The Destructive Mindset of The Elites - Davos Edition

The hypocrisy and material self-indulgence on display at Davos may rankle, but the deeper problem is the unspoken assumption that the sort of people who gather in Davos are the sort of people who have the answers to social problems. Historically speaking, there is little evidence to support that proposition. And that is why conventions like that in Davos end up being so frequently counterproductive. When elites get together to talk about the big issues, the discussion consists mostly of very similar people asking themselves what people like them can do. The answer is: A whole lot less than you think.

The intellectual homogeneity of policymaking elites is a serious and underestimated problem. To take an obvious example: The American policymaking class includes both progressives and conservatives, but it is overwhelmingly dominated by college graduates and people in occupations that are largely open only to college graduates. Unsurprisingly, our educational-policy debate is almost exclusively focused on how to get more people prepared for college, how to get more people through college, and how to help college graduates deal with financial obligations incurred in the course of a college education. Even a celebrity like John Ratzenberger (Cliff Clavin of Cheers), whose background is in carpentry and whose interest is in cultivating skilled labor, has a difficult time influencing that debate. This is not a result of ill will, selfishness, or malfeasance on the part of elites; it is just that it seems natural to them that the sorts of problems people like them tend to have are the ones that we need to focus on, and that what worked in their lives will work for everybody else.

The people who gather at Davos are wildly successful. And while some of them are simply self-serving and self-aggrandizing twits, the great majority of them genuinely want to help others lead happier, richer, more secure lives. Whatever Bill Gates is about, it’s a safe bet that he’s not in it for the money at this point. But billionaire entrepreneurs in sufficient number become as intellectually homogeneous a group as any university women’s-studies department.

People whose profession is the crafting of legislation or the application of regulation reflexively (and understandably) assume that if you want more of something, then the thing to do is to pass a law mandating it, and that if you want less of something, then the thing to do is to pass a law punishing it. The bigger picture — that laws and regulations and other aspects of policy interact with one another in unexpected ways — is generally invisible to them. If you are a lawyer, then you understand most social questions as a matter of law; if you are an economist, you understand them as questions of economics; if you are a teacher, you think that the answer to many social problems is better schools. This habit is only natural.

Conservatives are generally inclined to make a moral case for limited government: that transfers are corrupting, that taxes should be collected only to the extent that they are essential, that regulation is a necessary evil and that as such it should be kept to a minimum. That is generally true and persuasive, but the more important argument is the problem of ignorance. Even if Congress were populated exclusively by saintly super-geniuses, there is only so much that 535 human beings can know and understand. The more that decision-making is centralized in political agencies, or even in elites outside of formal government, the more intensively those decisions will be distorted by ignorance. This is true of market-oriented institutions, too, in the sense that big businesses make big mistakes. One of the lessons of the 2007 financial crisis is that the guys who run the banks do not actually know that much about how banks work, even if they know 100 times what the banking regulators know. Free markets offer a critical, if imperfect and partial, corrective to that in the form of financial losses and business failures, which is why things like cars and computers consistently improve while schools and welfare programs don’t. Big markets with lots of competing buyers and sellers are the biggest thinking machines we have, offering the broadest epistemic horizon that our species has figured out how to achieve.

There is a deep philosophical challenge for progressives in that: Progressives say that they want inclusive social decision-making, but the most radically inclusive process we have for social decision-making is the thing that they generally distrust and often hate: capitalism — or, as our left-leaning friends so often put it, “unfettered” capitalism. And who should decide what sort of fetters are applied to whom? The view from Davos is, unsurprisingly: the people at Davos.


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