Writing two and a half years ago, Acton Research Fellow and Director of Media Michael Miller warned of the dangers of over-managed capitalism.Washington’s foolhardy manipulation of the housing market brought our economy to its knees in 2008, but it seemed the gut-wrenching panic hadn’t had taught us anything. The recovery tactics weren’t fundamentally any different from financial policy in the mid-2000s, but the establishment couldn’t conceive of doing things any differently. Said Miller:
In The Wealth of Nations, Adam Smith warned, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Smith, who published his landmark work in 1776, warned of corporate collusion, but we’re experiencing something much more insidious — not just businesses, but business and government and a host of others all meeting, and colluding, at the posh Swiss resort town of Davos. It is Adam Smith’s nightmare.
This isn’t free market capitalism. It’s Davos capitalism, a managerial capitalism run by an enlightened elite — politicians, business leaders, technology gurus, bureaucrats, academics, and celebrities — all gathered together trying to make the economic world smarter or more humane. It might even be, as Bill Gates famously said last year at Davos, a more “creative” capitalism.
As Miller was writing those words, the White House was shunting billions of dollars of stimulus into green energy projects like Solyndra. The use of funds was more “creative” than a money bonfire on the National Mall, I guess.
Ok so the Occupy Wall Street set, the ones protesting corporate greed — the ones protesting a third ski chalet for the chief of a Fortune 500 company — surely they understand what Miller was talking about. General Electric’s CEO Jeffrey Immelt is the poster boy of creative capitalism (or, as conservatives call it, crony capitalism). He makes millions of dollars a year, lives in New Canaan, Conn., and was even the president of his Ivy League fraternity. His company has benefitted from the largess of the Federal Government (Think Progress was enraged when it found out that GE has gotten $4.7 billion dollars back from the IRS in the last three years). In a free market, Immelt wouldn’t still be in charge of GE: the company’s share prices have fallen 60 percent since their peak in 2001 just after he took over.
But the protesters don’t want the government to get out of business. In fact, they seem to think that if the government were just more involved in GE’s operations, everything would be more fair. Miller explains why the last thing we need is further collusion between Uncle Sam and GE.
The late Samuel Huntington coined the term Davos Man — a soulless man, technocratic, nation-less, and cultureless, severed from reality. The modern economics that undergirded Davos capitalism is equally soulless, a managerial capitalism that reduces economics to mathematics and separates it from human action and human creativity.
And we looked up to Davos Man.Who wouldn’t be impressed by the gatherings at the annual meeting of the World Economic Forum at Davos, a Swiss ski resort? Sharply dressed, eloquent, rich, famous, Republican, Democrat, Tory, Labour, Conservative, Socialist, highly connected, powerful and ever so bright.
Then, when the whole managerial economy collapsed, the managers and technocrats lost faith in markets. But they did not lose faith in themselves, and now they want us to entrust even more of the economy to them.
And who’s going along for the ride? Occupy Wall Street. When the jet set lost faith in markets, it was natural that they didn’t loose faith in themselves. How did they pull the wool over the eyes of anyone else though? How do they maintain an army of fiercely independent stooges?
It’s easy, it turns out, when that army’s economics is missing the understanding of human nature that ought to undergird it. The Davos men aren’t recognized for what they are — “soulless, technocratic, nation-less, and cultureless” — by camps of protesters who have no conception of culture, of fatherland, or even of soul.