From: allin
The 54th annual World Economic Forum (WEF) in Davos, Switzerland, which brings together politicians, business leaders, economists, and journalists, aims to improve the state of the world by engaging societal leaders to shape global, regional, and industry agendas [04:27:00]. While the event has historically been seen as a “flex,” there’s been a recent shift, with attendees sometimes feeling “shame” and apologizing for their presence due to rising global populism and criticism [05:27:00]. The theme for this year’s forum was “rebuilding trust,” a choice some found “insulting” given existing lack of trust [07:03:00].
Contrasting Voices at Davos
Amidst the usual proceedings and what some described as “ridiculous antics” [07:30:00], two sets of remarks garnered serious attention and went viral for contradicting the established wisdom at Davos: those from Argentinian President Javier Milei and comments by Jamie Dimon [07:40:00]. The reason for their virality was their “sensible things” that “subtweeting the other elites” [07:54:00].
Milei, introduced by Klaus Schwab, immediately began denouncing “collectivist experiments,” asserting that the West is in danger because its elites have been “co-opted by a vision of the world which leads inexorably to socialism and thereby to poverty” [08:12:00]. He reportedly flew commercial to the event, which was also noted as a positive gesture [08:37:00].
Milei’s Core Arguments: Free Markets vs. Collectivism
Milei’s speech, described as “incredibly powerful” and “super basic,” highlighted that free markets work, with individuals “opting into either side” of economic activity [12:46:00]. As an economics teacher, his arguments were grounded in historical data [12:32:32]. He discussed how GDP growth under capitalism has lifted people out of poverty, contrasting it with collectivism, which he defined as “a bit of a disaster” [12:57:00].
Key points from his speech included:
- Poverty Reduction: From 1800 to 2020, extreme poverty globally decreased from 95% to less than 5%, driven by free market capitalism and democracies allowing individuals to pursue self-interest [17:00:00].
- “Relativism Problem”: The issue arises when some people advance faster than others, leading to “envy or jealousy” and calls for redistribution [17:35:00].
- West in Jeopardy: Milei stated that the West is in jeopardy because countries are “no longer defending free markets, private property and other institutions of libertarianism” due to “errors in their theoretical framework and ambition for power,” which opens doors to socialism and “condemns us to poverty, misery and stagnation” [17:42:00]. He emphasized that “socialism has failed in all countries where it was attempted” [18:04:00].
The Argentine Example
Argentina’s history provided a compelling case study for Milei’s arguments [14:00:00]. In the mid-19th century, Argentina was a flourishing, vibrant economy, described as the “Paris of the West” with a GDP per capita wealthier than France or Germany by 1913 [15:25:00]. However, a series of military coups from 1930 to 1976, each driven by a “relativism” — the idea that some benefited more than others and thus the social structure needed to change by force — led to its economic decline [16:19:00]. Argentina is now in the process of dismantling its collectivist structures [14:47:00].
Milei’s message resonated particularly well because Argentina’s population includes many ethnic Europeans, making its failure with collectivism a relatable warning for Western audiences, unlike examples from South Asia or Africa which might not receive the same attention [14:21:00].
Government Intervention and Economic Impact
Milei’s speech tied into the broader discussion on the negative impacts of government intervention. When well-intentioned governments try to redistribute wealth by playing a market role, it often leads to inflation, degradation, and reduced economic opportunity [18:17:00].
For instance, in the United States, goods and services where the government has a role in buying or paying for them (e.g., education, healthcare) have seen prices rise significantly over two decades, while prices for goods in free markets (e.g., televisions, smartphones) have decreased [18:40:00]. This illustrates how good intentions can lead to negative outcomes in the market [19:48:00].
Beyond good intentions, some argue that government overreach is also driven by a “desire for power” by a small class of elites who want to feel “better than everybody else” by implementing policies that give them influence [20:26:00]. This creates a “negative reflexive loop” where the administrative state gains power, reinforcing its ability to decide “winners and losers” [20:54:00]. The ultimate consequence is a “level of incompetence and incapability” that negatively impacts citizens through high costs or risks [21:36:00].
This phenomenon is evident in industries like aerospace, where a duopoly (Boeing and Airbus) combined with regulatory capture leads to a lack of competition and accountability, potentially compromising safety standards and allowing exorbitant profits for suppliers like TransDigm Group, which was found to earn “excess profit of at least $21 million on 105 spare parts” due to lack of competition in government contracts [22:23:00] [29:35:00]. This highlights how certain markets have “veered into this collectivism” despite operating in a capitalist society [24:15:00].
Broader Perception of the WEF
The forum has seen a significant shift in its public perception. What once served as a means for “singular hierarchy of status” and a signal of having “made it,” is now seen by some as a “glorified enterprise software sales conference,” where attendees pay significant fees (around $40,000 a year) primarily to close large business deals [10:23:00]. The notion that it is “much of nothing” or even “embarrassing” to be associated with the “elite cabal” has gained traction, especially with events like the “air flute” and “shamanism” performances being mocked on social media [11:30:00]. This suggests that the World Economic Forum’s perceived usefulness is in its “back half” [10:44:00].