Davos capitalism: Adam Smith's nightmare

From Michael Miller's commentary in Acton Institute :

In The Wealth of Nations, Adam Smith warned, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." The shenanigans of business leaders over the last year, which led to a serious loss of faith in markets and a call for more government intervention, sadly proves Smith's point. Unfortunately, the problem runs deeper than Fannie Mae, Freddie Mac, Merrill Lynch, AIG or whatever company has grabbed the headlines of the day.

Smith, who published his landmark work in 1776, warned of corporate collusion, but we're experiencing something much more insidious -- not just businesses, but business and government and a host of others all meeting, and colluding, at the posh Swiss resort town of Davos. It is Adam Smith's nightmare.

This isn't free market capitalism. It's Davos capitalism, a managerial capitalism run by an enlightened elite--politicians, business leaders, technology gurus, bureaucrats, academics, and celebrities--all gathered together trying to make the economic world smarter or more humane. It might even be, as Bill Gates famously said last year at Davos, a more "creative" capitalism.

The late Samuel Huntington coined the term Davos Man -- a soulless man, technocratic, nation-less, and cultureless, severed from reality. The modern economics that undergirded Davos capitalism is equally soulless, a managerial capitalism that reduces economics to mathematics and separates it from human action and human creativity.

And we looked up to Davos Man. Who wouldn't be impressed by the gatherings at the annual meeting of the World Economic Forum at Davos, a Swiss ski resort? Sharply dressed, eloquent, rich, famous, Republican, Democrat, Tory, Labour, Conservative, Socialist, highly connected, powerful and ever so bright.

Then, when the whole managerial economy collapsed, the managers and technocrats lost faith in markets. But they did not lose faith in themselves, and now they want us to entrust even more of the economy to them.