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January 19, 2017updated 23 Jan 2017 3:30pm

Davos Man is dead

By William Cash

It is something of an irony that Theresa May spoke today in Davos about people who have been left behind by globalisation, writes William Cash.

No tribe is more rootless, nomadic and dispossessed than the very soi disant global ‘elite’ who assemble in Davos each year to lecture the world. Back in 2015, when George Osborne was actually invited in an official capacity rather than as an overpaid after dinner fringe speaker, British executives and HNW Rich Listers comprised of 283 delegates – the second most represented country in the world, only behind America with 797 delegates.

Today, with Trump due to be crowned in Washington and the dream of a New Liberal Elite Global Order having turned to slush, Davos is a very different place. Theresa May is staying for just a few hours.

How the world has changed since 2015. Apart from the BBC, which appears to have camped en masse in four star hotels to interview the likes of Davos head cheerleader Christine Lagarde of the IMF or pro-EU or pro-climate change activist leader they can find in the Davos ‘Artic Camp’, the truth is that Davos has lost much its VVIP global corporate cachet, not the least through its own corporate greed.

Ever since it emerged a few years ago that the summit’s 120 ‘strategic partner’ companies paying £462,000 each for membership of this pro-globalisation club whose bible is The Economist, many CEOs have struggled to justify the expense to shareholders. Now most of those who go are a rag-tag of overpaid corporate CEOs and FTSE executives who pay around £25,000 (excluding travel) for the lowest level of badge and the chance to hang out with celebrities like Amal Clooney or Bono at cossack parties hosted in vast chalets by Russian oligarchs or PR mogul Matthew Freud.

But you won’t see May at any of the after parties. Unlike David Cameron and Osborne, who are earning tens of thousands by speaking at private dinners hosted by PwC and HSBC bank accordingly, May is not even staying for a glass of gluhwein at Schneider’s tea room.

May hates the sort of cosy trainer-wearing apres-ski cocktail party small talk that Davos Man enjoys. The number of parties and dinner events each night are such that hedgies like Daniel Loeb or academics like Niall Ferguson often will RSVP saying they can attend for ‘main course’ or ‘starter’ only due to being triple-booked. Although billed by the media as the AGM of the world’s corporate and UHNW elite, the truth is that the appeal of Davos (and paying £462,000 to be a strategic partner company) thawed some years ago.

Although I used to be a regular, with Spear’s an official magazine of Davos – these days the real buzz is at conferences like the Google summer camp summit, hosted last year at Rocco Forte’s Verduna resort in Sicily and billed by the New York Times as the new summer Davos; and you can bring the family.

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The obituaries for Davos have been led by the magazine Politico which announced a few days ago as the private jets started landing: ‘As with most fashions, it’s difficult to pinpoint the exact moment Davos began to lose its mojo. Was it when Brangelina showed up? When Mick Jagger strutted onto the scene? Or the dawn of the Occupy movement? Whatever the trigger, there’s no denying the grandly titled World Economic Forum has lost much of its cachet. And with the global backlash against ‘elites’ likely to intensify as we enter the age of Trump, Davos is the last place many elitists want to be seen’.

Did somebody say ‘the last place’ to Instagram? Davos in 2017 holds up a cracked mirror to how the liberal pro-globalisation, pro-capitalist, free trade, free-movement of people political consensus – for so long the creed of the UHNW Global Citizen community – has not just been turned on its head, but smashed.

Not even Germany’s Angela Merkel is dropping by this year – no doubt she is too busy dealing with the investigation just launched into the whereabouts of 547 immigrant asylum seekers ‘who may pose a security threat to Germany, according to the country’s interior minister, Thomas de Maizière. That not even the Swiss wine loving Jean-Claude Junker, president of the EU Commission, is coming to Davos for his usual round of champagne-fuelled dinner and drinks parties tells you what you need to know.

My theory is that founder Klaus Schwab’s annual Davos Circus for the HNW global class has been killed off not just by the rising popular tide of anti-elitist politics but because in its glory years the WEF ended up becoming a victim of its own success. When I was last there, the question of ‘has Davos peaked?’ was widely discussed. That was at a a time when the idea of Brexit happening or Donald Trump being elected president of the US would have been unthinkable.

Certainly Davos was already losing its glitz some years ago.  When Cameron, Osborne and Boris Johnson were snapped after their speeches enjoying a rowdy pizza and Swiss plonk together at the cheap Alte Post restaurant, it certainly wasn’t a Bullingdon Club reunion, as some media mocked. The Bullingdon may have served ropey wine but they never served pizza.

But that is part of the point about why the media have so often got Davos wrong. While the BBC likes to think that Davos is an exclusive club for Davos Man, or global leaders or power-brokers, it never was the Bullingdon of global power clubs because – unlike the invitation-only Bilderberg group (an elite and quasi-secretive group of self-anointed global business leaders and politicians who meet annually in luxury resort hotels) – almost anybody rich enough can pay to get in.

Any ‘pay to play’ club will be found out in the end. And the players will move on. While politicians don’t pay to attend, many multi-national CEOs, top bankers or even billionaires have struggled for some years to see the point of spending $71,000 on a ‘non-VIP’ invitation to be an official delegate this year. Yes, that’s to walk around with a  ‘non
VIP’ badge hidden under your Lora Piano scarf.

Especially when (as many well-heeled financiers confessed to me they were preferring to do) you could pay around 25 Swiss francs (£18) for a day pass to the Belvedere Hotel, which is where much of the best partying and behind-closed-doors suite meetings, lobbying and action takes place, such as The British Business Leaders Lunch or the WPP party hosted by Sir Martin Sorrell. 

But to be fair, the $71,000 delegate ticket price is not the real issue with Davos. The real issue is whether the price is really worth it in terms of time, travel, and schmoozing/networking value?

For the dozens of heads of state – or would-be heads of state – the answer is almost certainly yes, so long as you understand how Davos really works and what Davos is really all about. It is not about sitting through earnest conference debates on ‘energy security’ or climate change. In short, Davos is about having (often buying) a

I recall being invited to the Klosters chalet of gold mining billionaire Peter Munk, who is a Davos veteran. For many years he has hosted a triple-A list dinner most years for the Davos elite: ‘If you put up x million, or you are the FT expert and you give coverage, you
become a panel member’ he said. ‘It’s not because you are smarter than anybody
else. But anyway, it is a phenomenal place. So Klaus is now a God – he is a king who also – with his wife – loves receiving heads of state’.

The other problem is that founder Klaus Schwab has made too much money himself out of the global forum – so much that his punters don’t like it any more. According to published accounts, the must-attend gathering of world leaders, oligarchs, business tycoons, hedgies, bankers, power-brokers, academics, economists, pundits, experimental artists and various celeb and PR kings cost $156 million in ‘expenses’ back in 2011, (figures for recent years aren’t available) just to host, and brings in revenue of $157 million, including repeat bookings from at least 69 billionaires. That means that the WEF is a working model of commercial capitalism at its most effective. The World Economic Forum- and founder Schwab – are making a huge amount of cash.

I do miss some aspects of Davos, like the Google Bar that was set up in Davos back in 2012 at the Belvedere Hotel – yes, free champagne, cocktails and all drinks for a week. But Google stopped this bar in 2013 and the went on to found their own Zeitgeist conference with even better food and wine, along with their Davos-style summer camp in Sicily. At the Belvedere, the likes of HSBC, Goldman Sachs or Merrill Lynch will rent suites for pharaonic amounts. It’s in exactly such a suite that George Osborne will be paid probably more than an MP earns in a year to address just 20 guests of HSBC bank.

Perched high above Davos, with its Disney-style turrets lit up like a wedding cake and the entrance path plastered with advertising and then more security than Tel Aviv airport, the
Belvedere always reminds me of Duke Bluebeard’s castle, the setting of Bartok’s opera in which guarded doors lead to various rooms and parties which the thrice-married Duke warns his newest lover (who is determined to gatecrash every room, invited or not) against entering for fear of what she will discover. The doors lead to a torture chamber and a treasury, and Davos Man wants to unlock all of them out of curiosity and for fear of being left out.

It is this fear of being left out that is part of the success of Davos. It was George Steiner who took Bluebeard’s Castle as the title of his 1971 stand-off against the demise of modern Western culture. This seems to only confirm his depressing postmodern thesis that a world in which the defining driver is the unbridled pursuit of consumer wealth – or alpha, in hedgie speak – has resulted in a world that is ‘intolerably deprived’ and, above
all for Davos Man, lonely at the top.

I partly blame the star struck media – with the BBC viewing Davos as an economic Glastonbury. Last night’s over-coverage of Davos by the BBC was embarrassing with almost every flagship news programme trying to find some CEO in an anorak and snow boots to promulgate the BBC’s global warming or Brexit negative liberal political agenda.

That there are so many hundreds of global media now ‘invited’ to Davos – with many having to sing for their supper by chairing panels – is something that also has resulted in Davos being avoided by many of the true global UHNW club members. They don’t want press around.

No other elite business leader summit – such as Herb Allen’s Sun Valley or (god verboten) the Bilderberg group – embraces the media with such zeal as the WEF. At a Bilderberg conference in Northern Virginia, a perimeter of a half-mile was set up around the conference hotel. A photographer for the Washington Times was told by law enforcement that any attempt to get close to the building would result in arrest.

At Davos, op-ed writers, columnists and editors are granted A-list status, which results in Davos being promoted as the holy grail of Big Business networking and a stage for world leaders (I recall once seeing Ed Miliband walking down the street carrying two suitcases himself) to flex their muscles and rub up their opponents and rivals.

Another reason for the decline and fall of Davos is that one of the reasons for Schwab’s brilliance and savvy as a commercial entrepreneur was that the conference also allowed him to become a political king maker. Behind closed doors, there is a very large amount of political campaigning going on – this year it’s the Chinese president making his first visit – especially in countries such as India, China and Latin America where regime change and elections offer vast profits for the well-connected business ‘leaders’ as well as industrialists such as the Mittal familly or a well known oligarch who ships in a famous Cossack Choir for his annual bash.

The point about Davos is that whenever you hear worthy political rhetoric, or uber-liberal social philosophy being spouted at the closed sessions that are beamed into every hotel, bar, chalet and flat in the surrounding area – Channel 1 – there is almost always somebody
or some company lurking in the wings posed to make a fortune from the ‘platform’ on which Davos is the global stage.

For an issue to be raised in Davos, gives it some validation, much as in the same way that Davos is not really about ‘improving the world’ but rather the delegates’ self-interest, meeting fellow Tarzans and – above all –‘raising money’, as one of the world’s most secretive and successful hedge fund managers whispered to me at a party in the private chalet of an oligarch. After Brexit and Trump’s inaugurated tomorrow, Davos man seems to be looking like a global loser.

The point of Davos is about – for CEOs and ex-politicans like Cameron- feeling less lonely at the top. It is really about reminding oneself that it’s not too late to be taken seriously again as a Global Citizen, to be remembered as a ‘philanthropist’ for their legacy – not
just how much money they have made, and because they have just bought a $70 million boat which they have been flashing photos about on their iPhone to anybody in Davos who they think may be impressed.

After making their fortune, they want to go back doing to reading Thomas Mann and hanging out with artists and singers like Lily Allen or professors like Niall Ferguson and they want to be quoted in the Economist as a Global Leader, not just in some hedge fund newsletter.

One of the open secrets of Davos is that corporations or hedgies or CEOs often pay for their platform at Davos. When you watch the key-note sessions on Channel 1, the speeches are peppered with advertising from such ‘strategic partners’ as Audi or Siemens. ‘Companies pay to go on the panels,’ Munk told me.

‘Do you think Schwab pays Merkel? Of course not. The only reason that May spoke today was because following her well-received Lancaster House speech, she is now looking for a more international platform to get her message across that a new self-governing Britain will be open for global business.

‘If Putin makes a speech in the Duma, do you think it is on the cover of the New York Times. No! If Putin makes it here, everybody talks about it. Davos is a phenomenal platform,’ added Munk.

One of the most useful aspects of Davos in its heyday – whose delegates are shrewdly split up into geographical sectors, with special sessions facilitating meetings between business leaders and governments – is that while Swiss banking may no longer be anonymous, there is still nowhere quite like Davos to have private meetings that are not recorded, or never officially happened.

The WEF is now less of an economic summit than a brand and a business – than an under-the-radar discussion and hospitality forum for a politically lost rag-tag global liberal elite. Critics say that the WEF is like the octopus that has swallowed its own ideology to become a global commercial cash-cow.

Then there long been speculation in the Swiss papers as to where, or how, all this ‘conference’ money is spent – leaving just a paltry $1 million in profit some recent years.

The local community pays for the security – which is six million Swiss CHF. Foreign governments put up ten million Swiss CHF. The Canton puts up ten million Swiss CHF and Schwab puts up another six million. But where does the rest go?

There are a lot of hotel bills and flights to pay but the WEF is clearly doing a useful job of keeping up with the 70 or so global billionaires who return annually to Davos to pay their respects to the spiritual god of the global elite. Hail King Klaus !

There is another big difference this year. In the past decade or so, the phrase ‘See you in Davos’ became something of a HNW Global Citizen catch phrase. It was a  joke that just as the global elite leave town, they all grumble and say that that is the last year they will be going to Davos. Jimmy Goldsmith was saying Davos was over more than fifteen years ago, along with the likes of Conrad Black and Jacob Rothschild.

As Peter Munk told me on my last trip:  ‘Even I used to say it – that Davos had hanged. That it was wasn’t the same – that there too many people, too many journalists; and yet here I am again in my eighties. And the same people who say Davos is “crap” always come back’. Whether munk is hosting his annual A-list Davos dinner this week I don’t know. But at 89, he might as well, regardless of whether he is flanked by Angelina or Amal.

William Cash is the editor-in-chief at Spear’s

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