What's wrong with Davos is not just disguised self-interest or status-seeking decadence. It's something deeper, something at the very heart of the enterprise. Even if we completely shed our cynicism about Davos, we'd still find it irredeemably flawed. And that's because even in its most idealized form Davos is built around a mistake.
The easiest way to see that mistake is through the words of Andrew Ross Sorkin. His column this week was an investigation into why some of the sort of people who some think should be at Davos refuse to attend. It was also a lament over this absence because the absence interferes with the work of the Davos luminaries.
"The progress they make—or try to make—may be praiseworthy. But at a time when globalization has so transformed business and economics, and at an event that bills itself as drawing the top stakeholders, it easy to understand why it is so difficult to make progress on the big issues when so many key people are not in the room," Sorkin writes.
The not quite explicit premise here is that "progress on the big issues" is something that occurs as the outcome of the efforts of "key people," which is to say the "bold-faced names" who get invited to Davos. This is the basic assumption of Davos—and it is completely without grounding in reality.
This confidence in the ability of people who have been successful in business, politics or global bureaucracies to bring about a better world is unwarranted. It appears to be based on a kind of cult of success, a notion that rising to the top of the global hierarchies of power and wealth implies a kind of expertise about worldly matters.
The effectiveness of the folks at Davos is not even really up for question. So the purpose of Davos is to marshal that effectiveness into making progress on big issues.
The truth is that there's no evidence to support this presumption of effectiveness. To put it even more strongly, it's a pretty good bet that this kind of expertise and therefore effectiveness is a kind of social illusion because the kind of knowledge that would be needed to sustain it just doesn't exist.
No one has the kind of power the folks at Davos think they do because no one has the kind of knowledge that would be required to wield that kind of power.
(Read more: The miseries of a Davos wife)
That's why some of the more paranoid attacks against Davos are wrong, by the way. The Davos crowd does not control the world, as some would have it. They don't even control the small parts of the world they imagine they do.
Business leaders don't really control their corporations and heads of state don't control their states. The touted organizational skills and expertise of Davos Man produce the desired effects so unpredictably and unsystematically that it's safe to say they are just coincidental.
What we mistake for success is closer to a priest praying for rain just before a storm hits.
The usual rejoinder to this is that if the successful were so powerless and ignorant they couldn't possibly be so successful. How could, say, Brady Dougan, the head of Credit Suisse, be as wealthy and as powerful as he is in a meritocratic system if he weren't imbued with the powers and habits that we associate with "highly effective people"?
Doesn't success in a capitalist and Democratic system at least imply some higher level of brilliance, foresight or competence? Or, to put it differently, if our system wasn't geared toward rewarding brilliance and foresight, how could we explain the prosperity that so much of the world has unquestionably experienced over the last hundred years?
The answer is quite simple: that's not how markets work. Our prosperity is not, fortunately, dependent on brilliance, foresight, honesty or vision. It is the result of market processes that allow enterprises that best deliver satisfaction to thrive and punish those that fail at this with bankruptcy or liquidation.
There is, of course, no way of telling in advance which enterprises will thrive and which will fail—if there were, no one would invest their time or efforts in the enterprises doomed to fail.