‘It’s too easy to insulate yourself’ – Davos leaders reflect on social divides

It’s long overdue, but the idea that diversity is something worth fighting for – at universities, in the boardroom and in positions of political decision-making – is now really gaining ground.

At meetings like Davos, leaders reiterate the importance of closing the gender pay gap, companies everywhere are putting in place diversity programmes, and many businesses even disclose the gender and racial breakdown of their workforce.

Of course, we are far from living in a society where your sex and skin colour don’t matter. A quick walk through the Congress Centre here in Davos – where, despite a big push by the Forum, participants are predominantly white and male – proves that.

But if one thing became clear over the four days of the meeting, it’s that an old dividing line is re-emerging: class.

For a while, the dominating consensus in the Western world was that we’d moved to a classless society – or at least a meritocratic one, where most of us had managed to join the middle class.

The picture that has emerged over the past year is rather different: on the one hand, an increasingly wealthy, powerful and many would argue out-of-touch elite; on the other an angry, disillusioned and squeezed middle class, one pay cheque away from poverty.

“Over 80% of US households have not seen any real income gains” since 2005, Erik Brynjolfsson explained, drawing on a McKinsey report that was much cited in Davos.

In the aftermath of Brexit and the election of Donald Trump, many in the establishment were quick to criticize voters for their short-sightedness. But the message from leaders in Davos was a different one: we did not see this coming because we are out of touch with the real world.

“I’ve spent quite a lot of the last year trying to be a one-on-one anthropologist and go into different parts of America, and frankly that journey has reminded me of how easy it is to insulate yourself,” Financial Times editor-in-chief Gillian Tett admitted in a session.

Philosopher Michael Sandel, who featured on several panels in Davos this week, calls the phenomenon the “skyboxification” of society.

In the past, “going to a baseball game was a class-mixing experience. CEOs and mailroom clerks sat more or less side by side,” which helped bridge income and educational divides.

Then came sky boxes, “corporate luxury VIP boxes where those on the top – the privileged – could watch the game in isolation from the common folk in the stands below. This seems to me a metaphor for what has happened throughout our social life.”

In another session, Anthony Scaramucci, who from today heads up the White House Office of Public Engagement, made the same point.

While he was raised in a solidly middle-class community, as his wealth grew, he isolated himself more and more.

“I’ve insulated myself – I started hanging out with wealthy people, I started going to fancier restaurants.”

The result? He completely lost touch with the challenges faced by the vast majority of people. That, he told participants, was what had happened to almost everyone in the political and business elite.

“People in the US and Europe are feeling a common struggle that maybe many of us here in Davos do not feel.”

It’s because the political and business elite seem out of touch that people have started turning to populist leaders. And unless mainstream leaders start listening, this trend will continue, British Prime Minister Theresa May said in her address.

“Those parties that embrace the politics of division and despair; that offer easy answers; that claim to understand people’s problems and always know what and who to blame feed off the sense among the public that mainstream political and business leaders have failed to comprehend their legitimate concerns for too long.”

It’s easy to dismiss these concerns as racism, xenophobia or narrow-mindedness, Sandel argued, even if these poisonous forces do often turn up. But that would be a mistake.

“Leaders need to do a better job of listening to the anger, the discontent, the frustrations, the resentment – even when they take sometimes ugly, odious forms – because there is something to learn. There are, embedded in those frustrations, legitimate grievances and aspirations that we have not successfully addressed for quite some time,” Sandel said.

But more than listening, it requires actually giving people a voice, allowing them to have a say in decisions that will affect their lives. What people seem to be calling out for, when faced with powerful but faceless forces like globalization and automation, is a sense that they at least have some control over their destiny.

That’s how Laurence D. Fink of Blackrock explained the Brexit vote and US elections: it was about people sticking two fingers up to the establishment and making a decision for themselves.

“They had a voice, and their voice has changed policy, and whether they are right or wrong, they believed past policies were wrong for them,” he said.

That goes back to a point made at the start of the meeting by Philip Jennings of UNI Global Union: if we want to create a society that works for all, everyone must have a seat at the decision-making table, in some capacity. “The only way you will have a fair slice of the cake is if you have more than one hand on the knife.”