found new boondoggles in the existing tax code. They have systematically pulled the levers of our democracies to transfer wealth from the bottom up while telling us that that is actually good for everyone through the magic of what I call the "cosmic lie," trickle-down economics, something that has been borne out in history zero times.

NIKOLAS GVOSDEV: I wanted to go back. As you noted, Huntington developed the term, and one of the things that Huntington stressed was that Davos Man may carry passports, may say "I come from the United States" or Great Britain, Italy, Russia, or China, but that Davos Man generally identifies more with each other than with the countries of origin and that, in a way, as you have just been describing, the question of escaping democratic accountability is saying, "We want to stand above and escape from the communities that ostensibly we belong to," and that Davos is a way for us to work together to support our interests.

As you said, you have been covering the rise of right-wing politics, and then, certainly, populism emerged. Do you think there is a political solution that will pull Davos Man back and say, "Nope, you're still part of a larger community," or do you think that they have worked the system in such a way that it is almost like Whack-A-Mole, that if I'm going to come down on you here, I just come to another jurisdiction, I have moved my wealth, I have 20 homes, five different passports, and if you don't give me the deal that I want or the immunity that I want, I'll just move onward?

One of the things I was really struck by is the sense that they may carry passports from countries but that they really see themselves as standing above the countries that they come from and in some ways, therefore, accountability: that they don't owe accountability to either the nations or even to potentially—even if they call it "shareholder capitalism," it's not clear who the shareholders are to whom they owe any sort of accountability.

PETER GOODMAN: It's stakeholder capitalism, and there is always one special stakeholder, and that is the shareholder.

I think that's right. There is this kind of overarching club of billionaires—I want to be very careful. I'm not talking about any sort of conspiracy, but we can see in plain view what's happening.

Take again somebody like Marc Benioff, CEO of Salesforce, this Silicon Valley tech company. He actually said in Davos—well, it was virtual Davos in 2021, so we have lived through a year of the pandemic—"The CEOs are the real heroes of the pandemic." That's just an astonishing statement. Not frontline medical workers, not essential workers who are delivering our food and our packages or working in slaughterhouses to keep the meat supply going, not parents, who are grappling with shutdown schools and distance learning, but CEOs.

He underscores this point by saying: "The government didn't save you. We saved you, and we did it not for profit but to save the world." Then he goes on to talk about how he—to your point, Nick—pulled strings with his connections in China during the first wave of the pandemic to find 50 million pieces of personal protective equipment (PPE), gloves, gowns, and masks, and he delivered them to frontline medical workers not just in the United States but to the United Kingdom as well.

Thank goodness he did that. He probably saved lives doing that, and that's tremendous, but we should pause and ask ourselves: Why are we, in what is supposedly the wealthiest country on earth, dependent upon the largesse of a tech CEO to use his little billionaires' club to find something that we ought to have for our frontline medical workers in the worst pandemic in a century?

It is not accidental, I think, that Benioff is a guy who loves to talk about his philanthropy. His philanthropy, unlike a lot of billionaires, seems to be real, and he has taken on some tough fights. He famously threatened to pull Salesforce out of Indiana when Indiana was about to pass a law that would have discriminated against lesbian, gay, bisexual, transgender, and queer/questioning employees. He has taken on Twitter and Google over privacy. He kicked in $10 million for a ballot initiative in San Francisco that increased services for homeless people, but he also has managed to have Salesforce pay the modest sum of zero in federal taxes not once but twice on revenues of billions of dollars.

All that other stuff is a rounding error compared to that because essentially we're talking about pillaging government, leaving government with very few resources, then coming along and denigrating government—"Oh, government is so inefficient, government can't do anything, and now I will ride to the rescue and be the savior getting PPE." It's a very neat message that reinforces first of all, "We, the billionaires, will take care of you, we are operating at a whole other level with our private jets and our ability to reach out to Alibaba in China, the National Health Service run by our friends in the British government," and it underscores that, "You need not bother us with regulation and taxation, etc. We can handle your problems."

TATIANA SERAFIN: Because I love the statistics in your book, I want to share some for our audience. One of them—to your point of these billionaires not paying taxes both for corporations and for themselves and putting their money into offshore tax havens, which was our last book talk with Casey Michel, American Kleptocracy—it's a system that has been created and fostered in America to help not only American billionaires but international billionaires funnel their money into the United States and hide it from the people who need the money and has led to this: Over the last four decades the wealthiest 1 percent of all Americans has gained a collective $21 trillion in wealth. I say that number, and I don't even know what it means—$21 trillion in wealth. But over the same period households in the bottom half have seen their fortunes diminish by $900 billion. I also don't understand that number, but I understand that that's not fair.

We can talk about it in these big numbers, but let's bring it to real examples. I think one of the real ways is your health care example. You started off with this lack of PPE and really laying it at the foot of how we have structured some of our regulations to allow private equity hedge funds to run roughshod over health care systems and education systems, and I would like to talk about, and one billionaire in particular for me keeps popping up around the globe wreaking havoc in these systems, and that is Stephen Schwarzman and Blackstone Group.

I am wondering, for our audience who may not be familiar with what exactly Blackstone is and what he has done, can you maybe take us around—because for me, people talk about Bezos all the time, I feel. He's a great communicator, speaking to your "these guys know how to communicate."

By the way, I love your point. It's always the white dudes who are in this billionaires' club, at least here in America, and in the world it's mostly dudes too.

They are great communicators, but, for me, Stephen Schwarzman kept coming back as someone who really has been able to get his slice of the pie in so many different areas, in so many different places around the world. He popped up in Italy, he popped up here, especially related to real estate and health care, and I wonder if you could talk to us about that because I feel like these are some of the names people don't necessarily have at the tip of their tongue every day the way they do with Amazon, for example.

PETER GOODMAN: That's a super-important question.

Schwarzman is the world's largest, most successful private equity investor. "Private equity" is this term that we used to call "junk bonds." That was the model that it replaced. It basically means you raise a huge amount of money, you borrow it, you go buy something, you buy a company ideally that's struggling, you load it up with debt, then you cut tons of costs, usually by firing lots of people, you consolidate some operations, and then you sell it to somebody else at a killing, and then because you borrowed most of the money your profits are amplified. If you buy something for a dollar and then sell it for two dollars, you made a dollar, but if you borrowed ten dollars—I'm tangling myself up in knots in this. The more leverage you put on the less actual money you put out, therefore the return is multiplied is what I am trying to say without torturing you all.

So Schwarzman has pulled this trick off again and again. What he has done, though, along the way is tell this Davos Man story of how it's really about civic virtue. After the 2008 financial crisis, there were all these foreclosed homes in the States, and Schwarzman and a bunch of other investors go in and buy them up en masse, and then they turn them into places a person could actually live, they rent them out en masse, and then they realize the gains and flip them and create a huge money-making opportunity for the Wall Street banks that write the bonds, and Schwarzman tells you in his memoir: "This was not about the money. This was about saving American neighborhoods. We went into places where the weeds were overgrowing houses, lawns were not cut, there were rodents running around, paint was peeling, and we fixed them up"—you can almost hear the soothing sounds of the soundtrack for a life insurance commercial with an adorable golden retriever puppy romping on a lawn with a cute toddler.

The reality is he created something called "Invitation Homes"—that is, an invitation for people to pay much more in rent than many of them can afford. It's an invitation to sit on hold for several hours to try to get somebody to come fix plumbing problems or other maintenance issues and to essentially exploit people who are vulnerable and can't move because they don't have much money.

This is a trick that he repeats again and again. In the run-up to the pandemic, it's important to understand that Blackstone, Schwarzman's company, sinks $6 billion into a company called TeamHealth, which is one of the two largest emergency room staffing companies in America. They put doctors, nurses, and other staff in emergency rooms in hospitals around the country.

It's important to remember that a casino magnate will tell you that it's a great place to make money—in a darkened room where people are drinking and don't know what time it is and aren't necessarily fully in control of their senses. Well, if you're going to invest in health care, it's pretty good to be in a place where the customer comes in wheeled on a gurney in some cases, not of much mind to interrogate anyone on the fine points of their insurance coverage, they're inclined to sign whatever they have to sign to go see the people in the white coats over there so they can get some help.

TeamHealth has been at the center of this so-called "surprise billing" scandal. The surprise is not of the happy variety. This is the surprise you get when you think you're going to a hospital that's in your insurance network so there is going to be some normalcy to the prices you'll pay only to discover later that you have signed off to go see somebody outside of your network who is now charging you exorbitant fees, administering all sorts of potentially unnecessary tests, and you find this out when you get a bill you can't pay followed by collection agents calling.

This is important because it's part of how American health care became something that operates not all that differently from airlines or fast food chains. The people coming in the door are customers. There are investors who are trying to maximize the revenue. The people who are working in these places—the doctors and the nurses—are costs to be contained, and the facilities are inventory to be managed efficiently. In the same way that United or American would like every seat on your plane to be full, the hospital chains that are increasingly under the control of private equity people like Steve Schwarzman want the rooms to be full, and that's how we ended up with a one-third reduction in hospital rooms compared to 20 years earlier in the run-up to the pandemic. That is part of why the world's most powerful country has had an especially wrenching experience with the highest rates of death in the world in the United States.

There is a lot more to it than that, and you can't oversimplify, but at the center of it is the incursion of investment, injecting considerations of profit and loss into a sphere where the market doesn't necessarily work all that well, and Schwarzman has been laughing all the way to the bank. He has actually been saying in the midst of the pandemic, while his assets are being rescued by the Fed and various other rescue programs, that he is now in a position to buy more health care assets because there are a lot of distressed assets out there.

TATIANA SERAFIN: I think that really brings it home to our audience, to the doorstep, to look at who is your health care provider and who controls your real estate. I think these are really important questions that we have forgotten how to ask or people just don't ask anymore that needs light to be shined on it.

I do think—you don't talk about it much in here—that journalism and journalists such as yourself are one part of who can shine a light onto what is going on. In your work you use a lot of resources. Who is shining the light? Where can we find more information on this so that we can get more regular citizens—our doorstep—to understand what is going on from the top down?

PETER GOODMAN: I think you're right that journalism is the solution, but they've got us outnumbered. During the pandemic, at the time when warehouse workers at Amazon are turning up sick and demanding paid sick leave and their union is basically getting busted before it gets a chance to begin, we find out that Amazon has been producing fake television spots—they're not fake, they're produced to look like television spots, but they're not produced by the television stations people are watching. It is interviews with Amazon workers talking about how everything is great, they're getting all this protection, and morale is so high. These spots get distributed around the country to broadcast outlets that just air them as their own spots.

Our journalism has been compromised by Davos Man essentially. I'm lucky enough to work at a place that is very well-financed and independent, so I was given the resources to go around the world to unearth this story, and there are other outlets doing really important work. ProPublica has done incredible work this year on the extent to which billionaires are not paying their taxes; I have a colleague at the Times, Jesse Drucker, who is a must-read in terms of the tax shenanigans that the billionaires can engage in; David Sirota's site The Daily Poster—actually, they just changed their name to something that I can't remember now, The Lever I think it's called—the intersection of money and politics.

There is a lot of great work being done. The problem is that Davos Man is very skilled at sowing confusion while selling these false binary ideas. My ultimate mission in this book was to alert you all that none of what we're experiencing has happened by accident, and the people who are the beneficiaries, the people who have engineered this bottom-up transfer are very skilled at convincing us that if we try to change the system, we jeopardize everything.

Take COVID-19 vaccines. We should all be grateful that Pfizer has helped alleviate this pandemic with these COVID-19 vaccines, but we should also know that they have monopolized the gains of publicly financed research; they have sold these vaccines to the highest bidder around the world; they have pretended to contribute to COVAX, this kind of stakeholder capitalism-like entity that is supposed to ensure that there is equitable distribution of vaccines. It failed wholesale, and not through any accident but because the people in control of the patents just don't want to share because they want to keep the money.

So Pfizer has commercialized this product on the backs of publicly financed research, and the result of this form of distribution is, if you live in a wealthy country like the United States, the United Kingdom, or Japan, you can get protected, and if you live anywhere else, you're in harm's way. There are parts of Africa and South Asia where frontline medical workers are treating COVID-19 patients without any protection while we're giving out booster shots to kids in the United States.

That did not happen by accident, and the result of that is we have Omicron. We are subsidizing the monopoly profits of Pfizer and Moderna executives through the extension and perpetuation of the pandemic. We are subsidizing executive compensation. Albert Bourla is the CEO of Pfizer. He also signed the stakeholder capitalism pledge. We are giving him tens of millions of dollars in pay in exchange for the continued disruption of our kids' schools and the disruption of their education. Death and fear are hitched to livelihood, and Davos Man would have us believe that it's all or nothing, that if we want vaccines at all, we've got to have them the way we've got them, and the alternative is we end up like Venezuela, where we have nothing and are diving into dumpsters for our dinner.

That's just simply not true. We can have capitalism, innovation, economic growth, we can have rich people. I don't have any beef with Jeff Bezos being rich. He gave us this revolution in e-commerce. Thank goodness for it. But we can still have a say about how we distribute the gains of that capitalism.

Ultimately, we have to wake up to that: that the solution to our problems is in front of us, and it's democracy, and it's not easy to get at because Davos Man has his own apparatus that is working very effectively to prevent us from using our democracy to bring accountability, but that mechanism is sitting there.

NIKOLAS GVOSDEV: When you were talking about the binary and how it's framed that way, I couldn't help but think back to not just the group of billionaires but coming back to the Davos meeting itself, which is the incubator in a way. While many of the people you are talking about are household names starting with Bezos, the organizer and creator of the actual forum, so looking at Klaus Schwab, is not a household name.

PETER GOODMAN: Right.

NIKOLAS GVOSDEV: How did this come about? Lots of people can hold conferences. We can fly people to Stowe, Vermont, we can say come visit us on the lovely shores of Monaco. What was it about Schwab's approach? How did he set this up? How does the conference gain such resonance as a meeting place for this class of people to come together and that people want the invites to go, and it becomes a badge to say, "Did you go to Davos this year or not?" That really marks whether or not you are part of the club.

What is Schwab's role in this, and can it survive him? I just saw from Jane Lentz's point [in the chat], is this really tied to Schwab himself in a way? Does Davos disappear? Is it then replaced by something else? In the book you talk about it, but perhaps for the audience you could give us a sense of the originator, in a way, of Davos.

PETER GOODMAN: Yes, that's an important question.

Klaus Schwab is this German economist who was raised in postwar Germany. He is steeped in the notion of European integration, "International trade will be the underpinning of peace across this fractious continent." He spent some time in the United States, where he then gets exposed to American corporate management and decides that the solution to life's problems is—and this is fairly noncontroversial—public-private partnership. You get the private sector working together with the government, and that's how we figure out how to solve our problems.

Then he has this idea that he'll get together a conference of academics, business people, and government officials from across Europe and eventually around the world, and they will meet on the mountaintop in this strangely charmless village of Davos, high up in the Swiss Alps. It's a former sanitarium. It's beyond distraction. It's hard to get there. It's clean air, it'll concentrate everybody's senses, and they will all get together.

But the masterstroke, as he grows it from something that just gets like 300 attendees the first couple of years to now about 3,000, is he markets it to business as not just another business conference. Life is full of—not to pick on them—glossy magazines that will convene executives to sit around and talk about how to make more money. He figures out: That's a commodity. I'm not going to do that. I'm going to sell this as: "We're committed to improving the state of the world. This is about a demonstration of our civic virtue."

So he invites them to participate in this, and when this starts to work, the more people come the easier it is to get the next people because the secret of the World Economic Forum is it's forward facing, it's a bunch of earnest panel discussions about everything you would expect—climate change, migration, gender imbalance, racial injustice, the future of work is on these panel discussions that the "cool kids" never go to. The cool kids at Davos will tell you in this beleaguered, sophisticated way that they don't even go inside the conference center unless it's to engage in the "Syrian refugee experience," to be blindfolded and led around in the dark while someone is screaming at them in a language they don't understand, and then they congratulate one another for their empathy and go off to a dinner sponsored by some global bank where they drink champagne and eat caviar.

But then, the really important people are the ones who are the "strategic partners." Schwab is running what is on paper a nonprofit. Boy, it has given him a very nice lifestyle. These strategic partners pay hundreds of thousands of dollars a year, and they get access to these executive conference rooms where normal badge holders—the lowest people at Davos have these little orange badges, that is for media participants. I have always been a participant—that's a white badge—and you can't go into these exclusive lounges unless you're an executive member, and that's where Schwab will play matchmaker. The heads of state oil companies will sit down opposite heads of European fossil fuel companies, and they will haggle with no regulators present, nobody from the Securities and Exchange Commission knows about it, no journalists, and no activists.

He has leveraged this into a highly successful enterprise where he then has tapped—this is one of the things I reveal in the book—this nonprofit World Economic Forum as his own profit-making venture fund. He has launched a couple of profit-making businesses. One is a catering and events business that has the Forum itself as a client, so there is a guaranteed profit stream. Then he sent his nephew to Boston during the dot-com bubble to launch a video conferencing program that he then sold to a listed company.

He turned about $5 million into about $20 million at the last minute. His nephew told me his uncle called and said, "I need you to transfer the ownership of the shares to this whole new foundation" his nephew had never heard of—the Klaus and Hilde Schwab Foundation. It's Switzerland. This is a black box. No one knows where the money goes. It puts out a report. It says they're drilling wells for clean water around the developing world, they're helping girls in Pakistan get to school. Maybe that's true, maybe it's not. We have no way of knowing.

This is a guy who gives lectures on corporate governance while essentially running the Forum like a Chinese state-owned enterprise. He gets a cut of everything that moves through there. He has Audi as a strategic partner, and he gets close-to-free Audi cars. He flies around on the strategic partner airlines glad-handing around the world. He had the Forum buy parcels of land connecting his fancy home in Geneva overlooking the lake to the even fancier Forum headquarters. He has told his associates that he expects to one day receive a Nobel Peace Prize, though Oslo has yet to ring.

TATIANA SERAFIN: And he has created this system where not only billionaires go but also politicians. In the book you mention several prominent names, and you also mention that it's a calling card, that people go there to show that they are part of this system. I know a lot of billionaires from Eastern Europe used it as, "Our money is clean, you can trust us."

One of the points that you make in the book—and I think it's a very strong point—is that taking the money from the bottom, taking the money and not paying taxes, taking the money for yourself, doesn't have a trickle-down effect because you're spending it. The Post had a great cover today about the Wall Street bonuses and how they are being spent on bottles of champagne and fancy dinners, not on investments in small business or local companies or whatnot.

So many of these people, especially from Eastern Europe from my experience—I used to cover billionaires for Forbes magazine with a focus on Eastern Europe—took that money away from Kazakhstan, Ukraine, and Russia and moved it to London. They didn't invest in their countries or their people. Can there be a role of the doorstep, of average citizens, in changing the system?

PETER GOODMAN: First of all, I want to underscore the crucial nature of your point. If you take the Forum at face value, it's part of the liberal democratic order. In the same way that we were told by people like Bill Clinton and Larry Summers when they were catering to Davos Man, who wanted the United States to let China into the World Trade Organization—let me pause and say I'm not sure that was a terrible idea, although there could have been other conditions, and I am not here to demonize trade, which is absolutely progressive if done properly. But it was Davos Man wanting to get into China so they could cut costs and transfer production from higher-cost centers of manufacturing to the ultimate low-cost center of manufacturing while people like Bill Clinton and Larry Summers were saying, "No, no, no, this is about democratizing China."

People like Klaus Schwab will tell you and attendees of the Forum will say: "This is about international understanding and cooperation, which tend towards democracy and transparency. This is about furthering human evolution. It's not just us drinking champagne underwritten by banks and going to Google parties."

Your point, Tatiana, is so important because it's not only not that—and anybody who has paid attention to what has happened in China in the last decade can tell you that—it's the reverse. It's that Schwab and the Forum are essentially laundering the legitimacy of the people he gets to come.

I was there in 2017 when he got Xi Jinping to come and give a keynote speech, and Xi Jinping gets rewarded for his participation because the currency of the Forum itself and the willingness of strategic partners to continue handing over the hundreds of thousands of dollars is enhanced by the knowledge that the highest-level members of the Chinese Communist Party, the decision-makers in the world's potentially largest consumer market on earth, are there. So Klaus Schwab welcomes Xi Jinping to the stage and says some version of: "You know, your people have entrusted you with the leadership."

Come again? They had an election in China that I missed somewhere?

When Donald Trump shows up in 2018 right after handing out the largest tax cuts tilted toward billionaires on earth, Klaus Schwab lauds him for boosting "inclusivity" in the United States and specifically says: "We know that your leadership is the subject of misunderstandings, and that's why it's good to hear from you directly."

Narendra Modi, a Hindu supremacist, only a month after a member of his party offered to pay a million-dollar bounty to behead a Bollywood director who had supposedly offended Hindus with his depiction of a Hindu story, is greeted on the stage as "boosting diversity."

This is an enabling of the participants. I think it's very important to note in places like Eastern Europe, Russia in particular, certainly India and China, the halo of the Forum is much more valuable than it is to somebody like Larry Fink or Marc Benioff who will be okay in any event. It does extend that sense of, "Hey, these guys are in the good guy club." The thing is called "committed to improving the state of the world."

TATIANA SERAFIN: We have some questions in the chat. A couple of questions about the United Nations. What is the role of the United Nations at Davos? Does Davos make the United Nations irrelevant? How do they work together or not work together?

PETER GOODMAN: I don't think they do work together particularly. Maybe they team up on research. That's possible.

The World Economic Forum doesn't present itself as the government. It presents itself as the layer that ties together government and industry working hand-in-hand. They do have some research interests that overlap, especially around health care and innovation, but the Forum, to my knowledge, does not present itself as like some sort of alternative to the United Nations.

TATIANA SERAFIN: There are a couple of questions in the chat about Singapore—I don't know if you know much about it—the way that Singapore forces the rich to live according to the common rules obligatory for every citizen. I am not familiar with it. Nick or Peter, if you can comment. If not, we can move on.

PETER GOODMAN: I'd get myself in trouble if I pretended to be an expert on Singapore, although I did start my career in Southeast Asia, but that was a long time ago.

NIKOLAS GVOSDEV: It does seem, though, that that and a few of the other comments in the chat are asking about if, as you said, you can hire as many lobbyists, you can rewrite the rules. It's essentially almost as if the democratic process isn't going to work, do you need perhaps some more authoritarian structure that will impose conditions?

Of course I think that brings us back to the question of the mobility of Davos Man, and this reminds me of an article you did for The National Interest so many years ago, Tatiana, about the availability of passports. You referred to Kazakhstan right now, and of course Kazakh businessmen who had Russian passports but also Cypriot passports, have passports from Israel, from the Caribbean, and so on. Perhaps this idea of "Well, democracy isn't working, but an authoritarian system will crack down more on these people"—it does seem that they have the ability to move from jurisdiction to jurisdiction.

PETER GOODMAN: Tatiana, did you want to field that?

TATIANA SERAFIN: No, no. You go.

PETER GOODMAN: I just want to say I don't think the solution to a democracy that has been purchased by Davos Man is something even more undemocratic. History is littered with examples of turns toward authoritarianism that maybe seemed like a good idea at the time to the people who were driving the bus that turned into persecution for many. It's not just civil liberties, it's what goes along, particularly in a place like the States, with our civil liberties, like our market system.

We don't need a revolution to solve this. We have fought these fights before. Between 1945 and 1975, following the Second World War, we had very healthy economic growth in the United States, and it was a time where the whole cliché about the "rising tide lifting all boats" really did apply, and every community got a piece of the action.

I don't have a fetish for the 1960s or 1970s. We don't want a time machine back to then. We had Jim Crow, we had the Vietnam War. We have made a lot of social progress that we ought to hang onto and advance further, but in one key regard we had something that we do need to get back to, and that is an economic system where, when the economy grew and companies got more profitable, the people working at those companies got wages that were commensurate with the gains.

That also didn't happen by accident. It happened through collective bargaining, it happened through anti-trust enforcement, and there was progressive taxation, which allowed social safety net programs so that people who fell into some harm could get a little hand and hopefully be pushed back on their way, which by the way gives us more entrepreneurship.

If we get those things—and those things will not happen easily, Davos Man will tell us that we can't afford health care, we can't afford child tax credits, we can't afford to help working parents with childcare, but we can always seem to afford tax cuts for billionaires because of the magic of trickle-down and wars. Those are the two things we always seem to find the money for. If we can simply pull that off, we will solve a lot of our problems. We don't need to go to utopian places or, god forbid, imagine authoritarian solutions to our problems.

NIKOLAS GVOSDEV: One thing with that, too—again building on some of the comments in the chat—is another striking phenomenon is that some of the people advocating a more authoritarian populist turn—"We must rise up against the elites that have defrauded us"—are perfectly happy to be at Davos themselves and to celebrate that. It does seem that there is a bit of that contradiction that we have seen for the last five years, certainly in the politics of the industrialized West: this move towards illiberal populism and "The elites must be made to pay" and "Cosmopolitans have defrauded us." Yet, many of the people who lead or finance those movements show up or are a part of Davos. Is there a correlation there, that this is a way to distract us from the agenda that you have just laid out?

PETER GOODMAN: Oh, for sure. Let's remember. Donald Trump shows up in Davos in 2018, and the conventional wisdom is: "Oh, we're all supposed to be titillated like we're at some sort of prize fight. Trump is against multilateral cooperation. He thinks it's for suckers. He thinks the United States has been cheated in global trade, and so we have tariffs across the board, not just against China but trading partners, allies—Germany, Britain, Canada." He posited himself as this sort of wrecking ball at the liberal world order. Meanwhile, Davos is supposed to be seen as globalist and people who believe in multilateral cooperation. They are aghast that Trump has pulled the United States out of the Paris Climate Accords.

The truth is—I was there and I walked around and took the temperature—the people who mattered saw right through that. The billionaires' sense was: "Yes, we could live without Trump threatening to write off the American national debt like it's some bad Deutsche Bank loan for some failed casino somewhere. We could live without the misogynistic and the racist rhetoric, but boy, we sure do like the tax cuts and the deregulation. We like the money landing in our pocket."

That, time and again, is a combination to watch. We can see Trump as a reaction to the decline of middle-class living standards if you like and political opportunists come in and blame immigrants and China. Steve Schwarzman is writing big checks not just to the Republican Party but eventually to Trump himself and hangs in with Trump right up until January 6.

The Brexit campaign—which again is this nativist response against declining wages, the hollowing out of manufacturing communities especially in places like the North of England—is underwritten by a bunch of hedge fund guys who are very much Davos Men, who want out from under what they view as onerous European Union regulations on the kinds of financial shenanigans that generated the financial crisis that led to the bailouts of bankers combined with austerity to pay for those bailouts that left people so angry they were willing to vote for something they didn't even really understand. The cynical players were the hedge funders who took advantage of the public just being bewildered, being upset about declining living standards, and basically sticking it to the elites.

Time and again I have heard this. I have heard this from Ohio to Tuscany to Sweden to the North of England: "Well, we don't really know what these people are going to do, but we sure do love that they're saying all these rude things to the elites," and there is a nexus between the political operators who are setting that in motion and the moneyed interests themselves, who don't mind being the punching bag as the elites so long as they actually get the proceeds through tax cuts and deregulation.

TATIANA SERAFIN: For all the places you mentioned, there is this symbiotic relationship between Davos Man and political figures. Macron was probably the best example in France, the way you describe his awe of the billionaire class one on one. Meanwhile, he is trying to be everybody's person. He is trying to solve the Ukraine-Russia crisis today, although he is not doing too well.

The average citizen may not see those connections and may just blame the politicians: Donald Trump—"Drain the swamp, blame the politicians." There is also that rhetoric going on that people tend to look at an Elon Musk as a beautiful, I-want-to-be-like-him figure, and a politician as somebody I hate. Yet the politicians are playing both sides of the house, if you will, because they need the money for their campaigns, including Biden too. He was taking money from the Davos Men that you mentioned.

PETER GOODMAN: Oh, sure. Biden, of course, comes out and says—I can't even remember when this was, many, many months—"We're going to set aside patents on COVID-19 vaccines because it's a global emergency, and we need to get people vaccinated." The Germans are against it because of German pharmaceutical companies. The Brits are against it as well, and American pharma companies are against it. Biden doesn't press anybody to actually do anything, and all these months later nothing has happened, and we have even more lopsided distribution of vaccines than we did before with some photo ops of pledges of a couple of million doses here and there destined for places that don't have any protection.

Time and again the moneyed interests win. One of the most surprising reactions I have gotten to this book is people keep saying to me: "Well, why are you blaming the billionaires? Shouldn't you blame the government? Shouldn't you blame the state?" As if there is somehow no connection between the billionaire class and the people who are running the government.

Who we have running the government and how much money the government has at its disposal to do or not do things is very much influenced by Davos Man. What we have is a democracy that is governed by the donor class, and the donor class is comprised of the people who have got the money. It's not a democracy in that sense. We know that things like expanding public health care and more affordable education poll really well. People want these things, and yet we're constantly told we can't afford them, and if we try to do those things, well, we might as well be communists. None of that rhetoric is by accident. It has come to us from Davos Man through compliant think tanks and through access journalists who are just in the thrall of geniuses like Elon Musk.

By the way, Elon Musk probably is a genius, as is Jeff Bezos. The point of my book is not to denigrate the creative minds who have done a tremendous service through their innovation. It's not that we want to ostracize the billionaire class. We don't want them to not be participants, we just want to get back to having a say, where the public has a say, about how we share the gains of capitalism, because if we don't do that, then nobody believes in anything, and if nobody believes in anything, then we can't actually sacrifice.

How do we say to a coal miner in West Virginia, "Sorry, pal, your way of life is no longer relevant to us," when we have no way of saying with any credibility: "But we're going to help you transition to the next thing. If your family needs help with housing, we'll help with that. We'll train you to be a solar panel installer" or whatever.

In the United States we have huge numbers of people who, not for crazy reasons but for legitimate reasons, have concluded that their interests don't matter very much to the people running the system, and unless we change that we're going to continue to have this rage, and there is a direct line to low vaccination rates, crazy conspiracy theories, and the January 6 insurrection. If you leave huge numbers of people kicked out from the system, it's just a fantastic opportunity for political opportunists working for moneyed interests to prevent us from changing anything.

TATIANA SERAFIN: I think that we are going to leave on "how do we share the gains of capitalism?" as the question, perhaps to have you back with your next book. You have a couple of chapters at the end with a "pathway to hope," you call it, for things that can be done. Maybe that's the start of your next book. Maybe it's something else, but we would love to welcome you back, and we want to thank you so much for joining us.

Thank you for the great questions in the chat. I'm sorry we couldn't get to all of them, but the evening got away from us. It was such a fantastic evening. Thank you so much for joining us.

To everyone, follow our Twitter handle and Peter's Twitter handle. If you have more questions, you can send them over Twitter to Peter and to us, and we would love to keep the conversation going on social media, via email, and via our next book talk. Hope to have you back soon, Peter.

PETER GOODMAN: Thank you so much. I really enjoyed this. These were great questions.

NIKOLAS GVOSDEV: Thank you very much.