Peter Goodman takes a close look at the robber barons of the modern era, explaining how they have grabbed the gains of globalization and profited off the pandemic, undermined working people, economic stability, and even our very democracy in the process.
Davos Man: How the Billionaires Devoured the World by Peter S. Goodman, Custom House
There are less than 3,000 billionaires in the world. Peter Goodman focuses in on just five to fill his nearly 500 pages detailing their effects and influence on the world. Because their outsized impact has been global, Goodman travels the world to tell the story. He talks to people on the ground in places like Granite City, Illinois, and Prato, Italy, roams the industrial north of England, and visits apartment blocks outside Stockholm, Sweden, explaining how the reach of the billionaires he profiles have had a direct and deleterious impact on the lives of individual people and entire communities, dealing blows to their economic prospects and poisoning their politics.
But after two years of suffering through the pandemic, one thing that many will find most infuriating is how their actions left us so ill-prepared for it, and how they came to profit off of it regardless. So that’s the part of the story I’d like to focus on first.
One of the Davos Men Goodman profiles, Salesforce CEO Marc Benioff, went on CNBC’s Mad Money early in the pandemic, in April of 2020, to suggest that “This is a moment where business has to be the greatest platform for change.” That is a boilerplate talking point for Davos Men, that business is the best tool we have for creating a better world, but here he was putting some action behind those often empty words. He was there to discuss his efforts to get PPE to hospitals and frontline workers and call on fellow CEOs to “take the ninety-day pledge” and avoid laying off any workers for at least ninety days. And he backed it up. According to a report from David Gelles in The New York Times later that month:
Mr. Benioff … drew in major companies like FedEx, Walmart, Uber and Alibaba. In a matter of weeks, the team spent more than $25 million to procure more than 50 million pieces of protective equipment. Fifteen million units have already been delivered to hospitals, medical facilities and states, and more are on the way.
It was a move that showed how quickly the well-connected billionaire class can mobilize resources and influence events, even if it was a bill that Benioff could have easily footed himself considering that, as Peter Goodman reports:
Between late March and the middle of August 2020, Salesforce doubled in value, making the business worth more than $225 billion.
In fact, “Salesforce had racked up more than $5 billion in revenue between April and June.” Benioff also honored his own ninety-day pledge, waiting until August to fire 1,000 Salesforce employees. One could argue that those layoffs weren’t exactly necessary—or maybe even cruel—in the middle of a pandemic that made the company even more profitable, but hey, he beat his own pledge by about 30 days! One could also suggest that Salesforce was itself not a platform for change, but quite the opposite—one that was used to make sure that nothing really changed for many workers in those early days other than where their work was being done, allowing already unrealistic levels of productivity to persist during the pandemic. Goodman paints the scene:
Professionals could use the platform to collaborate in real time, even as their desks rubbed up against racks of drying underwear; as their cooped-up children, home from shuttered schools, agitated for more screen time; as Amazon delivery people interrupted their meetings to drop off fresh shipments of peanut butter, brownie mix, and other fortifications for the apocalypse.
Of course, perhaps the greatest question is how we got to a point that we ended up relying on the better angels and largesse of billionaires to find and deliver PPE to our frontline workers in the middle of a pandemic. For a partial answer to that, we turn to another of Goodman’s five Davos Men, Stephen Schwarzman, head of the private equity firm Blackstone. After feasting on real estate that homeowners had lost when big banks blew up the economy during the Great Recession, Blackstone turned its attention to health care. Blackstone’s TeamHealth is one of two private equity firms that employ “roughly one of every three medical personnel working inside American emergency rooms.” And, well:
As in everything that private equity touched, health care found itself subject to intensifying demands for profit. […] As the logic of profit maximization gained influence—competing with the traditional imperatives of medicine—managers limited their purchases of personal protective gear and ventilators, undermining American readiness for future disasters. They introduced metrics that encouraged doctors to operate like units of business, focusing on enhancing revenue rather than prioritizing health.
Preparedness was subordinated to efficiency.
We have discovered that, while this definition of efficiency does an excellent job of efficiently directing profits to shareholders, it is not very efficient for people needing urgent health care. In addition to TeamHealth, private equity firms had bought up entire medical practices, and they were hesitant to give up their largest source of income, providing elective procedures, to focus on the pandemic.
At hospitals that did scrap elective procedures, many slashed pay and even eliminated staff in response to the hit to their revenue.
When it came to protecting people or profit in the midst of a pandemic, Davos Man’s actions speak louder than his words. That is on top of the fact that hospital beds have decreased in number from 1.5 million in the mid-1970s to 924,000 today, that “Rural areas alone saw 170 hospitals shuttered in the fifteen years before the pandemic” and “In New York City, eighteen hospitals had closed since 2003, resulting in the loss of more than twenty thousand beds.” If you’re wondering why we've been hearing so much about the lack of hospital beds during the pandemic, you now have a big part of the answer.
We’ve been sold what Goodman calls the Cosmic Lie—that whatever is good for billionaires is inherently good for economic growth overall and will trickle down to benefit the rest of us. The World Economic Forum dresses itself up in aspirational language and noble ideals of improving the world, but its fifty-year run has coincided with a dramatic increase in economic inequality in which those that populate the conference have received the lion's share of the gains in a globalized economy. The idea of stakeholder capitalization is championed by the conference’s founder and in many of the panels and discussions that take place there, but the real action is always behind the scenes, and in those rooms the practice of shareholder maximization is perpetuated. As Goodman sees it, Milton Friedman “laid down the intellectual infrastructure for Davos Man, deploying the parlance of economic theory 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.
“This,” Goodman states, “was the cardinal principle at the heart of globalization as engineered by Davos Man.” No matter what language they dress it up in, their actions prove out that it remains the primary principle. I haven’t even touched upon the other three Davos Men profiled in the book—or their connections to heads of state and other people in positions of power, many of whom also get considerable attention in the book. But one of the things I have become fascinated by is how the billionaire class is able to see their wealth and actions as not only morally justified, but as a moral good. Justin Farrell’s Billionaire Wilderness: The Ultra-Wealthy and the Remaking of the American West has left a lasting impression on me, explaining, as he put it in an interview, “the thick ironies around every corner, and the social-psychological and philanthropic work the ultra-wealthy do to wrestle with and morally justify the contradictions that exist.” I think they really do believe their own hype and the proclamations that whatever is good for business and benefits their bottom lines also benefits humanity.
And yet, I still almost dropped my book when I read a proclamation made by Benioff during the World Economic Forum: “We have to say it, CEOs are definitely the heroes of 2020.” Not frontline or healthcare workers, not those rightly deemed essential who kept stores stocked and the economy itself up and running, but CEOs. Yes, as Goodman writes, “In a year that exposed the fatal consequences of decades of tax evasion by the world’s billionaires, the same people who engineered this monumental grift demanded adulation for their generosity.” As they escaped to their mountain hideaways and beachfront properties to ride out the pandemic, those who engineered the dysfunction of governments through tax evasion, the fragility of supply chains through industry consolidation and just-in-time procurement and manufacturing, and the undermining of the middle class through offshoring, anti-union activity, and low wages now want credit for saving a system they have titled so grotesquely in their favor. As Goodman writes:
By the end of the year, the collective wealth of billionaires worldwide had increased by $3.9 trillion, even as their philanthropic contributions fell to their lowest level in nearly a decade. Over the same year, as many as 500 million people descended into poverty, with their recovery likely to take a decade or more.
The architects of austerity for the masses were the same actors funneling tax breaks and benefits to the already affluent. That created a dire situation for many working people even before the pandemic hit, and it has only been exacerbated since. So what happens when the economy no longer works for working people? One possibility is that cynical, opportunist, populist politicians will find scapegoats in those with even less power—namely immigrants and minority populations—a reality Goodman found playing out on the ground of communities decimated by the actions of Davos Man. Yet, as he found:
The framing of the argument over immigration and the impact on public resources spared one central actor of scrutiny: the billionaires whose success in shedding their tax burden had forced decades of budget cuts.
Another possibility, which Goodman illustrates in Part III of the book, is that we turn toward each other instead of away, and take back control over our economic lives by rebuilding sustainable businesses, cooperation, and solidarity within and between our communities—even and especially with those that may not look like us and who are often newcomers to the communities we live in. It requires us to see clearly how those with wealth and power have engineered the economy to concentrate ever more of both in their own hands, and that we use the levers of democracy that are still left to us to wrest some of it back toward the wider public. We can either regulate and reign in billionaires and big business interests, or allow them to continue corrupting our politics, demanding tax cuts for themselves and austerity for the rest of us, undermining our economy, and squashing the small businesses that we most cherish in our neighborhoods in the process. We can blame China as an easy target, or we can come to realize that the shift in production and jobs that went with it was orchestrated by the managerial class to undermine the gains workers had made since the Progressive Era and New Deal and “was merely the means by which Davos Man realized the maximization of profits for his own gain.”
Davos Man justifies his obscene amounts of wealth by painting it in Panglossian terms. They have come to believe that, as Voltaire’s Pangloss believed, “all is for the best in this best of all possible worlds,” or as Goodman writes of Davos Man, “that [their] continued victories are a requirement for society to achieve any wins at all.” The rest of us are, as Candide was, forced out into the real world to discover its harsher realities—realities made worse by their plundering of public coffers and hoarding of the very real gains free trade and globalization have created. The global economy need not be a casino in which the house of billionaires always wins. It can be a community garden we all work in, contribute to, take care of, and enjoy the fruits of. As Candide realized in the end, “We must cultivate our garden.”