'Davos Man' Book Examines Economic Inequality

They now control about three point five percent of the world's wealth. So very time we read for us to be joined by Peter S. Goodman. He's global economics correspondent at the New York Times. He's also the author of davos Man, How the Billionaires Devoured the World. It's a new book that came out earlier this month. Peter, great to have you with us. How are you great to be here? Thanks for having me guys, Yeah, we're delighted to chat with you. There's a lot to get to

We got quite a bit of time. Um, but I want to start with the title here. So what is it davos Man. Well, davos Man is his term coined by the political scientist Samuel Huntington's back in two thousand four, he was using it to describe people who go to the World Economic Forum in Davos, Switzerland, This glittering gathering of the world's most powerful people, the billionaire class, heads of state, a few celebrities wandering around now and again.

I'm using it to describe not only forum participants and billionaires, but a special kind of billionaire who would have us believe that their interests are our interests collectively. And that's this idea that if we organize our economies and our societies around sending more wealth to the people who already have most of it, the magic of trickle down economics will take care of the rest and we will all prosper.

We've been running an open air experiment in this idea that I refer to as the cosmic lie for the last half century, and the results are not at all pretty. This is an idea that Davos man uses really to protect himself against democracies trying to redistribute the wealth in a fair way. Well, you choose five of these Davos meant to to highlight throughout the book. Jeff Bezos, Stephen Schwartzman, Larry Think, Jamie Diamond, Mark, Benny Off names that our

audience is certainly familiar with. Why these five folks, and look and they're all men. Yeah, well, look, in reality, Davos man is mostly male, mostly American, mostly white. There are lots of exceptions, but that's that's the rule. Um. You know. Look, I could have picked almost anybody within the billionaire class who goes to Davos and come up with largely the same book. I take these guys because

you know, it's a cross section of finance and tech. Uh. And two of them, Benny Off and Larry Fink in particular, are champions of this idea, stakeholder capitalism, you know, much heralded, much celebrated by much of the business press, this notion that Milton Freedman is um is over and that companies are no longer just organized to return profit to shareholders. Now they're catering to what they all stakeholders, that's labor,

local communities, social aims. And you know, I argue in the book that the pandemic was really the first big test of stakeholder capitalism in the In the summer of nineteen a bunch of CEOs coalescing at the Business Roundtable then headed by Jamie Diamond, actually signed off on this new statement of a purpose of a corporation. And I argue, and I think the pandemic makes pretty clear that they used this pledge of stakeholder capitalism as a way to say,

you know, we've got this. You don't need to tax us, you don't need to regulate us. We you can outsource to us with confidence. Uh, the solving of the world's biggest problems like climate change, like gender and racial inequality, and the pandemic has shown that that was really a crude exercise in public relations. You know, Peter, It's really interesting because it's just coming off a conversation we just had about E s G investing, which we talked about

a lot here at Bloomberg. And there's so much money going into I'm sure you know, into the world of E s G to the point where it's becoming, you know, a very significant percentage of overall assets that are out there. Um, how do we kind of change this? Because I think there's a lot of investors who think they're doing good by tapping into E s G and yet it kind

of is many would argue it's not. I mean, we need more transparency, like there's Look, there's nothing wrong with the idea of stakeholder capitalism or e s G. Right. I mean, if companies want to actually try to solve social aims and they're being transparent about that, and some investors don't want to ride on that particular boat, they don't have to put their money there, that's fine. But we need a way to actually test these claims instead

of just you know, taking it. I mean, I mean here, you know, take a guy like Mark Manyo, who's the guy who does a lot of philanthropy. This is the CEO of Salesforce, big Silicon Valley tech company. He actually says at Davo's last year virtual gathering because they couldn't meet because of the pandemic, CEOs are the real heroes of the pandemic. I mean he's not talking about frontline

medical workers. He's not talking about parents dealing with kids cooped up dealing with business learning, or essential workers delivering our food CEO. And he says, uh, you know, it was the CEOs of companies who gave us vaccines and credits that staved off bankruptcy, right, right, specifically said the government didn't save you, we save You were talking about how Mark Bennioff of Salesforce UH last year at the Virtual Davos event, talked about how the CEOs the were

the real heroes. Um, and you write about that in your book. You also you engaged with with Mark Bennioff for this book. You spoke to him, UM, And I know I'm wondering what the productive conversation is around that, Like what did he tell you when you when faced with your criticism. Yeah, he seemed to be into the back and forth, which I think is an indicator of how you know, these guys use their participation in what

they call multi stakeholder dialogues. They love to go to Davos and engage in these earnest conversations about climate change and race in class, and and they just don't like to actually do anything. They're not into sacrifice. They're into finding wind wind solutions to every problem and using Davos to to you know, signal their virtues. So Benny Off will talk openly about anything. I mean, I've been to Davos and seeing CEOs like benning Off go off and

simulate the Syrian refugee experience. You know, they'll be blindfolded and let around in the dark while people are shouting at them in a language they don't understand, demanding papers. And then they all congratulate themselves to their empathy and they go off and eat truffles and drink champagne and a banquet, you know, hosted by some global bank. Benny Off was was very willing to get into it. But the status quo reigns with Davos man. How do we

work through this? Tim and I talked about this a lot Peter about I certainly feel fortunate, but I am the granddaughter of immigrants who came with nothing, you know, and I've seen or heard about parents going through the depression, Like how do I But I've worked really hard to achieve a certain amount, and you know, not on the level of billionaires. I understand that, but I feel very torn. Certainly, Um, there are people who are just in the equity market.

So therefore o n case who have benefited during this pandemic. We're not billionaires, but we have benefited. Others have not. So what's the productive Like Tim talks about, what's the productive conversation that we need to be having Is it with lawmakers? Is it with CEOs? With it? You know, we do this at Bloomberg. We have these conversations and get to some uncomfortable areas. So how do we get to a better point here, or what's what is it

that we need to be asking of these CEOs. You know, we don't really need anything radical, uh, And we don't really need to ask much of the CEOs. I mean, they can go on and maximize profits and look for innovation and ruther companies. That's all good and well. I mean I'm not I'm not suggesting that we ought to expect that they're going to be what they tell us they are, these like agents of social progress, their CEOs,

let them bring your companies. Those of us who are living in democracy ought to be demanding the things that we used to have. Progressive taxation, labor power so that workers can actually get a commensurate share of the games, and we need any trust enforcement. And this is not some sort of radical agenda. This is like what we had in the years after the Second World War to till the mid nineties seventies. And you know, we could

do that again. It's it's not easy because davos Man has formidable apparatus that he uses to fight off any attempts to redistribution, any any attempts had changed. But that's you know, that's a proven solution, uh, in terms of, you know, generating economic games that are helpful to more people. What about a wealth tax, Peter, What has your reporting

told you about the efficacy of a wealth tax? I mean, we've got to have a wealth tax, and anything short of a wealth tax just simply isn't fair, And then most people feel like the game is working. I mean, Jeff Bezos, his income is eighty three thousand dollars a year. That's a salary from Amazon on He's paid about as much as a public school teacher in California. If we tax income, then we live in a world where Jeff Bezos Steve Schwartzman, who's also a main character in my focus,

worth thirty five billion dollars. That these guys are gonna be paying less in their income and wealth to the government than the people who are scrubbing their toilets. And the result of that isn't simply that we can't finance government programs that it turns out we actually need, especially

in an emergency like a pandemic. It's also that we then live in a democracy where large numbers of people have legitimately concluded that their needs and interests, their ability to support their families just doesn't count very much for the for the powers to be. And you can draw a direct line between that and the rage that we feel in American life into the January six insurrection, the fact that huge numbers of people won't take these COVID vaccines.

I mean, a lot of this is just foundationally. The people don't believe in the system, and not because they're crazy. I'm not condoning where they go with their conspiracy theories and their asis tropes, but they're They're vulnerable to political opportunists who will cater to their worst instincts. And unless

we deal with inequality, we're stuck with that. So should we say, well, see what's hard is we talked about wealth versus income, right, and so how do we really shore up and is there the political will I guess as as well to shore up the income for most Americans so that we can reduce some of these gaps that are out there. Well, if there is political will, the problem is that we don't have a democracy in

terms of who's got to seat at the table. I mean, valvos Man hires lobbyists the way most of us hire one accountant to do our taxes. If we can even afford that davos Man has rigged the game through you know, threats to ballot access through deregulation, such that davos Man's votes count at the table much more than everybody else. So it's I'm not saying it's like easy to do a wealth taxed. Lots of people have tried it and

it hasn't happened, but it actually pulls pretty well. And when people are educated about how the tax system works, and let's face it, it's not, by accident incredibly complicated, which makes it, you know, right for manipulation by people who actually can hire lawyers and accountants and lobbyists to help them through it. When people are informed, they see the inequity in the current system where the billionaires are just paying much less as a share of their wealth

than everybody else. So what would you say to somebody says, okay, wait a second, someone like Jeff Bezos, he pulled himself up by his bootstraps. He created Amazon, on his own. He deserves to have as much money as Amazon has made him. Jeff Bezos does deserve to be very wealthy. He had a fantastic idea. He's revolutionized commerce. I mean, where would we be without e commerce in the midst

of the pandemic. I'm not here to demonize people like Jeff Bezos, but Jeff Bezos is a beneficiary of infrastructure. Right he uses roads paid for about tax payer, the smart people working at his company or ed vacated in schools that are financed by the taxpayer. And Jeff Bezos is a beneficiary of trade deals that have been shaped by lobbyists over time to return wealth mostly to people

like Jeff Bezos. Moreover, you know, he's making all this wealth not just while his warehouse workers aren't prospering, but because they're not prospering. Most of his warehouse workers have no pandemic protection in the first wave of the pandemic. I'm just saying he's got to pay his fair share while he's rightfully capitalizing on a great idea. And we would love to put you in a roundtable with all these guys and just continue that discussion. Peter Goodman, good Yeah,

we'll work on that. Peter Goodman, global economic correspondent New York to at the New York Times, on the phone from New York City, his new book, davos Man, How the Billionaires Devoured the World. It's all relevant to the broader conversation that we've been having over the last couple of years. Yeah. I really enjoyed it. Really good book. Um, and not just saying that because he was my old editor by the way, at hupost. Just a little