Who is behind the world’s widening economic inequality?

Cover image of “Davos Man,” a book about widening economic inequality

THE LIE BEHIND THE WORLD’S WIDENING ECONOMIC INEQUALITY

Goodman proceeds to explain that the label as used by the political scientist “referred directly to anyone who regularly made the journey to Davos” to attend the annual World Economic Forum. But, like many others, Goodman uses it “as shorthand for those who occupy the stratosphere of the globe-trotting class, the billionaires — predominantly white and male — who wield unsurpassed influence over the political realm while promoting a notion that has captured decisive force across major economies: when the rules are organized around greater prosperity for those who already enjoy most of it, everyone’s a winner.”

FIVE MEN, AND FIVE COUNTRIES, IN THE SPOTLIGHT

To illustrate how this tiny, often anonymous group of billionaires has managed to amass such riches while impoverishing untold millions of the rest of us, Goodman develops his narrative around five individual men and explores their impact in five countries. The five men are Internet entrepreneurs Jeff Bezos (Amazon) and Mark Benioff (Salesforce), banker Jamie Dimon (JPMorgan Chase), private equity investor Stephen Schwartzman(Blackstone), and investment manager Larry Fink (BlackRock). The five countries Goodman most closely examines are the United States, the United Kingdom, Italy, France, and Sweden. As he makes clear, the overwhelming majority of people in all five countries have suffered enormously as a result of the business practices of those five men — above all, their unceasing effort to avoid paying taxes.

DAVOS MAN: HOW THE BILLIONAIRES DEVOURED THE WORLD BY PETER S. GOODMAN (2022) 286 PAGES ★★★★☆

Attendees at the World Economic Forum at Davos, where the author of this book finds the men behind the world’s widening economic inequality
U2’s Bono is a familiar face at the World Economic Forum. You’ll also recognize Bill Clinton and Bill Gates on the left. Billionaires like Gates mingle at Davos with the occasional celebrities and a gaggle of nonprofit managers seeking to press their agendas and secure financial support. Image: Transnational Institute

A THESIS MARRED BY THREE FLAWS

While I concur with almost every charge Goodman hurls at “Davos Man,” it’s hard for me to see how much of what he writes applies as broadly as he suggests. In the final analysis, Davos Man comes across as the story of a vast global conspiracy led by a few thousand billionaires to plunder the planet and consign the rest of us to penury. Some of these men are called “vulture capitalists.” Goodman seems to imply that they all merit the label. To be specific, the book strikes me as flawed in at least three significant ways.

COMPETING FACTIONS

“Davos Man” is a concept rather than a term that applies precisely to a well-defined group or class of people. Throughout the text, Goodman implies that they’re all billionaires, although he wavers on the point from time to time. Others, such as Bill Clinton and Emanuel Macron, who also frequently attend the World Economic Forum, are “Davos collaborators” who help carry out the billionaires’ agenda. But surely this oversimplifies the reality, at best.

IDEOLOGY

Goodman seems to imply that the people who qualify as “Davos Men” act purely out of self-interest which translates easily into greed. But many of these folks actually believe the nonsense they espouse — the approach to economic policymaking Goodman sums up as the “Cosmic Lie.” That’s the proposition that cutting taxes on rich people and corporations will trickle down to the rest of us and be good for society in short order. Of course, four decades of experience in the United States have shown uncontrovertibly that this is ridiculous. Trickle-down economics simply doesn’t work. Despite the abundant evidence that the theory is flat-out wrong, many people believe it. Just because they’re rich doesn’t mean they’re smart. Clever in most cases, yes. But not necessarily capable of parsing economic data without focusing exclusively on what’s in it for them.

STAKEHOLDER CAPITALISM

The author reserves a large measure of his venom for stakeholder capitalism — an approach to corporate management that seeks to share a company’s gains among all its stakeholders. Which means that shareholders are considered merely one of several groups to benefit — contrary to the prevailing mode in business which revolves around shareholder primacy. Goodman rails against the declaration on August 19, 2019, by the Business Roundtable redefining the “purpose of a corporation.” Overturning its 22-year-old policy that held maximizing shareholder return as a company’s highest purpose, they asserted that “companies should serve not only their shareholders, but also deliver value to their customers, invest in employees, deal fairly with suppliers and support the communities in which they operate.” All five billionaires Goodman singles out signed this declaration.

Seal used by B Corporations to assert how they work to lessen the widening economic inequality
Few of the companies in the Business Roundtable are truly engaged in stakeholder capitalism. But thousands of B Corporations are doing so.

A PERSONAL PERSPECTIVE

Stakeholder capitalism represents a huge step beyond the ruthless corporate practices that have driven a wedge between rich and poor in our society and made life more challenging for us all. Goodman describes those practices in gleeful detail in the pages of Davos Man. He is either unaware, or simply chooses to ignore, how companies large and small have rejected shareholder primacy. I’ve been involved in the movement for socially responsible business since 1990 and know a great deal about this subject. To learn how thousands of companies around the world — including my own firm, Mal Warwick Donordigital — are undertaking earnest efforts to implement stakeholder capitalism, check out the growing number of B Corps you can find here. And to see how the principles we’ve elaborated are now becoming embedded in corporate law, take a look at the 21st century innovation called the benefit corporation.

ABOUT THE AUTHOR

Photo of Peter S. Goodman, author of this book about widening economic inequality

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