Class consciousness comes to Davos
WAS this the year when class came to Davos? To many outsiders, the event reeks of privilege, but from the inside its spirit has long attempted to be egalitarian. The bespectacled figure clumping along in the snow in his ski jacket could on closer inspection turn out to be a billionaire, a green campaigner, central banker or a politician. Yet somehow each year the divisions grow. Ever more of the plutocrats seem to travel by limousine, rather than foot. (The telltale indicator of status remains footwear: the more impractical the shoe, the clearer it is that the owner has arrived by car). There seems to be more queue-jumping by the powerful. Security is the obvious excuse: police kept a herd of freezing people outside one hotel for close to half an hour on the pretext that a Russian politician (and his courtly motorcade) might, just might, appear.
Class is also part of the conversation this year, especially in the Anglo-Saxon business world. There is a growing realisation that the pain is disproportionately hitting the bottom of society, an acknowledgement that it is not going to change soon—and, perhaps more selfishly, a worry that it will result in a backlash of some sort. Thus British businesspeople, especially those with consumer businesses, fret what will happen when governments cuts begin to bite in northern towns where many households depend on the state (either through benefits or as an employer). But the biggest worry is in America.
The two Americas
Take the views of two extremely rich Americans: a retailer and a banker. The retailer points out that his firm is now in effect dealing with two Americas. The first group are broadly upper-income and defined by a sense of mild optimism. They tend to work for the larger companies represented at Davos, which are doing well. Their mortgages cost less because of lower interest rates. They often own shares, so they are pleased by Wall Street’s recovery. They are not spending in the completely carefree way they did before the crunch, but, if they see something they want, they don’t pause before producing their credit card. The second, which he defines as middle- and lower-incomes, is defined by fear: they have either lost their jobs or they are worried about losing them. They spend money on essentials but not on discretionary items—and they are living from pay-packet to pay-packet. There is a clear monthly pay-cycle effect, with spending rising at the beginning of the month when they have cash in their pockets, but falling at the end.
The banker’s world is Wall Street—a long way from Middle America. But that is where he grew up, and he is deeply worried that well-paid middle-class manufacturing jobs are disappearing. He points to General Motors‘ recent IPO prospectus, and the huge gain the carmaker has achieved by shedding UAW workers. „Frankly, I think those guys are never going to get jobs.” Wherever he looks in America he sees working-class males with little future.
Their worries are compounded by two things. The first is a sense that there is little that can be done to stop this. America is simply going through a period of deleveraging and slow growth. Both the retailer and banker think money should be spent on education, retraining and the other familar bromides. But neither wants to increase intervention, nor do they want higher taxes—which would simply delay recovery still further. There is a sense of a process we have to go through. The second is fear of a backlash: how long will so many people tolerate this degree of economic sluggishness without populism taking hold?
- Class consciousness comes to Davos (economist.com)
- A small step for humanity: the people at DAVOS are talking about class (iflizwerequeen.com)
- Silicon Valley comes to Davos (economist.com)
- Davos Economic Forum: the out-of-it relic of the long-gone Washington Consensus (wired.com)
- Davos Man’s New Clothes: The World Economic Forum in Naked Denial (fastcompany.com)
- What If Davos Actually Worked? (huffingtonpost.com)
- Bankers regain power as Davos summit ends with a big fudge (telegraph.co.uk)
- Experiencing refugee-camp horrors at Davos (economist.com)
- Davos: Trying to solve the world’s problems in four days (blogs.ft.com)
- Descending on Davos (dealbook.nytimes.com)
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US embassy cables: Switzerland and counter-terrorism (guardian.co.uk)
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