After Governance: Davos and the Rituals of Late Hegemony

Davos performs the rituals of global governance after the power that once sustained them has ebbed. The annual gathering at Davos continues to convene the same cast—executives, ministers, central bankers, former heads of state—yet something has shifted in the character of the performance. Panels proliferate on resilience, fragmentation, climate coordination, and the "rules-based system." Coalitions are announced with familiar fanfare. Values are reaffirmed in familiar terms. The procedural confidence remains but what lies beneath it, the structural absence of any actor present who is willing or able to absorb the disproportionate costs required to stabilize the system, has vanished.

This situation is better understood as institutional lag than as hypocrisy or failure of will. The most useful analytical framework for making sense of it is Giovanni Arrighi's account of hegemonic cycles, which argued that such orders rise by organizing production, mature by organizing finance, and decline when they can no longer underwrite system-wide stability. In this late phase, governance does not simply disappear but becomes ritualized. Institutions persist after their material foundations erode and procedural continuity gets mistaken for effective power. The World Economic Forum (WEF) serves as the exemplary site of this afterlife. What presents itself as moral urgency at Davos might be better read as substitution with ethics rushing in where material capacity once stood; what gets described as fragmentation looks rather more like a system operating without a hegemon; and what gets proposed as coordination increasingly amounts to process without the asymmetry that governance has historically required: administration without an actor prepared to pay.

Most commentary on Davos makes an aesthetic (rather than an analytical) error. It treats the present disorder as aberration or mismanagement, when the evidence points towards a shift in the structure of accumulation itself. Arrighi's framework does not predict outcomes but it does narrow the field of plausible explanations. Read through that lens, the Davos spectacle becomes more diagnostic: a reliquary of governance practices preserved well after the capacity to make them effective has drained away.

Cycles, Capacity, the Cost of Order

Arrighi's framework, though deceptively spare in its formulation, offers explanatory power. Hegemonic powers, he argued, rise by organizing production, mature by organizing finance, and decline when they can no longer absorb the costs required to stabilize accumulation at a systemic scale. The WEF belongs recognizably to this third phase. It functions less as a forum for the construction of order than as a gathering devoted to its maintenance in memory.

Across successive hegemonic cycles—from Italian city-states through the Dutch Republic and Britain to the United States—Arrighi identified a recurring sequence. Periods of material expansion, rooted in production and trade, give way to financial expansion. This turn to finance is not, in his account, a deviation from success but rather its culmination. It signals that earlier organizational advantages have been exhausted, and that accumulation now proceeds primarily by managing claims rather than building productive capacity.

What follows this shift is not immediate collapse but a particular kind of strain. Governance becomes more difficult to exercise precisely when it is most insistently invoked. Rules multiply even as enforcement capacity thins. Coordination becomes increasingly procedural as material leadership recedes. The system does not fall apart in any dramatic sense. Actually, it continues to function but without a center capable of underwriting losses, absorbing shocks, or enforcing discipline across the whole.

Arrighi's key diagnostic question is therefore straightforward but brutally clarifying: who pays? Not who convenes, not who coordinates, not who declares values, but which actor proves willing to incur disproportionate costs in order to keep the system stable. Hegemony, in this analytical framework, is not primarily about dominance or moral authority, it refers to the capacity to socialize risk and defer crisis on behalf of the system as a whole. When we apply this lens to the contemporary fixation at Davos on 'resilience,' 'fragmentation,' and 'polycrisis,' these terms begin to look less like analysis than like a description of how disorder feels once systemic capacity has thinned. They do not explain why that capacity has ebbed, nor do they suggest how it might plausibly be restored. The problem, from this vantage point, is not complexity as such but the absence of an actor that's willing and able to underwrite order at scale.

This distinction matters because it allows us to separate governance from the performance of governance. In late hegemony, the two increasingly diverge. Ritual survives substance. Process substitutes for power. And coordination gets endlessly discussed precisely because the material basis that once made it effective is no longer sufficiently present. From Financialization to Moralization

One of Arrighi's more underappreciated insights concerns what happens to discourse when material leadership exhausts itself. The condition eschews silence for speech. Alot more of it, and of a very particular kind. As accumulation detaches from production and governance capacity thins, moral language tends to intensify. Ethics, we might say, rushes in where underwriting once loved to tread.

The contemporary preoccupations at Davos make considerably more sense against this backdrop. Stakeholder capitalism, values-based coordination, climate responsibility, and resilience are not straightforwardly cynical inventions. They function plausibly as compensatory forms. When capital no longer organizes production at scale, and when states no longer absorb losses system-wide, legitimacy gets sought instead through the articulation of norms rather than material commitment.

This relationship is not accidental. Financialized orders depend heavily on confidence, expectation management, and narrative coherence in ways that productive orders do not, and moral vocabularies perform precisely this kind of work. They reassure participants that coordination remains possible even as the means of enforcing it recede from view. The louder the ethical insistence tends to be, the more attenuated the underlying capacity generally proves to be.

This dynamic helps explain why discussions at Davos so often feel simultaneously urgent and weightless. Panels on climate finance proliferate, yet no actor commits concretely to underwriting a transition at anything like the scale required. Declarations multiply with impressive regularity, while mechanisms capable of imposing losses or redistributing risk remain conspicuously absent. What gets presented as ambition functions in practice as substitution.

Understood this way, the familiar charge of hypocrisy misses the point. The WEF is not cynically lying about its intentions, in fact most participants appear to believe them sincerely. The problem is structural rather than moral. Ethical intensification serves not as evidence of bad faith but a reliable indicator of exhaustion. It marks the point at which a system can still speak fluently in the language of governance but no longer commands the material means to enact it.

Arrighi's framework helps explain why this pattern recurs across hegemonic transitions. In late phases, the organizational advantages that once sustained leadership have already been, in effect, cashed in. Finance expands not because elites consciously prefer it to production but because production can no longer reliably deliver comparable returns. Moral discourse then follows naturally enough, filling the gap left by declining material capacity with increasingly elaborate claims about responsibility, coordination, and shared purpose.

The WEF, in this reading, functions less as a conspiracy of bad actors (though they proliferate) than a structural symptom of transition. It serves as the site where a financialized order explains itself to itself—earnestly, fluently and accompanied by a diminishing material effect. Middle Powers and the Category Error The natural response to thinning hegemonic capacity has been to search for institutional substitutes. If no single actor can underwrite order any longer, perhaps many can do so collectively. This intuition drives much of the current enthusiasm for 'middle-power coalitions,' whether framed as climate clubs, rules-based alliances, or coalitions of the willing.

This move tends to misfire, however, as governance of the kind that stabilizes accumulation does not emerge from coordination alone. It requires asymmetry of a specific sort. Historical orders have been stabilized not by the sheer number of participating actors but the presence of a single actor willing to absorb disproportionate costs—financial, political, and strategic—on behalf of the system as a whole.

The historical precedents often invoked in defense of coalition-building do not, on closer examination, contradict this analysis. The postwar multilateral order was not founded by middle powers acting in concert as equals. It was organized explicitly within an American hegemonic structure that provided material underwriting. The Marshall Plan was not an exercise in coordination among peers; it represented massive cost absorption by a single actor. Western Europe, Canada and Japan administered and benefited from an order whose asymmetries were entirely clear and whose center was demonstrably prepared to underwrite losses at considerable scale.

Contemporary middle-power proposals tend to invert that structure and attempt to coordinate in the explicit absence of a hegemon, mistaking procedural density for material capacity. What gets presented as leadership functions in practice as administration without an order to administer, or process without a patron willing to pay for its enforcement.

This distinction matters analytically because it explains the repeated stalling of such initiatives with considerable precision. Climate finance clubs lack credible enforcement mechanisms. Strategic autonomy frameworks proliferate impressively on paper but without serious fiscal backing. Declarations multiply in number and scope, yet no participating actor assumes concrete responsibility for systemic risk. The language of leadership persists intact but the material function has evaporated.

What presents itself as coalition-building therefore involves something closer to a category error. Middle powers can effectively run an order once it exists and once its terms have been established but they have not historically proven able to found one from scratch. Coordination without an actor willing to underwrite losses is not a new model of governance, it is what remains of the old model after its material basis has disappeared.

Greenland and the Return of Territory as Insurance The renewed American interest in Greenland has been treated in commentary as eccentric at best—an anachronistic land grab seemingly out of place in a world supposedly organized by markets, rules, and institutions. Read through an Arrighian lens, however, it appears less aberrant.

In late hegemonic phases, universalist claims characteristically thin out. Power stops presenting itself credibly as the organizer of a system and begins instead to secure itself positionally. Territory returns as a strategic concern, though not in the form of classical empire but rather as a form of insurance against systemic volatility.

Greenland is not coveted because it promises integration or development in any traditional sense. It matters because it sits astride emerging Arctic shipping routes; because it offers denial capacity in an increasingly fragmented strategic environment. Its value is defensive and positional rather than expansive in character. It functions as a hedge against volatility rather than as a bid to organize order at a larger scale.

Arrighi's long historical view helps clarify this shift. Earlier hegemonies moved characteristically from territorial conquest toward capitalist expansion, and from capitalism toward finance. What we observe now is not a simple reversal of that sequence but something more complex: a layering in which territorial logic re-emerges precisely when financialized universalism can no longer credibly secure stability. When the system ceases to be governable as a coherent whole, actors predictably fall back on control over choke points, strategic insulation, and irreducible physical assets.

This is why American interest in Greenland surfaces at precisely the same moment that Davos discourse speaks incessantly of fragmentation. The two are not opposed phenomena but rather complementary expressions of a single underlying condition. As the capacity to organize accumulation globally recedes, power reattaches itself to geography—to shipping lanes, mineral deposits, infrastructure nodes, anything that can be secured without requiring systemic consent or collective agreement.

Understood this way, Greenland does not represent a simple regression to nineteenth-century imperialism but a distinctively twenty-first-century response to late-system disorder. It indicates the point at which universalist governance gives way to positional security, and where the management of specific risks replaces the larger ambition to organize order as such. Trump and Late-Hegemonic Candor

If Greenland illustrates the structural logic of late hegemony in territorial terms, Donald Trump supplied its rhetorical form. What appeared to unsettle Davos audiences about Trump was not primarily his use of coercion but his candor. His main sin being to have abandoned the universalist language that earlier hegemons continued to deploy long after it had ceased to organize material reality.

Arrighi's framework anticipated the behavior pattern but not its distinctive tone. Late hegemons have consistently relied more on coercion as their capacity for consensual governance diminishes. The United States itself did so quite dramatically in the 1970s, abandoning Bretton Woods convertibility when absorbing others' claims became materially unsustainable. What distinguishes the Trump moment is the relatively open repudiation of the pretense that such coercion serves a universal order. Alliance relationships get priced explicitly as invoices. Security guarantees get treated as transactions requiring payment. Norms get invoked instrumentally or discarded outright when inconvenient.

This represents not a retreat from hegemonic assertion but a particular form of late assertion. Trump's insistence that allies "pay their share" was widely read as populist vandalism of the established order. Read through an Arrighian lens, it looks more like balance-sheet realism: a hegemon no longer willing, or materially able, to absorb costs on behalf of other actors, but still powerful enough to demand a degree of compliance. Functional dominance persists even as justificatory language collapses.

The contrast with earlier episodes of hegemonic decline proves instructive here. Britain continued to speak the language of free trade even as it retreated in practice into imperial preference. The United States under Trump simply did not bother with such rhetorical cover. What distinguishes the recent period is not the erosion of genuine consent—that process had been underway for decades—but rather the willingness to acknowledge it openly. Universalism was not quietly violated in practice while being maintained in rhetoric: it was explicitly disavowed.

This candor horrified Davos participants because it exposed the gap that the ritual exists specifically to conceal. Trump gave voice to what the system had already made structurally true: that coordination without material underwriting proves unsustainable over time, and that leadership without cost absorption tends to degenerate into bargaining among unequals. He did not create this underlying condition; he named it. He may have named it crudely but his words had sufficient accuracy to shatter the prevailing pretense that governance could be restored through better rhetoric alone.

In this analytical frame, Trump should perhaps be read not as an aberration from the Davos order but as something closer to its involuntary truth-teller. He gave relatively direct voice to the logic that Greenland embodies and that Davos gatherings systematically refuse to acknowledge: a hegemon that retains capacity to coerce but can no longer organize widespread consent will eventually stop pretending otherwise. China, the Absent Center Any serious application of Arrighi to the present moment inevitably raises the China question. And Davos's treatment of it serves as among the clearest indicators of elite cognitive lag. Arrighi himself entertained, particularly in his later work, the possibility that Beijing might emerge as the next center of systemic leadership, organizing accumulation along lines that would differ considerably from American universalism. Whether that prospect remains plausible is now subject to intense debate among analysts. What matters for present purposes is not the answer but the distinctive posture that Davos adopts toward it.

The WEF behaves as if the issue can be indefinitely deferred. China gets discussed regularly as a participant in the existing system, as a source of various risks, or as a problem requiring management, but rarely as a potential organizer of a different kind of order, and almost never as an actor that might prove capable of imposing new terms of governance on its own authority. The forum remains oriented primarily toward the management of an American-centered system that no longer functions as originally designed, while it declines to confront seriously either of the two futures that Arrighi's framework suggests as plausible: hegemonic transition to a new center, or prolonged fragmentation without hegemonic organization.

This refusal is revealing when examined closely. The issue is not that Davos participants deny China's material weight in the global economy. The difficulty is rather that they cannot incorporate that weight into their operative conception of how order gets constructed and maintained. Acknowledging China as a possible future center would require confronting directly the exhaustion of the existing one. Acknowledging the possibility of sustained fragmentation would require admitting that coordination without material underwriting has reached its structural limits. Davos, as an institution, does neither.

Whether China will ultimately assume hegemonic responsibilities of the kind Arrighi theorized, or whether the system will drift instead into a looser and likely more coercive equilibrium, remains genuinely undetermined. Arrighi's cycles describe recurring patterns in the organization of accumulation, not predetermined fates. What the Davos ritual reveals with considerable clarity is that Western elites remain organized around neither of these possibilities. They continue to operate within an inherited institutional grammar even as the material conditions that once sustained it steadily erode.

The WEF increasingly resembles, in this sense, a court assembled around a throne whose occupant is absent—not yet replaced by a successor, but no longer capable of exercising rule in any effective sense (think Ravenna c.460, or Beijing c.1600). The rituals persist with impressive fidelity, the etiquette remains elaborate and well-rehearsed, but the center of gravity has shifted elsewhere or dissolved altogether. Elite Lag: Why Davos Persists If the WEF no longer governs in any meaningful sense, why does it continue to endure as an institution? The answer lies in institutional lag. Organizations tend to outlive the historical conditions that made them effective, and elites trained within a particular order reproduce its operative grammar long after its material basis has eroded. Davos persists because it continues to make intuitive sense to its participants, even as it fails systematically at the scale it claims to address.

Arrighi's framework suggests at least three reasons why this lag should not be dismissed as merely accidental or as evidence of simple incompetence.

First, institutional stickiness of a quite specific kind. The WEF was constructed for a historical phase in which American-led governance could plausibly be coordinated, refined, and extended through multilateral consultation. Institutions designed to administer an existing order prove poorly equipped by their nature to recognize the absence of that order.

Second, cognitive lock-in. The elites who gather at Davos have been trained to fluency in the language of universalism: rules, norms, shared challenges, and collective action problems. That fluency becomes a liability once governance requires asymmetry and cost absorption rather than consensus among relative equals. Unable to name the loss of material underwriting capacity directly, participants tend instead to redescribe it as complexity, fragmentation, or crisis. This redescription has the advantage of flattering managerial competence while avoiding a structural reckoning.

Third, there is the problem of positional rationality operating at the wrong scale. The WEF may fail systematically at global governance but it continues to work quite effectively for many of those who attend it. It remains an efficient site for signaling status, for networking across sectors and borders, for agenda-setting within particular domains, and for deal-making that serves specific interests. The ritual continues to serve micro-level interests even as it fails macro-level functions. This is why the persistence of Davos should not be mistaken for collective stupidity or irrationality. It represents rationality but the sort that operates at a very different scale from the one the institution claims to address.

Davos continues to believe in coordination because it worked for several decades, and continues to speak the language of governance because that language once organized real power to significant effect. What the institution cannot easily do is acknowledge that the historical conditions that made those practices effective have now passed.

After Governance

What would effective governance require? Arrighi's answer is demanding. It would require an actor both willing and materially able to absorb disproportionate costs in order to stabilize accumulation at systemic scale—financing transitions whose returns remain diffuse and long-term, underwriting losses that other actors cannot bear, enforcing discipline where voluntary coordination predictably fails. In different historical forms, this is what earlier hegemons did: they paid to keep the system running.

Nothing currently on offer at Davos comes close to meeting this requirement. This is why the present historical moment feels suspended between conditions. The United States retains very substantial coercive capacity but no longer accepts the burdens of universal leadership in the form that characterized the postwar decades. China possesses growing material weight and organizational capacity but has shown, to date, little appetite for absorbing systemic losses on behalf of other actors. No coalition of middle powers can substitute for this absence. The result is not chaos in any dramatic sense but drift. There's an order that continues to function tolerably well at local and sectoral levels while failing increasingly at the global scale.

That the current order exhibits the characteristic features of late hegemony seems difficult to dispute on the available evidence; what follows from this condition remains genuinely open. The error that Davos makes as an institution is not that it fails to predict the future with confidence but that it fails to recognize the present with sufficient clarity.

In essence, what the WEF cannot readily admit is that governance of the kind it claims to facilitate has always depended on asymmetry and cost absorption, and that neither is currently available in sufficient degree.

This is why the forum now feels at once impressively busy and curiously hollow. It continues to speak with great frequency and conviction about order while operating, in effect, in that order's afterlife. It is not lying about its aspirations or consciously deceiving its participants. It is performing those aspirations with considerable faithfulness, but doing so after the material capacity to realize them has drained away. What remains is ritual: elaborate, sincere, and increasingly ineffective.