Davos: magic mountain or Alpine gabfest?

As Britain’s Chancellor Rachel Reeves turns up in Davos this week, she won’t go through an inauguration ceremony as the latest member of the club. The Davos elites have been quietly running

the world since communism collapsed in the late 1980s.

A small town in Switzerland, Davos has long been an international meeting place. More than a century ago it was colonised by German doctors who sent their patients with tuberculosis there to

benefit from the high, clean Alpine air in the decades before penicillin.

The German writer and Nobel laureate, Thomas Mann, set his 1924 novel, The Magic Mountain, in Davos. It’s a long metaphor about the spiritual disease of the West.

In the 1930s there were so many Germans living in Davos that the town had the largest branch of the Nazi Party outside Germany. Its leader was shot by an immigrant Jew from Croatia in 1936

in a protest against Hitler’s anti-semitism.

After 1945, Davos developed as a great ski and mountain resort. A young German economist, Klaus Schwab, set up the European Management Forum conference in Davos in the 1960s. Now 86, Schwab

had the genius to smell the coffee of the coming end of Soviet imperialism and the triumph of liberal capitalism when he renamed his outfit with the grandiose title the World Economic Forum.

Sited in neutral Switzerland and high in the Alps, Davos was a perfect location for world political leaders, bankers and CEOs to come to debate and discuss how to build a better world after

1990.

As President, Bill Clinton came. So did Yasser Arafat and Shimon Peres in the first of many futile efforts to bring peace to the Middle East and elsewhere — a task that seems less daunting

when viewed high in the mountains of Central Europe.

In the 1990s, British ministers made the pilgrimage to Davos, with Tony Blair’s cabinet being regular attendees. They were encouraged by Stephen Kinnock, son of Neil, now a Labour Minister,

who worked for Schwab. Together with his wife, a Danish social democratic prime minister, the young Kinnock epitomised the new generation of global leaders that Davos was meant to bring

together.

In essence, the Davosians who gathered each January are classic 19th century liberals. They are for human rights, democracy and decent treatment of everyone. But above all, like 19th century

liberals, they believe in wealth creation for themselves.

Davos represents the university-educated classes in all countries. Those without university education could compete in the West thanks to open border economic liberalism. This led to the

massive arrival after 1990s of millions of economic migrants from Latin America, Asia, the Middle East and Africa. They swept into North America and Western Europe to do all the low pay

manufacturing and service jobs that the Davos elites needed doing, but were not prepared to pay for with fair wages that might limit their right to maximise income.

The response of those left behind by the Davos world system since 1990 in Europe and North America has been to use their voting power to resurrect the protectionist and xenophobic

nationalism and illiberalism that Mann fretted about in the 1920s.

There is no counter-force to Davosism. The presence of Labour ministers in Davos this week along with other liberal-left leaders from around the world is Schwab’s great achievement.

But there is no Thomas Mann today to warn that just as the Davos elites think they have everything under control, they have been sowing the seeds of their own destruction and ejection from

power.

Denis MacShane is a former Labour Minister for Europe. He has been skiing for 30 years in the annual UK-Swiss parliamentary ski races held in Davos in January.

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