Superclass: The Global Power Elite and the World They Are Making

PREFACE TO THE PAPERBACK EDITION

TURNING POINT FOR THE SUPERCLASS?

None among the world’s superclass—the most powerful of the world’s most powerful people—have flown higher than the financial elites. No group globalized more rapidly or played a bigger role in fostering globalization. No group more effectively shrugged off the bounds of national regulatory regimes and flourished in the uncharted, unchartable territory above and beyond borders. They helped create great fortunes among themselves and the businesses they served. Their trading desks ran a real-time referendum on national policies that impacted the fate of political leaders as once only electorates or armies could do. The elite of this elite, heads of great financial institutions and funds, billionaire traders and commodity market kingpins, truly strode like titans through the first years of the global era. They have been symbols, examples, empowerers, and beneficiaries of a new system that appeared to concentrate more economic power in the hands of relatively fewer people and that, in the eyes of many, exacerbated the great chasm that separates the haves of this world from the have-nots.

And in the year following the hardcover publication of Superclass in the United States, no group was more in the headlines as the financial elites were buffeted by what former U.S. Federal Reserve chairman Alan Greenspan called a once-in-a-century financial meltdown. As once powerful financial institutions such as Lehman Brothers, Merrill Lynch,Bear Stearns, AIG, and U.S. mortgage lenders Fannie Mae and Freddie Mac were wiped away, rendered unrecognizable or brought under the wing of the U.S. government, much was revealed not only about the deep flaws in the global financial system but about this important segment of the superclass…and by extension about the nature, power, and importance of the superclass as a whole.

When Bear Stearns went into its tailspin in March 2008, it was made clear not only that today’s global markets operated far beyond the reach and understanding of national regulators but also that those same regulators were no longer in the position that they once were to manage crises on their own. New York Federal Reserve Bank president Timothy Geithner and his colleagues grappled with the crisis by convening a select group of the financial superclass in the conference rooms at the Fed, or in conference calls that included Treasury Secretary Hank Paulson or Greenspan’s successor, Ben Bernanke, because only with the voluntary cooperation of the private sector’s most important leaders could the financial bloodletting be stopped. When, at the time of that crisis, J.P. Morgan CEO Jamie Dimon stepped in to lead the acquisition of the remaining assets of Bear Stearns and facilitate a soft landing for the dying firm, it echoed an intervention more than a century earlier when J. P. Morgan himself procured over $65 million in gold for the U.S. federal government to help stem a run on financial markets. Thus, not only was the ascendant and central role of the financial superclass in today’s global markets revealed but so, too, was it underscored that there have always been superelites with a special role to play, the evolution to today’s group primarily reflected in its global nature. If a century ago there were only a few hundred people in the world who met this book’s definition for inclusion in the superclass—the ability to influence millions across borders on a regular basis—today there are thousands, and a greater percentage than ever before owe their power to their work in the private sector. More, too, had earned their positions, compared to the elites of the past, who often inherited them. Further, the role of military leaders among international elites receded as the cost of modern warfare became too high.

The financial crises of 2008 also revealed the volatility of the superclass. If I had included a list of superclass members in the original edition of the book, the heads of Bear Stearns, Lehman, and Merrill would have certainly made the cut. No longer. Some have asked if such volatility means that the group is not really a class. But I have relied on the definition of class that means a group that shares common characteristics. Their interests do not always align. In fact, great differences can come between members of the group. But they are in fact linked by their great power and the fact that members of this group, or important subsets of this group—like members of any economic class—often have aligned interests. The transient nature of the group does not in any way diminish the reality or the significance of its existence, particularly if you consider that, for example, when power is linked to position or an institutional affiliation, different individuals play roughly identical roles, acting as they do in the interests of the institution and shaped as they have been by their roles within that institution. That does not diminish their power, but it does mean that it is appropriate when considering the world’s most powerful people to include whoever is the chief executive of ExxonMobil or Deutsche Bank or Saudi Aramco, regardless of who that individual may be. That is why this book does not contain a list of names. While I use people to illustrate the roles and nature of the modern superclass, the story told in this book is of the superclass as a group of people who are a quantum level more powerful than any other on the planet and of the implications of that power for average people and for our collective future.

The struggles of the world’s financial markets not only have revealed the centrality of key groups within the global superclass but frame vital questions that are raised by their rise. The great institutions many of them lead no longer have any national identity at all, operating as they do in markets worldwide with no regard for borders and with a primary allegiance only to the interests of their stakeholders. Further, in many important respects they operate above and beyond national regulatory structures. When they use the freedom this brings to create wealth and to provide easy access to capital for those seeking to elevate new markets in the developing world, this is a boon. But when they inevitably overreach, as those in power and in markets very often do, their existence beyond the site and reach of regulators creates, as we have seen, significant problems with very real and grim consequences for average citizens. This in turn underscores one of the central themes of my book: that we are suffering from a global governance gap, from the failure of public institutions to evolve as fast as private ones in adapting to the new realities of the global era. That doesn’t mean we need world government. What it means is that we need multilateral institutions and mechanisms to ensure that the minimum basic protections we expect in our national homes are not undercut while the world’s most powerful pursue their narrow self-interests in the no-country’s land of the global marketplace.

Of course, beyond this, the financial crises of 2007 and 2008 have also revealed the power of the financial superclass in another important way. On the one hand, the leaders of the financial world, despite their history of booms and busts, of greed-driven bubbles that burst and crushed the lives and hopes of countless innocent bystanders, were able to use their influence to ensure that new financial instruments and many evolving global markets could be, in their words, self-regulating. They said ignore history and trust us. When an argument is so indefensible on its face and it succeeds, it is testimony to the power of those making the case. That alone would be impressive. However, the stark power of the group is even better illustrated by the fact that when markets did come up on the shoals of greed, mismanagement, and minimization and misunderstanding of complex new risks, these same financial titans who told government to stay out were able to persuade government in many cases to step in and pull their fat out of the fire…or at least what remained of it. That’s really stunning. The same people who gave you Too Global to Regulate gave you Too Big to Fail, and both times the political class, many of whom came from the financial superclass or saw their political fortunes buoyed by its donations, said, Sign us up. That’s raw power at work.

The crises have also revealed the public’s attitude toward many in the superclass, highlighting resentment at what is seen as a pattern of gaming the system, of getting rich on the way up and on the way down, of making the taxpayer pay for their errors while being the primary beneficiaries of their gains. The political drum has started to beat again for more aggressive and vigilant regulation and for an end to obscene pay packages that reward private sector leaders, even if they end up screwing their shareholders, their customers, their employees, and the public at large.

This in turn has led some to wonder whether we are at a turning point for the superclass, whether we might see the beginning of the end of a golden era of greed and excess. And while changes are likely afoot and twenty-five years of a default impulse to leave it to the markets (market fundamentalism) are coming to an end, any study of the history of elites shows that while overreach regularly dogs those in power, efforts to rein them in usually amount to invitations to a new group to assume, and often later abuse, that power.

The events of the first year in the life of this book have done a great deal to underscore the relevance of its themes. Today’s superclass is different from all those that have come before, and yet it, too, is changing in ways that will touch all of our lives. Sorting out who its members are, how they work, and the consequences of their existence is there fore more important than ever. We need to determine what about the rise of the few is in our interests (rewarding innovation and leadership, for example) and what is not (the grotesque income and power inequities that have resulted from a global system lacking the governance structures and balancing mechanisms we have come to expect from just societies). This book is an attempt to objectively frame and address those questions, and it is my hope that through the presentation of a paperback edition, like the creation of the many foreign language editions of the book that are now in print, it can help support a broad discussion of what are critical issues for our times, at a moment in history when we are acutely aware of their salience.

David Rothkopf

Bethesda, Maryland

November 2008

PREFACE

God is on everyone’s side…and in the last analysis, he is on the side with plenty of money and large armies.

—JEAN ANOUILH

This is a book about power. It is about the fact that power is concentrated in the hands of a remarkably small number of people around the world. It is about who they are, how they compare to the elites of the past, and how they differ from the rest of us. Most of all, it is about the profound impact this group has on our lives and how it is shaping our times.

Power is, of course, hard to quantify. Wealth is often a source of power. Position regularly translates into power. Perhaps the most ancient source of power is the ability to project violent force. But sometimes power is grounded in subtler things, like access or ideas. There is no single or universally accepted metric for power, so a certain amount of subjective judgment is inevitable. Determining who has it and who does not is made more difficult because some of the most influential among us commonly mask their power or use it infrequently. What is more, only a very few people have the sort of international power that is the subject of this book. Many of those we are accustomed to thinking of as powerful actually have very limited impact in a global sense. Formidable as they may be, they are figures of only local or national importance.

A global elite has emerged over the past several decades that has vastly more power than any other group on the planet. Each of the members of this superclass has the ability to regularly influence the lives of millions of people in multiple countries worldwide. Each actively exercises this power, and they often amplify it through the development of relationships with others in this class. The age of inherited lifelong power is largely behind us, and for most members of the group influence is transitory; to truly be a member of this superclass one has to hold on to power for at least long enough to make an impact—to enter or affect the world of other members of this superclass—a period of a couple of years or more.

That such a group exists is indisputable. Heads of state, CEOs of the world’s largest companies, media barons, billionaires who are actively involved in their investments, technology entrepreneurs, oil potentates, hedge fund managers, private equity investors, top military commanders, a select few religious leaders, a handful of renowned writers, scientists, and artists, even terrorist leaders and master criminals, meet the above criteria for membership.

By posing the idea of the existence of a superclass, some key questions emerge. The most obvious is: how big is it? Using the above parameters and combing systematically through publicly available resources, my researchers and I identified just over 6,000 people who qualify. As will become clear, it is a choice based on natural cutoff points, providing us with a group that is both small enough to analyze in some rational way and large enough to encompass all the core international communities from politics, business, the military, and the world of ideas needed for it to be representative of the most important sources of power worldwide.

The most common question I have been asked since undertaking this book is: Is there a list? As it happens, there is. Many people have suggested I publish it—partly because people love lists, but mostly because many of those who are members of the superclass or who aspire to be are interested in seeing who is in and who is not. But publishing such a list would be an exercise in futility. The day after it was published, it would be obsolete. As I noted earlier, power is transient: Many members of the superclass qualify because of jobs they hold, but people come and go from such jobs. Some retire, some die. Others suffer financial or professional calamities. Some members of the group are each year deposed. Others are incarcerated. For these reasons, I have attempted to include a few sublists to illustrate the overall nature of the group, but I have done so with the clear recognition that I am painting a picture of a moving object.

Some—mostly Americans—have suggested that by using the word class I am at risk of entering the intellectually disreputable territory of Marxism and class warfare. If acknowledging what is obvious to any sentient being—that social and economic classes remain in the world even as mobility between those classes has improved for a few subsets of humankind—is intellectually disreputable, well, then I’m all for it. In fact, I embrace it. This book is, by its nature, very much about the gross inequality in the distribution of power and wealth in the world. My position is that these are issues we ignore at our peril—in practical terms, in political terms, and perhaps most of all, in moral terms.

The reality is that the combined net worth of the world’s richest thousand or so people—the planet’s billionaires—is almost twice that of the poorest 2.5 billion. The human race may have made great progress over the centuries, but such disparities are an indictment of our civilization. And, I believe, they are a threat to its stability.

Having said that, this is not an eat-the-rich book. I’ll admit I am disgusted by the behavior of some of the world’s richest—those who pathologically acquire and give back, on average, something like 1 percent of what they make to society (a far cry from the almost 90 percent Andrew Carnegie gave back during his lifetime). And certainly one cannot help but be disturbed and often horrified by those who abuse political or military power, often to the detriment of the most helpless. But there are many deservedly respected and accomplished members of the superclass, individuals who have offered a great deal to the world. In every pursuit there are the best and the brightest, the people who rise to the top by virtue of their merits, and immense good often comes from their leadership. So, in the end, every era has its elites…and has a complex relationship with them.

This is also not a volume for conspiracy theorists. I do believe that some of the networks that exist among the most powerful people in the world have enabled a remarkable few to shape the global system and often to set the terms of our discussions about that system. But I have seen enough of the world of backroom conversations and discreet meetings of the powerful to know that conspiracies are hard to come by. These elites are in fact riven with differences and challenged by the practical impossibility of most conspiracies; old fantasies about world domination just don’t add up.

In the course of writing this book, I have looked pretty long and hard at a number of theories regarding who runs the world and at the rumors that swirl around high-level conclaves of the superclass such as Davos and Bilderberg, the Trilateral Commission and the Bohemian Grove. I’ll admit, I certainly would not want to miss out on such global conspiracies were they to exist and offer me a spot. As John Lehman, former U.S Secretary of the Navy, once said, Power corrupts. Absolute power is kind of neat. I had lunch with Eduard Shevardnadze shortly after he had stepped down as foreign minister of the former Soviet Union, and he had unabashedly expressed a similar thought. The collapse of the USSR had already taken place and he was, it seemed, relieved by it. He was relaxed and chatty, enjoying a good meal at Windows on the World, the restaurant that used to be on the top floor of the World Trade Center in Manhattan. A discussion broke out about power and the abuse of power, and after a while Shevardnadze, no longer obligated to couch his words in diplomatic terms, said, You know, I know something about totalitarianism. I have been a totalitarian ruler. And I have to admit, it was a great job while it lasted. Everyone laughed, and soon after Shevardnadze took the democratic route to becoming the president of the Republic of Georgia, where he ruled again for many years.

As a Jew, I have always had a particularly soft place in my heart for the old notion of a world Jewish conspiracy. I figured there were not so many Jews and so if we were in control, the odds were pretty good I could secure a respectable position in the inner workings of the world-domination machinery. (I had a friend who used to assert that such a conspiracy really did exist, and that he was responsible for global zinc prices.) As far as I can tell, however, either there is no such conspiracy or I have been the victim of some kind of special discrimination against Jews from New Jersey—or Jews who would be unable to keep the conspiracy a secret if we were let in on it. To this day, I am always astonished when people attempt to assert that somehow Jews are running the show, when the headlines of the past several millennia of Jewish history include exile, the Inquisition, the Holocaust, the acquisition of a tiny desert nation surrounded by enemies, and more or less relentless hatred and abuse. Had we really been in charge, surely we could have done better on all counts.

Setting aside both the fanciful and the insidious theories of puppet masters and cabals, we must recognize that there is something new afoot, a huge imbalance in the global distribution of power that concentrates great influence among informal clusters of elites. These elites often transcend or supplant the institutions of the past: national governments, systems of law that could not keep pace with global realities, and even the earnest but incomplete efforts of the past half century at creating effective multinational organizations. At the heart of this new reality are the members of the superclass, individuals whose daily decisions redirect massive assets among markets; create, dislocate, or eliminate jobs around the globe; determine the viability of government programs and sometimes of governments; and also play a vital role in shaping the global era, because so many of the institutions on which we have depended to play such a leadership role in the past have not or cannot because they have grown too weak or obsolete, and are ill-suited to the task. Furthermore, these individuals as a group, because of their influence, play a big part in defining the tenor of our times, determining which views are accepted and which are not, and what our priorities are. The influence of this transnational superclass is often amplified as the members act in clusters knit together by business deals, corporate boards, investment flows, old school ties, club memberships, and countless other strands that transform them if not into the conspiring committees of legend then at least into groups that are proven masters at advancing their aligned self-interests.

To move beyond the abstractions of political theory and the oversimplifications and absurdities associated with fantasies of secret conspiracies requires that I tell this story as one about people. In order to understand the impact of the superclass, we have to understand who its members actually are. This entailed interviews with more than a hundred international leaders in government, business, the military, the media, and religion, as well as extensive digging into the histories of hundreds of others. A census was undertaken (the list I mentioned earlier), surveying various characteristics of the roughly 6,000 selected for the group: their gender, their national backgrounds, where they went to school, their various affiliations, and their personal wealth. Through the interviews I have done and the background information I have collected, a picture begins to emerge—both of the group as it is today and as it is likely to be in the future.

Of course no such analysis takes place only in the limited context of the time it takes to write a book. This book is as much the consequence of my experiences in life as it is of the past two years of specific research. Throughout my career I have encountered members of this superclass and those who aspired to it. My first two jobs, in fact, included working for a prominent Wall Street financier and later for a member of Congress from Brooklyn, New York. Both were superclass aspirants, but because the financier was content with merely being very rich and the congressman was a better policy maker than he was a politician, neither ascended to the first tiers of global influence, although they exposed me to many who did. Subsequently, I worked for a while in television and then at a series of publications: Financial World, Institutional Investor, CEO Magazine, and Emerging Markets newspapers (which were published by a company of which I was a cofounder, International Media Partners [IMP]). We were in the midst of a financial boom, and I had the opportunity to get to know many of the top leaders of the financial community, the group that has been at the vanguard of globalization. From behind the scenes, it was clear that these individuals influenced everything from the way currencies were priced worldwide to which political candidates would have sufficient funding for their presidential campaigns. The people I met from that era included financing titans who were destined for greatness, like future Blackstone CEO Steve Schwarzman and future New York City mayor Mike Bloomberg; a few who later ran afoul of the law, like Michael Milken and Ivan Boesky; godfathers of globalization, like Citibank CEO Walter Wriston and Chase Manhattan Bank chairman David Rockefeller; and countless others in London, Tokyo, Frankfurt, Paris, and other financial capitals.

At IMP, we published newspapers covering the big annual meetings of the financial community like the Joint Annual Meeting of the International Monetary Fund (IMF) and World Bank, and meetings of the regional development banks. At such events we watched as a few hundred bankers and finance ministers worked together on global financial issues: bailing out failing countries at breakfast, forming alliances over canapés, funding deals at cocktail hour. Of course, occasionally we were also reminded just where we fit in the picture at that time. I vividly recall crossing 59th Street one cold rainy night to attend a reception at the Plaza Hotel for the king of Morocco, Hassan II. The lighting in the lobby was a soothing golden color, flattering to guests, muting the bustle of the hotel. As I entered the small ballroom in which the reception was being held, there was a receiving line, and immediately before the king was a protocol officer who discreetly leaned forward to ask me my name. I said, David Rothkopf. Mishearing me, his eyes lit up and he stood up quite a bit more erect and repeated with great reverence, David Rockefeller? He drew out the last four syllables so each was a complete word. Rock-e-fell-er? I hated to disappoint him. (Heck, given the response, I hated to disappoint me.) But I said no, just David Rothkopf. He let out a long sigh that trailed off in a whimper. Ohhhhh, he said. Your majesty, may I present, Mr. Rothberg.

While at IMP we also created the CEO Institutes, which ran events on global themes for the chief executives of big companies. Some of these business leaders were chillingly deal-oriented, as I saw at dinner one night when I was seated between the CEO of a leading aircraft manufacturer and Representative Pat Schroeder, then the ranking Democrat on the Armed Services Committee. The CEO leaned across me to speak to Representative Schroeder. Here’s the deal, he said. I want to sell a plane to Muammar Qaddafi and he wants to buy one. But we have sanctions in place that won’t let me sell to him. The U.S. wants this guy dead. So, what I’m thinking is, if you help me get the okay to sell him the plane, I’ll build it with explosive bolts connecting the wings to the fuselage. Then, one day he’s up flying over the Med and we push a button. He’s gone. I make my sale. Everyone’s happy. It was so bald-faced that even the experienced Representative Schroeder seemed nonplussed.

This CEO had built a fortune by outright asking for what he wanted. Nonetheless, some of the other individuals I got to know at our events were more subtle. Once, at a reception we were holding for former secretary of state Henry Kissinger, I noticed the wife of a prominent diplomat slip out of the room. When I got to the ballroom for dinner, I observed that she had rearranged all the place cards at the head table, shifting me and two other guests (Hank Greenberg, the CEO of AIG; and Fred Smith, the CEO of FedEx) away from Kissinger so she and her husband could sit next to him.

Naturally, I restored the arrangement of the tent cards—so that I would sit next to Kissinger, whom I had always found a fascinating character. During dinner he ignored me altogether. He chatted with the few people at the table he wanted to speak with: Greenberg, Smith, and the diplomat among them. This was enormously frustrating. I had been through an entire dinner with one of the world’s great raconteurs and I did not have a single story to show for it. Finally, as he got up to give the after-dinner address, he turned to me and in his famous Teutonic rumble said, Mr. Rothkopf? I eagerly answered, Yes? This was my moment to glean a gem.

Let me give you some advice, he offered, When you are having an after-dinner speaker, it is best if you eliminate the salad course. And with that he stood up and gave his remarks, knowing from experience that our overly long dinner had exhausted his audience and that his lone comment had thoroughly deflated his thirty-two-year-old host.

A couple of years later, I joined the Clinton administration as U.S. deputy undersecretary of commerce for international trade. Once again, I found myself in a job that brought me into regular contact with highlevel executives, senior U.S. officials, and other world leaders. Working to remove trade barriers and ensure the enforcement of trade laws, we were unabashed cheerleaders for business-led globalization, involved in everything from helping Raytheon capture a big technology project in Brazil, to helping Exxon develop oil and gas fields off the coast of Indonesia, to helping Boeing secure big aircraft contracts in Saudi Arabia.

Immediately following my time in government, I was invited to become a managing director of Kissinger Associates, the international consultancy founded and run by Kissinger himself. It was a small firm: just Kissinger, myself, a former investment banker named Alan Batkin, and a fellow named L. Paul Bremer—Jerry to his friends—who later would go on to fame and not a little controversy as the U.S. administrator in Iraq. Kissinger’s office, and indeed his life, was like a revolving door for the superclass. Kissinger was an extraordinary education, brilliant and charming and a magnet for fascinating people and discussions. Whether he was relaxing at the vacation home of the CEO of Asea Brown Boveri, or hosting a private dinner for the CEO of Gazprom, Kissinger was the master of every occasion. (And always knew just how many courses to serve at each meal.)

I eventually moved on from Kissinger Associates to start a company with Anthony Lake, who was, like Kissinger, a former U.S. national security adviser. Together we launched a firm called Intellibridge that used open-source Web technology to support the intelligence efforts of companies and government agencies. Although the plan was initially to support businesses, we soon found ourselves working primarily within the U.S. national security community. In this capacity, we spent seven years dealing regularly with the most senior officers of the U.S. military: three-and four-star generals and admirals who rival the best in any other part of the government for intelligence, creativity, and character. The venture gave us an inside view of the military-industrial establishment in the United States and around the world.

After Intellibridge was sold, I wrote a book called Running the World: The Inside Story of the National Security Council and the Architects of American Power. I drew on relationships from my time in Washington and ended up interviewing more than 150 leaders of the U.S. foreign policy establishment since the Eisenhower administration. It is a remarkably closed world, as I pointed out in the book. Every U.S. national security adviser since Henry Kissinger has either worked with or for Kissinger—or he or she has worked with or for someone who worked with or for Kissinger: two degrees of separation. Many went to the same schools. Many had fathers and brothers in the same line of work. Mostly old white guys. Not too many women. A classic elite.

So I came to this book with not an insignificant amount of relevant personal experience—experience that has given me useful perspectives into the connective tissue of the global superclass and introduced me to representatives of the group from every sector and from every region of the world.

To have reached the top of the pyramid, it stands to reason that many of the members of the superclass are exceptional. They are often brilliant, full of energy, and creative. They are also lucky and most of them know it. Many are rather happy. Money, which nearly all these elites have in abundance, doesn’t make you happy. But, as Woody Allen once said, Money is better than poverty, if only for financial reasons. It is hard not to prefer the vision and energy of the best among them to the hidebound narrowness of many of the national political opportunists who sometimes seek to score points by attacking them. But many among the superclass are also deeply self-interested and far removed from the world of most of the people of the planet. One billionaire CEO with whom I spoke responded to the idea of a superclass by saying, only half jokingly, That’s the way it should be. The only thing I’d change is that we should have…I should have…more power. In his joke was a more serious suggestion that things were actually working better than ever despite huge global inequalities in the distribution of wealth and power. He did not for a moment question whether his business success should have given him not just more money than other people but more power than them as well. He felt he had earned the power, too.

There have been many books written about the inequitable distribution of wealth on the planet, but few on the inequitable distribution of power. There have been books written about the most salacious and grotesquely appealing theories about the influence of the few, but few that tackle the realities of today’s rapidly evolving global elites. Understanding this group is vital to understanding the nature of the global era and the future we are presenting to our children. Further, by examining this group, we may come to question some of our own assumptions not only about how the world does work but also how it should work. With some luck, even members of the superclass may see this and recognize that the imbalances that exist are not only unjust, they are the deepest and most deadly threat to their long-term interests.

What is more, of course, these are really interesting people. Their stories are often more intriguing than the tabloids and other fiction they inspire. Seeing them up close reveals, in microcosm, much about the world. It is a small enough group that we can focus in on them, see into their eyes a little, and get a glimpse of their perspective. For a moment or two anyway, we can ride along with people like the former prime minister of a Latin American country, who once settled into the first-class compartment of a long flight only to discover that he was seated next to a woman who had attended kindergarten with one of his best friends. Small world, he said. Yes, she agreed, at the top.

David Rothkopf

Bethesda, Maryland

December 2007

Introduction

THE POWER ELITE ON THE PROMENADE

Any city, however small, is in fact divided into two; one the city of the poor, the other of the rich; these are at war with one another.

—PLATO, REPUBLIC

Gentiana is a small restaurant that would scarcely warrant a second glance in any other village in Europe. It is rather traditional, only slightly more charming than the bland shops and modest hotels around it. One nearby storefront offers a remarkable array of Swiss Army knives, another boxes of chocolates, another fur hats and mountain gear. The restaurant has a cozy, neighborhood feel to it. Beside the door there is a blackboard highlighting a few specials, and on the ground floor there may be seating for twenty if they are both thin enough and friendly enough. Upstairs there are a few small rooms for private parties, the biggest of which seats ten people squeezed in on either side of a long narrow table. Most of its character comes from a feel of woody intimacy, the dark wood façade, dark wood floors, dark wood tables. In fact, for all its charm, it is definitely not a place for claustrophobes—or people with an extreme fear of splinters.

The reason to go to Gentiana is the fondue, especially the cheese fondue, which is offered in robust portions that recall an era before cardiologists. My wife, Adrean, has a special weakness for fondue, and every year that we have gone to the annual meeting of the World Economic Forum in Davos we have gone to Gentiana for her birthday. We make reservations long in advance because during the week of the January meetings, which are attended each year by more than 2,000 business and government leaders from around the world, getting a table at Gentiana is not much easier than getting one at renowned eateries like Aragawa in Tokyo, Gordon Ramsay in London, or Le Bernardin in New York. Perhaps more surprisingly, for that one week the clientele at this humble Swiss bistro looks pretty much the same as what you might find at those world-class restaurants.

Of course, even during that week, there are still a few tables at Gentiana occupied by locals. One regular is a particularly garrulous drunk who loves to hobnob with the CEOs, heads of state, and rock stars who are wedged in, elbow to elbow, spinning hunks of bread on long forks in the pots of bubbling Gruyère. The local speaks only Swiss-German to the polyglot crowds around him, and few understand him, although judging by his demeanor the casual observer is not sure whether that has to do with the language he speaks or the local beer that he favors. No matter. He smiles and they smile, and the general effect is cheerful and relaxed.

One afternoon during a recent Davos, my wife and I were hurrying along the sidewalk on our way to Gentiana. This can be dangerous, as the locals do not shovel away the snow and ice lurks just about everywhere. In fact, attendees at Davos can see with some regularity central bank governors and senior executives of the IMF and other distinguished middle-aged men and women swaddled in cashmere, calfskin, and politically incorrect pelts of many origins launched skyward, only to land on their broader, softer regions. We walked gingerly, therefore, but with purpose, knowing we were meeting our friends in just a few minutes.

The weather was typical. A light snow was falling. It was very cold. But the Alpine air was crisp and dry and invigorating. We chatted about the meetings, who we had seen and who we hoped to run into. As we walked, we reflexively did what most of the visitors to this small mountain town do: We glanced at the people passing us in the street, trying to determine who they were. (Given the nature of Davos, they were likely to have been somebody.) It’s a ritual made easier by the fact that everyone at the meeting has to wear a badge around his or her neck at all times. The badge is used to get through the many security checkpoints—there are at least two Swiss soldiers and policemen in Davos for every delegate who attends the meetings—to register for sessions, and to let everyone know who you are. Your name is on the badge, along with the organization you represent. So too is your picture. People tend to walk with their badges dangling in plain sight so they don’t have to fumble with them getting in and out of buildings or past police. That’s how it was for everyone except for the universally recognizable—people like Bill Clinton, Bill Gates, Tony Blair, Bono, or Angelina Jolie. The badge-scanning move is so ubiquitous you might call it the Davos dip: Bend the knee slightly, cast a subtle glance downward, assess and move on.

Leaving the Congress Centre and walking along Davos’s main street, the Promenade, we passed Thierry Desmarest, the CEO of Total; a small cluster of Harvard professors; a senior executive of Saudi Aramco; and a woman pulling her two small children on a sled. (She was local and the sled seemed to hint at the reason they don’t shovel the sidewalks.) We stopped briefly to chat with Tom Donohue, the CEO of the U.S. Chamber of Commerce, who happens to be my wife’s boss, then paused a few steps later to chat with an Indian-born U.S. venture capitalist with whom I had some business. It was a typical sample. Five minutes along the Davos Promenade in January offered a cavalcade of freeze-dried economic leaders from three continents.

About two blocks from Gentiana, I was grousing about how one of the conversations that I had most wanted to have had resulted in a frustrating series of near misses. The objective was a long-delayed chat with Paulo Coelho, the Brazilian author of The Alchemist. Coelho has sold more than one hundred million copies of his books worldwide and is, after the Harry Potter author, J. K. Rowling, the second-best-selling author on the planet. He is also one of the few cultural regulars at Davos, one of a handful of people who might offer a different perspective on the Davos zeitgeist. We had intended to meet almost a year earlier but, due to a series of scheduling mishaps, had repeatedly failed to do so. Finally, we aimed for Davos, but I had yet to lay eyes on him. What did I expect from a man who lived on the other side of the world and was constantly in motion—a Brazilian who lived much of the time in Europe and sold many of his books in Russia? There was a little bit of hubris in thinking we might ever be able to end up in the same place at the same time. And then: Oh, my God, said a voice I did not recognize, "it’s