The Caste

Column: Meet the men and women who really run the world
2012 Fortune Global Forum / AP

2012 Fortune Global Forum / AP

BY:

When President Obama greets Chinese leader Xi Jinping at the Sunnylands estate in California today, another, arguably more important meeting will be taking place across the Pacific Ocean, in the central Chinese city of Chengdu. The Fortune Global Forum, an invitation-only conference of Fortune 500 CEOs, Chinese elites, and fashionable journalists, began on June 6 at the Shangri-La luxury hotel along the Jin River. The forum concludes on June 8. If there is an event that better explains the feeling of estrangement and frustration and cynicism ordinary Americans feel toward the men and women who govern and manage them, I can’t think of it.

The “partners” or sponsors of the forum include some of the largest and most famous corporations and brand names in the world: Air China, Coca-Cola, DuPont, Lenovo, Volvo, McKinsey, J.P. Morgan, APCO Worldwide, and the George Washington University, among others. The CEOs and top executives of Burberry, AOL, McKinsey, Time Warner, Sina.com, Honeywell, J.P. Morgan, SINOPEC, ConocoPhillips, Morgan Stanley, Johnson and Johnson, GE, Walt Disney Company, Dreamworks Animation, Novartis, Intel, Baidu, Qualcomm, Evercore, Starwood Hotels, and Royal Phillips Electronics will be there, as will dozens of top Chinese officials and businesspeople whose relationship to the Communist Party must play a not-unimportant role in their lives. Business journalists from Fortune and Time and Reuters will be there. The usual suspects of the global convergence circuit will be there: Jon Huntsman, Hank Paulson, Kevin Rudd, Joshua Cooper Ramo, Ken Lieberthal, Carlos Gutierrez, Christopher Dodd. Yao Ming will be there. So will Yu Wenxia, Miss World 2012, who may be doing more for Sino-American relations than the rest of the list combined.

The conference schedule is a snooze, unless your hobbies include reading up on Chinese energy independence. But summits are not really defined by their breakout sessions and self-serious panels. They are defined by the forging of what the Chinese call guanxi: connections, networks, relationships, bands of influence and power. I doubt, for example, that DreamWorks Animation CEO Jeffrey Katzenberg, who helps bankroll the U.S. Democratic Party, is overly interested in Håkan Samuelsson, the CEO of Volvo, droning on at a roundtable discussion on the future of transportation. But Katzenberg probably is very interested indeed in meeting Zhang Gaoli, vice premier of the People’s Republic and a member of its collective dictatorship, the Politburo, who opened the proceedings with a speech pledging economic liberalization. Zhang can help Katzenberg grease his way into the Chinese box-office, and hire Chinese animators at bargain wages. “I believe in the leadership here,” Katzenberg said in Beijing Thursday. Of course he does. They’ve made him filthy, stinking rich.

Money is a universal language that levels barriers of partisanship and ethnicity, a language that makes the avoidance of inconvenient facts so much easier. The wealth that the participants in the Fortune Global Forum have amassed, or are hoping to amass, from working with the Chinese one-party state anesthetizes them from concerns about food safety, or intellectual property theft, or industrial espionage, or cyber-war, or regional bullying. The fact that China uses American dollars to build its military capacity and maintain the brutal and unpredictable Kim regime in North Korea must seem inconsequential from inside the personal sauna in the Shangri-La’s presidential suite. Repression of political dissidents and religious persecution are minor affairs when your attention is fixed on a serving of thinly sliced pork belly and vegetable roll served with garlic sauce.

Money is not the only thing the American participants have in common. Looking over the list of attendees, I can easily imagine the political content of the conversations now taking place in the Fu River Room. We are becoming a global village. China is waxing and America is waning. Hard power is a relic. Trade agreements maintaining the flow of cheap imports from China must be supported and expanded. Immigration adds without cost to the diversity and growth of Western nations. Low wages boost productivity. Mass shootings will stop if we have stricter gun controls. The West must impose taxes to cut carbon emissions. Alternative fuels deserve government support until they can stand on their own. Americans must put aside their petty differences and work together to solve real problems. Republican wacko birds will be the doom of the GOP. Time for conservatives to put the social issues aside, to avoid controversial topics of life and marriage and religious liberty and euthanasia and drugs, to be hip and get down with the vibrant consumerism of the Millennial generation, the fiscally conservative, socially liberal wave of the future.

Such unanimity of opinion is a defining group trait. But of which group? The populist Five Star Movement in Italy identifies itself as an opponent of what it calls “il casta”: The caste that rules its country. Into this category the Five Star Movement places the establishments of the major Italian political parties and the electronic and periodical press, all of the elites who helped bring Italy to the brink on which it looms today. But the caste is not just an Italian phenomenon. The Fortune Global Forum shows it is a global one.

The financial crisis and Great Recession revealed how elites in finance, government, and media profit no matter the circumstances. Back in 2008, governments responded to an economic meltdown by rewarding the very institutions, public and private, behind the meltdown. In Europe, statesmen and bureaucrats stuck with their twin policy of European integration and multiculturalism despite the human misery those policies have created. In America, the crisis was used to advance a program of government regulation of major corporations—banks, health insurers—while the creation of a global economy of mobile goods, capital, and labor proceeded as before. The growth of the state coincided with, and perhaps was dependent on, an increase in individual autonomy and emancipation from the strictures of orthodox religion.

What was significant was the way in which those left behind were politely ignored, handed government transfers that can never replace community or partnership. What was significant was the way in which the connections between globalization and liberalization and social stratification and inequality were overlooked or dismissed to accommodate modish political correctness. What was significant was the lack of imaginative thinking among the men and women in government and politics, and the moral postures liberals assumed to assert their superiority over conservatives.

Obama sits at the pinnacle of the American caste. Ivy educated, cosmopolitan, a millionaire and celebrity with a global outlook who is careful not to rock the boat even as he repeats clichés on the topic of the day, Obama is without question the biggest winner of the last five years. But he is not one of a kind. From strivers in the upper-middle class to billionaires who stalk the globe like Bloomberg, Gates, and Buffett, from Republicans who say their party must diversify and moderate in order to win, to Democrats who move from criticizing hedge funds in government to flacking for hedge funds when they are out, from reporters who fetishize the concept of “objectivity” on the one hand while making snarky and petty comments about social inferiors on the other, the caste is composed of all of the winners in the postmodern economic Powerball. You see them in the coffee shops and chic restaurants, in the gentrifying neighborhoods of coastal cities, you hear them discuss their latest trips overseas, you read their food and politics blogs and oh so clever twitter feeds. They are the leaners in, the up-and-comers, the bright young things (and a few dim old ones) whose smarminess is like an ID badge.

Mike Allen’s Politico Playbook is their bulletin board. Must reading, Playbook is where one learns of General David Petraeus’s new gig at private equity firm KKR; of Christiane Amanpour and James P. Rubin, “who have been renting on Manhattan’s Upper West Side,” but who “leave for Europe next week with their 13-year-old son, Darius,” returning to “a house they have rented out in the Kensington/Notting Hill neighborhood of London, which they left at the end of 2007 after a decompression period.” This is where one learns of outgoing Columbia Journalism School dean Nicholas Lemann’s presentation of the Mike Berger Award for Outstanding Human Interest Reporting to Dr. Sheri Fink of ProPublica, the left-leaning journalism outfit to which IRS employees leaked classified tax information; of the engagement of “Today Show” co-anchor Savannah Guthrie to Michael Feldman of the Democratic consultancy Glover Park Group; and of Glover Park’s Alec Gerlach’s move to the State Department’s Public Affairs Bureau. Filled with in-jokes and Easter Eggs, self-promotion and self-congratulation, Playbook is a sort of Rosetta stone through which one learns the rhetoric of the caste.

Life is difficult for the uninitiated. The Tea Party members and supporters of Ted Cruz, the opponents of immigration amnesty and same-sex marriage and abortion and taxpayer-subsidized contraception, the critics of trade agreements that open America to foreign products without opening foreign countries to American ones, the advocates of drilling and fracking and building pipelines and refineries, critics of multilateralism and global governance, pro-Israel and Second Amendment activists, members of the white working class and others who have not seen wages rise or incomes improve for years, for whom long term unemployment continues to persist—all these must endure the scorn and mockery and animus of the caste. They are the low-skilled worker whom illegal immigration will price out of the market, the Tea Party organizer singled out by the IRS, the mother and father desperately trying to shield their children from what they see as a depraved culture. They do not go to Shangri-La, and unlike Mr. Smith they do not go to Washington, which they look upon with a jaundiced eye as the capital busies itself with issues—immigration reform, gun control, Obamacare—irrelevant or inimical to their everyday concerns.

What observers of American politics tend to misunderstand is that the differences of opinion among the caste are differences of degree, not kind. One of its wings wants more government transfer payments and regulation, and the other wing wants less. The caste will find a way to make a nice living either way. But if you took a poll of American attendees of the Fortune Global Forum, or attendees of the Davos World Forum, I seriously doubt you would find much disagreement at all on matters of sex and religion, immigration and trade, equality and diversity, environment and ecology. On such issues the consensus is ironclad. In this sense the encomiums to globalization one hears at the Obama-Xi summit, and at confabs like the Global Forum, are more than bromides. They are serious commitments, passionately held, that signify membership in the political- financial-media caste that profits from mortgaging the American future, piece by piece.