A few weeks ago, the annual Davos Conference was held, bringing together a diverse collection of world leaders, industrial titans, distinguished diplomats, and celebrities. Each year, they come together in the tiny town of Davos, Switzerland to discuss and shape the outlook of the global elite for the following year. In past years, even ones clouded by anti-elite, anti-globalization events such as Brexit and the election of Donald Trump, the mood at Davos remained generally optimistic, putting faith in the superiority and longevity of the ideals of free trade, unrestricted capital, and international cooperation. Such was not the case this year, however; most news outlets and pundits characterized the mood at Davos as particularly dour. Even the most optimistic, such as Davos founder Klaus Schwab, predicted 2019 would be “turbulent and unpredictable.”
A hint of why the folks at Davos aren’t optimistic about 2019 can be found in the guest list, or more specifically, who isn’t on it: French President Emmanuel Macron. Last year, Macron received a standing ovation for his speech extolling the virtues of the liberal social and economic order, at a time when he appeared to be the charismatic and politically potent answer to Trump from the political center. A year later President Macron finds himself unable to attend Davos due to the massive political and social unrest generated by the “Yellow Vest” movement, which has forced him into political retreat from his Davos-approved economic reforms. While Macron is at this point unlikely to be forced from his office, his agenda of deregulating the French economy while pursuing far-sighted policy goals such as carbon taxes have neutered his presidency. In the eyes of many Davos-attending intellectuals, this seems to signal that not enough revision has been made to the Davos doctrine in the wake of Trump and Brexit, and that a deeper analysis of the flaws of the neo-liberal economic and political programme needs to be made.
Another source of frustration for the average Davos attendee has been the rise of an unapologetically anti-capitalist Left in the United States during and after the 2018 midterm elections. While explicitly socialist politicians remain rare, radical ideas such as a Green New Deal, worker representation on corporate boards, and a 70% marginal tax rate have become commonplace in American political discourse, finding a surprising amount of public support. This discourse found its way into Davos itself, as historian Rutger Bregman’s rant on how attending billionaires’ refusal to consider higher taxes to combat climate change made him feel like he was at “a firefighters conference and no one’s allowed to speak about water.” Elsewhere at Davos, Michael Dell, CEO and founder of Dell, took potshots at the ‘ludicrous’ idea of a 70% marginal tax rate, only to be reminded by his fellow panelists that the United States had a marginal tax rate equal to or higher than 70% for large portions of the 20th century. Davos’ American attendees may feel at risk of being caught between an economically unacceptable Democratic Party and a socially unacceptable Republican Party, without a natural political home.
More than any other factor, the worsening global economic outlook determined the mood of Davos 2019, and it is here where the most important lessons for us plebeians back home can be learned. While the economic condition of the United States remains generally positive, the risk of a debt crisis in Italy and slipping manufacturing output in Germany have people like IMF Managing Director Christine Lagarde worried about Europe’s economic prospects. This, combined with an increasingly sluggish Chinese economy further damaged by a trade war with the United States, has led the IMF to downgrade its global growth predictions for 2019 for a second time. While some say the pessimism is unwarranted given strong economic fundamentals in the United States, the understanding at Davos is that the next economic crisis is a matter of when and not if, with the when appearing closer than ever in the rear-view mirror.
For students preparing to enter the job market, the fact that so many of the world’s leading economic figures are bracing for a downturn is… unpleasant, to say the least. Older Millennials graduating in the late 2000s faced an economic crisis that limited their ability to find jobs generally, but more specifically limited their ability to start a career directly related to their degree. As a result, by the mid 2010s Millennial workforce participation was in the norm for previous generations, but a disproportionate amount of young professionals were behind previous generations in terms of career advancement within their preferred field. Given this bit of recent history, it might do current students some good to widen their field of potential careers in order to have flexibility in a possibly problematic job market. Having that flexibility may allow us to climb the pay grade more quickly than our older compatriots, even if it means we won’t all get the career we hoped for during university. Of course, the Davos folks might have it wrong, and we will instead have smooth sailing for years after our graduation. Still, it is better to be well prepared and informed than it is to ignore the very real possibility that we will face a difficult transition from university life to the workforce.