The Benefits of Secrecy and Crony Capitalism

Prolific blogger Om Malik posted this provocative, loaded question for his readers to answer:

Does anyone else feel that World Economic Forum in Davos is elitist, all talk, no action, and a perfect representation of crony capitalism? The off the record nature of conversations only bolsters my argument. Talk away folks.

My response:

The older I get, the more I realize the value of conversations conducted in secret. One doesn’t have to worry about the oversensitive media creating an overblown polemic over some logical, agreeable, yet also out-of-context and outwardly controversial statement (Ex. Harry Reid’s observant remark that Barack Obama became the country’s first black president because he had “no Negro dialect.”)

Likewise, Obama’s meeting with House Republicans this week in Baltimore should’ve been (and indeed was initially planned to be) conducted in secret in order to foster dialogue, but was opened to the media as a result of secret meetings’ perceived incompatibility with Obama’s pledge to be the most transparent administration ever.

It just goes to show that even seemingly universally-positive values like transparency can become negative as you approach their extremes (liberalism, socialism, libertarianism, and conservatism are also examples of ideologies that become dysfunctional, regressive, and destructive as you approach implementations of their extremes).

Anyways, getting back to Davos, you are exactly right to call them elitists. Davos is where elitists feel comfortable amongst their brethren. And you’re also correct in your characterization of Davos as “all talk … no action.” Davos is basically a week-long press conference for elitists to trumpet their ideas and pat themselves on the back, coupled with receptions and parties, networking, and a little skiing. Little is actually accomplished AT Davos. However, the value of Davos can be seen in two key ways:

1) its benefit of expanded dialogue between business/political/cultural leaders,

and 2) the inception of many relationships between the elitist attendees that flower into real-life business relationships, which “greases the wheels of capitalism,” by the creation of useful partnerships.

I write this on a BlackBerry engineered in Canada and built in China, inside a centi-million dollar condominium building financed by major transnational banks. The existence of these two simple things (a cellphone and a condo building) are shining examples of the benefit to society that comes from cross-border business relationships–some of them made at places like Davos. So complain all you like, but the truth is that you likely benefit greatly from the World Economic Forum in Davos, whether you recognize it or not.

(I should note that I am not advocating corrupt crony capitalism between business and government. Rather, I’ve tried to illustrate my belief that elitists hosting a meeting like this and fostering incestuous business relationships is not in any way negative, nor should pejorative words like crony capitalism be used to describe the WEF.)