 This is Rob Johnson, president of the Institute for New Economic Thinking. I'm here with an old friend and outstanding journalist who's covered economic issues for over 20 years. Peter Goodman is currently the global economics correspondent at the New York Times and prior to that in the distant past was the head of the Shanghai Bureau for the Washington Post. He's got a new book that's an extraordinary, extraordinary portrait of our time. It's called Davos Man, How the Millionaires Devoured the World and it comes out on January 18th and I'm very fortunate for Peter, how I say, giving us the time to explore his ideas here today. Thanks for joining me Peter. Thanks so much for having me. I'm a huge fan of the podcast. It was a great inspiration to me actually while I was putting the book together because you kept teeing up these fantastic interesting speakers who had all sorts of relevant things to say about many of the subjects I've been diving into in the book. So thanks for having me. Yeah, thanks. So let's talk. What inspired you? What was the itch that made you want to scratch by writing this book? Well you know in a lot of ways it's the culmination of things I've been writing about, thinking about now for a quarter century. I mean going back to writing about China's transformation while I was based in Shanghai, covering the Great Recession in the States and then going off to be the European Economic Correspondent in 2016. But it's been triggered really by things that have happened more recently like, you know, Trump becoming president, Brexit happening, something that most of the sort of conventional wisdom thinkers would have said could not have happened. And just the clear sign that there's a lot of something other than harmony in a lot of our major economies. There are a lot of very unhappy people with a lot of legitimate grievances that has resulted in leaders taking power, not just Trump, not just the people who delivered Brexit, but Matteo Salvini becoming a force in Italy, the Sweden Democrats, this party with root in the neo-nazi movement becoming a mainstream party in Sweden. You go around the globe, the rise of Bolsonaro in Brazil, Narendra Modi in India, Duterte in the Philippines, signs that something fundamental is shifting in our democracies where suddenly leaders with very unconventional ideas about justice, about identity, about nationalism are taking power. And I found myself writing about these transformations in sort of siloed fashion while realizing again and again that they all had something in common. And that was a basic pillaging of public resources. And a lot of people were thinking about economic inequality in connection with what we now call right-wing populism. But a lot of the trends like the fact that the wealth, a wealthy handful of people in many developed economies were monopolizing and increasing the share of the gains of modern capitalism. Lots of people were writing that and observing this link. But the tone always seemed to be sort of passive. There was this kind of faceless group of beneficiaries. Nobody ever pulled the curtain. And so there was this discussion of these massive shifts happening in our societies as if we were discussing weather patterns, or worse, as if somehow inequality is just preordained. You know, if you want to have vaccines, if you want to have Google, then you've got to have some people losing, you know, in a tremendously dramatic way. And I found myself time and again dissatisfied by this explanation. There is a culprit. And that culprit is a species of humanity I refer to as Davos Man, stealing a name from Samuel Huntington, the political scientist who coined that term back in 2004 to refer to what we can now call the billionaire class. People who who are so wealthy and so powerful that they effectively write the rules for the rest of us. They don't feel any particular loyalty to any particular ideology or nation or set of conventions. They're really just about perpetuating their own power and adding to their own bottom line. And these are the people who have essentially made modern society and democratic governance come to a place of real dysfunction. These are the people who have effectively liquidated public infrastructure and given the proceeds to themselves through tax cuts, through tax invasion, who privatized important parts of government, who've left our governments in a really pitiful state, especially in countries like the U.S. and the U.K., where these trends are particularly extreme, but even in places like Sweden where this supposed bastion of social democracy where in the midst of a pandemic we learn that the public health system has been cut so much that we've essentially sacrificed senior citizens in order to build up herd immunity for everybody else. So you know that's a long-winded way of saying I felt it necessary to focus on the people who are actually responsible for engineering our modern economies to operate in the service of their own bottom line at the expense of everybody else. That's the sort of gray matter that explains why so many people are in such precarious state that they're willing to embrace some extremely unconventional and usually ineffective solutions to very real problems of scarcity. I remember a number of books, how would I say, walking up the ladder towards where you're at. A gentleman named, I think it's David Goodheart, The Road to Somewhere in the U.K. You mentioned Dead Souls, The Denationalization of the American Elite, which was the original article by Samuel P. Huntington, who is not considered a left-wing critic or what have you. He was just essentially saying with globalization created a place where these people aren't governed by anybody and they can, as you might call, play in the cracks and the fault lines or arbitrage between cultures and things have come way out of balance in that context. I'm curious, when I'm listening to you in the introduction, I always hear musical lyrics and I heard Buffalo Springfield sing for what it's worth. There's something happening here but what it is ain't exactly clear. There's a man with a gun over there telling me I got to beware. Hey, children, what's that sound? Everybody look what's going down. So you're sending us a flare. I mean, you might say it's long overdue in the way you describe things, but you're sending us a flare of how to look at, which I'm going to call, the psychological resistance from ideologies as it relates to people and actual structures. And, you know, Davos Mann is borrowed from Samuel Huntington's title. It's symbolic, but you also, in the book, explore the actual nature of the world economic form in Davos. And I'm curious how do I say how you arrived at this title, I think had to be in part influenced by what you saw in your diagnosis was evident in that context. Yeah, that, to be perfectly honest, was accidental initially. I mean, what's become the main thrust of the book didn't start out that way. I mean, initially I was writing what I thought, I mean, this is pre-pandemic, right? I'm conceptualizing a book that's about inequality and how in many societies where right-wing populists have taken power often demonizing immigrants or, you know, demonizing other vulnerable populations as the explanation for why people don't have enough health care, why housing is no longer secure, why people who previously could earn a living with their hands can't anymore without risk of poverty. And so I was trying to write, I began by writing this story of inequality and right-wing populists and looking at how these right-wing populist opportunists would demonize some other group and capture votes. This is a playbook, you know, we saw in the United States with Trump. This is to a large degree how Brexit ultimately happened. This is how the right wing got very popular during the time I was writing this book in Italy. And then I realized as I went off to Davos in 2017 Brexit at that point was six months into the process. Trump was about to be inaugurated and suddenly the founders of the World Economic Forum decided that, you know, they should at least pay lip service to an exploration of populism and inequality. So there were all these panels about how to deal with inequality and I thought, well let's go sample what's on offer. And I went to a bunch of different seminars and for those who've never been to Davos, which I assume is most people, it is officially a bunch of very earnest seminars on things like gender equality, inequality, threats to the environment and this supposed search for solutions all under this rubric committed to improving the state of the world. Which if you think about it gives away the central absurdity of the whole enterprise because the people who are gathered there are the people responsible for the state of the world. The people who go to Davos could with the blink of an eye solve all of human problems if there was consensus, you know, right there. But by gathering under this rubric committed to improving the state of the world everybody gets to claim that that's what they're actually interested in. So whatever it is they're discussing, whether you can have a panel full of pharmaceutical industry executives discussing the in affordability of drugs as if like, this is a real headscratcher. Let's try to get to the bottom of this one with everyone engaged in this supposed conversation truly devoted to this as opposed to, you know, posturing to maintain their own privileges. So at this particular Davos in January 2017 I went around and said okay everyone here has come around to the view that globalization, the system that's made everybody incredibly rich is now under threat. Some wacky things have happened. Nobody expected to see Brexit happen. Nobody expected to see a multiple bankrupt casino magnate who's threatening to treat the US national debt like the sort of debt that he can renounce as a casino magnate. You know, these things are wacky. What are we to make of this? Let's try to understand and as I went around I heard, you know, explanations, supposed solutions for inequality that always put the onus on the people who didn't have anything. Well, workers have to train themselves. I heard my former boss, Arianna Huffington, talk about how people need to sleep more. Everyone sleeps more. That will solve our problems. I listened to Ray Dalio who at the time I think is worth 17 billion dollars. One of the largest investment managers on earth. Talk about how what we needed to do was unleash more animal spirits so that people could feel more incentives to make money. As if a man worth 17 billion dollars somehow we don't have enough incentives in the system to make money to begin with. That was very odd. What I didn't hear anyone talk about was strengthening the power of labor so workers could negotiate for better wages and working conditions. I didn't hear anybody talk about progressive taxation so that we could actually redistribute some of the wealth from people who have more of it than they could possibly spend in multiple lifetimes to everybody else. And that was very striking. So as I began to conceive of the book I thought, you know, this right here, the gathering of the people who have all the money wanting to lecture us about how we're going to solve this solve, I put in air quotes, the situation where they have everything but they're not actually willing to sacrifice because they're interested in win-win solutions where you know this kind of mythical idea that the billionaires don't have to sacrifice. The wealthy don't actually have to give anything up but somehow through talk and the expressing of good intentions we can achieve some sort of solution to this problem that became my way in to the broader story about how we got to this place. And then I realized that you couldn't simply refer to the billionaire class in composite. We had to have some cases that we could explore so we could get into the life experiences and the psychology and the actions of these incredibly wealthy people who've amassed these fortunes and who have gone to great pains to protect those fortunes and build them even while they're giving us lectures about how they actually have our best interests at heart. So I then picked five characters who I thought typified this mindset in various ways and gave us exposure to different industries. So I started with Mark Benioff who's the CEO of Salesforce, this big software company who's on the board of trustees of the World Economic Forum who's taken to saying that CEOs or the heroes of the pandemic, that CEOs have saved us, the government hasn't saved us. I wrote about Jamie Dimon who of course heads JP Morgan Chase and who played a central role in getting Trump's enormous tax cuts which furthered inequality past. I wrote about Larry Fink who's another CEO like Benioff. He's the head of BlackRock which is the world's largest asset management firm. Like Benioff talks about this thing called stakeholder capitalism, this idea that we're past the days of Milton Friedman shareholder maximization. Now companies are thinking about social goods, they're thinking about the environment, they're thinking about local communities and who has along the way managed to amass his own fortune along with the power to shape the bailouts that have been spent not just in the most recent crisis, the pandemic from previously in the great financial crisis giving him just tremendous insight into how the Fed in particular really spends its money, how it operates. I wrote about Jeff Bezos who needs no introduction but I've come at Bezos in a different way I think than most people who've written about Bezos. I look at him as a tremendous beneficiary of international trade as the intermediary between factories around the world and consumers in the wealthiest markets especially the United States but has monopolized the bounty to such a degree that much of the public has turned against trade which is really a great loss because trade if we if we run the rest of our economies well is generally pretty beneficial to most people. Well we we're at a place now a juncture where you might say we're both looking back and looking forward. We're looking while the pandemic is still here at who's gotten rich from the pandemic and who's suffered. We're looking on the horizon at climate change and the need to organize what you might say for a common good. Right. And I would say we also have a need to how to say look forward to how despair distorts or impairs democratic politics and makes people which say vulnerable to the temptations of demagoguery or authoritarian solutions because they don't see any relief on the horizon for their multiple anxieties. Right. So I think and I guess I'm a doctor's son your diagnosis of the operation of what you call the Davos men does shed light on some of the what you might call depth and persistence of anxiety about future challenges. And I'm curious for instance when I heard you you were talking about BlackRock and others you're talking about the say the use of private sector systems to vigorously address challenges that some of these people would say if you do it to us it all bogs down if you do it with us or enlist us maybe you've got a problem with managing conflicted interests where doing well for themselves and doing well for the system they're asked to invigorate is hard to balance or to monitor or to regulate but I'm interested in how you're seeing given what you've learned we need to approach this next this next phase this next chapter let's say climate change I know Mark Carney is a friend of mine has talked about channeling the 30 trillion dollar capital markets in the direction of addressing climate change others Adair Turner who's been a senior fellow at Inet has talked about the need to engage all of these energy systems companies to deploy renewables around the world but the question at some level is how do you do that without which you might call excessive exploitation if this systems of governance regulation and balance is absent and may lead to further despair and further lurching toward authoritarian rather than democratic solutions I mean my intent in writing this book is not to demonize business or billionaires or wealth uh business is full of incredibly intelligent people who know all sorts of important things on a great range of subjects and have a lot of solutions I mean there's there's no question about that it's not that we need to get to a place where you know government is the solution by itself to all problems it's that we need to we need to excise this unhealthy thinking that we've adopted as a society and not by accident I mean mentalities that have been engineered by Davos man to prevent us from very commonsensical approaches to business like you know simple regulations that ensure that the public is protected against pollution against the risk of financial crises to ensure that there are basic workplace standards such that ordinary rank and file workers don't have to choose between exposure to a deadly virus in a pandemic and and their and their paychecks we need to have some rules and those rules need to be set by the public through democratic means but if we do that you know if we get the policies in place there's no reason why government can't then partner with businesses I mean how are you going to there's simply no way that we're going to address climate change without engaging the people who are running the energy sector they know the nature of the problem they have the solutions they have the data they have the science but we need to change the incentives and what we what ultimately I'm arguing in this book is we need to get over this idea that we can simply entrust billionaires who have built a machine that has been incredibly lucrative for themselves and their shareholders we need to get over the idea that they're just going to solve our problems through right now at stakeholder capitalism you know this this kind of absurd notion that we can just count on businesses doing the right thing so therefore we don't need government to regulate we don't need labor unions to play a role in in wage negotiations and ensuring decent workplace conditions we do need to have government play the role that it played especially in this country in the United States in the period in which the market was in fact working most effectively and that's you know 1945 till the middle of the 70s now my book is not an argument that we want to go back in time to the mid 70s I mean we had all sorts of problems that we've made a lot of progress on I mean we're a much more representative society though by no means can we declare victory in terms of race and gender there are tremendous class cleavages I mean we lived through the Vietnam War we had Jim Crow in that period I mean I'm not I'm not here to sort of romanticize the post world war two period but in one basic way a time when unions were stronger when government regulated much more diligently than it has since on antitrust on labor conditions you did have a situation where economic growth translated into rising living conditions for just about everybody just about every community got their piece of the action in that period and we need to get back to that in a modern context and that's not going to happen by waiting for Davos man to deliver on Davos man's rhetoric Davos man is extremely skilled at expressing empathy I mean the whole point of the world economic forum is this kind of elaborate virtue signaling for everyone who's a participant and even if those of us in the audience are not buying it Davos man himself is buying it Davos man leaves Davos every year more energized in his own goodness and his own ability to you know as Ben Benioff's actually written books about this to to do do good and and get rich at the same time there's a conflict between the the systems that Davos man is building for his own enrichment legalizing tax evasion stripping away regulations minimizing taxation at the top I mean this kind of bottom-up income transfer there is a direct collision between that and the policies that everybody else needs to do the things that are required to make to to generate economic growth that actually promotes well-being for large numbers of people that involves investing in public infrastructure that involves making healthcare housing education more affordable and there are no win-win solutions some people are going to have to give something up the people at the top are going to have to give something up and they're simply not going to do it of their own volition it's going to require an exercise in democracy yeah let me ask you a question about that the exercise in democracy because I know I have a group at INET called the Commission on Global Economic Transformation that Michael Spence and Joe Stiglitz co-chair yeah and they're working on five different reports related to what I'll call disruptors climate technology globalization the disruptor of governance which is what we'll come back to finance and migration in the question of governance as I've listened to these experts there are about 22 of them on this commission talking about it there's this notion which is local governance is tangible it's like if a guy says to you how can I get yeah if you got a local councilman you say how can I get my driver's license renewed he can help you right global governance it has everything under the tent that can affect you but it's a long way away from you local governments may diagnose the maladies but not have any control over the things that are damaging your life so yeah when you talk about democracy I feel like we're in a place where people who are skillful and not necessarily well-being whether consciously or unconsciously can arbitrage between societies and I think globalization with its high-speed technology financial transfer has strengthened the bargaining power of capital and technology and financial for sure and weakened people because the resistance to human migration particularly among the lower educated is quite formidable and so how do we how do we get the kind of governance of the whole system that is both responsive and equitable but acknowledges this global platform I mean this is the ultimate question and unfortunately there are no enormously satisfying answers beyond people have got to organize around educating their fellow citizens on the real root causes of our our problems you know how do you reform a system that is effectively controlled by the people who benefit from the system that's really what we're asking I mean how do you take a system that's been where the rules have been written by Davos man to promote the interests of Davos man to protect Davos man from things like antitrust enforcement and taxation and how do you use that very system that Davos man basically controls to make Davos man pay his fair share so the rest of us can send our kids to college and go see a doctor when we're sick without taking out second mortgages on our homes if we even have homes that that's that's really the question that we're asking you know all all we can say is that I mean in terms of our own history in terms of American history our history is full of people who didn't seem to have any power finding in the constitution in favorable platforms for organizing you know ways of securing rights for themselves and that now has to be done on a on a grand scale because the status quo seems to be that every time there's a crisis and we've now lived through two very profound crises in a short period of time and we've lived through the great financial crisis of 2008 which turned into the sovereign debt crisis in Europe and the great recession in the US which went on you know a long time and has left a lot of people nursing very real grievances about how little they got as they watched billionaires get bailed out and now we're we're living through the the pandemic and what we've seen is we get a lot of rhetoric around oh we need change we need a fundamental refashioning we need policies that will protect ordinary people instead of simply the the one tenth of the one percent but there's there's a system that you know here we are I'm tempted to now speak in the passive voice which is what what we seem to default know the system replicates itself for no what happens is Davos man I mean the phrase I use to describe the billionaires who actually write the rules they've got lobbyists that no one else can dream of you know I mean people who need help with childcare so they can get go get to work they don't have lobbyists people who who are defending themselves against eviction in a pandemic that was not of their own making where their job is now gone not through any a bad behavior on their part but because they happen to be unlucky to live in this moment of time they generally don't have lobbyists you know Amazon has a hundred plus lobbyists in Washington DC Davos man has the apparatus that is designed to maintain the status quo and make it sweeter and that's what happened after the global financial crisis that's what's happening now and the only solution to that is for the people to use the only strength the people have and that's numbers now Davos man is very skilled at dividing and conquering you know making sure that somebody is aggrieved about something that that implicates someone other than the billionaires who've managed to pillage the public infrastructure we're always talking about you you know we're always angry about some seemingly local issue that comes down to values again this is not by accident I mean the the worst media in our midst is is about you know getting clicks by demonizing somebody by making us afraid of crime by blaming big government also not accidental I mean the whole concept of big government financed by big business to protect itself from regulations to get out from under regulations and and you know we fall for it because the people Davos man doing this to us are very skilled in their use of a formidable toolkit the only the only way that gets undone is for people to use the democracy that's there I'm not I'm not looking at this through rose colored glasses I'm not saying that's simple I'm not saying that's around the corner but that's the only way out of this you know well at some level using the democratic process not necessarily the democracy that's there and here's the distinction I would make yeah it's a good point there are a whole lot of people let's say from the Biden administration in the I'll just focus on the United States for a moment who wanted to alleviate suffering but their survival whether it's in the house or the Senate or the future White House or whatever depends upon raising money and so the question is would they rather go for it and run the risk of getting bounced out in primaries or what have you by deep-pocketed counterforces or do they want to survive and see if they can edge their way towards something albeit not satisfying enough to create a change from the existing design to the one you might envision I think this is what I think is one of the most difficult dilemmas is how do we evolve democracy back into a healthier place when there is so much concentrated wealth and there's so much use for money in politics in thwarting those reforms I think it's it's a very painful thing to consider and I think on the if we don't consider it the prolonged despair leads to the further wreckage of the system yeah I was going to say it leads to the further wreckage of the system a despondency and as I've mentioned a couple of times the lurch toward authoritarian solution because at least the authoritarian says the system is rigged there's something wrong not that they're going to fix it right but they do diagnosis yeah I mean I think what Trump taught us in the US is there's a tremendous power in people who have suffered a degradation of their living standards hearing someone talk about that and identify a cause of that even if that cause is bogus there's a tremendous power you know the old cliche like everybody just wants to be heard I think there's a lot of truth to that in society I think I think a lot of people now most of us have have been living in a society where we have good reason to think the people in charge are not looking out for us are not thinking about our well-being they're thinking about something else they're thinking about the well-being of their donors if they're if they hold public office they're thinking about their own companies and their own shareholders we've now I mean the pandemic more than probably anything we've ever lived through is is a sign that we can't just assume that there's the system that's just going to take care of what needs to be taken care of that's that's just clearly fatuous and so given that the political apparatus which is very sophisticated has figured out how to find someone who can be blamed whether it's you know China and the trade deficit or it's and and not not by the way to dismiss the idea that China is a significant economic problem China is a big is a significant economic problem but the the solutions to that problem have been simplistic and in many cases have actually hurt the interests of the people who are supposedly set to be helped and the first step in this process of reclaiming a kind of democracy that can work is to at least lose these false binary ideas that Davos man has imposed upon us so you know take vaccines right I think I think the average person is grateful that Pfizer and Moderna in the U.S. have cooked up these life-saving concoctions that have clearly worked dramatically they've cut hospitalization rates cut the death rates they're incredible but along the way many of us have internalized this idea not an accidental idea an idea imposed upon us by the billionaires who run the pharmaceutical industry that we can either have these vaccines and accept that there's going to be tremendous inequality with you know the situation we're now in where you have frontline medical workers in parts of Africa going off to hospitals to treat COVID patients with no protection whatsoever while we're talking about booster shots for our children in the United States you can either have that that's just how it's going to be or we might as well live in caves just you know praying to the gods to save us from this pandemic this is nonsense right I mean the vaccines that we have and actually INE has done a lot of very good research on this has done a lot of very valuable research the vaccines we have are the result by and large of publicly financed research in the Moderna case the intellectual property itself is owned by the taxpayer and we have tremendous capacity to to both have vaccines and dictate how those vaccines are distributed now what we've lived through is Davos man distributing the vaccine to people who can pay and so if you live in a country like the US or the UK or Germany or Switzerland or Japan and your government is willing to write a giant check to Pfizer and Moderna and the other pharmaceutical companies that have developed vaccines then you have protection and if you live in Nigeria then you don't have protection that is the world that we're living in and it that has happened because we have accepted not merely accepted we have been sold by the pharmaceutical industry on this idea that it's an all-or-nothing proposition you either accept the inequality you accept the monopolizing of the returns or you go without and that's just demonstrably nonsense I mean we've lived through many periods in our history taking of the end of the HIV debate over intellectual property where the pharmaceutical companies can make out just fine no problem with pharmaceutical executives driving off to their beach houses in their outees that's all well and good the shareholders can make a nice return and we can still get life-saving medicines eventually far too late but eventually into the bloodstreams of people who need them and that basic reality needs to be explored in finance in housing in health care in education we need to understand that we have a lot more choices beyond the status quo we're a handful of people benefit and a lot of people suffer but at least we have the fruits of modern capitalism or we're Venezuela that is just a false binary that Davos man has sold us and it's really polluted our sense of governance and our sense of what is possible. One of the things I find how they say makes me shake my head is when people talk about fiscal prudence meaning not letting the deficits run out of control because it leads to which might call future tax liabilities or what have you and then they want to let the dissemination of these vaccines that as you mentioned rightfully the uh taxpayer largely paid for the r&d though you know there's value added coming from many dimensions the idea that I'm going to be really silly here that we don't go to the farm executive and say we'll double your profit and then disseminate all over the world so we stop variants from happening we stop having a second and a third and a fourth shutdown and all of the fiscal compensate we would save trillions by spending billions if we would just acknowledge what the playing field really looks like. Yeah I think that's true though I think there's also some credence to the idea that this this pandemic is probably not a one-off and the people in Pakistan Nigeria South Africa Bolivia you know who are still waiting for what COVAX was supposed to deliver I have every reason to say well we don't particularly feel like waiting for our former colonial masters to show up all generously with the goods we need to build up our own productive capacity and that's going to involve some some help with the intellectual property with technology transfers and that's not going to happen because you know Pfizer and their CEO Albert Borla you know signs the business roundtable stakeholder capitalism pledge that says we're not just running our company for the interests of our shareholder we're now thinking about society that's just that we we can't put stock in that we we need schools and maybe it's at the at the world trade organization maybe it's it's the US government joining with the UK government the European Union but we need something that's going to allow this process to happen beyond just waiting for the goodness of the corporations to come and save us but I think by which might call tolerating powerful ability what I'll call plutocratic ability to influence the rules regulations and possibilities and influence the false consciousness with ideologies we're actually costing ourselves lives and money there are unnecessary losses well who is we it's that malfunctioning system it's not the public at large who are disenfranchised there's there's no question I mean I get into this directly in the book that the failure to distribute vaccines globally I mean it's not just about humanitarian impulses if it's not enough to think that you know we ought to be making sure that doctors in front in in developing countries have access to vaccines when they go treat covid patients but if that's not enough yeah that's absolutely right how did we get omicron I mean I was writing stories and I was hardly alone a year ago saying that the the impact of this lopsided distribution of vaccines could very well be that we get variants and the variants are are going to shut down business not just in the places where they first pop up they're going to shut down business everywhere now if you're if you're mark benioff and you're selling software that allows people to work from everywhere maybe there's actually a net benefit and and let me be careful and say I'm not saying that mark benioff is rooting for variants or happy about this but certainly his company is beneficiary amazon is certainly going to reinforce its hold on e-commerce if more of us are stuck at home and don't feel like going to the shopping mall or the supermarket I mean there are beneficiaries in this more over every time there's a bailout davos man manages to unleash lobbyists to make sure that's a lot of the bailout functions as a kind of corporate welfare system for his own interests so you know we it's a complicated word when you're discussing davos man because davos man owns his own islands his own planes it lives in the ultimate sort of gated community and as long as money is moving around somewhere davos man is going to get a cut whereas it's we the vast majority of you know the rest of humanity that will suffer as the pandemic goes on yeah yeah but i what i was trying to suggest and i perhaps didn't do it well is it's not a zero sum game it's a negative sum game that the losses right from adhering to davos man's design are much greater than the benefits of doing it right and then paying them a little extra on the side even if that's what we had to do to bribe them to unlock a healthier design we're not doing that and i'm very very concerned on the scale of the pandemic coming back to the theme that i've emphasized over and over when people see something of this import meaning the pandemic and they see us failing it diminishes further their faith and trust in the capacity of governance social organization and makes the temptation of authoritarian alternatives even stronger yeah i think that's right or or even just misinformation i mean i think it's fair to say that part of the reason why vaccination rates are so low in the united states is that lots of people yeah i mean i mean to your point i mean if if you live in a system where your needs have clearly not weighed in uh very heavily in the decision making uh in terms of policies then you know suddenly you're supposed to believe that the people running the system have have your best interests at heart and deciding to take a vaccine that's that's uh that's been cleared just for emergency use now let me be careful i don't i don't want to feed you know anti-vaxxer line right seems pretty clear the vaccines have had a tremendously beneficial effect and if you you get vaccinated your risk of dying or ending up even ending up in a hospital uh get reduced dramatically we all should be taking these vaccines but it's not it's not difficult to imagine how someone who has seen their uh low skill job shipped out overseas uh so that somebody working for a fraction of their wages can take that job who's gotten very little help while they've been out of work uh who watched the powers that be bail out the bankers after the 2008 financial crisis while doing little to nothing for average homeowners or people threatened with eviction would look at this and say well i don't know uh i don't really know what to think but i don't have a whole lot of faith in the people running the system and that's not that can be expressed all sorts of ways one of them uh can be to lead somebody to anti-vaxxer clickbait uh propaganda uh and that does seem to be what's happened and that that certainly applies double in terms of climate change uh in terms of you know the biggest challenges of our time which are not you know win win i mean somebody's gotta i mean even if we can accept and and i think we should that in dealing with climate change we're going to need a lot of public and private investment that's going to create an awful lot of jobs if we do it right some jobs are going to be lost and so you can understand how uh somebody who in the immediate term a coal miner uh whose job is on the line in the face of climate change isn't open to a conversation around a sort of system-wide transition underway because they simply don't trust the that that there's a process uh at which their needs weigh in uh much if at all because again we all know it in our in our in our in our gut i mean this system has been built by davos man for the benefit of davos man and and and the realization of that uh does not lead toward uh cooperation it doesn't lead toward clear thinking and it opens the door to all sorts of nefarious interests the click bait merchants the political opportunists who who want to have us fear something or someone to get our vote while then doing nothing or even harming us you know along along the way it leads to more of the same that that that is our fundamental problem yeah let me uh look back at at the introduction i mentioned that you used to be a journalist in shanghai right and i'm looking at a world right now and i'll quote my friend i won't quote i'll hardly see paraphrase my friend orville shell yeah he wrote a book with john douberry called wealth and power in the book he said you have china which suffered from the opium wars and the japanese invasion on a pathway to regain its national dignity and you have the united states which has led the world system since world war two but it's smaller in numbers of people it's so forth than china as china's developing you have a western system what sabignou brzezinski used to call the uh in the cartesian enlightenment system and you have an eastern philosophical system we might call daoists that governs china so you have tectonic plates between who believes they should be in control or is there a changing of the guard you have philosophical differences you have a wounded rising country from the hands of the west in china right and you have this world that you're talking about social media whatever clickbait demonization we see it in the demonization of race in the united states in places where everybody's suffering maybe because of automation or machine learning or other causes the fights between black and white break out and the ability to make coherent school systems in heterogeneous parts of the community fall apart but the u.s china thing is now moving to center stage and the tensions whether it's related to the taiwan straits or whether it's related to the need for collaboration in climate how are how are we going to put china and the u.s together i mean i've seen some of your davos men have been trying to build in china even in recent months uh others are probably making a lot of money from having built there and avoiding whether it's labor or environmental restrictions others talk about how the uplift of the average living standard in china over the last 40 years is miraculous but how do we how do we build this governance across these tensions these philosophical differences in fault line you've been in china how do you see that scenario playing out well you know i was in china uh from uh roughly 2001 to 2006 at a time when businesses were still inclined to sell the uh almost comically absurd notion that uh increased trade would inevitably lead to pressures for democratization in china and you know i think i mean to answer your question like in in terms of in terms of the work that we need to do outside of china we need to disabuse ourselves of the fairy tales that have guided uh our our our policies i mean particularly u.s china policy and again not by accident because for davos man china was uh central to the profit making equation i mean china was ultimately allowed into the world trade organization in 2001 and got access to to markets around the globe because davos men like jeff bezos found that and eventually steve schwarzman who's a character in my book who's been engaged in all sorts of financial and real estate dealings in china larry fink now setting up mutual funds you know from from the from the beginning i mean if you go back now more than 20 years china was the ultimate way for companies that were organized around enriching shareholders often by reducing costs to make their stuff much more cheaply than they ever could in their home countries and then ultimately to sell into a country of 1.3 1.4 billion consumers making it the world's largest potential consumer market for damn near everything uh and and that was the pressure i mean what what china's w2 entry was really about was opening up this great frontier not only for sales but eventually for investment as chinese financial entities would take on the money they were earning by selling stuff to americans europeans and then plowing it into productive enterprises for davos men like steve schwarzman you know who sold all who sold real estate in in new york uh to to chinese interest it was it was never about how it was packaged right what the public was told by people i referred to as davos men enablers like bill clint like larry summers uh is treasury secretary in the u.s was that this wasn't really about business it was about democracy it was about civil liberties we engage with china then chinese consumer class will develop demand not just for our gucci handbags and our hollywood movies and our coca cola but also for democracy uh and and there was clear evidence that that was not happening and yet that in fact the reverse was happening that in fact engagement between china and the west was changing western companies more than it was changing china so you know jp morgan got caught basically handing out internships to the powerful to the children of powerful uh chinese communist party officials and you know guess what those officials then developed a taste for jp morgan investment banking services uh steve schwarzman runs this schwarzman scholars program which brings uh high level students from around the world to qinghua university which is this very prestigious campus in in beijing the chinese communist party selects its own candidates and through this exchange we're supposed to get you know mutual understanding yeah i'm sure some of that happens but a lot of deal making happens as a result that was always what the game was about and now that we have clear evidence that the chinese communist party has taken a you know dramatic turn toward the authoritarian uh there's much less of a healthy civil society than there was when i was there 15 years ago dissent is stamped out dramatically we've seen the treatment of the weavers this ethnic minority in the western province of shinjiang who've been uh housed in concentration camps i mean the word genocide is now commonly used to describe what they've suffered and it's it's it's impossible to cling to this idea that by engaging in trade with the west china would become democratic so what we're left with is a knowledge that china is vital for the solution of any global problem you cannot address climate change you simply cannot address questions around financial stability you can't address questions of national security in the shipping lanes around the world you can't address the supply chain cast that we're living through without a real relationship with china but that relationship has to be based on the genuine interests of the people in the societies that are engaging with china and not the handful of people davos man that has previously monopolized the conversation and set the policy for everyone now i recall in your book you paint portraits going to the actual davos world economic form of what it was like when donald trump gave a keynote speech as a new president and also a little bit later in time as jijin ping presented a vision of what he was to the western society that was you know perhaps i won't take apart claus schwaub he's a host and you've got to be gracious to the people who agree to come to your be your keynote speakers on the other hand neither of those men was particularly subject to debate then or after as a result i mean i mean claus schwaub actually praised donald trump the last time trump was in davos we're building an inclusive american society i mean he actually used the word inclusive uh and he uh at one point said you know we know that you're the subject i'm paraphrasing now of of a of a series of misunderstandings so it's good to hear from you personally i mean as if writing off you know all of the investigations allegations of impropriety uh the uh clearly uh allying himself with white supremacist organizations saying horribly misogynist and racist things as if these are just sort of misunderstanding you know misreported by the scribbling class people like myself i mean that's that that's a lot more than just graciously welcoming your host he he uh he praised shijin ping when he was in davos in 2017 uh described him as you know again i'm paraphrasing bearing the responsibilities of his nation as if he had somehow been chosen through some election uh no chinese leader in in our lifetime has been chosen in a in a popular election of course and shijin ping it is incredibly important and a figure that we have to engage with again if we're to solve any of our problems but let's let's be honest about what we're dealing with we're dealing with an authoritarian who rules under a one-party system uh who's uh sent a lot of people to concentration camps along the way mm-hmm i remember i was there during the uh the donald trump speech our mutual friends joan ania stiglitz were in the audience right me and they were quite unsettled and uh i remember uh how trying to calm everything down you know after uh trump was affirmed in in the ways that you described but you know what i found so interesting though about trump's appearance was that the conventional wisdom i mean if you sort of chatted with other journalists well what are you writing to read the coverage you got the sense that davos the world economic forum was aghast that trump was showing up because trump represents an attack on globalization an attack on democratic governance uh a trend toward authoritarianism and nationalism and and misogyny etc as if everyone at davos would be so horrified and what was so interesting about being there was to see that that was of course not true i mean the people in davos who mattered the most are are the people who run giant consulting companies and tech companies and finance companies uh davos man and you know let me tell you you've been to davos uh a lot more than i have been i mean i i've been going there for a decade and if there's one thing that we can clearly say about davos man davos man doesn't really believe in any ideology uh any particular model davos man believes in whatever is required to get the next deal done to get the policies to to be beneficial toward his own interests and in this particular case davos man understood donald trump we may not like the packaging we may not like uh the crude remarks that he makes we may not like that he's threatening to uh just walk away from the american national debt which can send titters through the marketplace but we get that he's going to give us tax cuts and deregulation and those are the things that we actually care about that's the stuff that's bankable and so as you wandered around davos then you would have these moments uh where uh people would just own up to that it was it was very clarifying and it it brought into stark relief the nature of the that the world economic forum plays in all this it's this place where you're simply being there signals your commitment to improving the state of the world your virtues that you're for stakeholder capitalism which is really a kind of way of fending off change while you're doubling down on the status quo and in this case expanding into this new frontier of deregulation and tax cutting davos man was very happy to have donald trump around and tuned out all of the stuff about trade all of the stuff about globalization all of the footsie with the white supremacists just tune that out as that's just some sort of reality television show that he's running we're we like the money that we're getting yeah i i think uh it's uh an article in the new yorker by a neutral friend of our seven osnos about how greenwich greenwich connecticut where i live for 15 years how did greenwich connecticut come to like donald trump i think was i'm paraphrasing the title but it was essentially the same kind of process in greenwich as you described among davos man becoming acclimated to trump or ignoring the side effects as long as the deal was sweeter for them yeah that was one of evan's best pieces of work and i'm an evan fan he's his greatest hits album is is chock full but that that was a very good piece that that landed actually as i was writing the book and and i i found it uh very interesting to you on you know it is how do you say engage with correlates to your book one of our mutual friends david sorota and my former partner in documentary filmmaking alex gibney have recently made a very very powerful podcast that's about eight hours long it's free on audible and it's called meltdown right and it comes to the place where it explores and the what do you call it general inspector barofsky from tarp right the overseer of tarp neil barofsky neil gives a very strong portrait and picture as do others of a demoralized america because of how the great financial crisis resolution was handled for the davos men not for the people who held mortgages or for the public in general so as joe stiglitz said the polluters got paid and people like steve bannon said and this is what brought you donald trump and uh yeah that's right yeah that i i'm also a fan of that podcast and i think the work they do on people who are victimized by the foreclosure disaster and the failure of the federal government to change anything uh for people who are caught in harm's way often you know there's this whole mythology around uh the housing disaster in the u.s that it was all about you know people using their houses like atm machines to get taking home equity lines of credit so they could take trips to tahiti you know of course there was some of that in in any uh christ in in in any bonanza in any gold rush there are gonna be some opportunists that that way but an awful lot of people were just caught up in the reality of of the american economy i mean if you you had kids who were of school age and you lived in san diego or miami in the years in which housing prices were going up exponentially society was saying to you you've got to live in a good school district or you're not doing right by your kids and see building this apparatus you know larry fink actually was a pioneer of the mortgage backed security and the mortgage backed security became this way for davos man to gamble on the market with the rest of us living in the assets that davos man was trading and to see it all crash and and to then see uh investors at aig goldman sacks jp morgan chase you know made whole while regular people basically got nothing except for a bunch of moralistic lectures about how they shouldn't assign on the dotted line that was truly galling and yeah serota and gibney really bring that home it meltdown and the result of that was a lot of unhappiness that's with us still and they continue to color our inability to uh to achieve anything close to useful policies on a great range of subjects yeah well i would say just this is from my own lens having at one time been the chief economist you had sent a banking committee at the time of the savings and loan crisis as i watched that unfolding i was i was very concerned at how the american people were going to react and the organization that's sponsoring this podcast i net the institute for new economic thinking was really founded in the aftermath of tarp and the fear of how which might call faith in authority with not just the financial sector would would damage society and what ended up happening is instead of it being what you might say we patched up finance and some academics did a little different work which they all did the spawning of the tea party on the right occupy on the left and everything else trust in faith and expertise deteriorated across many areas including medical science etc and and regaining in complex systems some kind of faith right in expertise and trust in expertise that represents the common good i think is a very big part of our task but it but the as gibney and serota show us the great financial crisis was a real detonator of loss of trust and faith and expertise but i agree and one of the things i try to do in my book is show that this is very much a global phenomenon so take the uk where i was living when i was writing and reporting much much of the book i went up to a city called sunderland in the northeast of england where the largest employer is nissan and nissan um it was employing about 6 000 people making cars for export around europe and so long as britain was part of the european union those cars could be sold across europe as if they'd been made in spain or germany or wherever it was just one common market so i went up there to try to understand how a majority of people in this city had voted for brexit they'd essentially voted directly against their economic self-interest they'd jeopardize the jobs at the largest employer in the city and i asked a bunch of people this question i got a bunch of answers and the most honest answer i got was and sorry for the foreign correspondent cliche from a taxi driver who said listen most of us we didn't understand what the european union was with the common market was we didn't know about any of that what we knew was that going back to margaret thatcher in the 80s who was the enemy of working people here who attacked labor unions who dismantled manufacturing who shut down coal mines we knew that her party the torey party the conservatives they weren't interested in us and then we watched after the financial crisis george osborne who was the uh chancellor of the x checker essentially the treasury secretary from britain imposed this crippling austerity on us where social services got cut to the bone where unemployment goes up and now fast forward george osborne and his prime minister david cameron same party as maggie fatcher come up here and they ask us you know you got to vote with us against brexit well he is more colorful language than i'll use on your podcast but you know we we didn't know what the hell to make of this but we sure as hell knew we weren't voting for those people so we voted the other way that's what happened and i mean to your point if people don't trust the authorities thinking becomes tribal well i'm not for those people so i'm for this other thing even if this other thing involves in the case of britain severing ourselves from our largest trading partner uh for no apparent reason beyond feeling good about shutting the borders to immigrants uh even if it involves uh in the case of the us uh voting for someone who brings us into a disastrous trade trade war with china which is actually weakened our ability uh to not only run manufacturing in our country because where we there are a lot more people who buy steel and work at companies that buy steel in the united states than there are companies that make steel but it's weakened us in terms of our ability to uh craft some sort of uh multilateral international uh campaign that we could use to try to force china uh to uh alter its uh its damaging uh policies you just awakened a memory in my life when i worked in the financial business i was sitting in the cafe in paris and this is in the early 90s and a gentleman walked out and spoke to me in french which i didn't master at all and i said may i speak in english he says oh he says the whole world it has to learn english and i and i said yeah uh he said well because it's either that or learning japanese and i said i kind of shook my head and he says sir the united kingdom particularly its northeast is an aircraft carrier and they launch cars off the deck of that aircraft carrier and they're destroying the auto industry in france and we're all learning english to watch it happen and it's not that important to me to get a cheaper car that's made in the uk and it reminded me of your uh of your trip during brexit these were the other side saying that they were here i mean this guy's working in a cafe he probably could have got a nice car for cheaper but the social disruption the coherence was not evident to him of a global division of labor system because the displacements the adjustments the suffering possibly of friends and family was so profound well the trade i guess i i mean i argue in the book that trade actually is an area where there are a lot of win-wins i mean they're always going to be some some there can be there can be with adjustment assistance there can be that's right i mean in the nordics for instance i mean i i've been struck whenever i go to the nordics uh labor unions there they're very powerful and they tend not to be against change i mean they don't fear automation they'll they'll say well if this makes our employers more competitive they'll be more profitable and they their lived experience contrary to the conversation we've been having is if my employer makes more money i'm going to get more money so i'm for it and if the job i remember doesn't work out you wrote an article in the new york times in january of 2019 about we love the robots and uh i went leaf pro grotsky who was the u.s council from sweden at the time in new york had me over for a lunch and he was reading from your article about exactly that notion and uh so it's great so there are how would i say there's a lot to be explored at times there's great complexity but in an absence of trust and with the people you call davos man thinking they can get away with things it's not in it's not repairing or enhancing trust and with the concentration of wealth i'll never forget the portion of your book where you describe how the covid vax system of covax right is a smaller amount of money than the individual money that jeff bezos could put into his spaceship system or endeavor not necessarily his physical structure but but the idea that the whole planet had less money for taking care of the pandemic than he had to build his own personal space program does illustrate what you might call the pressures that the common good must feel let me finish one last question people like gibreel zuckman and uh manuel syes thomas pickety and others are talking about a global wealth tax right do you see that as helpful viable a step in the process of counteracting the kind of maladies that you've described in your book i mean we have to have some kind of wealth tax uh whether you administer it globally or whether you do it nationally i mean there's a lot to debate there there has to be some kind of wealth tax for the simple reason that wealth is where the money is i mean jeff bezos makes about 83 thousand dollars a year that's his income so if we live on income taxes jeff bezos is going to pay income taxes that are about equivalent to what an elementary school teacher in california pays uh that's just absurd i mean jeff bezos's wealth is tied up in in the stock of amazon uh most of us can't get away with evading taxes the taxes are a fairly simple calculation if we own a home the property taxes are part of our escrow everybody can see them they're clearly calculated we work for an employer the employer withholds our taxes and then we file to maybe get some up and back or pay more you know whatever it's it's all very transparent there's not much we can do the the davos man has billions of ways to evade taxes but davos man has arsenals of of lobbyists we're finding new ways to exploit the tax code that exists and rewrite the tax code further toward his advantage the only way that we're going to deal with the redistribution that has to happen i mean i mean let's let's step back just for an american context i've heard it said and i subscribe to this view that the single that the thing that really distinguishes the united states from every other developed democracy is that we don't force wealthy people to pay taxes and so as a result of that our tax collections are meager and it's worse than that by the way davos man's lobbyists making it possible to even finance the irs so the irs doesn't even have enough people to do their job we're leaving tens to hundreds of billions of dollars on the table just there so when we then have conversations where ordinary people people who even consider themselves progressive will say well you know it'd be nice to have health care but we can't afford it it'd be nice to do more for people who who can't afford to send their kids to college but who's going to pay for it who's going to pay for it the people pay for it in other societies that don't seem to struggle over how to provide health care and housing and education that's davos man and the wealth tax is is the way you do that because that's where the money is very good well peter this is an extraordinary uh book that you've written it's a very very substantial challenge or a wake-up call to explore how we organize what we legitimate what we pretend is legitimate but don't really say raise the hood and look in at the at the engine and i think that this is a debate that has to happen because if it doesn't happen the democratic process which you're describing your conclusion will wither