[Apr 20th 2024]

The world this week

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The world this week

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The world this week

Politics
Apr 18th 2024 |

Iran launched an unprecedented direct attack on Israel in retaliation for a

strike at the beginning of April that killed two generals at its embassy
compound in Damascus, Syria’s capital. Almost all of the more than 300
drones and missiles launched by Iran were successfully intercepted.
America, Britain, France, Jordan and other Arab states contributed to Israel’s
defence. Binyamin Netanyahu, Israel’s prime minister, said his country was
determined to defend itself. Joe Biden, America’s president, urged him to
show restraint to avoid regional escalation.

Local officials said that four Palestinians were killed by Israeli settlers in the
West Bank. Their deaths took place amid violence that erupted after the
killing of a 14-year-old Israeli boy in what the Israeli army said was a
terrorist attack.
Gulf states were battered by storms that caused floods leading to the deaths
of 20 people. The United Arab Emirates saw its heaviest rainfall since
records began 75 years ago. Dubai airport, the world’s second-busiest, told
passengers to stay away.

Donors pledged around $2.1bn to humanitarian relief in Sudan, which is

facing the world’s largest humanitarian crisis because of a year-old civil war.
Experts warn that the country is entering the grip of famine, which could
lead to 500,000 deaths.

Ghana failed to reach a deal on debt forgiveness with its creditors, which
holds up its efforts to emerge from default and an economic crisis. Without a
sufficiently large write-off of debt it will be unable to access a $3bn bail-out
from the IMF.

Nigeria’s inflation rate climbed to 33.2%, a 28-year high, following a

collapse in the value of its currency, the naira. Although the central bank has
increased interest rates, prices have continued to rise because of economic
reforms, including the removal of a fuel subsidy.
Stable government

The prime minister of Singapore, Lee Hsien Loong, announced that he

would step down on May 15th, after 20 years in office. In a long-planned
succession Mr Lee is handing the reins to Lawrence Wong, his deputy, who
is also the finance minister. Mr Wong will be only the fourth prime minister
in the city-state. Mr Lee’s father, Lee Kuan Yew, held the job from 1959 to
1990.

Two violent incidents shocked Sydney. A man stabbed five women and a
man to death, before he was shot dead by a policewoman. The perpetrator
had mental-health issues. And in what police described as a terrorist attack, a
16-year-old boy stabbed and injured a bishop at an Assyrian Orthodox
church during a mass that was being streamed live. A mob confronted police
outside the church, where the boy was being held for his own safety.

Australia’s Labor government announced plans to increase defence

spending by A$50bn ($32bn) over the next decade. That would raise defence
spending from 2% of GDP to 2.4%. Australia, America and Britain have
created the AUKUS security pact to counter Chinese ambitions in Asia
Pacific.

The government of Haiti named the members of a transitional council that

will rule the country for two years when Ariel Henry formally steps down as
prime minister. Mr Henry is resigning in the hope of quelling an increase in
violence by gangs that in effect control the country. The trouble hasn’t
abated and the main airport and shipping ports remains closed. It has not
been announced when the council will start work.

America is to reimpose oil sanctions on Venezuela for failing to keep to the

spirit of an agreement to allow a free and fair presidential election. The
Venezuelan authorities have since barred the opposition’s most popular
candidate. American firms have until the end of May to wind down their
business in the country’s energy sector, although some existing licences to
sell Venezuelan oil, such as the one granted to Chevron, will still be valid.

The Democratic-controlled Senate in America voted swiftly to toss out the

impeachment of Alejandro Mayorkas, the homeland security secretary,
dismissing the trial and rejecting claims by Republicans that Mr Mayorkas
had wilfully ignored border-security law.
The first-ever criminal trial of an American president, former or sitting, got
under way in New York. Donald Trump faces charges of illegally
concealing hush-money payments to a porn star, which he denies. Dozens of
potential jurors were dismissed during jury selection because they could not
promise to be impartial. The trial could last six to eight weeks.

Mike Johnson, the speaker of America’s House of Representatives, pushed

forward with a complex package of bills that would provide military aid to
Ukraine, Israel and other allies. The Senate had passed a single bill, but it
ran into opposition in the House, not least from supporters of Mr Trump,
who gripe about giving more funding to Ukraine.

Meanwhile,Ukraine’s president, Volodymyr Zelensky, said his army had

been unable to thwart a Russian attack that destroyed a power plant, because
“We ran out of missiles.” Separately, a Russian missile attack on Chernihiv,
in northern Ukraine, killed 18 people.

In Germany police arrested two German-Russian men for allegedly spying

for Russia. One of the men is suspected of planning to sabotage an American
facility in Bavaria that trains Ukrainian troops. He is also thought to have
fought for pro-Russian forces in the Ukrainian region of Donetsk from 2014
to 2016.

Mass demonstrations took place in Tbilisi, the capital of Georgia, against a

proposed bill that would require NGOs and media companies that receive
more than 20% of their funding from abroad to register in effect as foreign
agents. The protesters call the legislation “the Russian law”, because of its
similarity to rules in Russia.
Cancelled

The prime minister of Belgium, Alexander De Croo, sharply criticised the

decision by a district mayor in Brussels, Emir Kir, to order police to shut
down a conference being held by national conservatives, an emerging
political alliance in Europe. The event’s speakers included Nigel Farage,
who championed Brexit in Britain, and Viktor Orban, the populist prime
minister of Hungary. Mr Kir, a Socialist, said he wanted to shut the
conference because protesters were targeting the venue (the courts disagreed
and the conference resumed). Mr De Croo, a liberal, said that “Banning
political meetings is unconstitutional. Full stop.”

An envoy for business in the EU who was controversially hand-picked for

the role by Ursula von der Leyen, the president of the European
Commission, quit just hours before he was supposed to start the job. Markus
Pieper, who comes from the same party in Germany as Mrs von der Leyen,
had scored lower on a test for the position than other candidates.

Britain’s plan to ban anybody born after 2008 from ever buying cigarettes
passed its first big hurdle. Rishi Sunak, the prime minister, easily won a vote
in the House of Commons by 383 to 67. A significant number of those who
voted against the bill came from his own Conservative Party; no opposition
Labour MPs voted against it. The bill now moves to its next stages. If
implemented, the ban would be among the strictest in the world. New
Zealand scrapped a similar plan earlier this year.
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week/2024/04/18/politics

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The world this week

Business
Apr 18th 2024 |

As it adjusts to slower demand for its electric vehicles, Tesla is reportedly

set to shed 10% of its global workforce, or around 14,000 jobs. Adding to
the woes of Elon Musk’s firm, two senior executives said they were leaving.
Tesla’s deliveries fell in the first quarter of this year. As other carmakers,
especially in China, step up their EV ambitions, Tesla is facing intense
competition in markets that it used to have to itself a few years ago. Its share
price is down by 37% this year. The company wants shareholders to reaffirm
Mr Musk’s pay at its annual general meeting in June, after a court in
Delaware struck it down in January.
The latest estimates from the IMF suggest that global GDP is on track to
grow by 3.2% this year. The fund said the world economy “remains
remarkably resilient” and that there would be “less economic scarring” than
it had thought from the pandemic. The biggest upgrades to its forecasts for
the largest economies it tracks were for America, where the IMF now thinks
GDP will expand by 2.7%, and Russia, projected to grow by 3.2%.

China’s economy grew by a better-than-expected 5.3% in the first quarter of

2024, year on year, helped by a 6.1% rise in industrial production. Much of
the growth came in January and February. In March retail sales struggled,
and the output of cement plummeted, highlighting the problems besetting the
country’s property market.

Markets were rattled by figures that showed retail sales growing rapidly in
America, more evidence that the economy remains red-hot. Investors pushed
back their bets on an interest-rate cut from the Federal Reserve. They were
also perturbed by comments from Jerome Powell, the Fed’s chairman, about
inflation taking “longer than expected” to fall to the central bank’s 2%
target. https://t.me/+Z6Sv8oUmW0pkMjI5
The numbers game

Britain’s annual inflation rate slowed to 3.2% in March, from 3.4% in

February. Inflation is now lower in Britain than in America, where it is 3.5%,
but higher than the euro area, where it stands at 2.4%. Still, the figures
caused traders to think that the Bank of England might not reduce interest
rates until September or November.

Goldman Sachs released a set of quarterly earnings that at last delighted

investors. Net profit surged by 28% in the first quarter, year on year, to
$4.1bn, helped by a 32% jump in revenue from investment banking and a
10% rise in revenue from trading. The results take some of the pressure off
David Solomon, the bank’s chief executive, who faces a shareholder
proposal at the impending annual general meeting to vote against his pay
award.

Microsoft announced a $1.5bn strategic investment inG42, a firm

developing artificial-intelligence technology in Abu Dhabi, which is backed
by the emirate’s government. The deal has the blessing of the Biden
administration, which persuaded G42 to divest from China and focus on
America.

A little of the shine came off ASML, Europe’s most valuable tech company,
when it reported a big drop in quarterly sales. The value of the company’s
order book for the lithography machines it supplies, which are an essential
component in chip manufacturing, plunged to €3.6bn ($3.8bn) in the first
quarter, from €9.2bn in the final quarter of 2023. ASML expects the second
half of the year to be stronger “in line with the industry’s continued recovery
from the downturn” in the chip cycle.
LVMH saw its weakest quarter for sales growth since the post-pandemic
boom three years ago. The luxury-goods company recorded a big drop in
revenue from champagne and watches and jewellery in the first three months
of 2024, though sales in Japan grew by double digits, helped by the weak
yen and an influx of Chinese shoppers. Meanwhile Bernard Arnault,
LVMH’s boss, shored up his succession plan by asking shareholders to
approve the addition of two of his sons to the board; they join two other
siblings.

CVC Capital Partners, one of Europe’s biggest private-equity firms,

announced its intention to list shares on the Euronext exchange in
Amsterdam. CVC had planned an IPO in 2022, which was upended by
Russia’s invasion of Ukraine. It also considered a float last year, but
postponed it in November amid market uncertainties.
Running ahead

Following its first annual loss in three decades, Adidas raised its profit
guidance for the year on the back of strong sales in the first quarter. Adidas
may face a new reputational problem, however, with the revelation that Rishi
Sunak, Britain’s prime minister, has a penchant for its popular Samba
trainers. Mr Sunak, whom one newspaper has described as a “geeky tech
bro”, recently made a humorous “fulsome” apology for reducing the hip
appeal of the shoes. I’ve worn them for “many, many years”, he said.
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week/2024/04/18/business

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The world this week

KAL’s cartoon
Apr 18th 2024 |

Dig deeper into the subject of this week’s cartoon:

America’s interest rates are unlikely to fall this year
When will Americans see those interest-rate cuts?
America’s inflation headache gets worse [June 2022]

KAL’s cartoon appears weekly in The Economist. You can see last week’s
here.

This article was downloaded by calibre from https://www.economist.com/the-world-this-

week/2024/04/18/kals-cartoon
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The world this week

This week’s cover

How we saw the world

Apr 18th 2024 |

THIS WEEK’S cover looks at reasons to feel optimistic about Generation Z,

or the group of people born between 1997 and 2012. The popular view is
that smartphones have made them miserable and they will live grimmer lives
than their elders. However, this makes an important omission: roughly four-
fifths live in emerging economies. They are richer, healthier and more
educated than their parents were; those who have smartphones are better
informed and connected.

In the rich world, wages for Gen Z are rising at a much faster pace than they
are for older workers, and the youth-unemployment rate across the rich
world is at its lowest in decades. Thanks to Gen Z-ers’ stronger wage
growth, house prices as a multiple of earnings are roughly where they were
for millennials a decade ago.

It is only natural for the old to worry about the young. Gen Z has been at the
sharp end of a technological revolution. Social media have brought benefits
—and costs. If worries about Gen Z’s lot lead to better mental-health
treatment, or fewer restrictions on building homes, well and good. But
celebrate Gen Z’s resourcefulness, and its successes, too.
Leader: Reasons to be cheerful about Generation Z
Finance & economics: Generation Z is unprecedently rich
Science & technology: What is screen time doing to children?
This article was downloaded by calibre from https://www.economist.com/the-world-this-
week/2024/04/18/this-weeks-cover

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Leaders
Reasons to be cheerful about Generation Z
OK Zoomer :: They are not doomed to be poor and anxious

India’s democracy needs a stronger opposition

The Modi juggernaut :: The Congress party is set for a drubbing in the world’s biggest election

Israel should not rush to strike back at Iran

The Middle East on fire :: Instead it should try a novel response to Iran’s missile attack:
restraint

How to get more people into military uniforms

Your country needs (more of) you :: Why mandatory military service makes sense for some
countries but not others

America’s interest rates are unlikely to fall this year

The second Powell pivot :: That will squeeze financial markets and the world economy

America’s moves against Chinese biotech will hurt patients

at home
Poor prescription :: The motives behind the BIOSECURE act are muddy

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OK Zoomer

Reasons to be cheerful about Generation Z

They are not doomed to be poor and anxious

Apr 18th 2024 |

A VAST COHORT is coming of age. Globally, some 2bn people were born
between 1997 and 2012, and so are part of “Generation Z”. In America and
Britain this group makes up a fifth of the population, rivalling the share of
baby-boomers; in India and Nigeria the young far outnumber the old. For
each generation there is a simple narrative: that boomers were shaped by
post-war plenty, for example, or millennials by the financial crisis of 2007-
09. For Gen Z the popular view is that smartphones have made them
miserable and they will live grimmer lives than their elders.

More and more people in the West tell pollsters that today’s children will be
worse off than their parents. Youngsters themselves worry about everything
from the difficulty of buying a home to the looming dangers from climate
change. Social scientists fret that Gen Z-ers, having spent their formative
years doomscrolling and suffering from FOMO, are now gripped by an
epidemic of anxiety and depression. Politicians in America and Britain are
mulling banning smartphones and restricting social media for the under-16s;
parents and schoolteachers everywhere are trying to police screen time.

All this can make it hard to feel optimistic about Gen Z. But when you look
around the world, and at a wider set of measures, the Zoomers are far from
doomed. In many respects, they are doing rather well.

For a start, the popular narrative makes an important omission: the roughly
four-fifths of the world’s 12- to 27-year-olds who live in emerging
economies. Thanks to growth and the spread of technology, youngsters in
places like Jakarta, Mumbai or Nairobi are far better off than their parents
were. They are richer, healthier and more educated; those who have
smartphones are better informed and connected. Small wonder that, in a
survey by the UN in 2021, the young in emerging economies were more
optimistic than those in the rich world.

Yet in some places there is a fear that the rapid progress of recent decades
might fail to repeat itself. That anxiety is evident in China. Thanks to
economic uncertainty and an emphasis on quantity over quality in higher
education, over a third of degree-holders there may be unemployed.

In the rich world the picture is rosier than people think. Those of Gen Z who
are in work—and in America there are nearly as many of them in workplaces
now as there are boomers—are doing nicely. Red-hot demand for workers
helps, as does the fact that Gen Z-ers are wisely acquiring marketable skills.
More of them are pursuing science, engineering and medical degrees; the
humanities have fallen out of favour.
Wages for Gen Z are rising at a much faster pace than they are for older
workers, and the youth-unemployment rate across the rich world is at its
lowest in decades. In America the income of the average Zoomer, after
adjusting for taxes and transfers, comfortably exceeds that of a millennial or
a Gen X-er at the same age, in real terms. True, housing affordability has
worsened since the 1980s. But, thanks to Gen Z-ers’ stronger wage growth,
house prices as a multiple of earnings are roughly where they were for
millennials a decade ago. And young people today are at least able to put
more of their salaries into savings.

Already Gen Z-ers are transforming the world of work. They have
bargaining power—and they know it. Many millennials came of age in the
shadow of the global financial crisis; they felt so precarious that they were
afraid to ask for pay rises. Gen Z seems to have fewer qualms about quitting
for a better opportunity, or taking things slowly and enjoying life. Bosses,
unused to being on the back foot, complain. But older workers will be
quietly thankful if overall pay and perks go up.

Gen Z will shape society in other ways, too. Young people’s concern about
climate change will, as they reach voting age, make states more likely to act.
More broadly, Zoomers tell pollsters they want bigger government. They
may change their minds when they have to pay more taxes—or they may
not.

They are a serious bunch, less given to late nights, binge drinking and
promiscuity than their elders were. There is a dark side to this. They
socialise in person less, have less sex, and are more likely to say they are
lonely. Reported rates of anxiety and depression are rising in much of the
West. Some of this probably reflects a greater willingness to open up about
mental health. But other factors play a role.

The extent to which social media fuel mental distress among the young is
furiously debated. In the West the rise in anxiety coincides with the adoption
of social media. However, hard evidence of causation is limited, and most of
it comes from studies of adults in the rich world.

What is clear is that Generation Z has been at the sharp end of a

technological revolution. The speed with which smartphones and then
social-media apps were adopted around the world left users, and young
people in particular, scrambling to figure out how best to navigate them.
Social media have brought benefits, such as entertainment and connectivity,
but also costs. Some content may be harmful, and time spent scrolling could
have been devoted to study or sleep.
OK Zoomer

Transformative technologies often have downsides. In the past, people have

adapted: think of the seat belts and regulations that made cars less deadly.
Encouragingly, there are signs that social-media habits are already shifting
as users weigh the costs and the benefits. Instead of posting about
themselves publicly, for example, many are retreating to private groups on
messaging apps. So far, the evidence that would justify a blanket ban on
smartphones for the young does not exist, though schools should be free to
bar them from classrooms, and parents are right to restrict screen time.

It is only natural for the old to worry about the young. If that leads to better
mental-health treatment, or fewer restrictions on building more homes, well
and good. But celebrate Gen Z’s resourcefulness, and its successes, too. ■

For subscribers only: to see how we design each week’s cover, sign up to our
weekly Cover Story newsletter.
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z

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The Modi juggernaut

India’s democracy needs a stronger opposition

The Congress party is set for a drubbing in the world’s biggest election

Apr 18th 2024 |

OVER THE next six weeks nearly a billion Indians will cast their votes. If
the polls are right, the general election will be a triumph for Narendra Modi,
the prime minister. His Bharatiya Janata Party (BJP) will secure another big
majority; he will serve a third term. For the opposition, disaster beckons.
The Congress party, which led the struggle for Indian independence and
dominated politics for decades afterwards, is headed for a third consecutive
defeat. With luck, this will be a Schumpeterian moment that forces it to
reform: the health of India’s democracy depends on it.

It is hard to overstate the role Congress has played in modern India. Under
Mahatma Gandhi it marshalled (largely non-violent) resistance to British
imperialism. Under Jawaharlal Nehru and his successors it ruled India for 54
years, positioning itself as a one-nation, multi-faith, left-of-centre
movement.

Yet it remains a family firm. Nehru and his descendants have led the party,
or India, or both almost continuously since independence in 1947.
Congress’s current de facto leader is Nehru’s great-grandson, Rahul Gandhi
(who is not related to the Mahatma). Under him, Congress is not expected to
improve much on the 20% of the vote it won in 2019, down from nearly
50% in the 1980s. That could translate into a paltry 10% or less of seats in
parliament.

Congress complains that the contest is rigged. Mr Modi has stifled dissent,
cowed the media and harassed his opponents. Arvind Kejriwal of the Aam
Aadmi Party, another opposition group, recently became the first sitting
chief minister to be arrested. Last year Mr Gandhi was suspended from
parliament for four months after being convicted of defamation for mocking
Mr Modi’s name (the Supreme Court suspended a two-year jail sentence).
Congress has had its bank accounts frozen.

But a skewed playing field is only part of the problem. Mr Modi is an

exceptionally gifted politician. His approval rating, in some polls, is over
75%. His strongman persona, combining Hindu chauvinism and Muslim-
bashing with an emphasis on economic development and national renewal,
appeals to many Indians. His powerful oratory and humble roots as the son
of a tea-seller help him connect with ordinary folk. By contrast, Rahul
Gandhi is easy to dismiss as a privileged amateur leading an ossified party
with neither the talent nor the ideas to govern the world’s most populous
country.

A big electoral defeat should be a clarifying moment for India’s opposition.

There is strong demand for an alternative to the BJP: more than half of
voters support other parties. The trouble is, these are mostly a mosaic of
regional movements that cannot plausibly aspire to national power. Congress
is still the best bet to lead a national opposition, but to do so it must change.

First, the Gandhi family, and the party elders around them, should make way
for younger, more dynamic leaders. Second, Congress must transform how it
communicates, not just grumble about media bias and censorship. Mr Modi
has mastered technology to reach ordinary Indians, as our analysis of his
monthly show, relayed on everything from YouTube to WhatsApp,
illustrates. Congress must learn to compete.

Finally, Congress needs better ideas, rather than a timid reheating of the
welfarism of the past or griping that the BJP has stolen its more innovative
policies, such as India’s digital identity scheme. Mr Modi’s economic
management has been competent, but India faces giant problems, from
improving its dismal schools to managing migration from farms to cities.

To avoid sliding into autocracy, India needs a serious opposition, as capable

as the BJP but less divisive. If Congress does not change, its young, would-
be reformers should split and create a new movement. Mr Modi has remade
Indian politics. Time for the opposition to remake itself.■

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weekly newsletter.
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The Middle East on fire

Israel should not rush to strike back at Iran

Instead it should try a novel response to Iran’s missile attack: restraint

Apr 18th 2024 |

THE WAR cabinet in Israel is grappling with a perilous decision: how to

respond to Iran’s unprecedented drone and missile attack on April 13th. The
barrage was, fortunately, blocked with help from friends and neighbours.
Should Israel “take the win”, as President Joe Biden is urging, letting a
blatant act of war go unanswered? Or should it retaliate and risk sparking a
regional conflagration?

A small country with many enemies, Israel has long prized massive—some
would say disproportionate—deterrence. It has wrecked Gaza in the attempt
to crush Hamas, which massacred Israeli civilians on October 7th. Israeli
retribution against Iran now seems inevitable. But Israel’s government
should stay its hand.
There is a precedent. In 1991 Saddam Hussein, Iraq’s despot, hit Israel with
dozens of Scud missiles. His aim was to provoke Israeli retaliation, and thus
divide an Arab coalition poised to help America evict his forces from
Kuwait. At America’s urging, Israel did not retaliate. Today, too, Israeli
restraint could make it easier to build a coalition against a regional threat:
Iran. But only America can muster such a coalition.

Iran claims Israel invited the attack by killing seven members of its Islamic
Revolutionary Guard Corps (IRGC), including two generals, with an air
strike on its diplomatic compound in Damascus. This is cant. Iran cared little
for diplomatic premises when it took American diplomats hostage in 1979,
and when its agents or allies blew up the American embassy in Beirut in
1983 and the Israeli one in Buenos Aires in 1992. Regardless, Iran’s recent
strike is disproportionate.

It fired 170 drones, and about 120 ballistic and 30 cruise missiles. It made
overt the long covert war with Israel, breaking the taboo against openly
attacking each other’s territory. The strike is a challenge to America, too. Mr
Biden has repeatedly warned Iran and its allies “Don’t”. They ignored him.
First proxies started shooting at Israel; now Iran has joined in.

As the war in Ukraine shows, drones and missiles favour the attacker
because they are hard and costly to shoot down. But they can be thwarted by
technology and co-ordination. American, British and French forces—and
more quietly Jordanian and perhaps Saudi ones—took out many of the
Iranian warheads. The rest were almost all destroyed by Israel. The few that
got through did little damage.

The attack proves the menace of Iran’s ever more zealous rulers. Its proxies
in Lebanon, Yemen, Iraq and Syria hollow out states and destabilise the
region. This “axis of resistance” has fired drones and missiles not only at
Israel but at Saudi Arabia, the United Arab Emirates and Pakistan. Iran’s
weapons are being used against Ukraine, too, as it aligns itself with Russia,
China and North Korea. The danger is all the greater because Iran is
alarmingly close to having nuclear arms.

Even so, Israel should bide its time. Restraint would help to heal the rift with
America over the conduct of the war in Gaza. It would allow the budding
air-defence partnership to grow into a bigger and more lasting coalition. The
more Israel can create a common front with like-minded countries, the
better. Co-ordinated sanctions, diplomatic isolation, cyber-attacks and
support for Iranian dissidents—and rapprochement between Israel and Arab
states—may prove better at containing Iran than strikes. If Israel acts rashly,
its neighbours will bear a heavy cost in a wider regional war; America and
Europe will be sucked into hostilities; oil prices will soar; and global trade
will be disrupted. Only Iran’s “axis of resistance” would welcome chaos.
Iran itself could cross the nuclear threshold.

America would be vital to creating a coalition to contain Iran. America and

European powers can start by co-ordinating sanctions on the IRGC and
allowing the “snapback” of UN penalties suspended under a now-defunct
nuclear deal from 2015. Diplomacy with Iran, direct or indirect, should
continue but with no illusions. America and Israel—and ideally others—
need to make a calibrated but credible threat of military action if Iran makes
a dash to acquire nukes.

To make all this possible, however, Israel needs to end the war in Gaza,
starting with a temporary ceasefire and the exchange of prisoners and
hostages. The more Hamas loses hope of fomenting a regional war, the
likelier it is to agree to such a deal. Progress towards Palestinian statehood,
under a reformed Palestinian Authority, would unlock the big prize—
normalisation with Saudi Arabia.

None of this will be easy or without risks. But Iran’s attack highlights the
dangers of escalation in a never-ending war. It also shows that Israel alone
cannot defeat Iran and its network. To counter it, Israel needs its own
network—with America, Europe and emerging Arab friends. A moderate
coalition is the surest way to end the perpetual conflict with the Palestinians,
which feeds Islamic radicalism, and to contain Iran. ■
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at-iran

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Your country needs (more of) you

How to get more people into military uniforms

Why mandatory military service makes sense for some countries but not
others

Apr 18th 2024 |

MANDATORY MILITARY service is under discussion once more in

Europe. The reasons? The possibility of Ukraine’s defeat looms large, as
does the threat of a future president Donald Trump abandoning NATO. Boris
Pistorius, Germany’s defence minister, says that Europe must be ready for
war before the decade’s end. He describes dropping a one-year period of
service for school-leavers in 2011 as “a mistake”. Britain’s army chief,
General Patrick Sanders, has called for a “citizen army”.

Compulsory stints in the armed forces can take several forms, including the
conscription of civilians of any age, call-ups using lotteries and a standard
period of military service for young people after they leave school.
Compulsion is being considered because many rich countries struggle to
recruit enough people for their all-volunteer professional forces. Some
countries look admiringly at NATO’s Nordic and Baltic members, all of
which have some form of mandatory service which enjoys high levels of
public support. Sweden ended it in 2011, only to resurrect it in 2018.

Is this an approach that other countries should follow? The short answer is
not yet. Armies should be designed to reflect both geography and how they
expect to fight. In countries with relatively small populations that have
borders close to Russia, such as Estonia and Finland, public acceptance of
conscription is high and training prepares forces for a “porcupine” defence
against an invader. There is a strong sense of a shared national endeavour.
For similar reasons, military service in Israel, which faces constant security
threats, is uncontroversial (aside from resentment that the ultra-Orthodox do
not have to serve). Taiwan and South Korea have conscription because they,
too, are close to bellicose powers.

Citizens in most of the rest of the rich world do not yet feel an imminent
threat. So for conscription to be workable, there would need to be a clear and
shared understanding of why it was needed. That is lacking in countries such
as Britain and France, where it is not obvious what conscripts could do in a
modern, technologically sophisticated army. Besides, “in a crisis” each
country must field a full division (30,000 troops with heavy equipment)
within 30 days if needed by NATO. Dealing with lots of conscripts could be
a distraction.

Because conscripting young people infringes harshly on their liberty, the

policy would need public support. Even Ukraine, in existential peril, found
lowering the call-up age from 27 to 25 this month politically tricky.
Undoubtedly the difficulties faced by most of Europe’s armed forces in
recruiting regular soldiers and building proficient reserves need redress. But
they can mostly be resolved by means other than compulsion.

First, consider raising soldiers’ salaries. Older folk sometimes grumble about
the supposed character flaws that make young people unwilling to serve. But
poor pay and conditions are by far the biggest obstacles to recruitment when
job-seekers have other choices. Defence budgets are rising but will need to
do so faster. NATO members’ target of spending 2% of GDP on defence will
not be enough to cover both higher wages and new kit. There should also be
more experimentation, for instance with one-year trials of service that can be
combined with university studies or other training. And despite much
discussion, few armies have done enough to recruit women and combat
sexual harassment.

Second, more civil-society support is needed to attract those with the

specialist skills required in emergencies. In addition to wooing more
volunteers to augment regular forces, armies could swell reserves by making
soldiers who leave the forces agree to annual training days until they reach
their mid-40s. In this way Britain could mobilise as many as 300,000 such
people if needed. The numbers might be even higher in France and
Germany, as they have larger armies.

In these tense times countries should still maintain plans for how, if the
worst came to the worst, a much wider mobilisation might occur. To deter
the most dangerous enemies, you must be ready for a war that you do not
want to fight. Just ask the courageous Ukrainians. ■
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The second Powell pivot

America’s interest rates are unlikely to fall this

year
That will squeeze financial markets and the world economy

Apr 17th 2024 |

FOR MOST of the year everyone from stockpickers and homebuyers to

President Joe Biden has banked on the Federal Reserve cutting interest rates
soon. Over the past two weeks those hopes have been dashed. Annual
consumer price inflation in March, at 3.5%, was higher than expected for the
third month in a row; retail sales grew by a boomy 0.7% on the previous
month. On April 16th Jerome Powell, the Fed’s chairman, warned that the
battle against inflation was taking “longer than expected”. Investors had
begun 2024 pricing in more than 1.5 percentage points of interest-rate cuts
over the course of the year. Today they expect rates to fall by only 0.5 points.
Mr Powell has conducted a pivot upon a pivot. The euphoric expectations
for rate cuts took on a life of their own after the Fed turned too doveish in
December. That unduly stimulated the economy and will force the central
bank to retrace its steps, and then some. The consequences of higher-for-
longer interest rates will reverberate around America, financial markets and
the world economy.

America’s economy has demonstrated that it can withstand at least a

temporary period of higher rates. On April 16th the IMF forecast that it
would grow by 2.7% in 2024, up from the 2.1% it expected in January. Yet
its resilience to prolonged exposure to high rates is less certain.

Many companies issued corporate debt during the pandemic when rates were
much lower. That has helped them cope with high rates so far; but eventually
they will have to refinance and pay up. Mortgage-interest rates of nearly 7%
have frozen much of the housing market. America’s high and rapidly
growing government debt is also becoming much more expensive to service:
the yield on ten-year Treasury bonds has risen to about 4.6% from 4.2% at
the end of March. Already the most recent forecasts, predicated on lower
rates, saw net interest absorbing more of this year’s federal budget than
defence.

Financial markets will also feel the effects of continued high rates. The Fed’s
doveishness in December propelled a stockmarket boom; though that
recently lost steam, the S&P 500 index of stocks remains a fifth above its
level at the end of October, when rates were last expected to stay higher for
longer. Stocks now look vulnerable to a correction.

Moreover, the problems that high rates exposed in America’s banking system
in 2023 still lurk. At the last count there were $478bn of unrealised losses on
banks’ balance-sheets, much of which result from higher rates reducing the
value of government and mortgage-backed bonds. That figure will have
risen now that bond yields have shot up again.

The consequences of higher rates in America will also ripple out to the rest
of the world. Though there are signs of somewhat sticky inflation elsewhere
—Britain’s consumer price inflation was also higher than expected in March
—no major economy is as hot as America’s. The IMF’s forecast for euro-
zone growth this year, for example, is just 0.8%. The result is a
strengthening dollar, which is up about 5% against its biggest trading
partners this year. Strikingly, the Japanese yen has slipped to nearly 155
against the greenback, despite a historic (though modest) monetary
tightening in March, prompting speculation that the government may
intervene to defend the currency directly.

In theory a stronger dollar should help the rest of the world by making its
exports more competitive, and growth in America should spill across borders
as it sucks in imports. But a surging greenback can also disrupt trade and
borrowing that is denominated in dollars. Economies that rely on commodity
imports, such as Japan’s, face a double squeeze from a stronger greenback
and a rising dollar price of oil, which is up by about 20% since early
December and could rise a little further if strife in the Middle East worsens.
If high interest rates in America end its enviable economic run, rate cuts will
eventually follow. Until that time comes, America’s monetary policy will
remain a problem for the rest of the world. ■
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Poor prescription

America’s moves against Chinese biotech will hurt

patients at home
The motives behind the BIOSECURE act are muddy

Apr 18th 2024 |

AMERICA’S CRACKDOWN on Chinese trade is broadening. On the

campaign trail on April 17th President Joe Biden proposed tripling tariffs on
steel imports, citing China’s unfair trade practices. Having choked off
China’s access to advanced semiconductors and moved to ban TikTok, a
Chinese-owned social-media app, lawmakers are eyeing a new target:
biotechnology. The BIOSECURE act, which has bipartisan support in
Congress, proposes to end government contracts for firms that count Chinese
biotech companies as clients or suppliers. American officials have previously
said they want to guard a “small yard” of sensitive technologies with a “high
fence”. This bill illustrates that the yard is getting bigger, with sorry
consequences for American consumers.
It uses the threat of ending lucrative federal contracts to sever American
firms’ ties with Chinese genomic sequencers, makers of sequencing
machines and makers of large-molecule drugs such as weight-loss
injectables. It extends the ban to any biotech firm with its headquarters in an
adversary country, and mentions four Chinese companies by name.

One target is a sequencing firm called BGI, formerly known as Beijing

Genomics Institute. BGI is the largest sequencer of human DNA in the
world and operates in over 100 countries. It supplies prenatal tests and
diagnostic swabs for covid-19 and other diseases. The firm, like its rivals,
provides health screenings on the cheap in return for keeping its patients’
anonymised data. The data in turn are used in cutting-edge drug
development.

Lawmakers allege that the data hoovered up by BGI are stored within reach
of nosy Communist Party officials. The firm says sensitive information is
stored privately and that its American operations are limited. But lawmakers
need not take BGI’s word for it. In February President Joe Biden banned
exports of health data to adversaries, including China, mirroring China’s
own controls. Lawmakers did not need to go further.

Moreover, having begun with reasonable concerns about a specific firm’s

handling of data, the authors of the bill have widened their scope much
further, by bringing in the makers of medical equipment and drugs, such as
Wuxi AppTec, which conducts research and manufactures compounds used
to make drugs for clients including the world’s biggest pharma firms. WuXi
AppTec and its sister firm, WuXi Biologics, are by revenue the world’s
largest providers of contract drug discovery and manufacturing. While some
diversification away from Chinese producers might have been justifiable,
that is not the stated intention of the bill. In any case, the legislation would
not merely enforce diversification, but wholesale decoupling.

The lawmakers claim that Chinese biotech firms have stolen intellectual
property (IP) and collaborated with the People’s Liberation Army (PLA) and
the Chinese government’s repression of Uyghurs. (WuXi AppTec says it is
not aware of unauthorised transfers of IP.) Yet here too the BIOSECURE act
is an overreaction. Western biopharma firms are notoriously protective of
their IP and are surely best placed to decide whom to trust with their drug
recipes. Chinese firms that are militarily or morally compromised should be
targeted on an individual basis, not by dint of their nationality or industry.

The muddier the motivation behind the legislation seems, the harder it is to
escape the conclusion that old-fashioned protectionism is at play. And that is
a problem, because it means the bill would unduly hurt American
consumers, without delivering any of the supposed security benefits.
Small gain, high price

If the legislation passes, as seems likely, drug shortages and delayed clinical
trials for medicines would probably follow. Every large Western pharma
firm and many small ones would have to abandon supply chains and find
new partners for trials. Biotech startups in particular rely on cheap Chinese
manufacturers to bring their products to market. And that would go against
another stated intention of the Biden administration: to lower drug prices. ■
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Letters
Letters to the editor
On China, WEIRD countries, nuclear weapons, software engineers, banlieues, uniforms :: A
selection of correspondence

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On China, WEIRD countries, nuclear weapons, software engineers,

banlieues, uniforms

Letters to the editor

A selection of correspondence

Apr 18th 2024 |

Letters are welcome via email to letters@economist.com

China’s economic quandary

You described the “new productive forces” strategy adopted by China’s

leadership as the country’s gravest economic test since Deng Xiaoping
relaunched reforms in the 1990s (“China’s risky reboot”, April 6th). The
significance of this new approach goes beyond the economy, and could pose
a threat to the regime that Xi Jinping has fashioned over the past dozen
years, which is centred on buttressing the power of the Communist Party
around its core chieftain.
Deng struck a simple bargain with China’s population after the repression of
protests in 1989: leave politics and power to the Communist Party and, in
return, the party will make you materially better off through high growth.
The means used to generate the second element of that deal have now
proved unsustainable, as was inevitable given the reliance on investment,
overcapacity, weak domestic consumption, the build-up of debt and other
interlocked factors. This presents the party with the puzzle of what to put in
place of high growth to enable it to claim political legitimacy and enjoy
popular appeal.

Given the likely failure of Mr Xi’s programme to provide

a convincing answer, the danger for the leadership is that a faltering
economy may now have a severe knock-on effect. That will bring the first
part of Deng’s equation into question in a manner for which even Xi Jinping
Thought cannot provide a ready answer.

JONATHAN FENBY
London

WEIRD countries
Two articles in the April 6th edition, “The white-collar mafiosi of Naples”
and “Meet the political nepo babies” on Asia’s damaging dynasties, are
similar in that they report on cultures that place an emphasis on looking after
their own. But according to Joseph Henrich, neither the Italian mafia nor
Asian nepotism is that peculiar. In “The WEIRDest People in the World”,
Mr Henrich showed that it is the citizens of WEIRD (Western, educated,
industrialised, rich, democratic) societies that seem weird to everyone else.

WEIRDos keep riches for themselves, rather than sharing their gains with
their clan, and snitch on friends for the sake of upholding the law. Mr
Henrich ascribes the split between WEIRD and non-WEIRD countries to the
policies of the Catholic church in the 5th century, which sought to
undermine kinship.

JOHANN WIRSING
Hohenschäftlarn, Germany

The risk of nuclear weapons

Your claim that nuclear deterrence has worked up to now is questionable (“A
world without America’s protection”, April 6th). There is no corroborative
evidence for this, only the correlation of the possession of nuclear weapons
by rival countries with the fact that they have not been used since 1945.
Even in the case of Ukraine, which you cite as evidence of deterrence in
operation, there is no way of knowing whether NATO really would have sent
combat troops to join the fight against Russia if the Kremlin did not have
nuclear weapons.

Deterrence doctrine is an unproved theory based on the naive assumption

that political leaders will act rationally 100% of the time. It assumes each
side always has accurate information about its opponent’s intentions. It fails
to consider the possibility of accidents, miscalculations, terrorist groups,
cyber-attacks or simple mistakes. We now know it was a matter of luck that
a Soviet submarine did not fire a nuclear torpedo at blockading American
navy vessels during the Cuban missile crisis.

Rather, it is the devastating humanitarian impact of nuclear weapons, as

shown in Hiroshima and Nagasaki, and the threat they pose to the whole
world, not just the states that possess them, that led to the adoption of the
Treaty on the Prohibition of Nuclear Weapons in 2017. Almost half the
world’s countries have signed or ratified the treaty.

The nations with nuclear weapons and their allies must learn from that.
Instead of putting their faith in a flawed theory of deterrence, they should
join the treaty and finally remove this existential threat. Eliminating nuclear
weapons is simply good risk management.

MELISSA PARKE
Executive director
International Campaign to Abolish Nuclear Weapons
Geneva
O.J. Simpson’s trials

Your analysis of the O.J. Simpson trials (“O.J. Simpson’s defence was a
harbinger of post-truth politics”, April 12th) misunderstood a crucial
distinction between criminal and civil law, which exists in California and
endures throughout the common-law world. You referred to the majority
black jury acquitting Simpson in his criminal trial, and the majority white
jury finding him liable in his civil trial. From this, you concluded that
“presented with the same facts, white and black Americans saw a different
reality”. However, this conclusion does not follow. The verdicts are neither
inconsistent nor opposite.

In a criminal trial, the prosecution must prove the offence so that the jury is
sure beyond reasonable doubt. In a civil trial, liability is established if it is
more likely than not that the relevant events occurred. Analysed in this way,
it is entirely possible that the black jury found it more likely than not that
Simpson committed the crime (thus liable under the civil standard of proof),
but they could not be sure of guilt, rendering them bound to acquit pursuant
to the criminal standard. For the same reasons, the white jury in the civil trial
might well have proceeded to acquit in the criminal trial.
Moreover, your criticism of Simpson’s criminal defence attorneys, and the
likening of them to populists or demagogues, was unfair. Their professional
duty was to cast doubt on behalf of their client. They did that with skill and
effect. If criticism is to be levelled, it should be directed at the police officer
responsible for racist slurs. Without this abhorrent behaviour, it would have
been far more difficult for Simpson’s attorneys to develop the “nebulous
conspiracy” that you suggest was responsible for his acquittal.

RUPERT WHEELER
Barrister
Grand Cayman, Cayman Islands

Drafting software engineers

I was not surprised to learn that an engineer at Microsoft discovered the

attack on XZ Utils, open-source software which is incorporated into Linux
systems (“Cyber-scary”, April 6th). Skilled developers typically work on
important projects either as a hobby or because their employer needs a bug
fix or new feature to support a business function. Policymakers should
consider two initiatives.
First, offering tax credits to developers for time spent writing, fixing and
reviewing code on open-source projects that are maintained by registered
charities would give people with the required skills a reason to spend a few
weekends each year contributing to these public goods. We already offer tax
credits to volunteer firefighters or teachers.

Second, the armed forces should consider open-source software

development as a model for their cyber-reservist programmes. Since 2002
various government initiatives in America have been trying to find ways to
put America’s professional programmers to work at the weekends. Asking
them to help maintain code on open-source projects used by the government
would be better suited to a weekend and night-time work regime than
transitional full-time software engineering. Personally I would be interested
in joining such a programme. What young techie wouldn’t love also to be a
sergeant.

JON WIGGINS
Machine-learning engineer
Salt Lake City

Don’s ban XL Bullys

Your call to ban XL Bully dogs everywhere was a strange bit of finger-
wagging paternalism from an ostensibly liberal newspaper (“When muzzles
are not enough”, March 25th). In the United States the breed abounds, and is
increasingly popular as a rescue dog. In 2023 there were 21 fatalities
attributed to bully breeds. It is hardly a statistically significant problem. The
owners of dogs that exhibit aggressive behaviour should be held to account
by the law. As should owners whose cruelty encourages and exacerbates
aggressiveness. But outlawing the breed will only drive it further into the
“shadows” where such cruelty is the norm.

R. ZACHARY THOMSON
San Francisco

On the edge of French cities

Karim Bouamrane, the mayor of Saint-Ouen, is quoted as saying that

“etymologically the word banlieue means the ‘place of the banished’. It’s the
place where we don’t like you” (“Making a splash”, April 6th). Although this
interpretation certainly supports the gist of the article, the truth is less
dramatic. Historically, the banlieue was the area around a city (usually
within one league, or lieue) where the authority of the city applied and its
decisions were relayed via proclamations, or bans.
ANDREW JOHNSTON
Paris

What to wear to work

Bartleby’s column on corporate uniforms missed an important point (March

30th). Uniforms help us realise when our own values are at odds with an
organisation’s. As a new management consultant, I was told that I could
wear a charcoal suit, a navy suit, a white shirt or a pale blue shirt. I looked
down at the yellow tartan dress I was wearing and realised that this was not
my place, and that these were not my people.

I quit, and joined a company where I was complimented on my long-

standing and deeply held belief that sequins are daywear.

SIÂN DAVIES
Oxford

Frank Zappa was interrupted from playing once by a member of the

audience who heckled him about some concert-guards in uniform. Zappa’s
reply was “Everybody in this room is wearing a uniform, and don’t kid
yourself.” You can hear the live exchange on “Burnt Weeny Sandwich”, an
album released in 1970.
DENIS BONACCOLTA
Nashua, New Hampshire
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By Invitation
A Middle East scholar on Israel’s escalating tit-for-tat with
Iran
Israel and Iran :: Both governments need to ditch dangerous policies, argues Steven Simon

A trauma surgeon on why Gaza is the worst of war zones

Casualties of war :: It is like stepping back into the 19th century, says David Nott

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Israel and Iran

A Middle East scholar on Israel’s escalating tit-for-

tat with Iran
Both governments need to ditch dangerous policies, argues Steven Simon

Apr 16th 2024 |

IT IS NO accident that Israel and Iran are on the precipice of war. It is the
result of long-standing agendas devised by misguided policymakers on both
sides.

Start with Iran. For decades its declared hatred of Israel and determination to
erase the country from the map has been all-consuming. One struggles for a
metaphor: Captain Ahab and the white whale?

Iran’s policy towards Israel has been geared towards two things it feels it
needs to stand nose-to-nose with its adversary. The first is the ability to
strike from territory adjacent to Israel. Iran wants to be able to threaten Israel
with a broad spectrum of attacks, from nuisance strikes to massive ground
and missile assaults. Hence the importance of its proxies in Syria and
Lebanon. The second perceived requirement is a nuclear-weapons system to
match Israel’s. Iran is yet to achieve that goal, and one can only guess at how
its leaders would think about and wield the capability once it was acquired.

George Washington believed that one country’s extravagant hatred of

another is sure to distort its foreign and domestic affairs in ways that get it
into trouble. Iran exemplifies this point. Yet for the late Ayatollah Ruhollah
Khomeini, the founder of the Islamic Republic, hostility to Israel validated
both Iran’s foreign policy and its domestic policy. The current crisis
demonstrates vividly who has the better of the argument.

Israel, for its part, has followed a strategic doctrine dubbed “the campaign
between the wars”. The idea, driven by the recognition that major wars no
longer produced decisive victories, was to maintain pressure on adversaries
between such conflicts to deter them from starting one. The problem with
this doctrine, long apparent outside Israel’s security bubble, is now clear: it
is virtually guaranteed to ignite such wars. As I have written before, one can
never know whether the next bomb dropped will trigger a large-scale
response. The Israelis have exploited Syrian airspace for years to attack Iran
and its friends as they tried to construct a front against Israel in the Golan
Heights and resupply Hizbullah’s arsenal in Lebanon. In their campaign, the
Israelis dropped that one bomb too many.

These are not problems that America can solve. Its diplomatic intervention in
a Middle East crisis works when regional adversaries value its help and
America has a workable strategy. These conditions are, of course, reciprocal.
America could work with Anwar Sadat and Menahem Begin, and with
Yasser Arafat and Yitzhak Rabin. Forget about Binyamin Netanyahu and
Ayatollah Ali Khamenei, Israel’s and Iran’s current leaders. Their obstinacy
is obvious. It needs stressing, nevertheless, given critics’ claims that the
current crisis reflects a failure of American strategy, or the suggestion that
some clever formula emerging from the White House will bring peace.

Iran has now selected the worst of all possible ploys in response to the twin
pressures it was facing: to take a strong stand against Israel’s campaign
against Hamas in Gaza, and to respond to Israel’s attack on the Iranian
consulate in Syria. Iran had been handling the Gaza challenge well by
limiting itself to political support for Palestinian militants and leaving kinetic
resistance to Iranian proxies. But Iran’s direct drone-and-missile attack on
Israel has arguably turned Iran and its Palestinian partners into villains.
Although it caused little damage and only one casualty, the unmistakable
message was that such an attack, if larger and on shorter notice, could cause
far greater destruction. It was ominous enough to call for a serious Israeli
reply.

For Israel’s current government, pleas from America, the EU and Gulf Arab
states to refrain from responding in kind probably sound foolish. As Naftali
Bennett, a former Israeli prime minister, has pointed out, the Iranians must
have expected, and certainly desired, many deaths. Thus, he argues, the
response should be scaled to what might have been rather than what actually
was.

If Israel does retaliate, as looks likely, it must decide not only how big to go
but where: should the attack be aimed at Iran’s proxies, targets within Iran or
both? To complicate matters, Iran is shovelling large quantities of small arms
into the West Bank to ignite the smouldering war there between Israeli
settlers and Palestinian farmers. Having asserted that it would counter any
Israeli response with a larger barrage and threatened to include American
targets in any subsequent attacks, Iran is either prepared to risk war or
foolishly assuming it is deterring it.

Concerned states have done all they could to prevent escalation. Perhaps
they will succeed. But the current state of politics in Israel and Iran and the
poor quality of their respective leaderships counsel only the most cautious
optimism. America has sharply increased its combat power in the region in
the hope of giving Iran and its client militias pause, but it is now essentially
hostage to Israel’s response to Iran’s latest provocation. The fact remains that
American and Israeli interests would be best served if focus shifted from
Iran’s attack back onto resolving the crisis in Gaza. This would underscore
Iran’s irrelevance to the core issue and perhaps incentivise Israel to take the
“day after” problem—the future of Gaza and broader Israeli-Palestinian
relations—more seriously.
The vexing question is how to engineer such a shift. The submerged anti-
Iranian alliance broke the surface when Jordan, France and Britain joined
Israel and America in countering Iran’s attack. The EU and the G7 also
condemned the Iranian attack. The EU is especially irritated by Iran’s
informal alliance with Russia and its material support for Russia’s war in
Ukraine. To head off escalation, America and the EU could propose a
meeting of alliance members in lieu of an Israeli military response. Such a
gathering—in, say, Riyadh, the Saudi Arabian capital—would be a powerful
if non-kinetic rebuke to Iran. It might also encourage Israel to refocus on a
swift conclusion of its campaign in Gaza, to agree on the deployment of a
multinational peacekeeping force and to start co-operating with the new
Palestinian prime minister, Mohammad Mustafa. Whether Mr Netanyahu
and his radical cabinet would recognise the wisdom of a merely diplomatic
response would, of course, remain uncertain. ■

Steven Simon is the professor of practice in Middle Eastern studies at the

Jackson School of International Relations, University of Washington, senior
research fellow at the Quincy Institute for Responsible Statecraft and the
author of “Grand Delusion: The Rise and Fall of American Ambition in the
Middle East” (2023).
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Casualties of war

A trauma surgeon on why Gaza is the worst of war

zones
It is like stepping back into the 19th century, says David Nott

Apr 15th 2024 |

OVER THE past 30 years I have worked in war zones around the world as a
surgeon treating casualties resulting from conflict, including in Syria,
Yemen, Afghanistan and Iraq. War wounds, the effects of fragments from
blast injuries and gunshot wounds require a special set of skills to manage.

At times there are mass casualties, and some of the patients I have seen over
more than 30 war missions had overwhelming injuries that even the best
units in the world would struggle to treat. The majority of injuries, though,
could be dealt with using the resources at hand. Most patients at least had a
good chance of arriving at a hospital within a timeframe that allowed them
to have the best surgical decision-making.
Gaza, however, is like no war zone I have ever witnessed.

During my recent month-long mission to Rafah, the approach to the city,

which is at the southern end of the Gaza Strip, was marked by mile after
mile of stationary trucks carrying aid which didn’t appear to be going
anywhere. The drive from Rafah through to the Beach Road, where most of
the NGOs were staying, was a shock to behold. I have worked in refugee
camps in Syria and Bangladesh where orderly tented structures had been
placed a safe distance apart, but here I witnessed thousands upon thousands
of people massed in a small area. There were whole families with just a
polythene sheet over their heads. The more fortunate had a tent but these
might hold six or seven people including children with hardly any room to
sit, never mind sleep, and with no toilet facilities. It felt inhumane. This went
on for miles, with small clearings which were full of stinking and rotting
rubbish infested with flies and surrounded by children.

My mission in Gaza was not to work as a surgeon on the front line, dealing
with the effects of gunshot wounds and fragments from blast injuries, but to
be on the second line, dealing with the surgical complications of thousands
of patients. It was worse than I could have imagined.

I worked in the only functioning hospital in Rafah. It had around 40 beds

and two operating theatres, but by the time I arrived, there were already over
2,000 patients lying in the wards, in corridors and in any other space that
was not occupied. There were often six to eight patients in a side room
meant just for one. Many patients had had operations and their risk of cross-
infection, because of proximity to each other, was enormous. Many had
wounds that had been stitched but fallen apart, dressed with sodden gauzes
stinking of pus and bacteria. All were malnourished, further weakening their
immunity and the normal healing process.

There was a total breakdown of the usual medical care that a society would
give to its population. Even in the midst of vicious wars such as in Yemen or
Syria, people had access to basic life-saving medicines. Not so in Gaza: all
pharmacies had closed down and there were no drugs. As a result, there was
no access to daily medications for people with chronic illnesses, such as
diabetes, and those with cardiological, renal, oncological and haematological
diseases. Of the 12 renal dialysis machines that were available in our
hospital, ten had broken down and the other two could not cope with the 30-
fold increase in patients requiring dialysis. There were no oral antibiotics
available for common conditions like chest infections or other
gastrointestinal illnesses.

Before the war, the World Health Organisation ran a mass-casualty training
programme and allocated an area within the hospital for the “red” patients—
who would be triaged into those requiring surgery immediately and those
who could wait a while—and a separate area for the “green” patients who
were the walking wounded. But by the time I arrived at the hospital this
system had broken down, overwhelmed by the sheer number of ill and dying
patients. The chaos I saw made a mockery of patient triage or any sense of
order.

With no access to routine medical or surgical help it appeared that the

hundreds of thousands of people squeezed together were on their own; it was
the grimmest of tests for Darwin’s theory of survival of the fittest. The
effects of communicable infectious diseases were cruelly apparent: some
children could not breathe owing to the effects of simple chest infections that
had progressed and turned their lungs into pools of pus, known as empyema.
For the first time in my life I found myself clinically diagnosing this awful
condition—something you would read about in a medical book in the 19th
century—in young children. Next to one six-year-old I found half a litre of
pus in the drain bottle.

I was operating on young people dying of a ruptured appendix, simply

because they had not been diagnosed early enough or could not get to a
hospital to see a doctor. I operated on patients with bowels that were
obstructed owing to cancers that should never have progressed so far. Once
removed, the cancerous bowels were simply thrown away. Patients weren’t
offered the vital pathological analysis that informs their continued treatment,
because there were no laboratories.

The accident and emergency department was overrun and there were patients
lying on the floor and propped up against the wall. Many of them had such
severe infections of their limbs that they required amputation; some were
due to the effect of diabetes being left untreated, others from the effect of
previous injury. Khan Younis, a city north of Rafah, was at that time under
bombardment and many of the wounded had to be left for 12 hours or so
before being brought in to us. The majority of them were by that time in a
state where nothing could be done. They were dead by the morning. ■

David Nott is a consultant surgeon at St Mary’s Hospital in London, where

he specialises in vascular and trauma surgery. He is the co-founder of the
David Nott Foundation, which trains surgeons in war zones.
This article was downloaded by calibre from https://www.economist.com/by-
invitation/2024/04/15/a-trauma-surgeon-on-why-gaza-is-the-worst-of-war-zones

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Briefing
America is uniquely ill-suited to handle a falling population
Emptying and fuming :: Which is a worry, because much of it is already shrinking

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Emptying and fuming

America is uniquely ill-suited to handle a falling

population
Which is a worry, because much of it is already shrinking

Apr 18th 2024 | CAIRO, ILLINOIS

CAIRO, A TOWN at the southern tip of Illinois founded in the early 19th
century, was given that name because it was expected to grow into a huge
metropolis. Located at the confluence of the Mississippi and Ohio rivers, it
was the transport hub of a region that became known as “Little Egypt”
because of its huge deltaic plains where farmers could grow anything.

Today, however, the name is redolent of lost civilisations. To walk around is

a strange experience. Turreted Victorian houses gently crumble, being
reclaimed by the weeds. What was once downtown (pictured) resembles an
abandoned film set. Cairo has no petrol stations, no pharmacies and no
hospitals. It has gone from six schools to two, both half-empty. “When I was
growing up in the 1970s, we had two grocery stores, we had two gas
stations. You know, a lot of businesses were still open,” says Toya Wilson,
who runs the city’s still operating and beautiful Victorian library. One
modest grocery store remains, but it is run at a loss by a charity and, when
your correspondent visited, was deathly quiet, with many bare shelves.

Cairo is on its way to becoming America’s newest ghost town. Its

population, having peaked above 15,000 in the 1920s, had fallen to just
1,700 people by the 2020 census. Alexander County, Illinois, of which it is
the capital, lost a third of its people in the decade to 2020, making it the
fastest-shrinking place in America.
Huckleberry Finnished

Its collapse has many causes. A century ago the supplanting of river
transport by railroads started the decline. In the wake of civil-rights
legislation in the 1970s, white-owned businesses fled to avoid hiring black
people. In the past decade the demolition of public housing displaced yet
more residents. But its biggest problem now is a national demographic
headwind. Between 2010 and 2020 over half of the country’s counties, home
to a quarter of Americans, lost population (see map). Over the coming
decades still more will, because America’s population is growing more
slowly. The change will be wrenching, because of America’s demographic
and administrative peculiarities.
Between 2010 and 2020 the number of people in the country grew by around
7.4%. That was the slowest decade of growth since the Great Depression
(when the population grew by 7.3%). In the 1990s the growth rate was 13%.
The main culprit is falling birth rates. The total fertility rate—a measure of
how many children a typical woman will have in her lifetime—was steady or
rising for 30 years from the mid-1970s. In 2008, however, it fell below 2.1,
the level needed to keep the population stable, and has since declined to 1.67
(see chart 1). If it remains below 2.1, only immigration can keep the
population growing in the long run. Yet net immigration, too, has been
falling since the 1990s.

The pandemic almost stopped the population growing altogether. In 2020

over 500,000 more people died than in 2019, even as the birth rate also fell.
With borders closed and American diplomatic outposts shuttered, net
immigration dropped precipitously. In 2021 the Census Bureau estimated
that the population expanded by just 0.2%, the lowest showing in the
country’s history. As covid-19 has receded, deaths have fallen back. And in
the past year or so, according to estimates published in January by the
Congressional Budget Office, immigration has increased, largely owing to
people crossing the southern border illegally. But demographers do not think
this surge will alter the long-term trend. This decade, according to William
Frey, of the Brookings Institution, a think-tank in Washington, DC, the
population will probably grow by around 4%. Even if you assume
immigration stays high, Mr Frey notes, America “would still show slower
growth in coming decades than in any decade in the nation’s history”.

The phenomenon is hardly unique to America. The populations of many

other rich countries are growing even more slowly or shrinking. So are those
of many developing countries. That of China, America’s biggest geopolitical
rival, shrank in 2023 for the second year in a row. Its fertility rate has
tumbled to just 1.15 children per woman. Russia’s population is smaller than
it was in 1991. America’s demographic problems are much smaller than
those of its peers. Yet there are reasons to worry that America will adapt to
slow growth even less readily than other countries.
Celebrated jumping frogs

America’s population is growing at about the same rate as those of Britain

and France. But America is different from Britain or France in that its
population is much more prone to move around the country. Some parts of
America are extraordinarily successful at attracting new people. The
population of the state of Nevada has grown ten times larger since the early
1960s, when it was so empty it could be used to test atom bombs. That of
Texas has more than tripled over the same period. In general Americans have
long flocked to “Sunbelt” states in the South and south-west. In the past that
was not a problem, because the national population was growing fast enough
that lots of people could leave the colder, cloudier states in the north-east
and Midwest without causing their populations to shrink. But if the
population as a whole is barely increasing, for one region to grow fast,
another must contract, notes Beth Jarosz of the Population Reference
Bureau, a non-profit research organisation that works with the Census
Bureau. Growing becomes a zero-sum game.
Between 2010 and 2020 just two states lost population: Mississippi and West
Virginia. The population of Illinois was essentially unchanged. All the rest
grew. But in 2021, 17 out of 50 shrank. The pandemic doubtless exacerbated
the trend, but internal migration shows no sign of stopping, so these
contractions are in all likelihood a sign of things to come.

Shrinking is bad for many reasons. As people leave a place, once beloved
businesses become less viable and close. Schools without enough pupils
struggle to maintain sports teams, or bands, or to teach a wide curriculum,
even if their funding per pupil remains generous.

But the biggest problem is that, once a place starts shrinking, it can set in
motion reinforcing cycles that accelerate the decline. For example, when
there is far more housing available than people to fill it, the result tends to be
a collapse in the value of homes. If it is severe enough, landlords and even
homeowners stop maintaining their properties, because the cost of repairs is
higher than the return they will generate. As the resulting blight spreads and
neighbourhoods begin to feel hollowed out, the incentive to stay is reduced
even further. This is what is called a death spiral.

Death spirals tend to be worse in America because of the remarkable level to

which the government is decentralised. Just 8% of spending on primary and
secondary education comes from the federal government, for example, and
less than a quarter of the spending on law enforcement. Local and regional
authorities levy 48% of all tax collected in America, compared with just 20%
in France and 6% in Britain (see chart 2). And even America’s federal
spending typically comes in the form of grants linked to population levels.
So when local tax revenues shrink, services must be cut or taxes must rise.
Research by Christopher Berry of the University of Chicago finds that, as
cities lose population, the cost of providing public services tends to stay
about the same. “Virtually nowhere reduces the public sector in line with the
population,” he says. Exactly why that happens is unclear: it could be that
servicing a given geographical area entails fixed costs, regardless of
population; it could be that laying off municipal workers is politically tricky.
Whatever the reason, the result is that the remaining taxpayers must pay
more simply to support the same services.
When high taxes combine with deteriorating public services, people leave.
Austin Berg of the Illinois Policy Institute, a right-leaning think-tank, notes
that people in southern Illinois have an easy way to escape higher taxation:
they can simply go to the next state. Whereas Alexander County in Illinois
has shrunk drastically, neighbouring counties just to the south are still
growing. The population of Paducah, Kentucky, 30 miles away on the other
side of the Ohio river from Cairo, grew by 8.4% in the 2010s. Many who
have stayed put still leave Illinois to buy petrol and groceries, to benefit from
lower sales taxes elsewhere. As revenue gradually diminishes in this way in
much of Illinois, the state is becoming ever more dependent on the taxpayers
of its one metropolis, Chicago.

The biggest contributor to death spirals is often pensions for government

workers. As America’s population ages, the overall burden of paying for
such pensions is getting heavier everywhere. But many pensions are funded
locally—and there are often shortfalls. Taxpayers in cities or states that
shrink end up lumbered with a pension bill from when the population was
much larger and so was the number of teachers, firemen and police officers.
As a result, says Mr Berry, “Places that shrink are screwed.”

When Detroit went bankrupt in 2013, the state of Michigan bailed out its
pensioners. But such bail-outs are dependent on the state having reasonably
healthy finances. When the population of a state as a whole is stagnant or
shrinking, that becomes much less likely. Across Illinois the total burden of
unfunded state and local pension liabilities is estimated to be around $210bn,
or roughly four times the state’s entire annual budget. Despite recent
reforms, the state government does not expect state pensions to be fully
funded for another 25 years. Chicago, meanwhile, is grappling with its own
pension problems. That does not leave much cash to bail out or revive places
like Cairo.

Does it matter if places die? Some would argue no. People are better off if
they can move to opportunity, instead of becoming trapped in dying cities or
jobless rural areas. Indeed, competition between cities helps explain
America’s economic dynamism; many economists would like there to be
even more movement. Although people are flocking to new jobs in places
like Houston or Atlanta, high housing costs stop workers from moving to
even better paid jobs in places like San Francisco or New York City. If those
cities built more housing, they would attract more workers from other parts
of America. Places like Cairo would shrink even faster, but America as a
whole would be richer.

Yet in reality, shrinking is hugely politically unpopular because, inevitably,

many people are left behind, and the lives of those unwilling or unable to
move worsen as their neighbours depart. Federal, state and local officials
know this. And so they will do almost anything to avoid shrinking. All
manner of big government facilities, from air-force bases to prisons, can be
located in rural areas, ensuring there are jobs that in turn sustain the rest of
the economy. For decades cities and states across America have also
competed to attract new businesses, handing out land, tax breaks or cash to
firms that open factories or offices.

Now cities and states are wooing workers directly, too. Take Muncie,
Indiana, a city of 65,000 people about 50 miles north-east of Indianapolis.
Since 2021 it has offered a $5,000 grant to remote workers who agree to
move there. The cash is in essence a marketing device to get potential
movers to consider a town they might not otherwise have heard of, says Dan
Ridenour, the city’s Republican mayor. “It’s become very competitive—and
not just for remote workers, for all workers,” he says.

So far 152 people have moved to the city under the scheme, which is run by
MakeMyMove, a firm based in Indiana which helps promote the incentive
schemes of cities that are willing to pay people to move there. From its
foundation in 2017 MakeMyMove has expanded enormously, says Christie
Hurst, its spokeswoman, not least thanks to the pandemic, which freed many
workers from having to go to an office. The result is a much larger pool of
potentially mobile workers over whom cities can compete—hence the
growth of the business. Yet a taxpayer gained by Muncie, Indiana, is one lost
to somewhere else. And with growth overall slowing, not everywhere can
win. In fact, remote-working may only hasten the decline of some struggling
places, by making it possible for a worker in, say, Muncie, to relocate to a
pretty mountain town in Colorado.
 All signs point to trouble

Ultimately, the risk is that all of this is at best “keeping places on life
support”, says Mr Berry. If America’s population does not grow faster, far
more places will begin to die. The politics of that will be ugly. Of the
counties that lost population in the decade to 2020, 90% voted for Donald
Trump in 2020. Presumably, his fulminations about American decline
resonate.

Yet much of the recent slowdown in America’s population growth dates to

Mr Trump’s presidency when, even before the pandemic, net migration fell
by a quarter as his administration deliberately gummed up the immigration
services. If he is re-elected, Mr Trump promises “the largest domestic
deportation operation in American history”, to remove illegal immigrants.
(Admittedly Mr Trump says that he is in favour of legal immigration. He
occasionally promises a “big beautiful door” as well as “a big beautiful
wall”. But he wants to let in only people from “nice” countries.)
No life on the Mississippi

Driving your correspondent around Cairo, Phillip Matthews, the chairman of

the Democratic Party in Alexander County, lists services that have been cut
over the years: public housing closed, government offices moved, schools
shut down. He points out the public hospital in which he was born—now a
derelict concrete hulk. “A lot of this is done by design,” he declares, of his
town’s decline. What he means is that politicians took many of the decisions
that have contributed to the decay. Mr Matthews is pinning his hopes on a
stalled plan to spend $40m on a new river port in Cairo, which has been
backed by J.B. Pritzker, the state’s Democratic governor. If the port is ever
built, perhaps Cairo will recover somewhat. But in the meantime, Mr
Matthews, a black pastor, says he understands why more and more people in
his region support Mr Trump. “The Democratic Party is failing its
constituents,” he says. “People are scared to say it, but truth is truth.” The
worse things get, the more votes Mr Trump will win. ■
This article was downloaded by calibre from
https://www.economist.com/briefing/2024/04/18/america-is-uniquely-ill-suited-to-
handle-a-falling-population

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United States
Donald Trump’s first criminal trial will be both
momentous and tawdry
Burlesque hour :: But will it even matter?

America’s trust in its institutions has collapsed

Busted trust :: What are the consequences?

Is ticketing homeless people a cruel and unusual

punishment?
Sleeping rough :: The question has confounded western cities. The Supreme Court will weigh
in

The White House unveils a pair of bad policies to woo

voters
Biden and student loans :: Tariffs for steelworkers and loan forgiveness for students are both
regressive

Lots of state legislators believe any contact with fentanyl is

fatal
Can touch this :: (It is not)

How two small Texas towns became the patent-law centre

of America
If you build it, they will sue :: Are entrepreneurial judges a good or a bad thing?

Truth Social is a mind-bending win for Donald Trump

Lexington :: And disturbing evidence of how he destabilises reality for Americans

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Burlesque hour

Donald Trump’s first criminal trial will be both

momentous and tawdry
But will it even matter?

Apr 18th 2024 | New York

MANHATTANITES ONCE rolled their eyes at Donald Trump. Then they

came to revile him. Soon 12 will decide if he is a felon. Jury selection in his
first criminal trial, expected to last up to eight weeks in a shabby courtroom,
has sped along; prosecutors will set out their case in a matter of days. One
prospective juror confessed that the weight of the task at hand had kept her
up at night: “This is, like, a big deal in the grand scheme of things.”

Yes and no. Manhattan’s district attorney, Alvin Bragg, has brought the first
criminal indictment against a former president, who also happens to be
running again. But the felony charges are low-level and the details tawdry.
The case is about sex, money and blackmail. Mr Trump’s former lawyer and
fixer, who will testify against him, once described the conduct at issue as the
“filth and muck of politics” and, less delicately, a “shit sandwich”.

The charges centre on Mr Trump’s efforts to buy the silence of Stephanie

Clifford, a former porn star better known as Stormy Daniels, before the 2016
election. Prosecutors allege that the payment was made to protect his
candidacy and thus amounted to an undeclared campaign expense. Mr
Trump is accused of falsifying business records to hide the pay-off. He
denies any such scheme.

Early in his first campaign Mr Trump met his lawyer, Michael Cohen, and
his friend David Pecker, then the boss of a tabloid publishing company. Mr
Pecker agreed to be Mr Trump’s “eyes and ears”—to look out for damaging
stories and alert the campaign to them. When a former Trump Tower
doorman tried to sell a bogus story to tabloids about how Mr Trump had
fathered an illegitimate child, Mr Pecker warned team Trump, which
directed him to buy exclusive rights to the story and bury it, a practice
known as “catch and kill”. A similar deal was struck when Karen McDougal,
a former Playboy model, emerged from the woodwork to allege an affair
with Mr Trump starting in 2006.

About a month before the election Ms Daniels surfaced, shopping around her
story about a sexual encounter with Mr Trump, also in 2006. The “Access
Hollywood” tape, in which Mr Trump bragged about grabbing women’s
genitals, had just appeared in the press and nearly sunk his candidacy. The
campaign could ill-afford headlines about how he had slept with a porn star
while his wife was nursing their newborn son. This time Mr Cohen paid Ms
Clifford $130,000 from his own pocket.

To reimburse Mr Cohen, Mr Trump allegedly agreed to pay him in monthly

instalments and mislabel them as legal expenses in the company’s accounts.
Hence the 34 felonies alleged by Mr Bragg: 11 related to invoices, 12 to
ledger entries and 11 to cheques. Normally these would be misdemeanours.
To upgrade them, prosecutors must show that the records were falsified to
commit or conceal another crime. They have suggested a few: that the hush
money violated federal campaign-finance rules, and that tax wasn’t properly
paid on the reimbursements.
A parade of witnesses should bolster the prosecutors’ case. Mr Cohen and
Mr Pecker will testify to Mr Trump’s alleged involvement in the scheme.
There is an ample paper trail, including cheques that Mr Trump personally
signed, and a recording of him discussing the payment for Ms McDougal’s
silence.

Mr Trump’s lawyers, for their part, will contend that there was nothing
illegal about the hush money: that it was paid purely to protect his personal
reputation and spare his wife embarrassment, not to influence the vote or
skirt campaign-finance rules. John Edwards, a former Democratic candidate
for president, successfully made that argument and was acquitted of
breaking campaign-finance laws to hide an affair and a child out of wedlock
during the 2008 election. But it will not help that Mr Cohen has admitted in
court that it was a crime. In 2018 he pleaded guilty to making an undeclared
campaign contribution (among other charges) and spent just over a year in
prison.

Mr Trump’s principal strategy, then, will be to impugn Mr Cohen’s

credibility and paint him as a fabulist. Indeed Mr Cohen has an impressive
record of lying under oath and a well-documented animus towards his
former boss, who reportedly relished treating him like garbage. If Mr Trump
is convicted, sentencing will be decided by the judge, Juan Merchan. Jail
time seems unlikely for a first-time, white-collar felon. There is no
mandatory minimum sentence. Each count carries a maximum of four years
in prison.

Would a conviction sway voters? That Mr Trump wanted his philandering

kept quiet is neither surprising nor news; Americans are inured to his sex
scandals by now. Compared with his other indictments this is small bore.
Voters consider it the least serious of the four and a plurality thinks a guilty
verdict will have no bearing on his political career, according to polling by
YouGov. An acquittal would vindicate Mr Trump’s claim to be the victim of
a political crusade by Mr Bragg, an elected district attorney who is a
Democrat.

The indictment has come in for heavy criticism, even among lawyers on the
left. There was doubt about whether state prosecutors could bring a case that
rests on a federal campaign-finance violation, since that is the domain of
federal prosecutors. Those questions might arise on appeal, but for now they
are academic: judges have refused to toss the case out. Of the four
indictments against Mr Trump, it may be the only one to produce a verdict
before the election in November. The other, weightier charges, about alleged
election interference and the mishandling of classified documents, are beset
by delays. ■

Stay on top of American politics with The US in brief, our daily newsletter
with fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
This article was downloaded by calibre from https://www.economist.com/united-
states/2024/04/18/donald-trumps-first-criminal-trial-will-be-both-momentous-and-
tawdry

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Busted trust

America’s trust in its institutions has collapsed

What are the consequences?

Apr 17th 2024 | WASHINGTON, DC

AS FAR AS stereotypes go, brash national self-confidence has long been a

defining feature of how Americans are viewed abroad. In 2006, when Gallup
first started asking Americans about their trust in key institutions, the
country ranked at the top of the G7 league table, tied with Britain. In 2023,
for the first time, America came last.

New data from Gallup, a pollster, show that American trust in several
national institutions is on the decline. That may not be surprising, given the
fraught state of the country’s politics, but the cumulative fall over the years
is startling (see chart). Twenty years ago Americans had the highest
confidence in their national government of people in any G7 country. Today
they have the lowest. Americans are tied with Italians in having the lowest
trust in their judicial system, and come last in faith in honest elections. Even
the army is suffering from a dip. Although still high at 81%, American trust
in its armed forces is now lower than at any point since 2006, and—gasp—
lower than in France.

The reasons behind this crisis of confidence in the self-declared greatest

country on Earth are varied. The roots of a (healthy) scepticism of
government can be traced back to the Vietnam war and the Watergate
scandal of the early 1970s. The gradual dying-out of the second world war
generation, which had significantly higher institutional trust than later
generations, also plays a role. However, more recent developments help
explain the sharp decline of the past years.

Donald Trump’s “constant barrage” of unfounded accusations about the

2020 presidential election clearly plays a big role in Americans’ low trust in
the electoral system, says Henry Brady of the University of California,
Berkeley. This no doubt also contributes to growing distrust of the judiciary
—just last week Mr Trump called the criminal “hush money” trial against
him “a communist show trial”. But few things seem to have done more to
directly erode trust in the judiciary than the Supreme Court’s decision in
2022 to overturn Roe v Wade. Before this ruling removing a constitutional
right to abortion in America, Democrats and Republicans trusted the court in
roughly equal measure; afterwards, confidence among Democrats dropped
through the floor.

The divergence with Britain is especially striking. Whereas British

confidence in the country’s judiciary and electoral system is higher than at
any point in the history of the survey, America has moved in the opposite
direction. Some 70% of Britons now say that they have confidence in the
honesty of elections, compared with only 44% of Americans.

“Like America, the UK has seen a pretty steady decline in confidence in

national government,” observes Benedict Vigers, from Gallup, “but this
more core belief in the foundation of the democratic system and in fair
elections is still pretty strong.” The same cannot now be said about America.
Even within the broader OECD club of mostly rich democracies, only
Hungary, Turkey and Colombia have less trust in honest elections.

Yet more than the loss of trust overall, what really worries Mr Brady is the
increased polarisation of trust in America. Having some institutions that
Democrats trust more (journalism, higher education, science) and others that
Republicans trust more (religion, the armed forces and the police) is a matter
of concern, particularly for the institutions themselves. The problem is even
starker when the workforces of such institutions become increasingly
homogenous, something that has happened in predominantly progressive
higher education as well as in the predominantly conservative military
services.

Strong and credible institutions count among the best guarantors of a

country’s long-term stability. People who broadly trust authority are more
likely to comply with government directives, such as filing their tax returns.
During the pandemic, people who had high trust in government were more
likely to get vaccinated and comply with public-health guidance on
lockdowns or social-distancing rules, according to a meta-analysis by Daniel
Devine of the University of Southampton and colleagues. Blind trust in
authority is dangerous, and a degree of scepticism can be healthy. But
America’s slide towards becoming an ever more distrusting place has perils
of its own. ■

Stay on top of American politics with The US in brief, our daily newsletter
with fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
This article was downloaded by calibre from https://www.economist.com/united-
states/2024/04/17/americas-trust-in-its-institutions-has-collapsed

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Sleeping rough

Is ticketing homeless people a cruel and unusual

punishment?
The question has confounded western cities. The Supreme Court will weigh
in

Apr 18th 2024 | Los Angeles

IN 2013 LOCAL leaders in Grants Pass, Oregon, held a meeting to

brainstorm ideas for how to tackle the city’s growing “vagrancy problem”. A
record of that meeting states that participants suggested “driving repeat
offenders out of town and leaving them there”, and buying homeless people
a bus ticket to anywhere else. “The point”, said Lily Morgan, a city-council
member, “is to make it uncomfortable enough for them in our city so they
will want to move on down the road.”

The city, tucked between the Cascade and Siskiyou mountains north of the
California border, banned sleeping and camping in public places. Over the
next few years Ed Johnson, the director of litigation for the Oregon Law
Centre, a legal charity, started to hear from homeless people in Grants Pass.
They were woken by police, he recalls, slapped with fines they couldn’t pay
and thrown in jail. In 2018 Mr Johnson sued the city on behalf of his
homeless clients. On April 22nd the Supreme Court will hear oral arguments
in Grants Pass v Johnson. The question at the heart of the case is whether
penalising homeless people for sleeping outside when they have nowhere
else to go counts as cruel and unusual punishment, which is banned by the
Eighth Amendment.

Two cases will serve as important precedent. In 1962 the Supreme Court
found in Robinson v California that a Golden State law making drug
addiction illegal—rather than the use, purchase or sale of drugs—was
unconstitutional. Jail time alone is not cruel and unusual, wrote Justice
Potter Stewart, in his majority opinion. But the law criminalised a status
rather than an act, and “even one day in prison would be a cruel and unusual
punishment for the ‘crime’ of having a common cold.”

In 2018 the Ninth Circuit Court of Appeals, which covers nine western
states, applied the logic set out in Robinson v California to homelessness. In
Martin v Boise the court held that the city of Boise could not penalise people
for sleeping rough when no shelter was available to them, as such citations
ran afoul of the Eighth Amendment. The Supreme Court declined to review
the case in 2019. Deciding to hear Grants Pass v Johnson gives the court,
now more conservative than it was five years ago, another crack at the issue.

Western politicians are hoping the court’s ruling will offer clarity on how to
tackle the proliferation of tent encampments. Half of the growth in
America’s homeless population between 2020 and 2023 came from the nine
western states that comprise the Ninth Circuit. More than a quarter came
from California alone. Oskar Rey, a lawyer who advised cities on how to
comply with the Boise and Grants Pass rulings, argues that they are narrower
than many think. “Sweeping” or breaking up encampments is allowable so
long as cities aren’t ticketing homeless people who have no other shelter,
argues Mr Rey. Sweeping encampments is anathema to activists who argue
that tearing down tents is traumatising, but doing so does not criminalise
homelessness.
Still, some policymakers argue that the courts have tied their hands. In some
cases that is true. In 2022 a federal judge interpreted the Boise and Johnson
rulings broadly, and blocked San Francisco from clearing encampments
when there is no other shelter available. Politicians have another reason to
blame the courts: it is easier to whine about judges than to shoulder the
blame themselves for failed policies.

The interest in Johnson is also revealing of a larger trend. As recently as the

early part of the covid-19 pandemic, Democrats were leery of sweeping
away encampments. That liberal mayors around the West are now
trumpeting their attempts to eradicate them is testimony to how fed up their
voters are with homelessness in Los Angeles, San Francisco and Portland.
Tents have come to symbolise disorder and failed policies. No wonder
politicians who hope to stay in office want them gone.■

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Biden and student loans

The White House unveils a pair of bad policies to

woo voters
Tariffs for steelworkers and loan forgiveness for students are both regressive

Apr 18th 2024 | WASHINGTON, DC

IT IS A Washington truism that little gets done in Congress during an

election year. This means that pandering politicians, and particularly the
president, need to get creative. Consider two recent moves by President Joe
Biden to shore up support among blocs traditionally supportive of the
Democratic Party.

On April 17th Mr Biden called for a 25% tariff on certain Chinese steel and
aluminium products; in some cases that amounts to more than tripling
existing import taxes. This is in addition to tariffs put in place by Donald
Trump on some products. Mr Biden also told a steelworkers’ union that his
administration will investigate Chinese shipbuilding subsidies and work with
Mexico to block Chinese tariff evasion.

The day before the tariff announcement, the Department of Education

proposed a regulation that would forgive unpaid interest for Americans who
owe more on their student loans than they originally borrowed. Around 25m
voters could benefit. The plan would also help more than 2m borrowers who
have held loans for at least 20 years and an additional 2m who qualified for
existing assistance programmes but didn’t sign up. Those who attended
“low-financial-value programmes or institutions” could get relief as well.

The rule faces a month-long public-comment period, then a review. The

administration hopes to implement the new proposal by the autumn. All this
follows an announcement on April 12th of another student-loan cancellation
for 277,000 borrowers that adds up to $7.4bn. The Education Department is
working on yet another proposal to help those “experiencing hardship”
repaying their loans.

These moves are the latest in a long White House campaign to relieve
hundreds of billions of dollars in student debt. The White House estimates
that it already has approved $153bn (or 0.6% of GDP) for more than 4m
borrowers. The Committee for a Responsible Federal Budget (CRFB)
believes the new policies cost $147bn. The hardship cancellation could
range between $100bn and $600bn, depending how stringent the final
proposal is.

This is probably good politics for Mr Biden, as the Democratic Party

continues to consolidate support among college-educated voters and worries
about losing rank-and-file union members seduced by Mr Trump’s overtures
towards them. As policies, they are retrograde bungs to favoured groups at
the expense of other Americans.

The steel and aluminium tariffs are inflationary, which makes them worse
for low-income Americans. As for student-loan forgiveness, helping
borrowers at high default risk could be progressive. But many borrowers in
relatively good financial health carry debt because they choose to cover only
their minimum monthly payments. Some voters might wonder whether law-
school graduates really need more federal help than plumbers.
Congress has given the presidency broad but not unlimited authority to enact
tariffs; Mr Biden’s student-loan actions are more dubious. The Supreme
Court struck down a previous proposal, which relied on an overly expansive
reading of a law that allowed for debt forgiveness during national
emergencies. “This one is a lot more targeted, but if you pick enough targets,
you get to a similar place,” Marc Goldwein of the CRFB says of the new
proposal.

Both parties see value in having a debate about the cost, legality and fairness
of Mr Biden’s student-loan efforts. While that goes on, the country is
avoiding a more serious conversation about what has made college so
expensive in the past few decades. And Mr Biden’s tariff play is only the
latest sign that embracing protectionism is now a bipartisan habit. ■

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with fast analysis of the most important electoral stories, and Checks and
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Can touch this

Lots of state legislators believe any contact with

fentanyl is fatal
(It is not)

Apr 18th 2024 | WASHINGTON, DC

IN AN EPISODE of the cop drama “Blue Bloods”, Detective Maria Baez

touches a dish covered in fentanyl, a powerful synthetic opioid. Moments
later she is rushed to the hospital, fighting for her life. In the real world, viral
videos show first responders seemingly harmed by the drug. In one, an
officer is warned not to get too close to the substance. Within seconds he
staggers back and falls to the ground. His peers administer naloxone, a drug
that reverses the effects of opioid overdose, and he slowly regains
consciousness.

The fear is so widespread that Florida’s governor, Ron DeSantis, even signed
a bill on April 8th making it a felony, punishable with prison time, to
recklessly endanger the life of a first responder by causing “inhalation” of
fentanyl or “absorption through skin” which leads to “an overdose or serious
bodily injury”. Yet there is no documented case of this taking place and
medical researchers say it is extremely unlikely. “The law creates a felony
assault charge for something that is scientifically impossible and has never
happened,” says Ryan Marino, a toxicologist at University Hospitals
Cleveland Medical Centre.

The Drug Enforcement Agency (DEA) has a webpage from 2017 warning
first responders about the dangers of fentanyl. “The opioid epidemic
nationwide has caused havoc and heartbreak…Any fentanyl exposure can
kill innocent law enforcement, first responders and the public.” Fentanyl is
indeed a scary drug. It is responsible for 70% of drug-overdose deaths per
year. And policing is also a tough job. By the nature of the role, officers are
at greater risk than the general public.

But toxicologists show that such incidental exposures are not harmful. The
American College of Medical Toxicology and the American Academy of
Clinical Toxicology say that “fentanyl and its analogs are potent opioid
receptor agonists, but the risk of clinically significant exposure to emergency
responders is extremely low.” According to the Centres for Disease Control
and Prevention, no law-enforcement officers have died from fentanyl
exposure while performing their duties.

If fentanyl were truly as toxic as claimed by agencies like the DEA, then
everyone would be at risk. Researchers have found trace amounts of the drug
in public spaces, such as buses. Yet passengers and drivers are not dying.
Nurses and doctors administer the drug and treat overdose victims every day.
Drug-dealers would also “be dropping dead left, right, and centre”, says
David Juurlink of the University of Toronto, unless they wore protective
equipment. But Brandon del Pozo, a former police chief and public-health
professor at Brown University, says that during fentanyl-related drug busts,
the scene was often quite casual. “There’s one guy watching TV, one guy
eating Chinese takeout, another guy cutting fentanyl on the table,” he
explains. “They are not wearing hazmat suits and gas masks.”

Perpetuating the myth of incidental harm makes an already tough job that
much more fraught. “Imagine being a cop and believing that any time I go
near these people, I could just die,” says Dr Del Pozo. “That is an incredibly
needless source of stress.” Some medical professionals say that the officers
in those viral videos probably had real physical reactions, but they do not
resemble the symptoms of an opioid overdose. Some think the officers may
have been stricken with panic instead.

Confusion about the potency of fentanyl could also have consequences for
people who are actually overdosing. Drug users may now hesitate to call for
help for an overdose victim for fear of punishment. If first responders take
time donning unnecessary protective gear, the victim could die.

Lawmakers in Florida passed the bill anyway. Jay Collins, a Green Beret
army veteran and state senator who sponsored it, is undeterred by the
naysayers. “We have to make sure we protect and preserve our law
enforcement,” he says. “I want our law enforcement to know that,
unequivocally, we here in Florida have their back.”■

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with fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
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fatal

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If you build it, they will sue

How two small Texas towns became the patent-law

centre of America
Are entrepreneurial judges a good or a bad thing?

Apr 16th 2024 | MARSHALL AND WACO

IN 2019 A federal judge named Alan Albright gave a presentation to a group

of lawyers. His courthouse in Waco, Texas, where he is the only judge, sits
near a sweet shop. The talk was called “Why You Should File Your Next
Patent Case Across the Street from the ‘Hey Sugar’”.

The intellectual-property lawyers who heard his pitch were apparently

persuaded. Less than two years after being appointed to the bench, Judge
Albright had nearly 20% of the country’s patent cases, according to Lex
Machina, a legal-analytics firm. By 2021, he had 23%. Trial teams of white-
shoe attorneys from New York and California, representing clients such as
Google and Intel, began streaming into Waco, a city of 140,000 people in
central Texas more widely known for being the birthplace of Dr Pepper, a
questionable fizzy drink.

Bill Wetterman, a real-estate developer and Waco native, spotted a business

opportunity. In 2021 he opened up Legal Lawfts, rentable offices—“war
rooms”, in the parlance—that come outfitted with security cameras, back-up
internet and, by request, gluten-free Oreos.

In Waco Mr Wetterman’s competitors include Connect Litigation, a firm that

runs a few war rooms downtown. But Connect focuses its operations about
200 miles north-east. The “patent docket” is a familiar term in Marshall, a
faded but quaint town of about 24,000 people near the Louisiana border.
Between 2000 and 2020, more than 17% of all patent cases filed in federal
court were in the Eastern District of Texas—roughly 13,500. By comparison
Delaware, where most big American companies are incorporated, had fewer
than 10,000 cases; the Northern District of California, where Big Tech firms
are based, had fewer than 5,000.

T. John Ward, Marshall’s federal judge from 1999 to 2011, is responsible for
the town’s puzzling popularity. Patent cases are technical. Judges must
referee the sharing of sensitive source code, for example: plaintiffs argue it
will prove their case; defendants resist, fearing their secrets will leak. They
also interpret what a patent’s words actually mean, which can be “outcome
determinative”, says Mark Siegmund, a patent litigator in Waco. Cases can
also take years to get to trial.

Mr Ward learned that Northern California’s court had implemented local

rules to build what lawyers call “certainty”—a predictable process—into the
unwieldy cases. He adopted similar ones, tweaking them to prioritise speed.
Litigants reached trial in half the time it took in California. Around the same
period, “it also happened that there was an explosion of patent-troll
litigation,” says Paul Gugliuzza of Temple University, referring to plaintiffs
who own bad patents and seek quick and cheap settlements. By the mid-
2010s Mr Ward’s successor, Rodney Gilstrap, had about a quarter of the
country’s patent cases.
Patentsville, USA
The caseload in Marshall books up the courthouse and boosts businesses
downtown. One hotel bought a subscription to PACER, an online database
for court records, to keep track of potential clients. In an apparent bid to
make locals (read: jurors) like it more, Samsung, a frequent defendant,
sponsored an ice rink across from the courthouse. TiVo spent $10,000 on a
champion steer at a livestock auction, and named it TiVo.

This sits uneasily with some. Federal judges are meant to be generalists, and
courts are not supposed to power their local economies. And the rules “tend
to be more plaintiff-friendly”, says Andrew Russell, a patent litigator in
Delaware. Defendants often try to transfer their cases elsewhere. Yet that is
partly because the speedy tempo suits plaintiffs, as deep-pocketed
defendants can afford to drag out litigation. Early on, verdicts in the Eastern
District were lopsided, because the posh defence lawyers were “terrible” at
arguing before juries, says Michael Smith, a longtime patent litigator in
Marshall. Verdicts in the Eastern District now conform to national averages:
in Waco, defendants actually win more, according to Lex Machina.

But the optics in Marshall were sufficiently bad that in 2017 the Supreme
Court made it harder, in effect, for plaintiffs to file lawsuits there, by
requiring defendants to have “regular and established” business where they
are sued. Apple shut down its nearby stores. (Samsung did not and, despite
the ice-rink, was hit with a $303m jury verdict in Marshall last year.)

By 2021 Waco’s patent docket—similarly speedy, thanks to local rules—was

attracting scrutiny, too. John Roberts, the chief justice of the Supreme Court,
acknowledged senators’ concerns about the “extreme concentration of patent
litigation” there. Starting in 2022 Waco patent cases were required to be put
into a lottery, so that any of the Western District of Texas’s 12 judges could
draw them. In 2023 fewer patent cases were filed overall, and Waco saw a
steep drop-off.

Patent litigation could reasonably warrant a specialised court, similar to the

system America uses to handle bankruptcy cases, stacked with experienced
judges. “There are compelling reasons why Congress might think it was wise
to create a national patent court,” says Steve Vladeck of the University of
Texas. “The problem is that it’s for Congress to decide, not the judge of the
37th-largest city in Texas.” Waco in fact ranks 24th in the state. Marshall is
tied for 138th.■

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with fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
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Lexington

Truth Social is a mind-bending win for Donald

Trump
And disturbing evidence of how he destabilises reality for Americans

Apr 18th 2024 |

SINCE SHARES in Donald Trump’s media firm began trading publicly on

March 26th, their value has slid by more than half, prompting headlines, and
some crowing from the left, about the decline. Which still seems less
newsworthy than that anyone is buying at all: even at roughly $26 per share,
investors are prizing Mr Trump’s social-media platform, Truth Social, at a
heroic value relative to its performance or apparent potential.

One must write “roughly” $26 per share because even the Wall Street
Journal has struggled to ascertain just how many shares are outstanding.
Other possible red flags for investors include the company’s independent
auditor reported on March 25th that its “operating losses raise substantial
doubt about its ability to continue as a going concern”. After forecasting
sales of $144m for 2023, Truth Social delivered just $4.1m, and a loss of
$58.2m.

Truth Social says it is contending with such entrenched giants as Facebook

and Amazon, but it does not disclose its audience numbers. In a regulatory
filing it tried to make a virtue of this by arguing that “adhering to traditional
key performance indicators” such as traffic or advertising results—the sorts
of results that typically obsess media investors—could “potentially divert its
focus from strategic evaluation” of its business. For March, the analytics
firm Similarweb found Truth Social had about 7.7m unique visitors, or
roughly 0.05% of Facebook’s traffic.

Maybe such realities will suddenly drag down the stock. But it has a long
way to fall to depart the reaches of faith for the realm of reason. John
Rekenthaler, a vice-president of Morningstar, an investment research firm,
has estimated that if people valued Truth Social as they did the initial
offerings of such firms as Tesla, Google and Facebook, the shares would be
selling for 50 cents.

Investors in Truth Social, compared with those in other startups, are clearly
not relying upon the same sort of analysis or even indulging the same sort of
dream. They are not even playing the same game as the very online investors
who drove up such meme stocks as AMC and GameStop to irrational
valuations that were also relative fractions of the paper value of Mr Trump’s
company.

Something else is happening here, a tremor in market logic, even a rupture

with common sense. Maybe investors believe that Mr Trump will win in
November and, as the first president with his own social platform, insist on
making all his pronouncements upon it. Maybe they adore him and want to
multiply his billions. Whatever their motives, the performance of Mr
Trump’s stock so far represents the purest demonstration of his power not
just to bend reality, but to convert illusion into reality—and also, maybe, of
how Americans are coming to confuse the two.

For years Mr Trump has used his mastery of the virtual world—the
controversy and excitement he generates online—to increase his political
power. He has just 7m followers on Truth Social, compared with 87m
followers on X. But by taking ownership himself of the virtual events he is
so skilled at provoking, he has created tremendous paper value, and he
appears to be on his way to turning that virtual value into real wealth. Mr
Trump holds 78.8m shares in the company, or about 57% of the total, and he
is due to receive 36m more if the share price stays above $17.50 until late
April. Under a “lockup” agreement Mr Trump cannot sell for six months,
until September 25th, unless the company’s board releases him from the
restriction.

What Mr Trump has called “truthful hyperbole”, and others call lying, has
been central to his success. When he built Trump Tower it had 58 floors, but
in numbering them he skipped ten to claim 68 instead. This tactic has
occasionally caught up with him, most severely in the $355m penalty
imposed on him in February after a New York judge found Mr Trump had
lied for years to secure loans and make deals—trebling the size of his
penthouse apartment, for example, and valuing his Mar-a-Lago estate in
Florida based on its potential for residential development, though he had
surrendered the rights to develop it as anything but a club.

Yet Mr Trump’s trademark hyperbole is the very foundation of Truth Social.

Its value rests on his participation—his agreement with the company
constrains his posting elsewhere—and his posts are full of exaggerations if
not lies, whether about the criminal cases against him, President Joe Biden,
or the state of the country. Is that some sort of fraud? Or is it just life online,
and how value is best created there, to be exchanged for an offline currency
via advertising, the stockmarket or the ballot box?
There is no spoon

Virtual reality always seems to be a step away. Alternative digital worlds like
“Second Life” have not caught on, and clunky AR headsets have proved
more aversive than immersive. But Americans may not recognise the degree
to which reality online—a reality that did not exist for most just a generation
ago—has washed back into the real world, distorting their politics, their
relationships, their apprehension of what is true or what has value. The rules
governing all of this have changed, and it is not clear what the new rules are.
Mr Trump and others are still inventing them.
Officials in the administration of President George W. Bush used to deride
what they called the “reality-based community” and insist they could “create
our own reality”. They were pikers compared with Mr Trump. It seemed like
a joke, during his campaign for president in 2016, when he referred to his
political following as a “movement”. Now it is reasonable to call him the
most consequential figure in American politics since Ronald Reagan. Maybe
Mr Trump will lose the election in November, and maybe that will cause
stock in Truth Social to crash, if it does not collapse before then. But it does
not seem like a crazy act to buy a few shares now, just in case. ■

Read more from Lexington, our columnist on American politics:

Are American progressives making themselves sad? (Apr 4th)
The case of Stormy Daniels echoes past scandals (Mar 27th)
Binyamin Netanyahu is alienating Israel’s best friends (Mar 18th)

Also: How the Lexington column got its name

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The Americas
Elon Musk is feuding with Brazil’s powerful Supreme
Court
Musk v Moraes :: The court has become the de facto regulator of social media in the country

The world’s insatiable appetite for Canada’s maple syrup

The sticky stuff :: Production is booming, but climate change is making output more erratic

Why Ecuador risked global condemnation to storm

Mexico’s embassy
The Glas affair :: Jorge Glas, who had claimed asylum from Mexico, is accused of abetting
drug networks

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Musk v Moraes

Elon Musk is feuding with Brazil’s powerful

Supreme Court
The court has become the de facto regulator of social media in the country

Apr 14th 2024 | Saõ Paulo

OVER THE past two weeks Elon Musk, a serial entrepreneur, has been on a
very public tirade against Alexandre de Moraes, one of the Brazilian
Supreme Court’s 11 judges. The dispute is about X, a social-media company
that Mr Musk owns. On April 6th X announced that a Brazilian court had
ordered it to block an undisclosed set of “popular” accounts or face hefty
fines. Instead, Mr Musk said he would lift restrictions on previously
suspended Brazilian accounts, and threatened to close down X in Brazil. Mr
Moraes then opened an inquiry into Mr Musk for obstruction of justice. That
prompted Mr Musk to rail that censorship in Brazil is worse than in “any
country in the world in which this platform operates”, and to call Mr Moraes
a “dictator” who should be impeached and put “on trial for his crimes”
So far, so hyperbolic; on April 15th it emerged that X had sent a letter to
Brazil’s Supreme Court, assuring the court that X would comply with its
orders. But the row is revealing on two issues. One is the power of Brazil’s
Supreme Court, which enjoys outsize authority over the lives of Brazilians.
The other is the debate over how to regulate social media without hurting
freedom of speech. Brazilians adore social media. According to GWI, a
market-research firm in London, they spend an average of three hours and
49 minutes a day swiping and scrolling, more than people anywhere else
(see chart). They also send the most messages on WhatsApp, a messaging
platform, and rely heavily on social media for news. This makes Brazil
fertile ground for the spread of misinformation and efforts to regulate it.
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americas/2024/04/14/elon-musk-is-feuding-with-brazils-powerful-supreme-court

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The sticky stuff

The world’s insatiable appetite for Canada’s maple

syrup
Production is booming, but climate change is making output more erratic

Apr 18th 2024 |

HAMMER A TUBE called a spile into the bark of a maple tree and its
translucent yellow sap will start flowing out; the tree has been tapped
(pictured). This gloop drips from some 55m Canadian maple trees today, raw
material for the tangy golden syrup which is one of the country’s proudest
exports.

Poring over the numbers reveals that maple-syrup production reached new
heights in 2022. Some 79m litres were produced, 54% more than in 2021.
Production has grown seven-fold in the past 50 years. But a warming climate
is making output erratic. Ice storms helped to reduce syrup flow by 40% in
2023 compared with 2022. Industry representatives expect a return to growth
this year.
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americas/2024/04/18/the-worlds-insatiable-appetite-for-canadas-maple-syrup

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The Glas affair

Why Ecuador risked global condemnation to

storm Mexico’s embassy
Jorge Glas, who had claimed asylum from Mexico, is accused of abetting
drug networks

Apr 18th 2024 |

ON APRIL 5TH Ecuadorian police scaled the walls of the Mexican embassy
(pictured) in Quito, Ecuador’s capital. They stormed the building and seized
Jorge Glas, Ecuador’s former vice-president. He had been granted asylum by
Mexico just hours earlier. (Andrés Manuel López Obrador, Mexico’s
president, is sympathetic to Mr Glas’s party.) For domestic police to raid an
embassy is extremely unusual. It has outraged diplomats and been
condemned around the world. Mexico immediately brought the case to the
International Court of Justice in The Hague.
At first glance the assault seems foolish. Why would Daniel Noboa,
Ecuador’s president, jeopardise his country’s reputation when it needs
international support in its battle against drug gangs, which have threatened
parts of the state itself?
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americas/2024/04/18/why-ecuador-risked-global-condemnation-to-storm-mexicos-embassy

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Asia
Gandhi v Modi: crunch time for Congress as India
prepares to vote
The last Gandhi? :: The Economist joins the most prominent opposition politician on the
campaign trail

Tensions mount between China and the Philippines

Maritime manoeuvres :: The latest incident was just inside the “nine-dash line”

An obscure communist newspaper is shaping Japan’s

politics
Waving the red flag :: Stories by Shimbun Akahata consistently pack a punch

Lawrence Wong will be only the fourth PM in Singapore’s

history
Banyan :: The next leader promises continuity and change

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The last Gandhi?

Gandhi v Modi: crunch time for Congress as India

prepares to vote
The Economist joins the most prominent opposition politician on the
campaign trail

Apr 16th 2024 | Nashik

RAHUL GANDHI seems angrier now. For years, even close friends
wondered if he had the drive to follow in the footsteps of his father,
grandmother and great-grandfather, all of whom were Indian prime
ministers. When he fronted the Congress party’s ill-fated campaign for a
general election in 2014, his speeches, often in faltering Hindi, mostly fell
flat. Five years later, he led his party to another bruising defeat, even losing
his own parliamentary seat in the long-time family stronghold of Amethi, in
northern India. Soon afterwards he resigned as party chief.
And yet in the run-up to the general election, which starts on April 19th, Mr
Gandhi has found the fire in his belly. That was one takeaway when The
Economist joined the final leg of a 6,300-mile (10,000km) journey across
India that he finished last month. In rallies across the state of Maharashtra he
denounced Narendra Modi, the prime minister, as a threat to democracy. He
castigated the tycoons who dominate its economy. And he deplored its
rampant inequality. “There’s no space for you in this country,” he told one
crowd in (now fluent) Hindi. “I don’t understand why you’re not doing
anything about it.”

Mr Gandhi’s newfound zeal has almost certainly come too late to swing this
year’s result, due on June 4th. Mr Modi’s Bharatiya Janata Party (or BJP) is
widely predicted to win again. But the hope among Congress loyalists is that
it will help to revitalise the party in the years ahead and to position Mr
Gandhi as a more serious challenger in 2029. By then, they say, public anger
over unemployment and inequality may have dented Mr Modi’s popularity.
And Mr Gandhi has time on his side. At 53, he is two decades younger than
Mr Modi.

The question, then, is no longer if Mr Gandhi has the stomach for the fight.
It is whether the Cambridge-educated, half-Italian scion of a political
dynasty is the right person to overhaul a party that even some allies liken to
a dysfunctional family business. Loyalists argue that the party needs a
Gandhi to bind it together and that Rahul has proved his mettle on his two-
stage trans-Indian tour, much of which he completed on foot. But after a
series of prominent defections, even some supporters are starting to wonder
if a third consecutive general-election loss should signal the end of the
Gandhi family’s nearly eight-decade grip on the party.
To be fair to Mr Gandhi, the odds have been stacked against him lately. Mr
Modi has curbed the independence of the media, the courts and civil society.
His tax and investigative agencies have targeted dozens of the opposition’s
politicians, arrested two of its party leaders and frozen Congress bank
accounts. Mr Gandhi himself is being probed for alleged money-laundering
(he denies wrongdoing) and was suspended from parliament for four months
in 2023 after being convicted of defamation for mocking Mr Modi’s name.
So uneven is the contest that Congress leaders have discussed boycotting the
poll.

Nonetheless Congress is still the only viable national alternative to the BJP.
Although its national vote share has declined steadily from a peak of 49% in
1984 to 20% in 2019 (see chart 1) it retains a hard core of support among
secular-minded Indians, Muslims and other minorities, especially in the
south. And there is still a pathway back to national power—if Mr Gandhi can
confront three urgent challenges that are within his purview.
The first is ideological. In the past decade, Congress has struggled to identify
a coherent message to compete with the BJP’s combination of Hindutva
(Hindu nationalism) and development. Branding Mr Modi a threat to
democracy hardly dents his support base in the Hindu majority, much of
which admires his muscular leadership (see chart 2). Congress leaders have
dabbled in “soft Hindutva”, schmoozing with holy men and making high-
profile temple visits. But that seems only to anger Congress stalwarts, while
failing to steal many BJP votes.
Recently Congress has made inequality its central campaign theme. A
manifesto put out on April 5th (and denounced by Mr Modi as pro-Muslim)
made commitments including a legal right to apprenticeship, a minimum
support price for farmers, cash transfers of 100,000 rupees ($1,200) to poor
families and a minimum wage of 400 rupees a day. It promised to carry out a
nationwide census of all groups in the Hindu caste system, to strengthen an
affirmative-action scheme and to reverse several BJP policies it considers
anti-democratic.
It’s not just the economy

The manifesto has also pledged to create millions of jobs in manufacturing

and mining. But the focus on government intervention and handouts (with
few details of how to finance them) gives it a distinctly left-wing flavour.
That partly reflects Mr Gandhi’s personal politics. Associates say he is less
concerned about boosting economic growth than distributing its benefits
more evenly. “Most Indian politicians would accept inequality as the price of
rapid economic growth,” says Jairam Ramesh, a party spokesman. “He
refuses.”

There is a logic to Mr Gandhi’s leftward tilt. To counter the BJP’s

majoritarianism, he seeks to mobilise lower castes and minorities that
represent around 80% of Indians. Still, it can be a hard sell coming from a
product of wealth and privilege. Mr Modi, by contrast, is the son of a tea-
seller, from a relatively low caste. He has won many votes among the poor
by expanding digital welfare. And the BJP has pledged more handouts in its
own manifesto, released on April 14th (and denounced by Congress as an
“empty jugglery of words”).

More troubling still for Congress is the apparent disconnect between voters’
everyday concerns and their political choices. While many care about
unemployment and want a caste census, they still back Mr Modi. That
suggests that many voters do not trust Congress to deliver, especially on
jobs, says Rahul Verma of the Centre for Policy Research, a Delhi-based
think-tank. Nor can the party cite a state that it recently transformed, as Mr
Modi could with Gujarat pre-2014. “The challenge is harder for Congress
because it was in power for so long,” says Mr Verma. “It comes with
baggage.”
Mr Gandhi’s second big challenge is with organisation. The BJP’s recent
electoral success is based in part on its ruthlessly efficient party management
and messaging. Congress, by contrast, is plagued by slow, opaque and
sometimes erratic decision-making. It has often been reluctant to jettison
candidates loyal to the Gandhi family, even after they have lost elections.

Its message discipline is also notoriously sloppy. Senior Congress figures

often disagree openly or say things that upset alliance partners. Last year the
party flip-flopped over its response to the Hamas attacks on Israel. In
January, Congress leaders split publicly over whether to attend Mr Modi’s
opening of a controversial Hindu temple. And in March, one senior Congress
figure wrote an open letter challenging its support for the caste census.

Two years ago the party tried to enlist Prashant Kishor, an electoral strategist
who helped engineer the BJP’s 2014 victory (and is now starting a new
political party). He presented the Gandhis with a detailed plan to overhaul
the way Congress organised itself, picked candidates and ran campaigns.
They rejected it. “They are yet not ready to accept that there is a problem
and they need to change,” says Mr Kishor. “They still believe that this is just
a temporary phase, that it will blow over, and sooner or later they will be
back.”

The third challenge facing Mr Gandhi is personal. Although more energised

now, he still prefers the intellectual side of politics. While relishing deep
discussions on social issues, he dislikes the dealmaking needed to manage
his party. His enthusiasm for initiatives often wanes when he meets
resistance. And he lacks experience, having never run a state or a ministry.
“Gandhis are only prime ministers,” one former party insider recalls being
told, after proposing that Mr Gandhi join the cabinet when Congress was in
power.

A bigger concern is that Mr Gandhi lacks the steeliness to grasp control of

his party. In the 2000s he led a drive to introduce new blood by holding open
elections for its youth wing and promising the same for the party leadership.
That brought an influx of young talent. But over the next decade they were
repeatedly sidelined by Congress elders, leading many rising stars to defect.
Since 2019 at least 25 prominent figures have deserted Congress. Failure to
overrule party elders contributed to its defeat in three state elections last
year.

Some party insiders worry that Mr Gandhi is still in limbo, neither fully in
control of Congress nor willing to let others take charge. After resigning as
party leader in 2019, he was replaced by his Italian-born mother, Sonia. In
2022, a Congress veteran, Mallikarjun Kharge, replaced her. But Mr Kharge,
now 81, is no match for Mr Modi and decision-making is still dominated by
the Gandhis and a cluster of family loyalists. So far the party has not
nominated a prime ministerial candidate, leaving Mr Modi with no direct
rival.

Congress officials say Mr Kharge’s appointment proves the party’s

commitment to meritocracy. Besides, they add, this is not a presidential race;
prime ministers are normally chosen after an election. Even so, Mr Gandhi’s
ambiguous role in the party leaves him vulnerable to suggestions that he is
shirking a head-on fight with Mr Modi. If Congress is to reverse its decline
in the years ahead, Mr Gandhi will have to make a choice: step up or step
aside. ■

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Maritime manoeuvres

Tensions mount between China and the Philippines

The latest incident was just inside the “nine-dash line”

Apr 18th 2024 | Manila

COULD THE Philippines be the next big flashpoint in the South China Sea?
On April 13th a Chinese coastguard vessel blocked a maritime-research
vessel and its escort, both belonging to the Philippines. The incident was just
35 nautical miles from the coast of the Philippines and barely inside China’s
notorious “nine-dash line”, which it uses to claim territory over its waters.
Reports have also emerged of Chinese coastguard vessels firing water
cannons at supply boats trying to reach troops on the Sierra Madre, a rusty
warship grounded on purpose by the Philippines within its exclusive
economic zone. Chinese boats are also swarming around islands occupied by
the Philippines and conducting patrols within its waters.
China has long had a contentious relationship with countries in the South
China Sea. The recent spate of incidents has had more publicity partly
because the government of the Philippines now highlights China’s actions as
part of a “transparency initiative”. This policy shift has been driven by
President Ferdinand “Bongbong” Marcos who, after being elected in 2022,
returned the country to its usual pro-Western stance. By contrast, Rodrigo
Duterte, the previous president, appeased China, generally staying silent
about its growing aggression in the South China Sea. “He didn’t even want
us to patrol our exclusive economic zone, that’s how far he went,” says
Rommel Ong, a retired rear admiral.
Mr Duterte’s reticence yielded no benefits. Instead, China encroached ever
more forcefully on the Philippines’ waters. In February 2023 China pointed a
military-grade laser at a coastguard ship on a resupply mission to the Sierra
Madre, which sits atop the Second Thomas Shoal, temporarily blinding the
crew. “We finally decided that it doesn’t help to suppress these things,” says
Jay Batongbacal of the University of the Philippines. Since early 2023 the
Philippines’ government has been releasing videos of China’s growing
aggression and taking journalists on its patrol ships to witness China’s “grey-
zone” tactics (strategies to harass and intimidate that fall short of an all-out
war).

This increased transparency has raised awareness among Filipinos over

Chinese aggression. It also helps Mr Marcos win international support. Amid
growing concerns over China’s coercion in the South China Sea, the
president met Joe Biden, his American counterpart, and Kishida Fumio, the
prime minister of Japan, in Washington earlier this month for the first high-
level meeting between the three leaders. Mr Biden warned at the summit that
“Any attack on Philippine aircraft, vessels or armed forces in the South
China Sea would invoke our mutual defence treaty.”

So far, publicising China’s aggression has not deterred it. The number of
Chinese ships around Second Thomas Shoal increased in 2023, according to
the Asian Maritime Transparency Initiative, a project run by CSIS, an
American think-tank. It uses data from automatic identification systems to
track Chinese ships in the South China Sea. Chinese researchers also claim
to have developed an AI-controlled water cannon. Expect more escalation in
the world’s most contested waters. ■
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Waving the red flag

An obscure communist newspaper is shaping

Japan’s politics
Stories by Shimbun Akahata consistently pack a punch

Apr 18th 2024 | Tokyo

SINCE JAPAN’S parliamentary session began three months ago, one issue
has dominated the agenda: a financial scandal within the ruling Liberal
Democratic Party (LDP). At the end of last year, prosecutors launched an
investigation into factions of the LDP which had failed to report revenue
from fundraising events, thereby evading taxes. Several people linked to the
LDP, including accountants and parliamentarians, have been indicted. In
December four cabinet ministers and five vice-ministers were sacked. On
April 4th Kishida Fumio, the prime minister, asked two of his party’s
heavyweights to quit and punished 37 other LDP members.
What is perhaps surprising is that this political turmoil can be traced back to
Shimbun Akahata (“Red Flag Newspaper”), a relatively niche newspaper run
by the Japan Communist Party (JCP). It is read by 850,000 subscribers,
down from a peak of around 3.5m in 1980. It first reported on the funding
discrepancies in 2022. “I didn’t expect things would blow up,” says
Sasagawa Kamiyu, the 33-year-old journalist who first reported on the scoop
after scrutinising government documents. He worked with Kamiwaki
Hiroshi, a law professor at Kobe Gakuin University, who filed a criminal
complaint with prosecutors.

This is not the first time that Akahata has punched above its weight. In 2013
it led investigations on black kigyo (“black companies”), which shed light on
the prevalence of abusive workplaces and pushed the government to
introduce tighter regulation. In 2019 it reported on politicians subsidising
dinners for supporters during an annual cherry-blossom-viewing party. Abe
Shinzo, then prime minister, was questioned by prosecutors; though he was
never charged, the scandal hounded Abe until his resignation in August
2020. The paper reports on issues “that everyone else is too afraid to touch”,
says Nick Kapur at Rutgers University in America.

The paper’s tumultuous history contributes to its “strong will to stand up

against power”, says Kogiso Yoji, its chief editor. Akahata was founded in
1928, six years after the JCP was established. Japan’s militarist regime
banned the communist party because it was viewed as subversive. Akahata
was produced and circulated underground; police arrested and tortured those
reading it. After the second world war, American occupying forces made the
JCP a legal party, as it claimed to promote democracy and free speech.

But Akahata’s accomplishments point to an awkward truth. Traditional

media remain powerful in Japan. Yomiuri and Asahi, two of Japan’s national
newspapers, have some of the largest circulations in the world, printing 6.8m
and 4m copies a day respectively. Yet such mainstream outlets often fail to
hold politicians to account. Self-censorship is widespread as journalists
develop close-knit ties with authorities and try to avoid upsetting ultra-
nationalist groups, which the police estimate have tens of thousands of
members. These can be an intimidating force in public life.
According to Reporters Without Borders, an NGO based in Paris, Japan’s
freedom-of-press ranking slipped from 11th in 2010 to 68th in 2023.
Akahata’s scoops usually derive from information available to the public,
including government reports and social media posts. Regarding the cherry-
blossom scandal, journalists were invited to and attended Abe’s banquet
every year. Yet they failed to realise that he might be violating political-
funding rules. “Usually, the big media outlets already know what we know,”
says Mr Kogiso. “We just have a different perspective.” ■
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Banyan

Lawrence Wong will be only the fourth PM in

Singapore’s history
The next leader promises continuity and change

Apr 18th 2024 |

IN THE REPUBLIC’S 59-year history, Singapore has had only three

leaders. On May 15th it gets its fourth, when the prime minister of 20 years,
Lee Hsien Loong—who is 72 and whose father, Lee Kuan Yew, ruled with
an iron will for 31 years—will resign. At a ceremony at the presidential
palace, Lawrence Wong, the current finance minister, will be sworn in. He is
Mr Lee’s junior by two decades. Singapore now faces the prospect of a
future without a Lee at the helm.

The investiture also marks when the ruling party, the People’s Action Party
(PAP), passes the baton from a “3G” (third generation) of senior party cadres
to the “4G” cohort who chose Mr Wong as their man. Mr Wong will then
call a general election, likely sometime this year. The PAP has made sure
never to lose one, and Mr Wong will certainly not lose his. He is guaranteed
a majority to make the leaders of many other countries weep. Yet never think
that elections do not matter to the PAP. More is at stake than meets the eye.

Singaporeans no longer judge the PAP merely on its traditional emphasis of

delivering economic growth and of keeping Singapore, a tiny, multi-ethnic
dot of prosperity in a sea of troubles, safe from threats to its extraordinary
success and social cohesion.

Indeed many younger Singaporeans, less respectful of hierarchy, want more

fairness in terms of who shares in growth: they think that a country sitting on
such gargantuan financial reserves should more generously support welfare.
They also want politics to be more participatory rather than heavily directed
from the top. At stake for Mr Wong, when he goes to the country, is not his
(and the 4G’s) formal mandate but rather moral legitimacy.

The party likes to leave little to chance, and before change comes continuity.
Mr Wong downplays expectations of major cabinet reshuffles before the
election. After it, Mr Lee, as did his father before him, will stay on, as senior
minister (more commonly called SM—the party loves initials). At least one
key member of the old guard, K. Shanmugam, will stay in post. Since 2008
he has served as law minister and runs the home ministry, too.

Mr Shanmugam takes a bleak view of threats to Singapore. They range from

extremism spilling over from majority-Muslim Malaysia and Indonesia; to
disinformation campaigns by foreign states; to great-power rivalry and other
trade-wrenching forces to which Singapore’s open economy is especially
vulnerable. Vigilance is the watchword. The PAP also likes to warn of the
dangers of populist politics elsewhere; it presents itself as the guard against
profligacy.

Yet Mr Wong has promised a break from the past. This week he described a
“rapidly changing environment” which demanded fresh approaches and a
readiness “to break new ground”. Some think his agenda will be thwarted by
a shortage of political capital. He was not the 4G’s first choice. Heng Swee
Keat, currently the economy minister, was Mr Lee’s anointed successor until
he suddenly withdrew in 2021. Mr Wong, a highly competent former
technocrat who entered politics in 2011, was the public face of the
administration during the pandemic. Still, he remains relatively unknown
among Singaporeans.

In reality, being the compromise candidate may be no bad thing. No 4G

member can hope to rule with the charismatic authority of earlier leaders. Mr
Wong’s is likely to be a more collective leadership, one that reaches for
consensus—perhaps, even, including outside the party. Promisingly, two
years ago Mr Wong led a consultative initiative, known as Forward
Singapore, that sought opinions among citizens about such issues as raising
taxes on the rich and strengthening social welfare. The mild-mannered Mr
Wong is more relatable to Singaporeans than most of the governing elites.
The guitar-strumming, self-confessed nerd brought up on an East Coast
housing estate did not go to any of the elite schools that the PAP high-flyers
often judge themselves by. To many, that is a plus.

Mr Wong, then, kicks off with a degree of goodwill. Still, the election will be
his key test. The PAP will win thanks to formidable organisation, unrelenting
attacks on the opposition, a docile press, a record of good governance and a
not always subliminal message that its survival and that of Singapore are
synonymous. Yet if the opposition gets many more than the ten out of 87
elected seats it currently holds, the change candidate will start off on the
back foot.■

Read more from Banyan, our columnist on Asia:

Some Australians are increasingly sceptical of AUKUS (Apr 11th)
For a glimpse at Japan’s future, look at its convenience stores (Apr 4th)
Vietnam’s head of state leaves under a cloud (Mar 27th)

Also: How the Banyan column got its name

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China
Why so many Chinese graduates cannot find work
Degrees and difficulty :: Our number-crunching suggests that their plight could be much worse
than previously thought

China is talking to Taiwan’s next leader, just not directly

A meeting and a message :: Officials in Beijing want the island’s new president to be more like
one from the past

Examining the fluff that frustrates northern China

A puff piece :: An effort to improve the environment has had unintended consequences

The dark side of growing old

Chaguan :: A coming wave of Alzheimer’s and other forms of dementia will test China to its
limits

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Degrees and difficulty

Why so many Chinese graduates cannot find work

Our number-crunching suggests that their plight could be much worse than
previously thought

Apr 18th 2024 |

AROUND THIS time each year companies visit university campuses in

China looking for potential employees. This year the mood is grim. At a job
fair in Wuhan a firm was looking to hire management trainees—but it
wanted only elite graduates and offered just 1,000 yuan ($140) per month,
claimed a post that went viral on social media. At a fair in Jilin most of the
advertised positions required advanced degrees, said a soon-to-be graduate
online. “Next time don’t bother inviting us.” Another griped that firms are
not hiring. The recruitment process is “a lie”, she wrote.

The data paint a similarly bleak picture. The unemployment rate for people
aged 16 to 24 in cities reached a record high of 21.3% last June. That was
perhaps too embarrassing for the government, so it stopped publishing the
data series while it rejigged its calculation to exclude young people seeking
jobs while studying. (America, Britain and many other countries include
such students when calculating their rates.) The new numbers are lower, but
still depressing: in March 15.3% of young people in cities were unemployed.
That’s nearly three times the overall jobless rate.
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A meeting and a message

China is talking to Taiwan’s next leader, just not

directly
Officials in Beijing want the island’s new president to be more like one from
the past

Apr 18th 2024 | TAIPEI

AFTER 11 DAYS in China, during which time he was granted an audience

with Xi Jinping, its supreme leader, Ma Ying-jeou came back to Taiwan this
month with a message. The island’s former president, posting on Facebook,
wrote that Mr Xi had “extended an olive branch to us”. Mr Ma hoped that
Lai Ching-te, Taiwan’s next president, would “put the people first and
respond pragmatically”.

Much has changed since Mr Ma left office in 2016, having pursued closer
relations with China. His successor, Tsai Ing-wen, has asserted Taiwan’s
status as a sovereign, democratic country. Mr Lai has called himself a
“pragmatic worker for Taiwan independence”. China froze high-level
contacts with Taiwan years ago. During Mr Lai’s successful campaign for
president, Chinese officials denounced his party as separatists and called the
election a choice between “war and peace”.
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A puff piece

Examining the fluff that frustrates northern China

An effort to improve the environment has had unintended consequences

Apr 18th 2024 | BEIJING

LIKE MOST blizzards, it begins with just a few white wisps swirling about.
Gradually the volume increases and the stuff starts to accumulate on the
ground. During the heaviest downfalls the air is so thick with it as to impair
visibility. But this is no winter scene. It is what happens every April across
much of northern China, when poplar trees start giving off their cotton-like
seed-pods.

The phenomenon has already begun in Beijing. On April 8th an eddy of fluff
balls wafted around the American treasury secretary, Janet Yellen, as she
held a press conference in an embassy garden.

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Chaguan

The dark side of growing old

A coming wave of Alzheimer’s and other forms of dementia will test China to
its limits

Apr 18th 2024 |

MR ZHANG HAS stared down death during his 90 years on Earth. He has
been diagnosed with cancer twice. During his latest bout doctors gave him
18 months to live. “That was 16 years ago,” he recalls wryly. Trim, snowy-
haired and energetic—the key is “no exercise” and “no smoking”, he says—
the retired manager cuts a dash in a blue shirt, green trousers and black
cotton slippers. Yet on this spring afternoon in the city of Hangzhou, Mr
Zhang is afraid. Not of death, but of dementia. In his youth, the old who lost
their faculties were called “crazy”. Later the Chinese learned about a disease
named by foreigners: Alzheimer’s. He has feared it for years. Advanced
sufferers cannot recognise their families and so always feel alone or numb,
he sighs: “That is the most terrible thing.” Quietly he adds that he has begun
to forget things.

Mr Zhang is luckier than many. He lives in his own apartment with his wife
(88). Hangzhou is one of China’s richest cities. His home district of Gongshu
is a pioneer, used to test government plans for tackling dementia, a disease
on the rise as China ages.
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Middle East & Africa

One of the Middle East’s oldest conflicts has entered a new
era
Striking out :: Iran’s attack on Israel throws out old rules and puts allies in a delicate position

Iranians fear their brittle regime will drag them into war
The Middle East on fire :: Ultra-religious hardliners are gaining power and yearn for
confrontation

Iran’s attack has left Israel in a difficult position

Israel’s dilemma :: How does it respond without squandering the coalition that supported it?

After a year of war, Sudan is a failing state

Deeper into hell :: Half a million may starve without urgent help

Tanzania’s opposition, once flat on its back, is now on its

knees
I get knocked down :: The next elections will be both uncompetitive and unfair

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Striking out

One of the Middle East’s oldest conflicts has

entered a new era
Iran’s attack on Israel throws out old rules and puts allies in a delicate
position

Apr 18th 2024 | DUBAI

EVEN AN INEFFECTIVE act can be transformative. The Middle East spent

the first half of this month waiting for Iran to retaliate for an Israeli air strike,
on April 1st, which killed two generals at its embassy compound in
Damascus. When it came, on the night of April 13th, it was bolder than
expected, a barrage of more than 300 missiles and drones aimed at Israel.
That it caused no death and little destruction did not diminish its import: this
was the first time Iran has struck Israel directly.

Now the region waits nervously again, this time to see when and how Israel
conducts its almost inevitable response. Its partners in the West, particularly
America, must strike a delicate balance between defending their ally and
restraining it. Friendly Arab states are in an awkward position, too. And the
belligerents themselves, Iran and Israel, must now navigate a conflict in
which the old rules of engagement have been abruptly shredded.

No one doubted that Iran would retaliate. Months of Israeli strikes had wiped
out almost the entire leadership of its Islamic Revolutionary Guard Corps
(IRGC) in Syria. The attack on a consular building was a last straw for
hardliners, who demanded a muscular response. But most observers,
including Israel, thought Iran would do so in a less direct way, pursuant to a
long-standing policy of fighting Israel through proxies rather than head-on.

Iran’s strike was telegraphed for days. That gave ample time to prepare: not
only for Israel, but also for an ad hoc coalition that included America,
Britain, France, Jordan and other Arab states. They shot down all but a
handful of the projectiles. Four missiles hit Nevatim air base, in southern
Israel, but caused little damage.

Israel’s leaders have vowed to hit back. “Any enemy that fights against us,
we will know how to strike him, no matter where he is,” Yoav Gallant, the
defence minister, said on April 16th. Their options range from a response in
kind against military bases in Iran to cyber-attacks on key infrastructure or
strikes on the IRGC abroad.

Allies have spent days pushing for restraint. Joe Biden told Binyamin
Netanyahu, the Israeli prime minister, that America would not support a
direct counter-attack. The American president worries that it would lead to
expanding tit-for-tat bombardment—the sort of regional war he has sought
to avoid since October 7th. European leaders sent a similar message.

To dissuade Israel, they will need to convince it that they take the Iranian
threat seriously. That is easier said than done. America promises new
sanctions on Iran’s missile and drone programmes, but that alone will not
reassure Israel. Some American officials suggest a loftier idea. They point to
the unprecedented co-operation between Western and Arab states during the
Iranian attack: Jordanian jets downed dozens of Iranian drones, while Qatar,
Saudi Arabia and the United Arab Emirates (UAE) helped behind the scenes.
Such co-ordination seems to fulfil a long-held American goal. For years it
has urged Arab states and Israel to integrate their air defences, hoping to
blunt Iran’s arsenal.

If Israel refrains from a spectacular counter-attack, these officials argue,

there is an opportunity to reinforce a regional coalition. The idea appeals to
Israeli officials as well. “This event is not over,” said Benny Gantz, a
member of the war cabinet. “The regional co-operation which we built, and
which withstood a significant test, needs to be strengthened.”
Don’t forget Gaza

Such talk makes Arab officials uncomfortable. They are still furious with
Israel over Gaza and also worry about the threat from Iran, which has
threatened to attack Jordan if it co-operates further with Israel.

Jordan says, rightly, that it shot down Iranian drones because they violated
its airspace. It also probably saw a diplomatic benefit. The kingdom is
among the world’s most aid-dependent countries. America, its largest single
donor, provided $1.2bn, along with military aid worth around 20% of
Jordan’s defence budget in 2022. Helping protect Israel gives King Abdullah
a boost with lawmakers in Washington.

Gulf states had their own motives. Some officials were miffed to watch
America rush to Israel’s defence. They saw a contrast with 2019, when
Iranian-made drones struck Saudi oil facilities, and 2022, when they hit Abu
Dhabi, the capital of the UAE. America did little in response. The incidents
are not quite analogous. There was no advance warning of the attacks on
Saudi Arabia and the UAE. Saudi Arabia is pushing for a defence treaty with
America. By helping shoot down Iranian drones, Gulf leaders hoped to show
that a formal arrangement would offer tangible benefits.

Like Israel, many Arab states see Iran as their main threat. But a sense of
shared danger will not override their anger about Gaza or their fear of an
Iranian attack. The prerequisites for deeper co-operation, they insist, are a
ceasefire in Gaza and a commitment from America to defend them if
attacked. Neither seems imminent.

Israeli leaders should not be overconfident. Their air defences were

impressive, albeit they had days of advance warning and ample foreign help.
A surprise attack might be more effective. Still, Iran can only repeat the trick
so many times. America estimates it has around 3,000 ballistic missiles. So it
used 4% of its arsenal—and a much larger share of those able to reach Israel
—in a single night, to no great effect.

Iran had two goals: to appease hardliners and to deter Israel from future
strikes. It almost certainly failed at the latter. Firing hundreds of missiles and
drones and hitting nothing of value makes Iran look belligerent yet weak—a
mix that invites, not deters, further attacks.

That suggests a longer-term worry. Mr Biden spent the first half of his
presidency trying to revive the nuclear deal with Iran, which imposed strict
caps on enrichment work in exchange for relief from economic sanctions
(and which Mr Trump abandoned in 2018). The effort failed. Iran now has a
stockpile of 122kg of uranium at 60% purity, enough to produce three
nuclear bombs if refined further to weapons-grade.

The Iranians have been cautious. They have walked up to the “nuclear
threshold” but refrained from crossing it, lest they trigger tougher
multilateral sanctions or a military strike. The past few weeks may change
their calculus. If drones and missiles are not enough to deter Israel, they may
reckon they need a nuclear weapon to do so. That, in turn, would greatly
increase the chances of an Israeli attack on their nuclear facilities. Iran chose
to move its decades-long conflict with Israel into the open—but the
consequences of that decision will be hard for anyone to predict. ■

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The Middle East on fire

Iranians fear their brittle regime will drag them

into war
Ultra-religious hardliners are gaining power and yearn for confrontation

Apr 15th 2024 |

DESPITE ITS 45-year-old hostility towards the “Little Satan”, Iran had
never fired a shot at Israel from its own territory. Instead, the road to
Jerusalem went through Karbala, an Iraqi city holy to Shias, said the Islamic
Republic’s founder, Ayatollah Ruhollah Khomeini, so he went to war with
Iraq. Ayatollah Ali Khamenei, Iran’s Supreme Leader since 1989, used its
proxies—Hizbullah, the Shia militia in Lebanon, and the Palestinian militant
groups, Hamas and Islamic Jihad—to strike Israeli targets and avoid direct
confrontation. When Israel attacked Iran’s nuclear programme and its
scientists in Tehran, the capital, in recent years, Mr Khamenei’s advisers
called for “strategic patience”.
That has all changed. Iran’s salvo of over 300 drones, cruise and ballistic
missiles launched at Israel on April 13th heralds “a paradigm shift”,
according to Ahmad Dastmalchian, Iran’s former ambassador to Lebanon.
The firepower stunned many Iranians, far exceeding the volley that Iran sent
in response to America’s assassination of its top general, Qassim Soleimani,
in 2020. The head of Iran’s Islamic Revolutionary Guard Corps (IRGC),
Major General Hossein Salami, says the regime is now working with “a new
equation.” “The era of strategic patience is over,” said an adviser to the
Iranian president on X (formerly Twitter) on April 14th.

Foreign pressure partly explains the policy change. Israel has racheted up its
attacks on Iranian targets throughout the Middle East since the start of the
war in Gaza in October. It has killed 18 IRGC commanders and about 250
Hizbullah fighters in attacks on Syria and Lebanon. The airstrike on April
1st on the Iranian diplomatic compound in Damascus, which Iran insists is
sovereign territory under international law, proved that Iran’s proxies were
no longer providing the deterrence on which it has relied for so long.

But domestic forces are also shaping decision-making. For most of his
career, Mr Khamenei relied on gruff conservative pragmatists like himself.
Many were commanders in the IRGC, the regime’s most powerful fighting
force, and ready to work with the West if they thought that doing so
bolstered the regime. But more recently a group of ideological diehards have
risen to prominence, who are to Iran what the religious hard right are to
Israel. The Paydari Front, or Front of the Stability of the Islamic Revolution,
are Shia supremacists who oppose any kind of compromise with anyone
inside or outside Iran. They deride their critics as atheists and counter-
revolutionaries and want to turn Tehran’s parks into mosques. They consider
any kind of reconciliation with the West such anathema that some of their ilk
burnt the text of the JCPOA, the deal Iran signed with seven world powers in
2015 limiting its nuclear programme, in parliament. They liken “strategic
patience” in the face of Israeli attacks to appeasement.

Their opponents speak of state capture. Ebrahim Raisi, the hardline cleric
who was elected president in 2021, has given them prominent positions in
his government. His father-in-law is perhaps Iran’s most radical cleric; his
sermons fire the Paydaris’ zeal. They tightened their grip on power in last
month’s parliamentary elections after many people boycotted the vote.
Paydari Front candidates trounced Mohammaed Bagher Qalibaf, a pragmatic
former mayor of Tehran, IRGC commander and relative of Mr Khamenei’s.
They are now seeking to oust him as speaker of parliament. They have
passed new chastity laws. Against the advice of IRGC old-timers, they are
seeking to reimpose the mandatory hijab after its de-facto suspension
following widespread protests in 2022. On the same day that Iran struck
Israel, they sent the morality police back on the streets after a year-long
hiatus.

Realists in Iran’s armed forces know that their military hardware is no match
for that of Israel. Its air force projected regional power under the shah, but
has not been upgraded since then. Its 1960s F-4 American warplanes are no
match for Israel’s F-35s, the world’s most advanced fighter jet. Many of its
tanks date back to the second world war. But the Paydari Front sees their
earthly battle in divine terms. “When you shot arrows at the enemies, you
did not shoot; rather God did,” said the zealots, quoting the Koran in a
statement after Iran’s attack. Its members speak of the sacrifice made in the
seventh century at Karbala when Imam Hussein, the grandson of the Prophet
Muhammad, was killed by a Muslim tyrant. He has been venerated by Shias
ever since. They pray for a conflagration that could trigger the coming of
Imam Zaman, a messianic leader who will inaugurate the end of days. After
Iran’s strike their followers celebrated in the streets and distributed sweets.
They have plastered Tehran’s billboards with banners in Hebrew warning
Israelis to stock up on supplies in anticipation of another attack.

The Paydari Front’s clerics have also infiltrated the ranks of the IRGC. The
most recent generation of commanders spent their careers attending summer
camps run by Paydari clerics, many of whom are also posted to their units.
“The new generation is more ideological and abrasive, less experienced and
less pragmatic,” says Saeid Golkar, an expert on the IRGC at the University
of Tennessee at Chattanooga. Unlike earlier generations, they have no
memory of the Iran-Iraq war in the 1980s. They use religious texts to devise
strategy. “Those who don’t know war are more eager to fight,” he says,
quoting an Iranian saying.

Mr Khamenei still calls the shots. His senior commanders say they gave
Israel and its allies three days’ notice of the attack. They signposted when it
was over. But some Iranians question the 84-year-old’s strength to withstand
the Paydari campaign. Under Mr Raisi, the religious right have purged the
civil service of reformists and other naysayers. They have used Israel’s
continued attacks to marginalise remaining pragmatists within the regime
and their calls for restraint. Some claim to welcome the prospect of an Israeli
strike on Iranian soil. They reckon it would unite Iranians, a proudly
nationalist bunch.

But for all its power, the Paydari Front’s rise may be making the Islamic
Republic more brittle. The gap between Iran’s rulers and their subjects grows
ever wider. Their president, Mr Raisi, is almost as unpopular with his people
as Binyamin Netanyahu is in Israel. Many Iranians blame his inexperienced
ideologues for crippling Iran’s economy (the rial reached a new nadir against
the dollar after the April 13th attack). And they fear that their zealotry could
drag Iran into war. Such is the antipathy towards them that many view the
regime’s enemies as friends. After the rocket salvo Iranians exchanged jokes
mocking their inefficacy. “A lot of Israelis died…laughing,” quipped one.
Graffiti has appeared on the streets calling for Israeli reprisals. “Hit them,
Israel. Iranians are behind you,” read one in Tehran. As one Iran-watcher
noted, Iranians’ reaction to an Israeli attack could prove a greater threat to
the regime than any attack itself. ■

Correction (April 17th): An earlier version of this article said that Iran
signed the JCPOA with six world powers in 2015. The correct figure is
seven. Sorry

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Israel’s dilemma

Iran’s attack has left Israel in a difficult position

How does it respond without squandering the coalition that supported it?

Apr 18th 2024 | JERUSALEM

IN THE SPACE of two weeks Israel has been dealt two major strategic
surprises. The first came in the aftermath of Israel’s air strike against Iran’s
embassy compound in Damascus on April 1st. Intelligence indicated the
Islamic Republic was about to abandon its decades-long strategy of
confronting Israel through proxies and this time retaliate directly from its
territory.

The Iranian attack came on April 13th in the shape of hundreds of drones
and missiles launched towards the Jewish state. With it came the second
surprise. A coalition of Western and Arab nations deployed fighter jets in the
skies over the Middle East and, along with Israel’s missile-defence systems,
intercepted nearly all the incoming threats. Together they reduced the
immediate impact of the attack to one wounded girl and some minor damage
to an Israeli air base. But they also left Israeli decision-makers with a
dilemma.

For Israel, a small nation that has built its survival in a hostile region on
military deterrence, failing to respond to a direct attack on such a scale on its
territory is all but unthinkable. The missiles fired by Iran could have been
devastating. Few in Israel doubt the need for a response.

But Israel has a lot to lose if it fails to calibrate its response. The
international coalition formed at the urging of President Joe Biden to foil
Iran’s attack could continue to be a big strategic asset. “All the countries
involved, both from the West and the Arabs, have already been working
quietly together for years,” says an Israeli security official. “This is the first
time they’ve been seen openly in action against Iran—and that’s a massive
development.”

Mr Biden, anxious to avoid a regional war, urged Binyamin Netanyahu,

Israel’s prime minister, to “take the win” and avoid further escalation. The
Arab regimes that were involved, particularly Jordan and Saudi Arabia, do
not want to be seen as Israel’s protectors; most of the Middle East is still
focused on the bloodshed in Gaza. Preserving the coalition will be no easy
task.

The Iranian attack has shifted some of the international focus away from
Gaza. After months of condemnation of its actions in Gaza, Israel has
unexpectedly found itself once again in the position it was in the wake of the
Hamas massacres on October 7th—supported by its allies. “We’ve been
given another moment of grace. Let’s see how quickly we waste it,” says one
jaded Israeli general.

The consensus among Israel’s war cabinet and generals is that Israel will
retaliate. But the timing and nature have been hotly debated in a series of
inconclusive cabinet meetings. Plans for an immediate counter-attack were
already in the works in the early hours of April 14th, while Iran’s drones and
missiles were on their way to Israel. The failure of the Iranian attack and the
phone-call from Mr Biden stopped Israel in its tracks. But this may not last.
As the ministers and generals argue, the biggest mystery has been the
position of Mr Netanyahu. Since the 1980s he has been warning of the
Iranian threat and the need for the West to co-operate with Israel and the
Sunni Arab nations against it. But in the days since Iran’s strike he has fallen
notably silent. He has appeared once in public, in front of new IDF
conscripts. All he had to say was that “Iran stands behind Hamas” and that
Israel is determined “to defend ourselves in all sectors”.

Mr Netanyahu’s dilemma is that even as he is being offered the coalition

against Iran that he has demanded for so many years, his far-right allies in
government are demanding he take action which would squander that
opportunity. They are clamouring for “a crushing attack”, in the words of
Itamar Ben-Gvir, the national-security minister. The far right is also worried
that America will force Israel into agreeing to a ceasefire in Gaza and the
return of the Palestinian Authority there. Mr Netanyahu’s silence is
explained by his dependence on the support of such political allies.

But Aryeh Deri, one of the prime minister’s closest allies in the government,
hinted at Mr Netanyahu’s position in a radio interview. “We have to
remember that there is still an unfinished campaign in Gaza,” said Mr Deri.
“At a time like this, we shouldn’t open more fronts.” ■

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Deeper into hell

After a year of war, Sudan is a failing state

Half a million may starve without urgent help

Apr 15th 2024 | el-Fasher

IT HAS BECOME a morbid sort of trivia game. Which country has the
world’s largest population of internal refugees? The highest number of
people facing famine? And where do aid agencies have the biggest
humanitarian load, but until this week were short of 95% of the funding they
need? The answer is not, as many might assume, Gaza or Ukraine. It is
Sudan.

When the conflict in Africa’s third-largest country began a year ago it might
have been mistaken for a clear-cut fight between two generals, each vying
for control of the central state. On one side were the Sudanese Armed Forces
(SAF), led by General Abdel Fattah al-Burhan; on the other the Rapid
Support Forces (RSF), a paramilitary unit under the command of
Muhammad Hamdan Dagalo (a Darfuri warlord universally known as
Hemedti). Even after fighting exploded in the capital, Khartoum, and
quickly spread to Darfur, some observers still imagined it could be contained
or that the two sides would grind themselves to a stalemate, and then strike a
power-sharing deal.

Instead the conflict has metastasised into a nationwide conflagration so vast

and anarchic it could yet destabilise several of Sudan’s neighbours. If there
were, at first, two broadly coherent armed blocs under identifiable
leadership, now there is a mosaic of competing militias and rebel
movements, each with its own interests and agendas. Arms and mercenaries
are pouring over the border from Chad, Libya and the Central African
Republic, and across the Red Sea (see map). Even fighters from as far afield
as Russia and Ukraine have reportedly joined the fray. With neither side
having managed to land a decisive blow, both the SAF and the RSF have
begun to splinter. “We are hurtling towards a failed state,” frets Tom
Perriello, America’s recently appointed special envoy. “There is a real risk of
a 20- to 25-year setback for the people of Sudan and the wider region.”
More immediate is the risk of mass starvation. “The situation is
catastrophic,” says Michael Dunford, the head of the UN’s World Food
Programme in east Africa. “When you look at the sheer size and scale, we’re
desperately concerned about where this is headed.”
On April 15th donors pledged around $2.1bn to fund humanitarian efforts.
Yet this may already be too late to avert a famine, which is expected by June
and may kill 500,000 people, according to the “most likely scenario” in a
study by the Clingendael Institute, a Dutch think-tank. In its “extreme”
scenario forecast, up to a million may perish. Because of the war, large parts
of Sudan—in particular Darfur—collected almost no harvest in 2023.
National cereal production collapsed by almost half; the price of basic food
commodities shot up by as much as 83%. These trends are set to worsen
with fighting having now reached the breadbasket state of Gezira.

Though the UN has yet to declare a famine, few experts doubt that one is
already under way in parts of Sudan. In the worst-affected areas, which
include the capital, people are eating leaves to survive. Children are already
beginning to die from malnutrition or related diseases. Some 70% of health
facilities in war-stricken areas are no longer functional, according to
Deepmala Mahla of CARE, an aid group. For most of last year refugees
arriving in Chad, which borders Darfur, said they were escaping a fearsome
campaign of ethnic cleansing unleashed by RSF troops and allied Arab
militias against local black Africans. Now the new arrivals tell aid workers
they are fleeing hunger.

Both sides are obstructing humanitarian assistance. RSF fighters regularly

attack aid lorries and loot warehouses belonging to NGOs. In February the
SAF banned aid agencies from delivering supplies via Chad. Since then it
has partially relented, but it continues to withhold visas and travel permits
for aid workers. Crossing the lines between territory controlled by the SAF
and RSF to deliver assistance is “cumbersome and deliberately time-
consuming”, notes a UN official. As a result, whole regions have for months
been cut off from emergency supplies. “Previous food crises in Sudan were
localised,” argues Alex de Waal, an expert on famines at Tufts University.
“Now we are witnessing something we haven’t seen since the 19th century:
a nationwide food emergency.”

Consider el-Fasher, North Darfur’s capital and the SAF’s last major holdout
in the west. Before the war the city was a sanctuary for those escaping
violence and hunger elsewhere: tens, if not hundreds, of thousands of
civilians had sheltered there since the previous round of ethnic cleansing in
Darfur 20 years ago. Yet these days it is a microcosm of the chaos that
prevails elsewhere in Sudan. In theory the national army remains in charge,
with several thousand troops holed up in barracks in the city centre. But in
reality rebels from the local Zaghawa ethnic group provide most of the
security, while much of the outskirts is under the control of the RSF and
affiliated militias. Crossing from one side of the city to the other means
navigating multiple checkpoints, each manned by a different armed group.
Though the SAF conducts frequent air strikes on RSF positions, they often
end up hitting civilian areas, including those under the army’s control.

With movement in, out and around el-Fasher so costly and dangerous, life
inside is growing desperate. “We are already too late,” says Justine Muzik of
Solidarités International, a French humanitarian charity. Dengue fever and
malaria are running rampant. Every two hours in Zamzam, a refugee camp
on the south-western side, a child dies from lack of food or medical care,
says Médecins Sans Frontières, another French charity. With new arrivals
streaming into the city from other parts of Darfur, basic supplies are
dwindling. Though food is still available in the market, a sack of rice can
cost almost eight times what it did before the war.

Across large parts of the country soldiers from both sides are raping women
and girls, in some cases because of their ethnicity. In Khartoum state alone
more than 1,000 rapes have taken place, according to lawyers and doctors.
Ghada Abbas, a human-rights lawyer who recently fled Sudan, describes an
incident in which soldiers violated three sisters aged 12, 16 and 18 in
Omdurman, a city close to the capital. Although people heard their cries,
“nobody dared to go out,” she says.

Elsewhere there are some hopeful signs. Discreet ceasefire talks are under
way in the Egyptian capital, Cairo. A separate process backed by America is
also to resume in Saudi Arabia soon. However, in recent weeks the regular
army has reversed some of the RSF’s earlier gains in Khartoum, raising
hopes among its supporters of a decisive victory. Just a few weeks before it
had been the RSF that appeared triumphant. “What this looks like now is
musical chairs,” not a genuine sea-change, argues Kholood Khair of
Confluence Advisory, a Sudanese think-tank. With both sides still
determined to gain the upper hand, the prospect of peace is slim. ■
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I get knocked down

Tanzania’s opposition, once flat on its back, is now

on its knees
The next elections will be both uncompetitive and unfair

Apr 18th 2024 | DAR ES SALAAM

THE MOST recent Tanzanian general election, held in 2020, made a

mockery of democracy. Agents of the ruling CCM party stuffed ballot boxes,
pre-marked voting slips and erected fake polling stations. Police officers
rounded up opposition candidates and their supporters. To hide the fraud, the
authorities shut down the internet, gagged journalists and suppressed rights
groups. The few opposition supporters brave enough to protest were shot at.
At least 14 were killed. John Magufuli, then Tanzania’s president, duly won
re-election with 84% of the vote. The CCM did even better, securing all but
seven of the directly elected seats in the country’s parliament.
Overturning such a whacking majority in a single electoral cycle would be
tough anywhere. Yet, when Tanzanians return to the polls next year, the
opposition ought not despair. The execrable Mr Magufuli is dead. His
successor, Samia Suluhu Hassan, is more tolerant of criticism.

She is also more vulnerable electorally than her predecessor. The margin of
Mr Magufuli’s victory may have been inflated, but he was undoubtedly
popular. By demonising foreign investors, denouncing Western imperialism
and championing the poor, he built a broad support base. Mrs Samia, by
contrast, has rebuilt ties with the West, welcomed foreign investors and
declined to engage in rabble-rousing. These may be sensible policies, but
there are few votes in them.

Tanzania’s GDP per person is among the 30 lowest in the world. Some 44%
of people are poor. Given that the CCM has held power since independence
from Britain in 1961, there must be a sizeable chunk of Tanzanians yearning
for change.

Even so, diplomats and analysts think it may take 15 years before the
opposition has a shot at winning power. “Politicians like to say ‘we will win,
we will win’, but we have to be practical,” says Zitto Kabwe, who stepped
down as the leader of Tanzania’s second-biggest opposition party, ACT-
Wazalendo, in March. Mr Kabwe reckons the best the combined opposition
can hope for next year is about 25% of the vote.

This is because Mr Magufuli eviscerated the opposition in a five-year reign

of terror. The trigger was an election in 2015, when the opposition won 40%
of the presidential vote and 45% of the parliamentary vote. In response, Mr
Magufuli intimidated, bought off and silenced his critics. Defections from
Chadema, the principal opposition party, were encouraged. The business
interests of opposition members and donors were relentlessly targeted.

Those who could not be induced to defect faced arrest, or worse. Tundu
Lissu, Chadema’s presidential candidate in 2020, survived after being
riddled with bullets by unknown assassins. Freeman Mbowe, its chairman,
was assaulted and had his leg broken. Mr Magufuli may be dead, but the
chilling effect of his presidency lingers.
Worse than the fear, though, was the systematic dismantling of the
opposition at a local level. In 2016 Mr Magufuli banned the opposition from
holding political rallies. These allow politicians to forge connections with
potential voters, particularly in villages and the countryside. More people
attend political rallies in Tanzania than anywhere else in the world, as far as
available statistics show, according to Dan Paget of the University of Sussex,
who is writing a book on the subject. Although Mrs Samia lifted the ban last
year, it had silenced the opposition across swathes of Tanzania for six years.

Perhaps the most grievous blow Mr Magufuli struck against the opposition
came not in the general elections of 2020 but in the local polls the year
before. The electoral commission barred 94% of Chadema candidates from
standing, prompting an opposition boycott. As a result, the CCM won 99%
of local seats.

It took two decades from the restoration of democracy in 1992 for the
opposition to become competitive. Its emergence at national level was built
on its successes in running local governments. Without a presence in
parliament or local government, the opposition can hardly present itself as a
government-in-waiting. “Under Magufuli our focus was on survival,” says
Mr Kabwe. “Now we have to rebuild.”

Tanzania’s election process has long been laughably skewed. Every official
involved in running previous polls, from returning officers to the electoral
commission, was either directly appointed by the president or was a public
servant whose livelihood depended on not upsetting the ruling party. Losing
candidates were forbidden from mounting court challenges in a legal system
where, in any case, judges are also appointed by the president.

Negotiations between Chadema and the government for electoral and

constitutional reforms have broken down. Mr Lissu, who opposed the talks,
says that the CCM “flatly rejected” all proposals for meaningful change that
Chadema put forward. “While uttering pretty phrases, she has actually been
consolidating authoritarianism,” he says of Mrs Samia. Now, he fears, the
CCM is intent on ensuring that local elections in December will be a repeat
of those in 2019, with Chadema candidates again excluded on technicalities.
In this gloomy view, any prospect of rebuilding and securing even 25% of
the vote next year therefore looks remote. “Without electoral reform, there is
no hope that we will get democracy peacefully,” says Mr Lissu. “We will
have to advance our cause on the streets through demonstrations and mass
action.” ■

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Europe
Germany is flunking the education test
Schuling around :: Its scores are heading down, as its schools fail to adapt

The German chancellor’s awkward meeting with China’s

boss
Not-so-bullish Germany in the China shop :: It is time for Xi Jinping to accept that Germany
isn’t America’s puppet

How Russia targeted France and radicalised Emmanuel

Macron
Le nouveau faucon :: He is now one of Europe’s leading Russia hawks

Ukraine is digging in as the Kremlin steps up its offensive

The Russians are coming :: Will it be enough?

Ukraine is ignoring US warnings to end drone operations

inside Russia
Droning on :: Its superdrones can reach targets as far away as Siberia

How a conservative conference morphed into a crisis of

liberalism
Charlemagne :: A Brussels hard-right confab descends into a mix of farce and petty tyranny

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Schuling around

Germany is flunking the education test

Its scores are heading down, as its schools fail to adapt

Apr 16th 2024 | Berlin, Cologne and Dortmund

FROM MAY 1ST, the proud holders of doctorates will no longer be allowed
to put the title Dr in front of their name in German passports. For a country
obsessed with qualifications—Prof Drs are fairly common and even Dr Drs
not so rare—this decline in standing may be hard. But it is not so hard as the
decline in German educational standards.
The most recent results from three very different testing regimes, comparing
pupils of varied ages, point in a single direction: downwards. The best-
known, the Programme for International Student Assessment (PISA) tests
performance in maths, reading and science among 15-year-olds across some
80 countries every three years. Its most recent scores, in December, confirm
steep plunges in all three subjects over the past decade in Germany (see
chart).

A separate study that measures reading competence among fourth-graders

across 65 countries, known by the acronym IGLU, found that 25.4% of the
German cohort lacked adequate skills in 2021, up from 18.9% five years
earlier and just 17% in 2001. Meanwhile the latest survey of German-
language competence among nineth-graders by IQB, an educational-research
institute that compares outcomes between German states, found that the
proportion nationwide that fail to reach minimum standards in reading,
listening and spelling had risen respectively by 9, 16 and 9 percentage points
since 2015.
The failure is far from catastrophic. Germany’s leading universities are still
among the world’s best, as are its opportunities for vocational training. Even
in decline, its schools perform in the middle rank of European standards; but
that still means that they do worse than Austria, Poland, the Czechs and the
Swiss—Germany’s neighbours and peers. Nor is the alarm new. When their
schools first underwent comparative tests, in 2000, the underwhelming
results so surprised Germans that the ensuing “PISA-Schock” prompted a
wave of reform.

What is new is that Germany is achieving mediocre and diminishing results

despite having tried varied reforms since the Schock, and despite spending a
similar proportion of its GDP on schooling as do better-performing
neighbours. Nor can the poor showing be ascribed simply to either the
covid-19 pandemic or to immigration, though the failure of the system to
respond well to the influx of 1m refugees in 2015-16 is certainly part of it.

The causes lie deeper. “[Germany] is failing to adjust to the learning needs
of the 21st century, as in Asia and the Nordic countries,” says Andreas
Schleicher, the director for education at the OECD, which runs the PISA
tests, in Paris. Axel Plünnecke, head of education research at the German
Economic Institute in Cologne, concurs. The education system has fallen
behind changes in social structure, he says, with the fact that almost a
quarter of pupils now speak no German at home being just one such shift.

The system’s rigidities start with cultural attitudes that are often not helpful.
In the country that invented the kindergarten, many parents actually shun
pre-school education in the belief that it encourages competition. German
children start school at six, but early schooling is often lax and playful,
because children “should not be overstressed”. Fourth-graders, for instance,
spend almost 30% less time reading in class than the OECD average.
Teachers, in Germany traditionally unquestioned masters of their
classrooms, often resist evidence-based new methods, or standardised tests
that might “stigmatise” poor performers. Many see education not in terms of
building core competences, but as a mission to create cultured citizens. In
most German states primary school lasts just four years, at which point
pupils are divided between those destined for academic studies or for
technical/vocational careers.
All these traits mean that children from less educated, poorer or non-
German-speaking families reach this juncture at a stark disadvantage. They
are far less likely to be chosen for the academic secondary schooling that
leads to better-paying careers. Of children with at least one parent holding a
higher degree, 79% will go on to university; of those with only professional
qualifications, just 27%; of those who speak a foreign language at home,
23% and of those whose parents hold no professional qualification, a mere
12%.

Such things are slow indeed to change. On the day Nele McElvany’s son was
born 19 years ago in the Berlin district of Kreuzberg, another mother in the
same building also gave birth. Ms McElvany—now Prof Dr McElvany—
was dismayed at the time to think that while her own child would almost
certainly end school holding an Abitur, the certificate for university entrance,
her neighbour’s would not, simply because of their contrasting backgrounds.

“At age ten they decide OK, we make you a knowledge worker, and you
not,” says Mr Schleicher. “That was very well suited to the industrial age,
but now it’s just a waste of a good part of human talent.” The problem is
compounded, he says, by the fact that nearly everyone in a position of power
is a product of the academic track. They simply cannot see the shortcomings
of a system that they themselves benefited from.

Even so, would-be reformers have repeatedly tried to shake up a system

unique to a clutch of German-speaking countries. One result is that across
Germany, high-school students relegated to the non-academic track can now
more easily cross over, or simply study to take the Abitur. Since education
falls under state, rather than federal control, German states have also
tinkered by introducing longer school days, by extending primary school (as
in Berlin) or by altering the length of high school (as in the southern state of
Baden-Württemberg).

But as Ms McElvany, an education expert and vice-president for research at

TU Dortmund University, notes, all too many such efforts have stalled or
gone into reverse. The obstacles are many. Education is a heated subject,
involving stakeholders from anxious parents to powerful teachers’ unions.
Election cycles are short. Politicians have a lot to lose from meddling in
schooling, notes Ms McElvany, and little to win from projects that are often
expensive and long-term.

This is a shame, because ideally Germany’s 16 states should experiment and

learn from each other—as, say, in America. Schools in Hamburg, for
instance, used to be near the bottom of the league among the states. In 2010
an effort at sweeping reforms that would have added a year to primary
schooling, in part to accommodate surging numbers of immigrants, was
quashed by insurgent conservative parents. But some changes were made,
among them the introduction of language tests for pre-school children, with
those doing poorly sent for a mandatory year of German lessons. The result:
the city-state’s schools are now among the country’s top performers.

That no other states have adopted similar reforms testifies to systemic

inertia. This often extends down to district level and to individual schools. A
2017 survey, for instance, discovered that whereas schools in the
Netherlands exercised direct control over 92% of decision-making, including
hiring of teachers, the level of independence in Germany trailed at a meagre
17%. “When I had to replace some simple parts that a kid broke in a science
lab I found that our school doesn’t even have a bank account,” says a teacher
at a Berlin high school. “Every spending decision has to go through the
district council.”

Asked how she would ideally tackle school reform, Ms McElvany

unhesitatingly ticks off a dozen measures. Luckily for Germany, none of
them sounds very hard, from following Hamburg’s example of language pre-
schooling, to emphasising core competences such as reading, to loosening
budget strings to let underperforming schools fix their own problems.
Unluckily for Germany, the political will to do much of this is absent.■

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Not-so-bullish Germany in the China shop

The German chancellor’s awkward meeting with

China’s boss
It is time for Xi Jinping to accept that Germany isn’t America’s puppet

Apr 18th 2024 | BERLIN

AN OFFICIAL CHINESE read-out said the summit meeting in Beijing that

ended on April 16th reflected the strong ties that bind the world’s second-
and third-largest economies. A morning of talks with Xi Jinping, China’s
president, punctuated by a comradely stroll in the garden and ending in a
cordial lunch, seemed to have marked a friendly climax to the three-day visit
to China by Olaf Scholz, Germany’s chancellor.

But not all is as rosy as spring. For a start, the German home audience was
denied a live view of their chancellor’s frolic in Beijing because ZDF, a
German public broadcaster, could not get Chinese press accreditation from
the host country’s notoriously awkward bureaucrats. But behind that quibble
lurked much bigger troubles. Just before the trip to China—his second since
he became chancellor in 2021, and one for which he has attracted a fair
amount of criticism from within Europe—Mr Scholz told an interviewer that
although an American-style “decoupling” of the German economy from
China is a bad idea, “de-risking” would be wise. “In Germany, the
peacemaking effect of economic contacts was certainly overemphasised,”
said the former mayor of Hamburg. “Nobody has that illusion today.”

This may be true for Germany, which learned a lesson after wooing Russia
for decades with fat energy contracts, only to see it invade Ukraine. Yet the
statement from Mr Xi stressed a contrary message. It said that the
intertwining of economies is not a risk but an opportunity, as well as “the
guarantee of a stable relationship”.

This difference means a lot to the bosses of 12 big German firms who
accompanied Mr Scholz. Many are deeply exposed as investors in China, or
face stiffening Chinese competition. A recent report by economists at
Allianz, a German insurance giant, suggests that the two countries are
moving “from complementarity to substitution”, as China begins to replace
Germany even in high-value manufacturing. One example: since 2019
German machinery exports to ASEAN countries have fallen by 14%, and
Chinese exports of the same goods have risen by 31%. China is pushing
Germany aside even in Europe. In some sectors, such as solar panels and
basic ingredients for essential pharmaceuticals, it already enjoys a near-
monopoly.

So when Mr Xi argued against protectionism, the response from Mr Scholz

is likely to have been as stilted as the Chinese leader’s response to German
nagging on such subjects as Ukraine or human rights. The fact is that
although both countries would like to insulate their bilateral relationship
from the more strident behaviour of their allies (for China that means Russia;
for Germany it is America and some of the more hawkish European
countries), they both sense that this is not sustainable. Soon enough, China
will have to stop pretending that Germany, and indeed Europe, is acting
tougher only because of American pressure, and accept that Europeans do
indeed have their own reasons to be wary of China. And Germany will have
to stop pretending there is much of a difference between “de-risking” and
“decoupling”. ■
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Le nouveau faucon

How Russia targeted France and radicalised

Emmanuel Macron
He is now one of Europe’s leading Russia hawks

Apr 18th 2024 | PARIS

ON JANUARY 16th the French president, Emmanuel Macron, announced

that he would send another 40 long-range Scalp cruise missiles to Ukraine.
Later that day Russia bombed Kharkiv, in north-eastern Ukraine, claiming
French mercenaries were based there and supplying a list of names that the
French army says is fake. Shortly afterwards the French uncovered 193
websites set up to undermine public support for Ukraine in France (as well
as in Germany and Poland), run by a Russian firm based in Crimea. Days
later Sébastien Lecornu, the French defence minister, said Russian air-traffic
controllers had threatened that a French aircraft patrolling over the Black
Sea would be shot down.
In recent months France has catalogued an intensified Russian campaign to
sow division, discredit the country and test its army. Russian security
services, say French sources, commissioned the stars of David stencilled on
walls in Paris last October, to stir up inter-religious tensions. In March
cyber-attacks briefly took down some of the French government’s websites,
and hackers stole data from its jobs agency. With the added help of Russia
apologists in France, Russian bot farms turbo-charged scare stories about
bed bugs in Paris, used a deepfake French news report to fabricate a
supposed attempt on Mr Macron’s life, and spread vile false rumours about
his wife, Brigitte.

This systematic targeting, say those close to the president, underlies a shift
that continues to puzzle many observers: Mr Macron’s conversion from a
leader who sought to engage with Russia’s Vladimir Putin to one of Europe’s
most hawkish voices. The president who once urged allies not to “humiliate”
Russia has now called for Russia’s defeat, urged allies not to be “cowardly”,
and warned that a Russian victory would spell “the end of European
security”. Mr Macron has not spoken to Mr Putin since September 2022. On
February 26th he refused to rule out sending ground forces to help Ukraine.

What explains this shift? At a basic level, says Bruno Tertrais of the Institut
Montaigne, a think-tank, Mr Macron was “mugged by reality”. Mr Putin lied
to him and played him. The French president’s pre-war diplomatic outreach
was a failure, even if he knew it was high-risk at the time. The assassination
of Alexei Navalny in February served as a further jolt. As a former minister
told Le Monde, Mr Macron was “radicalised by disappointment”.

Ukraine’s difficulties on the ground, as well as the prospect of another

Donald Trump presidency, have made standing up to Russia more urgent.
This comes at a time when Mr Macron has already concluded, in a speech in
Bratislava last May, that bringing Ukraine into both the European Union and
NATO would actually strengthen his ambition for European collective
defence, not dilute it.

“For decades France had believed that when it came to Europe, smaller was
better,” writes Célia Belin of the European Council on Foreign Relations, in
the American magazine Foreign Affairs. Russian aggression, she notes, has
transformed the case for a wider EU. A French ten-year security commitment
to Ukraine is now entrenched in a bilateral agreement, signed by Mr Macron
and Volodymyr Zelensky in February. It is worth €3bn ($3.2bn) in 2024 and
includes a French promise to support Ukraine’s entry into NATO.

Sceptics still query the sincerity of Mr Macron’s conversion, pointing to

French efforts to cap Ukrainian farm exports. Fine words are one thing;
concrete action another. Figures from Germany’s Kiel Institute suggest that
French bilateral military aid is a fraction of Germany’s, though the latest
numbers go up only to mid-January. With a budget deficit in 2023 of 5.5% of
GDP, France is strapped for cash, its army has little kit to spare and its
industry is struggling to produce stuff much faster.

Others dismiss Mr Macron’s hardline stance as electioneering, intended to

distinguish his geopolitics from Marine Le Pen’s, whose National Rally
(RN) was once financed by a Russian bank. While this is indeed a campaign
theme, its effectiveness is doubtful. The RN looks set to crush his party at
polls for the European Parliament in June. The idea of sending ground forces
to Ukraine is deeply unpopular in France.

It is noteworthy that Mr Macron’s volte-face has won the loudest approval

from Europe’s once sceptical eastern fringe. “I do think it’s genuine,” says
Nicu Popescu, a former foreign minister of Moldova. “Macron has
concluded that the EU’s security depends on the security of its neighbours.”
Mr Macron backs Estonia’s idea of joint EU borrowing to pay for arms to
Ukraine, an idea that is hated in frugal Germany. French diplomats recently
drew up alarming scenarios about the implications of a Russian victory. Mr
Macron, says a French military source, no longer harbours any doubts about
Moscow’s expansionist ambitions. If Russia wins, the president said last
month, Mr Putin will not stop at Ukraine. Now Mr Macron needs to act on
his new understanding. ■

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The Russians are coming

Ukraine is digging in as the Kremlin steps up its

offensive
Will it be enough?

Apr 18th 2024 | SUMY PROVINCE, UKRAINE

THE SUNKEN faces that peer from behind battered fences are aged,
whether or not the bodies that carry them are old. Russia, eight kilometres
away, isn’t hiding. In the past 24 hours, three guided bombs landed in the
village, with two of them exploding to devastating effect. Everyone here is
in waiting mode. Oleh, the officer in charge of constructing a new network
of fortifications on the outskirts of the village, shouts back a warning. “If
you hear a whistle, you’ve got a few seconds to drop down on the floor. And
hope for the best.”

The construction of three new lines of fortifications in Sumy province is part

of a billion-dollar Ukrainian scheme to shore up defences ahead of an
expected Russian summer offensive. Diggers are working around the clock,
as they are in Kharkiv, Zaporizhia and Donetsk provinces, where the main
push is expected. Construction follows a master plan of interlocking
trenches, underground command-points, observation posts, and sleeping
quarters that double as field hospitals. The general rule is that army brigades
build the first line. Engineering forces, local authorities and occasionally
local businesses take care of the rest. The outer line, about 30km back, is the
sturdiest, built in relative calm with diggers and reinforced concrete. After a
long delayed start, the first part of the project is due to be completed by the
end of the month. The question is whether that will be soon enough.

Things are already critical in part of the Donetsk area. On April 14th
Ukraine’s commanding general, Oleksandr Syrsky, said he was particularly
concerned by a deterioration around the small town of Chasyv Yar. Russian
troops had been ordered to seize it by Victory Day on May 9th, he said, and
were amassing a huge strike force. There is frankly little to seize. Anton, a
drone-company commander, describes the once-quiet town in apocalyptic
terms. The earth is ash-grey; the air heavy with the smell of gunpowder and
burning. Most buildings have been destroyed by artillery and guided bombs,
he says, “dozens” of which land every day.

In Anton’s view, the Kremlin is repeating scorched-earth tactics it used with

success to seize nearby Avdiivka in February. With Russian guns firing at
least seven times more than Ukrainian ones, it was just “a matter of time”
before the process would be completed once again. Ukraine has spent most
of the war in serious artillery deficit, he says, but the shortages have been
more pronounced since December. With Ukraine lacking the means to
suppress infantry advances, the Russian army is now able to approach its
positions with ease. “You’re always trying to preserve the ammunition you
have, to defend against more serious advances. And so they keep creeping
up, and you keep falling back.”

The vulnerabilities have many people worried. Some media reports, quoting
unnamed Western officials, have even suggested Ukraine may be on the
verge of military collapse. Those fears are exaggerated. Mr Kostenko, who
oversees groups in the south and east, assesses that there is only a “minimal”
risk of a major Russian breakthrough in the near future. Ukraine is
addressing its manpower shortages, he says. Things already look better than
they did in December, when Ukraine’s draft system essentially “broke
down”. But the critical factor remains ammunition. As long as a minimum
keeps arriving, which so far it is, Russia will find it difficult to achieve
anything other than limited tactical success in small places like Chasyv Yar.
“The front lines aren’t pleasant, but the Russians have real problems too.”

Not that any of that is calming nerves in Kharkiv, Odessa or even Kyiv,
where rumours of imminent large-scale offensives have been stimulated by
Russian influence operations and confused Ukrainian communications. A
defence insider, who asked to remain anonymous to speak freely, insists that
none of the supposed Russian operations looked particularly viable. He
suggests “chaos” within Ukraine’s main staff had made the military picture
seem worse than it was. “We are losing the information war to Russia,” he
complains. Another source suggests that bureaucratic paralysis had resulted
from the worsening military situation, with few people willing to take the
initiative.

For some, the delays in starting the fortification programme are a case in
point. Ukraine long denied the reality, they say, and waited far too long, until
February, to begin digging. But knee-deep in the black soil, the upbeat Oleh
counters the critics. “Try constructing a trench in snowy, frozen minefields,”
he retorts. ■

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Droning on

Ukraine is ignoring US warnings to end drone

operations inside Russia
Its superdrones can reach targets as far away as Siberia

Apr 18th 2024 | KYIV

A GUARD LOOKS on nervously. With every step, the air thickens with the
smell of petrol. Around a corner is the workshop, and the buzz of
manufacturing. Inside, lab-coated technicians are busy assembling grey birds
under the glow of overhead lights. Young men in T-shirts scuttle about,
before packing the drones in boxes for onward delivery. The destination for
some of them will be 1,000km away and more—hunting for important
targets inside Russia.

Since President Volodymyr Zelensky prioritised the technology, Ukraine has

invested hundreds of millions of dollars into long-range drones, capable of
searching out and striking distant targets. Half a dozen firms now make
them.

The best of the new models has a range of 3,000km, able to reach Siberia.
Born out of necessity—the West has been reluctant to provide Ukraine with
long-range weapons—the programme has disrupted much of Russia’s oil and
military infrastructure. But the White House is not happy. It is pushing the
Ukrainians to stop the strikes.

America’s concerns have varied, from a rise in the oil price to the prospect
of an uncontrollable tit-for-tat in which Ukraine could end up the loser. Fears
of the latter rose in late March, when Russia inflicted millions of dollars of
damage on Ukraine’s energy infrastructure. The attacks revealed gaps in air
defences and vulnerabilities to Russia’s new Kh-69 low-altitude cruise
missile. On April 11th such missiles destroyed Ukraine’s Trypilska power
station, 40km from Kyiv, though it was in range of the capital’s Patriot air-
defence systems.

So far, Ukraine is ignoring American advice to call off the strikes.

“Detective”, an intelligence officer responsible for part of the programme,
says he has not received instructions to dial down operations. Yes, there has
been a switch away from aiming at oil infrastructure in the past week, but it
is probably temporary. “Our targets change day to day. We keep the Russians
on their toes.”

One long-range-drone producer claims that not every American

representative agrees with its policy. His contacts “winked” while they
delivered warnings. “They’re privately telling us to keep going.” The
producer predicted an expansion of Ukraine’s drone programme in the
months to come. “Russia is scorching Ukrainian earth. It’s time we did the
same to European Russia.”■

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Charlemagne

How a conservative conference morphed into a

crisis of liberalism
A Brussels hard-right confab descends into a mix of farce and petty tyranny

Apr 17th 2024 |

ONE OF THE few benefits of Britain leaving the European Union, at least
for denizens of Brussels, was that Nigel Farage all but disappeared from the
city’s parliament, pubs and speaking circuit. The blowhard Brexiteer’s return
to the Belgian capital on April 16th will have done little to rekindle his
passion for the place. As the former MEP addressed several hundred fellow-
travellers of the hard right at a conference, Belgian police swooped into the
venue with orders to shut the event down. Outnumbered, the coppers ended
up beating a discreet retreat, allowing Mr Farage to deliver a few more quips
about gravy-train Eurocrats and fake-news media. After some to and fro, the
police opted to seal the conference venue instead, leaving the afternoon’s
speakers stuck outside and—worse, for attendees including Charlemagne—
caterers unable to deliver food. Not to worry: lunch was replaced by a stern
lecture from Suella Braverman, Britain’s former home secretary, about the
dastardliness of human-rights lawyers.

The half-hearted police raid at a reactionary gabfest was the culmination of a

discomfiting series of events around the “National Conservatism”
conference on April 16th-17th. At the ninth such jamboree, organised by the
Edmund Burke Foundation, an American outfit, the star attraction of this
iteration was Viktor Orban, Hungary’s proudly illiberal prime minister.
Unsurprisingly, some speakers held views outside the centrist consensus,
albeit ones endorsed by plenty of voters. This lèse-libéralisme sent local
Belgian authorities on a misguided mission to prove the “cancel culture”
decried by conservatives is not just a conspiracy. A policy that aims to
exclude hard-right parties from coalition governments, known as the cordon
sanitaire, metastasised into an ugly variant whereby merely expressing such
ideas is beyond the pale.

The first sign of trouble came a few days before the event, when its original
venue, a posh set of heavily gilded rooms near the EU institutions used by
political parties and diplomats for their own shindigs, decided to turf out the
conservatives. One of Brussels’s 19 district mayors had ginned up fears of
“anti-fascist” protests, arguing that security was impossible to arrange. This
is clearly nonsense. Brussels hosts dozens of summits featuring grandees
that run into no such problems. Nor had policing been an issue when the
National Conservative bunch had held a similar event at the same venue in
2022. Discomfiting as that show of censorship was, more was to come. A
backup Brussels venue was secured at a cavernous Sofitel near the European
Parliament also well used to political confabs. As the conservative organisers
were in the midst of setting up their stage on the day before the event,
another Brussels district mayor worked to evict them, taking pride in foiling
the conference of people whose views he disagrees with.

And thus it was that the homeless nationalists ended up cramped inside the
Claridge, a former nightclub turned into a concert venue and part-time
conference hall (with no connection to the luxurious London hotel, nor
anything remotely posh). If the site originally booked was the Ritz of
political rallies, this was more akin to a roadside motel, jammed between a
second-hand clothes shop and a kebab joint in Belgium’s poorest district;
upcoming events include a Shrek-themed rave (“Bring out your inner
ogre!”). Even then, yet another Brussels mayor sent in the cops.

The offstage rigmarole spiced up what was otherwise predictable globalist-

bashing fare. Those speakers who could attend—Eric Zemmour, a French
firebrand, was among them though barred by police on the first day—
delivered platitudes about family values and bent elites. Among the forces to
be combated: the European Parliament, the European Commission, the
mainstream media, polite society, the UN, immigrants, political correctness,
NGOs, “Bolshewokism”, George Soros, and green regulation. Things liked
by conference speakers included the freedom-loving owners of the Claridge,
farmers, Donald Trump, national sovereignty, motherhood and “the will of
the people”. Conspicuously absent, as well as lunch (which did arrive later,
for there is only so much self-sacrifice even conservatives will put up with),
was any kind of speech a liberal society should not be able to tolerate.
Conservatives at the gates

Charlemagne holds little truck with the ideas featured at the conference.
Many well-meaning speakers, notably from America, do not seem to realise
their Hungarian patrons (who helped fund the event) are abusers of their
conservative ideology, using it as cover to build a patronage system
benefiting cronyish insiders. Some, like Mr Zemmour, hold truly
reprehensible views. But to be misguided is their business, not that of either
the thought police or the Brussels variant. Happily, the ham-fisted censorship
proved surmountable. As the first day of the conference closed, Alexander
De Croo, the Belgian prime minister, decried attempts to shut it down as
“unacceptable”. An overnight court ruling quashed the original order to ban
the event. Boosted by the furore around the efforts of his liberal enemies to
silence him, Mr Orban got to address his fans, railing against the EU and the
very liberal norms that (belatedly) ensured his right to speak.

Stuck between the hubbub of police blockading the venue and persecuted
conservatives within, your columnist got to chat for a few minutes with the
owner of the Claridge. A first-generation migrant from Tunisia, Lassaad Ben
Yaghlane has run the place with his family for a decade. When he got the
call to host the event, he thought before agreeing, then decided there could
be no harm in providing anyone a room to debate in. The conservative
organisers were a polite lot, he said. Didn’t he mind that some speakers were
spewing migrant-bashing rhetoric from a stage he was providing? The 59-
year-old shrugged and asked: “What’s a democracy if you say, ‘You can
listen to this guy but not that one’?”■

Read more from Charlemagne, our columnist on European politics:

What happens if Ukraine loses? (Apr 11th)
Germany’s Free Democrats have become desperate spoilers (Apr 4th)
How Europe’s fear of migrants came to dominate its foreign policy (Mar
27th)

Also: How the Charlemagne column got its name

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Britain
Explore our prediction model for Britain’s looming election
All change :: The scale of the task facing Rishi Sunak is clear

How tactical voting might affect the British election

Crossover :: The evidence for co-ordinated anti-Tory behaviour

Where are all the British robots?

Machines :: Firms’ small size is the biggest barrier to automation

The push to decriminalise abortion in Britain heats up

If you pull on a thread :: But campaigners should be careful what they wish for

Britain’s black-mass problem

Critical minerals :: The thorny business of recycling electric-vehicle batteries

Online dating spells the end of Britain’s lonely-hearts ads

“Sexually, I’m more of a Switzerland” :: A 300-year-old genre is losing its GSOH

Local British politics is a mix of the good, the bad and the
mad
Bagehot :: Devolution is messier—and weirder—than people think

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All change

Explore our prediction model for Britain’s looming

election
The scale of the task facing Rishi Sunak is clear

Apr 15th 2024 |

THERE HAVE been 17 elections in Britain since the start of 1959 and the
Conservative Party has been successful in ten of them. The next one is
almost certain to take place in the second half of this year. It is safe to say
that Rishi Sunak’s Tories are very unlikely to add to their victory tally: they
currently trail Labour, led by Sir Keir Starmer, by 20 percentage points in the
polls. But it is tricky to predict how many MPs each party will have, partly
because national voting intentions do not convert simply into seats in
Parliament. In 1997, for example, the Labour Party won 63% of the seats on
43% of the vote.
To tackle this problem, The Economist has built a new prediction model
using 9,398 individual constituency-level election results along with
available polling data from every election since 1959. Our model builds on
the simple principle of uniform national swing—the idea that support for
parties rises and falls across all constituencies in the country by the same
magnitude—and augments it with specific regional polling from Scotland,
Wales, London and so on. The output is not so much a forecast as a
“nowcast”—a prediction of what would happen if the election were held
tomorrow. If you happen to be Mr Sunak, you should look away now.

Our modelling concludes that Labour has a near-certain chance of being the
largest party in Parliament, and an 87% chance of winning the 326 seats
needed for an outright majority. Our central estimate is that it would win 372
seats if polling stations were to open tomorrow (though the range of possible
outcomes is wide). The mid-point estimate for the Conservatives is 198
seats. Labour would retake many of the Conservatives’ 2019 “red wall”
gains in the north and the Midlands; the Tories would be left with just 55
seats north of the Watford Gap, compared with 147 now.

Labour is expected to gain at the expense of other parties, too. Scottish

politics is in a febrile state at the moment, but our central estimate is that the
Scottish National Party (SNP) would end up with 32 seats, 16 fewer seats
than it would have won if the last election had been fought under newly
redrawn constituency boundaries. We think Labour has a 40% chance of
winning between 350 and 399 seats, and a 27% chance of winning more than
400, as Sir Tony Blair did in 1997.
If all that sounds bad enough for Mr Sunak, the real picture may be even
worse. The biggest determinant of the final composition of Parliament is the
nationwide gap between Labour and the Conservatives; our model translates
that into seat counts pretty reliably. But it does not take into account the full
possibilities of tactical voting or the attention that parties’ campaign
managers will give to particular seats. These effects may, if anything, push
the Tory seat tally even lower.

In our model’s central estimate, for example, the Liberal Democrats, who are
hoping to become the third-largest party again in Westminster after being
surpassed by the SNP in 2015, are expected to win 21 seats. But if enough
Labour voters switch votes in constituencies where the Lib Dems are the
only credible challengers to the Tories, they could do much better. A
different prediction approach, enticingly called multi-level regression with
post-stratification (MRP), attempts to capture these local effects; a recent
MRP from YouGov, a polling firm, reckoned that the Lib Dems would win
49 seats.

The waters are muddied further by uncertainty over the impact of Reform,
an insurgent right-wing party that is critical of mass immigration and that is
currently polling at 13%. In 2019 the Brexit Party, which was renamed
Reform UK in 2021, did not have candidates in 317 constituencies held by
the Conservatives. There will be no such respite for the Tories this time. Our
model thinks it is unlikely that Reform will win any representation in
Parliament, because Britain’s first past-the-post system punishes parties
whose support is diffused across constituencies. (Reform’s best shot at a seat
is in Barnsley North, in South Yorkshire, where it would currently attract
around 30% of voters.) But its ability to hurt the Tories by taking votes away
from them is both real and unpredictable.

So should Sir Keir begin measuring up for the curtains in Downing Street?
Not quite yet. Predictions are not promises. Our swing model does
reasonably well if asked to predict the outcome of the elections it was
trained on. It correctly anticipated a hung parliament in the 2010 election, for
instance. But it is not foolproof: like most pundits and pollsters it gave the
Tories only a small chance of an outright majority at the following election
in 2015.

The biggest source of hope for Mr Sunak is that voting intentions can still
change. Our prediction is based on a scenario in which the election takes
place tomorrow. We only account for the pattern of voters’ behaviour today
and in the past, so shifts in the polls will affect our predictions (which will
be regularly updated online). If the gap in the national polls between them
and Labour narrowed to 15 percentage points, the Tories would increase
their own chances of electoral success to one in ten—still measly, but better.

It is ever plainer, however, that the Tories have a very steep mountain to
climb. No governing party has entered the final nine months of a
parliamentary term with a 20-percentage-point polling gap and won the
subsequent election. The fact that the Tories’ poll deficit has been
impervious to Mr Sunak’s various efforts suggest that their chances of
victory are increasingly slim. However long there is to go until polling day,
time may already have run out. ■

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Crossover

How tactical voting might affect the British

election
The evidence for co-ordinated anti-Tory behaviour

Apr 18th 2024 |

IF AN ELECTION were held tomorrow, our prediction model is sure that

the Tories would lose. But it may still be being too kind, since it does not
explicitly consider the potential for a jump in tactical voting. When the
Conservatives have suffered landslide defeats in the past—as they did in
1906, 1945 and 1997—these have been at the hands of co-ordinated anti-
Tory coalitions. Another such coalition may be forming now.

That is because of a big rise in the number of centre-left crossover voters

who are prepared to cast their ballots for more than one party (see chart).
This increases the chances that people will opt for a party other than their
first choice in order to defeat the Tory candidate in their constituency. In
2019 around 17% of all voters were considering both Labour and the Liberal
Democrats, compared with only around 13% in 2015. In May 2023 it was
almost 22%.

This number may be even higher now. Labour is more palatable to crossover
voters under Sir Keir Starmer than Jeremy Corbyn. And constituencies that
have held by-elections since 2019 show evidence of tactical voting. In by-
election seats targeted by the Lib Dems, the Labour vote fell by an average
of 7.5 percentage points; in seats where the Lib Dems were not going for
victory, Labour’s vote rose by ten percentage points. This may partly be
because Labour chose not to campaign hard in seats where the Lib Dems
were stronger. But it is also likely to reflect voter behaviour.

Less politically engaged voters, who are more likely to vote in a general
election than in by-elections, may not be as attuned to these possibilities. But
if they also vote tactically, the Tories could fare even worse than our model
suggests.■

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Machines

Where are all the British robots?

Firms’ small size is the biggest barrier to automation

Apr 16th 2024 |

SARNIES AND precision engineering may seem to be worlds apart. But

Greencore, Britain’s largest sandwich-maker, spends £20m ($25m) on
industrial robots annually. They peel, slice and stone avocados. They cut
wraps and baguettes in half using ultrasonic knives. They place slices of
bread above fillings. They also help make sushi.

Machines have not solved all of Greencore’s problems. They’re unable to

make a classic BLT (bacon, lettuce and tomato) sandwich, whose fillings are
hypersensitive to bruising from heavy machinery. “The software exists but
the dexterity of the robot is not where it needs to be,” says Dalton Philips,
Greencore’s CEO. Robots struggle with other tasks, too. The company’s
workers wrap millions of sandwiches by hand each week. But where they
can help, machines make a huge difference, saving 350 hours of manual
labour each week on sushi-making alone.

In a country where productivity growth has been anaemic for 15 years, such
gains are not to be sniffed at. Yet Britain has the lowest adoption rate for
robots in the G7 (see chart). The country deploys around 98 robots for every
10,000 workers in manufacturing, compared with more than ten times that
amount in South Korea and around four times that number in Germany,
Japan and China, according to the International Federation of Robots (IFR),
a trade body. A study by Copenhagen Business School has estimated that
Japan-like levels of automation would boost Britain’s productivity by over a
fifth.
You might expect economies that are more dependent on manufacturing to
be further ahead when it comes to investing in robots. Manufacturing today
accounts for only 8% of the British economy, down from 27% in 1970; in
South Korea and Japan, manufacturing accounts for 26% and 19% of GDP
respectively. But even compared with other services-oriented economies,
Britain is a laggard. For every 10,000 workers in manufacturing, America
has 285 robots and France 180.
Bright spots exist. The automotive industry in Britain has 734 robots for
every 10,000 employees; Jaguar Land Rover’s Solihull plant boasts more
than 615 high-tech robots, with a Jaguar XE rolling off the assembly line
every 78 seconds. Automation is also prevalent in logistics, where robots lift
and sort items in warehouses. But other industries trail behind. London
Economics, a consultancy, estimates that robots will perform just 1% of
tasks in construction and agriculture by 2035, despite up to 38% and 30% of
functions in these industries being suited to machines.

There are several causes of the slow overall pace of automation, some more
easily fixed than others. Uncertainty has almost certainly played a role in
dampening investment, from the upheaval of Brexit to the inconstancy of
policymakers—Britain’s capital-allowance regime has gone through as many
as 24 changes in four decades. A generous full-expensing regime for capital
investment is now in place; the Labour Party has promised to keep it if it
wins the next election.

The availability of cheap foreign labour in the past is thought by many to

have muted incentives to invest in machines. High levels of economic
inactivity since the pandemic and stricter immigration rules are exerting
more pressure on employers to automate. So is an ageing workforce, which
is highly correlated with investment in robots. A fifth of Britain’s engineers
are due to retire or be close to retirement by 2026, according to the
Engineering Construction Industry Training Board, an industry body. Robot
installations across Britain for food and drinks companies like Greencore
were up by 76% in 2022, according to the IFR. ABB, a big Swiss-Swedish
industrial-technology firm, says that Britain was one of its best countries for
revenue growth last year.

But the obstacles to large-scale adoption remain formidable. Britain lacks

enough workers with the right skills to install and operate modern tools. A
dearth of apprenticeships means that skilled technicians below degree level
are in short supply. Half of German school-leavers take up vocational
training, with a third opting for apprenticeships, compared with just 7% of
those in Britain.

Britain is also an economy of small (and often poorly managed) companies,

which sits uncomfortably with the high fixed costs of machinery. Firms with
fewer than ten workers employ a third of the country’s labour force; around
a fifth of German workers and a tenth of American ones work for firms of
that size.

A poll of 500 smaller businesses in 2023, by Charles & Dean, a finance

broker, found that less than half of firms took advantage of a now-defunct
“super deduction” scheme, which cut £1.30 from companies’ tax bills for
every £1 invested in new machinery. Even with a generous tax break, one in
five firms said they could not afford to invest. The average dairy farm in
Britain is expected to earn a profit of £50,000 this year, for instance. Yet for
a herd of 200 cows, milking robots can cost as much as £400,000 to buy.

The good news is that the costs of automation are falling. Doubling the
cumulative number of industrial robots produced leads to their prices falling
by half, according to ARK Invest, an investment-management firm. That
should help accelerate the slow spread of robots in Britain. Even if they
cannot yet make a BLT. ■

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If you pull on a thread

The push to decriminalise abortion in Britain

heats up
But campaigners should be careful what they wish for

Apr 18th 2024 |

FOR MORE than half a century abortion has been a largely uncontroversial
issue in Britain. In 1967 the Abortion Act was passed to allow women to end
their pregnancies up until 28 weeks with the approval of two doctors; this
limit was later lowered to 24 weeks. To satisfy those Britons—mostly
conservative Christians—who believe abortion is murder, lawmakers chose
not to repeal parts of a law from 1861 that criminalised it.

That legislative fudge has been successful, but it is now beginning to cause
problems. Until recently prosecutions under the Victorian law were rare;
they are now becoming more common. The reason is a change introduced
during the pandemic and made permanent in August 2022, which allows
women to receive abortion medication (two drugs taken a few hours apart)
by post after a telemedicine consultation, provided they are less than ten
weeks pregnant. This has made it easier to gain access to abortion. But it has
an obvious flaw: it is impossible to check how far along a pregnancy is via a
phone call.

In 2023 a woman was sentenced to 28 months in prison after she aborted a

baby of 32-34 weeks’ gestation. She had told the organisation that sent her
abortion medication that she was around seven weeks pregnant. An appeals
court later cut her sentence by half and suspended it, saying she deserved
“compassion, not punishment”. MSI Reproductive Choices, a charity, says
that in the past year five women have appeared in court on similar charges,
compared with a grand total of four in the previous 55 years.

Like other reproductive-rights groups, it believes the answer is to

decriminalise abortion. The charity supports an amendment to the Criminal
Justice Bill, which is now making its way through Parliament, by Diana
Johnson, a Labour MP; this would remove women who have abortions from
the Offences Against the Person Act 1861. Another amendment, supported
by Stella Creasy, another Labour MP, would decriminalise any abortions up
until 24 weeks. Although this would be largely symbolic, Ms Creasy has said
it would protect abortion access against what she has described as a coming
“backlash” against it.

Decriminalising abortion makes some sense. In 1967 most Britons broadly

opposed abortion; today, most believe it should be legal. When it was
legalised in Northern Ireland, in 2019, the anti-abortion parts of the 1861 law
were dropped. (Women there must, however, take the first tablets in a clinic.)

Yet opening a fresh debate also creates an opportunity for anti-abortion

campaigners to push for reform. There are plenty of them in Parliament,
where a comparatively high number of MPs are religious. Some of them are
itching to point out that Britain’s limit of 24 weeks is liberal compared with
many European countries’ first-trimester (12- to 14-week) limit. That is
evident in another proposed amendment to the Criminal Justice Bill, which
would lower the limit to 22 weeks.
Other pro-life politicians are trying another approach. In 1990 the law was
changed to allow abortions after 24 weeks in the case of a “serious
handicap”. Sir Liam Fox, a Conservative MP, wants to make it illegal to
abort babies with Down’s syndrome, a genetic disorder that causes
intellectual disability and delays in physical development, after that period.

The law does not spell out what a serious handicap means, so the definition
is subjective: many people with Down’s syndrome do not fit it. Yet most
jurisdictions also allow abortions after legal limits for health reasons,
meaning that decisions are between doctors and their patients. Although
Down’s syndrome is often diagnosed earlier than 24 weeks, many
comorbidities, like heart problems, are often not spotted until later.

In any case using one group to push anti-abortion legislation is a mistake,

says Ramandeep Kaur, whose 17-year-old son has Down’s syndrome. Sir
Liam’s campaign rests on the idea that people with Down’s are discriminated
against; that is no more true of them than any other people with learning
disabilities, she says.

The idea of legislating against abortion because it is discriminatory may be

inspired by campaigners across the Atlantic. Before Roe v Wade was
overturned in 2022, some conservative states in America introduced bills
banning abortion on the grounds of race, sex or fetal abnormality. Ms Kaur
notes that many of the groups that backed the Down Syndrome Act, a law
sponsored by Sir Liam in 2022 to “make provision about meeting the needs
of persons” with the condition, were vehemently anti-abortion. “This is not
about disability rights,” she says. “This is about reproductive rights.”
Abortion is not a divisive topic in Britain. But it can become one. ■

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Critical minerals

Britain’s black-mass problem

The thorny business of recycling electric-vehicle batteries

Apr 18th 2024 |

RECYCLING ELECTRIC-VEHICLE batteries is tricky. But they are full of

critical minerals—lithium, cobalt and other commodities—that are vital to
the green transition. At the moment most EV manufacturers in Britain crush
old batteries into a material called “black mass”, which is then exported to
other countries—mostly, experts say, to China. There the black mass is
dissolved in acid before the most useful materials are separated and
processed.

EV batteries can last for 15-20 years; since the EV fleet on Britain’s roads is
young, the amount of valuable stuff that is currently being exported is small.
But as volumes grow, so will the pressure to recycle closer to home.
According to Green Alliance, a think-tank, recycling could provide 43% of
the minerals required for domestic manufacturers to meet demand for
batteries by 2040. Western countries are keen to reduce their dependence on
China: the EU has proposed banning exports of black mass to non-OECD
countries.

The main barrier to building processing plants in Britain is cost. It is cheaper

to export the stuff to Asia and buy extracted materials back, according to
Heather Plumpton, an analyst at Green Alliance. Research is under way to
make black-mass processing more economic but it will take time for new
tech to prove itself, says Paul Anderson at the Faraday Institution, another
think-tank.

The EU is using regulation to speed things up. From 2031 batteries in EVs
sold there will need a share of recycled materials—16% for cobalt, 6% for
lithium and so on. It has also fast-tracked the approval of battery-recycling
projects. A consultation to update the regulation of EV batteries in Britain is
yet to be published; the process of obtaining permits remains painful. “The
government seems to be waiting until old EVs are available at scale to act,”
says Ms Plumpton. Exporting black mass to Europe would be better than
sending it to China. But if Britain wants its own supply of critical minerals,
as it claims, it has work to do. ■

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“Sexually, I’m more of a Switzerland”

Online dating spells the end of Britain’s lonely-

hearts ads
A 300-year-old genre is losing its GSOH

Apr 18th 2024 |

MR DARCY, IT turns out, was undemanding. In “Pride and Prejudice” Jane

Austen implies that he is a picky paramour, since he likes a beloved to have
“fine eyes”, “a thorough knowledge of music” and a mind improved “by
extensive reading”. But read actual Georgian “lonely heart” advertisements
and it is clear that Mr Darcy was pretty lax. Others were much fussier,
demanding, among other things, that their beloveds be “not fat”, have “a
good set of Teeth”, and a bosom that is “full, plump, firm and white”.

Britain’s affair with lonely-hearts ads is more than 300 years old but it is
now all but over. Another infatuation, for dating apps, has taken their place.
This year, for the first time, Tinder is running ads in British cinemas, which
tempt viewers to “just go out and find” someone. Modern Britons have
adopted the apps’ turns of phrase (“swipe right” has entered the vernacular);
some claim an addiction to them.

Meanwhile, sections of romantic ads that once spread over pages and pages
of newspapers and periodicals have withered. Their historical value remains,
however. Brief as a haiku but often far blunter, these ads illuminate Britons’
centuries-long search for the “one”—that elusive soul who is willing, loving
and, as one romantic requested, of “no bodily deformity”.

Lonely hearts have always existed but the lonely-hearts genre itself dates
back to the late-17th century. Perhaps the very first example was published
in 1695, in a pleasingly titled pamphlet on “Collections for the Improvement
of Husbandry and Trade”. Appropriately near promotions for a stallion and a
bed appeared an advert for “A Gentleman about 30 Years of Age”.

As Francesca Beauman points out in her book, “Shapely Ankle Preferr’d”,

the Industrial Revolution spurred things on. For this manufactured not just
products on an industrial scale, but loneliness, too. As the 18th and 19th
centuries progressed, hundreds of thousands of migrants were arriving each
year in London, where many experienced the kind of acute isolation that
only crowds can elicit. London, which had 1m inhabitants by 1800, offered
numerous potential lovers. But without the filters of family and friends it felt
impossible, one novelist wrote, “to find the one eel out of the colossal bag of
snakes”.

Where connections could not help find suitable matches, advertising stepped
in. It offered a way to filter London’s thousands by such criteria as their
weight (which, as adverts made clear, should favour plumpness); skin
(clear); ankles (shapely was indeed preferr’d) and even opinions (such as,
perhaps, on the all-important question of snakes v eels).

Early ads can strike modern minds as unamorous. The romantic movement
may have thrived in Britain at the turn of the 19th century, but it seems to
have taken quite some time to make its way to Dorset. There, in 1832, a
widower placed an advert explaining that he desired a new wife since his last
one was dead and he wanted someone “to look after the pigs while I am out
at work”. It’s not quite Keats.
In some ways, the history of lonely-hearts ads is evidence of great change in
Britain: few today would demand pig-husbandry of their paramour. In
another way, very little is different. The bawdiness is familiar: as long ago as
the 17th century one “plump, fresh, free and willing widow” was advertising
for a nice young workman to (in arguably another amatory first) send her a
“picture of his Tool”.

That may have been satire. But people’s preferences are genuinely similar.
Georgians wanted men who were tall, rich and educated and women who
were young, shapely and intelligent (though not, one warned, “a wit”).
Research on modern apps shows that women tend to look for wealth, status
and height while men seek out women who are slim, young and educated
(but not overly so: “wits” are still unwanted). It is, says Ms Beauman,
depressing.
The codes of Cupid

As the genre aged, it changed. Victorians specialised in starchy soppiness;

racy Edwardian “bachelor girls” merely sought “chums”. It also developed
its own language. In a pricing system based on characters, initials were
cheaper. By the late 20th century abbreviations such as GSOH (good sense
of humour) and WLTM (would like to meet) were commonplace.

The tone changed, too: from blunt requests to self-referential irony. In the
London Review of Books (LRB), a worthy literary magazine, advertisers
started to brag about their beetroot wine rather than their bodies and say such
obliquely brainy things as: “Sexually, I’m more of a Switzerland”. Others
offered (possibly ironic) confessions: “Likes to be referred to as ‘Wing
Commander’ in the bedroom,” explained M, 41. F, 29, listed her hobbies as
“crying and hating men”.

Even in these archly worded adverts the age-old blend of self-love, self-
loathing and hope that all dating engenders can be detected. “I hate you all,”
began another, unusually honest, ad in the LRB. “I hate London. I hate
books…I hate this column and I hate all the goons who appear in it.”
Though, it added, hinting that some hope remained, if “you have large
breasts [and] are younger than 30” he’d “put all that aside” and meet you. ■
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Bagehot

Local British politics is a mix of the good, the bad

and the mad
Devolution is messier—and weirder—than people think

Apr 17th 2024 |

“BUILDINGS OF ENGLAND”, the Bible of architectural historians, is

effusive about the Grand Hotel in Scarborough, a chilly, rather tired seaside
resort on the coast of Yorkshire. It is “a High Victorian gesture of assertion
and confidence: of denial of frivolity and insistence on substance, than
which none more telling can be found in the land”.

Other reviews vary. “ABSOLUTELY HORRENDOUS,” reads one. “If I

could give it 0 i would!!!” says another. A third vividly recalls: “The first
room I got had pubic hair all over the sheets.” When Bagehot visited, he
avoided that fate. But he found that the “glorious hall” highlighted in
“Buildings of England” now hosts an air-hockey table and a luminous arcade
machine, where punters can win prizes like an Xbox controller or a bottle of
Prime, a sickly energy drink. In the bar four bored pensioners watched “The
Chase”, a quiz show, at a disconcertingly loud volume.

The Grand Hotel’s owner is Britannia, which is consistently ranked the

country’s worst hotel chain. Soon it could have a new one: British taxpayers.
Keane Duncan, the 29-year-old Conservative candidate for the newly formed
York and North Yorkshire Combined Mayoral Authority, has pledged to buy
the decaying hotel if he wins office in local elections on May 2nd. If
Britannia refuses to sell, then Mr Duncan says he will use compulsory-
purchase powers bestowed on the mayor to force it to do so. “Sounds
bonkers, I know,” says Mr Duncan.

When it comes to devolution in England, there is a broad consensus. The

Conservatives are proud of introducing regional mayors in every major
urban area and now in some rural ones. Under a future Labour government
the powers of mayors will be juiced up further. Wonks generally agree that
devolution is “a good thing”. What gets forgotten is that it is also a very
messy thing. Some ideas will work. Others will fail. Some will be insane.
Local politics is always a mixture of the good, the bad and the mad.

For a taste of all three, drive 70 minutes north up the A171 to Teesside, a
struggling industrial region. Ben Houchen, the Conservative mayor of this
traditionally Labour region, is fighting for re-election. His offer to voters is
one of unapologetic economic interventionism. Almost £560m ($700m) of
public money has been pledged to overhaul a 1,800-hectare site by the Tees
in an effort to turn the graveyard of a former steelworks into something
productive. Lord Houchen even bought a loss-making airport on the basis
that executives could fly in to invest while Teessiders could fly out to spend
the proceeds on the Med. “Dirigisme” is the idea that the state can
orchestrate an economy; “Houchisme” is a shrunken version, with a local
economy bossed by a regional big man.

The scheme has been dogged by accusations of mismanagement and worse.

Andy McDonald, a local MP, made allegations of “industrial-scale
corruption” while speaking in Parliament, which is exempt from England’s
libel laws. Lord Houchen in turn labelled Mr McDonald a “liar”, a “coward”
and a “disgrace”. A report has found no evidence of corruption but a litany
of governance failures, with 28 changes recommended for the complex set-
up.

The project has, at times, taken a unique approach to stakeholder

management. During one disagreement about access rights to the site with a
neighbouring business, the then vice-chair of the development corporation
opted for film-dialogue threats: “I want your eyes out of your head; I want
the fucking roof off your house; I want your kids out of private school; I
want no shoes on your fucking feet.” Devolution succeeds in putting the
spotlight on sometimes forgotten areas; the glare will not always flatter.

Sometimes devolved schemes are wacky but largely harmless. In the West of
England Combined Authority, the mayor introduced a birthday bus pass,
giving people free travel during the month of their birthday (at a cost of
£8m). Other local decisions have bigger consequences. In Greater
Manchester Andy Burnham, the Labour mayor, has attracted plaudits for
bringing the region’s bus system into public ownership but chickened out of
a “clean-air zone” that would have charged polluting vehicles for driving in
the centre of the region. In London Sadiq Khan expanded a similar scheme
at some political cost. Pollution in the capital has plunged; pollution in
Manchester is the country’s worst. If Manchester’s residents choke, at least it
is due to their own choices.

This is part of the point of devolution. The British government and, in

particular, its mighty Treasury are good at stopping sins of commission.
White elephants do exist but they are rare, since so many projects are
aborted moments after conception. As a result, however, sins of omission are
common. Devolution means more things will be tried because of decisions
made by local politicians. But that will, inevitably, lead to mistakes.
Having a right mayor

At the moment, a place like Scarborough is stuck in limbo. Central

government has neither the guts to let it die nor the will to try to resuscitate
it. A mayor will neither change the weather (it is still woolly-hat
temperatures in spring) nor return the town to its Victorian pomp. But
someone might end up cleaning the layer of grime and seagull droppings that
covered the window in Bagehot’s filthy hotel room. Whether that is a good
use of taxpayer money is for voters—or at least the fraction of them who
bother to vote in local elections—to decide.

Devolution is a long-term punt that local politicians will, on the whole, make
better decisions about their area than national ones. Boosters insist a virtuous
circle will kick in: more powers will attract higher-calibre candidates, which
will lead to more scrutiny, which will mean better policy. Everyone in
British politics has signed up to the gamble. The price in the short term?
Whatever a 413-room Victorian hotel in Scarborough goes for these days. ■

Read more from Bagehot, our columnist on British politics:

Bootlicking: a guide to pre-election British politics (Apr 10th)
Sadiq Khan’s London offers a taste of Starmer’s Britain (Apr 3rd)
British boomers are losing out for the first time (Mar 27th)

Also: How the Bagehot column got its name

This article was downloaded by calibre from
https://www.economist.com/britain/2024/04/17/local-british-politics-is-a-mix-of-the-
good-the-bad-and-the-mad

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International
Would you really die for your country?
War and recruitment :: Military conscription is on the agenda in the rich world

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War and recruitment

Would you really die for your country?

Military conscription is on the agenda in the rich world

Apr 17th 2024 | Ermelo

BELLY DOWN in a muddy Dutch forest, Sabrina van den Goorbergh fires
blanks from a Colt C7 assault rifle. The third-year medical student is taking
part in the Dienjaar (service-year), a new programme that lets young Dutch
sign up for a year-long trial in the armed forces rather than the regular four-
year enlistment term. The programme is a success, drawing three applicants
for each spot, and the government plans to scale it up from 625 to 1,000
trainees next year.
Yet it can hardly begin to solve the country’s recruitment problems. The
Dutch armed forces number 49,000, less than a fifth of their size during the
cold war, and one in ten positions is vacant. Last year regular enlistment
yielded just 3,600 of a hoped-for 5,000 new soldiers. This is at a moment
when, in the face of the largest war on the continent since 1945, many
European countries actually want to expand their armed forces, not just
maintain them. By 2030 Germany hopes to raise its troop strength from
182,000 to 203,000, and France from 240,000 to 275,000 (see chart 1).
Poland plans to go from 197,000 to 220,000 by the end of this year, and
eventually to 300,000.

The problem is that today’s career-oriented, individualistic young people are

reluctant to join up. And it is not just Europe that is struggling with
recruitment. In and around the world’s conflict hotspots the question of how
to get more people into uniform is vital. Some countries are reconsidering an
old solution: mandatory military service for young people (or young men),
often for school-leavers. Terminology varies. Conscription typically means
compelling civilians to enlist in the armed forces, whereas military service
often refers to a subset of that—ordering young people to do a stint in the
forces.

At the start of the 20th century around 80% of countries had some form of
conscription; by the mid-2010s it was just under 40%. The practice reached
its peak during the world wars, and many countries continued to rely on it
throughout the cold war. Thereafter the West’s focus turned to high-tech
counterinsurgency campaigns such as those in Afghanistan and Iraq. Mass-
conscript armies were mostly replaced by smaller, professional volunteer
forces. Since 1995, 13 members of the OECD, a club of mostly rich
countries, have scrapped conscription. All but eight of NATO’s 32 members
have done away with it. But authoritarian countries such as Iran, North
Korea and Russia have doubled down on their press-ganged armies.

The most urgent discussion around mandatory military service and

conscription is in countries that face a serious threat of war, or are already in
one. Take Ukraine. More than two years on from Russia’s invasion,
thousands of men there are fleeing across the country’s borders, or hiding, to
avoid being served enlistment papers. On April 2nd a lack of troops meant
Ukraine’s government was forced to lower the minimum age of conscription
from 27 to 25. Russia has thrown hundreds of thousands of forcibly
mobilised men into the meat-grinder of its war.

In Israel, military duties are a central pillar of citizenship. After the October
7th attacks, some 300,000 Israelis left civilian life and rushed to join their
units. Israel wants to lengthen male conscripts’ service to three years (young
women currently serve for 24 months and young men for 32) and to extend
the call-up age for reservists to 45. At the same time, ultra-Orthodox Jews’
exemption from service is the subject of a bitter political struggle.

Meanwhile in Asia, Taiwan is trying to prepare for a possible war with China
as Sino-American tensions persist. Taiwan extended military service in 2022,
from four months to a year. But the island still boasts just 169,000 active
soldiers (China has around 2m). South Korea, where military service has a
brutish reputation, is trying to make it more appealing. Service has been
shortened to 18 months, wages are rising and sadistic drill-sergeants have
been pruned. The government also wants to hire more women (men-only
conscription has fuelled male resentment and anti-feminist politics).
In many places recruiters for the armed forces are struggling in the face of
shifting values: young people have grown averse to fighting even in
defensive wars. For decades the World Values Survey (WVS), an academic
research project, has been asking people around the world the same question:
“Would you be willing to fight for your country?” In the survey’s most
recent round, between 2017 and 2022, just 36% of Dutch 16- to 29-year-olds
said yes (see chart 2).
Recruiters try to counter with the rhetoric of patriotism, self-fulfilment and
shared values; the emphatic slogan of Germany’s armed forces, the
Bundeswehr, is Wir. Dienen. Deutschland. (We. Serve. Germany.) They also
run campaigns with influencers on TikTok and Instagram. But it does not
seem to be enough to hit their targets.

This is partly to be expected. As countries get richer, their citizens tend to

become less eager to sacrifice themselves for the nation. Herfried Münkler, a
German political scientist, called Western democracies “post-heroic”
societies, in which “the highest value is the preservation of human life” and
personal well-being. History certainly plays a role. Willingness to fight is
low in the countries that lost the second world war (Germany, Italy and
Japan). In Spain and Portugal, decades of military dictatorship left many
citizens suspicious of the armed forces.

But things can change when conflicts draw near. According to a forthcoming
paper by Wolfgang Wagner and Alexander Sorg of the VU University in
Amsterdam and Michal Onderco of the Erasmus University in Rotterdam,
proximity to war makes citizens more willing to fight. In Europe, this helps
explain why countries close to Russia are less doveish.
Political alignment is a poor predictor of willingness to bear arms. “The
radical right is not so eager to fight,” says Mr Wagner, at least in Germany
and the Netherlands. Last year he and his colleagues commissioned a study
in those countries which found that few people who planned to vote for
either far-left or far-right parties were willing to fight for their country.
Those who backed centrist parties, such as Germany’s Social Democrats and
Christian Democrats, were more prepared to do so.

Besides changing values, military recruiters face an economic hurdle: young

people currently have lots of employers bidding for their services. In most
wealthy countries, Generation Z has its pick of jobs. Unemployment among
15- to 24-year-olds in the European Union was 14.5% last year, down from
22.4% in 2015. In Germany it was just 5.8%. In such tight labour markets,
armies have a hard time competing with the private sector. Besides, sitting at
a desk is rather nicer than crawling through mud.

In some wealthy countries, however, young people’s willingness to fight

remains high. In France the share is 58% in the WVS. The figure is higher
still in Singapore, Taiwan and South Korea. In Denmark, Finland, Norway
and Sweden, four of the wealthiest and most peaceful countries in the world,
two-thirds or more of citizens say they are willing. (All are close to Russia.)
Their expanding armed forces also have no trouble finding soldiers: all four
have compulsory military service for young people.

Sweden actually eliminated the practice in 2011, but brought it back in 2018
after failing to meet recruiting targets. It is an intriguing case study for
others. Having just joined NATO, it is scaling up from 69,700 to 96,300
soldiers, which requires about 10,000 recruits a year. All of the country’s 19-
year-olds (men and women) must fill out service questionnaires; a bit under
a third qualify, and a tenth are ultimately inducted.

Rather than souring young people on the armed forces, in Sweden

mandatory service seems to make them more enthusiastic. In exit surveys at
the end of their stints, “about 80% of the conscripts would recommend other
young people to do military service”, says Pal Jonson, the defence minister.
Some 30% re-enlist as soldiers or reserves. Because more young people
qualify than are needed, only the best candidates make it in, and military
service looks good on one’s CV.
This kind of conscription helps keep Nordic armies a melting-pot for
different classes, and discourages political polarisation. (Volunteers in armed
forces tend to skew towards the right; in Germany neo-Nazi cells have been
uncovered in the Bundeswehr.) In the Middle East too, many states see
military service for young people as a social adhesive. The United Arab
Emirates introduced it in 2014 partly to forge a sense of shared identity
among its youth. Morocco, Jordan and Kuwait have followed suit.
You got no time to lose

Shortfalls across many democratic states suggest that better recruitment

strategies can do only so much to boost troop numbers. Few medical
students have Ms Van den Goorbergh’s drive to take up infantry training on
the side. In liberal societies, large segments of the population have come to
see serving in the army as someone else’s job. Reintroducing obligatory
military service for youngsters might be politically and practically
unworkable for the same reason recruitment is falling short: citizens feel
alienated from the armed forces.

Yet the Nordic model seems to help bridge that gap, ensuring that military
service remains a natural part of social life and nudging more school-leavers
to consider a related career. Other youngsters may still only join up in a
crisis. “It is fear that moves you to action,” says Andrei, a former television
producer now fighting in eastern Ukraine. He signed up the day after Russia
invaded. Most Ukrainians did not believe they would ever have to fight for
their country, either. ■
This article was downloaded by calibre from
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Business
Generative AI is a marvel. Is it also built on theft?
The imitation game :: The wonder-technology faces accusations of copyright infringement

Who will lead the LVMH luxury empire?

Pups in cashmere :: Bernard Arnault sizes up his heirs apparent

The lessons of woke Scrabble

Bartleby :: When heritage meets innovation

America hits Chinese biotech—and its own drugmakers

The health-care horserace :: A sweeping bill in Congress could cost patients at home

What is weighing on CEOs’ minds this earnings season?

Schumpeter :: Shareholder letters are proving to be bleakly prophetic

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The imitation game

Generative AI is a marvel. Is it also built on theft?

The wonder-technology faces accusations of copyright infringement

Apr 14th 2024 |

THE FOOTBALLERS look realistic at first sight but, on closer inspection,

something is wrong. Their faces are contorted, their limbs are bending in
alarming directions, the ball is slightly egg-shaped. Strangest of all, running
across one footballer’s left leg is the ghostly trace of a watermark: Getty
Images.

Generative artificial intelligence (AI) has caused a creative explosion of new

writing, music, images and video. The internet is alive with AI-made
content, while markets fizz with AI-inspired investment. OpenAI, which
makes perhaps the most advanced generative-AI models, is valued at nearly
$90bn; Microsoft, its partner, has become the world’s most valuable
company, with a market capitalisation of $3.1trn.
But some wonder how creative the AIs really are—and whether those
cashing in have fairly compensated those on whose work the models were
trained. ChatGPT, made by OpenAI, can be coaxed into regurgitating
newspaper articles that it appears to have memorised. Claude, a chatbot
made by Anthropic, can be made to repeat lyrics from hit songs. Stable
Diffusion, from Stability AI, reproduces features of images, including the
watermark of Getty, on whose archive it was trained.

To those who hold the rights to these creative works, generative AI is an

outrage—and perhaps an opportunity. A frenzy of litigation and dealmaking
is under way, as rights-holders angle for compensation for providing the fuel
that powers the creation of AIs. For the model-makers it is an anxious
period, notes Dan Hunter, a professor of law at King’s College London.
“They have created an amazing edifice that’s built on a foundation of sand.”

AIs are trained on vast quantities of human-made work, from novels to

photos and songs. These training data are broken down into “tokens”—
numerical representations of bits of text, image or sound—and the model
learns by trial and error how tokens are normally combined. Following a
prompt from a user, a trained model can then make creations of its own.
More and better training data means better outputs.

Many AI companies have become cagey about what data their models are
trained on, citing competitive confidentiality (and, their detractors suspect,
fear of legal action). But it is widely acknowledged that, at least in their
early stages, many hoovered up data that was subject to copyright. OpenAI’s
past disclosures show that its GPT-3 model was trained on sources including
the Common Crawl, a scraping of the open internet which includes masses
of copyrighted data. Most of its rivals are thought to have taken a similar
approach.

The tech firms argue there is nothing wrong with using others’ data simply to
train their models. Absorbing copyrighted works and then creating original
ones is, after all, what humans do. Those who own the rights see a
difference. “I’ve ingested all this incredible music and then I create from it,”
says Harvey Mason Jr, a songwriter and chief executive of the Recording
Academy, which represents musicians. “But the difference is, I’m a human,
and as a human, I want to protect humans…I have no problem with a little
bit of a double standard.” Roger Lynch, chief executive of Condé Nast,
which owns titles such as Vogue and the New Yorker, told a Senate hearing in
January that today’s generative-AI tools were “built with stolen goods”. AI
companies “are spending literally billions of dollars on computer chips and
energy, but they’re unwilling to put a similar investment into content”,
complains Craig Peters, chief executive of Getty.

Media companies were badly burned by an earlier era of the internet.

Publishers’ advertising revenue drained away to search engines and social
networks. Record labels’ music was illegally shared using applications like
Napster. Content-makers are determined not to be caught out again.
Publishers (including The Economist) are blocking AI companies’ automated
“crawlers” from scraping words from their websites: nearly half of the most
popular news websites block OpenAI’s bots, according to a ten-country
survey by Oxford University’s Reuters Institute in February. Record
companies have told music-streaming services to stop AI companies from
scraping their tunes. There is widespread irritation that tech firms are again
seeking forgiveness rather than permission. “A $90bn valuation pays for a
lot of lawyering,” says Mr Hunter. “That’s the business plan.”
The sincerest form of flattery

The lawyering is now happening. The biggest rights-holders are leading the
charge. The New York Times, the world’s largest newspaper by number of
subscribers, is suing OpenAI and Microsoft for infringing the copyright of
3m of its articles. Universal Music Group, the largest record company, is
suing Anthropic for using its song lyrics without permission. Getty, one of
the biggest image libraries, is suing Stability AI for copying its images (as
well as misusing its trademark). All four tech firms deny wrongdoing.

In America the model-makers are relying on the legal concept of fair use,
which provides broad exemptions from the country’s otherwise ferocious
copyright laws. An encouraging precedent comes courtesy of a ruling on
Google Books in 2015. The Authors Guild sued the search giant for scanning
copyrighted books without permission. But a court found that Google’s use
of the material—making books searchable, but showing only small extracts
—was sufficiently “transformative” to be deemed fair use. Generative-AI
firms argue that their use of copyrighted material is similarly transformative.
Rights-holders, meanwhile, are pinning their hopes on a Supreme Court
judgment last year that a series of artworks by Andy Warhol, which had
altered a copyrighted photograph of Prince, a pop star, were insufficiently
transformative to constitute fair use.

Not all media types enjoy equal protection. Copyright law covers creative
expression, not ideas or information. Computer code, for example, is only
thinly protected, since it is mostly functional rather than expressive, says
Matthew Sag of Emory University in Atlanta. (A group of programmers aim
to test this in court, claiming that Microsoft’s GitHub Copilot and OpenAI’s
CodexComputer infringed their copyright by training on their work.) News
can likewise be tricky to protect: the information within a scoop cannot itself
be copyrighted. Newspapers in America were not covered by copyright at all
until 1909, notes Jeff Jarvis, a journalist and author. Before then, many
employed a “scissors editor” to literally cut and paste from rival titles.

Image-rights holders are better protected. AI models struggle to avoid

learning how to draw copyrightable characters—the “Snoopy problem”, as
Mr Sag calls it, referring to the cartoon beagle. Model-makers can try to stop
their AIs drawing infringing images by blocking certain prompts, but they
often fail. At The Economist’s prompting, Microsoft’s image creator, based
on OpenAI’s Dall-E, happily drew images of “Captain America smoking a
Marlboro” and “The Little Mermaid drinking Guinness”, despite lacking
express permission from the brands in question. (Artists and organisations
can report any concerns via an online form, says a Microsoft spokesman.)
Musicians are also on relatively strong ground: music copyright in America
is strictly enforced, with artists requiring licences even for short samples.
Perhaps for this reason, many AI companies have been cautious in releasing
their music-making models.

Outside America, the legal climate is mostly harsher for tech firms. The
European Union, home to Mistral, a hot French AI company, has a limited
copyright exception for data-mining, but no broad fair-use defence. Much
the same is true in Britain, where Getty has brought its case against Stability
AI, which is based in London (and had hoped to fight the lawsuit in
America). Some jurisdictions offer safer havens. Israel and Japan, for
instance, have copyright laws that are friendly for AI training.

Tech companies hint at the potential threat to American business, should the
country’s courts take a tough line. OpenAI says of its dispute with the New
York Times that its use of copyrighted training data is “critical for US
competitiveness”.

Rights-holders bridle at the notion that America should reduce its protections
to the level of other jurisdictions just to keep the tech business around; one
describes it as unAmerican. But it is a reason why the big cases may end up
being decided in favour of the AI firms. Courts may rule that models should
not have trained on certain data, or that they committed too much to
memory, says Mr Sag. “But I don’t believe any US court is going to reject
the big fair-use argument. Partly because I think it’s a good argument. And
partly because, if they do, we’re just sending a great American industry to
Israel or Japan or the EU.”
Copyrights, copywrongs

While the lawyers sharpen their arguments, deals are being done. In some
cases, suing is being used as leverage. “Lawsuits are negotiation by other
means,” admits a party to one case. Even once trained, AIs need ongoing
access to human-made content to stay up-to-date, and some rights-holders
have done deals to keep them supplied with fresh material. OpenAI says it
has sealed about a dozen licensing deals, with “many more” in the works.
Partners so far include the Associated Press, Axel Springer (owner of Bild
and Politico), Le Monde and Spain’s Prisa Media.

News Corp, which owns the Wall Street Journal and Sun among other titles,
said in February it was in “advanced negotiations” with unnamed tech firms.
“Courtship is preferable to courtrooms—we are wooing, not suing,” said its
chief executive, Robert Thompson, who praised Sam Altman, OpenAI’s
boss. Shutterstock, a photo library, has licensed its archive to both OpenAI
and Meta, the social-media empire that is pouring resources into AI. Reddit
and Tumblr, two online forums, are reportedly licensing their content to AI
firms as well. (The Economist Group, our parent company, has not taken a
public position on whether it will license our work.)

Most rights-holders are privately pessimistic. A survey of media executives

in 56 countries by the Reuters Institute found that 48% expected there to be
“very little” money from AI licensing deals. Even the biggest publishers
have not made a fortune. Axel Springer, which had revenue of €3.9bn
($4.1bn) in 2022, will reportedly earn “tens of millions of euros” from its
three-year deal with OpenAI.

“There is not a big licensing opportunity. I don’t think the aim of [the AI
models] is to provide alternatives to news,” says Alice Enders of Enders
Analysis, a media-research firm. The licensing deals on offer are “anaemic”,
says Mr Peters of Getty. “When companies are…saying, ‘We don’t need to
license this content, we have full rights to scrape it,’ I think it definitely
diminishes their motivations to come together and negotiate fair economics.”

Some owners of copyrighted material are therefore going it alone. Last year
Getty launched its own generative AI, in partnership with Nvidia, a
chipmaker. Getty’s image-maker has been trained only on Getty’s own
library, making it “commercially safe” and “worry-free”, the company
promises. It plans to launch a video-maker this year, powered by Nvidia and
Runway, another AI firm. As well as removing copyright risk, Getty has
weeded out anything else that could get its customers in trouble with IP
lawyers: brands, personalities and less obvious things, from tattoo designs to
firework displays. Only a small percentage of Getty’s subscribers have tried
out the tools so far, the firm admits. But Mr Peters hopes that recurring
revenue from the service will eventually exceed the “one-time royalty
windfall” of a licensing deal.

A number of news publishers have reached a similar conclusion. Bloomberg

said last year that it had trained an AI on its proprietary data and text.
Schibsted, a big Norwegian publisher, is leading an effort to create a
Norwegian-language model, using its content and that of other media
companies. Others have set up chatbots. Last month the Financial Times
unveiled Ask FT, which lets readers interrogate the paper’s archive. The San
Francisco Chronicle’s Chowbot, launched in February, lets readers seek out
the city’s best tacos or clam chowder, based on the paper’s restaurant
reviews. The BBC said last month that it was exploring developing AI tools
around its 100-year archive “in partnership or unilaterally”. Most big
publications, including The Economist, are experimenting behind the scenes.

It is too early to say if audiences will take to such formats. Specialised AI

tools may also find it difficult to compete with the best generalist models.
OpenAI’s ChatGPT outperforms Bloomberg’s AI even on finance-specific
tasks, according to a paper last year by researchers at Queen’s University, in
Canada, and JPMorgan Chase, a bank. But licensing content to tech firms
has its own risks, points out James Grimmelmann of Cornell University.
Rights-holders “have to be thinking very hard about the degree to which this
is being used to train their replacements”.
Fake it till you make it

The new questions raised by AI may lead to new laws. “We’re stretching
current laws about as far as they can go to adapt to this,” says Mr
Grimmelmann. Last month Tennessee passed the Ensuring Likeness Voice
and Image Security (ELVIS) Act, banning unauthorised deepfakes in the
state. But Congress seems more likely to let the courts sort it out. Some
European politicians want to tighten up the law in favour of rights-holders;
the EU’s directive on digital copyright was passed in 2019, when generative
AI was not a thing. “There is no way the Europeans would pass [such a
directive] today,” says Mr Sag.

Another question is whether copyright will extend to AI-made content. So

far judges have been of the view that works created by AI are not
copyrightable. In August an American federal court ruled that “human
authorship is a bedrock requirement of copyright”, dismissing a request by a
computer scientist to copyright a work of art he had created using AI. This
may change as AIs create a growing share of the world’s content. It took
several decades of photography for courts to recognise that the person who
took a picture could claim copyright over the image.

The current moment recalls a different legal case earlier this century. A
wildlife photographer tried to claim copyright over photographs that
macaque monkeys had taken of themselves, using a camera he had set up in
an Indonesian jungle. A judge ruled that because the claimant had not taken
the photos himself, no one owned the copyright. (A petition by an animal-
rights group to grant the right to the monkeys was dismissed.) Generative AI
promises to fill the world with content that lacks a human author, and
therefore has no copyright protection, says Mr Hunter of King’s College.
“We’re about to move into the infinite-monkey-selfie era.” ■

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Pups in cashmere

Who will lead the LVMH luxury empire?

Bernard Arnault sizes up his heirs apparent

Apr 18th 2024 | BERLIN

BERNARD ARNAULT likes to describe LVMH as une affaire de famille.

The world’s richest man calling the €400bn ($425bn) luxury empire, of
which he is chief executive, chairman and controlling shareholder, “a family
business” is both a humblebrag and true. All five of his children work for
him. And at LVMH’s annual general meeting on April 18th, after we
published this, two of his sons (Alexandre and Frédéric) are poised to join
Delphine and Antoine, his eldest offspring from his first marriage, on its
board. Only 26-year-old Jean, the youngest, does not have a board seat (yet).

Arnault père can head LVMH for another five years. In 2022 shareholders,
who credited the then-73-year-old with minting their fortunes as well as his
own (see chart), happily amended the company’s by-laws to raise the
mandatory retirement age for the CEO from 75 to 80. The wolf in cashmere,
as the billionaire is known thanks to his killer dealmaking instincts, is
showing no signs of letting up. But the boardroom reshuffle and other recent
job moves suggest the succession plans for his lupine litter are well under
way.

Last year Delphine took over as head of Christian Dior, the iconic fashion
house which is LVMH’s second-largest brand (and which had a sparkling
run under Pietro Beccari, who quadrupled sales in five years and was
recently put in charge of Louis Vuitton, the group’s crown jewel). Antoine is
now chief executive of the family holding company which controls LVMH.
Alexandre is the de facto number-two at Tiffany & Co, a jeweller. Frédéric
and Jean have senior roles in the group’s watch business.

Erwan Rambourg of HSBC, a bank, sees three possible succession scenarios.

One is for the 49-year-old Delphine, who since 2000 has worked her way up
through Dior and Vuitton, to inherit the top job from her father. Another is
the enthronement of 31-year-old Alexandre, who did well as boss of
Rimowa, a German luggage-maker that he persuaded his father to buy. He is
now jazzing up Tiffany’s old-fashioned image through collaborations with
superstars such as Beyoncé, an American pop icon, and Jay-Z, a rapper. The
third is a collegial approach in which the five scions run five divisions of the
group.

If Mr Arnault has made up his mind, he is keeping his decision to himself.

Either way, he will hand over an enviable business. True, after a stellar 2023,
when sales rose by 9%, revenues in the first quarter of 2024 did dip by 2%
year on year, to €21bn, chiefly owing to softening demand from Chinese
shoppers worried about their country’s economy. In January Mr Arnault
foreshadowed the slowdown by talking of “normalisation” following a
period of post-pandemic revenge shopping for bling.

This first-quarter disappointment may, though, prove to be a blip. And Mr

Arnault’s new normal could still mean rude health. Fabbio Cereda of GAM,
an asset manager, expects global luxury sales to expand by 6-7% annually in
the next few years—and LVMH to keep gaining market share. A tidy
inheritance, for whichever Arnault fils or fille prevails. ■

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Bartleby

The lessons of woke Scrabble

When heritage meets innovation

Apr 18th 2024 |

“THICK”, SCOFFED the headline on the Daily Mail website on April 9th,
in response to the news that Scrabble has had an overhaul. In some parts of
the world the word-play game has been relaunched with a double-sided
board; one side now shows a new, simpler design that is meant to be less
intimidating and more inclusive than the original.

The idea that Scrabble needs to be made less competitive in order to be

attractive to Gen Z was always going to make some people rather vexed (16
points). “Next, they’ll turn to chess, but with only one piece each and only
two squares on the board,” ran one typically balanced reader comment.
Rants about snowflakes and wokeness aside, the new version of the game,
which Mattel is introducing outside North America, looks like a perfectly
good solution to a common strategic problem: how to make changes to
much-loved products.

Reams of innovation research focus on the need for managers to draw on

diverse sources of thinking. The more you rely on a group of the same old
faces for new ideas, the more you constrain the chances of breakthroughs. To
take one example among many, a recent paper by Paul Vicinanza of Stanford
University and his co-authors analysed the emergence of prescient ideas in
court rulings, earnings calls and speeches by American politicians. It found
that such ideas tended to come from the periphery. But the perils of
entrenched thinking can also apply to customers. If the people who buy your
products and services view them as traditional, they are more likely to resist
changes.

Such resistance is most obvious for brands with a long heritage and a loyal
following. Consumers like the notion of longevity. In a study by Fabien
Pecot of TBS Business School Barcelona and fellow researchers, the authors
showed people two logos for an unfamiliar chocolate company, one with an
old-school font and a black-and-white photo of a building, the other with a
more modern font and a picture of a contemporary office. Participants were
willing to pay more for the brand that had apparently been around for aeons
(five points but really handy if you have a lot of vowels).

But a rich history—even an entirely fictional one—also makes it harder to

make changes. In another study, by Minju Han of Singapore Management
University and her co-authors, people were told about a made-up cosmetics
company. Some heard it had been founded in 1917, others that it had been
established 100 years later. Each group then tested two hand creams, one
ostensibly made to the original formula and the other a newly developed
product. Even though the cream was the same in every instance, people who
thought the firm had been founded in the early 20th century rated the new
product as inferior to the original; those who thought it had been established
recently gave them the same ratings. Heritage can command a premium but
it can also be a prison.

These trade-offs are also visible in a paper by Giulia Cancellieri of Ca’

Foscari University of Venice, Gino Cattani of New York University and
Simone Ferriani of the University of Bologna, which looks at the
programming decisions made by Italian opera houses. Directors of such
cultural institutions have to balance respect for the traditional canon with a
desire to put on original productions; in management terms, they have to
innovate while being true to their qi (which is not the right word but does
give you 11 points and gets rid of that stranded “q”).

The researchers examined in particular how attendance was affected by

reinterpretations of classic operas. They categorise these changes depending
on whether they are more cosmetic (the plot of “La Bohème” remains
unchanged, for example, but takes place in a Dunkin’ Donuts) or more
radical (Mimi has incredibly warm hands, say). They find that opera-goers
liked novelty but that they reacted differently depending on its extent:
season-ticket holders, who were more familiar with the classics, were less
tolerant of radical changes whereas single-ticket visitors were keener on
them. Freedom to innovate depends in part on how much you depend on
loyal, repeat customers.

Given all these pitfalls, Mattel’s innovation works well. It allows

traditionalists to play the game they grew up with while also permitting an
experiment that might bring in new players. Despite the sound and fury, it is
all rather elegant (which gives you a bingo, 58 points and total, annihilating
victory). ■

Read more from Bartleby, our columnist on management and work:

Productivity gurus through time: a match-up (Apr 11th)
The six rules of fire drills (Apr 4th)
The pros and cons of corporate uniforms (Mar 27th)

Also: How the Bartleby column got its name

This article was downloaded by calibre from
https://www.economist.com/business/2024/04/18/the-lessons-of-woke-scrabble

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The health-care horserace

America hits Chinese biotech—and its own

drugmakers
A sweeping bill in Congress could cost patients at home

Apr 15th 2024 |

AMERICAN HEALTH-CARE costs are sky-high; as treatments get pricier

and the number of patients swells owing to an ageing population, they are
getting higher. Chinese biotechnology is increasingly sophisticated and, as
its companies gain scale, getting cheaper. A growing number of American
drugmakers, from startups to big pharma, rely on firms like WuXi AppTec
and WuXi Biologics, which conduct drug research on behalf of clients and
manufacture compounds used in drugmaking. MGI Tech, a maker of gene-
sequencing machines, is offering American hospitals kit that is cheaper to
buy and half as expensive to run as American-made alternatives. A match
made in heaven?
Not to America’s Congress. A bill currently before the Senate would forbid
the federal government from buying health-care products from companies
that do business with partners like the WuXi sister firms and MGI Tech. A
bipartisan group of lawmakers in the House of Representatives is pushing
for the BIOSECURE act, which would do much the same.

The politicians worry about American health data falling into the hands of
the Chinese authorities. They also fret about American intellectual property
(IP), for example in the form of drug recipes that big pharma shares with
contract manufacturers, flowing to Chinese rivals. And they are concerned
about American money going to Chinese firms that collaborate with the
People’s Liberation Army (PLA) and with the Chinese government’s
repression of Uyghurs, an ethnic minority. Should the bills’ sponsors
succeed, America’s patients may be left bearing some of the costs.
Despite irreconcilable differences on most other subjects, Democrats and
Republicans are united in their dislike of China. Last month the Senate
version of the legislation cleared the relevant committee by 11 votes to one.
Investors seem to believe it has a good chance of becoming law. The share
price of WuXi AppTec, which generates two-thirds of its revenues in
America, has fallen by 40% since the BIOSECURE bill was introduced in
the House in late January (see chart). WuXi Biologics, half of whose sales
come from American customers, has lost more than 50% of its value. MGI
Tech has lost more than a third. The three companies, which the House bill
name-checks, have shed a combined $22bn in market capitalisation in the
past two and a half months.

The knock-on effects for the Chinese firms’ American customers are also
likely to be profound. Start with the contract manufacturer-researchers.
WuXi is to big pharma what Foxconn, the Taiwanese assembler of iPhones,
is to Apple—a high-quality supplier entrusted with sensitive IP. It says its
clients include the world’s 20 biggest drugmakers. Dozens of American
pharma firms have notified investors that, should the BIOSECURE bill pass,
they may be unable to meet demand for their products or to complete clinical
trials on schedule. WuXi AppTec says that the proposed legislation “relies on
misleading allegations and inaccurate assertions”. WuXi Biologics says it
“has not, does not and will not pose any national-security risk to the US or
any other country”.

Western customers have not yet severed ties with the WuXi companies, says
Lila Hope, a lawyer specialising in biotech partnerships at Cooley. Some
drugmakers are reportedly sounding out alternative suppliers from India, a
big provider of similar services. But that would require a thumbs-up from
American regulators, who have longstanding concerns about Indian
companies’ lax quality standards.

Jefferies, an investment bank, reckons that replacing Chinese capacity would

take big Western drug firms at least five years and almost certainly end up
costing more. For biotech startups, which tend to rely on Chinese partners
with proven records to save time and money on research and manufacturing,
the BIOSECURE bill could be an existential threat. According to a survey
conducted in March by BioCentury, a consultancy, biotech bosses and their
investors expect a slowdown in drug development in the event of its passage.

Cutting ties with the lawmakers’ second target—China’s genomics industry

—would have a less immediate impact on American firms. MGI Tech is only
just entering the American market for gene-sequencers, having settled a
patent dispute with its bigger American rival, Illumina, in 2022. BGI
Genomics, which sequences more human genomes than any other company
(and is also named in the BIOSECURE bill), makes just 3% of its profits in
America. But both Chinese firms bring welcome competition to a highly
concentrated industry. Despite being blocked by trustbusters from acquiring
a rival in 2019, Illumina has 80% of the global market for high-end gene-
sequencers.

MGI Tech’s American subsidiary, Complete Genomics, says it “is not a

sequencing-service provider and does not have access to, collect, or maintain
genetic data”. Independent investigators it brought in to inspect its
sequencers have confirmed that the company cannot access patient data
through the devices. BGI Group says that the allegations made in the
BIOSECURE bill that it collects, stores and analyses personal genetic
information for the purpose of infringing human rights, that it supports the
surveillance of minorities and that it is controlled by the Chinese
government or the PLA are all “false”.

The law, if passed, would almost certainly face legal challenges from the
Chinese firms and, maybe, their American clients. It may be watered down,
especially once big pharma’s lobbyists on Capitol Hill get to work on it. But
the anti-Chinese sentiment guiding its congressional sponsors is not going
away—even if that spells trouble for American health care. ■

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Schumpeter

What is weighing on CEOs’ minds this earnings

season?
Shareholder letters are proving to be bleakly prophetic

Apr 18th 2024 |

SCHUMPETER LIKES to write—and receive—handwritten letters. When

he got out his pen last year and wrote to Larry Fink, boss of BlackRock, he
explained to the passive-investing billionaire that he was doing so because
he believed they shared a mutual interest: letter-writing. Your columnist
went so far as to use a John Donne quote, “letters mingle souls”, to elicit a
response. Evidently soul-mingling, whatever its merits in Elizabethan
England, is not the done thing in Hudson Yards. Mr Fink agreed to an
interview but not, sadly, to an exchange of correspondence.

The personal touch is not quite dead, though. You can see that in Mr Fink’s
latest letter to shareholders, as well as those of Warren Buffett, America’s
most celebrated investor, and Jamie Dimon, Wall Street’s top banker. Mr
Fink, to explain the importance of retirement savings, tells an uplifting story
about his late mum and dad. Mr Buffett writes of his sensible (and now very
rich) sister, Bertie. Mr Dimon, though hardly heart-on-sleeve, sounds like he
carries the cares of the world on his shoulders. The least personal is
Amazon’s Andy Jassy, who in a shareholder letter on April 11th came across
as an Amazonian to the marrow of his bones. No matter. The day the letter
was published his firm’s stockmarket value soared by $30bn to a record high
of almost $2trn. That is an ROI—return on ink—of $6m a word. For
shareholders, pure poetry.

There is more to these letters than self-publicity. They give a sense of how
America’s corporate bigwigs see the world. Two letters, from Messrs Dimon
and Jassy, are particularly relevant as the country enters the spring earnings
season. After three Goldilocks months from January to March, when the
stockmarket rallied on hopes of lower inflation, falling interest rates and a
soft landing, they are less upbeat than you might expect.

The main pressure on companies in this round of results will be to prove

their worth. Buoyed by expectations of lower interest rates, the recent rally
has lifted the share prices of the big companies that make up the S&P 500
index. The index’s ratio of price to earnings looks high compared with the
average of the past five years. Yet inflation has not fallen as fast as hoped—
and therefore nor have rates. For the lofty valuations to be justified, in other
words, earnings must rise. That should be easy enough for beneficiaries of
the artificial-intelligence (AI) boom—Amazon and Microsoft, which provide
the computing power; Nvidia, which supplies them with AI chips; and Meta,
whose advertising business has been strengthened by AI. It will be harder for
less techie firms. Unless they, too, show strong earnings growth, the
market’s mood may sour.

When it comes to AI, the big question on earnings calls will be to what
extent big tech’s investments in AI infrastructure and services are in fact
generating higher revenues. In his letter, Mr Dimon indulges in the hype. AI,
he writes, may be as transformational as “the printing press, the steam
engine, electricity, computing and the internet”. But he also makes clear it is
still early days. His bank, JPMorgan Chase, appears to be experimenting
with “generative” AI, the type that has grabbed attention in the past 17
months, rather than deploying it at scale. Mr Jassy describes a three-layer
system of building blocks that Amazon’s cloud-computing arm, AWS, is
creating to help customers train generative-AI models, feed their data into
existing ones and develop AI-related applications. For such services to make
real money, however, big firms like JPMorgan Chase must move from
experiments to deployment.

Look beyond big tech, propelled by the tailwinds of AI, and bosses’ main
concern is the business cycle. In recent weeks expectations of a soft landing
have given way to those of a “no landing”: growth and inflation staying
higher for longer, keeping long-term interest rates elevated. If those forecasts
come true, investors will be asking whether revenues and profits can grow
fast enough to offset the drag of higher rates. If not, fears of stagflation,
seemingly put to rest last year, may resurface. On this score, Mr Dimon
sounds almost prophetic. Consumer spending, and thus the American
economy, have remained resilient, he writes, partly thanks to government
largesse. But sloshing buckets of public money into clean-energy
investments, military spending and so on risks making inflation stickier—
and keeping rates higher—than markets expect. Adding to the uncertainty is
“one of the most treacherous geopolitical eras” since the second world war.

Days after Mr Dimon’s letter was published, his words came back to haunt
him. Fears of a long spell of higher interest rates contributed to a rare slump
in JPMorgan Chase’s share price on April 12th, decent first-quarter results
notwithstanding. Meanwhile, tensions in the Middle East put upward
pressure on oil prices, further stoking fears of inflation. Mr Jassy also
alluded to economic uncertainty in inflationary times. Though consumers
continue to spend, he warns shareholders, they are doing so carefully. To
save money, people are trading down whenever they can.
The write stuff

Mr Dimon and Mr Jassy lead giant companies. The bigger a business, the
more it tends to benefit from faster economic growth. The richer it is, the
less it fears an interest-rate crunch that could curtail its access to capital.
Other large, deep-pocketed firms, such as oil producers and obesity-drug
sellers, may reinforce big tech’s and big banks’ hopeful earnings narrative.
Smaller, more indebted ones will struggle if their interest costs do not fall.
In business, the worse your balance-sheet, the higher the interest-rate risk.
That is true in society at large. As Mr Dimon points out, nearly 40% of
Americans do not have $400 in savings to deal with emergency payments
such as medical bills or car repairs. His was not a cheerful letter. It was a
bleakly powerful one. ■

Read more from Schumpeter, our columnist on global business:

Generative AI has a clean-energy problem (Apr 11th)
Why Japan Inc is no longer in thrall to America (Apr 2nd)
Meet the digital David taking on the Google Goliath (Mar 27th)

Also: If you want to write directly to Schumpeter, email him at

schumpeter@economist.com. And here is an explanation of how the
Schumpeter column got its name.
This article was downloaded by calibre from
https://www.economist.com/business/2024/04/18/what-is-weighing-on-ceos-minds-this-
earnings-season

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Finance & economics

Generation Z is unprecedentedly rich
Earning power :: Millennials were poorer at this stage in their lives. So were baby-boomers

Why the stockmarket is disappearing

Buttonwood :: Large companies such as ByteDance, OpenAI and Stripe are staying private

China’s better economic growth hides reasons to worry

Manufacturing miracles :: The country’s leaders are too complacent about deflation

Frozen Russian assets will soon pay for Ukraine’s war

Conflict finance :: And America now hopes to convince others to make better use of the stash

Even without war in the Gulf, pricier petrol is here to stay

Explosive material :: Expensive oil could put Donald Trump in the White House

Citigroup, Wall Street’s biggest loser, is at last on the up

House of Fraser :: Jane Fraser’s unexpected success

Can the IMF solve the poor world’s debt crisis?

Free exchange :: The fund will freeze out China if that is what it takes to offer relief

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Earning power

Generation Z is unprecedentedly rich

Millennials were poorer at this stage in their lives. So were baby-boomers

Apr 16th 2024 | Kalamata and New York

GENERATION Z IS taking over. In the rich world there are at least 250m
people born between 1997 and 2012. About half are now in a job. In the
average American workplace, the number of Gen Z-ers (sometimes also
known as “Zoomers”) working full-time is about to surpass the number of
full-time baby-boomers, those born from 1945 to 1964, whose careers are
winding down (see chart 1). America now has more than 6,000 Zoomer chief
executives and 1,000 Zoomer politicians. As the generation becomes more
influential, companies, governments and investors need to understand it.
Pundits produce a lot of fluff about the cohort. Recent “research” from Frito-
Lay, a crisp-maker, finds that Gen Z-ers have a strong preference for “snacks
that leave remnants on their fingers”, such as cheese dust. Yet different
generations also display deeper differences, in part shaped by the economic
context in which they grow up. Germans who reached adulthood during the
high-inflation 1920s came to detest rising prices. Americans who lived
through the Depression tended to avoid investing in the stockmarket.

Many argue that Gen Z is defined by its anxiety. Such worriers include
Jonathan Haidt, a social psychologist at New York University, whose new
book, “The Anxious Generation”, is making waves. In some ways, Gen Z-
ers are unusual. Young people today are less likely to form relationships than
those of yesteryear. They are more likely to be depressed or say they were
assigned the wrong sex at birth. They are less likely to drink, have sex, be in
a relationship—indeed to do anything exciting. Americans aged between 15
and 24 spend just 38 minutes a day socialising in person on average, down
from almost an hour in the 2000s, according to official data. Mr Haidt lays
the blame on smartphones, and the social media they enable.

His book has provoked an enormous reaction. On April 10th Sarah

Huckabee Sanders, the governor of Arkansas, echoed Mr Haidt’s arguments
as she outlined plans to regulate children’s use of smartphones and social
media. Britain’s government is considering similar measures. But not
everyone agrees with Mr Haidt’s thesis. And the pushing and shoving over
Gen Z’s anxiety has obscured another way in which the cohort is distinct. In
financial terms, Gen Z is doing extraordinarily well. This, in turn, is
changing its relationship with work.
Consider the group that preceded Gen Z: millennials, who were born
between 1981 and 1996. Many entered the workforce at a time when the
world was reeling from the global financial crisis of 2007-09, during which
young people suffered disproportionately. In 2012-14 more than half of
Spanish youngsters who wanted a job could not find one. Greece’s youth-
unemployment rate was even higher. Britney Spears’s “Work Bitch”, a
popular song released in 2013, had an uncompromising message for young
millennials: if you want good things, you have to slog.

Gen Z-ers who have left education face very different circumstances. Youth
unemployment across the rich world—at about 13%—has not been this low
since 1991 (see chart 2). Greece’s youth-unemployment rate has fallen by
half from its peak. Hoteliers in Kalamata, a tourist destination, complain
about a labour shortage, something unthinkable just a few years ago. Popular
songs reflect the zeitgeist. In 2022 the protagonist in a Beyoncé song
boasted, “I just quit my job”. Olivia Rodrigo, a 21-year-old singer popular
with American Gen Z-ers, complains that a former love interest’s “career is
really taking off”.

Many have chosen to study subjects that help them find work. In Britain and
America Gen Z-ers are avoiding the humanities, and are going instead for
more obviously useful things like economics and engineering. Vocational
qualifications are also increasingly popular. Young people then go on to
benefit from tight labour markets. Like Beyoncé’s protagonist, they can quit
their job and find another one if they want more money.

In America hourly pay growth among 16- to 24-year-olds recently hit 13%
year on year, compared with 6% for workers aged 25 to 54. This was the
highest “young person premium” since reliable data began (see chart 3). In
Britain, where youth pay is measured differently, the average hourly pay of
people aged 18-21 rose by an astonishing 15% last year, outstripping pay
rises among other age groups by an unusually wide margin. In New Zealand
the average hourly pay of people aged 20-24 increased by 10%, compared
with an average of 6%.

Strong wage growth boosts family incomes. A new paper by Kevin Corinth
of the American Enterprise Institute, a think-tank, and Jeff Larrimore of the
Federal Reserve assesses Americans’ household income by generation, after
accounting for taxes, government transfers and inflation (see chart 4).
Millennials were somewhat better off than Gen X—those born between 1965
and 1980—when they were the same age. Zoomers, however, are much
better off than millennials were at the same age. The typical 25-year-old Gen
Z-er has an annual household income of over $40,000, more than 50% above
baby-boomers at the same age.
Gen Z’s economic power was on display at a recent concert by Ms Rodrigo
in New York. The mostly female teenagers and 20-somethings in attendance
had paid hundreds of dollars for a ticket. Queues for merchandise stalls,
selling $50 T-shirts, stretched around the arena. Ms Rodrigo will have no
trouble shifting merchandise in other parts of the world, as her tour moves
across the Atlantic. That is in part because Gen Z-ers who have entered the
workplace are earning good money throughout the rich world. In 2007 the
average net income of French people aged 16-24 was 87% of the overall
average. Now it is equal to 92%. In a few places, including Croatia and
Slovenia, Gen Z-ers are now bringing in as much as the average.

Some Gen Z-ers protest, claiming that higher incomes are a mirage because
they do not account for the exploding cost of college and housing. After all,
global house prices are near all-time highs, and graduates have more debt
than before. In reality, though, Gen Z-ers are coping because they earn so
much. In 2022 Americans under 25 spent 43% of their post-tax income on
housing and education, including interest on debt from college—slightly
below the average for under-25s from 1989 to 2019. Bolstered by high
incomes, American Zoomers’ home-ownership rates are higher than
millennials’ at the same age (even if they are lower than previous
generations’).

What does this wealth mean? It can seem as if millennials grew up thinking
a job was a privilege, and acted accordingly. They are deferential to bosses
and eager to please. Zoomers, by contrast, have grown up believing that a
job is basically a right, meaning they have a different attitude to work. Last
year Gen Z-ers boasted about “quiet quitting”, where they put in just enough
effort not to be fired. Others talk of “bare minimum Monday”. The
“girlboss” archetype, who seeks to wrestle corporate control away from
domineering men, appeals to millennial women. Gen Z ones are more likely
to discuss the idea of being “snail girls”, who take things slowly and
prioritise self-care.

The data support the memes. In 2022 Americans aged between 15 and 24
spent 25% less time on “working and work-related activities” than in 2007.
A new paper published by the IMF analyses the number of hours that people
say they would like to work. Not long ago young people wanted to work a
lot more than older people. Now they want to work less. According to
analysis by Jean Twenge of San Diego State University, the share of
American 12th-graders (aged 17 or 18) who see work as a “central part of
life” has dropped sharply.
Another consequence is that Gen Z-ers are less likely to be entrepreneurs.
We estimate that just 1.1% of 20-somethings in the EU run a business that
employs someone else—and in recent years the share has drifted down. In
the late 2000s more than 1% of the world’s billionaires, as measured by
Forbes, a magazine, were millennials. Back then pundits obsessed over
ultra-young tech founders, such as Mark Zuckerberg (Facebook), Patrick
Collison (Stripe) and Evan Spiegel (Snapchat). Today, by contrast, less than
0.5% on the Forbes list are Zoomers. Who can name a famous Gen Z startup
founder?

Gen Z-ers are also producing fewer innovations. According to Russell Funk
of the University of Minnesota, young people are less likely to file patents
than they were in the recent past. Or consider the Billboard Hot 100,
measuring America’s most popular songs. In 2008, 42% of hits were sung by
millennials; 15 years later only 29% were sung by Gen Z-ers. Taylor Swift,
the world’s most popular singer-songwriter, titled her most famous album
“1989”, after the year of her birth. The world is still waiting for someone to
produce “2004”.

How long will Generation Z’s economic advantage last? A recession would
hit young people harder than others, as recessions always do. Artificial
intelligence could destabilise the global economy, even if youngsters may in
time be better placed to benefit from the disruption. For now, though,
Generation Z has a lot to be happy about. Between numbers at Madison
Square Garden, Olivia Rodrigo sits at the piano and counsels her fans to be
thankful for all that they have. “Growing up is fucking awesome,” she says.
“You have all the time to do all the things you want to do.” The time and the
money. ■

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Buttonwood

Why the stockmarket is disappearing

Large companies such as ByteDance, OpenAI and Stripe are staying private

Apr 18th 2024 |

THE LAW of supply and demand is one of the first things that students of
economics learn. When the price of something goes up, producers bring
more to market. What, then, is going on in global stockmarkets?

Global share prices have never been higher, having risen by 14% over the
past year. At the same time, the supply of stocks is shrinking. As analysts at
JPMorgan Chase, a bank, note, the pace of company listings is slower this
year than last, and last year was already a slow one. This means that equity
issuance net of stock buy-backs so far this year is already negative, at minus
$120bn—the lowest such figure since at least 1999. Companies including
ByteDance, OpenAI, Stripe and SpaceX have valuations in the tens or even
hundreds of billions of dollars, and remain private.
Jamie Dimon, JPMorgan’s boss, is among those to have voiced concern. He
identifies demand for environmental, social and governance reporting and
the pressure of quarterly earnings reports as part of the trend’s explanation.
But for the most part, the disappearing stockmarket is a side-effect of
something more positive for company founders: they simply have more
options. Private-equity funds managed $8.2trn by the middle of 2023,
according to McKinsey, a consultancy—more than twice the amount in
2018. If founders do not want to go public, they now face less pressure to do
so. There are plenty of funds that are willing to invest in them regardless.

Founders have many reasons to stay private. The rise of intangible assets is a
big one. Such assets range from copyrights, software and other intellectual
property to brand recognition. René Stulz of Ohio State University notes that
requirements for disclosure of financial information and strategy favour
companies with tangible assets, such as machinery and real estate. When a
firm announces it owns a building, competitors can hardly steal the asset.
When it comes to ideas, research and other intangibles, the less rival firms
know, the better. If a company tries to withhold information when listing, it
may be undervalued. Worse still, it may be breaking the law.

People other than company founders may be worried by the trend, however.
Public markets are more transparent than private ones. Thus their reduced
importance matters not just for investors, but for regulators monitoring
financial stability and analysts assessing the market. Stocks also still tend to
be the cornerstone of portfolios for less sophisticated retail investors.
Alexander Ljungqvist, Lars Persson and Joacim Tag, three economists,
suggest that the disappearance of markets may reduce public support for
business-friendly government policies, as voters benefit less from corporate
profits.

Might anything be done to revive stockmarkets? The changing behaviour of

institutional investors may blunt some of the trend’s more damaging
consequences. Allocations from such investors to private equity have grown
in recent years, rising to 10% of their assets in 2023 from 6% five years
earlier, at the same time as allocations to listed equities have dropped by a
similar amount. This will provide households with exposure to privately held
investments through their pension and mutual funds.
But institutional investors will do little to improve transparency in private
markets. One option that might appeal to regulators is to impose tighter
requirements on large companies that choose not to list, in order to close the
gap between the rules faced by public and private firms. A less coercive
option would be to reduce the amount of information that companies are
forced to share when they go public.

Unfortunately, such efforts have produced mixed results in the past. The
Jumpstart Our Business Startups (JOBS) Act, which was introduced in
America in 2012, reduced disclosure requirements for public firms.
Although an assessment in 2015 indicated that it had boosted initial public
offerings by 25%, another in 2022 suggested that it had done so by
encouraging low-quality offerings that ended up underperforming the
market.

As a result, the best hope for stockmarkets may lie with the greed of private-
equity investors. Public markets still provide an unparalleled exit route for
those who would like to turn corporate holdings into ready cash. Bain,
another consultancy, notes that private-equity funds are currently sitting on
$3.2trn in unsold assets. At some point, end-investors will want the money
back. But until then, Mr Dimon is right: shrinking public markets are cause
for concern. ■

Read more from Buttonwood, our columnist on financial markets:

What China’s central bank and Costco shoppers have in common (Apr 11th)
How to build a global currency (Apr 4th)
How the “Magnificent Seven” misleads (Mar 27th)

Also: How the Buttonwood column got its name

This article was downloaded by calibre from https://www.economist.com/finance-and-
economics/2024/04/18/why-the-stockmarket-is-disappearing

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Manufacturing miracles

China’s better economic growth hides reasons to

worry
The country’s leaders are too complacent about deflation

Apr 16th 2024 | Hong Kong

WHEN CHINA’S leaders set an economic-growth target of “around” 5% for

this year, the goal was widely agreed to be ambitious. Now the country looks
increasingly likely to meet it. Several foreign banks have raised their
forecasts. Data released on April 16th show the economy grew by 5.3% in
the first quarter, compared with a year earlier—quicker than expected and
faster than the target requires.

How is this happening? Countries at China’s stage of development often

shift towards services. Yet China’s leaders have a soft spot for “hard” output.
Xi Jinping, the country’s ruler, sees manufacturing as a source of both
prosperity and security. He covets what officials call a “complete” industrial
chain that would free China from reliance on foreign powers for vital
technological inputs. His latest five-year plan aims to stop the steady decline
in manufacturing’s share of GDP.

The first quarter was consistent with that goal. Manufacturing output grew
by 6.7% compared with a year ago, faster than the overall economy. High-
tech manufacturing fared even better. China’s leaders have talked a lot about
the need to cultivate “new quality productive forces”, buzzwords that
appeared in the monthly statistical press release for the first time.
But even as China weans itself off foreign suppliers, it remains reliant on
foreign buyers. The volume of exports grew by 14% in the first quarter
compared with a year earlier, according to Zhiwei Zhang of Pinpoint Asset
Management. Falling prices and a competitive currency have helped.
America’s Bureau of Labour Statistics reckons the price of goods from
China fell by 2.9% year-on-year in the first quarter. That is the third-steepest
drop on record.
China cannot rely on strong exports for long without provoking a
protectionist backlash from its trading partners. Olaf Scholz, chancellor of
Germany, raised fears about Chinese overcapacity when he met Mr Xi in
Beijing on April 16th. Germany used to benefit from China’s economic
progress. It sold sophisticated industrial goods to China, even as China’s
manufacturers conquered lower-end markets around the world. Now the two
countries have become rivals in many industries Germany holds dear,
including chemicals, machinery and, of course, cars.

China’s reliance on markets abroad reflects some enduring weaknesses at

home. Retail sales were surprisingly poor in March. Consumer confidence
remains low. And the property market’s misery continues. The price of new
flats in 70 of China’s biggest cities fell by 2.2% on average in March
compared with a year earlier, the steepest drop since 2015, according to
Reuters, a news agency. Sales of newly built residential housing fell by over
a fifth.

The slump in China’s property market has contributed to falling prices in

many related parts of the economy, such as building materials and housing
appliances. That has deepened deflation’s grip on the economy. Factory-gate
prices have now fallen for 18 months in a row. Consumer price inflation,
after a brief uptick during the lunar new year holiday in February, remained
near zero in March. Declining prices are a double-edged sword, as Ting Lu
of Nomura, a bank, has pointed out. They have increased China’s
competitiveness abroad, which is one reason why the country’s exports have
been surprisingly strong. But if deflation persists it could erode revenues,
making debts harder to bear. It might also force companies to cut wages,
which would do nothing to restore household morale or spending.

For all the paranoia of China’s leaders, they seem worryingly complacent
about the danger of deflation. Perhaps they view it as a blip, which should
not distract them from long-term aims to fortify China against shifts in the
global balance of power—what Mr Xi calls “changes unseen in a century”.
Falling prices can, though, turn a passing downturn into a protracted slump.
This week’s figures showed that China’s GDP deflator, a broad measure of
prices, has fallen for four quarters in a row. That has not happened since
1999. Or to put it in terms Mr Xi might appreciate, it is a change unseen this
century. ■
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Conflict finance

Frozen Russian assets will soon pay for Ukraine’s

war
And America now hopes to convince others to make better use of the stash

Apr 18th 2024 |

AFTER RUSSIA destroyed the Trypilska power plant on April 11th, Ukraine
blamed a lack of anti-missile ammunition. The country’s leaders are also
desperate for more financial support. The two shortages—of ammunition
and money—reflect different constraints among Ukraine’s allies. Whereas
the lack of ammunition is mostly the product of limited industrial capacity,
the lack of money is the product of limited political will.

In one area, though, there are signs of progress: over what to do with
Russia’s frozen assets. After Vladimir Putin invaded Ukraine, Western
governments quickly locked down €260bn-worth ($282bn) of Russian
assets, which have remained frozen ever since. Proposals about what to do
with them have ranged from the radical (seize them and hand them over to
Ukraine) to the creative (force them to be reinvested in Ukrainian war
bonds). Until recently, none has found widespread favour with Western
governments.

Could that soon change? On April 10th Daleep Singh, America’s deputy
national security adviser for international economics, declared that the Biden
administration now wanted to make use of interest income on frozen Russian
assets in order to “maximise the impact of these revenues, both current and
future, for the benefit of Ukraine today”. Six days later David Cameron,
Britain’s foreign secretary, announced his support, too: “There is an
emerging consensus that the interest on those assets can be used.”

The approach is an elegant one. Income earned on Russia’s foreign holdings

can be seized in a manner that is both legal and practical. Many of the
country’s bonds have already matured. Cash from redemption of bonds is
held by the depository in which it currently sits until it is withdrawn, paying
no interest to the owner as per the depository’s usual terms and conditions.
Any interest earned thus belongs to the depository—unless, that is, the state
decides to tax it at a rate close to 100%.

Next, as suggested by The Economistin February, would be to transfer the

net present value of that income stream to Ukraine. Investing Russia’s cash
holdings into five-year German bunds would yield €3.3bn a year, enough to
service EU debt of about €116bn at the same maturity. The rest is financial
plumbing: set up a G7-guaranteed fund that receives the depositories’
incomes on Russian cash, issue that fund’s debt to the markets and send the
proceeds in bulk to Ukraine.

Although the EU has agreed to seize profits from depositories, it has not
agreed to the subsequent steps. Under the bloc’s current plans, the proceeds
will be used to pay for Ukrainian ammunition by July if all goes well, with a
small portion set aside to compensate depositories for any Russian legal
action or retaliation. But many in Europe remain suspicious about America’s
desire to unlock more money through financial engineering. On April 17th
Christine Lagarde, president of the European Central Bank, suggested that
such proposals face a “very serious legal obstacle”.
A drip of funds would be welcomed by Ukraine, but a big wodge of cash, as
promised by America’s proposal, would be better still. European politicians
would therefore be wise to sign up to it before there is a new occupant of the
White House. ■

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Explosive material

Even without war in the Gulf, pricier petrol is here

to stay
Expensive oil could put Donald Trump in the White House

Apr 17th 2024 |

WHEN IRAN’S missiles whizzed towards Israel on Saturday April 13th, oil
markets were closed. When they opened on Monday, their reaction was a
loud “meh”. Brent crude, the global benchmark, dipped below $90 a barrel.
It has since hovered around that level (see chart).

Traders had expected an attack of precisely this variety: big enough to cause
concern; obvious enough to be foiled. They are now betting that Israel will
avoid anything too rash in response. Yet even if oil prices do not surge, they
remain uncomfortably elevated and seem likely to rise higher still in the
summer, when increasing demand amid tight supply will probably tip the
market into deficit. A cast of decision-makers—from central bankers to
President Joe Biden, who faces re-election in November—is watching
anxiously.

Geopolitical risk explains, in part, why oil prices have risen by a quarter
since December. Brent passed $90 for the first time in nearly six months
after Israel bombed Iran’s consulate in Damascus on April 1st. Supply
disruptions are playing an even bigger role. Mexico is slashing shipments in
order to produce more petrol at home. A leaky Scottish pipeline was forced
to close. Turmoil in Libya is disrupting output; war in South Sudan could do
the same.

Meanwhile, tougher sanctions on Russia are leaving more of its oil stranded.
In March refiners in India—Russia’s second-biggest buyer since 2022—said
they would no longer welcome tankers owned by Sovcomflot, Russia’s state-
owned shipping firm, for fear of Western retribution. Most of the 40-odd
tankers subject to sanctions by America since October have not gone on to
load Russian oil. The reimposition of sanctions on Venezuela could further
dent supply. America may also decide to better police its embargo on Iran’s
oil sales.

The biggest supply disruption is deliberate. It is coming from the

Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
In November the group pledged to cut output by 2.2m barrels a day (b/d), or
2% of global production. Most observers had expected that, with prices
likely to rise throughout 2024, members would take the chance to row back
on the cuts. Instead, several announced in March that they would extend
them until the end of June. Russia even said it would deepen its cuts by
another 471,000 b/d, reducing output to 9m b/d, from 10.8m b/d pre-war.

Last year supply growth outside the cartel more than made up for the rise in
demand. This year non-OPEC output will rise again—Brazil and Guyana are
expected to pump record amounts—but growth will slow. Global oil stocks
are already falling. They will shrink faster this summer, as holidaymakers in
America take to the road.
All this is happening at the same time as demand becomes more pressing.
Measures of manufacturing activity in America, China and Europe have
surprised on the upside, leading the International Energy Agency, an official
forecaster, to predict that global crude demand will rise by an average of
1.2m b/d this year, up from the 900,000 b/d it suggested in October. Others,
including some big traders and OPEC itself, reckon demand growth may
near or surpass 2m b/d.
Where will the oil price go next? If OPEC+ keeps its cuts unchanged, it
could reach $100 within months. But that is not an outcome the cartel really
wants. Many members, not least Saudi Arabia, worry that a rapid rise in the
oil price could destroy demand. Dearer crude is pushing American petrol
prices, already at $3.60 a gallon, closer to $4. A surge past that point could
shave 200,000 b/d off petrol demand over the summer, estimates JPMorgan
Chase, a bank. Thus OPEC+ may signal its intention to produce more at its
next meeting. Jorge León, a former OPEC analyst now at Rystad Energy, a
consultancy, expects crude to average $90 a barrel in the third quarter of the
year and $89 in the final quarter. Futures markets are even more sanguine:
buying crude for delivery in December costs around $85 a barrel.

Even if the tit-for-tat between Israel and Iran escalates, it is unlikely to

change much. Any reduction in Iran’s exports—worth 1.6m b/d in March—
might be balanced by more pumping from the rest of OPEC. In a worst-case
scenario, Iran could decide to close the Strait of Hormuz, a waterway that
connects the Gulf to the Indian Ocean, through which 30% of the world’s
seaborne oil, and nearly all of the Gulf’s, must pass. Yet doing so would
anger just about everyone in the region, and cut off Iran from its sole oil
buyer: China. Although Iran could opt to cause trouble in less self-harming
ways, such as harassing ships in the Gulf, this may not have a big impact.
Even the tanker war of the 1980s—when hundreds of tankers were attacked
—failed to durably boost prices.

The most likely scenario, therefore, is that oil prices remain tolerable to the
world economy, at somewhere in the region of $85-90 a barrel, while
allowing OPEC members to earn juicy margins. Prices are unlikely to fall
soon, though. And whether such a level is tolerable to American voters, who
see gasoline prices advertised in big red numbers by the highway every day,
is another matter entirely. ■

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House of Fraser

Citigroup, Wall Street’s biggest loser, is at last on

the up
Jane Fraser’s unexpected success

Apr 18th 2024 | New York

UNMANAGEABLE AND uninvestible. That is how investors have long

considered Citigroup. For over a decade the bank, which was once the
largest and most valuable in America, has been a basket case. It trades at half
the value it did in 2006, making it the only big American bank to fetch a
valuation lower than its peak before the global financial crisis. Pick any
measure and Citi is invariably dead last compared with its rivals. The firm
has more staff than Bank of America, yet makes only a third of the profit.

Its prize for this miserable drubbing is not a participation trophy, but a
consent order from regulators instructing it to improve internal oversight and
change how it measures risk. The firm became the laughing-stock of Wall
Street in 2020 when it accidentally wired $894m to creditors of Revlon, a
failing company. That Jane Fraser became the first woman to run a Wall
Street bank following the mess attached an asterisk to her appointment.
“Glass cliff” is a term used to describe the phenomenon of women being
appointed to top jobs at companies in deep crisis.

It seemed as if Ms Fraser was bound to fall from that cliff. Some Citi staff
grumbled that she was a consultant, not a real banker, because she spent a
decade at McKinsey before joining the firm in 2004. Those who bought
shares on her first day in 2021 were choking down annualised returns of
-15% by mid-September last year. But a remarkable turnaround now appears
under way. On September 13th Ms Fraser announced a restructuring. She
later laid out plans to sack 20,000 people by the end of 2026, some 7,000 of
whom have already been shown the door. Investors seem to be rediscovering
their faith in the firm. Citi’s share price rose by more than 50% between
September and March, meaning that Ms Fraser now appears to be on the
path to an accolade far more elusive than “first woman to do something”.
She may become the banker who turned around Citi.
To understand what an achievement that would be, look to the bank’s
creation in 1998. Citi was going to be “everything to everyone, everywhere”,
recalls Ernesto Torres Cantú, who has worked at the bank for 22 years and
runs its international business. That was its ambition under Sandy Weill, who
was a legend on Wall Street. Mr Weill had bought and merged financial
institutions to form a “financial supermarket”. In 2000 Citi was the largest
bank in the world, as measured by its capital base.
Flaws are clear in hindsight. Harmonies between businesses never
materialised. Instead, Citi became bloated. Layers of management obscured
what was happening—which was, in the mid-2000s, a vast amount of bad
mortgage lending. In 2008 Citi required more bail-out money than any other
bank. It laid off 75,000 people, a quarter of its workforce. Its share price,
which at over $500 in 2007 had valued the firm at $270bn, had fallen to less
than a dollar by 2009. After the financial crisis, Citi’s bosses promised to
simplify the firm. Assets were sold. But “all of the other restructurings we
have made, until this one, wanted to preserve that idea [of being in all
businesses in all markets] in some way or another,” says Mr Torres Cantú.

Ms Fraser has ditched the mission once and for all. Her first act was to
outline plans to sell 13 consumer banks. Nine are gone; three are being
wound down. Only one in Poland, where the process has stalled owing to
war in Ukraine, remains.

These cuts have paved the way for the next phase: restructuring. A tangled
mess of reporting lines has been replaced by five businesses that report
directly to Ms Fraser: markets, which includes debt and stock trading;
banking, which houses investment banking; services, which is where
Treasury management and securities services are located; wealth
management; and the American consumer-bank and credit-card businesses.
Citi now details the capital allocated to each of these and their returns, as
well as their revenues and profits.

The reorganisation has cut red tape. Before, “if you wanted to get something
done with a client, you had to get the approval of the corporate-bank chain,
and then you would move to the approval from the geography management
and then you had to get the approval from the legal entity, from the CEO of
the regional bank,” says Mr Torres Cantú. It has cut thousands of jobs. And it
has also shed light on performance. “We want these business heads to
compete with one another to achieve their return targets,” says Mark Mason,
chief financial officer at the firm. “Everything is out in the open now.” What
has become clear is that Citi has a crown jewel: its services arm, which uses
a sixth of the firm’s capital and has returned 20-25% on that capital over the
past year (excluding the fourth quarter of 2023, which included significant
restructuring costs). Other business returns are poor or, at best, average.
Get the polish out

Ms Fraser wants a bigger crown jewel. Because Citi is a global bank, it has
an advantage with corporate clients that operate across borders. The bank
now hopes to gain smaller mid-market customers. Ms Fraser would also like
to turn around the two laggards—banking and wealth management—for
which she has brought in new blood. Andy Sieg, who ran wealth
management at Bank of America, joined in September. Vis Raghavan, the
head of JPMorgan Chase’s investment-banking business, will join in the
summer.

Investors are delighted. Citi’s share price has risen by almost twice as much
as those of America’s other large banks since September. But will the
changes produce the goods? Citi is still under regulatory scrutiny. The firm’s
results from the first quarter, released on April 12th, were mediocre; its share
price slipped. Just because investors can now see how poorly wealth
management and banking are performing does not mean those businesses
will improve. And talent is expensive. As the firm sacked thousands, Mr
Sieg was paid $11m for his first three months of work.

There is nevertheless a sense that Citi is at last changing. Reflecting on the

firm’s decision to abandon its global consumer-banking businesses, Anand
Selva, the firm’s chief operating officer, recalls how “years ago we were
competing with all of these big regional and global banks”. But as
regulations changed, many packed up, leaving just local banks as
competitors. “You decide where you want to focus…and build scale,” he
says. Citi will no longer be everything, to everyone, everywhere. ■

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Free exchange

Can the IMF solve the poor world’s debt crisis?

The fund will freeze out China if that is what it takes to offer relief

Apr 18th 2024 |

IT IS NOW four years since the first poor countries were plunged into
default because of spiralling costs from covid-19 spending and investors
pulling capital from risky markets. It is two years since higher interest rates
in the rich world began to put even more pressure on cash-strapped
governments. But at the spring meetings of the IMF and the World Bank,
held in Washington, DC, this week, many of the world’s policymakers were
acting as if the worst debt crisis since the 1980s, by portion of world
population affected, had come to an end. After all, the poorest countries in
the world grew at a respectable 4% last year. Some, such as Kenya, are even
borrowing from international markets again.
In reality, the crisis rolls on. The governments that went bust still have not
managed to restructure their debts and dig out of default. As such, they are
stuck in limbo. Over time more—and bigger—countries could join them. So
in between the spring meetings’ embassy dinners and think-tank soirées, the
IMF’s board announced a radical new step to deal with the problem.

The core of the difficulty in resolving debt crises has been that there are
more creditors, with less in common, than in the past. Over 70 years of debt
restructurings, Western countries and banks came to do things a certain way.
Now decisions require the assent of a new group of lenders, some of which
see no reason to comply. Each part of the process, even if it was once a
rubber stamp, can be subject to a protracted negotiation.

Chief among the new lenders is China. Even though the country is now the
world’s biggest bilateral creditor, it has yet to write down a single loan. India
has doubled its annual overseas lending from 2012 to 2022; it sent $3.3bn to
Sri Lanka soon after the country was plunged into crisis. The United Arab
Emirates and Saudi Arabia are in the group, too. They have together lent
more than $30bn to Egypt. The Gulf creditors’ preferred method is to deposit
dollars at the recipient’s central bank—a form of lending so novel that it has
never been subject to a debt restructuring before.

As a result, the seven countries that have sought restructuring since the start
of the pandemic have been unable to strike a deal to whittle down what they
owe. Only two small countries have made progress: Chad, which
rescheduled rather than reduced debts, and Suriname, which reached a deal
with all its creditors but the biggest, China. Zambia has waited four years for
a deal. Since no creditor wants a worse bargain than any other, there has
been next to no principal debt relief during the worst debt crisis in four
decades. Four years ago G20 countries signed up to the Common
Framework, an agreement to take equal cuts in restructurings, but creditors
have split over the degree of generosity needed.

The IMF, which usually cannot lend to countries with unsustainably high
debts, has been unable to do much. Yet on April 16th it made a move. It said
it would lend to countries that have defaulted on debts but have not
negotiated a deal to restructure all their debts. The policy is known as
“lending into arrears”.
In the past the fund, worried about getting its cash back, has lent into arrears
sparingly and only with the permission of creditors still tussling over
restructuring. Now all it is asking for is a promise from borrowing countries
and co-operative creditors that its cash injections will not be used to pay off
the holdouts. The IMF’s economists have long feared that such a step would
antagonise problem creditors, which are also countries with stakes in the
fund itself. It seems the fund’s patience has run out: officials want to get debt
restructuring moving.

The new policy has the potential to impose discipline on the holdouts. In
theory, restructurings work because easing the burden on borrowers
maximises creditors’ chances of getting some—perhaps most—of their
money back. The fund lending into arrears sharpens the incentive to comply
because lenders who hold up negotiations face the prospect of not getting
anything. They would be the ones frozen in limbo, while everyone else
strikes a deal and carries on. The policy also strengthens the hand of debtors.
In the past they may have feared walking away from their debts to, say,
China, which is an easy source of emergency cash even after a default. Now
if they wish to do so, they will have an alternative lender in the form of the
IMF.

Getting cash flowing would certainly be good for populations of the troubled
countries. Doing so might also keep the fund honest. Its debt-sustainability
analyses are used as a benchmark for restructurings, and it may have an
incentive to be too optimistic about sustainability, to avoid pushing a
borrower into restructuring limbo. In a process that does not depend on
playing down poor countries’ problems so as to avoid impossible
restructurings, the fund will probably become a better broker, distinguishing
between countries that need debt write-downs and those that just need a little
more liquidity to make their next payment.
Arrears and tears

The question is whether the IMF can stomach the costs. Its threat will only
bring creditors into line if it chooses to make use of its new powers. But in
Washington officials still worry about aggravating the newer creditors,
particularly China, with which the fund prizes its relationship. They might
turn their back on co-operative restructurings altogether. Some borrowers
could walk away from the IMF and take bail-outs from elsewhere.

In the end, though, the fund may have little choice. Too many countries are
in crisis. A clutch of big developing countries that have avoided default are
teetering closer than ever to the edge. To avoid a catastrophe for hundreds of
millions of people, international financiers need a way to get governments
out of default before a country like Egypt or Pakistan goes under. Lending
into arrears is the best available tool. ■

Read more from Free exchange, our column on economics:

What will humans do if technology solves everything? (Apr 9th)
Daniel Kahneman was a master of teasing questions (Apr 4th)
How India could become an Asian tiger (Mar 27th)

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Science & technology

Large language models are getting bigger and better
AI’s next top model :: Can they keep improving forever?

Locust-busting is getting a upgrade

Who you gonna call? :: From pesticides to drones, new technologies are helping win an age-
old battle

What is screen time doing to children?

Digital detoxes :: Demands grow to restrict young people’s access to phones and social media

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AI’s next top model

Large language models are getting bigger and

better
Can they keep improving forever?

Apr 17th 2024 |

IN AI-LAND, technologies move from remarkable to old hat at the speed of

light. Only 18 months ago the release of ChatGPT, OpenAI’s chatbot,
launched an AI frenzy. Today its powers have become commonplace.
Several firms (such as Anthropic, Google and Meta) have since unveiled
versions of their own models (Claude, Gemini and Llama), improving upon
ChatGPT in a variety of ways.

That hunger for the new has only accelerated. In March Anthropic launched
Claude 3, which bested the previous top models from OpenAI and Google
on various leaderboards. On April 9th OpenAI reclaimed the crown (on
some measures) by tweaking its model. On April 18th Meta released Llama
3, which early results suggest is the most capable open model to date.
OpenAI is likely to make a splash sometime this year when it releases GPT-
5, which may have capabilities beyond any current large language model
(LLM). If the rumours are to be believed, the next generation of models will
be even more remarkable—able to perform multi-step tasks, for instance,
rather than merely responding to prompts, or analysing complex questions
carefully instead of blurting out the first algorithmically available answer.

For those who believe that this is the usual tech hype, consider this: investors
are deadly serious about backing the next generation of models. GPT-5 and
other next-gen models are expected to cost billions of dollars to train.
OpenAI is also reportedly partnering with Microsoft, a tech giant, to build a
new $100bn data centre. Based on the numbers alone, it seems as though the
future will hold limitless exponential growth. This chimes with a view
shared by many AI researchers called the “scaling hypothesis”, namely that
the architecture of current LLMs is on the path to unlocking phenomenal
progress. All that is needed to exceed human abilities, according to the
hypothesis, is more data and more powerful computer chips.

Look closer at the technical frontier, however, and some daunting hurdles
become evident.
Beauty’s not enough

Data may well present the most immediate bottleneck. Epoch AI, a research
outfit, estimates the well of high-quality textual data on the public internet
will run dry by 2026. This has left researchers scrambling for ideas. Some
labs are turning to the private web, buying data from brokers and news
websites. Others are turning to the internet’s vast quantities of audio and
visual data, which could be used to train ever-bigger models for decades.
Video can be particularly useful in teaching AI models about the physics of
the world around them. If a model can observe a ball flying through the air,
it might more easily work out the mathematical equation that describes the
projectile’s motion. Leading models like GPT-4 and Gemini are now
“multimodal”, capable of dealing with various types of data.

When data can no longer be found, it can be made. Companies like Scale AI
and Surge AI have built large networks of people to generate and annotate
data, including PhD researchers solving problems in maths or biology. One
executive at a leading AI startup estimates this is costing AI labs hundreds of
millions of dollars per year. A cheaper approach involves generating
“synthetic data” in which one LLM makes billions of pages of text to train a
second model. Though that method can run into trouble: models trained like
this can lose past knowledge and generate uncreative responses. A more
fruitful way to train AI models on synthetic data is to have them learn
through collaboration or competition. Researchers call this “self-play”. In
2017 Google DeepMind, the search giant’s AI lab, developed a model called
AlphaGo that, after training against itself, beat the human world champion in
the game of Go. Google and other firms now use similar techniques on their
latest LLMs.

Extending ideas like self-play to new domains is hot topic of research. But
most real-world problems—from running a business to being a good doctor
—are more complex than a game, without clear-cut winning moves. This is
why, for such complex domains, data to train models is still needed from
people who can differentiate between good and bad quality responses. This
in turn slows things down.
More silicon, but make it fashion

Better hardware is another route to more powerful models. Graphics-

processing units (GPUs), originally designed for video-gaming, have
become the go-to chip for most AI programmers thanks to their ability to run
intensive calculations in parallel. One way to unlock new capabilities may
lie in using chips designed specifically for AI models. Cerebras, a chipmaker
based in Silicon Valley, released a product in March containing 50 times as
many transistors as the largest GPU. Model-building is usually hampered by
data needing to be continuously loaded on and off the GPUs as the model is
trained. Cerebras’s giant chip, by contrast, has memory built in.

New models that can take advantage of these advances will be more reliable
and better at handling tricky requests from users. One way this may happen
is through larger “context windows”, the amount of text, image or video that
a user can feed into a model when making requests. Enlarging context
windows to allow users to upload additional relevant information also seems
to be an effective way of curbing hallucination, the tendency of AI models to
confidently answer questions with made-up information.

But while some model-makers race for more resources, others see signs that
the scaling hypothesis is running into trouble. Physical constraints—
insufficient memory, say, or rising energy costs—place practical limitations
on bigger model designs. More worrying, it is not clear that expanding
context windows will be enough for continued progress. Yann LeCun, a star
AI boffin now at Meta, is one of many who believe the limitations in the
current AI models cannot be fixed with more of the same.

Some scientists are therefore turning to a long-standing source of inspiration

in the field of AI—the human brain. The average adult can reason and plan
far better than the best LLMs, despite using less power and much less data.
“AI needs better learning algorithms, and we know they’re possible because
your brain has them,” says Pedro Domingos, a computer scientist at the
University of Washington.

One problem, he says, is the algorithm by which LLMs learn, called

backpropagation. All LLMs are neural networks arranged in layers, which
receive inputs and transform them to predict outputs. When the LLM is in its
learning phase, it compares its predictions against the version of reality
available in its training data. If these diverge, the algorithm makes small
tweaks to each layer of the network to improve future predictions. That
makes it computationally intensive and incremental.
The neural networks in today’s LLMs are also inefficiently structured. Since
2017 most AI models have used a type of neural-network architecture
known as a transformer (the “T” in GPT), which allowed them to establish
relationships between bits of data that are far apart within a data set.
Previous approaches struggled to make such long-range connections. If a
transformer-based model were asked to write the lyrics to a song, for
example, it could, in its coda, riff on lines from many verses earlier, whereas
a more primitive model would have forgotten all about the start by the time
it had got to the end of the song. Transformers can also be run on many
processors at once, significantly reducing the time it takes to train them.

Albert Gu, a computer scientist at Carnegie Mellon University, nevertheless

thinks the transformers’ time may soon be up. Scaling up their context
windows is highly computationally inefficient: as the input doubles, the
amount of computation required to process it quadruples. Alongside Tri Dao
of Princeton University, Dr Gu has come up with an alternative architecture
called Mamba. If, by analogy, a transformer reads all of a book’s pages at
once, Mamba reads them sequentially, updating its worldview as it
progresses. This is not only more efficient, but also more closely
approximates the way human comprehension works.

LLMs also need help getting better at reasoning and planning. Andrej
Karpathy, a researcher formerly at OpenAI, explained in a recent talk that
current LLMs are only capable of “system 1” thinking. In humans, this is the
automatic mode of thought involved in snap decisions. In contrast, “system
2” thinking is slower, more conscious and involves iteration. For AI systems,
that may require algorithms capable of something called search—an ability
to outline and examine many different courses of action before selecting the
best one. This would be similar in spirit to how game-playing AI models can
choose the best moves after exploring several options.

Advanced planning via search is the focus of much current effort. Meta’s Dr
LeCun, for example, is trying to program the ability to reason and make
predictions directly into an AI system. In 2022 he proposed a framework
called “Joint Embedding Predictive Architecture” (JEPA), which is trained to
predict larger chunks of text or images in a single step than current
generative-AI models. That lets it focus on global features of a data set.
When analysing animal images, for example, a JEPA-based model may more
quickly focus on size, shape and colour rather than individual patches of fur.
The hope is that by abstracting things out JEPA learns more efficiently than
generative models, which get distracted by irrelevant details.

Experiments with approaches like Mamba or JEPA remain the exception.

Until data and computing power become insurmountable hurdles,
transformer-based models will stay in favour. But as engineers push them
into ever more complex applications, human expertise will remain essential
in the labelling of data. This could mean slower progress than before. For a
new generation of AI models to stun the world as ChatGPT did in 2022,
fundamental breakthroughs may be needed. ■

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Who you gonna call?

Locust-busting is getting a upgrade

From pesticides to drones, new technologies are helping win an age-old
battle

Apr 17th 2024 |

IN THE LIST of plagues inflicted upon the people of Egypt in the Book of
Exodus, only darkness and death get higher billing than locusts. That
ranking is apt. Today, Schistocerca gregaria, also known as the desert locust,
is considered the most dangerous migratory pest in the world. Measured by
the volume of foliage consumed, a small swarm can devour as much food in
a single day as 35,000 people. In places with fragile food security, the effect
can be devastating. Outbreaks are regrettably common. As of April 2024 the
Food and Agriculture Organisation (FAO), an agency, was monitoring five
active outbreaks of S. gregaria in countries near the Red Sea.
The problem is that swarms grow fast. In the right conditions, 1,000 locusts
can become 20,000 within three months, and 160m within a year. The last
big upsurge, which began in the Arabian peninsula in 2018, lasted three
years and affected countries as far afield as Tanzania and Iran. Fortunately,
this invasion also drove investment into new locust-hunting tools. Some of
this is now beginning to pay off.

The desert locust lives in the belt of drylands that stretches from Mauritania,
on the west coast of Africa, to India. The harsh conditions, low in water and
vegetation, normally keep its numbers down. But human activity is starting
to make their lives more comfortable. Climate change is bringing heavier
storms to deserts, driving greenery in unexpected places. At the same time,
forest environments that were once too damp for locusts to lay eggs in are
being transformed through desertification into drier habitats where they can
thrive. Add in hotter temperatures, says Arianne Cease of Arizona State
University, and the future looks rosy for the desert locust.

Controlling this pest depends on locust hunters spotting dens in the desert
and snuffing them out early. Patrolling known hotspots in the aftermath of
rainstorms, these scouts spray pesticide on smaller dens by hand or truck,
and douse larger ones by aeroplane. But this work burns up time and
resources, and is rarely comprehensive—especially in countries with limited
means or ongoing conflicts. In 2018, for example, a pair of cyclones lashed
rain upon a remote Yemeni desert. As civil war had left the government
powerless and distracted, three generations of desert locusts were left to
breed unobserved. Their descendants invaded 12 countries.
A break in the clouds

The resulting disaster also bred innovation. Keith Cressman of the FAO
estimates 16 significant developments have resulted from the upsurge.
Among them are tools that use data to make expeditions more efficient.
Desert locusts are creatures of habit: females like to lay eggs in soil that is
moist, but not sodden, and juveniles are more likely to survive if they are
surrounded by ample foliage to eat. Advances in remote sensing mean that
some of these environmental features are getting easier to detect from space.
By comparing satellite readings with massive data sets from ground sensors,
as well as the ample historical record, researchers are building statistical
models to better predict which nests pose the greatest risk. One such model
was rolled out in October 2023 by an FAO commission co-ordinating desert-
locust work in ten north and west African countries. It provides field officers
with an online map complete with probabilities of finding locusts at specific
locations. This will help field scouts prioritise routes, saving money and
time.

Drones can help them cover even more ground. The FAO and the Hemav
Foundation, a Spanish non-profit, have jointly designed dLocust, a portable
drone shaped like a Stealth bomber and launched by slingshot. It is designed
to fly a loop up to 80km long, autonomously snapping high-resolution
pictures of suspicious greenery. Field scouts review these by tablet or
smartphone and choose which to visit. Twenty-three dLocust units are in
field operation, mostly in Africa.

Attack drones are also in the works. Kenyan researchers have run
experiments to determine the optimal height for a drone to unleash a
pesticide over its hungry targets. (Spray it too high, and the wind dissipates
the deadly mist; spray too low, and some may be wasted). The ideal height
was found to be ten metres.

Pesticides, too, are overdue for an upgrade. In the panic following the latest
upsurge, some governments carpet-sprayed organophosphate pesticides,
chemicals that serve as locust nerve agents. The effect was as satisfying as it
was swift. “You could more or less see the insects falling dead from the sky,”
said Wim Mullié, an environmental toxicologist in Dakar.

Any humans nearby would have felt poorly too: such compounds are banned
in the EU, Dr Mullié says, because of their toxicity to other species. In
Ethiopia, pesticides may have killed or scared off billions of honeybees.
More targeted chemicals do exist, including Novacrid, a fungus-based
biopesticide first developed in the 1990s. Somalia, which used Novacrid
throughout the latest upsurge, got its locust problem under control. The
problem, however, is that it costs more than its competitors and takes three
weeks to kill the insect. This has left many governments hesitant to rely on
it. Better chemicals are needed.
Such technological advances will not fix the problem on their own. Locusts
thrive in conflict zones and under-resourced regions; field agents may well
stay home if they risk being shot at, or if there is insufficient power to run
their equipment. Where there is death and darkness, locusts remain close
behind. ■

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Digital detoxes

What is screen time doing to children?

Demands grow to restrict young people’s access to phones and social media

Apr 17th 2024 |

TWO MONTHS ago Daisy Greenwell and Clare Fernyhough set up a

WhatsApp group to discuss how to stave off their young children’s demands
for smartphones. After they posted about their plans on Instagram, other
parents wanted in. Now their group, Smartphone-Free Childhood, has more
than 60,000 followers debating how to keep their children away from the
demon devices—a debate they are naturally conducting on smartphones of
their own.

This group, based in Britain, is not the only one worried about children’s
screen time. Last month the state of Florida passed a law banning social
media for under-14s. Britain’s government is reportedly considering a ban
on mobile-phone sales to under-16s. The concerns are summed up by a
recent book by Jonathan Haidt, “The Anxious Generation”, which argues
that smartphones, and especially the social networks accessed through them,
are causing a malign “rewiring of childhood”.

In a contentious debate two things are fairly clear. First, smartphones and
social media have become a big part of childhood. By the age of 12 nearly
every child has a phone, according to research in Britain. Once they get one,
social media is how they spend most of their screen time. American teens
spend nearly five hours a day on social apps, according to polls by Gallup.
YouTube, TikTok and Instagram are most popular (Facebook, the world’s
largest social network, is a distant fourth).
Second, most agree that in much of the rich world there has been a decline in
mental health among the young. The share of American teenagers reporting
at least one “major depressive episode” in the past year has increased by
more than 150% since 2010. Perhaps such terms have simply become less
taboo, sceptics suggest. But it is more than talk. Across 17 mostly rich
countries, there has been a sharp rise in suicide among teenage girls and
young women, though their suicide rate remains the lowest of any cohort
(see chart).

Are the phenomena linked? The timing is suggestive: mental health began to
slide just as smartphones and social apps took off, in the 2010s. Some
studies also suggest that children who spend more time on social media have
poorer mental health than lighter users. But such correlations do not prove
causation: it may be, for instance, that depressed, lonely children choose to
spend more time doom-scrolling than happy ones do.

A small number of randomised experimental studies are chipping away at

the causal question. In 2017 Roberto Mosquera of the Universidad de las
Américas, and colleagues, got a group of Facebook users in America to stay
off the platform for a week. The abstainers reported being less depressed
than the control group and took part in more varied activities; they also
consumed less news.

In 2018 researchers at Stanford and New York University did a similar

experiment, again in America. After a month away from Facebook their
detoxees felt happier than the control group, spent less time online, more
time with family and friends and were less politically polarised. (Again, they
knew less about the news, and spent more time watching television alone.)
The effects on well-being in both studies were modest.

“The really convincing causal evidence we have is quite limited,” admits

Matthew Gentzkow of Stanford University, one of the authors of the 2018
study. But, he argues, most points in the same direction as the circumstantial
evidence around timing. “If you put all that together, I think it’s enough to
say there is a substantial probability that these harms are large and real.”

Much remains uncertain. The best randomised experiments have been done
on adults, who are not the main objects of concern. Most studies focus on
Facebook, which these days is a small part of teens’ media diet. And they are
mostly in America, which is unlike the countries where most of the world’s
teenagers live. A 72-country study last year by the Oxford Internet Institute
found that Facebook adoption correlated with a small improvement in well-
being among the young.

People’s relationship with social media also defies categorisation. The

Mosquera experiment found that, although people said they were happier
when they didn’t use Facebook, they nonetheless valued its utility at $67 a
week—and, after a week of abstinence, the detoxees valued it even more
highly. Asking whether social media are good or bad for mental health is the
wrong question, argues Pete Etchells of Bath Spa University, author of
“Unlocked”, a somewhat more upbeat book about screen time. Perhaps a
better question, he says, is: “Why is it that some [children] really thrive
online? And why is it the case that others…really struggle?”

Unless that question is answered, banning phones or social media until a

later age would simply delay the problem, he fears. It is also unclear what
should be covered by such a ban. Social media include everything from
Facebook to the chat function in games like “Fortnite”, points out Dr
Etchells. Dr Gentzkow, who supports a higher minimum age for some social
media, warns against limiting all of it. “Actual communication with your
friends”—by phone, text or video chat—“those may well be things we want
to encourage more of,” he says. Most social apps offer a mixture of
functions, which can be enjoyed or misused.

There are some signs that, while experts ponder how to rein in the worst of
social media, ordinary users are working out how to do so themselves.
Posting about oneself in public is becoming less common: last year only
28% of Americans said they enjoyed documenting their life online, down
from 40% in 2020, according to Gartner, a research firm. Messages are
moving from open networks to private chats. On Instagram, more photos are
now shared in direct messages than on the main feed, the company says. As
middle-aged folk identify the problems with the social networks they grew
up with, youngsters may already be moving on. ■

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Culture
On its 150th anniversary, Impressionism is surprisingly
relevant
Show me the Monet :: What the once-derided movement reveals about art today

How Hollywood fell in love with video games

Press play :: “Fallout” is the latest in a successful run of adaptations

What is a 14-letter word for a constructor of crossword

puzzles?
Get a clue :: A new book looks at the history of the crossword through the women who
designed it

Climbing Everest is the extreme sport du jour

Mountaineering :: More people are reaching the summit, but more people are dying on the
way, too

Much of the Great War was decided in the east

All quiet about the Eastern Front :: A new history argues the Eastern Front gets less attention
but was hugely consequential

Salman Rushdie’s gripping take on being stabbed

Back Story :: “Knife” is a memoir about the attack in 2022 but also a love story

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Show me the Monet

On its 150th anniversary, Impressionism is

surprisingly relevant
What the once-derided movement reveals about art today

Apr 18th 2024 | Paris

THE WORLD was not always an arena of Claude Monet superfans.

“Wallpaper in its embryonic state is more finished than that seascape,”
sneered Louis Leroy, an art critic, when describing Monet’s “Impression,
Sunrise”. The painting of a hazy port in Normandy was hung in a show put
on by the Anonymous Society of Painters, Sculptors and Engravers Etc that
opened on April 15th 1874. Some of the comments about the sketchy style
adopted by Monet and some of his fellow “rebels” were so acerbic that they
sound more like put-downs from social-media trolls than professional art
commentary. An “appalling spectacle of human vanity losing its way to the
point of dementia” was how another critic in the 1870s described the new
style.
The Anonymous Society’s show 150 years ago is remembered as the
Impressionist movement’s birth; it was then that the painters were called
“Impressionist” by Leroy, though the artists would not claim the label
themselves for another couple of years. (An impression was a sketch, in the
lingo of painters in 1874.) That show is now the subject of another
exhibition, “Paris 1874: Inventing Impressionism”, which recently opened at
the Musée d’Orsay. In September it will travel from Paris to the National
Gallery in Washington, DC.

Today Impressionist paintings are among the most recognisable, beloved and
valuable, so it is easy to forget the shock many people felt when first
confronted by them. The startled reaction was as much a result of the subject
matter as it was the rough brushwork depicting the fleeting quality of natural
light. The artists rejected the focus of traditional painting—classical myths,
history and idealised portraits—in favour of scenes of contemporary life,
including the theatre and Paris’s boulevards.

Theirs was a democratic and capitalist undertaking: the 31 artists who took
part in the Anonymous Society’s show wanted to select which of their works
to exhibit and to sell them directly. This was in response to a government-
sponsored Salon put on by the Académie des Beaux-Arts, which screened
paintings with a jury and had conservative taste. Only four paintings sold
during the Anonymous Society’s exhibition; the company formed to put on
the show dissolved within months.

Viewers regarding these paintings from the past can see some parallels with
the present. The Impressionists evoked the destruction of the natural world,
with a pure environment altered by railroads and smokestacks. They also
painted in the shadows of violence and political uncertainty: only a few
years after France’s defeat in a war with Prussia and a subsequent
insurrection against the government, known as the Paris Commune. The way
the artists “deliberately or maybe unconsciously erased anything having to
do with war from the paintings”, focusing instead on “happy scenes of
modern life”, is “in itself fascinating and intriguing”, says Anne Robbins, co-
curator of the show at the Musée d’Orsay. She posits that this is not unlike
how people are anxious to move on from dislocations wrought by covid-19.
The Impressionists were also reacting to new technology, which influenced
the creation of art, as it does today. They worked outdoors, rather than in
studios, thanks to the invention of portable paint in tubes. Their pictures
were influenced by another innovation: photography. Some other artists tried
to emulate photography’s clarity. But with the Impressionists’ thick, visible
brushstrokes, it is “almost as if they were saying, ‘Look, this is paint. This is
not photography,’” says Philip Hook, author of “The Ultimate Trophy”, a
history of Impressionism.
Déjà vu

Fittingly, the Musée d’Orsay makes good use of innovative tech to present
these works, harnessing virtual reality to imagine what the exhibition in
1874 might have looked like. Visitors can don a headset and go on a
startlingly realistic guided tour. You can almost touch the paintings you
could have bought back then for 1,000 francs (if only you had!). Many
museums have tried to use tech to complement their old-fashioned shows
and lure in younger audiences; this is one of the most successful attempts to
date.

This exhibition is about the art world in 1874, but it makes you ponder art’s
current state. It raises the question of what has happened to the avant-garde
today. In going from shocking audiences to gaining broad acceptance, the
Impressionists set a “template that has been repeated regularly with every
new modernist art movement”, says Mr Hook. In subsequent decades artists
played with style, subject matter and form, challenging viewers to consider
what exactly art is, from Marcel Duchamp’s urinal to Tracey Emin’s unmade
bed.

Today there is much less revolutionary experimentation. “Artists challenge

much less today,” says one art dealer, who finds contemporary architecture
more willing to break with norms. “In a moment when I thought more artists
would be reaching out more politically, they seem to be reaching in more
conservatively,” agrees Josh Baer, an art adviser and gallerist. Depicting
beauty and personal identity are today’s popular artistic preoccupations. “I
thought we’d be seeing something a little bit more aggressive,” Mr Baer
adds.
This year’s Whitney Biennial in New York is a collection of sleek works that
take little risk. The Venice Biennale, which opens on April 20th, will be
another pulse-taking. With prizes and pavilions, it is often described as the
Olympics of the art world, and it usually captures the zeitgeist. This year’s
theme is “foreigners everywhere” and focuses on artists whose identity and
sexuality make them outsiders.

Many feel the political correctness that has strangled dissent on college
campuses has infected the art world, with artists becoming afraid to ruffle
feathers and go against consensus. In today’s political climate museums are
“terrified” to push the envelope, says Leslie Ramos of the Twentieth, a firm
that advises on art and philanthropy: they have to be “woke but not too
woke, interesting but not too scholarly, not too expensive but not too cheap”.
Others blame the internet: a premium is now put on creating large, vibrant
canvases that look good on social media.

Those paintings by young artists (called “ultra-contemporary” in today’s

parlance, according to Clare McAndrew of Arts Economics, a research firm)
can sell for six- and seven-figure sums. Here the Impressionists also offer a
humbling reminder. Of the 31 artists who presented at the Anonymous
Society’s show in 1874, fewer than ten are remembered today. A handful are
so obscure that the curators could find virtually nothing about them, says Ms
Robbins of the Musée d’Orsay.

The odds are that an even smaller proportion of artists working now will be
celebrated in 150 years. As Helena Newman of Sotheby’s, an auction house,
puts it: “Look at what we see today, and we know in our bones that only a
small amount will stand the test of time.” ■

Images courtesy of Musée D’Orsay / Musée Marmottan Monet / Studio

Christian Baraja SLB / National Gallery of Art, Washington / Dist. RMN-
Grand Palais / Patrice Schmidt / RMN-Grand Palais / Hervé Lewandowski /
Bibliothèque nationale de France.

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Press play

How Hollywood fell in love with video games

“Fallout” is the latest in a successful run of adaptations

Apr 18th 2024 |

A NEW INSTALMENT of “Fallout”, a long-running series of video games,

was released recently to rave reviews. Critics called the post-apocalyptic
adventure a “rare gem” and an “absolute blast”. In its look and feel, the new
“Fallout” is much like previous releases. The difference is that the latest
iteration is not a game at all, but a television series.

Converting pixelated adventures to live-action narratives long defeated

scriptwriters in Hollywood, resulting in turkeys like “Street Fighter” (1994)
and “Doom” (2005). The developer of one celebrated game confides that its
silver-screen adaptation around a decade ago was the worst movie he had
ever seen.
But now studios are reworking games and finding commercial and critical
success. Last year “The Super Mario Bros” was the second-highest-grossing
film at the worldwide box office. “The Last of Us”, a TV show based on a
PlayStation game, won a haul of Emmy awards in January. More game
adaptations are on the way: IGN, an entertainment website, counts more than
70 games in development for film or TV, including shows based on “Tomb
Raider” and “League of Legends” and films based on “Zelda” and
“Minecraft”.

What explains the enthusiasm for these game-shows? One reason is that
Hollywood’s favourite source of creative material, comic books, is getting
boring. For two decades the box office has been ruled by superheroes. But
more recently each Marvel film has seemed to be less successful and lauded
than the last. “The Marvels”, released in November, was the lowest-grossing
so far. Games offer an alternative: “A deep well of franchises, a built-in
audience, years of storylines and endless spin-off franchise possibilities,”
says Fred Black of Ampere Analysis, a research firm.

The pioneers of the new wave of adaptations have been Amazon Prime
Video (which commissioned “Fallout”) and Netflix. These streaming
companies, relative newcomers to Hollywood, have been on a
commissioning binge to attract subscribers. Unlike older rivals such as
Disney, which owns Marvel, they have a limited archive of intellectual
property. “Most of the comic franchises were already owned, so they needed
to find something else,” says Mr Black. Games were that something. Their
success with titles like “Castlevania” (2017) and “The Witcher” (2019) got
the attention of Hollywood studios.

Changes in the gaming world have also helped. The game-playing public has
ballooned, thanks to smartphones (which put a miniature console in
everyone’s pocket) and the covid-19 pandemic (which created millions of
new gamers through sheer boredom). Big titles like “Minecraft” are played
by more than 100m people each month, guaranteeing a large potential
audience for film spin-offs. The broader and ageing pool of gamers makes it
easier to get video-game projects greenlit in Hollywood. Previous
generations of producers were befuddled by youngsters’ games; today’s
moguls grew up playing them.
Most significant, modern games are better fodder for adaptation than their
precursors. Amazon’s “Fallout” has a sharp script and a strong cast. But its
epic, post-apocalyptic setting, twisting plot and rich back story all come
from the game. The PlayStation version of “The Last of Us” was so
cinematic that the opening scenes of Warner’s TV adaptation were barely
changed. Its central characters, Joel and Ellie, were already vividly drawn;
the TV series borrowed plenty of dialogue from the game.

For all the recent hits, game adaptations are not yet such reliable performers
as superheroes. Paramount’s “Halo” and Netflix’s “Resident Evil” did not
live up to expectations. The biggest hits, says Mr Black, tend to be either so
well known that even non-gamers recognise the brand (think “Mario”,
“Sonic” or “Angry Birds”), or so engaging that their digital origin ceases to
matter (“The Last of Us” or “Fallout”). The explosive first episode of
“Fallout” is entitled, “The End”. For games on screen, it is just the
beginning. ■

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Get a clue

What is a 14-letter word for a constructor of

crossword puzzles?
A new book looks at the history of the crossword through the women who
designed it

Apr 18th 2024 |

The Riddles of the Sphinx. By Anna Shechtman. HarperOne; 288 pages;

$29.99 and £22

WHAT IS A three-letter word for “preppy, party-loving, egotistical male, in

modern lingo”? Answer: “Bro”. When Anna Shechtman, a cruciverbalist
(crossword constructor), introduced this clue to the New York Times
crossword puzzle in 2014, readers took notice. “Bro” was traditionally clued
as “sibling for sis”. Ms Shechtman was modernising the puzzle and
capturing the zeitgeist.
What makes a word puzzle-worthy? Since its appearance in the Sunday
edition of the New York World in 1913 (pictured), the crossword has helped
define the canon of common knowledge. Though it was invented by Arthur
Wynne, an editor, in its early days, women—especially bored housewives—
were the primary constructors and solvers. In “The Riddles of the Sphinx”,
Ms Shechtman, who now creates crosswords for the New Yorker, traces the
history of the crossword in America through the women who helped create
it.

In the 1920s and 30s, newspapers warned of “crossword puzzleitis”, an

“epidemic” they claimed was draining America’s brainpower and distracting
women from their household duties. But by the 1940s, the New York Times,
which had resisted the crossword craze, introduced the puzzle, partly to offer
readers relief from unrelenting news about the second world war. “You can’t
think of your troubles while solving a crossword,” wrote Margaret Farrar, its
founding editor. Farrar, who edited the Times crossword until 1969, insisted
on decorum. Words and clues too unsavoury for a morning breakfast on
Sundays were stricken from the grid. The clue offered for “LSD”, for
example, was “British currency” instead of “psychedelic drug”.

As more women entered the workforce, the number of them producing

puzzles declined. In 1989 Eric Albert, a computer scientist, developed
constructing software, which helped designers fill a grid by enabling them to
create and manage word lists. The world of crossword creation began to look
more like the heavily male tech industry. Ms Shechtman interweaves this
history with a memoir of her puzzle-making and eating disorder (reflecting a
need for control that she sees in the rigid format of the grid). In constructing,
she thinks about cultural representation. Should crosswords push solvers to
expand their knowledge or keep them comfortable?

Since the covid-19 pandemic, the popularity of the crossword and similar
online games like Wordle has only increased. The New York Times acquired
Wordle in 2021, and in 2023 subscriptions to the Times’s Games app
climbed to over a million, around a tenth of the newspaper’s total subscriber
base. Games, now a big driver of revenue, are a five-letter strategy. ■

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Mountaineering

Climbing Everest is the extreme sport du jour

More people are reaching the summit, but more people are dying on the way,
too

Apr 18th 2024 |

Everest, Inc. By Will Cockrell. Gallery Books; 352 pages; $29.99 and £20

CLIMBING MOUNT EVEREST used to be a feat of staggering bravery,

endurance and skill. In the 40 years after Sir Edmund Hillary and Tenzing
Norgay first reached the summit in 1953, an average of 12 people a year
followed in their footsteps. In 2023 more than 1,200 people attempted the
climb, with 655 making it to the top.

What was once an “almost certainly fatal” endeavour is “the new Ironman
triathlon”, argues Will Cockrell, a journalist, in “Everest, Inc”, a fascinating
new book. High-tech equipment and better understanding of the
physiological impact of high altitudes have brought new hopefuls to Everest.
But the biggest reason for the rising number of Everest conquerors is the
establishment of a professional guiding industry. For a hefty fee—between
$35,000 and $110,000—experienced climbers will put novices on top of the
world.

As with many extreme sports, Everest offers a test. Amateurs want to know
if they can achieve something physically and mentally demanding.
According to some psychologists, people undertake Herculean endeavours to
deny their own mortality. Mr Cockrell believes this helps explain why
interest in climbing Everest increases after deaths are reported: people are
more attracted to the adventure if they are reminded of its dangers.

The guiding industry exists in large part because of a foolhardy but

irresistible character called Dick Bass. The heir to an oil fortune, Bass had
the lunatic idea of climbing the highest mountains on all seven continents.
He bought his way onto three different Everest expeditions and, in 1985,
aged 55, he became both the oldest and least experienced climber to reach
the summit. The sight of an average Joe on top of the world generated a
media frenzy—and the establishment of companies that could cater to the
new demand for tours.

The early years of guided expeditions in the 1990s were mostly successful.
In 1992-95, around 150 people paid to be led up the mountain, and a third
succeeded. But in 1996, Jon Krakauer, an American writer, joined one of two
simultaneous expeditions that went wrong. A storm “dropped down on the
climbers like a piano on a cartoon character”. The guides, eager for their
clients to reach the top, delayed turning them around. Three guides and two
climbers died. In a bestselling book, “Into Thin Air”, Mr Krakauer argued
that Everest had become a high-end tourist trap. He decried the judgment of
the guides and the selfishness of inexperienced climbers. Many businesses
assumed that the book would crush them. Instead, fascination with Everest
soared.

The industry has depended on local labour. Large numbers of Nepalis were
hired by companies in the West to install ropes and carry equipment for
clients. The guiding firms made efforts to build lasting relationships with
their teams on the ground. But, Mr Cockrell notes, “The reasons Westerners
and Sherpas were climbing mountains remained very different.”

Two accidents in the 2010s brought change. In 2014, 16 Sherpas were buried
by falling ice while transporting clients’ gear. Their colleagues went on
strike and forced the cancellation of the season. Then, in 2015, an avalanche
killed ten Sherpas and nine foreign clients. In the aftermath, many Western
operators lost their enthusiasm for Everest; today all the biggest guiding
firms are Nepali-owned.

“Everest, Inc” ends on a confounding note. More people are reaching the
summit, but more are dying en route, too: 18 people perished in 2023, the
highest-ever number. Nepalese authorities say climate change has caused
more extreme weather. Mr Cockrell argues that there was no negligence on
the part of the firms. He suggests that Nepali guides consider themselves in
the logistics business and generally leave decisions of safety to clients.

But amateur climbers make bad choices. The disaster in 1996 showed that
even guides get these decisions wrong. Experts know more than ever about
how to navigate Everest safely. But that does not make it a safe place. ■

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All quiet about the Eastern Front

Much of the Great War was decided in the east

A new history argues the Eastern Front gets less attention but was hugely
consequential

Apr 18th 2024 |

The Eastern Front. By Nick Lloyd. Viking; 672 pages; £30. To be

published in America by W.W. Norton in August; $42

JUST 29 YEARS old, Karl I was desperate to lead Austria-Hungary out of

the first world war. He was crowned as Habsburg emperor in November
1916 after the death of his great uncle, who had ruled for 68 years. Though
the empire had been instrumental in starting the conflict following the
assassination of its archduke, Franz Ferdinand, in June 1914 by a militant
Serb nationalist, now Karl could see only the nightmarish cost. Austria-
Hungary’s increasingly ramshackle, polyglot army had suffered devastating
losses at the hands of Aleksei Brusilov, a Russian general, five months
earlier. To function it depended on its ally, Germany. Vienna was starving.
But secret peace talks went nowhere, and Austria-Hungary was dragged
limpingly along in Germany’s wake to disaster.

Karl, ultimately exiled in Madeira, died from pneumonia in 1922. Though

unsuccessful, Karl was beatified by the pope 82 years later for his
peacemaking efforts. He is one of a small number of sympathetic figures in
Nick Lloyd’s superb history of the Eastern Front in the first world war and
one of even fewer who had some inkling of how it might end. But apart from
the heroism and resilience of the ordinary soldiers, this is a story of
vainglory, cynicism, incompetence and callousness.

Fascination with the Great War endures. The name has stuck despite the
even larger conflict—and death toll—that came later. Though the books
devoted to the first world war’s Western Front are extensive, the story of the
Eastern Front has been mostly neglected. Mr Lloyd, a professor of modern
warfare at King’s College London, has produced the first major history of
the Eastern Front in English in nearly 50 years.

The first world war drew in 32 countries; its Eastern Front stretched over
900 miles “from the Baltic to the Alps, from the peaks of the Carpathians to
the shores of the Aegean”. Some of the fiercest fighting was in Galicia, a
region that includes what is today western Ukraine. It was very different
from the war on the Western Front where, other than in its opening and
closing stages, the armies of both sides were locked into a highly
concentrated, trench-bound stalemate. In the east, there was often the space
and terrain for manoeuvre warfare and pitched battles—and even the
potential for dramatic, cavalry-led breakthroughs.

Although more fluid, the Eastern Front was as lethal as its Western
counterpart, due to the destructive power of modern artillery and the
machine gun. Mr Lloyd estimates that the two doomed empires, Russia and
Austria-Hungary, lost upwards of 2.3m and 1.2m men respectively. Some
450,000 Germans were probably killed on the Eastern Front. Because the
fighting was less static but also because of simmering ethnic hatreds, many
more civilians died or were displaced than in the west.
When Winston Churchill wrote about the Eastern Front in his sixth and final
volume on the Great War, published in 1931, he described it as both the
“greatest war in history” and the “most frightful misfortune” to fall upon
mankind since the destruction of the Roman Empire. Yet the book was called
“The Unknown War”.

Some individual episodes are still remembered, such as the Russian loss at
Tannenberg early in the war and Brusilov’s offensive, which was Russia’s
greatest and bloodiest feat of arms, resulting in nearly 2.5m casualties on
both sides in three months. But so much has been forgotten, including the
course of the war in the east across multiple theatres of operation and the
strategies pursued by both sides. It is all this and more that Mr Lloyd has
resurrected in compelling detail.

Unusually for such a vast confrontation of forces, all three major belligerents
ended up as losers. Russia collapsed into chaotic revolution in 1917; Austria-
Hungary’s stricken empire was formally dissolved in 1919; Germany met
with humiliating defeat on the Western Front.

The first world war redrew the world map. With conflict raging in the
Middle East and Ukraine today, some might find the prospect of turning to a
story of gruesome conflict from the past unattractive. But it was such a
painfully consequential war that it continues to demand attention. As the
German-American historian, Fritz Stern, ruefully observed, the conflict was
“the first calamity of the 20th century, the calamity from which all other
calamities sprang”. The calamity of the “unknown” Eastern Front is
inseparable from everything that occurred afterwards. ■

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Back Story

Salman Rushdie’s gripping take on being stabbed

“Knife” is a memoir about the attack in 2022 but also a love story

Apr 16th 2024 |

THERE ARE, writes Sir Salman Rushdie, “three important characters” in

“Knife”, a new memoir of his near-fatal stabbing in August 2022 and his
arduous recovery. The first two are predictable: the author and his blade-
wielding assailant. The third character turns this chronicle of violence into a
surprisingly tender and redemptive story.

Sir Salman was about to speak at a festival in upstate New York when a
black-clad man charged the stage. His first thought was: “So it’s you. Here
you are.” It was 33 years since Ayatollah Ruhollah Khomeini of Iran had
called for his death because of the alleged blasphemy of his novel, “The
Satanic Verses”. It was more than 20 since he moved to America after years
of police protection in Britain. Now the half-expected, still-astonishing
assassin was upon him. “I raise my left hand in self-defence. He plunges the
knife into it.”

And into his neck, face, abdomen and eye—15 wounds in a 27-second
frenzy. Violence, he notes, is confounding to its victims: “Reality dissolves
and is replaced by the incomprehensible.” But he was alert enough to think
this was the end. In a book that is both passionate and illusionless, he is clear
there was no out-of-body experience: “My body was dying and it was taking
me with it.” He seemed unlikely to survive but was stitched and stapled
together. His blinded eye bulged from its socket “like a large soft-boiled
egg”.

Only after a few weeks did Sir Salman see his disfigured face in the mirror.
When he left hospital there were more scares and treatments and nightmares.
He dreamed of the blinding of Gloucester in “King Lear”; he thought of the
knife that kills Kafka’s protagonist in “The Trial”. Among the supporting
cast in “Knife” is the knife itself—at once a cold, sharp object and a
metaphor for hatred, fanaticism and life’s ruptures.

Intermittently he thinks of the second character, the young Lebanese-

American who has pleaded not guilty to attempted murder and assault, and
who, typically, had barely opened “The Satanic Verses”. Omitting his name
—he is “My Assailant”, then “the A”—Sir Salman wavers over whether he
wants to confront him. Instead he makes up a jokey-serious dialogue
between them, probing the imaginary suspect about faith, failure and
loneliness. “You aren’t capable of understanding me,” the suspect insists.
Standing outside the jail where the real man was awaiting trial, Sir Salman
had an urge to dance.

All he wanted was to be a novelist, but the ayatollah and the knife have
made him a global champion of free speech. He reaffirms its value here.
“Without art,” he writes, “our ability to think, to see freshly, and to renew
our world would wither and die.” He decries the “false narratives” of bigots
and autocrats and extols openness and debate. “Language was my knife,” he
avers, “the tool I would use to remake and reclaim my world.”

Yet the principal riposte to the brutality in “Knife” comes from its third main
character: Rachel Eliza Griffiths, an American writer and photographer and
Sir Salman’s fifth wife. In forensic detail, he recounts the “coin-toss
moments” that led them to meet and fall in love, his giddy infatuation and
eventual proposal. All this is more than a gushy ode: it is essential to his
underlying themes.

One of those is time. His next thought, up on that stage, was: “Why now?”
The knifeman was “a murderous ghost” seeking “to drag me back in time”.
The past, he sees, is both inescapable and fixed. He poses lots of questions
and what-ifs about the assault, including why he “just stood there like a
piñata”. He nearly pulled out of the talk but needed the fee for an air-
conditioning bill. He knows, though, that time allows no do-overs. Nor,
because of Eliza, does he ultimately want it to: “We would not be who we
are today without the calamities of our yesterdays.”

His other deep theme is the challenge of living in a bleak world; or, to put it
another way, the riddle of human nature. He “experienced both the worst and
best” when onlookers tackled his attacker and saved his life. Above all,
however, the counterbalance to evil is the love and devotion of Eliza, with
whom Sir Salman salvaged “a wounded happiness”.

“Knife” is a love story about being stabbed, a paradox captured in the

skewed symmetry between the attack and another central scene. On the night
he met Eliza, Sir Salman walked klutzily into a glass door; he lay on the
floor, blood streaming down his face, until she ministered to him. He got up
then, and, triumphantly, he has risen again now. ■

Read more from Back Story, our column on culture:

Kate Winslet explores how to be a good autocrat (Mar 19th)
Infatuation, kids, adultery: marriage is the theme of the Oscars (Mar 7th)
“The Picture of Dorian Gray” points to the future of theatre (Feb 29th)

Also: How the Back Story column got its name.

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assault

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Economic & financial indicators

Economic data, commodities and markets
Indicators ::

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Indicators

Economic data, commodities and markets

Apr 18th 2024 |
This article was downloaded by calibre from https://www.economist.com/economic-and-
financial-indicators/2024/04/18/economic-data-commodities-and-markets

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The Economist explains

How a home-improvement subsidy is wrecking Italy’s
public finances
Government largesse is costing taxpayers

What is geoengineering?
Deliberately cooling the climate is an unsettling idea

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The Economist explains

How a home-improvement subsidy is wrecking

Italy’s public finances
Government largesse is costing taxpayers

Apr 17th 2024 |

JUST THINKING about it “gives me a stomach ache”, said Italy’s finance

minister, Giancarlo Giorgetti. He was referring to a home-improvements
subsidy that has turned into the fiscal equivalent of King Kong: a monster
running amok, wreaking havoc on the country’s seldom-robust public
accounts. On April 9th Mr Giorgetti revealed that claims of the subsidy,
known as the “superbonus”, made in the four years that the scheme has been
running, together with claims of another that offsets the cost of renovating
façades, would eventually drain the treasury of €219bn ($233bn). That is
almost 10% of Italy’s GDP last year. How on earth did things get to this
point?
Giuseppe Conte’s second government, a left-populist coalition that ran Italy
from 2019 to 2021, introduced the superbonus in 2020 at the height of the
covid-19 pandemic. The idea was to stimulate the stricken economy with a
measure that was also environmentally beneficial. The government offered
to pay homeowners 110% of the price of energy-saving renovations. Its other
initiative covered 90% of the cost of doing up the front of a building. The
cash was not to be reimbursed directly, but in the form of tax credits that
could be sold on. The two measures have certainly helped to reinvigorate the
economy. The turnover of Italy’s construction sector grew by 31% in the
four years to the end of 2023; in other big European economies it has been
flat at best. That has helped Italy recover more quickly from the pandemic
than either France or Germany have managed. But success has come at a
huge price.

There are at least four reasons why things have gone badly wrong. The first
is simply that the superbonus has proved wildly popular. That should not
have been a surprise: what is not to like about being repaid more than you
have spent? Or not spent: since the tax credits are tradeable, many
homeowners simply passed them on to their builders without having to part
with a euro. A second reason is outright fraud. Last August Giorgia Meloni,
Italy’s prime minister, said that contracts falsified to claim the subsidies
constituted the biggest-ever rip-off of the Italian state. That was when they
amounted to a mere €12bn; since then, the figure has risen to €16bn. A third
problem is overpricing. Because the superbonus refund is greater than the
outlay, actual or theoretical, it is in the interests of both the builder and the
homeowner to inflate the cost of the work. A fourth reason is that until
recently Italy’s politicians did nothing to stop the merry-go-round. The
superbonus had cross-party support when it was introduced. Neither of the
two governments that followed Mr Conte’s has wanted to anger the public
by halting a popular programme.

Ms Meloni’s government has nevertheless curbed its scope. But the cost of
the superbonus alone has already left a €122bn hole in the public accounts.
That goes some way towards explaining why Italy’s budget deficit soared
last year from an original estimate of 5.3% of GDP to 7.2%. The future cost
of the subsidies will make getting the deficit back down to 3%, as demanded
by the European Commission, a formidable task—all the more so since
Italy’s post-pandemic growth surge is tailing off. An austere budget in the
autumn looks likely. ■
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The Economist explains

What is geoengineering?
Deliberately cooling the climate is an unsettling idea

Apr 16th 2024 |

ON APRIL 2ND a contraption resembling a snow machine on the deck of

the USS Hornet, a defunct aircraft-carrier moored in San Francisco Bay,
began producing a mist of salty aerosol particles. The scientific collaboration
behind the project, the Marine Cloud Brightening (MCB) programme, led by
the University of Washington, is investigating whether such aerosols might
help to slow climate change through a form of “geoengineering”. What does
this term mean—and why is it so controversial?

In 2009 Britain’s Royal Society, a scientific academy, defined

geoengineering as “the deliberate large-scale manipulation of the planetary
environment to counteract anthropogenic climate change”. It split
approaches into two categories: those that make it easier for the Earth to lose
heat, and those that reduce the amount of heat it gains. Carbon-dioxide
removal (CDR) helps in the first way by lowering the level of greenhouse
gas in the atmosphere, making it easier for heat to escape. Reducing the
amount of energy the Earth absorbs from the Sun, known as solar
geoengineering, helps in the second way. The MCB experiment seeks to do
this by increasing the number of “cloud condensation nuclei” in low marine
clouds: that would raise the number of droplets that such clouds are made of
while decreasing their size, so that they reflect more sunlight into space.

The technologies used for CDR and suggested for solar geoengineering are
completely different. But there are similarities in their potential
ramifications. In the absence of either, the degree of warming the Earth will
experience will be set by the total cumulative emissions of long-lived
greenhouse gases. If CDR were used to mop up some of those gases, or if
solar geoengineering reduced the amount of sunshine getting in in the first
place, that strict dependency would no longer hold.

This introduces a risk often termed “moral hazard”. For as long as total
emissions are the only thing that matters, the policy prescription is clear:
emit less, come what may. If there are ways around total cumulative
emissions, the need is not all-consuming. Some argue that this could reduce
the urgency with which countries and businesses pursue emission cuts.

There are other concerns about solar geoengineering. The most-studied

technique requires the creation of a layer of fine particles in the stratosphere,
similar to the cooling layers created by large volcanic explosions. That could
have implications for the recovery of the ozone layer. It would have
repercussions for weather patterns in the lower atmosphere, too, leading to
changes in rainfall. The effects would depend on the details of the strategy
implemented and would not be uniform; different approaches would bring
benefits to some regions and could do harm to others. But unlike emissions
reduction, which has to be undertaken by most big emitters to work, solar
geoengineering can be done unilaterally. This sounds like a recipe for
conflict.

As a result, solar geoengineering remains a fringe issue. By contrast, in the

15 years since the Royal Society’s report, CDR has become mainstream. The
idea of “net-zero” emissions, now central to lots of government and
corporate climate policies, relies on it. CDR is considered palatable because,
by removing greenhouse gases from the atmosphere, it reduces greenhouse
warming in a permanent way. Solar geoengineering, by contrast, would
allow for the continued accumulation of greenhouse gases, merely masking
their warming effects for as long as the geoengineering continues. That
would be a problem if solar geoengineering efforts were suddenly to be
stopped for some reason; the masked warming effects of the accumulated
greenhouse gases would quickly kick back in. This risk, among others, and
the sense that accepting all solar geoengineering’s geophysical and
geopolitical risks still only gets the world a temporary patch leads some
proponents of CDR to resent the two approaches being lumped together.

Given the controversy around solar geoengineering, why would anyone want
to research it? Because unlike CDR it could work quickly: a stratospheric
solar-geoengineering programme might start to cool the Earth within a year.
None of the researchers investigating its potential thinks that it should
displace emissions reduction. But they do think that its potential merits study
nonetheless. ■
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Obituary
Akebono was the first foreign-born grand champion of
sumo
A gaijin makes good :: The wrestler who shocked and changed Japan died in early April, aged
54

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A gaijin makes good

Akebono was the first foreign-born grand

champion of sumo
The wrestler who shocked and changed Japan died in early April, aged 54

Apr 18th 2024 |

LUMBERINGLY, HE paced to the centre of the ring, then back to his corner
again. Several times he did this, flexing his arms. Then he squatted, and
fixed his opponent with his stare. That stare, of absolute focus, which he
could keep for days.

Except for his loincloth, he was naked. His mountainous torso glistened with
sweat, oil, fat and muscle. Moments before he had rinsed his mouth with
power-water, rubbed his body with power-paper and grabbed a handful of
purifying salt to scatter in the ring. His long hair was caught up in a topknot
styled like a leaf of the ginkgo tree. He had clapped his hands to alert the
gods, stamped his feet to scare off evil spirits, and shown with a few deft
postures that he had no weapons. He was more than ready.

Then it was over. In seconds he had charged forward, lunged for the throat,
and pushed his opponent out of the ring. Job done.

So ended many of Akebono’s matches. At 2.03 metres, he towered above his

rivals. (His name meant “dawn”, because when he stood up it was like the
sun rising.) He also outweighed most of them, swelling from 154kg, when at
18 he started training, to 235kg five years later. His long arms could shove a
rival off-balance in a heart-beat, making him touch the ground with
something other than the soles of his feet, which doomed him. Brute force
was all it took; no matter if they were on your belt, push them, and fast.

Much of his size-advantage came from the fact that he was a gaijin, a
foreigner. It had been enhanced for sure by sumo training, which involved
huge meals of chicken-broth stew and litres of beer, followed by naps, to
build bulk. But Akebono was also American, a Hawaiian, one of very few
foreigners before the 1990s who endured the training regime. He was big
when he arrived, a handy centre in high-school basketball games, and his
first coach feared he might prove too lanky for sumo. He was wrong. His
pupil romped through the regular 15-match tournaments, rose swiftly
through the rankings and became, in 1993, the first-ever non-Japanese
yokozuna, or grand champion.

His ascent seemed quite improbable. He had been brought up poor on Oahu
Island as Chad Rowan, the son of a half-Irish taxi-driver. His boyhood was
spent learning street-smarts and watching wrestling on TV, and his future
seemed to be as a beach bum. Then a Hawaiian sumo-recruiter spotted him,
and that was that.

The first months were tough, since he spoke almost no Japanese and pined
for a decent American steak. But in the wrestlers’ training stable he suffered
no more nor less than all the others in the lowest ranks, getting up at 4am to
exercise before breakfast, slopping out for his superiors, cooking their rice
and serving it before getting a mouthful himself. The only differences were
his dumbness, but he was shy anyway, saying little either in Japanese or
English; his Hawaiian horror of cold winters; and the need to forget all the
codes of life he had learned over 18 years.

But he stuck it out, and felt as he progressed that, when he wrestled, he was
neither American nor Japanese: just a wrestler, whose body by the end did
the thinking for him. It was never a matter of planting his flag in the middle
of the ring and taking on a rival nation. He was learning a great, ancient
skill.

The more serious racial frictions emerged as he climbed higher. An essential

virtue of the sumo wrestler was hinkaku, dignity. He should be sober,
uncomplaining, and modest, celebrating his triumphs with nothing more than
a wave of the right hand. The sumo elders doubted that foreigners could ever
possess that. In 1992 another hefty Hawaiian, Konishiki, “the Dump Truck”,
had been turned down for the title of yokozuna. In terms of tournaments
won, he deserved it; but, said the elders, he did not have enough hinkaku.
Konishiki called this racism, pure and simple. Only eight months later,
however, Akebono was promoted to that foremost rank and stayed there for
eight years.

His elevation calmed the controversy, for he had the sumo ethos in spades.
Already, as a sekitori or senior wrestler, he qualified for a car and driver,
customised kimonos to wear in public and a host of assistants. But he was
not a man for showing off. As a yokozuna his new monthly salary of
$15,000, though huge for a sumo wrestler, was still tiny by American
standards. And it was all he needed. Once the splendid belt was off he stayed
dignified and humble, an ordinary Hawaiian who loved welcoming high-
schoolers, plying them with snacks and teaching them how to wrestle. To
American visitors, he was still “Chad”.

His example brought many more foreign wrestlers to sumo. Some were
Hawaiian; more were Mongolian. Eastern Europeans came. By 2000 many
Japanese worried that their national sport did not have enough native
recruits, let alone champions. In 2002 the elders reduced to one the number
of foreigners allowed in each stable. But the truth was that, among the
young, sumo was increasingly seen as hidebound and audience-unfriendly.
Akebono himself wanted it to be more exciting and open to anyone. But
when he asked to join the rule-imposing body that governed sumo—just for
a year, perhaps—he was told, firmly, “No”. At that point he retired as a
yokozuna, feeling he had no future there. He had worried sometimes that
Japan was becoming too Americanised; but clearly not as far as that.

In 2001, at his retirement as a yokozuna, he sat in the ring in his robes. He

had no plans to abandon martial arts in general, and was to win several pro
wrestling championships before both knees and heart gave out. But he was
laying down his sumo career. Eleven thousand people watched as, one by
one, 320 friends and colleagues came up to snip a few strands from his
topknot with a pair of gold-plated scissors. He felt sad, much more than he
thought he would. His head felt lighter, but not with the loss of his hair;
more with the loss of a great honour, and the responsibility he had carried to
bring two nations together. ■
This article was downloaded by calibre from
https://www.economist.com/obituary/2024/04/18/akebono-was-the-first-foreign-born-
grand-champion-of-sumo

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