It’s Davos week again, and we can expect the usual deluge of meaningless stories from journalists desperately trying to justify their presence at the annual Alpine shindig known as the World Economic Forum. If I were there, I’d be doing the same thing, but my invitation got lost in the mail. This year, sadly, I won’t get the chance to discuss over breakfast with Bono how to alleviate African poverty, stop in for a nightcap with Tim Geithner, who is leading the American delegation, or cavort on the dance floor at the Google party with the girlfriend of a minor Russian oligarch.
The event is only just starting, but already the Huffington Post has set up a special Davos page with “Live Updates, Tweets, and More” and published a column from Arianna saying she is en route; the Financial Times has published a separate Davos supplement; and the BBC, which annually dispatches a small army of reporters, cameramen, and techies to the Eastern Alps at the U.K. taxpayers’ expense, has broadcast a thrilling report about changes in the conference center’s layout.
Amidst the dross, one story stands out: Andrew Ross Sorkin’s column in Dealbook on what business executives pay to attend Davos. Four years ago, on my sole trip to the conference—I was working on a Profile of Paul Wolfowitz, who was then the head of the World Bank—I quickly grasped what was in it for the journalists: stunning scenery, free booze, and the chance to bypass the usual P.R. machinery and collar senior sources when they are drunk and chatty. But what about the twenty-five hundred or so business executives from companies such as PepsiCo, Bank of America, and Intel who make up the bulk of the crowd? Why do they show up?
As Ross Sorkin reveals, attendance certainly isn’t cheap. A single membership of the World Economic Forum and a ticket to the conference costs $71,000. If you want to be included in the “private” discussion sessions that litter the agenda—which self-respecting C.E.O. wouldn’t?—the price rises to $156,000. Bring your spouse or partner and the tab is $301,000. Add your secretary, your chief of staff, and your second cousin’s husband who got a Ph.D. from Stanford in development economics and who might be able to feed you a few lines about how Botswana has largely avoided falling victim to the “resource curse,” and the bill is $622,000. (For that price, you get to call yourself a “Strategic Partner.”)
The FT’s Gillian Tett, who has a Ph.D. in social anthropology, quotes one Davos veteran to the effect that it is a self-help group for fearful and embattled C.E.O.s. The world is an increasingly “murky, complex, and unpredictable place,” Tett notes, wherein “hostility to elites is rising.” At Davos, it is true, the corporate bigwigs get to chinwag, socialize, and meet with clients in peace. Following violent protests a few years back, the Swiss police now erect roadblocks halfway up the mountain, and the nasties in black ski masks are largely limited to hurling snowballs at the attendees’ limousines as they whizz by. (Many people fly in by helicopter from Zurich, at a cost of $3,400 each way, thus sparing themselves any indignity.)
I wouldn’t push Tett’s argument too far, however. If C.E.O.s want to meet each other on the q.t., they can have breakfast at the Mayfair Regent or the Savoy. If they want some affirmation, they can agree to be profiled by Forbes or Fortune. The real key to Davos’s success, and reason why it has survived for forty years, is that it has turned into what economists refer to as “a positional good”—an item or service the value of which is mostly a function of its desirability to others.
The essence of positional goods, and the reason they cost so much, is their exclusivity. An apartment at 740 Park Avenue is a positional good, so is a painting by Andy Warhol, and so is a reservation at a trendy new restaurant. The fact that you can’t get in is the main reason you want to.
The same applies to Davos. If anybody (and by “anybody” I mean anybody who holds a senior job in a multinational corporation) could go—if you didn’t have to be “invited” and the entrance fee were, say, a mere $10,000—it wouldn’t attract the Sergey Brins, Rupert Murdochs, and Jamie Dimons of the world. The elaborate vetting procedures and stratospheric prices are ways of creating artificial scarcity. About the only people who can get in fairly easily and cheaply are journalists and heads of state, and that’s because they provide so much free publicity.
Some anti-globalization protestors view Klaus Schwab, the seventy-two-year-old German economist who set up Davos forty years ago and still runs it, as the devil incarnate. I prefer to view him as a savvy nightclub promoter or restaurateur, a German version of Ian Schrager and Steve Rubell, or Keith and Brian McNally. Back in the nineteen-eighties, when I first moved to New York, people used to queue around the block to get into the McNallys’ latest hotspot, such as Odeon, Canal Bar, or 150 Wooster. But unless you knew the private reservation line or worked on Page Six you had little chance of securing a table.
Davos works on the same principle. The actual sessions are largely devoid of meaning, as evidenced by the recent themes of the conference. 2011: “Shared Norms for the New Reality.” 2010: “Improve the State of the World: Rethink, Redesign, Rebuild.” 2008: “The Power of Collaborative Innovation.” I defy anybody to find any meaning in this corporate-speak gobbledygook. The point of Davos is not to learn or think or do deals, but simply to be there—and to be seen to be there. If the shareholders are picking up the tab, that’s all the better.
P.S.: Dear Klaus, Re: next year’s invitation. My address is: The New Yorker, 4 Times Square, New York, NY 10036.
Photograph: Fabrice Coffrini/AFP/Getty Images
