Davos 2020: Donald Trump is outsmarting global elite

They came to sneer at Trump, not to praise him. But when the US President addressed the Davos forum, political leaders and chief execs got a surprise.

Hundreds of chief executives and political leaders, the great and the good, pitched up in the Swiss Alps on Wednesday to sneer at the American president. And sneer they did. Since Donald Trump first addressed the schmooze-fest two years ago, Davos Men (and a very thin sprinkling of Davos Women) have needed him as a hate figure, the populist-in-chief challenging and therefore legitimising their creed of globalism.

Some left their private jets at home this time, some garaged their limos to establish their credentials as environmentally sensitive masters of the universe humble enough to walk on ice. The presidential performance was expected to be full of bluster and snide criticism, a Gaddafi-like rant, proof for this most self-satisfied of audiences that, in impeachment kick-off week, we have reached Peak Trump.

Instead, they were subjected to a disciplined and relentless roll call of statistics about the various successes of the US economy, a speech that sent social media fact-checkers into overdrive. Then came a nod to European culture and the strategic patience that could be learnt from the 140-year construction of the Duomo in Florence. And finally a call on Davos to abandon self-doubt and borrow some of the optimism emanating from America.

Davos Man was dumbfounded. How dare the president present America as a model for the world when everyone in the room knew that the country had been split asunder by his polarising rhetoric. That China was the coming economy! That fossil fuels were the work of the devil! How dare he champion optimism!

As the day wore on, it began to dawn on the Davosniks that Trump and his speechwriters had taken issue with the whole philosophy of Klaus Schwab, the founder of the World Economic Forum talkshop. When he set it up 50 years ago it was to promote the idea that entrepreneurs should be socially responsible and as such be in constant dialogue with the political class. Business had to be worried not only about satisfying shareholders but also multiple “stakeholders”, including employees, customers and the environment.

Schwab, now 81, found himself in opposition to the politicians of the 1970s like Margaret Thatcher who had bought in to the economist Milton Friedman’s message that “the social responsibility of business is to increase profits”. The post-Thatcher, post-Reagan era was good for Davos: Tony Blair, Gordon Brown, Bill Clinton, these were the natural Schwab disciples.

Trump has run a coach and horses through the idea that global co-operation, based on a pliant bankrolling America, could embed the power of the establishment. The US leader says his political priority is to restore the worker communities smashed by globalisation but the engine of growth has to be lightly regulated business. Could it be that Trump has won great swathes of the argument? After all, it was resentment about global powerbrokers that helped to get him and the Republicans voted in. And now he is setting the agenda on Iran by killing the nuclear deal and killing the architect of Iran’s regional terror network, Qasem Soleimani. He is, despite his rather feeble trade truce with Beijing, challenging the Davos assumption that China is somehow a better champion of free trade and global values than the US.

Trump is still ignoring the bulk of the science about the man-made impact on climate trends. But he is right to reject the idea that the changes under way can be contained by some elaborate form of global regulation or unaccountable world government. As the gifted historian and journalist Anatol Lieven argues in a new book, tackling the challenges of climate depends on new social compacts reached at the level of the nation state. The sacrifices, the big energy and conservation choices that are going to be demanded of voters, have to be legitimised by parliaments and governments whose starting point will be the national interest.

Many big business hitters at Davos think it’s politically safer to side with Greta and the Extinction Rebels, even though they fear the climate cause masks a fundamental hostility to capitalism. If the zeitgeist turns against fossil fuels, institutional investors may shift funds out of oil into renewables; that is the quasi-revolutionary intent of Greta’s backers. They are trying to leverage the Alpine axis between business and political elites to their advantage.

If it wants to survive, Davos needs to slim down. The big-tent circus idea has run its course. There are issues such as mass immigration waves that bother ordinary people which can benefit from a global pooling of knowledge. Private-public schemes to improve digital literacy and other tools can persuade the young in sprawling new cities in Africa that there’s a way to prosper at home rather than sign up with a people smuggler. Adapting coastal societies to the threat of rising sea waters is plainly something that demands global co-ordination but which could directly benefit national prosperity and security.

These are useful tasks that need to be backed by expertise and thought about over months. The Davos business model, however, depends on grabbing world attention for a few days, drawing up proposals that are rarely implemented, telling the people at home they need to work and live better and building up a store of bragging points for future dinner parties. Oh, and of course trashing America. That’s no way to solve the problems of the world.

The Times