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Analysis | How Davos Elite Is Dealing With The War In Ukraine

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The war will have forced it to the top of the agenda as global elites gather in the Swiss resort of Davos this week for the spring meeting of the World Economic Forum (WEF).

The pandemic has shrunk the annual jamboree of the big and the rich. There will be no Russian oligarchs wandering in the “Outer Davos” mostly uninvited and still heavily present in private chalets and gatherings. Now they are under Western sanctions and under the radar.

This puts some of the craziest parties in town to an end, but there will be a virtual star appearance by the intrepid Ukrainian President Volodymyr Zelenskiy. The mayor of Kyiv, Vitali Klitschko, will also seek help to rebuild his devastated city. Ukrainian billionaire Victor Pinchuk invited Forum guests to soberly watch Russian war crimes.

“Back to War”, “Cold War 2.0”, “Where is Russia going?” There will be sessions on the subject. The expectation of “Sanctions” and the “Economic Iron Curtain” that descends between the newly united West and its enemies.

But will the hearts of business delegates have it?

Klaus Schwab, WEF founder and presidential genius, will launch “a groundbreaking initiative to strengthen global collaboration.” This sounds more palatable to the usual gathering that preaches belief in the power of the global economy and celebrates the wealth it produces. (It is a rare conference where I am asked to specify whether I will arrive by commercial or private jet.)

Ahead of the virtual version of the summit held in January, a poll of WEF delegates revealed their concerns as the micron wave of the pandemic swept the globe. Priorities have shifted from political and economic issues to social and environmental issues and mental health issues.

It must have come as a shock, therefore, that an old-fashioned war of territorial conquest, the most serious in Europe since 1945, broke out in February.

This isn’t to reiterate the Davos Man’s accusation that he can’t always predict the next big development – many governments have also misjudged the Kremlin’s intentions. But it portrays a collective internationalist mentality that is uncomfortable with the harsh realities of power politics and nationalism.

Corporate CEOs and their political leaders observe the advances in prosperity brought about by globalization, free trade, and peace, but tend to forget that war is also a feature of the international system. It is the same in diplomacy as it is in stock market bubbles: Those who say, “This time will be different,” witness that they are wrong the hard way.

Five years before the First World War, the astute economist and journalist Norman Angell designed the peace-praising masterpiece, The Great Illusion, to prove that “the economic cost of war is so great that no one can hope to win by starting a war.” A war with disastrous results.” Nations had become too economically interdependent to fight each other through trade—after all, Germany and England were each other’s principal trading partners.

Germany, Britain, and other great powers entered the war in 1914. But Angell’s best-selling thesis has not fallen out of favor. If anything, the destruction and lasting economic damage caused by the conflict has proven its point: In modern warfare, everyone loses. Angell was awarded the Nobel Peace Prize in 1933, the year Hitler came to power. The great powers, led by fascist and communist dictatorships, embarked on a second round of global warfare, more devastating than the last.

In February, too, the risks of the war in Ukraine outweighed the supposed gains of conquest, but Putin still rolled the dice. Nationalists are not governed by cost-benefit analysis. The long-term consequences of this decision are incalculable, but Russia may lift Western sanctions in the short term. The recent challenges are incomparable with the economic shock caused by the collapse of the Soviet Union, hyperinflation and the devaluation of the ruble in the 1990s.

Even after Putin’s reckless gamble, many institutional and political leaders in the West still believe that all business is good and that the market economy will bring democratic change in societies. But it doesn’t have to be. The transformation of Homo Sovieticus into a ruthless capitalist oligarchy after the collapse of communism did not make Russia any less dangerous to its neighbors.

As we now see clearly, self-serving German industrialists led by former Chancellor Gerhard Schroeder deceived themselves in doubling their gas imports from Russia to aid the cause of peace. This was “exchange through trade,” an idea straight out of the playbook of Wandel durch Handel or Angell. Instead, Putin was encouraged to be more belligerent – he calculated that his dependence on Germany’s gas would break resistance to territorial ambitions.

China’s successful adoption of a market economy is also one of the biggest events in our lives. But this revolution was also accompanied by violent internal repression, the rise of the surveillance state, and “wolf warrior” diplomacy abroad.

EH Carr, a historian of great power politics, once said that “English-speaking peoples have in the past mastered the art of concealing their selfish national interests under the guise of the general good.” Consider 10 years ago when former British Prime Minister David Cameron and Chancellor George Osborne announced a new “golden era” in relations with China, based on improved trade links and hopes for liberalization in Beijing.

Today, as the two countries heap insults over the treatment of Hong Kong, Britain signed a defense agreement with the US and Australia to control China’s naval power in the Pacific.

At Davos, Chinese leader Xi Jinping delivers speeches designed to appease the sensitivities of market-hungry capitalists. At the WEF in 2017, the Communist party leader talked about the advantages that global free trade brings to all countries. In January of this year, he argued that the world should “abandon ideological prejudice and jointly pursue the path of peaceful coexistence, mutual benefit and win-win cooperation.”

Xi has the right to put forward the best case for his regime, and who can object to peaceful coexistence? But Beijing’s latest behavior has shown that it may want to curb the West’s cheers in the Alps.

By the end of his life, Angell was an ardent advocate of NATO and peace through collective security. Until then, humanity had doubts that it would overcome an ancestral war drive. Delegates making deals with the enemies of the West in their “magic mountains” at Davos must plan for the worst, even when they can hope for the best.

This column does not necessarily reflect the views of the editorial board or Bloomberg LP and its owners.

Martin Ivens is the editor of the Times Literary Supplement. Previously, he was editor and chief political commentator of the Sunday Times of London.

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