Davos and Inequality

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I heard one pretty standard criticism of Davos on a BBC preview earlier in the week. It went something like, ‘Davos is rich, white, men flying to a Swiss ski resort to discuss inequality, diversity, and climate change’.

Suffice to say, it’s easy to slip into dismissing Davos discussions of inequality.

But there were some interesting things from a panel that included Ray Dalio (founder of Bridgewater, the world’s largest hedge fund) and Larry Summers (former US Treasury Secretary):

http://uk.businessinsider.com/ray-dalio-populism-scares-me-2017-1?r=US&IR=T

One thing was Dalio’s analogy between the present day and the 1930s, supported to some degree by this chart, which points out how US wealth-share at the top today looks like it did back then:

wealthshares

Emmanuel Saez and Gabriel Zucman, August 2015

(Of course, similarity on a single measure does not imply precise correspondence in societal dynamics, as Dalio acknowledges. See the article’s summary of his broader commentary.)

Another notable point was Summer’s dismissal of the idea that Trump’s election is a consequence of inequality: “The US has just elected the world’s most visible symbol of conspicuous consumption — that is a bizarre manifestation of a concern about inequality.” Summer’s statement seems to be me to be an extraordinary manifestation of how out of touch Harvard professors can become. He appears oblivious to the point that hopeless and disempowered people will do almost anything to try to make change. While this kind of disconnect persists, America – and the world – will continue to wrestle with its divisions.

Today, I missed an opportunity to hear from a very different viewpoint. This evening, I’m feeling sadness and regret. Tomorrow, I’m going to make sure that I seize all the opportunities that life offers me. I invite you to join me in this quest. It’s by connecting across, through and beyond our differences that we can take down the walls that seem to divide us.

Nicholas Wright
Nicholas Wright
Economist

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