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  1. Wealth
February 2, 2009

The Davos delusion

By Spear's

I was invited to Davos two years ago as editor of Spear’s and I have very deliberately not gone back.

I was invited to Davos two years ago as editor of Spear’s and I have very deliberately not gone back.

The experience was not unlike when I covered the funeral of Richard Nixon in California in 1994. Large coachloads (‘teams’) of Barbour wearing American journalists from the Wall Street Journal, New York Times and FT – amongst thousands of others – arrive and compete with each other to see who can build the largest base camp, with their own IT teams in tow, and carrying duffle bags with multiple lap-tops inside, like professional tennis players who never travel with less than a dozen rackets.

These ‘teams’ of editors and journalists swagger around with their laminated passes swinging around their neck self-importantly trying to get past the air-port style security erected at the entrances of the big hotels in order to elicit a quote or a sound-bite from a celebrity like Bono, or a leader like Gordon Brown or ex-leader like Tony Blair, or Rupert Murdoch (who rarely shows but did this year), or Prince Andrew, who claimed that there could never have been a Madoff-style $50 billion fraud in London’s hedge row because the UK’s system of ‘principles-based’ regulation was not broken.

Little of any consequence that is not carefully scripted or predictable  – such as the squabble between the Turkish Prime Minister and Shimon Peres – is ever reported.

But that is not the point of Davos. The point of Davos, like any other conference, is to make pharaonic amounts of money for the organisers; or in this case the founder and president Klaus Schwab, a former Swiss banker who founded Davos in 1971 as a ‘non-profit’ foundation (how noble) to improve the state of the world.

Well, I am not sure how much it has succeeded on that front but it has certainly enriched him to become a fabulously wealthy multi-millionaire, just as the founders of Burning Rock have made millions from their desert carnival, and the founders of Frieze art fair have made a pretty packet out of giving London the art fair it needed.

Nothing wrong with making money and seizing an opportunity but what has always worried me about Davos is how far the media have been used and manipulated into holding it up as this great intellectual fest for global movers and shakers, when in fact it is just another security conscious conference in Switzerland with paying delegates and a few visiting super-star VIP that add a bit of badly needed glamour.

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People never write about the thousands of paying non-entity delegates that clog up the hotels and pretend to be important. They are not. But it was a clever wheeze to invite them to theoretically (of course, they never actually do) rub shoulders with the likes of Nouriel Roubini, economics professor at New York University, or Angela Merkel, and get them to pay handsomely for the privilege.

What most people don’t realize when they read the various ‘Davos summit reports’ and endless glut of Davos Blogs and Diaries written by their ‘teams’ of columnists , editors and reporters is that  in Davos there is a media Berlin Wall erected – a Davos protocol – that prevents anything actually interesting that is said being repeated as the whole conference works under the principle of Chatham Rules.

And whilst there are many bars and indeed many parties at Davos (I, for one, did not weep when I heard that the Goldman Sachs party had been postponed this year), don’t think having a pass gets you to hang with the likes of Bill Clinton, Sir Martin Sorrell or Bill Gates.

All the real social action takes place behind guarded closed suite doors – all the people partying in the hotel bars are the ‘teams’ of hacks, the delegates paying their £20k for a badge and the WAGS of the global CEO classes who are bored into entropy by the three day ego-trip for their partners.

The bulk of these ‘teams’ of editors and reporters are kept way out of site of the global leaders they feign in print to be so intimate with. Real journalists are kept out. For newly elected politicians, or would-be prime ministers, showing up is a three line whip that guarantees some useful publicity and a platform for a speech; and for celebrities – thin on the ground this year by all accounts – there is the ‘validation-by-association’ that they so seem to enjoy from being written up by the economics editor of The Times or having a cocktail with George Soros.

But, in the end, like most conferences, it is all about vanity and the moolah. Few seem to understand why conferences really exist – they are not really about fostering global understanding, they are really about vanity.

As editor of Spear’s, I often get invited to speak at conferences in the wealth management sector; I was flattered, until I actually RSVP’d to one conference and was told the fee for being a panelist was 10,000 euro.

That translates into an awful lot of Swiss francs for founder Klaus Schwab who last year described the mood in Davos as ‘moderately optimistic’; this year he summed up the mood by saying, ‘We are all responsible for not recognizing the dangers of a world completely out of balance’.

If you had any idea how much corporate CEOs actually pay for a badge that supposedly gives them the chance to rub shoulders with Kofi Annan or the CEO of Google, then you would realize that most CEOs only go because it is a chance to play the Gordon Brown card – blame the problems they have created with their own companies on global difficulties and arrive back from Davos to tell the board that they are not alone.

Their slumped stock prices, their need to cut wages, need to ‘think out of the box’, need to embrace the digital revolution or green enterprise technologies (Cameron and Murdoch spent an hour hunched together in a canvas igloo talking ‘green’) – read any coverage of Davos and you realize it is all self-interested networking on the back of cliche business-speak platitudes.

Most people are there because they have their own agenda – to do with book deals, raising their profile so that there after-dinner circuit fees can be raised; getting away from the wife and the office and getting in some skiing with the mistress or foxy protege at Klosters, just down the road, where the hotels and the slopes are better.

The media who are accredited are used as mere pawns to inflate the egos of the politicians and the genuine VIP tycoons, such as the guest speaker Murdochs and the Peter Mandelsons who are invited free, whilst the paying CEOs are, in reality, left out in the cold, and kept away from the high-table and the after-parties in the hotel suites.

In times like these, most CEOs would be better off sitting behind their desks at their own companies working out how to save their own businesses, rather than trying to beat Gordon Brown at ‘saving the world’.

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