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Peter S. Goodman is the global economic correspondent for The New York Times. In his latest book, Davos Man: How the Billionaires Devoured the World, Peter exposes the ways in which members of the elite, affluent class have a hidden impact on almost every aspect of modern society.
For those of us that keep track of agriculture and the food industry, we’ve seen the impact of these billionaires at work with the consolidation in the meat industry and with most of our food in grocery stores coming from a handful of powerful food conglomerates.
Peter uses the term “Davos Man,” coined by political scientist Samual Huntington to describe attendees of The World Economic Forum, an annual gathering of the world’s most powerful people. Started in 1971 by Klaus Straub as a non-profit organization, Davos is intended to “demonstrate entrepreneurship in the global public interest.” But as Peter describes in his book, what this event actually provides is an opportunity for secret meetings and clandestine deals.
Co-host of the podcast, James Connolly, chats with Peter about the stories in the book and the ways in which “Davos Man” has stripped away protections and resources, all while bolstering their own wealth. In this episode, they cover:
- The comparison of robber barons of the past to the Davos Man of today
- Stakeholder Capitalism
- The Great Reset
- The normative behavior of billionaires
- The good and bad of Universal Basic Income (UBI)
If economic justice and the ever-increasing wealth gap is something that concerns you, be sure to check out Davos Man: How the Billionaires Devoured the World.
Resources:
The Image Makers by Bill Moyers
Larry Fink, founder of BlackRock
When Mckinsey Comes to Town by Walt Bogdanich & Michael Forsythe
The World for Sale by Javier Blas & Jack Farchy
Connect with Peter:
Website: Peter S. Goodman
Twitter: Peter S. Goodman
LinkedIn: Peter S. Goodman
Facebook: Peter S. Goodman
Episode Credits:
Thank you to all who’ve made this show possible. Our hosts are Diana Rodgers and James Connelly. Our producer is Emily Soape. And, of course, we are grateful for our sponsors, Patreon supporters, and listeners.
If you’re ready to take your support for a nutritious, sustainable, and equitable food system to the next level, join my Global Food Justice Alliance community on Patreon. You will have access to ad-free podcasts, exclusive videos, a discussion community, and much more. Go to sustainabledish.com/join to support my work.
For the month of January, my Sustainavore course is 50% off. If you’re struggling with holiday weight gain or finally ready to regenerate your health, It’s a great time to take my course. You’ll learn how to set and track your protein goals, which foods to include and what to avoid, and info on sourcing the right ingredients. The course includes instant access to eight easy-to-follow modules, 60 days of inspiring emails, 20 hours of bonus videos, a free cookbook, and more.
Go to sustainavore.com and use code JAN50 for 50% off.
Quotes:
“If you live in a country that can afford to pay the freight for their vaccines, fantastic the pandemic ends for you, and if you’re anywhere else on planet Earth, the pandemic goes on…” – Peter S. Goodman
“What is the value of democracy or capitalism or markets, you know, any of the things that we revere, if we can live through something like a pandemic and see our system simply fail to provide for huge numbers of people? It is not a surprise that huge numbers of people will not have faith in any of these incredibly important institutions.” – Peter S. Goodman
“You have decades of wealthy people taking an outsized share of political power and using it to diminish spending on things that ordinary people actually like and need: health care, housing, universities, public transportation.” – Peter S. Goodman
Transcript:
Diana Rodgers, RD
Welcome to the Sustainable Dish Podcast. I’m Diana Rodgers, a real food registered dietitian, author, and sustainability advocate. I co-host this podcast with James Connelly, who was a producer on my film Sacred Cow. I also founded the Global Food Justice Alliance, an initiative advocating for the inclusion of animal-source foods like meat, dairy, and eggs for a more nutritious, sustainable, and equitable worldwide food system. You can check it out and join me at global food justice.org. Thanks again for listening. And now, on to our show.
James Connolly
Good morning. Actually, we’re both from New York, so we don’t… we’re not doing… I think we actually… Peter, are you in New York? Where are you?
Peter S. Goodman
I’m an hour north of the city in the lower Hudson Valley.
James Connolly
Okay, good, good. So there’s no time difference here. So I’ll say good morning to our audience. This is James Connolly, I had the opportunity through an internship that I have with somebody who is going to Haverford College now to reach out to some books that I’ve read over the past few years to find these authors and kind of track them down, which is something I’m not particularly good at, literally track them down, and then actually be able to talk about some of the issues that I have been thinking about that have been happening in my head that a lot of people don’t necessarily want to talk about these days. And, you know, I think Peter Goodman’s book was one of those books that I picked up. And it’s one of those things that I actually find it makes me angry in a good way. It really like solidifies, I think what is a lot of conversations that we’re having, giving sort of a 20,000 foot 30,000 foot view of what has happened during globalization. But one of the things I was thinking about… let me actually introduce the book – Peter S. Goodman, Davos Man: How the Billionaires Devour the World. And Peter is the global economics correspondent for The New York Times. He is a two time winner of the Gerald Loeb Award for distinguished business and financial journalism. He is really just one of the people that I want to have in my head as much as possible. But one of the things I was thinking about while reading this book, and it kept occurring in my head, was a program that came out years and years ago by Bill Moyers. And it’s called The Image Makers. And so at the turn of the century, in the early teens, you had a say the Rockefellers who had been involved in what was the suppression of a minor strike in Colorado was around 1913-1914. And the suppression actually ended up in about 75 people being killed. State militia came in and shot up the tents that these miners who had, in essence, been set up in this economic system that put them into penury, they can never get out of this. The homes are owned by the mine, owned by Rockefeller, and everything that they bought – all the tools, materials and everything else that they had, was essentially owned. So you ended up in this cycle of debt that you can never really get out of. And the mines are really dangerous. And the perception among a lot of people who read in the newspapers was that these miners were being co-opted by, say communism or say, you know, new forms and system of government or antagonism to a lot of the governmental policies like that. The actual strike and the end of the massacre that ended up happening was Senator around for the first time, US newspapers were talking about this, and this sympathy was with the public. And so Rockefeller kind of came about – he hired a man by the name of I think it was a Ivy Lee. And he paid him about $1,000 a month to rehab his image. And so you had this sort of birth of public relations for the first time, Ivy Lee ended up working with sort of the father of propaganda and the father of public relations guy by the name of Edward Bernays to kind of rehab their image. And when you looked at a lot of the cartoons about Rockefeller at the time, what you would see what you would see his tentacles all over the world. He had enormous wealth, he had enormous power, you could essentially call up and, you know, direct policy legislation, he didn’t care about workers rights. He didn’t care about anything like that, sort of towards the end of his life. And then just an idea is his image had been rehabbed in many different ways. And so now he’s considered a philanthropist. The way that we think about Rockefeller and the Rockefeller Foundation and same thing with Carnegie and Ford, and all of that stuff, what we see is a transition to a legacy of philanthropy that I think is sort of centered around this idea that these people have enormous wealth are deserving of it, and that they’re the stewards to sort of bring us into a new future. And so when we’re talking about Davos, kind of one, do, again, sort of pull out 30,000 feet, and just talk about the origin of Davos, the founder of it, and how he sort of played a key role in some of the aspects of the way that we think about the sort of rehabbing of the image of these guys who have made enormous amounts of profits off of globalization. But thank you so much for coming on.
Peter S. Goodman
Thanks for having me. And I’m delighted that you found the book useful. You know, first of all, I think that you’re quite correct to look back at the robber barons, this group of industrialists who amassed tremendous monopoly power over a whole host of industries, from railroads to oil to steel, and who used their wealth to purchase political power, and subsequently use that political power or simultaneously I should say, to bolster their wealth. And along the way, they figured out something that, you know, I write about quite a bit in the context of our modern day crop of would be robber barons, this group, I called Davos Man, they figured out that boy, people are going to notice that we’ve got a lot more wealth than everybody else. And especially in times when there’s economic crisis, when people are having to choose between their lives and their livelihoods, whether we’re talking about going into work in dangerous mines a century ago, or going into slaughterhouses in the middle of a pandemic, or an Amazon warehouse, without adequate protective gear, with the knowledge that they’re helping a mass, you know, stupendous fortunes, unprecedented fortunes for the executives who dominate the shareholding class, well, people are going to notice, and eventually the pitchforks may be at the gate. So you better take preemptive action. And that preemptive action is consistent from the robber baron period till today and essentially amounts to protect yourself by capturing the political process through favors back in the day control of the press to you know, help politicians who are constantly thinking about the next election cycle. Now, of course, campaign contributions make an enormous difference in in our own political system, and crucially fashion a narrative in which we, the wealthy are not only not – pardon, the double negative, – the problem, we are the solution. And today’s crop of would be robber barons, this group I called Davos Man, you know, it’s a term I steal from Samuel Huntington, the political scientists who coined it in 2004, to refer to people who go to the World Economic Forum, this glittering gathering of the world’s most powerful people, heads of state, the odd celebrity CEOs from giant tech and finance companies, venture capitalists, some public intellectuals, they go there every year. And they use it as the opportunity to do deals to schmooze with one another. And really, I argue in the book, to rally around this idea that they’re the good guys. And if you’re the good guys, the more wealth you’ve got, the more good you can do. And this arbors them for the cause of returning to their home countries after this annual gathering high in the Swiss Alps every January, to resume their perpetual motion to deregulate markets, to strip away rules that allow labor unions to form and agitate for a piece of the action, and crucially to constantly look to reduce taxes, to liquidate public infrastructure, public programs, and give the proceeds to themselves through tax cuts. And there is a constancy from the robber baron period till today where you know, today’s Davos, I mean, Davos Man has social media powers, public relations, capacities that just go vastly beyond what the old robber barons had, which was mostly just press and the beginnings of the public relations industry.
James Connolly
Yeah, I mean, can you give a just a basic overview definition of of stakeholder capitalism? Because I think that that is the overall narrative that kind of comes about through this, right.
Peter S. Goodman
I mean, that’s the new one, right? There’s always something, right? So we’ve lived through decades of trickle down economics. I mean, this idea that we cut taxes and deregulate that’s not just good for people who have lots of money. It’s good for everyone because they’ll spend and invest and their wealth will trickle down. Something that has in reality happened zero times. But the first part consistently happens, which is the wealthy people get to keep more of their money, which is why they keep financing politicians who engage in that fantasy. Well, you know, enough decades have passed and enough people have gotten wise to this con. I call this the “cosmic ally” in my book that the smart Davos Man I mean, these guys are not dummies, they’ve had to come up with some, something new. And the thing that they’ve cooked up is this term was actually coined way back in the 70s by the founder of the World Economic Forum, Klaus Schwab. But it’s gained a lot of momentum in recent years called stakeholder capitalism. This idea that Milton Friedmanism is behind us, right? Milton Friedman, the godfather of neoliberal economics, who essentially said, just let the markets do their magic, companies should focus on racking up the largest profits. And that’s where we get the greatest social benefit. And when they think about being nice to workers and communities, well, that’s a distraction. They end up being inefficient and wasteful. And we all pay the price as a result. Well, Davos Man has figured out, that’s not going to cut it anymore. We have the inequalities that we’re living in are simply too stark, we see the ravages of climate change. The pandemic showed us that if you’re not lucky enough to live in a country that can afford vaccines that are produced by essentially monopolists, who’ve managed to privatize the gains of publicly financed research and then make themselves very wealthy. Well, if you live in a country that can afford to pay the freight for their vaccines, fantastic the pandemic ends for you. And if you’re anywhere else on planet Earth, the pandemic goes on and the dangers work. So they cooked up this idea of stakeholder capitalism. We’re not about Milton Friedman anymore. Now we’re catering to stakeholders, and that includes labor crucially, never labor unions. This is a unilateral grant not not a relinquishing of power, local communities. Marc Benioff is one of the five key characters of my book is the CEO of Salesforce once said, on television, the planet is a stakeholder which is, you know, very gratifying to those of us who live on the planet, you know, and that really gives away the the ruse right? I mean, if everything’s a stakeholder, then nothing’s a stakeholder. And in fact, they argue in my book, about these prominent pledges like the crescendo was in the summer of 2019. The Business Roundtable, then run by are headed by another key character in my book, Jamie Dimon is the CEO of America’s largest Bank, JPMorgan Chase, convenes 180 CEOs to sign this new statement of a purpose of a corporation that declares explicitly it’s not about Milton Friedman anymore. Now it’s about stakeholder capitalism. Well as a rundown in the book, who signs this pledge, Jeff Bezos signs the pledge. Somehow his stakeholder capitalism pledge does not prevent him from allowing his workers to continue to labor during the worst pandemic in a century without protection without a clear understanding of what the risks are. When one worker Christian Smalls says I don’t think this is fair. I think we need more information. I think we need to shut this place down organizes a workout at a at a big warehouse in Staten Island. He is fired and accused of violating quarantine, which is an incredible irony given that he wants everyone to effectively be quarantined, though with pay something that Amazon is against. Amazon has lobbied aggressively against paid sick leave. So apparently, none of that invalidates stakeholder capitalism. Albert Borla, the CEO of Pfizer science and stakeholder capitalism pledge that does not prevent him from taking these vaccines that his company miraculously produces and we should be grateful for that and selling them to the highest bidder. So during the worst waves of the pandemic, when we’re vaccinating children in the United States, there are still frontline medical workers in places like Pakistan and West Africa going into hospitals treating COVID patients without any protection because despite Albert Bourla’s pledge to administer doses through COVAX, this sort of stakeholder capitalism, like a multilateral organization, it’s part of the World Health Organization and a bunch of thing called GAVI and a bunch of other nongovernmental organizations. They don’t actually get any vaccine. The vaccine gets sold to the people who can pay for it. You know, I could go on and on. But if you look at the signatories to the stakeholder capitalism pledge, it’s clear that this is just a fancy way to dress up the status quo. And in fact, a bunch of academics I talked to at MIT looked at the companies that signed the Business Roundtable stakeholder capitalism pledge, and they compared their workplace safety protective gear work-from-home policies, and they compare them to companies that didn’t even sign the pledge, and the companies that didn’t sign the pledge perform better than the companies that did and none of the companies except for JP Morgan Chase, bothered to get Board approval for this supposedly landmark development in the future capitalism. So I mean, I think you can look at stakeholder capitalism and look at the World Economic Forum in general. And are you? Ah hah! This is a prophylactic against democracy. This is the billionaire class, recognizing that if we don’t take action to try to convince the rest of society that you know, you can count on us to solve all your problem is to be nice to workers, to think about climate change. If we don’t convince people, we’re really doing that, well, they might actually make us do that through the exercise of democracy through progressive taxation through an anti-trust enforcement through other rules that will make the party less festive for the billionaire class.
James Connolly
Yeah, and I find it to so pervasive throughout. I remember reading Klaus Schwab said, The Great reset during the pandemic, and most of it is really an unintelligible… it’s real sort of corporate speak. You can read entire passages and it never goes into long term memory. But one of the things that kind of sticks out in it is that he was talking about how some of the elements of he talked about actually taking celebrities and conscious consumption and trying to shame them. Meanwhile, all of the people that he’s supporting through Davos and through these sort of backdoor machinations that kind of happen, which I’d love for you to kind of talk about, there’s this sort of outward setting of Davos, which is what we ended up seeing, which is maybe Rutger Bregman sitting on stage or just Stieglitz or anything like that. But then you see what is not happening at Davos, which is the really just a gathering of billionaires across the world to sort of cross-pollinate different ideas that sort of take over and control huge aspects of what we would have considered to be like sanctified elements of governmental policies, say in like Finland, or Sweden, what Stephen Schwarzman has done in terms of real estate across the globe, you know, any number of different things to kind of be able to take their brand of economic theory and essentially insert themselves into economies that actually took care of their populace. I often think of it is like, you know, you’d have these sort of a during the feudal system, you know, in England, you’d have these absentee landlords, holding stakes in places like Ireland never really been visiting the spot, extracting enormous resources and never having to see the end result of that stuff so they could live within this sort of good minded policy, that they’re civilizing the barbaric Irish, like bringing religion in or, you know, sort of forcing them into this economic worldview. So sometimes they range a little bit too much. I would love for you to talk about some of the sort of interior machinations so you’ve been sort of privy to because you don’t go under the, what do you call it? Access journalism aspect of it?
Peter S. Goodman
I mean, yeah, I’ve been lucky enough to go as a participant, which, you know, it’s like high school cliques at Davos. It’s all very childish, and designed to make everyone feel insecure, whatever color badge you’ve got, somebody’s got a better one. So I’ve gone with a white badge, which gets me pretty much everywhere, except these secret member lounges, where you could go only if you pay unbelievable amounts of money, you know, memberships of up to half a million dollars a year. So you know, let me just back up for a second. So there are lots of conspiracy theories about Davos and the World Economic Forum, and I don’t traffic in them. My own view, having gone there for 11 times, I think, is that it’s a show, it’s a charade. If you gathered the same group of people anywhere and call it some other thing, you would get more or less the same thing. It’s not that the World Economic Forum run by Klaus Schwab, author of The Great Reset has some sort of blueprint for how to go govern society. And we’re all living according to that blueprint. In fact, I mean, there’s lots of stuff that progressives would favor at Davos. There’s all sorts of conversations about how to deal with climate change, and how to deal with racial and gender injustice. I mean, there’s sort of something for everyone, and the agenda almost doesn’t matter. I mean, I’ve gone to… I’ve seen, you know, billionaires go and start their morning, you know, meditating with the mindfulness guru Jon Kabat Zinn, and then they go off to their private suites. And they, you know, plot the next deal was designed to make drug prices go up, you know. I’ve seen billionaires, you know, engage in the Syrian refugee experience. I’m not making this up, like they submit to being blindfolded and run around in the dark while someone’s hollering at them in Arabic demanding papers, you know, and then they high five one another for their empathy and then they go off and they eat truffles and drink champagne at some banquet, underwritten by, you know, McKinsey, or Goldman Sachs or some other or some tech company. I mean, it’s sort of everything and nothing. I mean, the magic of Davos for the people who matter the people who pay the bills, is that it’s a place where they can meet quietly. I mean, Klaus Schwab’s genius is that publicly he brands this whole thing committed to improving the state of the world, you know, that their banners everywhere that say this. So if you show up there you are, is understood that you are courted privileges as one of the good people. You’re seeking out solutions to life’s problems. But what’s really happening is Schwab is collecting these giant membership fees from huge corporations and then playing matchmaker in private. So the lounges I can’t get access to that’s where Schwab will introduce, you know, the head of a giant European oil company with a member of the Saudi monarchy, without regulators, without annoying journalists, without any written record. You know, that’s the magic of it. It’s where these guys can meet in secret. And then it’s also a chance for them, to the billionaires, you know, convince one another that they are the good guys. They talk about their philanthropic efforts. I mean, the cool kids don’t even go to any of these conferences, right? I mean, amongst the people who’ve gone to Davos year after year, they’ll say, I mean, it’s like a badge of pride, like, Oh, I didn’t even set foot in the Congress Center, the official place where it all goes on, I just stayed in my private suite at the Belvedere hotel, beyond the Congress Center itself, where I just, you know, met other billionaires and other dealmakers. So it’s… so I wouldn’t fall for this like sort of secret government conspiracies, theory thought rather, it’s a packaging. It’s a skillful packaging of the same sort of gathering that happens all over the world, when rich people meet up beyond the purview of regulators and journalists, and they do what they do, which is carve up the world for their liking.
James Connolly
Yeah, I mean, I think in some ways, I think it’s become so pervasive within the culture of the sort of Western economic theory that the way that these guys operate is considered normative. Well, I actually think of it as abnormal. Right. I mean, you know, I remember the antitrust lawsuit that happened with Bill Gates, which actually really scared him, right. He used a number of manipulative business practice and antitrust work to, in essence, corner the monopoly on, you know, on the computer industry for a very long time. The antitrust case, when that was sort of settled, or at least being deployed, he actually use a lot of the same techniques that Rockefeller used. He then became a philanthropist. And he decided he was going to give away 95% of his fortune. And so now this is sort of like a key factor in the way that they sort of operate. Maurice Strong actually did the same thing when I don’t even remember, was it Summit 21, where he gathered all of these world leaders together. Maurice Strong was a Canadian industrialist who created one of the first climate change summits, I think, was in the early 90s. And you read his book, and he’s celebrating the fact that he, as an individual living on this planet was able to gather the world’s leaders, some of people who hadn’t talked to each other in years. And so what you have is like, for me is they’ve normalized this as a proper business practice. And you kind of go into a lot of detail in the way that they have kind of gotten into Scandinavian economies and Finland, and talked, you know, in sort of, utilized a lot of the stuff that was primarily real estate, but also like, any number of different economic products. I wonder if you can kind of talk a little bit about that. I think that because it’s sometimes the individual stories are so much more of a portal into the way that these things have been manipulated to that then gives rise to economic disenfranchisement for people who have been living in these countries for years, then builds a level of resentment, you know, to the government to economic policies, right, and gives rise to any number of different factors.
Peter S. Goodman
Yeah, you know, I mean, I didn’t set out to write a book about Davos, or billionaires. I, you know, was based in London for five years for The Times as the European Economic correspondent, and I, as I moved to London, Britain, voted to Brexit. And then Trump was elected. And then I found myself spending time in places like Italy, and Sweden, and France, looking at the march of the far right. I mean, in Sweden, which I think most of us in the States to the extent we think about Sweden at all, we think of it as a kind of model social democracy, which it is, by the way, in many respects. But you know, I watched in Sweden where the Sweden Democrats, this extreme right-wing party, with roots in the neo-Nazi movement, rehabilitated itself as a sort of pragmatic conservative party. Oh, we’re not against immigrants. We’re against wasteful spending. And, you know, our system is predicated on the assumption that we pay very high taxes, we get very generous social benefits. I mean, Sweden is a country that famously provides, you know, 500 days of parental leave when a child is born to be apportioned however the parents would like in the first five years of that kid’s life. There’s very affordable childcare. There’s national health care. There’s national education, if you lose a job in Sweden, you can get easily retrained for another one, you get help with your housing if you need it. And of course, your healthcare is not on the line at all. And suddenly, the Sweden Democrats, as the largest per capita influx of immigrants in Europe shows up at this country that’s traditionally been thought of as kind of a humanitarian superpower, you know, incomes, the equivalent of five… I mean, in the States, the equivalent number would be 5 million Americans, you know, show up in the course of a calendar year. I’m sorry, a 5 million immigrants show up in the US in the course of the calendar year. This is 2018 of the Sweden Democrats. So Well, look, you know, these people are not going to work. They’re not going to pay taxes. They don’t speak Swedish. These are people from some of the most vulnerable countries on Earth: Afghanistan, Somalia, Libya, Ethiopia. We’re not against them. We’re not against Islam. I mean, when you actually talk to the Sweden Democrats, you do get a lot of like, we feel uncomfortable seeing people look different than we do on the streets. Oh, my neighbor is being woken up by this chanting at the mosque. It’s very disconcerting for us in a Christian country, but their official position is no, we’re just about, you know, fiscal pragmatism. We don’t want to waste tax. Our system will break down if we have too many people coming into our country who can’t work and pay taxes. And so it’s on that basis that we’re against not extending benefits to immigrants and actually sending immigrants back to their home countries. And this is a very powerful political equation. That vaults the Sweden, Democrats rates to the third most popular party while I was writing the book, and recently, a bunch of a coalition of right wing parties actually took power in Sweden. It’s a similar story in Italy. If you scratch below the surface of the Brexit conversation in Britain, where you look at the rise of the National Front in France, or you look at the emergence of Donald Trump in the United States, what I found again, and again, and this is what led me to then write about Davos was that in all of these cases, you have decades of growing inequality. You have decades of wealthy people taking an outsized share of political power, and using it to diminish spending on things that ordinary people actually like and need health care, housing, universities, public transportation, and then as enough people slip and in places like Britain and Italy and France, it’s quite an extreme slip. You have this kind of nativist reaction, especially amongst white people, who become vulnerable to be picked off by right wing political opportunists who always tell some version of the same story like you guys have a birthright to live at a decent standard of living, you’ve been abandoned by the elite. And that part’s true, right? I mean, the elite has been captured by wealthy people, and you ought to be angry about it also true. And then comes the part that’s not true. And the problem is, in all of these cases, immigrants are coming in and stealing your livelihood and making life a living hell, let’s slam the gates on on immigrants, let’s demonize the people who look different than than the majority who pray to a different god who speak a different language. And let’s ratchet up fear, you know. Let’s talk about Central American gangs. And let’s talk about China. And China is actually a complex story. But, you know, as I argue in the book, most of this inequality is home cooking, right? I mean, people in Sweden were vulnerable to the Sweden Democrats narrative because in fact, a bunch of wealthy people managed to persuade the government to slash wealth taxes, and to pay for that by cutting spending on things like health care. So Sweden performed very poorly during the pandemic, and effectively had to euthanize large numbers of senior citizens because they simply couldn’t manage the flow of people ending up in hospitals. In the same way in which in our own country, we spent a lot of time talking about China. And as I say, China is a complex story. But the downgrading of American middle-class living standards is largely a story of how we have a portion to the gains from globalization We are net winners. But the problem is that Jeff Bezos has built this business that’s exploited international trade very effectively, has connected consumers to shareholders and has left out workers. Most of our problems, most of the threats to the American middle class bargain are the result of decisions made not in Beijing but in boardrooms in New York, and Seattle, in the halls of Congress. And so my book was really about calling BS on this, you know, on, say, instead of chasing after the demonized the immigrant story, which might be politically satisfying to people, but it’s totally hollow. I mean, it’s vacuous as an explanation of what’s happening. Let’s focus on the people who actually have done the pillaging. And that’s the billionaire class.
James Connolly
Yeah. And I think we see that we talk a lot in here about agriculture, US agricultural, but global. And I just did a podcast, with Chloe Sorvino at Forbes, where she was talking about the consolidation, the meat industry, JBS and Cargill and Tyson, in essence, owning 85% of meat production in the United States, but you see…
Peter S. Goodman
That’s my next book.
James Connolly
Yeah, will you see this with Dan Gertler over in Israel, him doing enormous amounts of bribes, working with Glencore who just had to pay, you know, what I would consider a slap on the wrist for all of the corruption to get at mineral and mining rights in the Congo. You know, we see this everywhere. We see a class of people that I would say, that actually don’t really even care that much about nationality. But they do care about finding new markets and new opportunities to go out into the world to be able to get at whatever it is lithium, cobalt, coffee, you know. We see this even with Harvard’s endowment, going into places in the Amazon and being sort of, you know, there for illegal logging and mining, you know, you have these very liberal institutions like the sort of college endowments, who then get caught up in these scandals where they’re taking over huge tracts of land, to get at aquifers and water rights in places like California and all over the world. So you have this very small class of people who are utilizing all of this new technology, all of this new sort of utilizing the internet, to be able to hone their profit-making systems in order to you know, just extract as much as they possibly can of wealth. But then also on the end of that is a PR machine, which kind of like brings them into this idea that they are the saviors of the world. We’re going to build this green capitalist is perfect future.
Peter S. Goodman
That’s the punchline. I mean, I spent a lot of time on my book in my book, writing about Larry Fink. So you know, Larry Fink is the founder of BlackRock, which is the world’s largest asset management company. This is a company that has vacuumed up pension funds, university endowments around the world at the height of it before the markets tanked. They were managing $10 trillion worth of assets, I mean, just an amazing amount of money. And I think, has made himself I suppose, along with Marc Benioff, the sort of poster child for stakeholder capitalism. So he writes these letters to fellow CEOs and investors every January, right before Davos actually, were in recent years, he spent a lot of time talking about climate change, talking about how, you know, the markets are going to punish companies that don’t do the right thing in terms of the transition to green energy and limiting practices that are contributing to climate change. And positing that, you know, he, as the leader of, you know, social impact investing. I mean, these new kinds of investments where we’re supposed to feel good about the impact of the money on on local communities on societies, that this all is stakeholder capitalism, in action, and he’s a very active member of the World Economic Forum. Well, as I detail in the book, in the worst days of the pandemic, in the spring of 2020, Larry Fink personally intervened in a debt settlement deal in Argentina. So Fink’s company, BlackRock had done a really good job persuading, you know, pension funds from school teachers in the north of England, firefighters in Ohio to get extra returns from taking out a little bit of risk, but he vouched for the risks being contained by going in buying Argentine debt. And Argentina, of course, has famously defaulted something like eight times on its sovereign debt. It’s a country with a unique risk profile, and think sort of fell for the pitch from another Davos man, Mauricio Macri, who was the kind of darling of the new neoliberal set, the Washington Consensus set, who’s going to end left-wing populism and it’s constantly just printing up pesos to pay for whatever was needed without thinking about arithmetic and the sensible leader. Macri would come in and set everything in order. He was, in fact, a disaster. He borrowed himself once he set the house in order, didn’t anticipate that the Federal Reserve would tighten interest rates, which would damage the Senate money at Argentina. There was a currency depreciation, inflation rises, he’s kicked out. Suddenly, Argentina is dealing with the IMF. And Larry Fink has a real problem. He’s got to go explain to these firefighters in Ohio and teachers in the north of England. Hey, sorry about that. We’ve lost a lot of your money. So in the midst of this, he and a bunch of other bondholders are negotiating with the new Argentine government over how much, how big a haircut are we’re going to take how much of our money are we going to kiss goodbye forever. And for the sake of a few extra pennies on the dollar, Larry Fink squeezed the Argentine to pay more than even the International Monetary Fund said, which is no darling of the progressive set. Traditionally, he, with Argentina dealing with rising poverty demands on its healthcare system in the middle of a pandemic, he personally turn the screws and he really did it to send a message to every other poor and middle income country around the globe, on the hook for debts to financial institutions. Like BlackRock, as I argue in the book, he sent the message, you know, nobody stiffs Davos Man. He had to make it ugly. So here’s the cheerleader for stakeholder capitalism, who behind the scenes, is functioning as the ultimate collection agency, making real threats for societal dysfunction in the middle of the pandemic.
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James Connolly
Yeah, I mean, I would love for you to go a little bit into Adam Curtis. He actually did a documentary where he highlights some of the basic story of the Larry Fink supercomputer. But it’s a little bit more of that story. So I think our audience would love it.
Peter S. Goodman
Sure. So I Fink by dint of the fact that he does control a huge amount of money, presumably has a good understanding of where that money’s going, where the risks are, he developed this product called Aladdin, which is the surveillance system that’s supposed to be based on the intelligence that he and his people can gather by managing all this money so they can warn other companies who paid for it about the pitfalls. Now, this did not put them in a position to warn anybody about the 2008 financial crisis. In fact, Larry Fink was among a large group of people on Wall Street who said early on No, this shouldn’t be that big a deal that should be contained. Within all that worried about Lehman Brothers whose collapse was, you know, the ultimate event during the 2008 financial crisis. But he nonetheless parlayed his supposed expertise to become the adviser to the US government, as its deciding where to put its money. I mean, he had an inside role in crafting the bailouts. He was the adviser to Treasury Secretary Hank Paulson, during the Bush administration, continued to have access during the Obama administration, counseling Tim Geithner, who became the treasury secretary. And then during the pandemic, when we have a similar crisis of confidence in finance, he gets the ultimate deal. He gets a contract. Blackrock gets a contract from the Fed to advise on which baskets of securities the Fed should buy as he’s trying to prop up the market. Well, this was immediately useful to Blackrock because the market understood that a lot of this money was going to go into these so called exchange traded funds, these assets where you can buy, you know, little slices of lots of individual, lots of individual stocks and, and bonds. And so, Black Rocks own funds started to rise in value even before the Fed started distributing its money because investors understood that Blackrock was better positioned to get this stuff. And then most amazingly, to me, there were some members of Congress who said this seems like a real conflict of interest and on the one hand, thinks people are going to be you know, behind the curtain with the Fed understanding Fed strategy and on the other hand, managing money for everybody else, won’t they have this huge advantage to which Fink expressed you know, offense at this question. Analysts on an investor call and said, You know what, these guys always tell Oh, no, this is a clear,,, they love the term Chinese wall. This is a Chinese wall. One side of our operation can’t see what the other side is doing. When somebody then got hold of the contract that I believe was released by the New York Fed that showed that basically the same people who are conferring with the Fed and understanding the Fed strategy, merely had to wait for two weeks afterwards, before they can go back to the trading and investment management side of the house, and advise Blackrock and where to put its money. I mean, a two week cooling off period doesn’t sound like much of a Chinese wall.
James Connolly
Right? Yeah. And we, you know, I just finished when McKinsey Comes to Town. They came out, you know, McKinsey does exactly the same thing. They work both sides of the fence, working on health insurance for governmental institutions, and the companies that are actually leveraging themselves to get to get favorable contracts. And, you know, to the point where you don’t even get other bidders when McKinsey comes to town. Right. I mean, that was another book, just so angry, just because a level you know, it’s very… McKinsey’s very Davos-like, right. So they will have these huge parties that maybe 10 to 15 miles away from wigger encampments in China, celebrating their largess and their ability to sort of be the front runner, and in terms of the way that we’re going to talk about sustainability, environmental and human rights. And so you have these overt overwrought institutions, these institutions that have essentially inserted themselves in every aspect of, of modern society. McKinsey being one of them. A lot of the commodities dealers are… The World for Sale, Javier Blas’s book talks a lot about this stuff. These guys who can kind of take individualistic, like if you can take say something like almonds, you read an article that almonds, you take a commodity like that, that can be traded so easily across global markets. And the what ends up same thing with beef, what ends up is the result is the producer gets nothing. They get you know, fractions of pennies on the dollar. Meanwhile, the amount of wealth that can be generated as being sort of a broker middleman, in essence, so to put so much leverage on these guys did you know so that they can’t even pass on farmland to their children, in essence, and have put out it, you know, put out of business and put out to pasture?
Peter S. Goodman
Beef is sort of the ultimate example. I mean, I remember stumbling early on in the was sort of the middle of the pandemic, learning that beef prices were skyrocketing. Americans sequestered to their homes were eating more beef than ever, and you would think great days to be a cattle rancher. And yeah, to your point, cattle ranchers were actually going bankrupt. They were selling their land to the developers because the middlemen, these four giant meat packers, who thanks to deregulation had managed to build their control of meatpacking from something like 35% in the 1980s, to north of 85% today. They’re getting all the money. And that is the story. That is a Davos Man story, right? I mean, it’s very much about capturing the whatever value there is. But one of the things I find most interesting about the current moment that we’re in is you could go all the way back through human history and see examples of elites figuring out how to capture political power to, you know, grab most of the spoils and keep it for themselves. The difference is that now we know how to generate economic growth. I mean, for much of human history, I mean, if you go back before the Industrial Age, where you don’t have economic growth for huge swaths of history, so anyway, so it’s a zero sum game, right? It’s if the elite has to figure out how to use some form of brutality, to go in and, and push people off their land or get the people who are on the land to give them most of the Crop or, you know, mobilized labor, whatever. Well, now, we’re in a time where, you know, I mean, we can malign the economics professional, you know, all you like, I mean, that’s shooting fish in a barrel. But we’ve developed some pretty sophisticated understanding of what it takes to generate economic growth. And in much of the world, we’ve had robust economic growth for decades, with crises in between, and yet, the contemporary billionaire class, I mean, our modern day robber barons are going for it all. And that’s new. I mean, we should be able to have a continuation of the sort of economic growth in which you know, the old cliche, the rising tide lifts all boats applies, but the people who have power are so intent on getting, you know, all of it, like let’s get all the meat off the bone, that here we are, where it’s actually a crisis for democracy. Because, again, we may properly criticize the response when organized political movements just come along and say, well, let’s blame the immigrants. But we cannot criticize the impulse, which is this understanding of like, I’ve been cheated. I should be able to make if I set an alarm clock and go off to work in the morning, and stay out of trouble. And I’m open to gaining a few skills, you know, when I need to, I should at least have a roof over my head and a decent meal, and maybe even a vacation, you know, and for huge numbers of people, that just simply doesn’t apply anymore. And it’s not a surprise that they’re angry about it, and that they’re going to react in ways that are going to be and honestly that they’re going to react in a way where they don’t care about democracy. I mean, what is the value of democracy or capitalism or markets, you know, any of the things that we revere? If we can live through something like a pandemic, and see our system simply fail to provide for huge numbers of people, it is not a surprise, that huge numbers of people will not have faith in any of these incredibly important institutions. And let me be careful, like, I believe in democracy, I think democracy is vital. And we do need to protect it. But we shouldn’t be surprised that not everybody feels that way when the experience of people through decades of democracy has been, Oh, this looks like a game that’s rigged. And I don’t, I can’t count on anything.
James Connolly
Yeah, and I think if I had some sort of weird, like, elevator speech of the 20th century, you know, I think the two world wars that we had were, in essence, like family squabbles of inbred monarchies and governmental institutions that were fighting these wars that actually most people did not want to sign up for that. There’s a really brilliant book. And she’s one of the English literature professors over at West Point. And she wrote this book, where she’s kind of dismantling the this Spielbergian idea of like, the, you know, the recruiting stations of everybody lining up after Pearl Harbor, most people did not want to fight this fight. They did not want to fight foreign wars. And they understood what when we had left all of these monarchies behind that we didn’t want to fight these, you know, old school institutional, like arguments that these the Hapsburgs are having. And, you know, in order to sort of like, retell this story was the, I think, the bargain after World War Two, which Michael Dell obviously doesn’t know about with the bargain was that we were going to allow for some degree of social security. The GI Bill, we’re going to bring people into an educational system that allowed them upward mobility, that they would be able to afford housing and take care of their children and have all of this other stuff. And slowly over that period of time, the billionaire class of people said, No, we want more. And you know, one of the stories that I remember about that was when they started actually talking about CEO compensation. One of the the ideas was to shame people saying that the CEOs were making too much money. But what ended up happening was all these CEOs started arguing with each other. And then they all started arguing for more pay. And so you saw this, like huge uptick in terms of CEO compensation, which is what we’ve gotten to now, right? You have numbers in your book on the distinction that’s happened over that period of time. But it’s a slow dismantling of the notion that your citizenry and the people that are in essence… like I joined the military when I was 18. Every single one of those kids who joined up, were given three choices, either stay in a town that had all manufacturing had left, staying a farming community, where consolidation was forced by the US government so that that they couldn’t actually afford to live on the land anymore. Or they would live in the inner city where they were given four years of jail or four years in the military. That was overwhelming the people who had joined up, you know, to fight these foreign wars, that they didn’t understand any of the geopolitics, why they were going over there. Sorry, there was my rant for the day.
Peter S. Goodman
No, no, no, no. I mean, if you don’t have economic opportunities, you don’t have a functioning democracy. Because people don’t believe in the basic justice of society.
James Connolly
Yeah. And I think in to your point, the book relates over and over again, that the part of the reason or the majority of the reason why is the extraction of capital from government saying that they’re inefficiently using that capital, so we need to hoard taxes. The billionaire class needs to record as much taxes because they’ll deploy it in reasonable and philanthropic ways that the US government or any Western government cannot do anymore. Was over…
Peter S. Goodman
I’m sorry, go ahead. No, no…
James Connolly
Yeah, I was over in England when Brexit happened, and then it came back here for Trump to get elected. And some of the same methodology is the same. When you looked at newspapers that were outside of London, what you saw was a very sort of Murdochian, if that’s a term, notion of like that how Britain was losing its sense of self and every single front page newspaper article was something about the war, some heroes, some savior. Britain had saved democracy. And then how much of this stuff was being lost immigration. And it’s all the same rhetoric, we see it over and over again.
Peter S. Goodman
Well, and even more cynical in that particular case, I mean, this story that I unearth in the book is you have a bunch of hedge funders, who didn’t like how, after the European sovereign debt crisis, the European Union instituted much stricter regulations on hedge funds. And so they actually underwrite this cynical campaign, this weave campaign making all sorts of absurd promises that were clearly absurd when they were making them, you know, we’re gonna get more money for the National Health Service. You know, once we get out from under European Union, nevermind that the European Union is actually lavishing all sorts of grants throughout the country. We’re gonna sign trade deals with fast growing parts of the globe, the United States and China and India and Australia. We’re gonna get out from under you know, this ossified, you know, stagnant backwater of Europe. Nevermind that Europe at that point was buying 47% of Britain’s exports. And nevermind that Britain is a net importer. So once the currency drops, you’ve created inflation that continues to present day. I mean, these were all lies. And of course, the biggest lie of all, that all of your problems are because of immigrants. And nevermind that the immigrants who are mostly Eastern Europeans are doing most of the work like driving trucks and building buildings. And suddenly, you know, now there’s shortages of truck drivers in Britain, same same as in the United States, which is part of their supply chain problem, which is part of their inflation. Well, all of this was underwritten by a bunch of cynical hedge funders who didn’t believe their own claims. Maybe they believed the, you know, nostalgia for Imperial Britain. I mean, think there is, amongst especially the British, right? The you know, the highly educated landed gentry elite. There is this kind of yearning for the old days of colonialism, though they don’t look at it that way. But the time when Britain was the boss and sail the seas, and the pound was the global reserve currency. I mean, that those days are long over, up. But really what they wanted was to get out from under European Union regulations on their own industry. And in order to realize that, they have trashed the British economy. They have turned the economy, the United Kingdom from one of the strongest in the G20 into the weakest.
James Connolly
Yeah, I mean, you remember Boris Johnson’s bus? Right? Yeah, I mean, just driving around. Just total lies. Yeah, yeah. No, I just think it’s, uh, I remember reading a report about in Canada in the 70s, they had been testing a UBI project in a rural community, that it was a single market economy, primarily. Yeah, yes, Canadian rapeseed, but just the level to which like, everything changed. I had so many different metrics that were so strange, like rates of autism went down, you know, obesity, health outcomes, divorce rates went down, any number of different educational outcomes came up. It’s one of those kinds of studies that was kind of lost, but you go into UBI in the book, and I just find it’s like, it is so difficult, like, you know, talking to most people, you came around on the issue. So I just wonder we could try to leave on like, kind of a high note.
Peter S. Goodman
Yeah, I came around on the issue. But I’m also very skeptical because I mean, my ultimate conclusion is, if you live in a society that already has a robust social safety net, then the concept of universal basic income is probably a very good one. I watched the Finland experiment, up close, where the idea was, hey, instead of making people sit in unemployment offices and fill out lots of paperwork and prove every week that they’re out trying to get a job, just give them the money, let them live their lives. People want jobs, there is good job training. And the evidence was mostly anecdotal. The data was not all that satisfying, although the data show that people are a lot happier when they receive UBI, which is that’s not nothing but in in the States, it’s important to remember that Davos Man likes universal basic income. I mean, Marc Benioff, whose company Salesforce is engaged in all sorts of automation and AI, has posited that this is the way to pay back the people for the loss of jobs through through automation. Well, if you’ve got people like that, lining up in support of UBI it’s easy to imagine a scenario where a deal is cut in Congress where there’s some sort of universal basic income in exchange for wiping out forms of welfare, subsidized childcare, which is incredibly important to single moms who now our time limited in some states is as little as a year for any kind of welfare support. So if this becomes an opportunity to just whack other stuff, that’s not good. But certainly the promise, the concept of a universal basic income where everybody’s got a minimal income. And this is an idea that goes back centuries, you know, I mean, John Stuart Mill was into this idea. Martin Luther King was into this idea of Milton Friedman was actually kind of into the idea. The State of Alaska has its permanent fund dividend, which is a slice of oil royalties. There is evidence that if everybody can count on some basic amount of money coming in every month, people are going to make better decisions than some government bureaucracy about how to use the money. You know, the sort of lie that the philanthropist tell about themselves actually applies to individuals. If you can free people up from state bureaucracy, they will generally use the money intelligently.
James Connolly
Well, thank you so much for this book. You know, thank you. I hope to interview you again when your new book comes out, but just want to tell people the name of the book, it’s called Davos Man: How the Billionaires Devoured the World. Peter S. Goodman, how do people find you? You are you on the Twitters?
Peter S. Goodman
I’m on Twitter. I can tell you about Mastodon, but I don’t understand it. I’m Peter S. Goodman, on Twitter, or my website’s Peter S. Goodman.com. And I really appreciate you absorbing the book, and thanks for having me.
James Connolly
Great. Thank you so much.
Diana Rodgers, RD
Thanks so much for listening to the Sustainable Dish Podcast. If you liked the show, please leave a review on iTunes. And if you’d like to support the work I’m doing on Patreon, please visit sustainabledish.com/join. As a Patreon subscriber, you’ll get access to ad-free podcasts, plus exclusive video podcasts, never before seen interviews, and a discussion community. Go to sustainabledish.com/join, and thank you for your support.
