Davos man: how the billionaires devoured the world
Peter Goodman, Mariner Books, £14.99

THIS is a deeply researched book about the tiny minority of billionaires who we allow to exploit the peoples of the world while they pillage the world’s resources. 

The term “Davos Man” was coined by political scientist Samuel Huntington who first used it in a 2004 essay in which he described people so enriched by globalisation that they are effectively living without loyalty to any particular nation.

Goodman demonstrates how the world’s economies are run by and for the 1 per cent, at the expense of the 99 per cent.

During the first year of the pandemic, they used their power to turn “gargantuan, taxpayer-financed bailout packages into corporate welfare schemes for the billionaire class.” As a result, by the end of 2020, the total wealth of billionaires worldwide had increased by $3.9 trillion, while their philanthropic contributions fell to their lowest level in nearly a decade. In the same year, 500 million people were pushed down into poverty.

Marc Benioff, founder and CEO of Salesforce, a Silicon Valley software giant, told us that “in the pandemic, it was CEOs in many, many cases all over the world who were the heroes.” Not nurses and doctors then, Mr Benioff? In 2018, his company had revenues of over $13 billion, and paid exactly zero federal income taxes.

As a result of this kind of tax avoidance, public health care in the US was drastically underfunded. When the pandemic hit, the US had only 924,000 hospital beds, down from nearly 1.5 million in the mid-1970s. So, the US suffered more than other countries. 

It was the great liberal president Clinton who widened the loophole that corporations used to shift their profits to wherever taxed the least. In 2007, Amazon’s stock price doubled, increasing Jeff Bezos’s fortune by nearly $4bn, on which he paid no federal income tax. Bezos has spent some $5.5bn on his vanity space project, enough to save 38 million people from starvation, on World Food Programme estimates. 

Clinton had imbibed Milton Friedman’s views when he studied under Friedman’s acolyte Robert Bork at Yale Law School. Goodman describes Friedman’s drive “to give license to unmitigated greed. Executives could justify no end of abominable behavior — poisoning the air, accelerating climate change, firing American workers, and moving production overseas — on the grounds that not doing these things amounted to ripping off shareholders. Maximizing profit was not merely okay; it was a moral imperative.” 

President Trump said his tax cuts would increase investment and cut the budget deficit. Two years later, corporate investment was lower than before. (Instead, companies bought a one-year record $1 trillion’s worth of their own shares in 2018, and paid out a record $1.3trn in dividends.) And the budget deficit had widened by more than a third. 

In Britain, the Cameron-Osborne austerity programme cut state support for working age people by seven per cent, and ended tax credits for the poor. Overall, low-income people suffered a three per cent drop in income. By 2018, the proportion of British children who were officially poor had risen from 27 per cent to 30 per cent.

But again, the 1 per cent flourished. 

During 2020, Britain’s Treasury used over a hundred lending firms to distribute some £52bn in loans to companies in debt trouble. The Treasury refused to disclose the names of the companies getting these loans, declaring that letting the public see where its money was going would make the companies uncomfortable. 

One such lender, Greensill Capital, furnished £350 millions’ worth of loans to a collection of companies owned by Sanjeev Gupta, a steel magnate whose companies’ annual revenues were $20bn. Yet he had managed to get into so much debt that he was facing bankruptcy. Greensill — coincidentally — employed former PM David Cameron, paying him more than £1.2m in annual salary and bonuses, plus stock grants that he had cashed in for more than £3m in 2019.

He concludes: “Cutting taxes on the wealthy has proved disastrous for the vast majority of ordinary people. It has not promoted growth. It has not yielded increased wages for rank-and-file workers. It has largely produced more wealth for the people who already had most of it. An expansive study of tax cuts for the wealthy in 18 large economies around the world found that they widened economic inequality while producing no additional economic growth or jobs.”

Goodman believes that free trade is good for all, but his analysis is flawed by his failure to understand that the excesses he rightly deplores are the inevitable outcome of the workings of the system that he embraces. He claims that: “the capitalism since hijacked by Davos Man is not really capitalism at all,” and calls for “reviving the sort of capitalism we knew before” — a familiar reactionary fantasy.

Finance capital does not put money into public goods like jobs, industry, services. It puts ever larger amounts of money into its own pockets. It is a drain on society, not a benefit to society. It is an extractor of value, not a creator of value. 

It is a blood-sucking leech. A vampire.