In a meeting including the most successful minds of the business and political world, you would expect a buzz of new ideas on how to solve the rising displeasure in the Western world: none of that; the 2017 World Economic Forum in Davos was an echo-chamber of whining about the democratic participation of the masses that are no longer blindly obeying their elites, scorned as “populism”.
Davos 2017 was the reflection of an elite detached from the reality of the lower classes of the West, unable to understand their problems: the choice of the location for the forum is further evidence of this; a tourist location in a tax haven, instead of, for example, Molenbeek in Brussels, transformed by globalization into a breeding ground for Muslim terrorists, a no-go area for years, until the Belgian police had to use its special forces in the wake of a terrorist attack. This is the daily reality of the average Belgian, European, Western citizen.
Capitalism has winners and losers
IMF Director Christine Lagarde on day 2 tells us what’s going on: the global middle class has been growing, but the Western middle class has been shrinking. As always in the world of free market capitalism, there are winners and losers. The winners for the last 25 years have been the Western elites but also the middle classes of the world outside the West. The big losers were the Western lower classes. Trump and Brexit express the demand of the Western lower classes to start winning again; if they win, someone has to lose.
And that’s where Xi Jinping comes in: the Chinese lower classes have benefited from globalization, but they might become the losers if their Western counterparts start winning again, and the Chinese leadership might face the same political upheaval their Western colleagues are facing now; hence the Chinese are now the champions of the free market, at least as long as they benefit from it and keep winning1)President Xi’s speech to Davos in full, WEF 2017-01-17.. Alibaba founder Jack Ma echoes them in defending globalization2)Nobody ‘stealing’ your jobs, you spend too much on wars – Alibaba founder to US, YouTube 2017-01-20..
A lot of whining, no solutions
Martin Schultz, a former President of the European Parliament, and EU Commissioner Frans Timmermans3)‘This double game is destroying us’ – EU strikes back at its critics in Davos, WEF 2017-01-19. believe Brussels is not to blame. They can’t imagine European countries facing global challenges on their own either, which is evidence of intentional close-mindedness.
If we really wanted to point fingers, the free movement of capital has fueled tax evasion and channeled a financial crisis while the free movement of people has created a war among the poor for jobs. Both are two of the four fundamental freedoms of the European Union. The unwillingness of the EU leadership not only to tackle problems deriving from their policies but even to acknowledge the existence of those very same remains the biggest threat to European integration, more than “populism” could ever do.
Ray Dalio, CEO of the hedge fund Bridgewater also complains about populism4)Why the Manager of the World’s Biggest Hedge Fund is Afraid of Populism, Fortune 2017-01-18.: he shouldn’t. In any other system and at any other time, whenever people revolted against the elite, they simply chose the path of physical removal. Today, the people are still opting for the very basic principle of democracy: if you do not agree with the way things are done, you vote in someone else. Instead of being thankful that democratic participation is preventing a violent revolution, he whines about it, revealing the pervading feeling of entitlement of the globalist elite.
He’s also convinced that populism threatens multinational corporations5)Ray Dalio: Populism Threatens Multinational Corporations, Bloomberg 2017-01-19.. He’s correct but for the wrong reason. Big corporate conglomerates today are a threat to free markets and democracy. They write treaties so that they themselves benefit, hold oligopolitistic positions in many sectors, and, as a basic economic theory would say, monopolies and oligopolies are bad for consumers. They also take massive advantage of tax havens, causing a missing revenue that states have to deal with by imposing crippling austerity (also known as taxing the breath of their own citizens). The tight relations between multinationals and globalization supporting politicians also make sure that competition among corporations, that fundamental and beneficial element of Adam Smith’s liberalism, is non existent, while workers of the West are forced to compete against those whose human rights are ignored.
This two-faced globalization, oligopoly of the multinationals, competition for the workers, is the reason Western workers have been losing for the past two and a half decades and are now revolting.
George Soros of the Soros Fund Management continues his personal war against Donald Trump, convinced that the latter “will fail”6)Soros: Trump Will Fail, Markets Won’t Do Well, Bloomberg 2017-01-19.. Truth be told, Trump’s victory and the successive reaction of markets has cost Soros a billion dollars already7)George Soros reportedly lost about $1 billion after Trump’s election, Business Insider 2017-01-12. and he was convinced that Hillary’s victory was a done deal8)George Soros Talks EU, China, Fed and Donald Trump, Bloomberg 2016-01-21..
Finally, Christine Lagarde is one of the few who try to offer a solution: wealth redistribution9)Davos Elite Seeks Fixes to Defend the System From Populists, Bloomberg 2017-01-18.. While many, especially those left-leaning, could be tempted to take the offer, they shouldn’t. It’s nothing short of bribery so that the globalist elite can continue to pursue the policies of corporate oligopoly and cronyism that are destroying the Western lower classes.
Also, as long as tax havens are allowed to prosper, attempts to redistribute wealth from the rich are doomed to fail as they would just result in further evasion.
References [ + ]
|1.||↑||President Xi’s speech to Davos in full, WEF 2017-01-17.|
|2.||↑||Nobody ‘stealing’ your jobs, you spend too much on wars – Alibaba founder to US, YouTube 2017-01-20.|
|3.||↑||‘This double game is destroying us’ – EU strikes back at its critics in Davos, WEF 2017-01-19.|
|4.||↑||Why the Manager of the World’s Biggest Hedge Fund is Afraid of Populism, Fortune 2017-01-18.|
|5.||↑||Ray Dalio: Populism Threatens Multinational Corporations, Bloomberg 2017-01-19.|
|6.||↑||Soros: Trump Will Fail, Markets Won’t Do Well, Bloomberg 2017-01-19.|
|7.||↑||George Soros reportedly lost about $1 billion after Trump’s election, Business Insider 2017-01-12.|
|8.||↑||George Soros Talks EU, China, Fed and Donald Trump, Bloomberg 2016-01-21.|
|9.||↑||Davos Elite Seeks Fixes to Defend the System From Populists, Bloomberg 2017-01-18.|