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.
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