Ivo Vegter: Davos - A tale of two speeches

Key topics:Carney warns middle powers: rules-based order is over, adapt wisely.Trump’s Davos speech full of false claims, insults, and confusion.Sharp contrast: statesmanship vs lies, racism, and economic errors..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Ivo Vegter*.The fractures in world politics were on full display at the World Economic Forum this week, as two very different leaders took the podium.Two special addresses offered a dramatic contrast at this annual gathering of the world’s business, government and civil society elite in the Alpine resort town of Davos, Switzerland.One speech was concise, dignified, polished and statesmanlike. The other ran well over the allotted one-hour time, and was self-aggrandising, rambling, littered with personal insults, and punctuated by blatant dishonesty, rank ignorance and outright racism.It will grieve MAGA cultists to learn that their supreme leader, Donald Trump, was responsible for the second of these speeches. It was like watching a 72-minute train crash. Just when you thought it couldn’t get any worse, more carriages came barrelling down the tracks to join the pile-up.But let’s start with an address that will reverberate in the halls of geopolitics for years: by Mark Carney, prime minister of Canada (or as Trump likes to say, Governor Carney of the Great 51st State of America).Thucycidean TrapCarney’s speech, all of 17 minutes long, was well written, and delivered with gravitas and grace.Beginning in French, Canada’s second official language and the international language of diplomacy, Carney – without naming any particular leader or great power – spoke of “a rupture in the world order, the end of a pleasant fiction, and the beginning of a harsh reality in geopolitics where the great powers submit to no limits, no constraints.”.Read more:.Mark Carney in Davos - A path for countries like SA caught between US and China elephants.He paraphrased Thucydides, the first modern historian (whose History of the Peloponnesian War written in the 5th century BCE happens to be open on my bedside reader): “The strong can do what they can and the weak must suffer what they must.”This idea is often viewed as the cornerstone of political realism – that the world is at root anarchic and so the only rational foreign policy is to act according to your own power and interests. It is also known as the Thucydidean Trap.The line comes from the Melian Dialogue, which happened after the Athenians sent a force to the island of Melos, and demanded its unconditional surrender. The Melians, knowing they were outmatched, pleaded with the Athenians to relent, for the sake of justice and because such unprovoked aggression would destroy any trust other neutral parties might have had in the Athenians. The Athenians, more afraid of looking weak, told the Melians: “Questions of justice apply only between equals; otherwise the powerful exact what they can and the weak endure what they must.”It was an inspired quotation from Carney; entirely apt.Perhaps mindful of the words of Aeschylus in Agamemnon (“What! To prolong our lives shall we thus submit to the rule of those defilers of the house? / No, it is not to be endured. No, death would be better, for that would be a milder lot than tyranny.”), the Melians mounted a doomed resistance to the Athenian siege. All that survived was their honour.“Faced with this logic,” Carney said, “there is a strong tendency for countries to go along to get along, to accommodate, to avoid trouble, to hope that compliance will buy safety. Well, it won’t.”Useful fictionCarney urged middle powers like his own country, Canada, to recognise that the rules-based international order was over.“For decades,” he said, “countries like Canada prospered under what we called the rules-based international order. We joined its institutions. We praised its principles. We benefited from its predictability. And because of that, we could pursue values-based foreign policies under its protection.“We knew the story of the international rules-based order was partially false. That the strongest would exempt themselves when convenient. That trade rules were enforced asymmetrically. And we knew that international law applied with varying rigor depending on the identity of the accused or the victim.“This fiction was useful and American hegemony in particular helped provide public goods, open sea lanes, a stable financial system, collective security and support for frameworks for resolving disputes.”Carney drew on Vaclav Havel, the former anti-communist dissident who lived to become president of first Czechoslovakia, and later the Czech Republic, who in 1978 wrote a seminal essay on dissenting under communist rule, entitled The Power of the Powerless.He noted that systems have power not because they are true, but because ordinary people perform as if it were true. Systems survive as long as people follow the rules, and act with compliance. “Havel called this ‘living within a lie’,” Carney said.The old fiction, the international rules-based order, he said, has ended. He was clear to label it a “rupture”, and not a “transition”, because there is nothing gradual or temporary about it.Weaponised globalisationGreat powers, he said, have weaponised globalisation. They “have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.”This necessitates a strategic reassessment on the part of lesser powers, to become less dependent on great powers, to diversify their risk, and to become more resilient to pressure. He regrets that this world will be poorer, more fragile, and less sustainable, but adapt his country and others must.“The question is whether we adapt by simply building higher walls or whether we can do something more ambitious. …[O]ur new approach rests on what Alexander Stubb, the president of Finland, has termed value-based realism. Or to put it another way, we aim to be both principled and pragmatic.“Principled in our commitment to fundamental values, sovereignty, territorial integrity, the prohibition of the use of force except when consistent with the UN charter, and respect for human rights. And pragmatic in recognising that progress is often incremental, that interests diverge, that not every partner will share all of our values.“So, we’re engaging broadly, strategically with open eyes. We actively take on the world as it is, not wait around for a world we wish to be. We are calibrating our relationships so their depth reflects our values. And we’re prioritising broad engagement to maximise our influence given the fluidity of the world at the moment.”He added that Canada, like other middle powers, could not rely only upon its values, but must now focus on building both economic and defensive military strength at home.And it was already doing so, he said, listing domestic investment, tax reductions, removal of internal trade barriers, increasing defence spending, and numerous new trade deals, security compacts and strategic partnerships with a wide variety of countries and supra-national groups.“[D]ifferent coalitions for different issues based on common values and interest,” is how he described it.Galvanising, statesmanlikeHe concluded with a call to action: “We know the old order is not coming back. We shouldn’t mourn it. Nostalgia is not a strategy. But we believe that from the fracture, we can build something bigger, better, stronger, more just.“This is the task of the middle powers, the countries that have the most to lose from a world of fortresses and the most to gain from genuine cooperation. The powerful have their power, but we have something too. The capacity to stop pretending, to name reality, to build our strength at home, and to act together.“That is Canada’s path. We choose it openly and confidently, and it is a path wide open to any country willing to take it with us.”Carney’s address was rhetorically sophisticated, intellectually coherent, and strategically ambitious. It threw cold water in the face of complacency and naïve hope, and extolled the principles of democracy, pluralism and human rights that must remain a moral lodestone for the free world.He might have overstated Canada’s actual power, and underplayed the challenges of building and maintaining a complex web of diversified coalitions, but his address was a galvanising, inspirational, statesmanlike performance.Mark Carney drew a standing ovation.UngratefulDonald Trump didn’t like Carney’s speech very much. “Canada gets a lot of freebies from us by the way. They should be grateful also, but they’re not. I watched your prime minister yesterday. He wasn’t so grateful. But they should be grateful to us. Canada, Canada lives because of the United States. Remember that, Mark, the next time you make your statements.”Coming as it did 46 minutes into Trump’s speech, his tone was hardly surprising. It permeated his whole address.The admonishment of Carney came hot on the heels of one of the more egregiously dishonest passages in Trump’s rambling, disjointed speech, in which he mostly rehashed what we already know about US foreign policy.Explaining why the US deserves to be given Greenland, Trump said: “We never asked for anything, and we never got anything. … [W]hat we have gotten out of NATO is nothing except to protect Europe from the Soviet Union and now Russia. I mean we’ve helped them for so many years. We’ve never gotten anything except we pay for NATO and we paid for many years until I came along. We paid for in my opinion 100% of NATO because they weren’t paying their bills. And all we’re asking for is to get Greenland including right title and ownership because you need the ownership to defend it.”Sounds almost reasonable, doesn’t it?Except that none of that is true. Direct funding of NATO is supposed to be proportional to each member’s gross national income. The US represents about 45% of NATO’s GNI, but only funds 15.8813% of NATO’s expenses. Germany funds the exact same share, despite having a much smaller economy. In terms of direct funding, therefore, the rest of NATO has been carrying the US.In terms of military spending, it is also not true to claim the US “paid for… 100% of NATO”. Sure, NATO members sharply increased their defence spending in recent years, but it’s a toss-up whether that is at Trump’s demand, or because a country that borders NATO’s eastern flank was invaded by Russia, and Russia has expressed ambitions to expand further into Europe.So either way, that’s a lieMore pertinently, the only time NATO ever invokedArticle 5, mandating common defence, was on 12 September 2001, on behalf of the United States. On 3 October 2001, the US formally requested NATO assistance (which NATO granted the next day) with various needs, ranging from intelligence sharing and increased security at US facilities on NATO territory, to deployment of naval and air resources to assist the US.Most NATO members also participated in Operation Enduring Freedom in Afghanistan in 2001, and NATO led the UN-mandated International Security Assistance Force to Afghanistan in 2003.So the US absolutely asked NATO for assistance, and got it, in a way that no other NATO member has ever done. To turn Trump’s quote around on the US: “They should be grateful also, but they’re not.”Speaking GermanThat wasn’t the only groan-worthy part of Chairman Don’s speech. He made a cheesy and clichéd joke about the US contribution to the Second World War effort: “Without us right now, you’d all be speaking German and a little Japanese perhaps.”That rudely disrespects the millions of Allied soldiers and civilians who died in the war against fascism – especially the Soviet Union, which bore the brunt of the German onslaught, and without which the Americans would have been far too late to the party.Worse, though, is that Trump thought that joke might land well in Davos, Switzerland, where the people literally all speak German.Senility and ignoranceTrump’s growing senility was on full display as he repeatedly referred to Greenland as “Iceland”.He also repeated his notorious story about “a pill” (a pill which he has never identified, to my knowledge) that supposedly costs $130 in New York or Los Angeles, and costs $10 in London. This irks the Don.He said: “So our drug prices are going to be coming down by a staggering 90%. Again, you could say a 1,000%, 2,000%. Depends on the way you want to figure it.”No, Donald. You couldn’t say that, and if that was the way you wanted to figure it in your fifth grade exam, it would have been marked wrong, because it is wrong.Just because an increase from $10 to $130 could be expressed as 1,300% does not mean a decrease from $130 to $10 can also be expressed as 1,300%. That’s not how percentages (which are really just ratios) work. A 1,300% decrease from $130 would be minus $1,560, which would make no sense. This is elementary school stuff.Anyway, Trump blames Emmanuel Macron for America’s high drug prices. He demanded that Macron increase drug prices in France, because he believes the US effectively subsidises low drug prices in France. Failing to do so, he would raise punitive tariffs on French exports, because Trump always negotiates with a gun against his supposed ally’s head.The US does subsidise lower drug prices in Europe, in a way, but not in the way that Trump thinks. In particular, raising drug prices by government fiat in Europe will do nothing to lower drug prices in the US.The difference is that European countries, for the most part, have single-payer systems that have significant negotiating power. They use that monopsony power (single buyer, as opposed to monopoly, which is a single seller) to drive prices down. Europe also mandates shorter terms on drug patents, which means that cheaper generics are faster to market in Europe than in the US.The price European citizens pay for this state intervention in drug prices is that they get slower access to new drugs, they don’t get access to advanced drugs at all (because of a bureaucratic calculation involving number of life-years saved), and they spend weeks, months, or even years on waiting lists because healthcare in Europe is free or cheap, but strictly rationed.The US, by contrast, refuses to do business this way. It doesn’t want the universal healthcare system that would result in lower drug prices (but would also result in far less innovation, long queues, and the loss of market leadership in pharmaceuticals).So no, it’s not Macron’s fault, and slapping 100% tariffs on champagne isn’t going to make that $130 pill cost $10, or $20, as Trump appears to think.For good measure, Trump rudely insulted Macron, who wore sunglasses during his earlier speech. “What the hell happened?” he asked, derisively.It’s none of Trump’s business what happened, and trying to embarrass Macron on a global stage isn’t the flex Trump thinks it is. It shows him to be petty and cruel.Swiss watchesMacron wasn’t the only recipient of base insults at the hands of Trump.He gleefully told a story about Switzerland and its watches, which just showed off his economic illiteracy..Read more:.Trump’s boldest speech yet: Tariffs, taxes, and tumult – and the truth behind his claims.“[Switzerland] were paying nothing. They make beautiful watches, great watches, Rolex, all of them. They were paying nothing to the United States when they sent their product in.”Well, why should they? When you buy something from a shop, you pay the shop. The shop doesn’t pay you. When an American buys a watch from a Swiss watchmaker, the American pays the Swiss watchmaker. Why would anyone pay anything to the American government for the privilege of conducting a simple purchase?So Trump is upset about the $41 billion trade deficit the US has with Switzerland. This reflects the fact that Americans buy more stuff from Switzerland than Swiss people buy from America. Which makes sense, given Switzerland’s size and location.But to Trump, this is a grave injustice. “But I then realised that they’re only good because of us.”The Swiss will be delighted to hear that they owe their skill at watchmaking to the US.“So I said, ‘Let’s put a 30% tariff on them. So that we get back some of it. Not all of it at all. We still have a deficit. Big deficit. We had 40, 41 million.” (No, gramps, it’s billion.)Then, as Trump tells it, “All hell broke loose.”He said: “And the I guess prime minister, I don’t think president, I think prime minister called – a woman – and she was very repetitive.”It wasn’t a prime minister. Switzerland does not have a prime minister. It has a seven-member Federal Council, which has an annually rotating presidency. The President of the Swiss Confederation, in 2025, was Karin Keller-Sutter, or “a woman”, as Trump dismissively said.“She said, ‘No, no, no, you cannot do that, 30%. You cannot do that. We are a small, small country.’ I said, ‘Yeah but you have a big, big deficit. You may be small, but you have a bigger deficit than big countries.’ … Kept saying the same thing over and over. … And she just rubbed me the wrong way. I’ll be honest with you. And I said, ‘All right. Thank you, ma’am. Appreciate it.’ And I made it 39%.’”That’ll teach a mere woman, of forgettable name and indeterminate office, to try to explain basic economics to the mighty, macho Trump!Other lies“We gave Greenland back to Denmark,” he said about defending Greenland during World War II. “How stupid were we to do that? But we did it. We gave it back. But how ungrateful are they now?”Not true. The US occupied Greenland, like Germany occupied Denmark, but itnever took formal possession of Greenland, and therefore could not have given it back. In fact, after the war, it offered to buy Greenland – an offer which Denmark firmly rejected.“China makes almost all of the windmills,” Trump said, “and yet, I haven’t been able to find any wind farms in China. Did you ever think of that?”No, I didn’t, because that’s not true.“It’s a good way of looking at how they’re smart. China is very smart. They make them. They sell them for a fortune. They sell them to the stupid people that buy them, but they don’t use them themselves.”That’s a good way to tell if Trump is smart. China happens to be the single biggest user of wind power in the world, and it is building wind farms faster than any other country.Now I’m not saying wind farms are smart investments, but it simply isn’t true that China doesn’t use wind power itself.“Biden and his allies destroyed our economy and gave us perhaps the worst inflation in American history,” Trump said.No, they didn’t destroy the economy. The spike in inflation was caused not by Biden, but by the coronavirus pandemic lockdowns, which started under Trump. By the end of Biden’s term in office, US inflation was back under control, below 3%, where it still is. Trump’s claim to have defeated inflation himself is simply not true. Biden also left behind an economy that had consistently grown by well over 2% for two years. It was the single best-performing advanced economy in the world. It wasn’t “destroyed”.Blatant racismThen we got to the Somalians. Some Somalians were involved in a fraud scheme – masterminded by a white American woman – in Minnesota.Cue Trump: “But equally importantly, we’re cracking down on more than $19 billion dollars in fraud that was stolen by Somalian bandits. Can you believe that? Somalia? They turned out to be higher IQ than we thought. I always say these are low IQ people. How did they go into Minnesota and steal all that money?”If you “always say” that people from Somalia are “low IQ people”, then you’re a racist.He also calls Ilhan Omar, a Somalian immigrant who has been an American citizen for over 25 years and serves as a Member of Congress for Minnesota, a “fake congressperson”. He adds: “She comes from a country that’s not a country and she’s telling us how to run America.”That’s because she was elected, in her district, to help run America, Mr President. She was eligible to run, she ran, and was elected. Now I don’t like her politics any more than you do, but why resort to racist insults, instead of substantive engagement with her policy positions?I know why, because racist, macho bullying is all Trump is good at.Insults and liesI could go on. It is hard to tell when Trump is telling the truth, because he spends all his time bragging about how smart he is, or how smart other people say he is, or lying about his record, or hurling gratuitous insults at anyone and everyone who stands in his way.The contrast with the statesmanship and class of Mark Carney is startling.I don’t always agree with Carney’s policy positions either, but I sure know who I respect more as a political leader..*Ivo Vegter is a freelance journalist, columnist and speaker who loves debunking myths and misconceptions, and addresses topics from the perspective of individual liberty and free markets..This article was first published by Daily Friend and is republished with permission

Ivo Vegter: Davos - A tale of two speeches

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