The analyst who once predicted the ‘end of capitalism’ sees Zohran Mamdani’s election as a ‘day of reckoning coming in’—and corporates only have themselves to blame
Albert Edwards, the long-standing strategist at Société Générale known for offering the “alternative view” within the institution, believes the recent political success of figures like Zohran Mamdani signal the corporate sector’s self-inflicted backlash against “greedflation.” Edwards, whose career in finance dates back to 1982 and who hasn’t been aligned with the “house view” of his investment bank for many years now, has gained a sort of cult following for his skeptical approach to market narratives, once famously writing a note about how appalled he was by “greedflation,” or record profit margins against the backdrop of post-pandemic inflation. He described it as the “end of capitalism” in 2023, and in conversation with Fortune, absolutely stood by his point.
At that time, Edwards said, inflation was generally being blamed on raw material prices because of the Ukraine war, as well as the labor market, with very few people saying there was profit-driven inflation, but he took a different view: “This is unprecedented,” he noted, pointing out, “when unit costs rise, always, unit margins fall, always, in history.” He said that shouldn’t have happened, and the reason it did was because of so much stimulus from the government that “companies could get away with doing it, using [inflation as] cover.”
The consequence of this money printing and fiscal expenditure was a “bonanza for the corporate sector,” resulting in corporate profit margins soaring “off to infinity” after the pandemic. Edwards noted specific sectors benefited enormously, recalling a St. Louis Fed study that showed corporate profits as a share of national income surging since the inflation spike, a total outlier compared with the rest of the world.
This period of corporate excess laid the groundwork for severe political instability and public outrage, Edwards argued. Just look at the election in New York, he said, which was all about the cost of living. Zohran Mamdani’s election is “an indication that this still is a big issue.” Edwards agreed “affordability” is a major topic of the moment, along with the U.S. housing market: “It stands out as, like, ‘What’s going on?’”
This latest twist in the populist turn isn’t necessarily something to celebrate, Edwards said. As an economist, he said he considers Mamdani’s policies, deriving from his democratic socialist background, such as rent control and price controls, to be “lunacy,” having experienced them himself in the 1970s. Still, dysfunction in capitalism means that society will “come back full circle to this.” The increasing intergenerational strife, driven by young people being shut out of the housing market and out of wealth concentration, has created a primal sense of betrayal, especially among Americans who no longer feel they are better off than their parents.
Edwards was speaking as the first-time homebuyer hit an average age of 40 years old, a stark symbol of how the largely youthful voter base that elected Mamdani is shut out of the market. Sean Dobson, CEO of the Amherst Group, one of America’s largest institutional landlords, recently estimated the same post-COVID economic landscape that so outraged Edwards meant “we’ve probably made housing unaffordable for a whole generation of Americans.”
‘You reap what you sow’
Coming back to his critique of capitalism, Edwards argued Mamdani’s election is “part of the consequence … The corporates, by being excessively greedy, hence ‘greedflation,’ have laid the seeds for their own destruction—and backlash.” Edwards added that “more and more people are identifying corporate excess.”
Speaking about what he called “intergenerational strife,” Edwards said he thinks this is “the first generation where people are not seeing themselves as better off than their parents were.” Everywhere you look in modern capitalism, “young people can’t get on the housing ladder, they see wealth extremely concentrated … It takes the incentivization out of the economy if young people don’t feel they’re participating.”
Edwards’s argument here has some strange bedfellows, as none other than Peter Thiel has been warning about this incentivization problem for years. Mamdani’s election seemed to send a shiver through Silicon Valley’s right-wing contingent, as Chamath Palihapitiya shared Peter Thiel’s 2020 email to Mark Zuckerberg and Marc Andreessen, warning of a “broken generational compact” and reasoning, “if one has no stake in the capitalist system, then one may well turn against it.” In a follow-up interview days later, Thiel told The Free Press, “if you proletarianize the young people, you shouldn’t be surprised if they eventually become communist.”
On the left wing of legal thought, Columbia Law School professor Tim Wu recently told Fortune that he wrote his new book, The Age of Extraction, about a similar feeling. “My understanding of America is that it’s the place where things are supposed to get better,” Wu said, but instead we’re living through a time with “an economy-wide problem” where “everything kind of just creeps. It’s that weird feeling of something you like becoming worse.” He added that American politics right now are “very angry” and marked by “economic resentment” but also a general feeling that “we let things go a little too far” and we “just kind of lost touch with the tradition of broad-based wealth that was the American way.”
On the subject of greedflation, Edwards was philosophical but insisted that what happened in 2023 was a mistake. “Okay, I can understand this is capitalism, this is how it works,” he said about pursuit of the profit motive, “but if the government doesn’t step in” then a backlash is bound to happen. Edwards declined to say whether this was a particularly Democratic or Republican issue, but, he noted, “there’s a reluctance” in American culture to dictate to the corporate sector. At any rate, the consequence of it is “there’s a day of reckoning coming in,” he said.
Edwards, who is also convinced artificial intelligence is in a bubble, said he views his role in this often overly optimistic market as similar to “Caesar’s slave,” referring to the story from antiquity about the Roman emperor ordering someone to follow him around and always whisper in one ear: “You are mortal.” (This is also commonly referred to by the Latin phrase “memento mori.”) Edwards warns while the macro-level excesses might not be visible in aggregate, drilling down reveals “things are pretty crappy under the surface.” The political reaction embodied by Mamdani’s focus on affordability is a clear sign that the economic consequences of corporate greed are now driving mainstream political change.
Edwards concluded there’s a fitting phrase for the dysfunctions of capitalism in the 2020s: “You reap what you sow.”
China’s hotels are welcoming record numbers of travelers, yet room rates are sinking—a paradox many operators blame on Trip.com Group Ltd.
For Gary Huang, running a five-room homestay in the scenic Huzhou hills near Shanghai was supposed to secure his family’s financial future. Instead, he and other hoteliers in China’s southeastern Zhejiang province say nightly rates have fallen to levels last seen more than a decade ago, as Trip.com’s frequent discount campaigns force them to cut prices simply to remain visible on China’s dominant booking platform.
“The promotion campaigns now are almost a daily routine,” said Huang, who asked to use his self-given English name out of concern of speaking out against Trip.com. “We have to constantly cut prices at least 15% to attract travelers. We have no choice but to go along with the price cuts.”
Trip.com has been central to China’s post-pandemic travel rebound, connecting millions of travelers with small operators like Huang. But for many hotels, visibility—and sometimes survival—comes at the expense of profits.
That dynamic is now at the heart of Beijing’s antitrust probe. Regulators allege Trip.com is abusing its market position, with analysts citing deflation across the sector as the government’s main concern. Interviews with lodging operators, industry groups and travel consultants describe a system where constant price-cutting and opaque policies are eroding profitability, even as demand rebounds.
Trip.com has said it’s cooperating with the government’s investigation. The company’s stock dove more 16% since the probe was announced a week ago.
Revenue per room—a key hotel metric—was flat across China in 2025, even as other Asian markets saw gains, according to Bloomberg Intelligence. Marriott International Inc.’s revenue per room in China fell 1% most of last year, while Hilton’s China room revenue trailed its regional peers.
The company controls about 56% of China’s online travel market, according to China Trading Desk, and has grown into the world’s largest booking site. Its dominance has helped fuel domestic tourism’s recovery—nearly 5 billion trips were logged in the first three quarters of 2025—but operators say the benefits are being offset by falling room yields.
“The market has developed unevenly and innovation is lacking due to monopolistic practices,” said He Shuangquan, head of the Yunnan Provincial Tourism Homestay Industry Association that represents some 7,000 operators. “The entire online travel agency sector is stagnating in a pool of dead water.”
‘Pick-one-of-two’
The broader challenge is oversupply and cautious consumer spending. In regions like Yunnan, hotel capacity has tripled since the pandemic, just as travelers tightened budgets. Consultants note that while people are traveling more, they’re spending less—leaving hotels slashing rates to fill empty beds and posting billions in losses.
For operators like Huang, the paradox is stark: the platform that delivers customers is also accelerating the race to the bottom. The complaints center around Trip.com’s “er xuan yi,” Mandarin for pick-one-of-two exclusivity arrangements—a practice that Chinese regulators have repeatedly vowed to stamp out.
Trip.com categorizes merchants into tiers with “Special Merchants” enjoying the most visibility and traffic, Yunnan Provincial Tourism’s He said. However, these top-tier merchants are typically prohibited from listing on rival platforms like Alibaba’s Fliggy, ByteDance’s Douyin or Meituan. Merchants who aren’t bound by these exclusive arrangements report being effectively compelled to offer the lowest prices on Trip.com’s online booking platform Ctrip, or risk facing a raft of measures like lowered search rankings.
Good morning. The atmosphere here at the World Economic Forum in Davos is all about nervous excitement as the Trump administration descends on the normally quaint but currently chaotic ski town in the Alps.
President Donald Trump will be making remarks just a couple hours from now, and Fortune will be reporting live from USA House on the main promenade, with insights from government officials and chief executives during and immediately following the president’sconversation. Keep an eye on our livestream, here https://fortune.com/2026/01/21/ceos-davos-buy-into-the-agentic-ai-hype/.
Elsewhere around town, CEOs are setting their agendas for the year. Here’s what’s top of mind for a few of them:
This will actually be the year of agentic AI. The first time I heard the term “agentic AI” was at Davos last year. For all the hype around it, does the average CEO really know what it is or how to deploy it? And is AI good enough yet for agents to replace or even significantly assist human employees? The answer appears to be yes. Google Gemini head Demis Hassabis told me that Gemini 3 achieved some milestones that allow agentic AI to truly proliferate in terms of its capabilities. ServiceNow CEO Bill McDermott is also an emphatic “yes,” and says he is already using it to do things like automate his IT department (without doing layoffs, he stresses; he says he has repurposed employees instead). He thinks other CEOs are ready to do the same.
Get ready for Google glasses—for real, this time. A decade ago, Google launched its Google Glass eyewear to widespread mockery. Hassabis thinks the timing was just off; at the time there was no super app to go on the platform. AI has changed that, and Hassabis is bullish on Gemini glasses being the future form for consumer AI. Meta is betting the same thing, and OpenAI is also reportedly considering a super-device, but it doesn’t seem like either can match Gemini’s capabilities any time soon.
There’s artificial intelligence, and now there’s also “energy intelligence.”Schneider Electric CEO Olivier Blum says that nailing energy intelligence is his mission this year. By that he means he wants to capture data from various energy sources into a single “data cube,” filter it, and use agentic AI so customers can manage it all in one place to find opportunities to save power and money. “Our job is to make sure we go to the next level of energy technology to make energy more intelligent,” he told me yesterday. If he can achieve it, he sees a 7%-10% annualgrowth opportunity ahead.
Greenland: national panic or national security risk? I’ve heard various reactions to President Trump’s desire for a full U.S. takeover of the huge island—from outrage to vigorous support. If he does get his wish (which some here think is likely), could Europe retaliate by making life harder and more restrictive for big U.S. tech companies? That was one CEO’s consideration. Said another: “Clear-eyed people can agree that that is a national security concern. And having a national security concern is not just a U.S. concern, it’s also a NATO concern.” They were optimistic that the in-person meetings this week would help move the matter in a positive direction. You can follow all our Davos coverage—including Fortune live interviews today with Ray Dalio, Dara Khosrowshahi and more—right here.—Alyson Shontell
The annual Edelman Trust Barometer, revealed at Davos every year, shows an “insular” mindset permeating the business world, with 70% of respondents not wanting to talk to, work for, or even be in the same space with anyone with a different world view. Richard Edelman says CEOs must adopt a sense of urgency in addressing the crisis; they need to sense that “time is running out.”
The Fortune 2026 World’s Most Admired Companies list
Fortune published the 2026 World’s Most Admired Companies this week, an annual ranking in collaboration with Korn Ferry that surveys executives, directors, and analysts across a range of industries. Apple made the top of the list among leaders in all industries for the 19th year in a row—read who else made the cut.
Netflix co-CEOs boost the case for the Warner Bros. deal
Netflix co-CEOs Ted Sarandos and Greg Peters praised the streaming company’s planned acquisition of Warner Bros. Discovery during its earnings call on Tuesday, selling the deal as a boost to its streaming business and a production boost for America. Investors, however, remain worried that the deal will push Netflix away from its core business, and the stock dropped almost 5% after hours.
The markets
S&P 500 futures are up 0.19% this morning. The last session closed down 2.06%. STOXX Europe 600 was down 0.41% in early trading. The U.K.’s FTSE 100 was down 0.02% in early trading. Japan’s Nikkei 225 was down 0.41%. China’s CSI 300 was up o.09%. The South Korea KOSPI was up 0.49%. India’s NIFTY 50 was down 0.3%%. Bitcoin was at $89K.
In a major effort to close the global health equity gap, the Gates Foundation and OpenAI are partnering on “Horizon1000,” a collaborative initiative designed to integrate artificial intelligence into healthcare systems across Sub-Saharan Africa. Backed by a joint $50 million commitment in funding, technology, and technical support, the partnership aims to equip 1,000 primary healthcare clinics with AI tools by 2028, Bill Gates announced in a statement on his Gates Notes, where he detailed how he sees AI playing out as a “gamechanger” for expanding access to quality care.
The initiative will begin operations in Rwanda, working directly with African leaders to pioneer the deployment of AI in health settings. With a core principle of the Foundation being to ensure that people in developing regions do not have to wait decades for new technologies to reach them, the goal in this partnership is to reach 1,000 primary health care clinics and their surrounding communities by 2028.
“A few years ago, I wrote that the rise of artificial intelligence would mark a technological revolution as far-reaching for humanity as microprocessors, PCs, mobile phones, and the Internet,” Gates wrote. “Everything I’ve seen since then confirms my view that we are on the cusp of a breathtaking global transformation.”
Addressing a Critical Workforce Shortage
The impetus for Horizon1000, Gates said, is a desperate and persistent shortage of healthcare workers in poorer regions, a bottleneck that threatens to stall 25 years of progress in global health. While child mortality has been halved and diseases like polio and HIV are under better control, the lack of personnel remains a critical vulnerability.
Sub-Saharan Africa currently faces a shortfall of nearly 6 million healthcare workers, ” a gap so large that even the most aggressive hiring and training efforts can’t close it in the foreseeable future.” This deficit creates an untenable situation where overwhelmed staff must triage high volumes of patients without sufficient administrative support or modern clinical guidance. The consequences are severe: the World Health Organization (WHO) estimates that low-quality care is a contributing factor in 6 million to 8 million deaths annually in low- and middle-income countries.
Rwanda, the first beneficiary of the Horizon1000 initiative, illustrates the scale of the challenge. The nation currently has only one healthcare worker per 1,000 people, significantly below the WHO recommendation of four per 1,000. Gates noted that at the current pace of hiring and training, it would take 180 years to close that gap. “As part of the Horizon1000 initiative, we aim to accelerate the adoption of AI tools across primary care clinics, within communities, and in people’s homes,” Gates wrote. “These AI tools will support health workers, not replace them.”
AI as the ‘Third Major Discovery‘
Gates noted comments from Rwanda’s Minister of Health Dr. Sabin Nsanzimana, who recently announced the launch of an AI-powered Health Intelligence Center in Kigali. Nsanzimana described AI as the third major discovery to transform medicine, following vaccines and antibiotics, Gates noted, saying that he agrees with this view. “If you live in a wealthier country and have seen a doctor recently, you may have already seen how AI is making life easier for health care workers,” Gates wrote. “Instead of taking notes constantly, they can now spend more time talking directly to you about your health, while AI transcribes and summarizes the visit.”
In countries with severe infrastructure limitations, he wrote, these capabilities will foster systems that help solve “generational challenges” that were previously unaddressable.
As the initiative rolls out over the next few years, the Gates Foundation plans to collaborate closely with innovators and governments in Sub-Saharan Africa. Gates wrote that he himself plans to visit the region soon to see these AI solutions in action, maintaining a focus on how technology can meet the most urgent needs of billions in low- and middle-income countries.
Politics8 years ago