It’s inequality, stupid

What the great and the good in business will not be discussing at the Davos summit.

Prime Minister David Cameron Meets Emir of Qatar Sheikh Hamad Bin Khalifa al-Thani
British Prime Minister David Cameron has vowed that in 2017 - assuming he's still in power - he will hold a referendum on Britain's membership in the European Union [Getty]

Amsterdam, The Netherlands – Billions of people would apply the Groucho Marx rule to Davos – the exclusive club meeting in the Swiss Alps allegedly gathering the great and the good of business; “I wouldn’t want to belong to a club that accepts me as a member”.

Well, to start with, those billions wouldn’t get past the bouncers, because the pompously self-defined World Economic Forum is indeed about exclusion. Yet even if – by divine design – they might, what’s the point?

The austerity mantra devastates large swathes of Europe. The US remains mired in the fiscal cliff maelstrom. The Japanese are about to unleash an economic tsunami – devaluation of the yen at all costs.     

Double-dip recession rules.

On the other hand, growth does apply to parts of the BRICS group of emerging nations, and even more to some selected members of the N-11 (the mini-BRICS in the making); certainly Indonesia, Mexico, Philippines, Turkey, South Korea and Vietnam.  

But then, into the fervent Western doom and gloom pit parachutes British Prime Minister David Cameron, solemnly announcing that in 2017 – assuming he’s still in power – he will hold a referendum where Britain will decide Yes or No about its European Union (EU) membership.

Inevitably, European-wide businesses reacted almost in lockstep; this is bad for business, and not only of the British kind. With uncertainty now coming with a date on the calendar, there’s hardly any incentive for companies to invest. 

The price of austerity

Basic membership plus access to private sessions, at Davos, cost a whopping $245,000. Then there’s hotel bills, restaurants, schmoozing opportunities. So what’s the point of spending the GDP of a sub-Saharan country trekking to the Alps for a mere blabber fest? (The slopes of Jackson Hole, Wyoming, for instance, are way cooler.)

 Looking ahead to the 2013 Davos meeting

Essentially, this is what’s been happening in double-dip land. On one side we have Bad for Labour: millions in the West have been thrown into unemployment hell – or had their wages frozen. On the other side we have Good for Capital: companies are flusher. Yet the result is uncertainty, all over again. These – in theory – more “robust” companies are not investing. Why? Because there’s no demand. That’s the “price” of the austerity mantra.

There’s no evidence the business/financial/government Zegna suits in Davos will be addressing the drama; after all, Davos since the 1990s has always been about hardcore globalisation – and its prime spin-off: the absolute marketisation of everything in life.

To get to the bottom of it, the CEOs, bankers and techno-bureaucrats at Davos would have to engage in an in-depth discussion of hardcore neoliberalism (bringing in David Harvey would help). They would have to hold global banking mafias to account. They would have to condemn austerity to the dustbin of history. They would have to decide to bet on a minimal level playing field between capital and labour.   

Let’s go back to David Cameron to see how this won’t happen. For Cameron, the EU is essentially a problem because its Brussels-concocted labyrinth of rules doesn’t let British businesses pay Chinese (aka “competitive”) wages to their already heavily exploited workers.

Cameron – and myriad CEOs at Davos – could not but have wet dreams with Apple’s brand of postmodern capitalism, which relies for manufacturing on Taiwanese Foxconn and its monster factories in China populated by hordes of mainlanders toiling in Dickensian conditions.  

So Cameron, essentially, craves the social hell that engulfed Greece, Spain and Italy; social conquests and benefits sacrificed to satiate the God of the Market.

There’s no question this neoliberal European “union” needs to be hauled upside down to really start representing most of its citizens. But the way to do it is from the inside, as even European pillars Germany and France already admitted, and informed Cameron.

So myth number one is shattered; the idea that Britain may blackmail the Europeans into picking only what it wants from the union. As shattered as myth number two; the idea that the City of London’s position as the top financial/business centre in Europe creates jobs – and growth – in the UK and in Europe (it does, but only for a tiny minority).  

It’s only (virtual) business

The theme at Davos this year is Resilient Dynamism; as a definition of the current woes of turbo-capitalism, a five-year-old in a favela in Rio could come up with something more meaningful. Davos is a one-trick pony; “resilience” remains a euphemism for the ever-expanding markets/shitty pay for workers syndrome – or globalisation driven by huge multinational corporations.  

Scrap “resilience”. The name of the game is inequality. Davos doesn’t do inequality. As in Silvio “Bunga Bunga” Berlusconi’s paycheck at his Fininvest holding company being 12,000 – that’s twelve thousand – times higher than his average worker’s.

Take this Berkeley study [PDF] showing how the wealth of the top 1 percent of Americans accrued by 11.6 percent in 2010, while for the 99 percent it was a mere 0.2 percent. This is what’s at the heart of hardcore neoliberalism/capitalist liberal democracy – producing not that silly “end of history” but an entropic, chaotic new world (dis)order with oceans of neo-medievalism encroaching over a few high-tech islands.

Davos could also bring in Zygmunt Bauman to discuss how a key segment of the fast elites of liquid modernity concocted the Wall Street-provoked financial crash. That was only (virtual) business. But it was far from virtual national governments that had to intervene afterwards to bail out their banks.  

Then there’s war. Not an executive soul across the EU is asking what kind of “union” is this, perpetually mute about war (while at war in Afghanistan, Syria and now Mali). There’s only talk about the euro in peril (or not anymore, according to the latest Brussels mumblings). Meanwhile, Europe stumbles like in Pieter Bruegel’s masterpiece The Blind Leading the Blind towards neo-colonial wars dressed up as “humanitarian” or “anti-terrorist” interventionism.

Resilient dynamism? Now that’s a good definition of China. While European – and American – elites accrue their bellicosity capital to contest Beijing’s advance in both Africa and Asia, China’s interventionism is of the business kind. Build roads, not wars.

Still, the question Davos won’t dare to ask remains. Why is it easier to imagine the total destruction of mankind – from nuclear war to a climate catastrophe – than to work on changing the system of relations spawned by capitalism? Stay tuned for the sequel.

Pepe Escobar is the roving correspondent for Asia Times. His latest book is named Obama Does Globalistan (Nimble Books, 2009).