Jan 30th 2018

Davos Man Kowtows to Trump

by Ana Palacio

Ana Palacio, a former Spanish foreign minister and former Senior Vice President of the World Bank, is a member of the Spanish Council of State and a visiting lecturer at Georgetown University.

MADRID – It has been a confusing couple of years for “Davos man” – the members of the global hyper-elite who gather each year for the World Economic Forum’s flagship conference to mull over the challenges the world faces. After decades of reveling in broad global acceptance of the rules-based liberal world order, the stewards – and, in many cases, key beneficiaries – of that order have been forced to defend it from high-profile assaults, most prominently by US President Donald Trump. Rather than fight, however, they seem to be giving in.

Last year, participants in Davos were shaken in anticipation of Trump’s inauguration, which occurred on the final day of the meeting. With the United States about to come under the leadership of a president who loudly touted an “America First” outlook, they looked desperately for a new champion of globalization. As their gaze settled on Chinese President Xi Jinping, the first cracks emerged in their commitment to putting ideas and values above expediency.

This year – the year of Trump’s Davos debut – the dam burst. Before the event even began, one could hear rationalizations of Trump’s destructive past behavior, myopic approach to issues like trade, and populist impulses. Trump’s is not an unhinged presidency, they said; it is a pragmatic one.

That sentiment grew stronger following Trump’s speech at Davos, in which he insisted that “America first does not mean America alone.” After a year in the wilderness, wondering what would become of benign globalism and neoliberal ideas, Davos man had found a new North Star: pragmatism. This is not good news.

To be sure, pragmatism is not, fundamentally, a bad thing. Indeed, Europeans like me are well acquainted with the dangers of inadequately pragmatic policymaking. But a system based exclusively on pragmatism – where ends justify means and values mean nothing – can be neither strong nor stable.

A purely pragmatic approach to international relations would be highly transactional, with countries pursuing one-off partnerships of convenience, in which the stronger party would have significant coercive power. This is no way to foster the kind of long-term stability that is needed to support peace and prosperity – objectives that everyone, not least the elites of Davos, have a strong interest in achieving.

As for Trump, it is not even clear that his approach is pragmatic to begin with. Of course, there are those who argue that his bluster on the international stage is the work of a businessman attempting to strengthen his negotiating position, so that he can bring recalcitrant and free-riding members of the international community in line. Trump is, they argue, simply forcing an adjustment toward sovereignty, after a prolonged period of international overreach. They tell us to judge him by his deeds, not his words.

So let’s look at his deeds. For all of the gains made by the Dow Jones Industrial Average during the first year of his presidency (the continuation of an ascent that began under President Barack Obama), Trump’s actions so far have been decidedly mixed.

Trump’s rash outbursts have allowed North Korean dictator Kim Jong-un to present himself practically as a peacemaker by comparison – a development that may open the way for that highly dangerous regime to maintain its nuclear arsenal far into the future. Trump kowtowed to Israel’s government by recognizing Jerusalem as the country’s capital and pledging to move the US embassy there next year, without getting a single concession in return.

Trump’s record on economic multilateralism is no better. When Trump withdrew from the Trans-Pacific Partnership (TPP), which he declared a “bad deal” for America, he claimed that he could strike better deals with each individual party. Instead, the other parties have moved forward without the US. Now, instead of having its position vis-à-vis China strengthened, the US is watching China move to fill the vacuum Trump has left behind in Asia.

Similarly, Trump hastily withdrew from the Paris climate agreement before taking the opportunity to shape its rules, including with regard to tariffs on solar panels, which could have served US interests. As a result, the US solar industry, which employs over 250,000 Americans, will suffer, while Trump continues futilely to try to revitalize a coal industry that employs fewer than 55,000 people. At best, this is politics; it is certainly not pragmatism.

Trump apologists would probably argue that we are looking at the wrong deeds. He did, for example, fulfill his promise to reduce the US corporate tax rate, a move that has added further fuel to the soaring US stock market.

But, even if we regard these developments as evidence of a certain pragmatism, the sudden embrace of Trumpism carries deeper risks. A stable system requires buy-in and belief. Even if the reality never looks like the ideal, the pursuit of that ideal serves as a powerful motivator, linking diverse actors through a shared goal – one that would serve everyone’s interests.

By so easily betraying the values that have long underpinned the rules-based liberal world order – such as multilateralism, democracy, and the rule of law – the toadies in Davos have put the lie to the entire system. This is not a correction; it is destruction. And it will hurt all of us. After all, while the liberal world order surely is in need of reform, so that it can deliver more of what it has promised, it remains our best hope.

Some leaders recognize this. French President Emmanuel Macron, to name one notable example, dedicated his own Davos speech to calling for a “true global contract.” But Macron cannot do it alone. All people who believe in building a better world through cooperation and collaboration must raise their voices, with those who benefit the most from a functioning world order leading the charge. I’m looking at you, Davos man.


Ana Palacio, a former Spanish foreign minister and former Senior Vice President of the World Bank, is a member of the Spanish Council of State and a visiting lecturer at Georgetown University.

Copyright: Project Syndicate, 2018.
www.project-syndicate.org

 


This article is brought to you by Project Syndicate that is a not for profit organization.

Project Syndicate brings original, engaging, and thought-provoking commentaries by esteemed leaders and thinkers from around the world to readers everywhere. By offering incisive perspectives on our changing world from those who are shaping its economics, politics, science, and culture, Project Syndicate has created an unrivalled venue for informed public debate. Please see: www.project-syndicate.org.

Should you want to support Project Syndicate you can do it by using the PayPal icon below. Your donation is paid to Project Syndicate in full after PayPal has deducted its transaction fee. Facts & Arts neither receives information about your donation nor a commission.

 

 

Browse articles by author

More Current Affairs

Jan 26th 2020
EXTRACT: "Gibson’s diagnosis is supported by international attitude surveys. One found that most Americans rarely think about the future and only a few think about the distant future. When they are forced to think about it, they don’t like what they see. Another poll by the Pew Research Centre found that 44% of Americans were pessimistic about what lies ahead. But pessimism about the future isn’t just limited to the US. One international poll of over 400,000 people from 26 countries found that people in developed countries tended to think that the lives of today’s children will be worse than their own. And a 2015 international survey by YouGov found that people in developed countries were particularly pessimistic. For instance, only 4% of people in Britain thought things were improving. This contrasted with 41% of Chinese people who thought things were getting better."
Jan 24th 2020
EXTRACT: "........while over 80% of the ECB scheme buys government and other public sector bonds, a huge chunk still goes into corporate bonds and other assets. At the time of writing, the ECB holds €263 billion worth of corporate bonds – a very significant amount in relation to individual firms and the sectors in question. According to the ECB, 29% of these bonds were issued by French firms, 25% by German firms and 11% each by Spanish and Italian firms. As at September 2017, the sectors they came from included utilities (16%), infrastructure (12%), automotive (10%) and energy (7%)."
Jan 17th 2020
EXTRACT: "Thanks to cutting-edge digital technology, cars are increasingly like “smartphones on wheels”, so manufacturers need to have access to the latest patented 4G and 5G technologies essential to navigation and communications. But often the companies that hold the patents are reluctant to license them because manufacturers will not accept the high fees involved, which leads to patent disputes and licensing rows."
Jan 13th 2020
EXTRACT: "Recent polling from Pew Research demonstrates how the public’s attitudes toward the US and President Trump have witnessed sharp declines in many nations across the world. In Europe, the Americas, and the Middle East favorable attitudes toward the US went from lows during the years of George W. Bush’s presidency to highs in the early Obama years to lows, once again, in the Trump era. And in our Zogby Research Services (ZRS) polling we found, with a few exceptions, much the same trajectory across the Middle East."
Jan 13th 2020
EXTRACT: "In the absence of a declaration of war against Iran, the killing of a foreign official – by a drone strike on Iraqi territory – was possibly illegal. But such niceties do not perturb Trump. The evidence is that Trump’s decision was taken without consideration of the possible consequences. The national security system established under Dwight D. Eisenhower, designed to prevent such reckless measures, is broken to non-existent, with ever-greater power placed in the hands of the president. If that president is unstable, the entire world has a very serious problem."
Jan 9th 2020
EXTRACT: "It is possible that Trump’s reverential base won’t be sufficient to keep him in the White House past 2020. But such ardent faith is hard to oppose with rational plans to fix this or that problem. That is why it is so unsettling to hear people at the top of the US government speak about politics in terms that rightly belong in church. They are challenging the founding principles of the American Republic, and they might actually win as a result."
Jan 7th 2020
EXTRACT: "If anything has become clear in our recent Zogby Research Services (ZRS) polling in Iraq, is that most Iraqis are tired of their country being used as a playground for regional conflict, especially the conflict between the US and Iran. In fact, our polling has shown Iraqis increasingly upset with the role played by both the US and Iran in their country. Majorities see both of these countries as having been the major beneficiaries of the wars that have ravaged their nation since the US invaded in 2003. "
Jan 5th 2020
EXTRACT: "Under his [Suleimani's] leadership, Iran helped Hezbollah beef up its missile capabilities, led a decisive intervention to prop up Syrian President Bashar al-Assad, supported the Houthi rebels who have been waging a war against Saudi-led forces in Yemen, and backed a wave of resurgent Shia militias in Iraq. According to Gadi Eizenkot, who completed his term as the Israel Defense Forces’ chief of general staff last year, Suleimani had plans to amass a proxy force of 100,000 fighters along Syria’s border with Israel."
Dec 31st 2019
EXTRACT: ".....stunning technological progress during the 2010s makes it possible to cut GHG emissions at a cost far lower than we dared hope a decade ago. The costs of solar and wind power have fallen more than 80% and 70%, respectively, while lithium-ion battery costs are down from $1,000 per kilowatt-hour in 2010 to $160 per kWh today. These and other breakthroughs guarantee that energy systems which are as much as 85% dependent on variable renewables could produce zero-carbon electricity at costs that are fully competitive with those of fossil-fuel-based systems."
Dec 31st 2019
EXTRACT: "Predicting the next crisis – financial or economic – is a fool’s game. Yes, every crisis has its hero who correctly warned of what was about to come. And, by definition, the hero was ignored (hence the crisis). But the record of modern forecasting contains a note of caution: those who correctly predict a crisis rarely get it right again. The best that economists can do is to assess vulnerability. Looking at imbalances in the real economy or financial markets gives a sense of the potential consequences of a major shock. It doesn't take much to spark corrections in vulnerable economies and markets. But a garden-variety correction is far different from a crisis. The severity of the shock and the degree of vulnerability matter: big shocks to highly vulnerable systems are a recipe for crisis. In this vein, the source of vulnerability that I worry about the most is the overextended state of central-bank balance sheets. My concern stems from three reasons."
Dec 14th 2019
EXTRACT: "Conspiracy theories about sinister Jewish power have a long history. The Protocols of the Elders of Zion, a Russian forgery published in 1903, popularized the notion that Jewish bankers and financiers were secretly pulling the strings to dominate the world. Henry Ford was one of the more prominent people who believed this nonsense."
Dec 13th 2019
EXTRACT: "In previous British elections, to say that trust was the main issue would have meant simply that trust is the trump card – whichever leader or party could secure most trust would win. Now, the emerging question about trust is whether it even matters anymore."
Dec 5th 2019
EXTRACT: "Europe must fend for itself for the first time since the end of World War II. Yet after so many years of strategic dependence the US, Europe is unprepared – not just materially but psychologically – for today’s harsh geopolitical realities. Nowhere is this truer than in Germany."
Nov 23rd 2019
Extdact: "The kind of gratitude expressed by Vindman and my grandfather is not something that would naturally occur to a person who can take his or her nationality for granted, or whose nationality is beyond questioning by others. Some who have never felt the sharp end of discrimination might even find it mildly offensive. Why should anyone be grateful for belonging to a particular nation? Pride, perhaps, but gratitude? In fact, patriotism based on gratitude might be the strongest form there is."
Nov 20th 2019
Extract: "Moody’s, one of the big three credit rating agencies, is not upbeat about the prospects for the world’s debt in 2020 – to put it mildly. If we were to try to capture the agency’s view of where we are heading on a palette of colours, we would be pointing at black – pitch black."
Nov 17th 2019
Extract: "Digital money is already a key battleground in finance, with technology firms, payment processing companies, and banks all vying to become the gateway into the burgeoning platform-based economy. The prizes that await the winners could be huge. In China, Alipay and WeChat Pay already control more than 90% of all mobile payments. And in the last three years, the four largest listed payment firms – Visa, Mastercard, Amex, and PayPal – have increased in value by more than the FAANGs (Facebook, Apple, Amazon, Netflix, and Google)."
Nov 14th 2019
Extract: "Trump, who understands almost nothing about governing, made a major mistake in attacking career public officials from the outset of his presidency. He underestimated – or just couldn’t fathom – the honor of people who could earn more in the private sector but believe in public service. And he made matters worse for himself as well as for the government by creating a shadow group – headed by the strangely out-of-control Rudy Giuliani, once a much-admired mayor of New York City, and now a freelance troublemaker serving as Trump’s personal attorney – to impose the president’s Ukraine policy over that of “the bureaucrats.” "
Nov 4th 2019
Extract: "Trump displays repeated and persistent behaviours consistent with narcissistic personality disorder and antisocial personality disorder. These behaviours include craving for adulation, lack of empathy, aggression and vindictiveness towards opponents, addiction to lying, and blatant disregard for rules and conventions, among others." The concern is that leaders with these two disorders may be incapable of putting the interests of the country ahead of their own personal interests. Their compulsive lying may make rational action impossible and their impulsiveness may make them incapable of the forethought and planning necessary to lead the country. They lack empathy and are often motivated by rage and revenge, and could make quick decisions that could have profoundly dangerous consequences for democracy.
Oct 31st 2019
EXTRACT: "......let’s see what happens when we have less money for all the things we want to do as a country and as individuals. Promises and predictions regarding Brexit will soon be tested against reality. When they are, I wouldn’t want to be one of Johnson’s Brexiteers."
Oct 21st 2019
EXTRACT: "Were Israel to be attacked with the same precision and sophistication as the strike on Saudi Arabia, the Middle East would be plunged into war on a scale beyond anything it has experienced so far. Sadly (but happily for Russian President Vladimir Putin), that is the reality of a world in which the US has abandoned any pretense of global leadership."