August 9th 2025

The world this week

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The world this week
Politics
Business
The weekly cartoon
The world this week

Politics
August 7th 2025

America escalated its row with India over purchasing Russian oil, which
Donald Trump says is “fuelling the war” in Ukraine. The president will
impose an extra 25% tariff on Indian goods on August 27th as a punishment,
taking the overall levy to 50% on certain Indian imports (he is also using the
threat to press for a trade deal). The Indian government said it was being
unfairly singled out, pointing to the EU’s still-substantial trade with Russia.
The Kremlin said it was up to individual countries to choose their trading
partners.

A Swiss delegation flew to Washington for talks on reducing a 39% tariff on

Swiss exports to America, but returned seemingly empty-handed. The levy
has stunned Switzerland, which sells a lot of watches and chocolate in the
United States.
Mr Trump said he would soon hold meetings with Vladimir Putin and
Volodymyr Zelensky, following a trip to Moscow by America’s special
envoy, Steve Witkoff. Mr Trump has warned Russia that he will impose
swingeing sanctions if it does not take a big step towards ending the war
with Ukraine. A few days earlier Mr Trump ordered nuclear submarines to
be positioned in “appropriate regions” in response to “foolish and
inflammatory statements” made by Dmitry Medvedev, the deputy chairman
of Russia’s Security Council. Mr Medvedev had described Mr Trump’s
ultimatums to Russia as “a step towards war”.

In Lithuania Gintautas Paluckas resigned as prime minister amid a business

scandal (he denies any wrongdoing). He had been in the job for only eight
months. The new prime minister will probably be Inga Ruginiene, who says
she is “guided by left-wing, social democrat values”. Earlier, Lithuania
asked NATO for more air support, after two drones crossed the border from
Belarus last month.

Around 600 former Israeli security officials wrote a letter to Mr Trump

urging him to press the Israeli government to end the war in Gaza. The
signatories included former heads of the Mossad and Shin Bet intelligence
agencies and former generals in the Israel Defence Forces. The letter said
that Israel had accomplished its military goals against Hamas and that a deal
to release the remaining hostages in Gaza could not take place while the
conflict still raged.

The letter came as Binyamin Netanyahu, Israel’s prime minister, prepared to

expand Israel’s offensive to the whole of Gaza, giving it entire control over
the strip for the first time since it officially withdrew in 2005. Meanwhile,
Hamas and Palestinian Islamic Jihad were widely condemned for releasing
videos of emaciated hostages. Hamas denied it was starving its captives.
Chaos continued to surround aid distribution in Gaza, resulting in the deaths
of dozens of people, according to the Hamas-run authorities.

Ghazi Hamad, a senior member of Hamas, said that the announcements by

Britain, Canada and France that they would recognise a Palestinian state
were one of “the fruits” of Hamas’s attack on Israel on October 7th 2023. A
British government spokesman refused to confirm whether Britain’s
recognition of Palestine would go ahead if Hamas remained in power.
The UN warned that people face starvation in el-Fasher, the capital of
Sudan’s Darfur region, a focal point in the country’s civil war. The rebel
Rapid Support Forces surround the city and have blocked aid from reaching
it.

A helicopter crash in Ghana killed eight people, including the minsters for
defence and the environment and the vice-chairman of the governing
National Democratic Congress party.

The Italian government reacted furiously to a ruling by the European Court

of Justice that means it must rethink its policy of sending migrants to
Albania for processing. The ECJ said that EU states could fast-track migrant
returns to safe countries of origin, but that the definition of “safe” must be
subject to judicial review, and all citizens of the country must be “safe”. The
government said the ECJ had further reduced “the already limited scope” of
EU countries’ autonomy.

An agreement between Britain and France came into force formalising the
return of illegal migrants crossing to Britain in small boats. Sir Keir Starmer,
the prime minister, labelled the scheme as “one in, one out”, and said it
would “send a clear message” to those arriving illegally. Some 25,000 small-
boat migrants have arrived since January, by far the highest number ever by
this time of the year. Small-boat migrants account for barely 5% of all
immigration, but their presence has led to protests and violent clashes, often
outside hotels that house them.

More than 100 people were feared to have died in flash floods that swept
through a village in the Indian state of Uttarakhand. Meanwhile, Hong Kong
recorded the most daily rainfall for August since 1884. And new temperature
records were set in Japan, where the thermometer topped 41.80C (107.20F)
in the city of Isesaki, north-east of Tokyo.

Japan won a $6.5bn contract to build navy frigates for Australia, its most
important defence deal since ending a ban on exporting military equipment
in 2014. The warships will be highly automated and able to operate with a
crew of 90, half the number deployed on Australia’s current type of frigate.

Jair Bolsonaro, Brazil’s president from 2019 to 2023, was placed under
house arrest on the order of Alexandre de Moraes, a justice on the Supreme
Court. Mr Moraes is overseeing Mr Bolsonaro’s trial for allegedly trying to
overturn the result of the 2022 election. The arrest worsened Brazil’s
relations with America; the State Department condemned Mr Moraes’s
order.

Meanwhile, tariffs of 50% came into force on many Brazilian exports to the
United States. The effective rate is significantly lower thanks to exceptions
for products like orange juice and aircraft. Most agricultural products,
including coffee, have been hit with the full 50%. Brazil is the world’s
largest coffee producer and the United States its largest market.Mr Trump
has linked the tariffs to what he calls a “witch hunt” against Mr Bolsonaro.

In Colombia Álvaro Uribe, a former conservative president, was sentenced

to 12 years house arrest, after being found guilty of attempting to bribe a
witness. Mr Uribe is to appeal against his conviction.

More than 50 Democratic state legislators in Texas left the state in order to
deny the Republicans a quorum for remapping federal congressional
districts. With a wafer-thin majority in the House of Representatives, the
Republicans think they can gain five seats in Texas by redrawing the
districts’ boundaries.
In response Gavin Newsom, the governor of California, proposed putting a
plan to voters to redraw that state’s congressional boundaries so that
Democrats could pick up at least another five seats. Arnold Schwarzenegger,
who was governor in 2010 when the power to redistrict seats was given to a
non-partisan agency, is ready to return to politics and campaign against the
proposal, according to his spokesman.
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The world this week

Business
August 7th 2025

Donald Trump fired Erika McEntarfer as head of the Bureau of Labour

Statistics, alleging, without evidence, that her department was manipulating
employment figures to make his administration look bad. The BLS’s
monthly jobs survey is watched closely by investors. Its report for July
recorded 73,000 new jobs in the month, but it also revised down the estimate
for May and June by a whopping 258,000, making those months the lowest
for job creation since the start of the pandemic in early 2020. Economists are
still trying to work out why the revision was so large. They also worry that
Ms McEntarfer’s sacking will undermine the credibility of future federal
statistics.

Mr Trump suggested that he was considering either Kevin Hassett or Kevin

Warsh to replace Jerome Powell as chairman of the Federal Reserve. Mr
Hassett is the director of the National Economic Council and Mr Warsh sat
on the Fed’s board from 2006 to 2011. Mr Powell’s term as chairman does
not end until May next year, but a vacancy on the Fed’s board could offer the
president a chance to name his successor.

The Bank of England reduced its benchmark interest rate from 4.25% to to
4%. The central bank said that although consumer prices are rising, with the
12-month inflation rate hitting 3.5% in the second quarter and expected to
reach 4% in September, underlying growth in the economy “remained
subdued”. The decision was close. The monetary committee was forced to
hold two votes to arrive at a 5-4 decision to cut by a quarter of a percentage
point.

China’s exports increased by 7.2% in July, year on year, helped by a truce in

America’s trade war with China. August 12th is the next deadline for a trade
deal.

BP announced an oil-and-gas discovery at the Bumerangue prospect in

Brazilian waters. It is the company’s biggest find in 25 years, forming part
of its strategy to refocus on fossil fuels and away from renewables. BP also
updated investors on its cost-cutting programme and said it would review
the sequence of investments in new projects in order to increase shareholder
value. It is also cutting 6,200 office jobs. Elliott Management, an activist
hedge fund, is pressing BP to do more to increase its stock price.

BP’s headline profit in the second quarter fell by 14%, year on year, though
it was far from being the only big oil company to have had a damp spring.
Chevron and ExxonMobil reported their lowest second-quarter net profits in
four years. Shell and Total Energies have also announced sharp drops in
profit for the period.

After contemplating a move of its primary share listing to New York,

Glencore confirmed that it will keep the stock registered on the London
Stock Exchange (Glencore also trades shares in Johannesburg). It is a boost
for the British bourse, which has seen a number of companies defect
elsewhere of late.

Tesla awarded shares worth around $30bn to Elon Musk, raising his holding
to 16%. Mr Musk has warned he may leave the company or be forced out,
but in a securities filing Tesla said “We are confident that this award will
incentivise Elon to remain.” Mr Musk has been battling a judge’s decision to
strike down a previous pay package worth $56bn. He must retain a senior
executive role for two years to qualify for the new pay out. Meanwhile,
Tesla’s European car sales plummeted again in July, as those of BYD, a low-
cost Chinese competitor, surged.

Palantir reported quarterly sales of $1bn for the first time. The data-analytics
company, best known for its work in the defence industry, said revenue from
the American government had risen by 53%, year on year, amid the Trump
administration’s roll-out of new spending on national security. Palantir’s
share price has surged by 135% this year, outperforming the likes of Meta,
Netflix, Nvidia and Oracle.

OpenAI was reported to be considering a sale of stock by current and former

staff that would give it a notional value of $500bn, a huge increase from the
$300bn it was reckoned to be worth in its previous funding round.

Berkshire Hathaway wrote down its investment in Kraft Heinz for the
second time since buying a large stake in the consumer-goods company in
2015. The charge reduced its post-tax profit by $3.8bn. The write-down
comes amid investors’ skittishness about the looming departure of Warren
Buffett as chief executive. Berkshire’s share price is down by almost 15%
since early May, when it was announced that he would step down.

Jaguar Land Rover is getting a new chief executive. P.B. Balaji, who is head
of finance at Tata Motors, JLR’s parent company, will sit in the driving seat
from November, an appointment that is seen as tightening Tata’s grip on its
subsidiary as it pivots towards making only electric cars. The leadership
change comes as JLR also grapples with a controversial rebranding; an ad
last year featured brightly coloured futuristic fashion models, but no cars.
Responding to JLR’s management change this week, Donald Trump took to
social media to decry the rebranding as woke, and asked, “Who wants to buy
a Jaguar after looking at that disgraceful ad?”
This article was downloaded by zlibrary from https://www.economist.com//the-world-this-week/2025/08/07/business
The world this week

The weekly cartoon

August 7th 2025

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

Donald Trump escalates his war on numbers

America’s economic data are becoming murkier

Ten indicators of what’s going on with America’s economy

The editorial cartoon appears weekly in The Economist. You can see last
week’s here.
This article was downloaded by zlibrary from https://www.economist.com//the-world-this-week/2025/08/07/the-weekly-cartoon
Leaders
Why Israel must hold itself to account
Donald Trump’s awful trade policy will outlast him
Buy now, pay later gets a bad rap. But it could be useful
McKinsey and its peers need a strategic rethink
Will an astronomical anomaly challenge the idea of scientific
revolutions?
Leaders | War in Gaza

Why Israel must hold itself to account

And how it can be made to do so
August 7th 2025

ON MAY 14TH 1948, in its Declaration of Independence, Israel embraced

universal human rights “irrespective of religion, race or sex”. This belief in
individual human dignity is also enshrined in the Geneva Conventions,
submitted to governments that same month. Today the founding vision of
Israel and the laws of war are under attack in Gaza. In its bombed and barren
landscape the fate of both lies in the balance.

From the beginning, the world has struggled to live up to the high ideals of
1948. Israel was born in violence and ever since it has wrestled with the
tension between upholding universal rights and being the home of a people
in a contested land. The cold war was a stand-off between two systems that
too often treated humanitarian law as inconvenient. Even so, the decades
after the fall of the Soviet Union gave rise to aspirations that law-breaking
leaders could be held to account.

Gaza shows how this vision is failing. The laws of war are being broken and
the system for upholding them is not working. However, that failure does
not exonerate Israel from having to answer for its actions in Gaza, including
war crimes and crimes against humanity. Indeed, its foundations as a liberal
democracy demand that it must.

Something has gone very wrong in Gaza. Israel’s just war against the
terrorists who massacred its people on October 7th 2023 has turned into
death and destruction on a biblical scale. Most of Gaza lies in ruins, millions
of civilians are displaced and tens of thousands have been killed. And still,
Israel’s prime minister, Binyamin Netanyahu, cannot stop himself. This
week it emerged that he wants to occupy all of Gaza. But Hamas is no
longer a military threat, so the war no longer has a strategy and fighting on is
no longer just.

Worse, Israel’s government, despite its duties as an occupying power, has

used the distribution of food to civilians as a weapon against Hamas. It
continued even when, as predicted, that led to starvation and the death of
desperate people queuing for survival rations. By corralling civilians in
pockets as it systematically bulldozes their homes, Israel is also practising
ethnic cleansing.

Gaza is not alone. Civilians are being slaughtered and driven from their
homes in the Democratic Republic of Congo, Myanmar, Sudan, Ukraine and
pretty much every other warzone today. Hamas, don’t forget, started the
current Gaza conflict 22 months ago with an orgy of hostage-taking and
crimes against humanity. Instead of seeking peace, it has gorged on the
misery of its own people. It recently described the recognition of a
Palestinian state promised by Britain, Canada and France as the “fruits” of
October 7th.

Yet Hamas’s crimes do not excuse Israel. The Jewish state is a democracy. It
should hold itself to higher standards than terrorists, warlords and dictators.
At the same time as the laws of war are being broken, the system that
enshrines them is failing. The Geneva Conventions sought to spare civilians.
However, they were drawn up for wars between states. Most conflicts today
involve at least one militia, which makes separating fighters from civilians
hard. Under Geneva’s code, the high ratio of civilian to military casualties in
Gaza is not proof of crimes. Israel has loosened its rules of engagement, but
the strip is crowded; Hamas knowingly shelters among civilians. In such
circumstances many civilians die, as America once learned in the Iraqi cities
of Mosul and Fallujah.

The International Criminal Court is becoming activist, issuing warrants for

the arrest of Mr Netanyahu and his then defence minister before the Israeli
system had time to act. The courts have also become tools in ongoing
“lawfare”. South Africa accused Israel of genocide at the International Court
of Justice just 12 weeks after October 7th, allowing activists to bolster their
campaigns demanding boycotts of Israel by the West long before a judgment
is reached.

Activists dream that the courts will impose their notion of virtue on a world
that does not share their values. They are doomed to fail. The big powers,
including America and China, do not recognise the courts. International law
takes a long time to issue final judgments. It has limited powers of
enforcement. A case brought today may one day be a deterrent, but it is a
poor tool for stopping war crimes as they unfold.

That sounds like a counsel of despair, but it is not. And the reason goes back
to 1948. The laws of war were not just a cudgel with which to beat
militarists and Nazis. They were also the latest example in a long history of
some belligerents imposing restraints on themselves. The question therefore
is whether Israel, founded as a democratic, universalist state, still cleaves to
that tradition.

In the past Israel has managed to investigate wars and hold some political
and military leaders responsible. It is comparable to other countries at
investigating atrocities by soldiers, albeit slowly and with a focus on the
lower ranks—as with a lethal strike on the staff from the World Central
Kitchen in 2024. However, as we report, higher-level accountability is
lacking. The Supreme Court and the attorney-general are caught up in a
domestic power struggle with Mr Netanyahu. When it comes to criticising
the government over Gaza they have been missing in action.

It is not too late. The urgent test is whether Israel floods Gaza with food and
medicine in order to stop the incipient famine. It should also agree on a
ceasefire, which will enable it to recover its hostages. The second, longer-
term test will be whether it sets up a truly independent commission of
inquiry after the war ends, probably under a new prime minister.

The outside world and especially the United States have a role in making
this happen. No American president in recent times has been less likely to
respect international law than Donald Trump. But peace in Gaza would help
him stabilise a volatile region and reset relations between Israel and Saudi
Arabia. America has repeatedly intervened to stop Israel’s wars in the past.
This week roughly 600 former Israeli security officials urged Mr Trump to
act again today.

Those officials understand that Israel has an interest in the law, too. Some
Israelis calculate that they can do what they like now and patch up relations
with the West later. But views of Israel are bleak in Europe and are changing
in America among Democrats and the MAGA right. If Israel becomes an
ethno-nationalist state that annexes the West Bank and crushes its people,
the violence will not cease.

You might argue that, after suffering the worst attack in its history, Israel
will have no appetite for prosecuting its own leaders. However, the
penetrating insight which emerges from the Geneva Conventions is that
countries which break the laws of war without shame or recourse do not just
harm their victims: they also harm themselves.

Israel has an existential interest in seeing justice done. If instead it glorifies

those who orchestrate famine and ethnic cleansing in Gaza, its politics and
society will lurch towards demagoguery and authoritarianism. The young,
idealistic country that was born in May 1948 will have been eclipsed. ■

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account
Leaders | The new imperial preference

Donald Trump’s awful trade policy will outlast

him
He thinks America is winning. It is not
August 7th 2025

With every passing day, America’s new trading order comes into sharper
relief. In place of rules, stability and low tariffs is a system of imperial
preference. Duties are not just higher, they are set by presidential whim.
Canada and India have irritated Donald Trump, and so they could face tariffs
of 35-50%. To ward off threats the eu, Japan and South Korea have all
hurriedly made deals with America. Because Mr Trump regards deficits,
bizarrely, as theft, he has imposed “reciprocal” tariffs ranging from 10% to
41% on tens of other trading partners, which went into effect on August 7th.

A seductive idea is settling in that because Mr Trump is calling the shots,

America is winning. The world has not descended into all-out trade war;
only a few countries, including China, have retaliated, while most others
have caved, accepting higher duties, opening up their own markets and
promising to invest vast sums in America. Even financial markets seem
acquiescent; although they took a nasty dive after the president unveiled his
“Liberation Day” levies in April, this time they have taken the duties in their
stride. All the while, tariff revenues are rolling in. This thinking is deeply
misguided, however. Mr Trump has started something from which America
will lose, not win.

Consider first the idea that high tariffs punish not America, but its trading
partners. According to the Yale Budget Lab, America’s effective tariff rate
has risen to 18%, nearly eight times higher than it was in January and
towards levels last seen in the Depression. The way maga paints it, this is a
triumph, because America’s trading partners are eating higher tariffs, while
US Customs rakes in nigh on $30bn a month.

This a fundamental misunderstanding of trade. When Mr Trump raises

tariffs he is hurting his own compatriots by depriving them of choice at low
prices. Years of experience show that tariffs do not harm the sellers of goods
as much as they harm the buyers. Even though foreign suppliers are
lowering their prices more steeply than after Mr Trump’s first-term duties,
analysts at Goldman Sachs reckon that fully four-fifths of the tariffs have so
far been borne by American consumers and firms. Just ask Ford or GM: the
carmakers reckon they paid $800m and $1.1bn in tariff costs, respectively, in
the second quarter of this year alone.

What of the muted market reaction? The S&P 500 remains around 10%
higher than it was on Liberation Day; the dollar, though down, has
strengthened in recent weeks. But markets are being buoyed by America’s
extraordinary artificial-intelligence boom, which is pushing up expected
earnings for its biggest tech firms. Investors may hope, too, that companies
will divert their supply chains so as to reduce tariff costs. Details of the trade
deals remain fuzzy. And an uncomfortable dynamic may be at play: markets
might expect the president to chicken out as the pain of tariffs becomes
clear, but the lack of reaction might be emboldening him to press ahead.

America will pay the price. Its long expansion is already under strain: in the
first half of 2025 growth underwhelmed and inflation was disappointingly
high. Lately, job creation is slowing, and a survey of bosses suggests
service-sector activity may be close to stalling. But the full toll of tariffs will
be felt over the long term. Mr Trump is discarding a predictable multilateral
system that applied the same tariff rate on most products, regardless of their
origin, for a bilateral system where rates vary depending on where goods
come from, and are subject to ceaseless bargaining. The president will
consider exemptions when he is next flattered, and threaten duties when he
is next displeased.

Whereas once American shoppers were spoilt for choice, as domestic and
foreign producers competed to sell to them, now firms that succeed will do
so not only because they are the most innovative, but also because they are
cleverest at playing the system. Fortunes will be spent on lobbying.
Companies will face needless uncertainty. Shoppers will lose out on
innovation and choice. But because the counterfactual world where trade
flowed unchecked cannot be observed, voters may not realise what is hurting
them.

That is one reason why the Trumpian system will be hard to dislodge. If
future presidents want to cut tariffs, they will be met by furious lobbying
from American firms that got used to sheltering behind them and have
thereby become globally uncompetitive. Few consumers will clamour for
change, if they do not know how much more choice they could have
enjoyed. Lawmakers, too, might be reluctant to lower trade barriers if it
means giving up tax revenues today for broader prosperity tomorrow. The
new system is not just harmful. It could last long after Mr Trump retires to
play more golf. ■

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brings together the best of our leaders, columns, guest essays and reader
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will-outlast-him
Leaders | Credit where it’s due

Buy now, pay later gets a bad rap. But it could be

useful
Provided lenders open up
August 7th 2025

New forms of credit are often met with suspicion. A century ago retailers
selling furniture and cars realised they could reach more customers if they
accepted payments in instalments. To detractors this was a sign of moral
decay: “Beware of the slimy coils of the instalment evil,” blared one advert
in the Houston Chronicle in 1926. When in 1958 Bank of America started
posting credit cards to customers, it did not take long for opponents to worry
about the consequences.

Today the reproachful frowns are aimed at “buy now, pay later” (bnpl). This
practice, which lets people pay for things they buy online in instalments, is
booming; over $300bn in payments were financed in such a manner last
year. Borrowers tend to be younger and less creditworthy than average,
which is fuelling concern. Many critics—including Tucker Carlson, a
MAGA pundit—fret that the industry preys on the young. Analysts worry
that the hidden debt makes it hard to monitor credit risks. Yet bnpl could be
a valuable innovation.

New financial products often cause worry because they draw in customers
with little experience of credit. Some will undoubtedly be fleeced by
charlatans who mis-sell their services. But reaching new customers is
generally a good thing. Modern finance is not perfect; the poor and the
young are underserved, partly because they often have no credit history. It is
only rational for upstarts to fill a gap in the market. If they provide a useful
service, they can grow rapidly. After an early spate of fraud, Bank of
America’s credit-card business went on to transform payments. Today it is
better known by the name it took when it was spun out in the 1970s: Visa.

For some Americans, credit cards can be a trap. Those with low credit scores
are more likely to hold revolving balances, carrying over debt rather than
paying it off each month. Their heavy interest bills subsidise those with
better credit scores, who amass points and other benefits.

bnpl is different. Its providers earn most of their money from merchant fees,
not debt interest. bnpl borrowers are no more likely to get into debt
difficulties than cardholders. Despite the lower credit scores of typical users,
bnpl loans have a default rate of around 2%—similar to the share of credit-
card payments that were more than 120 days delinquent. bnpl purchases are
low-value and do not involve revolving balances, which probably helps.

Critics are right, though, to worry that bnpl loans remain hidden from
regulators and other lenders. Providers do not supply comprehensive data to
credit-reporting firms on their users’ borrowing and repayments. Although
they benefit from checking their customers’ credit, they deny other lenders
the opportunity to do the same. That raises the possibility that banks will
lend to people with hefty bnpl debts, not realising they are riskier than they
appear.

Some providers say they do not trust credit bureaus to understand this new
form of finance; others may see opacity as an advantage, because it attracts
borrowers who wish to keep their debts hidden. Despite such concerns,
providers should be required to report their data, as Affirm, one of
America’s largest bnpl lenders, has recently begun to do. Many providers
aspire to reach further into mainstream finance. To achieve those dreams,
they must open up. ■

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brings together the best of our leaders, columns, guest essays and reader
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it-could-be-useful
Leaders | Ripe for transformation

McKinsey and its peers need a strategic rethink

AI could make consultancy more effective—or redundant
August 7th 2025

Since the birth of management consultancy at the turn of the 20th century,
people have questioned its usefulness. Bosses of firms that hire consultants
are paid lavishly to define a vision and corral their teams into achieving it.
Why would they ask a bunch of jet-setting know-it-alls who have never run
anything but a spreadsheet calculation how to do their job?

Over the decades, however, consultants have proved their worth, and not just
because their clients are lazy, incompetent or scared of making difficult
decisions. In 1990 McKinsey, bcg and Bain, the three elite strategy advisers,
had a few thousand staff between them. Today they employ around 90,000.
Over the past decade their combined revenue has more than doubled. And
they do seem to offer useful advice. Recent research finds that companies
which hire strategy consultants experience a significant and sustained
improvement in productivity relative to those that don’t. Now, though, the
industry is heading for disruption. If consultants are to stay useful, they need
to rethink what they do.

The value of consultancies lies chiefly in their experience of similar

problems at other clients. Situations a chief executive might encounter only
once in a career, such as a big merger or relocating a factory, are rarely
unique. Some critics argue that consultants who swan in and out of clients
tend to offer elegant but impractical recommendations. But that view is out
of date. In recent years the strategy trio have moved deeper into helping
clients implement their advice: for example, by helping them digitise their
businesses. And they are increasingly tying their fees to the success of their
projects, thereby aligning their interests with those of their clients.

For the bright young things these firms hire, the experience seems to pay off.
Many of the world’s biggest businesses, from Alphabet to Coca-Cola, are
run by alumni of the elite three consultancies. And our analysis suggests that
these companies outperform their peers.

As the age of artificial intelligence (AI) beckons, however, the corporate

world’s consiglieri face an uncertain future. Plenty of senior partners quietly
scoff at the idea that the technology will be anything but a blessing for an
industry that has mastered the art of jumping on every new management
craze. Already companies struggling to make use of AI have turned to the
strategy advisers for help. For their part, the consultancies have built bots
trained on their intellectual property that can perform much of the grunt
work behind their projects.

But what happens when AI models also start producing the kinds of
alliterative three-part frameworks those senior partners so proudly present?
In recent years the firms’ core business of strategic advice has grown
robustly alongside the push into implementation; soon it may come under
strain. Meanwhile, fast-growing technology providers such as Palantir are
also helping clients deploy AI systems, which could force the traditional
consultants to retreat.
To remain relevant, the industry will have to adapt. Generic ideas recycled
from client to client will become of little use. To compete with ever smarter
AI models, the approach of training up generalist advisers will have to give
way to earlier and deeper specialisation, including in the art of managing
change. That, combined with the need for fewer minions to do a senior
partner’s bidding, will require the firms to rethink whom they hire and how
they nurture them.

To a degree, these changes are already under way at the elite trio. To help
clients implement their ideas, they have hired thousands of specialists such
as coders. BCG’s success in using these experts is at least part of the reason
why it is on track to overtake McKinsey as the largest of the three firms.

To succeed in the decades ahead, however, a more extensive overhaul will

be needed. As the firms expend time and energy reinventing themselves,
they will have to accept that there are some problems, particularly those
relating to technology, that others are better placed to help their clients solve.

All this will require humility, something that does not come easily to many
in the industry. Consultants often speak of the need for transformation. Now
they will have to live it. ■

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strategic-rethink
Leaders | New ways of looking

Will an astronomical anomaly challenge the idea of

scientific revolutions?
Not everything is a paradigm shift
August 7th 2025

Before the revolution triggered by Nicolaus Copernicus, a 16th-century

cleric, the Earth was the unmoving centre of the cosmos. Afterwards, it was
one of a family of planets swinging through space. Before the work of
Antoine Lavoisier, an 18th-century nobleman, chemists had no notion of
“oxygen”, “carbon” and the like; afterwards they could not understand the
contents of their alembics without them.

Such examples are at the heart of the idea, put forward in the 1960s by
Thomas Kuhn, of the paradigm shift. Such shifts, he argued, did not just
involve a new theory explaining the world better than an old one; they
required a change in the sort of entities the world was thought to be made up
of. In a way that seems almost self-exemplifying, the idea provided a new
way of looking at science itself: not as one thing, but two. In the “normal”
phase scientists applied their physical and conceptual tools to problems the
scope of which was pretty well understood; in revolutionary phases,
paradigms shifted.

Normal didn’t mean dull or unimportant. When, in the 1980s, American

astronomers made the case for the Hubble Space Telescope, then the
costliest scientific instrument in history, none of its goals mattered more than
what seemed a perfect example of normal science: nailing down the value of
the constant (also named after Edwin Hubble, an astronomer) which says
how fast the universe is expanding.

The Hubble did this very well. The difficulty, as our Science section reports,
is that since its launch it has become possible to estimate the Hubble
constant on the basis of background radiation from all over the sky, rather
than distances to individual objects. And these new estimates are
significantly lower. The seemingly unbridgeable divide between the
approaches has become known as the Hubble tension.

To those who know their Kuhn this looks like the sort of anomaly that might
precede some new paradigm shift. The possibility is tantalising. The
conceptual usefulness of paradigm shifts has been much debated, as indeed
has their existence. The concept is horribly overused. (A new paradigm for
vegan cosmetics!) Yet the notion of a fresh worldview remains dramatic and
beguiling, and the romance only increases when it applies on a cosmic, but
reassuringly inconsequential scale. (A paradigm shift in financial markets
might be far more practically important.)

The problem is that, as Kuhn noted, you can judge these things only in
retrospect. The sort of anomaly that is recast and solved by a paradigm shift
is not in principle distinguishable from a “normal” problem which has not
yet been solved.

The paradigms in which normal science is done are, like the fabric of the
universe, somewhat stretchy; new ideas, sometimes quite big ones, can be
incorporated without wholesale change. And some suspect that science’s
capacity to adapt itself in this way has increased since the days of Kuhn’s
examples. It is far more institutionalised and regimented today, and that may
provide a stability, even a rigidity, to its worldviews.

This need not be a bad thing. Paradigm shifts are not necessary for
technological improvement. But it is hard not to think that, if their age has
gone, then so has some of science’s thrill—and hard not to want the Hubble
tension to demonstrate that paradigms can still be pulled apart. ■

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challenge-the-idea-of-scientific-revolutions
Letters
The economic aspect of cancer prevention
Letters | A selection of correspondence

The economic aspect of cancer prevention

Also this week, AI and the web, emissions and cars in Europe, William F.
Buckley, the Big Mac index, underpants
August 7th 2025

Letters are welcome via email to letters@economist.comFind out

more about how we process your letter

“Winning the war on cancer” (July 19th) was a welcome and thoughtful
overview, highlighting the tangible benefits of cancer prevention and even
daring to address the frontier science of personalised cancer vaccines. Yet
the economic aspect felt conspicuously absent. Cancer care today faces not
only molecular complexity, but mounting financial entropy. Newer drugs
come at a staggering cost. For instance, pembrolizumab, for early triple-
negative breast cancer, can run well into a six-figure sum for each patient.
On the development side, launching a clinical trial requires deep investment.
Biomarker refinement, manufacturing, pharmacokinetics, regulatory
scaffolding, co-ordination of contract research organisations; the list is as
long as it is expensive.

Meanwhile, regulators such as the Food and Drug Administration and the
European Medicines Agency are increasingly reluctant to approve therapies
that do not demonstrate clear survival benefits. Cheaper surrogate endpoints,
such as the reduction in tumour size, which were once acceptable, are now
viewed with growing scepticism. The scientific bar is rising, and so is the
cost of reaching it.

The cost curve is bending in uncomfortable directions. If progress is to

remain sustainable, economic models must evolve to reward true clinical
value, de-risk early development and align regulatory standards with
measurable outcomes. Biology may drive discovery, but without economic
architecture to support it, even the most promising therapies may never leave
the bench.

Jesús Fuentes AntrasMedical oncologistNEXT OncologyMadrid

Cancer is not only a biomedical challenge, it is a human one. Our

forthcoming Lancet oncology commission finds that although cancer
biology is increasingly well-understood, the lived experience of people with
cancer remains fraught. Around the world patients face late diagnoses or
misdiagnoses, fragmented care, emotional neglect and financial catastrophe.
Psychosocial and physical distress are common and often profound but
routinely overlooked in cancer care.

A review in 2023 found that fewer than half of national cancer-control plans
even mentioned psychosocial services, let alone provide them. Palliative and
end-of-life care remains unavailable to most people in need of it across
global contexts. Even in high-income settings, people with cancer say they
feel unseen in systems that tend to be optimised for throughput rather than
for holistic care.

We are not arguing against scientific innovation. But framing victory in

cancer as a technical accomplishment risks side-lining the fundamental
question of what kind of care people actually need. Winning the war on
cancer will remain incomplete unless health systems invest in the human
dimensions of cancer care and in the relief of suffering and support for the
well-being of people with cancer and their families.

Dr Amalya FeldmanPostdoctoral fellow

Dr Gary RodinProfessor of psychiatryPrincess Margaret Cancer

CentreUniversity of Toronto

Dr Richard SullivanDirectorInstitute of Cancer PolicyKing’s College

London

Can anything save the web, you ask, which is being killed by artificial
intelligence (“World wide worries”, July 19th). You highlighted the
disruptive effect of large language model chatbots on search engines. But the
problem runs deeper. It’s not just Google that faces an existential challenge.
It’s the entire commercial ecosystem that has depended on search-driven
traffic: retailers, publishers, review platforms and countless others.

When AIs like ChatGPT or Gemini summarise answers rather than link to
sources, the click-throughs, ad revenues and potential sales decline.
Companies may respond by blocking AI crawlers or placing more content
behind paywalls. But that risks creating a new distortion: AI-generated
answers will then be drawn only from freely available, and often lower-
value, content.

One possible solution is to embed copyright metadata in online content and

develop an automated micropayment system. If an AI uses a snippet, the
originator gets paid automatically. Until then, we risk losing not just ad
dollars, but also the incentive to produce the quality information these
models depend on.

Simon RodanProfessor of business strategy Lucal College of BusinessSan

Jose State University

For years the internet has been dominated by content driven by search
engines and filled with clickbait titles, repetitive keywords and affiliate links
leading to low-quality content and online surveillance that tracks users’
behaviour. AI equipped with retrieval augmented generation removes the
need to wade through recycled content, fake news and biased reviews. Nor is
there any evidence that a decrease in referrals from traditional search
engines translates to a drop in online purchases. Some studies suggest users
of AI search are more likely to make online purchases and take less time to
complete the process.

If some business models are struggling, it’s not because the web is dying.
It’s because AI is bypassing search-engine optimisations that have bogged
down the web and frustrated users for decades.

Jo LevyChairAlliance for Responsible Data CollectionPalo Alto, California

Is less web content such a bad thing? Mr Williams, my high-school physics

teacher, taught us critical thinking. If a million people say a stupid thing, it’s
still a stupid thing.

Steve TarrSammamish, Washington

Ola Källenius, the chief executive of Mercedes-Benz, argued that in order to

succeed in the decarbonisation race, Europe should open its clean-car
standards to all technologies and move away from its carbon-based rules (By
Invitation, July 15th). There have been previous efforts to try to get Europe
to adopt this “life-cycle methodology’” before. The European Commission
has investigated integrating life-cycle emissions into its car regulations on
several occasions, and rejected it as unworkable. The problem is that getting
carmakers to report on, let alone be accountable for, the entire process from
energy production to mining, to who drives a car and how they do so, is a
bureaucratic nightmare.

Instead of today’s simple performance-based rule, which is bringing dozens

of electric-vehicle models to Europe, Mr Källenius’s confusing scheme
would take ages to agree to and cost Europe its final chance to catch up with
China.

Europe shouldn’t waste any more time rewriting the rules. It is worth noting
that America and China do not base their emission rules on a life-cycle
method. So why are European car manufacturers dredging up discredited
ideas now?

Julia PoliscanovaSenior directorVehicles and e-mobility supply

chainsTransport & EnvironmentBrussels

Lexington asserted that William F. Buckley’s career augured Donald

Trump’s rise in Republican politics (July 12th). There is no comparison.
Buckley brought American conservatism into the national conversation on
the pages of its newspapers, magazines, books and broadcasts for decades.
He actively engaged with the establishment while persuading the public that
there was an alternative to liberalism. To say that he and Mr Trump are both
“fierce culture warriors” is akin to saying they are both TV show hosts. The
policies and traits that define Mr Trump—patronage, corrosive dialogue and
personal loyalty over constitutional process—are a rejection of Buckley’s
methods and objectives, not their evolution.

ALEXANDER FRANZGrosse Pointe Farms, Michigan

Your update of the Big Mac index contained the sentence, “None of their
currencies has become more than marginally less undervalued since
January” (“Ground down”, July 19th). That really got my beef up. I didn’t
relish unpicking this tortured syntax so I flipped the page and moved on.
Adrian FogartyLondon

Have you ever considered adopting the true fundamental meaning of PPP in
the Big Mac index? Purchasing-patty parity.

Steffen HoernigProfessor of economicsNova School of Business and

EconomicsCarcavelos, Portugal

“The age of the celebrity brand” (July 5th) reminded me of the story of
Calvin Klein’s daughter, Marci, being acutely embarrassed when she was a
young woman at seeing her father’s name emblazoned on her boyfriend’s
briefs. Talk about a buzzkill.

Thellen LevySan Francisco

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prevention
By Invitation
Ekrem Imamoglu on how Turkey can have peace at home and respect
abroad
By Invitation | Turkey’s future

Ekrem Imamoglu on how Turkey can have peace

at home and respect abroad
Not through democratic backsliding, writes the imprisoned opposition
candidate for president
August 7th 2025

IN JULY SOME 30 members of the Kurdistan Workers’ Party (PKK), an

armed group designated as a terrorist organisation by the European Union
and America, laid down their weapons in a symbolic ceremony in northern
Iraq. The disarmament under way is welcome and marks a historic
opportunity to break a cycle of violence that has long burdened the country’s
political system, slowed economic progress and deepened divisions. It also
presents a golden opportunity for Turkey to reframe its regional role.

For decades the Kurdish conflict, which began with a separatist insurgency
by the PKK, has been an obstacle to Turkey’s greater democratisation. There
is irony in the fact that the disarmament process is unfolding even as
authoritarianism under President Recep Tayyip Erdogan is growing, and the
political opposition is under great pressure. Earlier this year several mayors
belonging to the Republican People’s Party (CHP)—myself included—were
jailed on politically motivated charges. That sent a chilling message to the
opposition and further narrowed the space in Turkey for democratic
engagement.

A sense of growing repression has a bearing on the peace process. It

unfolded without the kind of inclusive political framework needed to deal
with the Kurdish population’s long-standing political, cultural and economic
grievances. Nor has there been a real strategy for engaging with PKK-linked
groups operating across Iraq, Syria and Iran—without which key regional
dimensions of the conflict remain unaddressed. The government should have
begun an open and inclusive national dialogue. Instead, it opted for closed-
door negotiations. That squandered a chance to build legitimacy and trust.

For the CHP, which has chosen me for its candidate for president, the
Kurdish issue is not solely a matter of national security but also of
democracy, justice, development and institutional reform. We advocate a
long-term strategy to end violence, promote development and redress deep-
seated inequalities. We want equal citizenship, democratic participation,
accountability and an inclusive future in the republic for all Turkish
nationals.

From the moment the PKK declared its intention to disband, we put forward
two key proposals. First, we called for the immediate establishment of a
parliamentary commission to ensure that the peace process is guided by
legality, civic participation and institutional oversight. A commission has
now been set up, convening for the first time on August 5th. It is a step in
the right direction. Many fear the government’s narrow security agenda will
dominate deliberations; we are nonetheless taking part to ensure that broader
issues of democratisation and social cohesion are put squarely on the
agenda. We need a transparent process, not a body that rubber-stamps
decisions by Mr Erdogan’s coalition.

Second, disarmament must go hand in hand with a return to democratic

norms. Lasting peace cannot happen in a system marked by partisanship and
democratic backsliding. The institutions that should confer legitimacy,
parliament and civil society, have long been sidelined, and the judiciary has
been politicised. Yet peace for our people requires legitimacy, not
repression.

My own experience illustrates Turkey’s contradictions. In March, serving as

mayor of Istanbul and about to be endorsed as my party’s presidential
candidate, I was jailed on politically motivated charges, among them
corruption and aiding terrorists. This latter accusation was based on claims
that city-council candidates on our electoral list had links to a platform
allegedly affiliated with the PKK, despite their having been vetted and
approved by the Supreme Election Council before being elected.

Meanwhile, a government claiming to seek peace has systematically targeted

elected Kurdish representatives. Dozens of mayors from the Peoples’
Democratic Party (HDP, now the DEM Party), have been dismissed and
replaced with state-appointed figures. Rulings from the European Court of
Human Rights, including an order to release two former HDP co-chairs,
Figen Yuksekdag and Selahattin Demirtas, remain unheeded.

Democracy’s erosion under Mr Erdogan is not just a domestic concern. It

undermines Turkey’s full potential abroad, at a moment when the world
needs reliable partners in areas like security, energy and migration. Turkish
foreign policy, reactive and driven by internal political calculations, lacks
consistency. Dealings with neighbours swing between confrontation and
rapprochement.

A shifting regional landscape, not least with the collapse of the Assad
regime in Syria, offers a chance for real engagement in support of peace,
reconciliation and reconstruction in the Middle East. Turkey can do much—
if it pursues a foreign policy rooted in justice and inclusivity for all
communities. We can also work more with the EU in the Middle East, but
only with a foreign policy grounded, at home, in democratic legitimacy and
the rule of law. Upholding fundamental rights could also revive Turkey’s
stalled EU accession process. Turkey’s geographic position, historical
richness and democratic legacy equip it as a force for stability and progress.
But a policy abroad shaped by Mr Erdogan’s personal ambition and
polarisation of politics at home frustrates that.
Turkey stands at an inflection point. Its domestic governance will more and
more shape its relevance abroad. To be a responsible regional power, Turkey
must restore the integrity of its democratic institutions. Only then can it act
as a trusted partner in an increasingly unstable world. As the CHP’s
candidate for president, I am committed to leading my country’s democratic
renewal. A new government anchored in legitimacy and the rule of law will
responsibly engage with the world with clarity and resolve. ■

Ekrem Imamoglu is the imprisoned mayor of Istanbul and presidential

candidate for the opposition Republican People’s Party .
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can-have-peace-at-home-and-respect-abroad
Briefing
Israel on trial: can the country police its own war crimes?
Briefing | Justice in Gaza

Israel on trial: can the country police its own war

crimes?
Israel’s legal system claims to be fiercely independent. On the Gaza war it
is largely silent
August 7th 2025

Gali Baharav-Miara, Israel’s attorney-general, has been duelling with

Binyamin Netanyahu, the prime minister, since Mr Netanyahu’s latest stint
in office began in 2022. Appointed to a six-year term by the previous
government, she loudly and publicly denounced the current one’s plans to
overhaul the judiciary in 2023. The cabinet set in motion plans for her
dismissal, and on August 4th formally voted to sack her (the decision will be
challenged in the Supreme Court). She is, in short, neither docile nor
reticent.
Yet when the cabinet voted in July to force all 2m people in the Gaza Strip
into a tiny “humanitarian city”, indefinitely and perhaps permanently—a
plan many Israelis and foreigners alike considered a brazen war crime, and
which since seems to have been set aside—she uttered not a word of
misgiving, at least publicly. She has not formally investigated, nor even
chided (beyond a vague warning), any of the members of the cabinet who
have called for all Palestinians to be removed from Gaza or to be starved
into submission, even though both those steps would be illegal under Israeli
law. Indeed, although it is her job to advise the government of the legality of
its policies, she is not known to have taken issue with anything it has done in
its 22-month war.

Israel has been accused of all manner of misdeeds in Gaza. They concern
every level of its war machine, from the actions of individual soldiers to
high-level directives about how the war should be prosecuted, issued by the
cabinet. Israeli government spokesmen deny most of the accusations. To the
extent that they admit wrongdoing, they argue that Israel’s internal
procedures can be relied on to rectify the problems and punish those
responsible. Yet Ms Baharav-Miara’s silence suggests that the system is not
working as intended—and there are many other signs of dysfunction lower
down the chain of command.
After militants of Hamas and other Palestinian Islamist groups launched a
surprise attack on Israel in October 2023, massacring nearly 1,200 people
and taking 250 hostages, they retreated to the Gaza Strip. They hid in a
warren of tunnels under Gaza’s densely populated cities and refugee camps.
Any large-scale Israeli retaliation was bound to present moral and legal
quandaries, given Hamas’s deliberate intermingling of combatants and
innocent bystanders. The likelihood of civilian casualties was high. “There’s
no way this war could look good,” says an Israeli general.

Indeed, it has not. By July 29th at least 60,000 Palestinians had been killed
in the war, according to a tally kept by the Gaza health ministry, which says
it is unable to count everyone, with thousands still buried under rubble. A
study by researchers at Royal Holloway, University of London and others
estimated that by January 2025 another 4,500 to 12,500 had died from
indirect consequences of the war, such as lack of medical care. This was
before supplies of food were largely cut off. Named lists of the dead kept by
the ministry of health suggest about half are women and children. Even the
most optimistic Israeli intelligence assessment speaks of only around 20,000
being members of Hamas or other militant groups. Satellite data suggest
roughly 60% of buildings in Gaza have been damaged or destroyed.

The war crimes of which Israel has been accused fall into three broad
categories. The first involves actions allegedly carried out by individual
soldiers and commanders on the battlefield, such as the shooting of civilians,
the destruction of civilian buildings and infrastructure without military
authorisation, and the mistreatment of prisoners. In most of these cases the
perpetrators would have been acting against orders. A second category
concerns the operations themselves, in particular air strikes and artillery
barrages which hit populated areas, targeting civilians or
“disproportionately” harming them if aimed at military targets.

Last come the decisions made by Mr Netanyahu’s cabinet. Although

ministers do not usually dictate military tactics or targets, the cabinet has
determined Israel’s humanitarian policy in Gaza. It has often prevented
supplies of food, medicine and fuel from entering the strip, sometimes for
long periods.
These last policies were the main reason the International Criminal Court
(ICC) issued arrest warrants last year for Mr Netanyahu and his former
defence minister, Yoav Gallant, for the “war crime of starvation as a method
of warfare; and the crimes against humanity of murder, persecution, and
other inhumane acts”. The same humanitarian horrors, and especially the
statements made by Israeli politicians in favour of starving and destroying
Gaza, were at the centre, too, of a South African complaint to the
International Court of Justice (ICJ) at the end of 2023 that Israel was
committing genocide.

Although Mr Netanyahu has fulminated against these international

proceedings as “motivated by antisemitic hatred of Israel”, the Israeli
government’s lawyers have presented a more technical defence: that under
international law countries are allowed to investigate and prosecute war
crimes in their own legal systems. Under this “complementarity principle”,
the ICC is a court of last resort which should act only if sovereign states
have failed to do so. In effect, Israel is insisting that it can hold itself to
account. Can it?

Israel’s system for policing possible war crimes has several tiers. The IDF
has a Fact-Finding and Assessment Mechanism (FFAM), a team of
experienced commanders with the authority to examine what the IDF calls
“exceptional incidents” or “deviations” on the battlefield. Its role is to make
initial assessments of cases, both for operational needs, such as clarification
of orders and procedures, and as a prelude to criminal investigation.

Since the war began, the FFAM team has been beefed up and now includes,
according to the IDF, “dozens” of investigators, led by a former major
general and six former brigadier generals, dealing with “hundreds” of cases.
It is supposed to be outside the chain of command, with access to all military
records and data, and answerable only to the IDF’s chief of staff and the
office of the Military Advocate-General (MAG), which is responsible for
implementing the rule of law within the IDF.

“The mechanism works to a degree,” says an IDF officer who served in

Gaza and was involved in one of its investigations into the killing of
civilians. “Officers came to our unit, interviewed officers and had all the
information. We didn’t hear from them again and this was eight months ago.
Many other cases didn’t get investigated because there were no complaints.”

Yesh Din, an Israeli human-rights organisation, has called it the

“whitewashing mechanism”, pointing out that only 7% of the FFAM’s
complaints to the IDF in the nine years before the war led to criminal
investigations against soldiers. Incidents that took place in Israel’s campaign
in Gaza in 2014 were still being investigated nine years later. “The
mechanism is part of the IDF’s own operational debriefing system,” says
Michael Sfard, an Israeli human-rights lawyer. “Soldiers and commanders
talking to the investigators can’t be prosecuted on the basis of what they say
and the investigations drag on for years. It’s not an effective procedure.”

IDF officers insist that confidential testimony, allowing soldiers to talk

freely, is essential for fact-finding and that investigations may be slow but
they get done. A former chief of the Australian defence force, Mark Binskin,
dispatched by the Australian government to look into the death of an
Australian aid-worker killed in an Israeli drone-strike in Gaza, credited the
FFAM’s procedures as “timely, appropriate and, with some exceptions,
sufficient”. But the hundreds of cases that do not attract international
attention are a different matter. One general admits that it will take many
years to investigate all the allegations, once the war in Gaza is over.

In cases where evidence is deemed sufficient, the military police carry out
criminal investigations from scratch. Those that are indicted are then heard
before military courts. But, unlike the combat veterans of the FFAM, the
military-police investigators whose job it is to build the cases are unpopular
within the ranks and suffer intimidation. In July 2024, when they arrived at
the Sde Teiman detention centre to question and arrest suspects over the
sexual assault of a prisoner, investigators were met with violence from the
soldiers and had to wear masks to conceal their identity.

“Ultimately, in a war of this magnitude, the FFAM and [the military police]
are overwhelmed,” argues one senior military judge. “There are hundreds of
allegations and by the time they make it through the pipeline, there is no
crime scene, the weapons have been used many times, and the evidentiary
basis for a prosecution, much less a conviction, has been chewed over. That
doesn’t mean that allegations are being ignored, but it does mean we’ve
failed when it comes to establishing norms through indictments.”

The IDF has not released up-to-date numbers of investigations or cases. In

the first year of the war around 15 soldiers were indicted for conduct on the
battlefield, mostly for looting and theft from the army. Five of the suspected
assailants from the detention centre were indicted in February and another
was convicted and sentenced to seven months in prison for treating inmates
brutally. Most of those indicted are low-ranking soldiers. One brigadier
general who ordered the destruction of a university building without
authorisation was investigated, received a minor reprimand and was
appointed commander of the Gaza Division. Another division commander
who ordered the destruction of Gaza’s only cancer hospital without
authorisation remains in his post.

Senior officers in the MAG’s unit say they have identified hundreds of
incidents that need investigation and have established a set of priorities to
deal with them. But amid an ongoing war, which stretches beyond Gaza, it
will take years to complete the inquiries, if they are completed at all.

“Internal investigations in any organisation are a difficult process,” says one

former military lawyer. What is more, “You can’t detach the weakness of the
IDF’s internal investigations from the broader context of an Israeli army and
society which were traumatised and humiliated on October 7th, where the
senior generals had lost credibility and were under fire from politicians.
Enforcing the law within such an army, whether among young conscripts or
reservists, was always going to be extremely difficult.”

The MAG’s unit has an additional role: advising on the military-planning

process. Its legal officers are involved in authorising operations, air strikes
and targets, when these are planned in advance, at division level or higher.
Many of the tens of thousands of deaths in Gaza have happened in such
strikes. But although some of the strikes have been investigated by the
FFAM, no criminal investigations have been launched. A senior IDF officer
involved in the investigations claims that every strike has been aimed at a
“legitimate military target” and that, at most, investigators have identified
“mistakes” or use of the “wrong munition”, leading to procedures being
tightened up.

The MAG’s officers insist that the death toll in Gaza is proof not of war
crimes, but of an unprecedented war the IDF had no choice but to fight in a
dense urban environment, against an enemy hiding behind and beneath
civilians. Yet the international-law department in the MAG’s unit, which
prescribes the IDF’s rules of engagement and targeting, has been stretching
the principle of discrimination—which defines who is a legitimate Hamas
target—to include civil servants and journalists affiliated with the
movement.

It has also adjusted the principle of proportionality, or how many civilian

casualties are permissible in striking a legitimate military target. Since the
October 7th attack, the IDF’s legal parameters of proportionality have been
moved to a point where killing dozens of civilians in an attack on a mid-
level Hamas commander—a number that would previously have been
deemed excessive even for the most senior leaders—is now acceptable. A
senior officer in the MAG says that “there is no textbook answer for the
dilemmas of proportionality. You can’t ask ChatGPT. But the red lines were
not redrawn, they were applied differently,” owing to the war’s
circumstances. “It’s a total blurring of lines,” one combat officer admits.
“There is a philosophical dilemma at the base of international law,” says one
IDF lawyer. “For human-rights lawyers it’s humanitarian law and is focused
on how to protect civilians. For military lawyers it’s the laws of conflict and
they’re all about how an army can go about killing people, including
innocent civilians, legally.”

At the heart of Israel’s “complementarity” defence is the claim that its

military and civilian legal advisers are independent. Formally this may be
true, but the government is undermining the principle. The military
advocate-general, Major General Yifat Tomer-Yerushalmi, has become a
hate-figure for the government’s nationalistic supporters, who accuse her of
“tying the hands” of Israel’s fighters on the battlefield and decry the arrest
and investigation of soldiers in the Sde Teiman case. In May the defence
minister instructed the IDF’s chief of staff to prevent Ms Tomer-Yerushalmi
from speaking at the annual conference of the Israel Bar Association.

It was not the first time government politicians had intervened in the military
legal process. In July 2024 coalition parliamentarians led a mob which
stormed the Sde Teiman base, trying to impede the investigation there. Such
interventions go back at least to 2016, when Mr Netanyahu, who was prime
minister at the time, made a supportive phone-call to the family of a soldier
who had been accused of killing a wounded Palestinian assailant in the city
of Hebron. After the soldier had been convicted of manslaughter, Mr
Netanyahu called for his pardon.

The IDF’s legal apparatus is not supposed to work on its own. At the civilian
level, Ms Baharav-Miara, in her role as the government’s chief legal
counsel, is supposed to both guide the MAG and ensure that the cabinet’s
directives to the IDF conform to the standards of Israeli and international
law. “Our biggest problem in enforcing legal standards during this war is
that the attorney-general has become a rubber-stamp,” says a veteran legal
officer in the IDF. “On constitutional matters she is a fighter. On security
issues she hasn’t spoken out once.” Human-rights lawyers agree. The
attorney-general represents many in the Israeli legal establishment, says Mr
Sfard, “who think that we can fight for democracy at home without checking
out the torture chamber in our backyard.”
The lack of legal restraint by the attorney-general on the government’s war
policies has been most evident in the legal petitions against the
government’s practice of blocking or severely restricting food and medical
supplies to Gaza, which in recent months have slowed to a trickle (see
chart). These petitions were made at what should be the highest tier of
accountability, the Supreme Court, which hears complaints from individuals
and organisations against government actions.

Despite being at loggerheads with the Netanyahu government and refusing

to represent it in a number of cases over the past two-and-a-half years, in the
main petition against the blockade of aid the attorney-general’s
representatives seemingly had no issue with presenting the government’s
arguments. The defence ministry was closely monitoring the situation and
there was no hunger in Gaza, they claimed. What’s more, they added, Israel
was not an occupying power and therefore under no legal obligation to
supply the needs of the population there.

After the petition dragged on for a year of war, during which the judges
granted the government repeated continuances and refused to issue any
temporary injunctions, the Supreme Court backed the government’s
humanitarian policy on Gaza in a 64-page ruling. The court’s president,
Yitzhak Amit, who has clashed frequently with the Netanyahu government
and was appointed against its wishes, wrote that “the state of Israel is not
allowed to ignore” the human suffering in Gaza, but put the responsibility
for that on Hamas and did not accept that Israel was using starvation as a
weapon of war.

Osnat Cohen-Lifshitz, the legal director of Gisha, an Israeli human-rights

organisation which advocates for Gazans and which petitioned the court,
says the entire proceeding was “a farce in which [the court] collaborated
with the state to create the appearance of a legal proceeding. The judges
could have saved lives, but they gave the people of Gaza nothing.”

Justice Amit was reviled by the far right for even being prepared to hear the
petition and his detailed ruling is far from a summary dismissal. But it is
hard to escape the impression that, like the attorney-general, he is choosing
his battles with the government and prefers not to challenge it on war-related
matters.

There is one more tier of accountability in Israel. National commissions of

inquiry have been formed in the past to examine the conduct of its armed
forces. The most famous was the one established in 1982 to investigate
Israeli complicity in a massacre in the Palestinian refugee camps of Sabra
and Shatila in Israeli-controlled Beirut. The killings were carried out by
Israel’s allies, the Phalangist militia. The commission ruled that, although
the IDF was not directly involved, senior Israeli officials had been aware the
massacre could take place and had not acted to prevent it. The then defence
minister, Ariel Sharon, and the commander of military intelligence were
forced to resign.

Such a commission, whose members are appointed by the president of the

Supreme Court, could provide the necessary accountability in this war as
well. But the decision to hold a national inquiry is the government’s, and Mr
Netanyahu has so far adamantly refused to appoint one. The attorney-
general has called for a commission of inquiry, though she has specified that
its mandate should be to investigate the failures of Israel’s political and
military leadership which allowed it to be taken by surprise by Hamas in
October 2023, rather than the events of the war itself.
This might change if Mr Netanyahu’s government were to fall. A new
government could appoint a commission, possibly with a mandate to
examine the government’s actions during the war as well as leading up to it.
In the meantime, the apparent humanitarian abuses seem only to be growing
more severe.

Perhaps the ultimate test of the government’s ability to restrain itself will be
its next steps in Gaza. The mooted “humanitarian city” appears to have been
set aside, at least for now. In an open letter to the defence minister and the
IDF’s chief of staff, a group of Israeli experts on international law argued
that herding Gazans into the city would involve “a series of war crimes,
crimes against humanity and in certain circumstances could be considered
the crime of genocide”. Some of the IDF’s own lawyers privately argue that
it would amount to ethnic cleansing.

Until now, Israeli lawyers insist, the displacement of civilians in Gaza,

although widespread, has conformed to three important conditions: it has
been carried out to protect the civilian population from specific military
operations; it has been temporary (although in many cases the homes to
which displaced civilians might seek to return have been destroyed); and it
has been voluntary, in the sense that civilians could choose to remain in an
area being pulverised by air strikes if they wanted to. The plan for the
“humanitarian city” would conform to none of those standards.

Mr Netanyahu seems to have shifted, at least temporarily, towards a

proposal to wage an all-out campaign to occupy nearly every part of the
Gaza Strip not yet under Israeli control. The IDF seems to be no more
enthusiastic about this plan than the last. Mr Netanyahu may believe in the
hardline approach, as some of his aides suggest. It could equally have been
raised as a lever to press Hamas to accept Israeli demands of disarmament
and exile of its surviving commanders. Mr Netanyahu is certainly using the
proposals to try to convince his far-right coalition partners (several of whom
advocate the annexation of all Palestinian territory) to remain part of his
embattled government.

In other words, rather than hastening Mr Netanyahu’s political demise, the

more radical plans may delay it. The prime minister is also unlikely to be
hauled in front of the ICC in The Hague any time soon. For now, he cannot
visit countries which are members of the court, but those do not include
America, where Donald Trump’s administration has proclaimed its own war
on the international justice system. The ICC’s chief prosecutor and four of
its judges have been subjected to American sanctions and America’s aid to
South Africa, which brought the genocide case to the ICJ, has been cut. Not
surprisingly, the procedures in both international courts seem to have slowed
down.

Other Western countries which are signed up to the ICC may not be hosting
Mr Netanyahu soon but are unlikely to push for sanctions on Israel. As they
embark on an expensive process of rearmament against a resurgent Russian
threat, many are looking to Israel for battle-tested weapons systems. In 2024
Israel’s arms firms signed $14.7bn-worth of export deals, 13% more than in
2023. Over half of these were with European countries.

The cost of the war to Israel’s reputation is immense. Israeli companies are
battling to avoid divestment from funds with rules against dealing with
entities linked to war crimes. Israeli academics and artists are being shunned
by colleagues, universities and festivals around the world. But in the short
term, unless Mr Trump changes his position, it is hard to see how Mr
Netanyahu’s government or the IDF will be held accountable, at home or
abroad.

“For years we warned the IDF that if they don’t abide by international law
they would be hauled to The Hague,” says Amichai Cohen, a legal expert at
the Israel Democracy Institute, a research organisation. Now he is concerned
that it was the wrong tactic. “It’s looking unlikely any politician or general
will be hauled before the ICC and I think that our message should have been
different: abide by international law because it’s the right thing to do.”■
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police-its-own-war-crimes
United States
MAGA’s disenchantment with Israel
Democrats are likely to lose the redistricting war
Donald Trump escalates his war on numbers
The National Park Service is in disarray
Alligator Alcatraz is an exercise in performative cruelty
How is Donald Trump putting America first by bashing Brazil?
United States | America First, no exceptions

MAGA’s disenchantment with Israel

Democrats have long been split over the Jewish state. Cracks are
appearing among Republicans, too
August 7th 2025

When the Speaker of the House of Representatives went to the Western Wall
in Jerusalem on August 3rd, placing a handwritten note to God in its cracks,
he declared: “Our prayer is that America will always stand with Israel.”
Mike Johnson went on to visit the Jewish settlement of Ariel, and met the
Israeli prime minister, Binyamin Netanyahu, in another settlement, Shiloh,
which lies deep in the occupied West Bank. Using the biblical terms for the
territory, he said that “the mountains of Judea and Samaria are the rightful
property of the Jewish people,” and promised to promote the use of the
names in official American discourse.
Mr Johnson represents a well-established wing of the Republican Party that
these days stands with Israel for the most part uncritically, and his itinerary
signalled that many Republicans would bless Israel’s formal annexation of
the West Bank. The party’s current establishment backs Israel not just in its
right to exist as an embattled Jewish democracy, but in its more ethno-
nationalist incarnation under Mr Netanyahu and his hard-right cabinet.

Yet there is a different and increasingly voluble view of America’s alliance

emerging among Republicans, notably from some prominent acolytes of
President Donald Trump’s MAGA movement. Marjorie Taylor Greene, a
firebrand congresswoman from Georgia, posted a startling statement on X
on July 31st arguing: “Of course we are against radical Islamic terrorism, but
we are also against genocide.” Her use of the word genocide, common on
the left of the Democratic Party, was no error. She has also mused whether
innocent people being killed for who they are is not “the definition of
genocide”—and why she is the only Republican voicing such concerns.

Ms Greene is sometimes dismissed as a self-promoting gadfly, yet criticism

of America’s alliance with Israel has also been reverberating in the MAGA
echo chamber of influential podcasters, among them Tucker Carlson, Matt
Gaetz and Joe Rogan. For the most part, MAGA sceptics seem motivated by
fear of entanglement. A pivot point came during the 12-day war between
Israel and Iran in June. Ms Greene, Mr Carlson and Steve Bannon, a former
adviser to Mr Trump during his first term, were among those who warned
that America risked being drawn into another disastrous and costly war in
the Middle East.

Mr Trump stilled their fears by ordering a limited strike, sending B-2

bombers to destroy deeply buried nuclear facilities and then immediately
imposing a ceasefire. Yet afterwards, criticism of support for Israel seemed
to become permissible on the grounds of America First principles.

In many ways, America First means what Mr Trump says it does. He has
been just as inconsistent on Israel as on many other areas of his foreign
policy. Having joined Israel in bombing Iran last month, he then cursed Mr
Netanyahu on camera for breaching the ceasefire. He blames Hamas for the
war in Gaza, but has also acknowledged the “starvation” of Palestinians.
Yet influencers such as Mr Bannon suggest views about the alliance are
shifting within Mr Trump’s voting coalition. “It seems that for the under-30-
year-old MAGA base, Israel has almost no support, and Netanyahu’s attempt
to save himself politically by dragging America in deeper to another Middle
East war has turned off a large swathe of older MAGA diehards,” Mr
Bannon told Politico, a news portal.

According to the latest opinion polls conducted by YouGov for The

Economist, support for Israel among those calling themselves
“conservative” or “very conservative” remains strong but is falling (see
chart). A survey by Pew published in April suggested that unfavourable
views of Israel were most marked among young Republicans, aged 18-49.
The age gap may reflect the influence of social-media images of suffering in
Gaza, seen by younger voters. The changing views of self-identified
conservatives must be understood in context: opinion polls show support for
Israel is declining across America. Disenchantment is most acute among
Democrats. A majority of those calling themselves “liberal” or “very liberal”
are now more likely to express sympathy for Palestine than for Israel.

Ms Greene’s dissent took on a moral and religious tone after the bombing of
the Holy Family Church, the only Catholic church in Gaza. Israel expressed
regret, saying the strike, which killed three people, was accidental. Ms
Greene’s post denouncing “genocide” was written as part of her description
of a conversation with a Christian pastor in the territory. “There are children
starving. And Christians have been killed and injured, as well as many
innocent people. If you are an American Christian, this should be absolutely
unacceptable to you,” she wrote.

How far will this go? Mr Trump, for now the final arbiter of all things
MAGA, has made clear he is on Israel’s side, despite his moments of
irritation with Mr Netanyahu. Indeed, he has denounced Israel’s judicial
system for charging the prime minister with corruption. America’s
ambassador, Mike Huckabee, attended Mr Netanyahu’s trial to show
support. The president has acted quickly to banish antisemitism from
university campuses and elsewhere. Pro-Palestinian activists have been
arrested pending deportation. Mr Trump’s idea of turning the Gaza Strip into
a “Riviera” fanned hopes on Israel’s hard-right that Palestinians might be
moved out.

Mr Trump’s improvisational approach to foreign policy is inherently

difficult to categorise or forecast. On Ukraine, he has set an ultimatum this
week for Russia to end the war or face economic punishment, not least
through “secondary tariffs” on countries that buy Russian oil, including
India and China. How much pain he will inflict on India, China and others
remains to be seen. But Mr Trump has already agreed to supply weapons to
Ukraine if they are paid for by European countries. And he said he ordered
the repositioning of two “nuclear submarines”, presumably boats carrying
nuclear weapons, in response to Russian nuclear threats.

Ms Greene feels isolated in a party that, she argues, is reverting to its “neo-
con” instincts. “I don’t know if the Republican Party is leaving me, or if I’m
kind of not relating to the Republican Party as much any more,” she told the
Daily Mail, a British newspaper. Whether MAGA sceptics pull Mr Trump
even partly away from Republican orthodoxy on Israel may yet shape the
endgame of the war in Gaza—and whatever follows. ■

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with fast analysis of the most important political news, 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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israel
United States | Battle lines

Democrats are likely to lose the redistricting war

If both sides abandon principle, a draw is possible, but Republicans face
fewer obstacles
August 7th 2025

Colouring books for grown-ups have exploded in popularity in recent years.

Befitting America’s hyperpolarised era, political anoraks have put a partisan
spin on the pastime. Dave’s Redistricting is a web app developed by Dave
Bradlee, a software engineer, that allows users to draw imagined electoral
districts. Hobbyists can combine the relaxation of paint-by-numbers with the
catharsis of destroying their political opponents in a fantasised redistricting
process.

In the real world, total war is already under way. Under pressure from
Donald Trump’s administration, Texan Republicans proposed an unusual
mid-cycle redistricting process, putting forward a set of borders which
would make them heavily favoured to win 30 of the state’s 38 seats in the
House of Representatives, five more than they hold now—even if they only
won the statewide popular vote by a small margin. The Texan plan has not
yet passed the state legislature—and Democratic lawmakers have left the
state to render the lower house inquorate. The Democrats’ stunt will
probably fail and the Republicans’ scheme is likely to face legal challenges.
But the plan’s naked partisanship has already set the scene for a redistricting
face-off between Republican and Democratic lawmakers in other states.

Gavin Newsom, the governor of California, issued his own provocation on

August 1st when he reposted a particularly egregious pro-Democratic
gerrymander of his state. The map was designed by an anonymous user on
X, based in Britain, and would eliminate all nine of California’s Republican-
held congressional districts.

To consider how such a no-holds-barred fight might play out, The

Economist has analysed data produced by Dave’s Redistricting, including
proposed congressional maps designed by its users. We mapped the most
effective gerrymanders created by users in states controlled by each party to
simulate a scenario where lawmakers faced no legal or political constraints
on their map-making. Overall, we found that Democrats could redraw 35
congressional districts won by Mr Trump last year, while Republicans could
redraw 34 won by Kamala Harris, the Democratic nominee (see chart 1).
Under these boundaries, 229 districts voted for Mr Trump—one fewer than
the 230 districts he won under the present maps. The theoretical numbers
add some weight to Mr Newsom’s idea that Democrats could fight
Republicans to a draw.

In reality, state legislators do not have a free hand. In addition to legal and
political challenges, it can be difficult to draw maps which are tolerable to
all of a party’s local politicians. The limits on redistricting power are likely
to hobble the Democrats disproportionately, making it harder for them to
match Republicans’ potential.

One reason is the geography of Democratic voters. Voters in districts Ms

Harris won backed her by a margin of 13 percentage points, while voters in
areas Mr Trump won supported him by just five points. This makes it easier
for Republicans to redraw maps to concentrate Democrats into a small
number of districts. In Austin, Texas, for example, Republicans have
redrawn two districts which voted for Ms Harris last year to pack her voters
into a single one, surrounded by six suburban districts which voted for Mr
Trump by a comfortable margin (see chart 2).

Not only do Democrats have a less favourable starting point, they are also
likely to face more checks on their power to act. In a number of large
Democratic states, including California, the party has handed redistricting
responsibilities to independent commissions which would need to be
circumvented. Mr Newsom has proposed putting his plan to voters in a
special election, which would be expensive and risky. Democrats might fall
victim to their own anti-gerrymandering efforts in state courts as well. Just
three years ago New York’s Court of Appeals struck down proposed districts
because of a state ban on partisan gerrymandering. New York is “one of the
big states where they could really have done a lot”, says Jonathan Rodden of
Stanford University. “That ship has sailed.”

Whether Republicans can succeed in insulating themselves from a mid-term

backlash is difficult to predict. In a close election, the Texas gerrymander
could decide control of the House. But Mr Trump’s approval rating has
already fallen to similar levels as in his first term, when a blue wave turfed
30 Republicans out of office. Even aggressive gerrymandering in red states
would struggle to prevent a Democratic victory of that scale. ■

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with fast analysis of the most important political news, 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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the-redistricting-war
United States | Inconvenient data

Donald Trump escalates his war on numbers

Another shocking assault on a non-partisan institution
August 7th 2025

JUST FOUR months ago Donald Trump was basking in the glow of the jobs
report produced by the Bureau of Labour Statistics (BLS). “GREAT JOB
NUMBERS, FAR BETTER THAN EXPECTED”, he posted on Truth
Social, his social-media site. But on August 1st the BLS announced that
employers had added fewer jobs than expected in July; it also revised down
the employment data for the previous two months. This time Mr Trump
turned on the messenger. Saying (without evidence) that the figures were
“rigged”, he fired Erika McEntarfer, the BLS commissioner who was
confirmed last year on a bipartisan basis.

Mr Trump has pledged to appoint a successor to Ms McEntarfer who is

“much more competent and qualified” so that BLS statistics are “fair and
accurate” and “can’t be manipulated for political purposes”. But the
president’s vainglorious sensitivity and norm-breaking intervention will
make it difficult for any appointee to re-establish trust. “Unfortunately, as a
result of this”, says a BLS worker, the administration is “going to change the
perception of anything that comes out”. The episode also comes at a time
when the cash-strapped bureau is struggling to measure an increasingly
sprawling workforce and a public reluctant to respond to government
surveys.

The numbers produced by the BLS are still some of the most important
indicators tracking America’s $30trn economy. Its headline-generating jobs
report, usually released on the first Friday of each month before markets
open, is read closely by reporters, investors and the Federal Reserve. The
report is drawn from two surveys. The first asks individuals whether they are
working or looking for a job; these results determine the unemployment rate.
The second survey collects payroll data from businesses and government
agencies to track the total number of paid positions in the economy.
Together, the measures offer a snapshot of the economy’s momentum.

What specifically set Mr Trump off was the magnitude of technical

adjustments known as revisions. The agency releases preliminary estimates
based on incomplete data because it is helpful for the Fed and investors to
know quickly what is happening to employment. As more data arrive, the
BLS updates its estimates, issuing revisions. These are often modest,
typically adjusting the figures by some 40,000 jobs (or about 20%, on
average). But the most recent revisions were three times that. Goldman
Sachs, a bank, called it the “largest two-month revision since 1968” outside
recessions.

Mr Trump alleges malice, claiming the new numbers were manipulated to

make him look bad. For that to be true it would require a vast conspiracy co-
ordinated by scores of civil servants. The process of producing the jobs
report is designed to prevent meddling. It is intentionally decentralised, with
strict digital-security protocols, physical lockdowns in the BLS headquarters
during the week preceding public release and siloed workflows. If protocol
is followed, the commissioner would not collect or analyse any data herself.
It is a puzzle why this month’s revisions were unusually large. Historically,
revisions have tended to be larger when the economy is at a turning point—
precisely when the imputation methods used by the BLS, which lean heavily
on historical data patterns, become less reliable predictors of future
conditions. Some data sleuths have pointed out that a disproportionate share
of the downward revisions came from state- and local-government payrolls.

Declining response rates to government surveys may have played a role, too.
A decade ago response rates were 20 percentage points higher. Fewer
respondents means noisier estimates. Some also point to staffing and budget
constraints. Across that same period the BLS budget has fallen by some 12%
in real terms, and the White House has proposed cutting it by another 8%
this year. The reason could also be more mundane: random chance.

Whatever the explanation, Mr Trump has undermined confidence in the

agency’s output. Private-sector alternatives cannot replicate what the BLS
provides. There is already enormous financial incentive to do so. Trillions of
dollars in global assets reprice within moments of a BLS release. If investors
could reliably anticipate the results using private-sector proxies they would.
But the alternatives that exist, like the jobs report from ADP, an HR firm, are
widely regarded as noisy and too narrow.

Private-sector estimates are also benchmarked to government surveys, which

serve as a sort of statistical ground truth. And even if a private firm managed
to reliably estimate headline numbers, they would still fall short on
providing granular insights across sectors, geographies and occupations.
Decision-making about interest rates and investing is hard enough with BLS
numbers that are widely regarded as reliable, within the limits of survey
methodology. For a time, at least, those peering at the economy’s horizon
will have to cope with dimmer light. ■

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Balance, a weekly note from our Lexington columnist that examines the
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on-numbers
United States | Parks and consternation

The National Park Service is in disarray

The Trump administration is cutting thousands of staff at America’s
favourite agency
August 7th 2025

ON A HOT day in July, several visitors to Yosemite National Park, along the
mountainous spine of California, go on a bear walk. No bears are spotted,
but the group learns about what they eat (wild raspberries), where they frolic
(lush meadows) and what to do if you encounter one on the trail (don’t run!).
In the busiest part of the park, tourists trek to waterfalls and queue for
snacks and T-shirts at the visitor centre. The bathrooms are dirty, but no
worse than when your correspondent visited last summer. All may seem
well, yet there is trouble lurking.

The National Park Service (NPS), the federal steward of natural wonders,
has been shrinking since 2011. Now Donald Trump’s administration is
gutting its staff and budget in the name of rooting out “waste, fraud and
abuse”. His Department of Government Efficiency (DOGE) has initiated a
mass exodus. Full-time workers were laid off, or retired and resigned rather
than put up with the uncertainty.

An internal document leaked to the National Parks Conservation

Association, an advocacy group, suggests the NPS has lost nearly a quarter
of its permanent employees since Mr Trump took office. As of July 8th
Glacier National Park in Montana had nearly 200 full-time staff and 47
vacancies, including six firefighting roles, according to its database. The
park is missing IT specialists; spotty internet may affect how well search-
and-rescue teams operate.

The administration risks alienating its supporters. Fully 76% of Americans

viewed the NPS favourably in 2024, according to Pew Research Centre, a
pollster, more than for any other agency. In a rare bipartisan consensus,
Democrats and Republicans are fans almost in equal measure. Last year
nearly 332m people visited the parks, a record high. When NPS workers
began to protest that some visitor services would have to be cut because of
limited staff, Doug Burgum, the interior secretary, ordered parks to remain
open. Closures of trails or campgrounds have to be reviewed by the top
brass. But he seems to be betting that Americans care more about whether
they can enter a park than how healthy that park is when they arrive.

Staffing cuts are not the only problem. Earlier this year DOGE deactivated
hundreds of thousands of federal credit cards in a bid to curtail spending.
Smaller parks had to rely on larger ones to pay their heating bills. Expenses
are still tightly controlled. Buying plastic bags for scientific samples in at
least one park requires filling out a form and explaining why the purchase is
“mission critical”. “It’s this toxic mix of confidence and ignorance in
leadership in government right now,” complains one NPS worker in Alaska.

Rather than spending time educating people about wildlife or answering

questions at visitor centres, some workers are tasked with making sure signs
do not “inappropriately disparage Americans past or living”. Guidance from
Mr Burgum’s office suggests that parks should play up “the greatness of the
achievements and progress of the American people” or the “beauty,
abundance, and grandeur of the American landscape”. Signs or programmes
that mention slavery, racism, climate change or the indigenous peoples who
once lived on the lands that are now parks may fall under scrutiny.

More cuts are imminent. Earlier this year the administration requested a 37%
reduction to NPS’s $3.3bn budget, although a draft of the House
appropriations bill suggests funding could stay flat. Whatever Congress
decides, the Department of Interior is set to lay off 1,500 more people as part
of its planned “reduction in force”. NPS workers expect most of its cuts to
come from headquarters in Washington and the agency’s regional offices.
Mr Burgum argues that these positions are mostly “overhead” and deal with
IT, finance and human resources. But the regional offices also employ
researchers in the “inventory and monitoring” programme, created by
Congress in 1998, who collect weather, climate and species data that provide
a picture of the parks’ ecological health.

The effects on conservation are distinct from those that may affect campers.
“I’m not sure if you’re a visitor, you are noticing it yet,” says Beth Pratt of
the National Wildlife Federation, a non-profit. But NPS workers stress that
there is more to the parks than hospitality and recreation. In the long run,
firing experts on extreme weather, wolves or invasive species could erode
the progress America has made in protecting these places since 1872, when
the world’s first national park, Yellowstone, was established by President
Ulysses S. Grant. Such cuts would fit into the administration’s broader
attacks on science and dismissal of climate change.

Mr Burgum seems to realise that he may be in a pickle over the parks’

staffing levels. Summer is NPS’s busy season. “If anybody is looking to join
the National Park Service for a summer temporary job,” he mentioned
during a congressional hearing in June, “positions are still open.” ■

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in-disarray
United States | Political theatre

Alligator Alcatraz is an exercise in performative

cruelty
Many Republican voters don’t like it
August 7th 2025

In the middle of the night the Everglades are loud. The soundtrack of
Florida’s swamplands is a constant call of cicadas. But an hour from
downtown Miami there are almost no people. The narrow offshoots of the
main road take you deeper into the grasses, where snakes and alligators lie
lazily in and around still water. One bend in the road, however, is busy. A
blue sign for “Alligator Alcatraz” marks the turn-off where pickup trucks
circle hours before dawn. Near the perimeter a guard inside a car rolls down
her window an inch. She cannot talk, she says, “the bugs are too bad”. She is
right: if you reached out and grabbed a fistful of air you could catch dozens
of mosquitos.
Alligator Alcatraz is Florida’s newest immigration-detention facility. On a
strip of land once used as an airfield, the state is housing more than 900
immigrants in the kind of plastic tents used for big parties.

The facility opened at the beginning of July. Ron DeSantis, the state
governor eager to get back in MAGA’s good graces after challenging Donald
Trump in the presidential primary, pitched Florida as the site of the
administration’s next big immigration project. James Uthmeier, Florida’s
attorney-general, suggested putting a detention centre in the Everglades
where fugitives would have “nowhere to go, nowhere to hide”. The Trump
administration embraced the idea and in just over a week Florida used
emergency powers to seize land from Miami-Dade county and build a 3,000-
bed prison in the middle of a national preserve.

States have not hitherto played such an active role in detention. Unlike most
civil detention facilities in America designed for immigrants, Alligator
Alcatraz is not funded by the federal government, at least initially, nor run
by private contractors with experience locking people up. Instead Florida is
footing the bill—so far Mr DeSantis has allocated $245m for it—and the
state’s emergency management agency is in charge of operations. Because of
that the facility looks more like a base camp set up for first responders after
a natural disaster than the fenced-in concrete complexes that house
immigrants awaiting deportation in places like Texas and Louisiana. The
contractors hired for logistics are equally unsuitable. Dynamic Integrated
Security, a firm that does school security, is recruiting correctional officers
for the site. Listings on a job forum say the gig pays $10,000 a month, does
not require prison experience, and that guards will receive “on-site
orientation” and start “ASAP”.

According to Anna Eskamani, a Democratic state representative in Florida

who toured Alligator Alcatraz last month, in each tent there are eight cages
with bunk beds that sleep 32 men. There is no running water or grid
electricity, so water is trucked in and generators are used to keep the power
on. Detainees have reported that the water makes them sick. Despite having
air-conditioning pumped through big pipes, the tents are hot and after sunset
they fill with frogs and biting bugs. Critics worry that if a hurricane hits
south Florida—as they regularly do in late summer and early autumn—the
tents will flood. It is not clear if the state has made proper evacuation plans.

The facility expects to expand to perhaps 4,000 detainees by the end of

August, which would make it America’s biggest. Construction crews
continue to build it as busloads of immigrants arrive from Krome, another
Miami detention facility, and from local jails. Because it is not under federal
purview, no readily available public data exist on who the detainees are and
how many have criminal records. Attorneys have sued over lack of access to
their clients. As of the second week of July there were no visitation rooms.

In Miami, where 70% of people are Hispanic, the deportation theatre is not
going over well. Many expected the Trump administration to pick up gang
members, but not cleaning ladies and Uber drivers. “Arbitrary measures to
hunt down people who are complying with their immigration hearings” is
“not what we voted for”, the co-founder of Latinas for Trump wrote on X in
June. “Pick them up, throw them out, but don’t mock them,” one veteran
Republican says of criminal immigrants. Another party strategist who loves
“everything else Trump is doing” wonders how a country known for taking
in “the poor and huddled masses” can also be “dragging them out to be
tortured in the Everglades”.

A majority of Americans agree. In recent polls 52% said the government is

trying to deport more people than they expected; 57% opposed building new
detention centres. On July 25th the administration announced it would give
states $608m in federal emergency-management funds to build detention
facilities. Other Republican governors may soon follow Florida’s lead. They
might be wise first to check if their own base is not similarly repulsed. ■

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is-an-excercise-in-performative-cruelty
United States | Lexington

How is Donald Trump putting America first by

bashing Brazil?
He isn’t
August 7th 2025

On July 17th the secretary of state, Marco Rubio, dispatched a memorandum

to America’s diplomats stepping back from a decades-old priority,
promoting democracy abroad. Henceforth, he wrote, diplomats should
simply congratulate the winning candidate in any country’s election and
refrain from “opining” on the fairness of the process, or even on “the
democratic values of the country in question”. The change, he wrote, was in
keeping with “the administration’s emphasis on national sovereignty”.

The president apparently did not get the memo. That same day Donald
Trump posted on social media a letter he sent to the former president of
Brazil, Jair Bolsonaro, who faces charges of plotting a coup to overturn an
election he lost in 2022. Mr Trump, who identifies with Mr Bolsonaro as a
fellow strongman who idolises Donald Trump, bemoaned his “terrible
treatment” by “an unjust system”. He went on to attack Brazil’s democratic
values, accusing its government of a “ridiculous censorship regime”.

And Mr Trump did not stop at mere opining. About two weeks later, citing
the prosecution of Mr Bolsonaro, he imposed a 50% tariff on Brazilian
imports. For his part, Mr Rubio invoked the Global Magnitsky Act, which is
meant to protect human rights, to impose sanctions on the judge overseeing
the case. Mr Rubio was suddenly determined to promote democratic values,
and not just in Brazil: “Let this be a warning to those who would trample on
the fundamental rights of their countrymen,” he wrote.

Expecting consistency from Mr Trump about policy is, of course, as foolish

as expecting modesty about anything. And in the directive about ignoring
antidemocratic behaviour, Mr Rubio carved out an exception, saying
diplomats could raise objections when “there is a clear and compelling US
foreign-policy interest.” It is Mr Trump’s slippery definition of the American
interest that makes naming his foreign policy such a challenge for those who
have tried to stick a label to it. Is he an isolationist or an interventionist? A
hawk or a dove? The answer is yes. “I’m a nationalist and a globalist,” he
has observed. Respect for human rights is a vexing issue for him in Brazil,
but not in El Salvador, for the same reason that antisemitism can outrage
him when it is identified within Harvard University, but not within, say,
Kanye West. Principles can be useful as weapons in a thoroughly pragmatic
global struggle to punish adversaries and reward acolytes—as distinct from
allies—in pursuit of a national interest that has become inseparable from the
president’s own interests.

Mr Trump himself has advertised defining themes for his foreign policy that
have proved misleading. Take Mr Rubio’s invocation of an “emphasis on
national sovereignty”. In a speech to the United Nations in 2018, Mr Trump
said he valued sovereignty and independence “above all” and honoured “the
right of every nation in this room to pursue its own customs, beliefs, and
traditions”. The United States, he said, “will not tell you how to live or work
or worship”. Just this May he repeated such assurances in a speech in Saudi
Arabia, mocking past “interventionalists” for “giving you lectures on how to
live and how to govern your own affairs”.
Yet no administration in memory has delivered more righteous public
lectures, at least to allies, than this one, whether over South Africa’s
treatment of its white minority or all Europe’s approach to free speech.
Moreover, Mr Trump’s piety about sovereignty is hard to square with his
demand for the Panama Canal, not to mention for Canada and Greenland.

Mr Trump’s preferred label for his foreign policy—“America First”—also

confuses people. The historical meaning of the term, combined with Mr
Trump’s abuse of allies and his scorn for international institutions, has led
both admirers and adversaries to view him as an isolationist. He is not. He
believes strongly in diplomacy (when he conducts it) and also in unilateral
military action (when he is in charge of it). He has not withdrawn American
leadership from the world; he has instead declared himself unconstrained to
assert that leadership where, when and how he wants.

This is the same way he uses power domestically. He invokes states’ rights
when it is convenient for him, as on abortion, but has sent in the National
Guard over a governor’s objections when he saw fit, too. When informed in
June by the Atlantic that critics such as Tucker Carlson did not consider his
support of Israel against Iran to be consistent with “America First”, he
replied, “I’m the one that decides that.” After all, he said, he invented the
term.

Mr Trump appreciates the power of “weaponised interdependence”, a term

coined by two political scientists, Henry Farrell and Abraham Newman, to
describe how America in the 21st century has learned to use networks of
finance, trade and even communication as tools of coercion in foreign
policy. This is why America’s allies are having such a hard time in the
Trump era. As Mr Trump puts his understanding of America’s needs and
wants first in every bilateral relationship, he has more leverage to extract
concessions from allies than from adversaries. Now, the more a country
depends on America, the less dependable America is for it.

In the stand-off with Brazil, Mr Trump is testing how far he can push an
independent-minded ally jealous of its own sovereignty, and how far he can
stretch his definition of America’s interest. Mr Trump has pointed to
bilateral trade deficits as an emergency to justify his other tariffs, but
America has run a trade surplus with Brazil for more than ten years. And
Brazilian exporters may be able to quickly find new markets for such
commodities as beef and coffee, which, unlike orange juice, Mr Trump has
not exempted from his tariff. If Americans wind up paying more for
hamburgers to help a friend of Donald Trump avoid his day in court, they
will be right to wonder who is really being put first. ■

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america-first-by-bashing-brazil
The Americas
Can Peronists, Argentina’s former masters, stop Javier Milei?
Nayib Bukele could now rule El Salvador for life
Panama brings lawfare to the canal ports saga
The Americas | Opposition divided

Can Peronists, Argentina’s former masters, stop

Javier Milei?
They are in disarray. Hoping that his government fails is their main
strategy
August 7th 2025

It has been a bumpy month for President Javier Milei of Argentina. Despite
his success in cutting spending, pulling down inflation and even reducing
poverty, his government is irritable.

Troubles with the peso are fraying nerves. Having partially floated it in
April, the government has kept trying to prop up its value so as to press
down on inflation. But that has hampered foreign-reserve accumulation. The
government badly missed the reserve targets it agreed to in an imf bail-out in
April. That worries investors. The strong peso has also induced spending on
imports, creating a current-account deficit. And trying to prop up the peso
helped send short-term interest rates soaring dangerously. Despite the
government’s efforts, as the supply of dollars dried up at the end of the
harvest the peso slid sharply anyway. In July it fell by over 12%.

Concord among normally irreconcilable opposition parties is another

headache. On July 10th they passed increases in pensions and disability
benefits. Mr Milei vetoed the bill, but the opposition is trying to gather the
votes to overrule him. Even if it fails, it has already rattled the government.
Mr Milei branded his vice-president, who runs the Senate and oversaw the
offending vote on benefits, a “traitor”.

With congressional mid-terms approaching in October, all this is far from

ideal. But if the drama is to hurt Mr Milei in those elections, or beyond, the
opposition will need a modicum of credibility. Instead, it has looked punch-
drunk since Mr Milei won the presidency in 2023 as an angry libertarian
outsider. Its recent show of organisation is the exception, not the rule.

Moderate alternatives seem doomed. The centre-right Republican Proposal

(PRO) party, run by a former president, Mauricio Macri, was obliterated by
Mr Milei’s Liberty Advances party in elections in May in the city of Buenos
Aires, normally a PRO stronghold. Unable to beat Mr Milei, the PRO has
joined him. It hopes an alliance with Liberty Advances in elections for
Buenos Aires province in September and in the congressional mid-terms will
let it survive. It may well simply become irrelevant. The contest between Mr
Milei and Peronism, the amorphous populist movement that dominated
Argentine politics for 80 years, is deeply polarised. Third parties like the
PRO may be squeezed out.

But the Peronists are in disarray, too. Just 29% of Argentines say they will
vote for them in the mid-terms, and nearly 40% plan to vote for Liberty
Advances. In June the Supreme Court upheld a six-year sentence for
corruption for Cristina Fernández de Kirchner, a former president who leads
the movement. She is under house arrest and barred from public office. The
decision prompted a show of outraged unity among Peronists, yet in reality
they are still deeply divided. Ms Fernández may aspire to copy Luiz Inácio
Lula da Silva, Brazil’s president, who was jailed for corruption, but got his
conviction annulled and won power again. But this is unlikely. If she did
leave national politics, it might ultimately help the Peronists: though she has
a devoted core of supporters, she also carries some weighty baggage.

Other leading Peronists include Máximo Kirchner, Ms Fernández’s son;

Axel Kicillof, the governor of Buenos Aires province; and Sergio Massa,
economy minister in the previous government. None excites voters. All
come from Buenos Aires, so they may struggle to win support in the rural
interior, which contains Mr Milei’s firmest supporters, especially young
men. Mr Massa has already lost to Mr Milei once, in the presidential run-off
in 2023. Three-quarters of Argentines dislike Mr Kirchner, according to a
recent opinion poll. Mr Kicillof’s job gives him a high profile but he is
dogged by his involvement in the sloppy nationalisation in 2012 of YPF, the
country’s largest energy company, when he was Ms Fernández’s economy
minister.

All three have endorsed a joint Peronist platform and candidate lists for the
upcoming elections for the province of Buenos Aires, but the process of
reaching agreement was slow and painful, and repeatedly nearly collapsed.
Messrs Kicillof and Kirchner do not get on. Juan Grabois, a hard-leftist in a
leather jacket who ran in the Peronists’ presidential primary in 2023, stayed
out of negotiations. All bar Mr Grabois are now trying to agree on joint lists
for the mid-terms. Each faction hopes the coming elections will demonstrate
their might and help crush internal rivals before the next presidential
election in 2027.

The movement has barely started to discuss its difficulties. “We are like a
sick man who won’t go to the doctor,” says Fernando Navarro, who served
in the last Peronist government. Some Peronists think they moved too far to
the left; others say they have lost touch with the poor. Few mention their
chaotic economic record. Nor do they agree on style. Mr Grabois says they
must be as aggressive as Mr Milei, who swears incessantly and insults and
threatens rivals and journalists, calling them “eunuch donkeys” among other
things. By contrast, someone close to Mr Massa says the opposition should
be “firm but not rude”. There is little focus on ideas. “We either repeat
phrases from [Juan] Perón from 50 years ago…or we snipe at colleagues,”
says Mr Navarro.
One good reason for the Peronists to worry is the sense that Argentine
attitudes have profoundly changed. In 2011 some 70% of Argentines
“wanted to live in a country where most things are done by the state rather
than the private sector”, according to Isonomía, a pollster. By 2024 that
number had fallen to 42%. Some Peronists are starting to echo the
libertarian, anti-statist Mr Milei. “It’s true that fiscal balance should be a
golden rule,” says the person close to Mr Massa.

The leading Peronists will highlight unemployment and shrinking state

pensions, but for now their main strategy is just to hope that Mr Milei
stumbles dramatically before 2027. A crisis triggered by a volatile exchange
rate is not unimaginable. Yet voters who tire of Mr Milei may simply stay at
home—or look for another new face. That could open the door to an
ambitious provincial governor. Those from different political parties have a
history of working in concert to oppose the presidency. Keep an eye on
Martín Llaryora of Córdoba and Maximiliano Pullaro of Santa Fe, says Ana
Iparraguirre of GBAO, a pollster. The pair, along with several other
governors, recently announced a new nationwide political alliance for the
mid-term elections.

For his part, Mr Milei is furious at the opposition for trying to increase
spending. He says he will reimpose his spending cuts “after we crush them”.
But Mr Milei must work with the opposition after the mid-terms, whatever
the outcome. Just a third of the seats in the Senate and half of those in the
lower house are up for grabs, and he has only a few lawmakers now. That
makes his scorched-earth approach risky. For a chance to truly crush the
opposition, he must wait for the general election in 2027. His own job will
be on the line then, too. ■

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masters-stop-javier-milei
The Americas | Perpetual power

Nayib Bukele could now rule El Salvador for life

His supermajority in the legislative assembly has removed the
constitutional barriers to unlimited re-election
August 7th 2025

To those familiar with the autocrat’s playbook, Nayib Bukele’s latest move
was not surprising. On July 31st El Salvador’s legislative assembly,
dominated by his New Ideas party, voted to remove presidential term limits
from the constitution. Mr Bukele can now seek re-election indefinitely. Aged
just 44, he could rule El Salvador’s 6.3m people for decades. That a leader
who is admired so widely across Latin America has secured a path to
indefinite rule bodes ill for democracy in the region.

Mr Bukele, who first won the presidency in 2019, has been steadily eroding
checks on his power ever since. In 2021 the Supreme Court—packed with
loyalists thanks to his supermajority in the assembly—reinterpreted El
Salvador’s constitutional ban on consecutive presidential terms to let Mr
Bukele run a second time. Many Salvadorans wanted him to do so. His
crackdown on gangs, which started in 2022, won him huge popularity. El
Salvador’s murder rate had fallen to 1.9 per 100,000 by 2024, lower than the
rate in the United States, from 51 per 100,000 in 2018. Extortion all but
disappeared. In 2024 Mr Bukele secured re-election in a landslide, buoyed
by approval ratings near 80%.

Many Salvadorans seemingly accept Mr Bukele’s tough tactics in return for

law and order. A state of emergency which suspends a swathe of
constitutional rights has been rolling for more than three years. It is renewed
every three months by the legislature. Around 85,000 people have been
jailed under its provisions; none has been tried in court. And NGOs such as
Human Rights Watch have documented torture in prisons by the authorities.

But recently Mr Bukele has turned on softer targets, too. His crackdown has
expanded beyond alleged criminals to include human-rights defenders,
journalists and lawyers. In May Mr Bukele’s goons jailed Ruth López, a
well-known anti-corruption lawyer. Days later lawmakers passed a “foreign
agents” law requiring people or organisations receiving money from abroad
to apply to the government for permission to do so and to pay a 30% tax on
it. (Vladimir Putin, Russia’s president, did something similar in his country
in 2012.) In May and June several journalists from El Faro, an investigative
outlet, fled the country after Mr Bukele’s attorney-general prepared arrest
warrants for them. And on July 17th Cristosal, a prominent human-rights
NGO which employs Ms López, shut its offices in El Salvador, citing threats
to the safety of its staff.

This increase in repression happened alongside a big power grab. In January

the unicameral legislature made it easier to amend the constitution,
removing a requirement for changes to be ratified by its successor after the
next legislative election. The supermajority that Mr Bukele’s party enjoys in
the legislature gives him, in effect, the power to rewrite the constitution at
will. The removal of presidential term limits proved as much. So did other
recent tweaks.

Presidential elections can now be won with a plurality in the first round of
voting, without holding a subsequent run-off between the top two candidates
if neither wins more than 50% of the vote. The next presidential election has
also been brought forward, from 2029 to 2027, so that it coincides with
legislative polls. All this makes it much harder for the ragged opposition to
rally round a single candidate and gives them less time to prepare. That
probably suits Mr Bukele just fine.

Loyalists are celebrating. “I’ll say it bluntly: President Nayib Bukele is the
only one who can take El Salvador to where our people want to go,” Xavier
Zablah, Mr Bukele’s cousin and the president of New Ideas, wrote on X, a
social-media service. Others are growing disillusioned. Corruption
allegations concerning the Bukele family swirl online. And in May El Faro
published videos of gang leaders describing secret pacts they had made with
Mr Bukele, to keep the murder rate down in exchange for release from
prison or safe passage out of the country. This took some of the gloss from
the crime-fighting narrative.

Foreigners are increasingly wary. Crypto enthusiasts, tourists and big tech
companies such as Google have flocked to El Salvador in recent years,
attracted by low crime rates and Mr Bukele’s tech-positive rhetoric. The
prospect of it having the same leader for the next 40 years may not seem
quite as cool. Some bitcoiners have already left the country, venting their
disillusion on X, Mr Bukele’s preferred social-media platform. The IMF,
which has agreed to lend El Salvador $1.4bn in exchange for a pledge to
curb the use of bitcoin, expects GDP to grow by 2.5% in 2025, lower than its
previous forecast of 3%.

The descent into authoritarianism has been swift. Mr Bukele has done in
months what took Nicaragua’s Daniel Ortega years. Support from one of the
world’s most powerful men, Donald Trump, has been helpful. Mr Bukele
pleases him by locking up America’s deported migrants in El Salvador’s
maximum-security prisons; Mr Trump calls Mr Bukele a “great friend”.
How the feelings of Salvadorans will evolve is unclear. They are probably
stuck with Mr Bukele now, like him or not. ■

Correction (4th August 2025): The original version of this article said that
Xavier Zablah was Nayib Bukele’s brother. In fact, he is his cousin.
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salvador-for-life
The Americas | A man, a plan, a canal—Panama!

Panama brings lawfare to the canal ports saga

China will be furious if CK Hutchison’s contract is scrapped. America will
be delighted
August 7th 2025

“The ports are ours,” declared Anel Flores, Panama’s comptroller-general,

on July 30th. His office, which manages public funds, had just filed two
cases with Panama’s Supreme Court, asking it to revoke the contract held by
CK Hutchison (CKH), a conglomerate based in Hong Kong, for the
operation of two ports at either end of the Panama Canal (see map). In doing
so Mr Flores has opened a new front in the tug-of-war between China and
the United States over the canal that has been going on since Donald Trump
took office.

In his inauguration speech on January 20th Mr Trump vowed to “take back”

the canal. Then, in March, he hailed a deal in which BlackRock, an
American investment giant, and MSC, a Swiss shipping firm, would acquire
the ports from CKH, along with 41 others in 22 countries, as part of a
transaction worth $23bn. But by late July the deal had reached an impasse.
The Chinese government refused to support it unless COSCO, its state-
owned shipping firm, was included as a veto-holding member of the
acquiring consortium.

Mr Flores’s announcement came three days after the deal was supposed to
be wrapped up. It wasn’t right, he said, that “In other parts of the world there
are people negotiating the future of assets that belong to us, the
Panamanians.”

One way of looking at Panama’s efforts to scrap the contracts is the

“sophisticated application of national independence”, according to Carlos
Ruiz-Hernández of the Centre for Strategic and International Studies, a
think-tank in Washington. Another is that they represent a new tack from the
United States in its push to eliminate a Chinese presence around the canal.

The possibility that CKH’s contract could be revoked has always loomed
over the deal. Panama’s government started an audit of the contract on the
day of Mr Trump’s inauguration. On April 7th Mr Flores announced its
preliminary results, accusing CKH of manipulating its finances and saying
that the state had missed out on $1.3bn due to alterations made to the
contract in 2002. He also said the most recent renewal of the contract did not
follow correct procedure. At the time CKH said the figures from the audit
were incomplete. (On August 1st the firm said it was prepared to work for “a
better future to support the people of Panama”.)

Acquisition talks carried on. A tidy takeover suited Panama and the United
States. Only once the Chinese government made its terms clear, terms
probably unacceptable to Mr Trump, did the Panamanians act. There is
broad political support for exercising sovereignty over the canal.

One case presented to the Supreme Court claims breach of contract. The
other alleges unconstitutionality. The latter is more likely to succeed, says
Alonso Illueca of the Santa María La Antigua Catholic University in
Panama City. Panama’s constitution says foreign governments cannot
acquire title over its territory. “The state would have to assert that the
People’s Republic of China controls the ports,” says Mr Illueca. “It would be
confirming Trump’s concerns and likely incite diplomatic actions and
litigation from China on the basis of illegal expropriation.”

If the Supreme Court does tear up the contract, it will be reassigned or put
out for tender. That process would be scrutinised. “Chinese companies could
make a bid that American firms can’t compete with,” says Euclides Tapia of
the University of Panama. If those bids are overlooked, or if Chinese firms
are excluded from bidding, it could prompt litigation. Panama already faces
an arbitration claim worth some $20bn from a Canadian mining firm over
the closure of a major copper mine, although proceedings are on hold while
both sides negotiate.

The role of the United States in the comptroller-general’s decision is unclear.

The US State Department has repeatedly pushed Panama’s government to do
its bidding in recent months, from increasing American military presence on
Panamanian soil to giving free passage through the canal for American naval
vessels. For Panama, the costs of restructuring the contracts probably
outweigh the benefits. China could try to make an example of Panama, a
warning against yielding to the Americans.
“For the United States there is no risk,” observes Mr Illueca. “The one who
will suffer is Panama.” ■

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canal-ports-saga
Asia
Pakistan’s army chief is cosying up to Donald Trump
Islamist parties are gaining ground in Malaysia
Narendra Modi and Donald Trump go head-to-head
Nuclear nightmares are back
Asia | Marshal arts

Pakistan’s army chief is cosying up to Donald

Trump
The field marshal is also tightening his grip on power at home
August 7th 2025

Field Marshal Asim Munir, Pakistan’s army chief, could hardly have wished
for more. For almost two years he had been under fire at home over his
meddling in politics. Racked by debt and insurgent violence, his country had
been sidelined in geopolitics as America and other rich countries courted
India, Pakistan’s arch-rival. And yet there he was, enjoying a private lunch
with Donald Trump in the White House on June 18th, just over a month after
Pakistan’s brief conflict with India. Then, at the end of July, came further
snubs for India: branding it a “dead economy”, Mr Trump imposed tariffs of
25% while hailing a new trade deal with Pakistan. He then raised the tariff
rate to 50% on August 6th.
The field marshal’s fortunes reflect a shift in American policy that affects
India, China and the Middle East. America’s close ties to Pakistan
deteriorated after American forces killed Osama bin Laden, the al-Qaeda
leader, in his Pakistani hideout in 2011. America then lost interest after
leaving Afghanistan a decade later. But to India’s dismay, America and
Pakistan are now rebuilding ties with a focus on trade and investment,
counter-terrorism and consultation on Middle Eastern policy. America may
even sell arms again to Pakistan (it currently gets around four-fifths of them
from China).

Pakistan’s politics may be at a turning-point, too. There is still broad public

support for Imran Khan, the jailed former prime minister (and one-time
cricket superstar) who was barred from parliamentary polls in 2024. Even
so, Field Marshal Munir’s popularity has surged since the recent skirmish
with India. And Pakistan’s military-backed civilian government now has the
two-thirds parliamentary majority needed to alter the constitution (after a
controversial reallocation of seats). That has ignited rumours that the army
chief could become president too, opening a fourth period of military rule
since the country’s independence in 1947.

The future of the world’s second-largest Muslim country and its relations
with America, India and China thus depend increasingly on one question:
what exactly does Field Marshal Munir want? The man himself declined an
interview request (as he has done for all media since his appointment in
2022). But Lieutenant General Ahmed Sharif Chaudhry, Pakistan’s military
spokesman, tells The Economist that talk of his boss becoming president is
“nonsense”. He also challenges the idea that Field Marshal Munir is more
ideological than his recent predecessors.

Unlike most of them, the field marshal is the son of an imam. He was
educated in a madrasa and can recite the Koran by heart. He is also the first
Pakistani army chief not to have trained in America or Britain. Yet General
Chaudhry argues that the army chief is “well-versed” in the West and
resolutely opposed to jihadist groups operating on Pakistani soil (one of
which India blames for the terrorist attack that triggered the recent conflict
between the two countries). Among his troops, the army chief often voices
distaste for mullahs who have “made religion a business”, General Chaudhry
says.
On India, however, the military spokesman says the field marshal’s personal
views were reflected in a speech on April 16th, six days before the attack in
the Indian-controlled part of Kashmir. Some suggest the field marshal was
improvising when he invoked the idea that Hindus and Muslims could not
co-exist in one nation, and described Kashmir as India’s “jugular vein”.
Pakistan denies involvement in the Kashmir attack. But in that speech, the
military spokesman suggests his boss was articulating “what he stands for,
what he is ready to die for”, partly as a response to the rise of Hindu
nationalism in India.

Others who have regularly met the army chief describe him as both pious
and pragmatic, with a keen interest in the economy. Though he prays five
times daily, says one, he does not “apply spirituality to statecraft”. He
admires the modernisation drive of Saudi Arabia’s Crown Prince
Muhammad bin Salman. Like MBS, he can be vindictive and has a temper,
especially when talking about Mr Khan, who (as prime minister) sacked him
as intelligence chief. And his appetite for risk is greater than that of his
predecessor, who favoured quiet—and ultimately fruitless—diplomacy with
India. Even some critics credit the field marshal with resisting foreign
pressure not to respond to India’s initial air strikes.

But his ultimate political ambitions are uncertain. Some predict he could
grab the presidency soon, to capitalise on his domestic popularity and Mr
Trump’s fondness for strongmen. That would institutionalise his authority.
Indeed, foreign and business leaders already try to deal with him directly on
many matters. It would also offset the risk that a less pliant civilian
leadership might replace him as army chief when his current term expires in
2027. Critics cite his promotion to field marshal in May, comparing him to
Ayub Khan, Pakistan’s first dictator and only other officer of that rank.
Pakistan is not under martial law but “Asim law”, Mr Khan, the ex-prime
minister, argued in a statement from prison on July 24th.

The counter-argument is that the current “hybrid” leadership works in the

field marshal’s favour. Aged just 57, he is the most powerful army chief
since Pervez Musharraf, who seized power in a coup in 1999. He has a co-
operative and able prime minister and, if the current political compact
endures, he can remain as army chief indefinitely (there is no term limit or
mandatory retirement age). He and civilian leaders also share an interest in
suppressing Mr Khan’s supporters (many of whom have recently been jailed,
including 108 on July 31st alone) before parliamentary polls due by 2029. A
more overt power grab might fuel support for Mr Khan, including in the
armed forces.

Either way, the field marshal would probably still enjoy America’s backing.
He recently earned its praise for killing and capturing leaders of a local
offshoot of Islamic State. He has sparked interest from Trump associates in
Pakistan’s crypto and mining sectors. And he has positioned Pakistan as a
potential means to advance America’s interests with Iran and its efforts to
get more Muslim countries to establish diplomatic ties with Israel.

In return, America has toned down criticism of Pakistan’s programme to

build longer-range ballistic missiles, which officials from Joe Biden’s
administration considered a threat to America. It has resumed some aid
programmes. It is also considering selling weaponry, including armoured
vehicles and night-vision goggles, to help Pakistan combat local insurgents.
And American officials are examining Pakistan’s evidence to support its
claims that India backs those insurgencies, although they are unconvinced so
far.

The field marshal’s aim is to build a more sustainable, multi-faceted

relationship with America. There is potential for progress. It is, however, a
high-wire act. The prospects for economic co-operation are uncertain given
Pakistan’s poor investment climate. Mutual distrust hampers efforts to
combat terrorism. And though Pakistani officials suggest that closer ties
with America will not come at China’s cost, the Chinese leadership may
disagree.

Then there is India. Field Marshal Munir wants to bring it to the negotiating
table. Narendra Modi, India’s prime minister, is determined to resist and has
vowed to respond to any more terrorist attacks with further military action.
Asked how Pakistan would react to that, its military spokesman says it
would begin by striking deeper within India. “We’ll start from the east of
India,” he says. “They also need to understand that they can be hit
everywhere.” The field marshal’s power may have increased since May. But
so too has the risk of a bigger clash between South Asia’s nuclear
strongmen. ■
This article was downloaded by zlibrary from https://www.economist.com//asia/2025/08/03/pakistans-army-chief-is-cosying-up-to-
donald-trump
Asia | Turning green

Islamist parties are gaining ground in Malaysia

Religious attitudes are hardening—particularly among the young
August 7th 2025

Videos of public brawls are depressingly popular online. Add in a dash of

religious strife and you have all the algorithmic ingredients for a viral clip.
That was the case on Malaysian social media earlier this year, when the
video of an elderly Malay man berating and slapping a bewildered teenager
across the face drew thousands of viewers. The teen’s wrongdoing? He had
supposedly erred by eating in public during the holy month of Ramadan.

For some the video was yet another warning sign that Islam in Malaysia is
growing more austere. Malaysian Muslims have turned more conservative in
recent decades, often influenced by stern theologies from the Middle East. A
survey in 2023 by Pew, a pollster, found that 86% of Muslims in Malaysia
favoured making sharia the law of the land. Two-thirds of Muslims who
prayed daily said being a Muslim was “very important” for being truly
Malaysian. That is souring race relations in a multi-ethnic country of 30m,
where 61% of the population are Muslims, mainly ethnic Malays. The rest is
made up of Malaysians of Chinese (23%) and Indian descent (7%).

Many observers are now concerned that hardening religious attitudes are
shaping politics. PAS, Malaysia’s stridently Islamist party, appears buoyant.
In a fractured parliament, PAS won the most seats of any single party at the
last general election in 2022—despite gaining only 15% of the vote. It is the
largest party in the main opposition bloc, Perikatan Nasional (PN). PAS has
long held the rural states of Kelantan and Terengganu. In 2023, it picked up
another by narrow margin, Kedah. It is also picking up support in urban
areas. Some analysts believe that PAS has a shot at government at the next
general election, in 2028. By contrast, Islamist parties in other Muslim-
majority countries in the region have not fared nearly as well.

What explains this Islamist lurch? Some of this is a protest vote. Malaysians
are downbeat about the economy. Many have lost faith in establishment
parties, including the United Malays National Organisation (UMNO), which
was in power in post-independence Malaysia until its ousting in 2018 over a
corruption scandal, and Prime Minister Anwar Ibrahim’s Pakatan Harapan
(PH) coalition, which has back-pedalled on many of its promises.
Disillusioned and shorn of alternatives, young Malays are turning to PAS.
Data are scarce but the best estimates suggest that around 37% of Malays
aged under 30 plumped for parties in PAS’s coalition in 2022, a smidge
higher than for Mr Anwar’s more socially liberal PH. According to recent
polls, “upholding Islam” is the most important criterion for how young
Malays vote.

Malaysian Islamists have also benefited from longer-term trends. In the

1980s, fearing competition for the Malay vote from Islamists, UMNO
embarked on an “Islamisation” drive for government and society to burnish
its pious credentials. PAS is now reaping the rewards. Education is one
example. Malays in public schools endure hours of religious schooling each
week. “When religious identity is emphasised...students believe that religion
cannot be separated from anything, including politics,” argues Syaza Shukri
of Malaysia’s International Islamic University.
The blending of Islamic and Malay identities has allowed PAS to “bang the
drum more aggressively and obnoxiously” than Islamist parties in Indonesia,
where Islam often cuts across various ethnic groups, argues Adib Azlan, the
head of Invoke, a Kuala Lumpur-based political consultancy. He points out
that PAS has struggled to make inroads in eastern states like Sarawak and
Sabah, where the Muslim communities are more ethnically diverse.

This is turbocharged by social media. Savvy imams can rack up millions of

views on YouTube or TikTok with casual sermons on relationship troubles
and personal finances. But PAS also pumps out a prodigious number of
political clips on TikTok, where most young Malays get their information,
says Ms Shukri. The worry is that online echo-chambers will only deepen
the country’s religious cleavages. As one user mused underneath the slap
video: “This is only going to get worse.” ■
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malaysia
Asia | A strongman struggle

Narendra Modi and Donald Trump go head-to-

head
A dispute over tariffs and oil escalates
August 7th 2025

Editor’s note: On August 6th Donald Trump announced that the additional
tariff he had threatened to impose on Indian goods would be 25%, bringing
the total tariff rate to 50%.

On August 4th Donald Trump took to Truth Social, his social-media

platform, to berate India: because the country’s “massive” oil purchases fund
“the Russian War Machine”, he said, it would suffer substantially steeper
tariffs than the 25% the president slapped on the country last week. Two
days later he added a further 25% from August 27th—pushing the total tariff
rate to 50%. In some ways the president is not wrong: Russia supplied a
negligible 0.2% of India’s oil imports before the war in Ukraine. Since then,
it has become India’s biggest supplier, providing between 35% and 40% (see
chart). But Mr Trump’s vendetta also marks an ugly end to his bromance
with Narendra Modi, India’s prime minister.

Months-long negotiations between the two countries towards a “mini-deal”

have yielded a final tariff rate that is virtually double the original threat of
26% tariffs on Indian exports to America. Previously, Mr Trump has
complained about the total bilateral trade of $212bn, that India hoped would
be a sign of closer ties. In Mr Trump’s view, though, America runs a
“MASSIVE TRADE DEFICIT WITH INDIA!!!”

Few in India seem in the mood for compromise. In a defiant public address
on August 2nd Mr Modi avoided name-checking the American president but
urged economic self-reliance at a time of global uncertainty. Anonymous
Indian officials are briefing international media on India’s right to Russian
oil. America’s negotiating team is expected in Delhi, as planned, for the
sixth round of talks starting on August 25th. Even so, Ajit Doval, the
national security adviser, was warmly received in Moscow on August 6th.
Subrahmanyam Jaishankar, India’s foreign minister, will reportedly follow
later this month.
This marks a striking change from Mr Trump’s first term, when the
American president and Indian prime minister filled stadiums from Texas to
Gujarat in celebration of a blossoming bond between the two countries.
India clinched deals for defence equipment and tech usually reserved for
NATO allies and some exemptions from sanctions on its dealings with
Russia. A mutual disquiet about China’s rise lent the relationship urgency.
As a result, India welcomed Mr Trump’s comeback. According to a poll in
2024 by the European Council on Foreign Relations, a think-tank, 84% of
Indians believed Mr Trump was good news for their own country—the
highest among all 24 countries polled.

But despite Mr Modi’s outwardly friendly reception at the White House in

February, one journalist briefed on the visit describes Indian diplomats as
“stunned” by the “lack of respect” America’s president showed India’s prime
minister behind closed doors. Mr Trump has demanded that India buy more
American weapons. He used a military plane to deport illegal Indian
migrants in handcuffs. Trade disputes between the two countries in Mr
Trump’s first term look like “an early sign of the madness that was to come”,
concedes one former Indian ambassador.

Economic assessments of the fallout from MAGA tariffs are shaky. Indian
manufacturers—of textiles and garments, for example—will find themselves
at a huge disadvantage compared with regional competitors such as
Bangladesh, Indonesia and Vietnam. These countries have emerged from Mr
Trump’s executive-order blitz facing tariff rates on their American exports
less than half of India’s. At least, to India’s relief, existing exemptions for
pharmaceuticals and electronics seem to have survived. India is the world’s
biggest exporter of generic drugs and is also experiencing an electronics-
export boom. Trade experts assume that Apple will keep making most of its
American-sold iPhones in India. However, other companies may be wooed
by lower tariffs elsewhere.

Even India’s few reliably pro-American voices are losing faith. Mr

Jaishankar, known for his patient decades-long campaign to corral sceptical
compatriots into American arms, has mounted no recent defence of Mr
Trump. Instead, on August 4th he said that: “We live in complicated and
uncertain times. Our collective desire is to see a fair and representative
global order, not one dominated by a few.” A hawkish foreign-policy analyst
now uses a term usually reserved for China, saying that India should “de-
risk” from America. India’s small club of free-market economists has
stopped arguing for India to unilaterally lower its tariffs. One foreign-affairs
insider describes how, under previous administrations, the view was that
“America cannot be trusted”. Now that Mr Trump has alienated Mr Modi’s
government, India “will go back to thinking that way,” she says. ■

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to-head
Asia | Banyan

Nuclear nightmares are back

A grim anniversary points to fading memories and a fraying world order
August 7th 2025

The survivors of the atomic bombings of Hiroshima and Nagasaki have had
to live through several stages of trauma. First came the horrors of August 6th
and August 9th 1945: the blinding flash, the ferocious force, the flesh-
melting heat; plus the black rain, the flattened buildings, the charred corpses.
“It was a real hell,” recalls Tanaka Shigemitsu, who was just four years old
in Nagasaki when the bomb dropped there. Then came decades of quiet
suffering, as radiation ate away at victims’ bodies and stigma at their souls.
Finally there have been the frustrations of recent years, as the hope of a
world without nuclear weapons has receded into the distance.

This year’s anniversaries, the 80th, come at an especially worrying time. As

recently as 2009, nuclear weapons seemed increasingly anachronistic.
Barack Obama, then America’s newly elected president, spoke seriously of a
nuclear-free world. Instead, the world has entered what strategists call a
“third nuclear age”, messier and more combustible than ever before. “The
danger of nuclear weapons being used has never been as imminent at any
time during the past 80 years,” laments Mr Tanaka, the co-chair of Nihon
Hidankyo, an association of hibakusha, as the atomic-bomb survivors are
known in Japan.

Russia’s threats to use nuclear weapons in Ukraine helped usher in this new
era, but the underlying developments are deeper. The arms-control
architecture of the cold war has broken down. The New START treaty, the
last remaining pact between America and Russia limiting nuclear arms, is
due to expire next year. Existing nuclear states are building up and
modernising arsenals. America’s nuclear umbrella, which offers assurances
of protection to vulnerable allies, is fraying, prompting discussions about
nuclear armament in countries such as Poland, Saudi Arabia and South
Korea. Even in Japan, talk of acquiring a bomb is no longer beyond the pale.

Around the world, the “nuclear taboo”, the shared moral revulsion that has
helped control the use of nuclear weapons, seems to be weakening. Threats
have become ever more overt. Just last week, as hibakusha prepared for
ceremonies in Hiroshima and Nagasaki, America’s president and the deputy
head of Russia’s Security Council traded nuclear barbs on social media like
internet trolls.

The dawn of this new nuclear age is not for lack of effort on the part of the
hibakusha. Achieving political miracles was always an unfair burden to
place upon them, but for decades survivors like Mr Tanaka have been telling
their stories across Japan and around the world, hoping to bring about
disarmament. Nihon Hidankyo received last year’s Nobel peace prize for
“demonstrating through witness testimony that nuclear weapons must never
be used again”; hibakusha have also been central to the International
Campaign to Abolish Nuclear Weapons, a network that won the peace prize
in 2017 for pushing the United Nations to adopt a treaty barring the
development, acquisition, stockpiling or use of nuclear weapons.
Unsurprisingly, not one of the world’s nuclear states has signed up.
For the Japanese government, the new nuclear age heightens a long-standing
tension. Japan believes it has a special responsibility, as the only country to
have been attacked with nuclear weapons, to advocate for disarmament. But
it also depends on nuclear deterrence to ensure its security in a dangerous
neighbourhood, facing three nuclear-armed states: China, Russia and North
Korea. At a ceremony in Hiroshima on August 6th, Ishiba Shigeru, the
prime minister, promised to “work with all our might” to realise a “world
without nuclear weapons”. Yet much to the chagrin of the hibakusha, Japan
has also refused to sign the new UN treaty.

And the hibakusha will not be around to speak out much longer. “We are
approaching an era when hibakusha are no longer with us,” notes Suzuki
Shiro, Nagasaki’s mayor. Efforts are under way in Hiroshima and Nagasaki
to keep their memories alive for future generations. Both cities have been
training scores of “atomic-bomb legacy successors”—memory keepers
tasked with inheriting a specific hibakusha story.

But fewer than 100,000 officially recognised hibakusha are now alive, down
from a peak of nearly 400,000. Many of those still around were quite young
at the time, like Mr Tanaka: the average age of the remaining survivors is 86.
It is surely no coincidence that a new nuclear era is dawning just as the
hibakusha’s voices are growing quieter. ■

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China
Six months after DeepSeek’s breakthrough, China speeds on with AI
Savvy staff are moving from China’s nurseries to its care homes
Shanxi province is struggling to diversify away from coal
China | China’s AI juggernaut

Six months after DeepSeek’s breakthrough, China

speeds on with AI
Real-world applications have priority over cutting-edge development
August 7th 2025

THE MECCA for China’s boom in artificial intelligence is Liangzhu, a leafy

suburb of Hangzhou, the tech-heavy capital of Zhejiang province. The
Communist Party has long touted Liangzhu’s famous archaeological
remains, dating back to 3300BC, as proof of the age of Chinese civilisation.
Now Liangzhu, with its myriad AI startups, represents the future. Investors
from all over China flock there to meet growing numbers of founders, app
engineers and other AI developers and dreamers. It is six months since a
barely known AI startup, DeepSeek, caused a huge stir by releasing an
impressive open-source model trained for a sliver of the cost of fancier
Western ones. Its founder studied at Zhejiang University, a tech mothership
not far from Liangzhu. The area is at the heart of an AI ecosystem which
China hopes will soon rival America’s.

The signs are promising. Last month three Chinese labs introduced stellar
large-language models that are reckoned to be among the world’s best. AI
technologies have “broken through the critical threshold of usefulness”, says
one early-stage investor who frequents Liangzhu. He predicts a surge in how
AI can be applied. “Once the water boils,” he says, “many people want to
build a steam engine.”

Sam Hu, at a sunny café in Liangzhu’s main plaza, is one such person. After
stints at Tencent, a tech giant, and two ride-hailing firms, last year Mr Hu
struck out on his own to develop an AI agent that helps managers make
decisions. The moment was right. These days, he explains, “the cost of trial
and error is lower.”
The prize for Mr Hu and his peers is enormous. Morgan Stanley, a bank,
predicts that China’s AI industry will grow from $3.2bn last year to $140bn
by 2030; that figure jumps to $1.4trn when AI-related sectors such as
infrastructure and component suppliers are included. In June last year some
8% of Greater China firms surveyed by Gartner, a consultancy, were using
generative AI. Less than a year later the figure had leapt to 43%.

The question now is how to keep the industry steaming along. Some of the
early frenzy around DeepSeek has passed, and plenty of users still grumble
about how models can “hallucinate”. But DeepSeek’s breakthrough has
helped shift China’s approach to AI in profound ways. It has lowered costs
and moved the emphasis away from cutting-edge development and cut-
throat competition among developers of AI models towards explorations of
how AI can be applied across business, industry, the public sector and
society itself. The importance of AI for China—and indeed the way it can
outdo America, its AI promoters increasingly argue—is through its
adoption, adaptation and diffusion: that is, spreading the use of AI more
broadly.

It helps greatly that China’s leadership believes the same thing, and is
offering state backing. President Xi Jinping’s handshake with DeepSeek’s
founder, Liang Wenfeng, broadcast earlier this year into the country’s living
rooms, helped transform how ordinary Chinese view AI. Grandparents were
suddenly keen to try out chatbots. The early frenzy was all a bit over the top,
says Louis Dong, who developed AI courses for schoolchildren after parents
bombarded the education company he works for with requests. Now, Mr
Dong says, the focus is on identifying applications for specific industries and
putting AI capabilities to pragmatic use. Rapid adoption is key, many
experts argue, and DeepSeek’s breakthrough, along with advances in other
models, is enabling it.

Companies appear to be adopting a more can-do attitude by experimenting

with the technology. There is still room for improvement. Accenture, a
consultancy, found that 46% of Chinese firms have broadly integrated
generative AI, but only 9% saw real benefit in productivity or profit growth.
It is early days, AI executives insist. Jiang Xinghua, chief technology officer
at Yizhi Intelligence, which develops AI customer-service agents for
retailers and AI livestreamers for beauty brands, says ever more clients want
to adopt AI-enabled products, and are even tolerant of them making minor
mistakes.

A big question is how much AI products can improve. A lot, say the techno-
optimists. Chinese efforts to train new models have been complicated by
America’s ban on exports of its most advanced AI chips. In April President
Donald Trump’s administration banned shipments to China of Nvidia’s H20
chip, which is deliberately hobbled to make it less effective for training
(though it is well suited to “inference”—the process of actually running AI
models for customers). In July America reversed course. Yet the political
uncertainty and risk remain.

Strikingly, China’s AI development seems to sail on through the turbulence.

At a huge AI conference in Shanghai last month, the boss of a leading
Chinese model-maker, MiniMax, predicted inference costs would continue
to fall as they have done, by orders of magnitude. Mr Jiang of Yizhi
Intelligence says that although Chinese AI development is frustrated by
being denied the best foreign models (such as Gemini and GPT), domestic
open-source models are improving rapidly. (So rapidly, indeed, that on
August 5th OpenAI, the developer of GPT, released its first free and
customisable models in years, to compete with Chinese ones.)

Meanwhile, the state is playing a big role, not only by supporting AI

development, but also in creating demand. In April, when the leadership
convened a study session on AI, Mr Xi talked about making the most of
China’s juguo tizhi youshi—its systematic, state-led advantage in mobilising
the whole country.

Lower levels of government, used to reading cues from the top and keen to
find new areas of economic growth, have embraced the message, often
rather keenly. When Rokid, a Hangzhou startup making AI-equipped
glasses, submitted an application to the district-level government for a
subsidy, 3m yuan ($420,000) appeared in its account within eight minutes.
Across China, cities are rushing to offer subsidies for everything from
housing to computing power to tailoring open-source models to suit business
needs. The state is also an important customer. State museums offer Rokid
glasses for tours, while state power workers use them to identify faults along
transmission lines.
Meanwhile, provincial and municipal governments have rushed to use
DeepSeek to improve hotlines, analyse data and interpret policies for
residents. Shen Yang, a professor at Tsinghua University, says he has
consulted for twice as many government units across China this year
compared with last year. They all want to know how to use AI. One example
he cites is Beijing’s Haidian district, well-known for its tech universities and
businesses, which has deployed AI software to help teachers prepare lessons.
Another is Jiangxi province, which wants to integrate AI into its rare-earth
and ceramics industries.

Plenty of risks come with the state and investors rushing in. Analysts at
Jefferies, an American investment bank, identify enthusiasm for humanoid
robots as a bubble in the making. Humanoid robots are part of an “embodied
AI” push written into the central government’s work report this year. Local
governments are falling over themselves to back them. Yet it may be years
before the humanoids can be put to profitable use—if they ever can.

Other applications of AI might carry greater risks than excess capacity. In

April Tsinghua researchers asked if the more than 300 Chinese hospitals
already using DeepSeek were moving “too fast, too soon” and were in
danger of making diagnoses based on false outputs. Last month another
group of researchers identified “an urgent need” to ensure that AI was being
safely and responsibly deployed at hospitals. The central leadership is
growing more aware of the possible pitfalls. Last month Mr Xi named AI,
along with computing power and electric vehicles, as areas shown excessive
attention by local governments. “Do all provinces have to develop industries
in these directions?” The answer is surely “no”. But for now, their
involvement is another reason for thinking that China’s AI juggernaut will
keep rolling. ■

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world.
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breakthrough-china-speeds-on-with-ai
China | From colouring in to calligraphy

Savvy staff are moving from China’s nurseries to

its care homes
Last year there were 12m fewer pre-school pupils than in 2021
August 7th 2025

LESS THAN three years ago Ms Jiang was tidying away toys and singing
rhymes as a teacher at a nursery in Beijing. She remembers parents knocking
on the door in an effort to sign their children up. That gradually became
rarer, until last year Ms Jiang found herself distributing promotional leaflets
for the nursery in her lunchbreaks. She realised the writing was on the wall.
Last May Ms Jiang moved into a sector with better growth prospects: care
homes. “Caring for the elderly is easier than caring for young children,” she
says. And Ms Jiang’s abilities to teach handicrafts and play games come in
useful.
Between 2017 and 2022 China’s total fertility rate, the average number of
births per woman, crashed from 1.8 to 1—far below the replacement rate of
2.1, at which a population remains stable in size. To help boost births China
has announced subsidies of 3,600 yuan ($500) each year for every child
under the age of three. That is too little, too late for nurseries. Between 2021
and 2024 pupil numbers in pre-schools fell from 48m to 36m. Some 42,000
of 295,000 pre-schools have closed, and 360,000 of 3.2m pre-school
teachers have quit.

A silver lining exists for those savvy enough to adapt. Whereas China’s
nursery-going cohort, from ages three to six, will fall by 14m in the next five
years, the number of people aged 65 and over will rise from 211m to 256m,
according to UN projections. China badly needs more staff to care for them.
In 2021 it had just half a million certified care workers, according to
People’s Daily, a party mouthpiece. That made for just 0.27 care workers per
100 people aged 65 and above, a shockingly low number. (Rich countries
average nearer six.) Universities have launched degrees in elderly care. The
first batch of students graduated last year, to hot demand.

All this motivated one Ms Wu in 2023 to open her own care home in Jiangxi
after years in nurseries. She has nine residents paying 2,600 yuan a month to
be there. The outlook is bright, she says: right now those in care homes have
multiple children on average. Those born in the 1970s and 1980s mostly
have only one child, which means fewer people to look after them when they
eventually get old. Ms Wu gets enquiries almost every day from prospective
customers. She has also had a few from nursery teachers looking to make the
switch she did.

The government likes “mixed-use” facilities where both young and old are
looked after. Last year in Chongqing in south-west China, for example, an
empty floor of a nursery was turned into an “elderly-care station”, according
to a local report. It had facilities for table-tennis and space for calligraphy,
and when the nursery teachers were free, they taught the elderly. A
newspaper run by the National Development and Reform Commission,
China’s main economic planning body, has called for local governments to
provide subsidies and tax concessions to such projects. The old certainly
enjoy seeing the young; some grandparents even drop off tiny relatives at the
nursery before heading to their own floor. ■
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China | Sputtering along with the dirty stuff

Shanxi province is struggling to diversify away

from coal
Why the transition is going so slowly
August 7th 2025

ON A MUGGY July morning the museum of coal in Taiyuan, capital of

Shanxi province, is bursting with visitors. An exhibit boasts of the
province’s reserves of 650bn tonnes of coal. “Mining could last for over 200
years,” it enthuses. Asked if coal would still be dug up in that distant future,
a guide nods eagerly, seemingly unaware of China’s green transition.

Shanxi is China’s most sluggish province. Last year its economy grew by
2.3%, well below the national average of 5%. In the first half of this year, it
grew by 3.8% compared with a year earlier: a marked improvement on 2024,
but still the slowest of the pack. A man tending an electronics shop in
Taiyuan is unaware of Shanxi’s poor standing. Yet he says its economy is
only “so-so”. He adds, hopefully: “Things will definitely get better sooner or
later.”

A big problem is Shanxi’s long-standing dependence on coal. In 2021 its

rising price set the local economy flying. The province grew by 9.1%,
putting it third in provincial rankings that year. Since then fortunes have
dived. In June Shanxi’s producer prices fell by 13.6% compared with a year
before. Wages at coal companies are down, with workers laid off.

When President Xi Jinping visited in July, he exhorted local officials to

speed up its economic transition. “For a long time Shanxi has prospered on
coal, but also been trapped by it,” he has said. There should be a “sense of
urgency” in transforming the economy, Mr Xi told the Shanxi cadres back in
2020.

Yet efforts to wean Shanxi off coal have achieved little. In 2012 the National
Development and Reform Commission, China’s main economic-planning
body, hatched a plan to “vigorously” expand the service sector. By 2015, it
hoped, “the economy’s reliance on coal resources will be visibly reduced.”
In 2023 Shanxi’s service sector made up 43% of the economy, up from 38%
in 2013. But mining still made up 30% of GDP, a percentage point more
than in 2013.

Entrenched interests and inefficient government are obstacles. Shanxi is

boxed in by mountains, has bad infrastructure and is riddled with
bureaucracy, says Ms Jia, a 26-year-old working at a medicine company.
Lumbering state enterprises get priority when bidding for projects, stifling
private business. They are bloated with too many workers. Talented
youngsters flee the province on graduation to work elsewhere, including
Tianjin and Beijing.

Last year’s launch of Black Myth Wukong, a hit video game, brought an
avalanche of tourism. The province’s beautiful but hitherto deserted temples
and caves, featured prominently in the game, were suddenly full of tourists,
sparking hopes of a smart transition. But despite over 100m visits to local
attractions by the year’s end, tourism barely affected the GDP figures. When
The Economist visited recently, the sites were quiet.
Now efforts to diversify have been dealt another blow by China’s trade war
with America. In the second quarter of this year Shanxi’s exports shrank by
33% compared with a year earlier, the biggest drop in any province. Much of
the decline came from smartphone exports. Foxconn, a Taiwanese
manufacturer that assembles iPhones for Apple, has two plants in Shanxi.
Once the hope for broadening its industrial base, they may now be victims of
shifting supply chains. So far this year America has imported 47% of its
smartphones from China, down from 81% last year.

On Dianzi Lu (Electronics Street) in Taiyuan, where Foxconn’s plants are

located, paint is peeling off the buildings. At closing time glum workers
stream out from the factory gates, uninterested in chatting to your
correspondent. Around town one sees few luxury cars and fewer cranes,
unusual for a provincial capital.

Shanxi has tried to gee itself up in areas such as renewable energy and high-
end equipment manufacturing, with a “rapid rise” in the hydrogen industry,
says Li Guomin at Taiyuan University of Technology. Coal companies now
also make hydrogen out of their coal. There are plans to put hydrogen-
powered vehicles on the streets. But these developments are slow. A
“transition demonstration zone”, housing such projects, was set up in 2017.
In the first quarter of this year its output amounted to about 5.3bn yuan
($738m), according to People’s Daily, a party paper: a measly 1% of local
GDP.

China is pushing hard to roll out green energy such as solar and wind, but is
still burning more coal. One day demand for it may fizzle out. In his annual
work report Jin Xiangjun, Shanxi’s governor, mentioned “transition” 24
times, up from 17 in 2024. Hardly a revolutionary change. ■

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Middle East & Africa
A glimpse of Gaza’s miserable future
Israeli sentiment on the war in Gaza is shifting
How climate change could spread malaria
Why it’s a pain to take a plane in Africa
As the world focuses on Gaza, starvation also looms in Sudan
Middle East & Africa | Irreversible damage

A glimpse of Gaza’s miserable future

The territory will remain at the mercy of outsiders for years to come
August 7th 2025

FOR weeks the world has claimed it is working to end the widespread
hunger in Gaza. The UN is pleading with Israel to allow more lorries of aid
into the territory. Arab and Western states are airdropping food. On August
5th Donald Trump said America would take a larger role in distributing aid,
though he was vague about the details. “I know Israel is going to help us
with that in terms of distribution, and also money,” he said.

Yet on the ground, Gazans say little has changed. There is not enough food
entering Gaza, nor is there law and order to allow its distribution. Airdrops
are hard to reach. Convoys are looted soon after they cross the border.
Finding food often requires making a risky trip to an aid centre, where
hundreds of Palestinians have been killed in recent months, or paying
exorbitant sums on the black market.

This is a calamity in its own right, one that will have long-term
consequences for many Gazans, particularly children. But it is also a
glimpse of Gaza’s future. Even after the war ends, it will remain at the
mercy of others for years to come.

Wedged between Israel and Egypt, the tiny territory was never self-
sufficient. Its neighbours imposed an embargo after Hamas, a militant group,
took power in 2007. The economy withered. Half of the workforce in the
strip was unemployed and more than 60% of the population relied on some
form of foreign aid to survive. The UN doled out cash assistance, ran a
network of clinics that offered 3.5m consultations a year and operated
schools that educated some 300,000 children.

Still, Gaza could meet at least some basic needs by itself. Two-fifths of its
territory was farmland that supplied enough dairy, poultry, eggs and fruits
and vegetables to meet most local demand. Small factories produced
everything from packaged food to furniture. The Hamas-run government
was inept and repressive, but it provided law and order. After nearly two
years of war, almost none of that remains.

The UN’s World Food Programme (WFP) says that Gaza’s 2m people need
62,000 tonnes of food a month. That is a bare-bones calculation: it would
provide enough staple foods but no meat, fruits and vegetables or other
perishables. By its own tally, Israel has allowed far less in. It imposed a total
siege on the territory from March 2nd until May 19th, with no food
permitted to enter.

Then Israel allowed the UN to resume limited aid deliveries to northern

Gaza. It also helped establish the Gaza Humanitarian Foundation (GHF), a
shadowy outfit that distributes food at four points in southern and central
Gaza. In more than two months of operation, it has handed out fewer than
0.7 meals per Gazan per day—and that assumes each box of aid, stocked
with a hotch-potch of dried and canned goods, really provides as many
meals as the GHF claims it does. All told, Israel permitted 98,674 tonnes of
food aid to cross the border in the five months through July, an average of
19,734 tonnes a month—just 32% of what the WFP says is necessary.

Although the volume of aid has increased in recent days, it is still

insufficient. “We’re trying to get 80 to 100 trucks in, every single day,” says
Valerie Guarnieri of the WFP. “It’s not a high bar, but a realistic bar of what
we can achieve.” On August 4th, though, Israel allowed only 41 of the
agency’s lorries to enter a staging area on the Gaza border, and it let drivers
collect just 29 of them.

Getting into Gaza is only the first challenge. Distribution is a nightmare.

Since May 19th the UN has collected 2,604 lorryloads of aid from Gaza’s
borders. Just 300 reached their intended destination. The rest were
intercepted en route, either by desperate civilians or by armed men. Aid
workers are nonchalant about civilians raiding aid lorries, which they
euphemistically call “self-distribution”: they reckon the food still reaches
people who need it. “There’s a real crescendo of desperation,” says Ms
Guarnieri. “People have no confidence food is going to come the next day.”

But the roaring black market suggests that much of it is stolen. Gaza’s
chamber of commerce publishes a regular survey of food prices (see chart).
A 25kg sack of flour, which cost 35 shekels ($10) before the war, went for
625 shekels on August 5th. A kilo of tomatoes fetched 100 shekels, 50 times
its pre-war value. Such prices are far beyond the reach of most Gazans.
Those with a bit of money often haggle for tiny quantities: a shopper might
bring home a single potato for his family, for example.

Israel’s ostensible goal in throttling the supply of aid was to prevent Hamas
from pilfering any of it. Earlier this month the group released a propaganda
video of Evyatar David, an Israeli hostage still held in Gaza. He was
emaciated, and spent much of the video recounting how little he had to eat: a
few lentils or beans one day, nothing the next. At one point a militant handed
Mr David a can of beans from behind the camera. Many viewers noted that
the captor’s hand looked rather chubby. As much of Gaza starves, Hamas, it
seems, is still managing to feed its fighters.

The consequences of Israel’s policy instead fall hardest on children—

sometimes even before birth. “One in three pregnancies are now high-risk.
One in five babies that we’ve seen are born premature or underweight,” says
Leila Baker of the UN’s family-planning agency. Compare that with before
the war, when 8% of Gazan babies were born underweight (at less than
2.5kg). There were 222 stillbirths between January and June, a ten-fold
increase from levels seen before the war.

The Integrated Food Security Phase Classification (IPC), a UN-backed outfit

that tracks hunger, said last month that 20,000 children were hospitalised for
acute malnutrition between April and mid-July. Even before they reach that
point, their immune systems crumble. Moderately malnourished children
catch infections far more easily than well-fed ones, and become more
seriously ill when they do, rapidly losing body weight.

The body takes a “big hit” when food intake falls to just 70-80% of normal,
says Marko Kerac, a paediatrician at the London School of Hygiene and
Tropical Medicine who has treated children in famine-stricken places. Most
children in Gaza are eating a lot less than that. In July the World Health
Organisation reported an outbreak of Guillain-Barré syndrome, a rare
autoimmune disease that may have links to hunger. Gaza’s health ministry
says cases are multiplying, including among children.
Nor is calorie intake the only concern. Although flour and salt in Gaza are
fortified with some vitamins and minerals, such as iodine, they are
consumed in limited amounts—especially now, since many bakeries have
been closed for months, owing to a lack of flour and fuel. In February,
during the ceasefire, Israel allowed 15,000 tonnes of fruits and vegetables
and 11,000 tonnes of meat and fish into Gaza. Since March it has allowed
just 136 tonnes of meat. All of this means there is widespread deficiency of
essential nutrients that help children’s brains develop.

Every child in Gaza, in other words, will remain at lifelong risk of poor
health because of today’s malnutrition. There is consistent evidence for this
from studies of populations that have lived through famine: during the
second world war, the 1960s famine in China and, more recently, places like
Ethiopia. Children who have suffered acute malnourishment have higher
rates of heart disease, diabetes and other chronic diseases as adults. They are
also at risk of worse cognitive development.

A flood of aid cannot undo the damage, but it can prevent it from getting
worse. It will have to be sustained. The devastation wrought by Israel’s war
has left Gazans with no alternative but to rely on aid.

In February the UN estimated that the war had caused $30bn in physical
damage and $19bn in economic disruption, including lost labour, forgone
income and increased costs. Reconstruction would require $53bn. At this
point, that is little more than a guess. The real cost is impossible to calculate.
But it will be enormous.

The first task will be simply clearing the rubble. A UN assessment in April,
based on satellite imagery, estimated that there were 53m tonnes of rubble
strewn across Gaza—30 times as much debris as was removed from
Manhattan after the September 11th attacks. Clearing it could be the work of
decades. The seven-week war between Israel and Hamas in 2014, the
longest and deadliest before the current one, produced 2.5m tonnes of debris.
It took two years to remove.

Rebuilding a productive economy will be no less difficult. Take agriculture.

The UN’s agriculture agency says that 84% of Gaza’s farmland and 71% of
its greenhouses have been damaged in the war. Livestock have been all but
wiped out.

A satellite assessment last summer found that 68% of Gaza’s roads had been
damaged (that figure is no doubt higher today). The two main north-south
roads—one along the coast, the other farther inland—are both impassable in
places. Even if farmers can start planting crops for small harvests after the
war, it will be hard to bring their produce to market. The picture is equally
bleak in other sectors: schools, hospitals and factories have all been largely
reduced to rubble.

The Geneva Conventions are clear that civilians have the right to flee a war
zone. Exercising that right in Gaza is fraught: Palestinians have a well-
grounded fear that Israel will never allow them to return. Powerful members
of Binyamin Netanyahu’s government do not hide their desire to ethnically
cleanse the territory and rebuild the Jewish settlements dismantled in 2005.
Still, the dire conditions have led some people to think the unthinkable: a
survey conducted in May by a leading Palestinian pollster found that 43% of
Gazans are willing to emigrate at the end of the war.

Mr Netanyahu may not follow through on his talk of reoccupying Gaza,

which he hinted at in media leaks earlier this month. His far-right allies may
not fulfil their dream of rebuilding the Jewish settlements dismantled in
2005. In a sense, though, the ideologues in his cabinet have already achieved
their goal. Israel’s conduct of the war has left Gazans with a grim choice:
leave the territory, or remain in a place rendered all but uninhabitable. ■

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miserable-future
Middle East & Africa | The ones who care

Israeli sentiment on the war in Gaza is shifting

More and more people are outraged by the conduct of their government
August 7th 2025

During the annual fast for the sacking of Jerusalem on August 3rd,
worshippers mourn the Jewish temple the Roman army destroyed nearly
2,000 years ago. This year Itamar Ben-Gvir, Israel’s national-security
minister, led thousands of Jews in prayer on Temple Mount and promised to
rebuild the temple in place of the Dome of the Rock, a Muslim shrine. But
on a rooftop on the other side of the city some Jews lament destruction past
and present. “Gaza is desolate and laid ruin. We are the new Romans,” a
religious leader with the Faithful Left, a group that has flourished during the
war, tells his flock.

Until last month, such hand-wringing was a fringe spectacle in Israel. Most
Israeli Jews thought their country was waging a just war. But since mid-July,
mainstream news bulletins that had shunned pictures of suffering in Gaza
have begun showing footage of the emaciated and cast doubt on the morality
of the cause. “This is not a public-relations failure but a moral failure,” Yonit
Levy, Israel’s most popular anchor, said on television. Jerusalemite Jews
packed a cultural centre to watch “We’re no heroes”, a documentary by a
film-maker fighting in Gaza’s ruins. “We used to know why we sent our
sons to war,” says a parent of two conscripts. “Now we no longer do.”

For most of the war, Israel’s left-wing opposition either supported it or

withdrew from the fray. Tens of thousands left Israel. But the few activists
who rally outside airbases with pictures of Palestinian children killed by
Israeli bombs speak of a broader awakening. They say their numbers, though
paltry compared with the hundreds of thousands demonstrating in capitals
around the world, have grown ten-fold.

Some former generals and a few mainstream politicians echo the protest. “A
sane country does not kill children as a hobby,” Yair Golan, the head of the
left-wing Democrats, said in May. Moshe Yaalon, a former defence minister,
calls infant-killing and ethnic cleansing “government policy”. In early
August hundreds of academics, artists and architects called on soldiers to
disobey orders. On August 6th a group of law professors questioned the
legality of the war in a letter to Binyamin Netanyahu, the prime minister.

Accusations of genocide are also no longer taboo. In late July B’Tselem and
Physicians for Human Rights, two of Israel’s most prominent human-rights
organisations, issued parallel reports detailing the annihilation of life in
Gaza. Both concluded Israel is perpetrating genocide. “My heart is broken,
but I must say it: it’s genocide,” David Grossman, a well-known novelist,
told an Italian newspaper.

Why the shift in opinion? A ceasefire earlier this year was supposed to bring
back the remaining 20 or so living hostages. When Mr Netanyahu resumed
the war in March, many Israelis began to rethink its rationale. Reservists
who have spent 200 or more days at the front are increasingly reluctant to
fight a war without end. Global condemnation has begun to resonate.
Journalists question editors about the gap between global and local
coverage. Sports commentators challenge football managers about the
impact of a growing European boycott. Academics worry about their
prospects abroad. Opposition politicians say Israel is becoming a pariah
state.

Mr Netanyahu ploughs on regardless. With ceasefire talks in a rut, he now

appears to be toying with the idea of occupying all of Gaza. His supporters
are equally unmoved. According to one poll, 47% of them consider reports
of starvation in Gaza fake news. Another 18% say they don’t care. (Only
23% say they do.) Pro-government channels accuse critics of the war of
acting like a fifth column. “Let them leave,” says a commentator on Channel
14, which supports Mr Netanyahu.

Still, there are cracks. Eyal Zamir, the army chief, struggles with an
exhausted reserve corps and resists orders that would suck him deeper into
Gaza’s quagmire. Politicians who speak out against targeting civilians are
gaining support. Even the police have grown more tolerant of protest, say
activists. The plight of Palestinians remains far down the list of Israelis’
political concerns. But it is inching upwards. ■

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Middle East & Africa | Hot buzz

How climate change could spread malaria

And how scientists are scrambling to stop it
August 7th 2025

Southern Africa is suffering a malaria surge. Countries including Botswana,

Eswatini, Namibia and Zimbabwe are experiencing outbreaks of the disease,
which causes fevers and chills and kills 600,000 people worldwide every
year. Zimbabwe has been particularly badly affected. By July it had reported
nearly four times as many cases and more than six times as many deaths as
over the same period in 2024.

The surge may be a harbinger of things to come. Global warming is

expected to stymie the fight against malaria, with most of the harm
concentrated in Africa. By 2050 1.3bn Africans will live in areas where, due
to climate change, the disease will be harder to eradicate than it is today,
predicts the Malaria Atlas Project (MAP), an NGO. MAP estimates that
unless efforts to control malaria improve, changing weather patterns will
cause an extra 550,000 malaria deaths between 2030 and 2049 (see map).

The picture is not simple. Warmer weather could make malaria seasons
longer and speed up the mosquito life cycle. Heavier rains could make rivers
spill their banks and form breeding grounds. Climate change will
redistribute the burden of malaria, shifting it into regions where people have
less natural resistance. On the plus side, some areas will grow too hot for
mosquitoes, including parts of the Sahel. But such places are thinly
populated.

One reason for the recent surge in Zimbabwe was the uneven use of bednets.
Increasing heat may make people even more reluctant to use them. “Suppose
you are a pregnant woman who sleeps in a hot hut,” says Alastair Robb of
the World Health Organisation. “You’ve been told to use an insecticide-
treated net. It’s uncomfortable to start with, and then the temperature goes
up. A lot of people will stop.”

Perhaps the biggest threat comes from natural disasters, which climate
change is making more common and intense. Take the floods that hit
Mozambique in December 2024. Some 70,000 homes were destroyed;
500,000 people were affected. When floodwaters recede, they leave stagnant
pools and puddles—ideal places for mosquitoes to reproduce.

When the larvae mature, they find victims who no longer shelter in
insecticide-doused houses, because their homes have been washed away, and
who cannot get to a clinic when they fall sick, because the roads are flooded.
MAP projects that 90% of the extra malaria deaths from climate change will
come from extreme weather, mostly because floods deprive people of shelter
and access to medicine. Taking into account both gradual warming and
natural disasters, only one African country, Niger, is expected to have fewer
malaria deaths by 2050 because of climate change.

Countries are scrambling to adapt. South Africa currently has much less
malaria than Mozambique, thanks to a cooler, drier climate and decades of
well-organised mosquito-bashing. In 2023 Mozambique had roughly 9m
cases; South Africa only 5,000. However, climate change could make parts
of South Africa warmer, wetter and buggier. Meanwhile, because wages are
relatively high there, it attracts migrant workers from neighbouring countries
with more malaria, such as Mozambique. These migrants can bring the
parasite with them.

This is why, at the frontier town of Manguzi, every minibus from

Mozambique is accosted by a blood-test tout. Young men and women with
big smiles offer free malaria screening. Any traveller with the parasite in
their blood is given free malaria drugs. Crucially, no one asks about visa
status. Even the infected are free to journey on, with pills in their pockets
that make the parasite harder to pass on. That is far more effective than
trying to quarantine people. South Africa has nearly 5,000km of land
borders that migrants can easily cross unobserved.

Another possible defence is to sterilise male mosquitoes. At a lab in

Johannesburg, they are zapped with gamma rays to render their sperm
infertile before being released into the countryside. They mate with females,
which then lay eggs that never hatch, explains Power Tshikae, an
entomologist in KwaZulu-Natal, a South African province bordering
Mozambique. His team places clay pots that mosquitoes like to rest in near
cattle kraals and monitors how many they attract. The aim is to keep
numbers low, even as climate change makes the area more mosquito-
friendly. (Only the females bite and spread malaria.)

In countries where malaria is entrenched and likely to get worse, another

promising approach is vaccination. Two new vaccines are available, both of
which prevent roughly half of cases in children under five. Pilots of one in
Ghana, Kenya and Malawi showed a 13% drop in overall child mortality.
Children are now getting the jab in more than 20 countries.

Better preparation for extreme weather will be essential, too. In flood-prone

areas, stocks of malaria drugs and bednets need to be dispersed more widely
before disaster strikes, so villagers are not cut off from supplies even if they
are inundated. Globally, efforts are being made to make malaria drugs more
heat-stable, so they do not spoil before they are used.

Another challenge is to bring climate and malaria data together, so

policymakers can see how one affects the other. TDR, a UN-backed
programme, is working with health ministries in Senegal and Nigeria to map
how outbreaks shift with the weather. Integrating climate data into malaria
models should make them more accurate, allowing countries to prepare for
outbreaks.

Malaria is not just a killer. It also makes people poorer. Feverish workers are
less productive. Sick kids learn less in school. And when children need to be
taken to a clinic, it is the mother who drops what she is doing “99.9% of the
time”, says Michael Adekunle Charles of the Roll Back Malaria movement.
A recent study found that a 10% fall in malaria incidence was associated
with an increase in income per person of nearly 0.3%. “If we’re able to
reduce the burden of malaria, ultimately there will be more money flying
around that can be used for development,” says Dr Charles. ■

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Middle East & Africa | Flying low

Why it’s a pain to take a plane in Africa

Bad connections, high fees and strict visa rules hamper travel around the
continent
August 7th 2025

Freetown, the capital of Sierra Leone, is as far from Lagos, Nigeria’s

commercial hub, as Berlin is from Athens. But whereas a round-trip ticket
for the three-hour flight from the German capital to the Greek one can be
had for around €150 ($173), getting from Lagos to Freetown took your
correspondent two flights, a ferry and almost $2,000. The trip included a
seven-hour layover in Ghana and required changing from a Nigerian to a
Togolese airline. The cheaper option, albeit longer by 20 hours, would have
been to fly across the continent to Ethiopia before taking another plane west
towards Sierra Leone.
The journey is illustrative of much air travel in Africa. In a massive
continent that contains 16 landlocked countries, planes should be an obvious
way of getting around. Yet flying between African countries is an ordeal.
Passengers and non-human cargo alike have to contend with terrible
connections, sky-high prices, and hostile visa rules and customs regulations.
That hampers the exchange of goods, people and ideas.

Much like other African infrastructure, the continent’s poor air connections
are both a symptom and a cause of its poverty. Few Africans can afford to
fly, so for airlines it is not worth offering many connections. Even though
nearly a fifth of the world’s people live on the continent, it accounts for just
2% of air travellers. Those who can pay for tickets tend to travel outside the
continent rather than within it. In 2023 only 28% of flights run by African
airlines were to other African countries, whereas 80% of flights by European
airlines were within Europe. Even so, flights within Africa operated at just
76% capacity on average, the lowest in any region.

A lack of competition begets poor service quality. Fusty national carriers

dominate the market. Their fleets and their safety records are better than
they used to be. But they charge high prices, both because they frequently
have a monopoly on a particular route and because they have to hedge
against currency movements and compensate for limited access to credit.

Governments are making things more unpleasant. Not all go as far as Mali,
Burkina Faso and Niger, which recently banned Air France from serving
their countries, making them even harder to reach. But most are cash-
strapped and see their travelling citizens as a source of revenue. Average air
taxes in Africa are twice those in the richer Middle East. Nigerian travellers
pay an average of $180 in tax on every international trip; those in Gabon and
Sierra Leone have to fork out around $300. In Freetown, simply leaving the
airport costs an additional $25. The African Union’s plan for a more
liberalised, single air-transport market has not got off the ground.

The joy of flying around the continent is further dampened by Byzantine

visa rules. Aliko Dangote, a Nigerian entrepreneur and Africa’s richest man,
has complained about visa requirements that render business travel at short
notice all but impossible. Less than a third of trips around the continent are
visa-free for Africans; getting the right permit is both expensive and can take
weeks, if it comes through at all.

All this makes it much harder to move goods and people. Africa-themed
conferences are frequently held in the Gulf. A Tanzanian and a Senegalese
who want to do business can meet more conveniently in Doha than in Dar es
Salaam or Dakar. Cargo that might be flown across vast distances instead
has to travel for days on terrible roads, crossing many borders.

There is some hope for African flyers. Thanks to Ethiopian Airlines and
Kenya Airways, flying in east Africa is already smoother than getting
around the west or across the continent. Yet there is progress even in west
Africa. Ivory Coast wants to become a travel hub, with its state airline
adding more routes. Happily for your correspondent, Sierra Leone’s flag
carrier recently started flights to Lagos. Qatar Airways is eyeing a stake in
RwandAir that could help it expand in central Africa. If that helps African
countries close the gaps between each other, they may yet make progress on
closing the gap between the continent and the rest of the world. ■

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take-a-plane-in-africa
Middle East & Africa | The other hunger crisis

As the world focuses on Gaza, starvation also

looms in Sudan
The civil war shows no signs of ending
August 7th 2025

More than two years after it began in April 2023, the war in Sudan shows no
sign of ending, with deadly consequences for the people of Africa’s third-
largest country. On August 5th the World Food Programme (WFP), a UN
agency, said that residents of el-Fasher, in the western region of Darfur,
faced starvation. It was a grim sign of the humanitarian toll of the war at a
time when the locus of the conflict is shifting westwards, raising the
prospect of a permanently fractured state.

El-Fasher, the capital of north Darfur, is the last major city in the region
under the control of the Sudanese Armed Forces (SAF), one of the two main
belligerents. The other, the Rapid Support Forces (RSF), has besieged the
city since April 2024 to secure its Darfuri stronghold. Some residents have
been able to flee the city and the Zamzam refugee camp on its outskirts, but
a common destination, the nearby town of Tawila, is crammed and in the
midst of a cholera outbreak. Since the RSF was ousted from Khartoum, the
capital, in March, it has tightened the noose around el-Fasher.

That has made it harder for food to get in—and for people to get out. Aid
agencies report that food prices are five times higher than in the rest of the
country. Often food is unavailable, rendering redundant the mobile-money
payments and community kitchens that have so far averted starvation. Local
journalists report that many of the 300,000 remaining residents are turning to
animal feed. The WFP says it has lorries ready to enter el-Fasher, but the
RSF is blocking access.

The SAF and its allies have proved unable—or unwilling—to mount a full
effort to liberate the city. The army is focused on the neighbouring area of
Kordofan, where the RSF has intensified attacks in recent months. If the
militia succeeds in taking parts of Kordofan, the country will probably end
up divided. The likeliest outcome would be an RSF-dominated zone in the
west and a SAF-controlled east, in addition to smaller fiefs controlled by
other militia groups.

Outsiders claim to want to stop the war that has forced nearly 13m to flee
their homes in the world’s worst humanitarian crisis. But late last month
America cancelled a meeting of a “quad” of countries that also included
Egypt, Saudi Arabia and the United Arab Emirates (UAE). They disagreed
about what a statement ought to say about the role of the RSF, which is
backed by the UAE, and the SAF, historically supported by the other two
Arab states, in a post-war Sudan. Sadly that notion seems as remote a
possibility as ever.■

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on-gaza-starvation-also-looms-in-sudan
Europe
Europe’s top court nixes Italy’s plan to expel migrants, for now
A tariff avalanche catches Switzerland unawares
Albania’s new anti-corruption unit is taking down bigwigs
Moldova’s election will test its resistance to Russia
Why the Germans are falling out of love with beer
Europe’s Hogwarts has a new Dumbledore
Europe | Is it safe?

Europe’s top court nixes Italy’s plan to expel

migrants, for now
Countries must be completely safe before asylum-seekers can be sent back
August 7th 2025

Italian politicians rarely agree on much, but they were unanimous in finding
a ruling from the European Court of Justice (ECJ) on August 1st hugely
important. They differed, however, as to whether it was good or bad. A
“watershed”, declared an opposition deputy. A judgment that blocked the
government from “combating illegal immigration and defending the nation’s
borders”, thundered the office of the prime minister, Giorgia Meloni.

The judgment will indeed have immediate effects, and its implications reach
beyond Italy. It concerned a scheme that has stirred the approving interest of
other European leaders. Last year Italy began freighting migrants who had
been rescued at sea, and were felt to have a shaky case for asylum, to camps
in Albania. That was because they were from countries the government had
deemed safe. Once in Albania, their applications were put on a fast track on
the assumption that most would fail and that the applicants could then be
promptly repatriated. Controversially, Italy’s safe-countries list includes
Bangladesh and Egypt.

Italian judges blocked the scheme on suspicion that it violated European

Union law. They ordered the migrants who had been sent to Albania to be
returned to Italy. Of the two camps in Albania, one was intended for the
reception of migrants and the other for detention. The detention camp has
been repurposed to house asylum-seekers whose applications have been
definitively rejected and who are awaiting repatriation. But prison-welfare
officials who visited the site reported on August 4th that only 37 people had
been repatriated and that the camp housed a mere 27 inmates. The scheme
has become an embarrassment to the government and a godsend for the
opposition, which has branded it a colossal waste of taxpayers’ money. Over
the five years to the end of 2028, it is expected to cost around €680m
($790m).

The ECJ ruled that the Italian judges were in the right, and specifically in the
case of two asylum-seekers from Bangladesh. For a country to be put on a
safe list, it had to offer “adequate protection to its entire population”, the
court said. That sets the bar high. It freezes the Italian government’s already
stalled plans for shipping migrants across the Adriatic. And it will no doubt
make other European governments think hard before proposing any similar
expulsion schemes.

But there is an important caveat. The ECJ’s judgment only concerns Italy’s
compliance with the EU’s existing rules—which are being replaced. The
EU’s Pact on Migration and Asylum, due to come into effect next June,
allows member states to designate countries as broadly safe while making an
exception for certain areas or sections of the population. The authorities will
thus be able to fast-track applications from people who are not from those
regions or minorities. That provision could open the way to a flurry of
lawsuits of the sort that have repeatedly scotched the efforts of European
governments to stem irregular migration. But the pact also empowers
governments to speed through requests for asylum from people whose
compatriots’ applications have a high rejection rate. Denmark, which holds
the EU’s rotating six-month presidency, wants the bloc to let members apply
these looser provisions before the pact comes into force.

The pact will not allow governments to ignore the ECJ’s new ruling entirely.
The judgment makes several broader points. The designation of a country as
safe must be subject to review by the courts. And the information on which
the designation is based needs to be available so that objectors can lodge
proper challenges. “That will continue to be relevant even once the pact
comes into effect,” says Susan Fratzke of the Migration Policy Institute, a
think-tank in Brussels.

Arguably, though, the most important aspect of the judges’ ruling is what it
omits. Italy’s pioneering scheme has two aspects. One is the fast-tracking of
arrivals from ostensibly safe countries. But the other is their deportation to
what is, in effect, imprisonment in a third country.

Why Italy is so set on transporting migrants to Albania has never been

entirely clear. Since the deal between the two countries designates the camps
as Italian territory, nothing can be done there legally that cannot be done
back in Italy. Part of the reasoning appears to have been practical. Within
Italy, local objections have frustrated authorities’ efforts to build the holding
camps they need to detain migrants waiting for their asylum requests to be
processed. Diverting them to Albania, which is not a member of the EU, also
eliminates the risk of their slipping away to live as undocumented residents
in Italy or other member states. Just as important are the psychological
effects of deportation. Anyone hoping for a better life in Europe is bound to
be daunted by the risk of being kicked back outside EU territory.

Many Italians concerned about immigration, including voters who back Ms

Meloni’s hard-right Brothers of Italy party, believe—mistakenly—that the
scheme dumps the problem onto a neighbouring state. Whether involving a
non-EU state is compatible with European law has yet to be tested in court.
As Adriana Tidona of Amnesty International notes, “the ECJ judgment does
not have anything to say about the legality of extraterritorial detention.”
Even once the new pact comes into force, that is an issue over which
lawyers will doubtless seek to wrangle. The battle is far from over. ■
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Europe | All stick, no carat

A tariff avalanche catches Switzerland unawares

The soaring rate is based on exports of Trump’s favourite metal
August 7th 2025

THE FIREWORKS celebrating the Rütlischwur, Switzerland’s foundational

oath on August 1st 1291, had just subsided when Donald Trump announced
that Swiss exports to America would soon face tariffs of 39%. It was a shock
to Europe’s most stubbornly independent country. Karin Keller-Sutter, the
president, flew to Washington on August 5th. As The Economist went to
press, she seemed to have come back empty-handed.

Switzerland had negotiated early. The deal it offered “was not so different
from that of the European Union”, says a senior Swiss official. It contained
similar pledges to invest in America, an overall tariff rate lower than the
EU’s and other goodies. Switzerland could hardly open its own market
wider: it had already cut tariffs on nearly all industrial goods to zero, and its
currency is overvalued by about 50%, according to our Big Mac index.

What sealed Switzerland’s fate was its outsize trade surplus in goods with
America, which reached $48bn in 2024. That comes to about 5% of Swiss
GDP, too much for the deficit-obsessed American president, who bizarrely
thinks this amounts to “stealing money” from Americans. The surplus
surged to $54bn in the first quarter of 2025 alone—and Mr Trump is largely
to blame. Upon his inauguration, uncertainty over American policy rose
sharply, leading investors to seek safety in one of Switzerland’s main
exports: gold (see chart). The country is responsible for about a third of
global gold refining, and typically exports around $4.5bn-worth to America
each year. That grew to $12.5bn in 2024 and $48bn in the first five months
of 2025.

Switzerland’s role as a refiner can make trade flows look deceptively big. It
exported $116bn-worth of gold last year, but also imported $100bn-worth.
America charges no tariffs on gold imports, and Mr Trump is not likely to
impose any on his favourite metal. Switzerland’s gold exports, along with
the watches and jewellery it sells to America (worth $7bn in 2024), may
simply have convinced the president that the country is rich enough to bear
more.
Drugs are the other Swiss export that angered the president. “We want to be
making pharmaceuticals in our country,” Jamieson Greer, the US trade
representative, said after the tariff announcement. Mr Trump sent letters to
17 pharma CEOs, including those of Novartis and Roche, two Swiss
companies, to demand prices in line with the lowest in comparable
economies. “I don’t think it was a coincidence that we had a tough call with
the president 20 minutes after” the letters were sent, the Swiss official says.
Luckily for Switzerland, drug tariffs will stay at zero pending American
decisions about global pharma policy.

Because of the exemptions for gold and pharma, Switzerland faces an

overall effective tariff rate of just 12% for now. But businesses other than
gold and pharma must pay the 39% rate. They are the main victims of Mr
Trump’s economically misguided focus on bilateral trade balances. Half of
Switzerland’s overall trade surplus with the world is with America, because
its specialties—pharma, gold, luxury items and high-end machinery—fit
American demand.

Thermoplan, the sole supplier of coffee machines to Starbucks, a coffee

chain, is considering a partnership with an American firm to lighten the tariff
burden. “Some businesses say they will just increase prices; others have
already lost half of their orders from America,” says Daniel Kalt of UBS, a
bank. Switzerland is likely to face a mild recession, should the tariffs stick,
but its flexible economy will be able to adjust.

The Swiss will also look more eagerly to co-operate with others. The EU’s
better deal is helpful because Swiss firms are integrated into European
supply chains, and the country trades far more with Europe than with
America. Yet politically, being slighted by America hurts. The country is
moving towards a referendum on a permanent package of agreements with
the EU, in place of its long-standing patchwork of temporary deals.
Eurosceptics who want to reject that proposal will find their case harder to
make. “Their narrative is breaking down now: being alone out there has not
paid off,” says Mr Kalt. That was also the central insight of the Rütlischwur,
more than 700 years ago. ■

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Europe | How the mighty are falling

Albania’s new anti-corruption unit is taking down

bigwigs
Prime Minister Edi Rama is not always amused
August 7th 2025

In the Tirana of the 1930s, as Lea Ypi, an Albanian academic, writes in a

forthcoming book, wags used to debate whether corruption was “the cause
of Albanian misery or rather its most natural consequence”. You might hear
the same argument today in Albania’s capital. One thing, however, has
changed: for the first time in Albania’s century of statehood, an independent
anti-corruption unit is arresting politicians, officials and drug smugglers,
apparently without fear or favour.

The Special Structure against Corruption and Organised Crime (SPAK)

began work in 2019. Opinion polls show 76% of Albanians trust it, making
it the most popular institution in the country. Ever more of Albania’s elite,
including senior officials of the governing Socialist Party, are being caught
in its dragnet. Edi Rama, the prime minister, is no longer as enthusiastic as
he was when it mostly arrested his enemies.

In 2023 SPAK placed Sali Berisha, a former president who leads the
country’s main opposition party, under house arrest. He is on trial for
corruption. Last year it arrested Ilir Meta, another former president and now
opposition leader. He too has been charged with corruption. Former
ministers in Mr Rama’s governments have also been arrested, and in
February it was the turn of Erion Veliaj, the Socialist mayor of Tirana,
considered a possible successor to Mr Rama. All three deny the charges.

In its role combating organised crime, the unit has scored major successes
working with police abroad. Typically, an Albanian drug kingpin might
operate from Dubai. His buyers in Ecuador ship to Europe, where his men
oversee distribution. He then invests his profits in construction in Albania,
and his foot soldiers buy flats. In July SPAK seized assets from men
allegedly laundering drug money from Switzerland, and charged another
group with trying to smuggle guns to Britain.

The arrests of politicians are more controversial. Mr Berisha claims Mr

Rama is persecuting him, and calls SPAK “his whip”. But the rising number
of Mr Rama’s close associates accused of corruption has tarnished his image
as well. When Mr Veliaj was arrested, it was the prime minister’s turn to
accuse SPAK of abusing human rights. This earned him rebukes from the
European Union; one diplomat from an EU country calls his allegations
“bollocks”. Mr Rama soon dropped his attacks.

Mr Rama has promised that Albania will join the EU by 2030. A track
record in fighting corruption is a vital criterion, and several member states
rate SPAK’s co-operation in fighting drug gangs highly. Much as Mr Rama
might have wanted to stick up for Mr Veliaj, he also understood that
attacking it was a vote-loser. A source in the judiciary says laconically that if
Albania’s political classes were happy with its work, “we would have a
problem.”

Mr Veliaj began his career as an anti-corruption activist. As mayor of Tirana

since 2015, he has helped transform it from a ramshackle town to an
attractive city. But SPAK says Mr Veliaj and his wife laundered money from
developers via a system including donations to NGOs. Six months after his
arrest, Mr Veliaj remains behind bars; he was formally indicted only on July
23rd. That is par for the course in Albania, where 62% of those in prison are
actually in pre-trial detention, a far higher number than elsewhere in Europe.
Indicted alongside Mr Veliaj is a Socialist Party deputy accused of witness
tampering. On July 15th SPAK also indicted a former Socialist MP for
allegedly sharing police information with a crime boss in exchange for help
during elections. Mr Veliaj, his wife and both MPs all deny SPAK’s
allegations.

Arbi Veliaj, the mayor’s brother, says SPAK has “gone rogue” and that it is
keeping him in prison on spurious grounds. His arrest has divided Tirana’s
chattering classes. Some mutter darkly that SPAK is a reincarnation of the
Sigurimi, the communist-era secret police. Others are delighted by the
felling of the powerful, who they think have long been stealing from regular
folk. The judicial source says that the point of establishing SPAK was to end
the country’s “culture of impunity”. In Albania, that would be the story of
the century. ■

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Europe | Battling Russia’s bots

Moldova’s election will test its resistance to Russia

Pro-EU President Maia Sandu faces off against disinformation and
oligarchs
August 7th 2025

On August 1st a journalist who writes for an American celebrity-gossip site

woke up to a nasty shock. The site had been cloned, and she appeared as the
author of a fake story claiming that Maia Sandu, the president of Moldova—
a country that most of the journalist’s readers would have trouble locating—
had spent $400,000 on “illegally obtained sperm” from gay stars, including
Elton John. Moldova will hold a parliamentary election on September 28th,
and like many foes of Russia, Ms Sandu and her party are being targeted by
disinformation campaigns.

It was a textbook “matryoshka”, or Russian-doll, operation. Few see the

cloned site itself, but the article is disseminated by networked accounts on
social media, where its seeming origin in a foreign news source lends it
credibility. Such stories are everywhere, says Vadim Pistrinciuc, a Moldovan
political analyst: “On Telegram, TikTok, Facebook, they have thousands of
accounts.” Bot networks are supplemented by payments to local influencers.
Saturated by such garbage, people sometimes end up believing it. More
often, they become unsure whether any news is real.

Speaking with The Economist, Ms Sandu lists such disinformation as one of

ten types of electoral interference orchestrated by Russia. Another is vote-
buying, which was rife during a presidential election and a referendum on
joining the European Union last year. Also last year, a hundred or so
Moldovans got paramilitary training from Russian instructors in Serbia and
Bosnia. Russia’s aim, Ms Sandu says, is to “take control” of the part-
Romanian-speaking, part-Russian-speaking country.

In 2024 Moldova’s government, led by Ms Sandu’s Party of Action and

Solidarity (PAS), opened accession negotiations with the EU. Should PAS
lose the election, that process could be suspended. Last October’s
referendum passed with only 50.3% support, and the following month Ms
Sandu required overwhelming support from Moldovan voters abroad to be
re-elected to a second term. According to the country’s intelligence services,
vote-buying schemes in both elections were organised from Russia by Ilan
Shor, a fugitive oligarch who was convicted for his role in the theft of $1bn
from Moldova’s banks in 2014.

Polls (which are unreliable in Moldova) show PAS leading with over 35% of
the vote, but it will probably lose its absolute majority in parliament. A pro-
Russian government could come to power, or PAS may be forced into
coalition with nominally pro-European parties whose leaders have had links
with Russia in the past. These include Ion Ceban, mayor of Chisinau, the
capital, who accuses Ms Sandu of calling everyone outside her party an
agent of Russia’s hybrid war. “You could not do European integration if
other parties in the coalition do not really support it,” says Ms Sandu.

About a third of the electorate is strongly pro-European, says Mihai

Mogildea, another political analyst. A third is pro-Russian, and the rest are
moderately pro-European or somewhere in-between. But economics plays a
role. If siding with Europe and resisting Russia are seen to entail higher gas
and electricity prices, he says, many “moderate pro-Europeans think ‘no, no,
no, I don’t want this.’”

In Copaceni, 100km north-west of Chisinau, men slam dominoes loudly in

the village pub. Their views are a bewildering mix of contradictions.
Nicolae, a pensioner, wants Moldova to join the EU, but thinks the union
will collapse within three years—a familiar Russian propaganda line. “All
deputies are bandits,” says Simion, another pensioner. Then he adds: “I want
to be with both Europe and Russia,” another self-contradictory notion
propagated by pro-Russian politicians.

Maria, a retired teacher, is a staunch supporter of PAS. She says that during
the presidential election a group of village women boasted openly about how
much money they were paid to bribe others to vote for Mr Shor’s party.
After the election one of them was arrested, fined “and got really scared”.
Now the group are as “meek as mice”, she chortles.

Another fugitive oligarch, Vlad Plahotniuc, was arrested in Athens on July

22nd. Before fleeing in 2019, Mr Plahotniuc spent several years as
Moldova’s unofficial leader: although nominally a mere MP, he in effect
controlled all government institutions. He has been charged in connection
with the $1bn bank fraud, though he denies having anything to do with it.
According to the Insider, an investigative website, he recently travelled to
Moscow to meet an adviser of Vladimir Putin. If Mr Plahotniuc were
extradited to Moldova “in handcuffs” before the election, it would
undoubtedly help PAS, says Mr Mogildea.

A decade ago, Ms Sandu was a plucky anti-corruption campaigner and

opposition leader waging a quixotic struggle against Mr Plahotniuc and his
fellow oligarchs. Today she is president and he is under arrest. It is an
astonishing story, but that may not be enough to keep her party in power.
Russia’s mouthpieces, Ms Sandu says, are trying to scare Moldovans by
claiming that PAS will ensnare the country in the war in Ukraine. In fact, she
says, the opposite is true: electing pro-Russian parties would put Moldova at
the disposal of Russia’s war effort. It might also bring back the likes of Mr
Shor and Mr Plahotniuc—and not in handcuffs. ■
Editor’s note (August 7th 2025): This article originally stated that Ms Sandu
was narrowly re-elected. In fact Ms Sandu won a solid 55% of the vote. The
Economist regrets the error.

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Europe | Tapping out

Why the Germans are falling out of love with beer

In the land of biergartens and Oktoberfest, Helles increasingly for other
people
August 7th 2025

SUMMON THE idea of the German at play, and chances are you see a rosy-
cheeked Lederhosen- or Dirndl-clad youngster bearing half a dozen
overflowing steins of beer. Never mind that—as the rest of Germany will
hasten to remind you—you have taken Bavaria as a synecdoche for the
entire country. The real problem with this image is that Germans are losing
their taste for the tipple that once defined them.

On August 1st Germany’s statistical office announced that in the first half of
2025, six-month beer sales had fallen below 4bn litres for the first time since
it began counting in 1993. In 2005 the median German quaffed 112 litres of
the stuff. The figure is now less than 90. Germany remains the sixth-biggest
beer market in the world. But whereas Germans once downed more than
anyone bar the insatiable Czechs, they are now eighth in the per-person
league table. Worse, the decline is gathering pace. “Panic” has gripped some
breweries, says Gerrit Blümelhuber, a consultant.

Some of the culprits are familiar: Germany is ageing, and younger folk are
less keen on booze. Some blame cost, though that seems hard to square with
the €15 ($17.40) Kisten (crates) of Paulaner on supermarket shelves.
Struggles in hotels and restaurants point to a broader hospitality problem.
And yet the decline in wine-drinking is much gentler. “There is a noticeable
thirst for beer in Germany,” says Volker Kuhl, ceo of the C&A Veltins
brewery, but “no desire for a third or fourth glass”.

If there is a glimmer in the glass it is the booming non-alcoholic sector,

which now accounts for almost one-tenth of beer brewed in Germany
(though it is excluded from official statistics). Rare is the Biergarten without
an alkoholfrei offer; last year Munich saw its first devoted solely to
boozeless brews. Germany’s sometimes-staid Braumeister are trying new
techniques like using wild yeasts that do not ferment all the sugar in the
brewing process. But Germany’s storied purity law, which limits what can
be marketed as beer, is not always an invitation to innovate, warns Markus
Raupach of the German Beer Academy.
Even in the brightest forecasts, non-alcoholic beer cannot possibly
compensate for the decline in the boozy sort. Nor can exports, which are
dwindling even more quickly than domestic sales and now face Donald
Trump’s tariffs. Nearly 100 German breweries have closed in the past five
years; more will surely follow. A sobering thought. ■

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Europe | Charlemagne

Europe’s Hogwarts has a new Dumbledore

Patrizia Nanz is trying to make the European University Institute relevant
August 7th 2025

There can be few better places to contemplate Europe’s destiny than the hills
that look south across Florence, the city that nurtured the continent’s
intellectual rebirth during the Renaissance. Such is the mission of the
European University Institute (EUI), set up in 1976 and housed there in
some of the glorious villas that Italy keeps lying around for such purposes.
The institute’s founding document speaks of fostering “the advancement of
learning in fields which are of particular interest for the development of
Europe”. Though relatively little-known, the EUI is among the world’s
foremost graduate schools, with departments of economics, history, law, and
political and social sciences.
Soon after its founding, however, it became apparent that the EUI’s splendid
digs might be distracting its scholars. As one insider explained to
Charlemagne: “Left to their own devices, the academics began producing
studies of the wool trade in 15th-century Flanders and suchlike.” He was
joking—up to a point. A search for recent articles on the EUI’s database
produced a list headed by “Silk consumption and dressing practices in late-
medieval Catalonia”. In 1993 the university set up a new division, the
Robert Schuman Centre, to keep things forward-looking and relevant, but
with mixed success. In 2017 a School of Transnational Governance was
founded in the hope that this would finally do the trick.

To most residents of Florence, the EUI’s doings are as much of a mystery as

the goings-on at Los Alamos must have been to the inhabitants of Santa Fe.
More to the point, over the past 15 years or so the channels between the EUI
on the one hand and the European Commission and Council on the other
became clogged. To be sure, some alumni went on to become commission
officials or national politicians. But overall, Europe’s Hogwarts was
producing too few practising wizards. “It has hosted a lot of really important
thinkers,” says Mark Leonard, head of the European Council on Foreign
Relations, a think-tank in Berlin. “But there have always been questions
about whether it is relating to the practical business of government—and
whether it has an animating vision.”

Last year Patrizia Nanz, an academic of German and Italian heritage, took
over as the EUI’s president, determined to fix these problems. Having also
worked in the private sector, in publishing and as an adviser to corporations
and governments, she is hard to dismiss as an ivory-tower intellectual. Since
arriving in Florence, Ms Nanz has wielded, if not a chainsaw, then certainly
a stiff new broom. One of her earliest moves was to scrap the institute’s
annual flagship event, a grandiosely titled State of the Union conference that
she decided had become a costly networking fest.

The next step was to take up that animating vision. The summary version of
the new mission statement she and her colleagues drafted has three points:
maintaining academic excellence; providing orientation to European
institutions and society at large; and communicating more effectively with
the world outside academia. On the second count, Ms Nanz is trying to get
the institute to co-operate with the member-state governments that do most
of Europe’s governing, rather than just with Brussels. A new project with the
Polish government on security and defence has kicked off that effort.

More philosophically, the EUI’s new president wants to host a rethink of

Europe’s intellectual foundations, one that goes beyond tedious debates over
how much power the EU’s federal government should get. She wants to take
things to a deeper level. The first chapter of the EUI’s new mission
statement is titled “What is Europe?” And this is where some problems
appear.

European politics today is divided between groups with incompatible visions

of what Europe is. No definition can satisfy both the continent’s mainstream
parties and its nationalist populists. Take, for example, the controversial
address that Giorgia Meloni, Italy’s hard-right prime minister, delivered to
parliament in March. Ms Meloni read extracts from the Ventotene
Manifesto, a sacred text of European unification written during Mussolini’s
dictatorship by two imprisoned anti-fascist activists. Her reading included
affirmations such as: “The European revolution needs to be socialist; private
property must be abolished.”

“I don’t know if that’s your Europe,” Ms Meloni declared. “But it certainly

isn’t mine.” (Neither was it that of the Manifesto; she had distorted the
quotes.) The point that even admirers of the EU now abjure some of its
founders’ convictions might have been fair. But the opposition took it as an
attack on the very concept of European unification. Ms Meloni’s party is
descended from Italy’s fascists, not their opponents. Deputies leapt to their
feet, roaring in indignation. One was so overcome by emotion that he wept.

It is not clear that the EUI, an institution anchored in the liberal tradition of
the EU, can accommodate ideas rooted in Eurosceptic nationalism. Yet the
populists are now an inescapable force in the continent’s politics. They have
intellectual outfits and erudite pontificators of their own. Their visions of
Europe, rooted in religion, ethnicity, conservative sexuality and cultural
purity, may be winning out. Why would they come to the EUI to discuss
them?

Ms Nanz thinks common ground can be found. The EU’s enthusiasts, she
argues, must embrace a word dear to nationalists: sovereignty. The trick is to
identify where European states need “joint sovereignty” to regain their
strength, as after the second world war when the focus was coal and steel.
Today the key fields are digital tech and AI. Nationalists and integrationists
should be able to agree that only by acting in concert can European countries
hope to compete with America and China. She may be right. It is certainly
worth debating. Perhaps a working group or conference could be set up. No
doubt a villa is available in Florence. ■

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Britain
AstraZeneca’s falling out with Britain
British authorities are cracking down on strip clubs
Is Britain’s Green Party too nice to emulate Reform UK?
Stella Rimington battled communists, terrorists and literary critics
What’s Britain good at?
Starmer versus the burrito taxi
Britain | Big Pharma

AstraZeneca’s falling out with Britain

The country’s largest listed company is a jewel that may drop out of the
crown
August 7th 2025

IN A COUNTRY struggling to find reasons for cheer, British life sciences

offer a ray of hope. The £108bn ($145bn) industry employs more than
300,000 people, many in high-value jobs, and Britain is a genuine global
power. No wonder ministers like to boast about it. Sir Keir Starmer, the
prime minister, has said it could be “the rocket fuel for our stagnant
economy”.

That fuel tank could now be leaking. The launch of Labour’s Life Sciences
Sector Plan on July 16th was peppered with optimistic references to this
“world-leading” industry unlocking growth. But the last of its “six bold
actions” conveyed a fear: the express goal to ensure life-science firms “stay
in the UK”. This seemed aimed at AstraZeneca, Britain’s most valuable
listed firm. The pharma giant’s increasingly fractured relationship with its
home country lays bare Britain’s weaknesses and strengths as a home for
life-science firms.

Sir Pascal Soriot, the firm’s outspoken CEO (a French-born Australian), has
not been shy in voicing frustrations with Britain. He has reportedly held
private discussions about changing its primary listing to New York, a move
that could open doors to a larger, more diverse investor base (Sir Pascal
declined to comment for this article). On July 29th, in a press call following
the firm’s half-year earnings announcements, he called AstraZeneca a “very
American company”. He said about Britain that the firm needed “to see that
there is access and a reason to invest.”

This is partly a negotiating tactic to get a better deal from the British
government, including on what the NHS pays for its drugs. But the risk of a
departure is real. The announcement on July 21st that AstraZeneca would
invest $50bn in America by 2030, no doubt in anticipation of tariffs imposed
by Donald Trump, and Sir Pascal’s statement that this reflected a “belief in
America’s innovation in biopharmaceuticals”, will add to British angst.

The company’s original decision to list in Britain in 1999, after a merger of

Sweden’s Astra and Britain’s Zeneca Group, was largely an endorsement of
its attractive climate for research and development (R&D). Sir Pascal, who
took over in 2012, helped AstraZeneca turn a corner after years of
stagnation, eschewing higher shareholder payouts (buy-backs ceased
between 2013 and 2021) and channelling cash into scientific discovery
instead.

When Pfizer, an American rival, made a takeover bid in 2014, ministers

called for AstraZeneca’s protection on public-interest grounds. In 2020 the
race for a covid-19 vaccine solidified its status as a national asset. Its life-
saving jab, developed with Oxford University, became a symbol of British
scientific prowess and turned AstraZeneca into a household name. Its share
price has risen by nearly half since.

But its relationship with Britain has frayed. In 2021 Sir Pascal picked
Ireland over England for a new £320m factory, later blaming Britain’s
“discouraging” taxes. In November 2024 NICE, England’s drug-approval
body, rejected the firm’s breast-cancer drug, Enhertu, over its high price,
despite its availability in 25 other European countries, including Scotland.
Months later AstraZeneca scrapped a £450m expansion of its vaccine plant
in Liverpool after ministers threatened to slash subsidies from £90m to
£40m on cost-effectiveness grounds, citing a reduction of AstraZeneca’s
R&D promises. Sir Pascal rejected a final offer of £78m, calling the project
“unviable” just hours after the chancellor, Rachel Reeves, had called the
firm one of Britain’s “great companies”.

In part this is simply haggling. In negotiations over the Liverpool plant, the
firm apparently raised several unrelated issues, including complaints about
the NHS’s drug-pricing mechanism and NICE’s rejection of its breast-cancer
drug. Clawback taxes are another gripe. Earlier this year the Association of
the British Pharmaceutical Industry (ABPI), a trade body, complained to
Wes Streeting, the health secretary, about having to pay back nearly a
quarter of its members’ total sales—quadruple the average rate in France.

But the tensions also underscore some of Britain’s weaknesses when it

comes to attracting and holding onto life-science companies. Its share of
global pharmaceutical R&D is in decline. The number of phase III clinical
trials (the stage closest to treatment) plunged by two-fifths between 2017
and 2021, making Britain drop from fourth to tenth in the world. It is starting
to recover and now stands at eighth place, behind countries like Spain (third)
and Italy (seventh). A survey by the ABPI found that in 2022 some 30% of
its members deemed Britain among the top three countries for launching
new medicines globally; this year only 13% did. Since 2010 Britain has
fallen from the fifth-largest exporter of pharma products to ninth.

Yet the opportunity in Britain is still vast, at least in theory. Its strengths
include world-class scientific talent and groundbreaking research. Britain’s
academics account for more than a tenth of global citations in medical
science, surpassed only by America and China. The potential for using the
NHS’s vast patient database for research is unrivalled. Just this week Sir
Pascal praised Britain’s “tremendous science” and “talented people”.

One way to boost Britain’s appeal to drugmakers would be to reform the

much-loathed (by pharma) drug-approval process. To be deemed cost-
effective, a drug must provide an additional quality-adjusted life year
(QALY) for no more than £30,000, according to thresholds set by NICE. Yet
the Treasury pegs the value of a QALY at £70,000, fuelling accusations that
the regulator undervalues new drugs. Lifting regulatory barriers for clinical
trials would also help, reckons Huseyin Naci of the London School of
Economics. More investment would be better achieved through increasing
public R&D and boosting public-private partnerships, he adds.

Meanwhile AstraZeneca is increasingly flirting with America, where it

employs more people than anywhere else. The company believes this market
will account for half of revenues by 2030 (up from 44% today). In addition
to pledging big investments, it recently rejoined the Pharmaceutical
Research and Manufacturers of America, the country’s biggest drug lobby.

America has long claimed that Europe is freeloading on stateside pharma

spending. Mr Trump is putting pressure on drug companies to reduce prices
in America. He is also pushing for higher prices across the Atlantic. The
terms of America’s trade deal with Britain require it to “improve the overall
environment for pharmaceutical companies operating in the United
Kingdom” in exchange for preferential tariff rates.
Agreeing to higher prices for medicines or reducing rebates would put
further strain on the NHS. The alternative is costly, too. The ABPI estimates
that keeping the current rebate rates would result in £11bn of lost R&D by
2033. AstraZeneca has already made big commitments elsewhere: $1.5bn
towards a cancer-drug factory in Singapore, $570m for 700 scientific jobs in
Canada, $1.5bn for its R&D centre in Spain and $2.5bn towards a new one
in Beijing—its second in China. It has earmarked only £200m for a
conference facility in Cambridge. Winning back AstraZeneca will be neither
simple nor cheap.■

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Britain | The last lap-dance

British authorities are cracking down on strip

clubs
They are misguided to do so
August 7th 2025

Sugar & Spice, a strip club in Norwich, counts surgeons and judges among
its customers. The business, co-owned by Daz Crawford, an actor and
former athlete in the television game-show “Gladiators”, is fighting not only
for respectability but survival. Like most nightlife spots in Britain, it suffers
from declining footfall. It also faces challenges unique to its category. The
number of licensed clubs, formally known as sexual entertainment venues
(SEVs), in England and Wales has dropped from around 350 in the early
2000s to some 150 today. Although stigma and changing consumer habits,
including the rise of online pornography, have not helped, local restrictions
have accelerated the retreat.
Norwich City Council—like many other local authorities—has a “nil cap”
licensing policy for SEVs. This means no new licences can be issued: when
one such business closes (Norwich has three), it cannot be replaced.
Norwich also imposes constraints on what performers are allowed to do.
Performers and club owners say these have become steadily more disruptive,
with limits on “dirty talk” and on dancers touching even their own bodies.
By sanitising performances, suggests one Norwich-based dancer, Nina
Salome, the council is legislating SEVs out of business.

When strip clubs close, Ms Salome says, the demand doesn’t disappear, it
goes underground. Far from feeling exploited, Louise, a dancer at Sugar &
Spice, says the work is empowering. Tech platforms like OnlyFans are often
seen as alternatives to strip clubs. But performers say in-person work has
clearer boundaries. Louise notes the advantages of physical clubs’ security
staff, CCTV and peer friendships.

In Germany and the Netherlands sex-related industries are nationally

regulated. In Britain control is given to local councils and unionisation is
weaker. The result is a wildly uneven landscape. In some cities, like
Manchester, strip clubs are treated as part of the night-time economy, with
robust licensing reviews. Norwich City Council says it updates its policies
“to ensure businesses can continue to trade successfully and safely for
everyone’s benefit”. Mr Crawford claims that, despite repeated invitations,
“no one” from the council has attended Sugar & Spice. He does not dispute
the need for rules, but asks that those with knowledge and experience of
strip clubs be the ones to make them.■

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Britain | Green and pleasant

Is Britain’s Green Party too nice to emulate

Reform UK?
The party’s next leader will need to turn vibes into votes
August 7th 2025

Father Christmas probably votes for the Green Party, according to the British
public. A poll by More in Common in December 2023 found that 30% of
Brits thought so, more than any other party. One might assume that being
associated with a jolly, tubby, much-loved character would be a good sign
for the Greens, but voters do not seem to value Mr Claus’s political nous.
The same poll showed the party winning only 6% of the vote.

The woes of the Labour government give the Greens an opportunity to solve
this polling quandary. Sir Keir Starmer, the prime minister, has staked his
success on winning back voters from the hard-right Reform UK party. He
has adopted tough rhetoric on immigration, crime and welfare and seems to
relish rebuking Labour’s progressive voters. This creates an opening for the
Green Party to transform itself from a well-liked but powerless collection of
happy warriors to a serious political force. Due to Britain’s volatile voting
system, just a small number of voters switching sides could pull the rug out
from under Sir Keir, as happened to the previous prime minister. So far
progress is slow, but a leadership election this month could change that.

In July pollsters at YouGov found that two in five Britons had a favourable
view of the Greens, more than any other major party. Around half of those
would consider voting Green in future but only one in ten—half again—say
they would go Green if an election were held tomorrow, according to The
Economist’s tracker of nationwide voting-intention polls. Although the
Greens increased their number of seats in May’s local elections (for the
eighth time in a row), their net gain of 44 councillors pales in comparison to
Reform’s 677.

Step forward Zack Polanski, the party’s energetic deputy leader. Four days
after the local elections, he launched his leadership bid. A slick roll-out
pitched him as an “eco-populist”, whose strategy was to eat into Labour’s
base. Although Mr Polanski has emphasised his support for the Green
Party’s left-wing policies, including a wealth tax and rent controls, he
represents a dramatic shift in tone. “I think it’s a good moment for the party
to clarify that the party is challenging an unpopular Labour government,”
says Mr Polanski. “We are not there to collaborate with them. We’re not
there to be disappointed or concerned about them. We are there to replace
them.” No more Mr Nice Green.

If Mr Polanski manages to win over some Labour voters who like the
Greens, the results could be devastating for the government. After the last
election, in July 2024, the British Election Study found that over half of
Labour voters rated the Greens six out of ten or higher (see chart 1). Among
young graduates and students, this rises to almost 60%. By comparison, only
5% of Labour voters gave such positive marks to Reform and even fewer
(4%) to the Conservatives. Strong Green results in cities such as Bristol,
London and Sheffield could be the seedlings to prise cracks in Labour’s wall
of left-wing, studenty constituencies (see chart 2). Next year the party hopes
to score victories over Labour administrations in London’s borough councils
and the Senedd, Wales’s devolved parliament.

But Mr Polanski’s combative style is not to everyone’s taste. “I think it is

neither possible nor desirable to be the Reform of the left,” says Ellie
Chowns, the Green MP for North Herefordshire. Ms Chowns is running
against Mr Polanski on a co-leadership ticket with Adrian Ramsay, one of
the party’s incumbent leaders. Their candidacy has been endorsed by many
of the party’s senior figures, including Caroline Lucas, the sole Green MP
from 2010 to 2024. These endorsements made the pair early favourites,
before the election became hotly contested. Ms Chowns draws a contrast
between the “loud-hailer politics” of Reform, characterised by what she
describes as “simplistic sloganeering and scapegoating”, and Green
successes built on local campaigns.
Ms Chowns and Mr Ramsay both represent former Conservative seats which
voted to leave the EU in 2016. In both constituencies, fewer than one in ten
adults are young graduates or students—the party’s most promising voter
pool. These seats were won by the party’s incremental “Target to Win”
strategy, which pours resources into a small number of winnable seats. Ms
Chowns emphasises pragmatism. “They might vote out of frustration for a
party that promises them the Earth…but fundamentally, people do want
politicians that they can trust and that are credible.” The announcement of a
new left-wing party co-launched by Jeremy Corbyn, a former Labour leader,
could be a boost for their campaign over Mr Polanski’s—reinforcing the
argument that the Greens should focus on being distinctively
environmentalist.

There are other barriers to the Greens mimicking Reform’s success.

According to YouGov, more than nine in ten Brits have an opinion of
Reform’s leader, Nigel Farage. A recent poll by Stack Data Strategy found
that only 15% could name both Green co-leaders. The party has come under
criticism for its lack of responsiveness to news and, despite
professionalising, has struggled to shake off some of its wackier elements.
Mr Polanski himself is dogged by an article in the Sun, published in 2013,
claiming he offered breast enlargement by hypnosis while working as a
hypnotherapist. (He has apologised and said it was meant to help with bodily
self-image.)

Recent polls show Labour losing nearly as many supporters to the Greens as
to Reform (its greatest losses are to the Liberal Democrats). Under Britain’s
first-past-the-post system, this could dash Labour’s chances—at the 2024
election the Green vote was larger than Labour’s margin of defeat in 42
constituencies. Whether the Greens can turn the opportunity into political
power remains to be seen. Their choice of leader will be an indicator of how
the eco warriors will approach the battle.■

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emulate-reform-uk
Britain | A novel spy

Stella Rimington battled communists, terrorists

and literary critics
The first female head of MI5 died on August 3rd, aged 90
August 7th 2025

Watch her closely and—or so the upper echelons of British espionage felt—
you could see the signs. There was the cut of her hair, for one thing: that
close, severe crop. Something, too, in the way she held herself. And she was
a woman. There was, everyone agreed, little doubt. Dame Judi Dench’s “M”
in the 1995 film “GoldenEye” was based on Dame Stella Rimington, the
first female head of MI5, Britain’s domestic counter-intelligence and
security agency. Dame Stella agreed: she “holds her hands in the same way
as me”.

There are many ways to judge the importance of the career of Dame Stella,
who died on August 3rd, aged 90. She rose through MI5’s august alphabet of
espionage—from lowly F-Branch, to head of K-Branch, then G-Branch—to
“DG” (director general) in 1992. She caused Britons to question tired
preconceptions about women’s roles at work and in the home. (Or, as one
headline put it, was a “Housewife Superspy”. ) Perhaps most radically of all,
she caused a nice sensible woman with a nice sensible haircut to appear in a
James Bond movie, explicitly and implicitly telling him he was “a sexist,
misogynist dinosaur”.

Housewives were not, in those days, expected to become spies. Certainly not
super ones. The criterion that Vernon Kell, the founder of MI5, looked for in
his male recruits was “the ability to make notes on their shirtcuff while
riding on horseback”. For women, his criteria were rather different. “I like
my girls”, Kell said, “to have good legs.” There were indeed, Dame Stella
felt, able men in MI5. There were also “a lot of stupid men”. On the
prevalence of galloping horses, she remained silent.

Her greatest career move was, paradoxically, to abandon her own career (as
an archivist) for her husband’s. He had been posted to Britain’s High
Commission in New Delhi and she followed. Her opportunity came when
she was walking through the commission compound and someone “tapped
me on the shoulder” and asked, with the subtle tradecraft of MI5 legend,
“Psst…Do you want to be a spy?”
She was soon immersed in the thrilling world of intelligence. She found it
“pretty dull”. Her first job was to spy on communists in Sussex. Since the
comrades of Sussex seemed peaceable, she passed the time reading novels
under her desk. This, by the standards of MI5, was energetic. One colleague
arrived at 10am, went for “breakfast” at 11am; returned “smelling strongly
of whisky” at noon; went for lunch then fell asleep at four. Eventually he
collapsed in a lift and was never seen again.

Her capability (or perhaps sobriety) got her noticed and her work became
increasingly interesting. She moved from cold-war work to Irish terrorism
before, in 1992, becoming the first female DG—and the first holder of the
top job to have her name formally announced. Paparazzi duly descended, to
her horror: you could never be quite sure whether someone was trying to
shoot a photograph or just “shoot you”.

Her lack of anonymity became an asset. When she left, she published an
autobiography, then started writing spy novels. Here too she did things her
way. The key to a thriller, Ian Fleming had said, was to “write about what
people are really interested in: cards, money, gold”. In Bond novels, Bond
has a housekeeper, lots of sex with characters called things like “Pussy
Galore” and spends his time musing on “the sweet tang of rape”. In Dame
Stella’s first novel, her heroine has no housekeeper, very little sex and
spends her time musing about whether the washing machine will have
finished its run. (Spoiler alert: Chapter One ends with it “stopped mid-
cycle”.)

Critics sniffed. Her autobiography was “a dull read”; her novels

“predictable”. But whether or not she changed MI5, she has changed the
portrayal of spies. One of the highest rated spy thrillers on Netflix is not
about a male spy, but “Black Doves”, about a female spy and mother. One of
its best moments comes when the heroine, played by Keira Knightley,
pauses mid-job, to hiss “Go back to bed!” into her child’s baby monitor.
Fleming was correct: thrillers should cover what people are interested in.
But as Dame Stella showed, they are interested in women and domesticity
too. ■

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terrorists-and-literary-critics
Britain | Innovation nation

What’s Britain good at?

Surprisingly, lots
August 7th 2025

New knowledge drives progress. For centuries Britain often led the way.
Thomas Newcomen and James Watt created the steam engine. Edward
Jenner pioneered the vaccine. Ada Lovelace wrote the first computer
program. Today, claims of Britain being world-beating can sound desperate,
as it struggles to convince even its own firms that prospects are anything but
gloomy. Rumours of AstraZeneca, a pharma giant, moving its listing to New
York don’t help.

Yet Britain remains a place where ideas spark—in this lies its potential for
revival. It is home to four of the world’s top universities. One, Cambridge,
sits in the centre of the densest innovation cluster on Earth, according to the
World Intellectual Property Organisation’s Global Innovation Index. This
century Britain has created some 178 unicorns, reckons Dealroom, a data
provider—more than France, Germany and Switzerland combined (see
chart). Its venture-capital market is Europe’s largest. Consider three of
Britain’s strengths: advanced manufacturing, life sciences and technology.

The country’s global share of manufacturing has declined over the years. Yet
firms like Rolls-Royce, which has long been a leading producer of jet
engines for wide-bodied planes, continue to fly high. Using its “UltraFan”
technology, a geared turbofan with carbon-fibre blades, ceramic composites
and 3D-printed parts, Rolls-Royce hopes to re-enter the larger market for
single-aisle aircraft, aiming to power smaller jets more efficiently. Its alumni
are spreading that spirit of innovation. Itxaso Ariza, formerly chief engineer
in its aerospace division, is now at Tokamak Energy, a British firm working
on nuclear fusion.

Britain also leads in making the materials of the future. In 2010 two
scientists at the University of Manchester won the Nobel prize in chemistry
for discovering graphene, a form of carbon only one atom thick. The
nanomaterial could soon be used in high-altitude balloons to launch
satellites. Others are already aiming higher still. Space Forge, a Welsh
startup backed by nato’s innovation fund, hopes to become the first company
to manufacture semiconductors in orbit (the theory being that low gravity
and cold temperatures make space ideal for a chip factory).

Life sciences are another area of strength. Two of the world’s top pharma
firms are British. GlaxoSmithKline once led in innovation; now
AstraZeneca, the UK’s largest listed company (at least for now), invests
heavily in genomics, oncology and artificial intelligence (AI). Britain is
“well ahead of most of the US” in training scientists who understand biology
and computation, says Chris Gibson, boss of Recursion Pharmaceuticals, an
American drug-discovery firm. He should know: Recursion recently merged
with Exscientia, its British rival and the first firm to bring AI-designed
molecules into clinical trials.

Perhaps the most significant recent biochemistry breakthrough has been the
development of AlphaFold, a program that can predict three-dimensional
protein structures. For their work on it, Demis Hassabis and John Jumper of
DeepMind, Google’s AI company, won half of the Nobel prize for chemistry
last year. DeepMind was a British company until the tech giant bought it in
2014.

Hence the third area of strength: technology. Britain will never have the data
centres or computing power to compete with America and China. But it does
have deep expertise in machine learning, and firms eager to deploy ai.
Wayve, a startup that recently raised over $1bn—the largest-ever investment
in a European AI firm—worked out that the best approach to autonomous
driving is to have an ai learn human driving patterns on its own. Many
graduates of Palantir, an American data firm that employs a quarter of its
staff in London, go on to found their own startups. One such spin-out is
Arondite, which uses ai as the “connective tissue” between disparate defence
systems. Both Wayve and Arondite are based near King’s Cross—the
nascent tech hub in London that DeepMind still calls home.

Britain is also learning to pair technology with its strengths in services.

Proximity to the City has already helped fintech firms like Revolut, one of
the world’s largest challenger banks, to flourish. A new marriage of
technology with legal services might do the same. And as a world leader in
video games, Britain excels in combining creativity with code.
To fully realise these strengths, however, Britain must improve its track
record in scaling and retaining high-growth firms. Being bought by foreign
investors is one thing, but seeing firms leave Britain’s shores because they
feel they cannot continue to grow there is quite another. Too often Britain
serves as a launchpad for world-class companies—and in some cases not
even that. After being informed that there are no launch slots available at
British spaceports in 2025, Skyrora, a Scottish space firm, is now
considering launching its rockets from Australia.

Above all, halting the exodus will require a shift in the national mindset.
Britain thinks too small. The government talks up growth, but does little to
bring down crippling industrial energy costs. Entrepreneurs face what Lady
Stowell, who recently led a review on scaling startups, calls “a spaghetti of
schemes” to pick through while “drowning in an alphabet soup” of
regulators. And for all their flair, many British innovators aim merely to
grow large enough to be bought—rather than to build truly world-beating
companies. If Britain is to realise its potential, it must first learn to see its
own worth. ■

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Britain | Bagehot

Starmer versus the burrito taxi

If Sir Keir Starmer means what he says about labour rules, Deliveroo is in
trouble. Does he?
August 7th 2025

The “burrito taxi” was an internet meme that took aim at the perceived
entitlement of America’s millennial left. They griped about grocery inflation
under President Joe Biden, the joke ran; they also tucked into meals from
DoorDash, a delivery app. “Inflation is bad,” asks the meme’s protagonist,
“or you ordered a private taxi for your burrito”? Progressive ideals lasted
right up until it cost more for someone to bring their dinner round.

The millennials were right; inflation is a thief. But Britain has its own
burrito-taxi problem. How much are Labour’s voters willing to pay for Sir
Keir Starmer’s vision of a stricter labour market? Like many of his
supporters, the prime minister cherishes a Friday-night takeaway with his
teenagers, brought by Deliveroo, Britain’s best-known delivery firm
(currently being bought by DoorDash for £2.9bn, or $3.7bn). It’s not easy
getting those blue bags into Number 10, Sir Keir quips, but he’s mastered it.
Yet his theory of what ails Britain’s economy is inimical to Deliveroo’s
theory of how to make money. If his project amounts to more than hot air,
the burrito taxi as we know it will die.

Deliveroo is hardly the only player in the gig economy. But it has become a
symbol of Britain’s open and flexible labour market, whose rules on hiring
and firing are among the loosest in the OECD. In a triumph for the firm, in
2023 Britain’s Supreme Court accepted that the riders are “self-employed
suppliers” rather than workers, in part because their contracts contained a
“virtually unfettered” substitution clause that let them delegate their
deliveries to others. That clause made it attractive to new immigrants—if
they could pedal and use a phone, they could earn a living through a friend’s
account.

For the Labour Party in opposition, such flexibility was a weakness rather
than a strength of the British economy. It may have kept unemployment low
but it also meant low investment, the corrosion of family life and populism,
its leaders argued. As chair of Parliament’s business committee, Rachel
Reeves, the future chancellor, harangued Deliveroo’s boss: just how much
tax was saved by not treating its riders as employees? Now in office, a
sweeping Employment Rights Bill will put Britain in the middle of the
OECD pack. Ministers boast of making British workers more like the
French: more regulated and more productive.

For years, French ministers have claimed that Britain’s light-touch labour
market means it has only itself to blame for illicit migration. The Home
Office agrees, observing that migrants expect a job in the app economy;
delivery bikes have been spotted outside hotels housing asylum-seekers. Sir
Keir has cast immigration in histrionic terms as a Hayekian conspiracy:
under the Tories, he claims, Britain was subject to a “one nation experiment
in open borders” by the “party of the uncontrolled market”.

Follow that rhetoric to its logical conclusion and Deliveroo and its
competitors would be in peril at this government’s hands. It’s not clear what
contribution a firm that employs the low-skilled and newly arrived to deliver
pizza in the rain can make to Sir Keir’s vision of a high-productivity, low-
migration Britain. But the evidence so far is that his government prefers
labour-market regulation more in theory than in practice.

Ministers promise to squeeze illicit workers from the gig economy. Delivery
riders are targeted in immigration raids; the Home Office has cajoled the
industry to use facial-recognition technology to ensure riders have the right
to work in Britain, particularly those detected near asylum hotels. Under a
new law, delivery firms will be responsible for the immigration status of
subcontractors.

But many Labour MPs and peers would like ministers to go much further:
why, they ask, just clean up Deliveroo, when you can redraw its business
model altogether and insist its riders are treated as workers? For as long as
riders are self-employed, the raft of new rights created by the employment
bill won’t touch the firm. That creates the worst of all worlds, making it
more onerous for fancy accountants and law firms to hire graduates while
doing nothing to tighten up the grimiest jobs.

The crunch will come in the autumn, when a government consultation will
review the legal definition of workers. Deliveroo’s defenders fear that if the
tests of what constitutes “work” are tweaked, the Supreme Court’s ruling on
which it relies could be unwound in years of litigation. Turning riders into
employees, they argue, would produce a smaller and less flexible network—
as happened when the Swiss city of Lausanne deemed Uber, a ride service,
to be an employer. Consumers could no longer assume their burrito would
reliably arrive piping hot for a modest fee at 8pm on a Friday night.

Would Labour’s electorate consider that such a tragedy? They might

consider a costlier, less reliable takeaway a price worth paying for a more
equitable society. Brits tell pollsters they like Labour’s workers’-rights
agenda. Perhaps some expect to get paid more; or perhaps the urban middle
classes feel guilty every time they open the door to a bedraggled courier.

Or perhaps, like their American cousins, they would complain. For Sir Keir
ducks the trade-offs that his policy implies: that better conditions for some
may mean less consumption for others. A more confident left-winger would
tell the delivery firms to suck it up: change or die. Instead he obfuscates. He
promotes the immaculate conception of labour reform: workers will be
richer and happier, businesses more successful. But a leader so squeamish
about the end point of his own logic seems unlikely to follow through.
Here’s a prediction: Sir Keir will enjoy Friday night Deliveroo with his
brood long after he has left Downing Street. The burrito taxi is mightier than
the government. ■

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International
Why the laws of war are widely ignored
How to write laws of war for a wicked world
International | Guns v gavels

Why the laws of war are widely ignored

Global courts struggle to cope with power politics
August 7th 2025

International courts have never been busier. Conflicts are more common
than at any point since 1945. Ever more civilians are being bombed, starved
and raped by men with guns. These are the curses that the laws of war were
invented to prevent, and that international courts are meant to punish and
deter.

The International Criminal Court (ICC), which prosecutes people for the
vilest offences, such as crimes against humanity, is investigating a dozen
conflicts and has issued arrest warrants for 30 big-time defendants who are
still at large. The International Court of Justice (ICJ), which settles disputes
between countries, is ordering mighty armies to stop fighting.
But not with much success. The fugitives on the ICC’s most-wanted list
include Vladimir Putin, Russia’s president, and Binyamin Netanyahu,
Israel’s prime minister, neither of whom will be arrested any time soon. The
wars the ICJ has loftily ordered to cease include Mr Putin’s invasion of
Ukraine and Mr Netanyahu’s assault on Gaza, both of which are still
blazing.

Many supporters of global rules are in despair. “I cannot remember a time

when I was more concerned about the state of international humanitarian
law,” says Michael Schmitt, a law professor at the University of Reading and
former American Air Force officer. “And I go back a ways.”

Granted, some areas of international law are working fine. Nearly all
countries honour treaties on the allocation of radio frequencies and satellite
orbits, just as nearly all motorists drive on the correct side of the road.
Everyone understands that a free-for-all would hurt everyone.

But when it comes to humanitarian law, there is no consensus. The high-

minded principles that led the League of Nations to set up the first world
court, in the hope that “law and justice” would trump “diplomatic
expediency”, are clashing with the hard reality of geopolitics. At the same
time, ambitious judges are overreaching and cynical actors are using the
global courts to wage lawfare, undermining their authority and even the
concept of a rules-based order. In short, when people complain that the laws
of war are often ignored, they are right.

There are several reasons for this. International law is seldom as clear or
certain as the domestic sort. There is no global parliament to pass rules that
reflect the will of 8bn people. Nor is there a globocop to enforce them.
Instead, international law has always been about finding a balance between
universal values (to the extent that the world can agree on them) and
national interests (more often defined by rulers than the ruled). Enforcement
relies largely on countries consenting to be bound by the treaties they have
signed.

Only one body, the UN Security Council, can authorise force to uphold
international law. But it is constrained by the veto power of its five
permanent members (America, Britain, China, France and Russia). It was set
up in 1945 to give the UN the teeth that the League of Nations lacked.
America’s president, Franklin Roosevelt, believed the world needed four
policemen (France was an afterthought). These powers argued that any
decision to use force would be political, and that since they would probably
have to provide the troops, it should not be made without their consent.
Smaller powers were given a choice: a UN with a veto or no UN at all.

Thus, geopolitics is baked into international law. This may explain why
early efforts to frame it tended to be modest. Hugo Grotius, a 17th-century
Dutchman who codified some of the first laws of war, noted that countries
could breach them with impunity. So he stuck to rules that combatants
would comply with out of self-interest, such as “no killing of prisoners”. The
early Hague conventions were not about bleeding hearts trying to impose
unwanted rules on armies, but about men intimately familiar with war
agreeing to constraints that balanced military necessity with mercy.

These laws were written with state-on-state wars in mind, in which soldiers
would all wear uniforms and follow the same rules. However, most modern
wars involve militias that fight in civilian garb and then blend back into the
population. This makes it hard for armies to honour the most basic law of
war: that they differentiate between civilians and soldiers.

Great powers have always resisted rules that might cramp their battle plans.
Even after the second world war, with memories of Dresden and Nagasaki
still fresh, a ban on indiscriminate area bombing was not included in the
1949 Geneva conventions.

Judges on the first world court were careful to avoid overstepping their
powers. (Oda Yorozu, one of the first, thought the very idea of world peace
was an impractical dream.) In 1923 the League of Nations asked for an
advisory opinion on a border dispute between Finland and Russia, which
was not a member of the league or the court. The court refused, saying that
disputes between countries could be adjudicated only with the consent of
both.

Today, much of that caution has been abandoned, as a result of two trends.
Liberals have overreached in their desire to create a kinder world, by trying
to write one into existence. And many international judges see themselves
not as careful interpreters of treaties, but as bold champions of human rights
and underdogs.

From the 1960s several new laws and treaties were drafted or updated. Some
created “rights” that were impossible to guarantee. According to the
International Covenant on Economic, Social and Cultural Rights, for
example, people have a right to “the continuous improvement” of living
conditions, which implies that recessions are illegal. In the 1990s, when the
collapse of the Soviet Union sparked an explosion of liberal optimism,
idealists ran far ahead of the real politics of power.

The ICC, established in 2002, aimed to end impunity for the most serious
crimes. However, many powerful countries, including America, China,
India, Israel, Russia and Turkey, simply refused to join the court—or
actively opposed it.

In other cases where the law has run ahead of what governments will accept,
they have been allowed to add opt-outs to treaties. The 1977 additional
protocols to the Geneva conventions aimed to ban area bombing of cities.
America refused to ratify these. Britain did so, but with a legal “reservation”
retaining the right to drop atom bombs and to carry out reprisal attacks on
enemy civilians if British ones were indiscriminately attacked.

The spread of opt-outs has undermined humanitarian law, by formalising

rules for thee but not me. The United Arab Emirates (UAE) was one of
several countries that signed the Genocide Convention of 1948 on the
condition that it would apply only to others. (It was allowed to opt out of the
ICJ’s automatic jurisdiction.) The hypocrisy of this was made clear this year
when the court threw out an urgent request by Sudan to order the UAE to
stop supporting a genocidal militia in Darfur.

Another problem has been growing lawfare. This is when countries or

groups use courts to score vexatious political points. South Africa was
accused of this when it rushed to file a genocide case against Israel, only
weeks after Hamas massacred Israeli civilians in October 2023. The UN has
repeatedly asked the ICJ to give advisory opinions on areas outside its
competence, such as climate change. Lawfare often asks judges to answer
questions that are political (such as how much to spend on mitigating
climate change) or diplomatic (when and how to stop a war). “These all
reflect a failure of diplomacy, a failure of other international political
institutions to resolve disputes,” says Michael Becker of Trinity College,
Dublin.

Some expect courts to end today’s horrors now, when all they can do is
slowly gather and weigh evidence to reach verdicts that might deter future
horrors. This puts the court in a position where it risks looking either
partisan or impotent. “When courts get into high politics there is a clash
between the law and power, and the law often gets relegated,” says Yuval
Shany of Hebrew University in Jerusalem.

More dangerous still is when judges try to create new law. All courts,
domestic and international, must walk the line between exceeding their
authority and “being so deferential as to be useless”, says Mr Becker. But for
international courts, which have fewer mechanisms for accountability than
domestic ones, the risks are greater.

When drafting the Rome statute, which established the ICC, negotiators tried
to find a balance between respecting immunity for heads of state or
government, a long-standing principle of international law, and ending
impunity for tyrants. The awkward compromise they reached was that
signatories must waive immunity for their own leaders (and, therefore, hand
them over if the ICC indicts them), but respect the immunity of leaders of
countries that refuse to sign.

In 2019 the court flagrantly broke its own rule. Jordan had failed to arrest
Omar al-Bashir, Sudan’s president. The ICC ruled that its members should
arrest the blood-drenched despot, despite his immunity. “The court was the
author of its own misfortune,” says Roger O’Keefe of Bocconi University.
“Not only in its actual judgment, but in its triumphalism that it was part of
an inexorable movement towards a higher realm of the rule of justice.”

The judgment was “very dangerous and unwise”, wrote Dapo Akande of
Oxford University, Britain’s candidate for a seat on the ICJ. Countries
hostile to the court (such as America) grew more so. Even the ICC’s allies
grew uncomfortable. After the court issued an arrest warrant for Mr
Netanyahu, America imposed sanctions on ICC officials; France, Germany
and Italy all cast doubt over whether they would arrest him, citing head-of-
government immunity.

Some think global courts can recover their clout by focusing on the core
principles that most states have a stake in upholding. The ICC has had some
success in prosecuting malefactors without friends on the Security Council,
from Congolese warlords to Sahelian jihadists. The ICJ has issued helpful
rulings in territorial disputes where both sides agreed to be bound by it. But
in a world where more leaders think might makes right and fewer trust
international institutions, it is hard to be optimistic. “We’re in a dark place
right now,” says Mark Ellis, the head of the International Bar Association.
“It’s about ‘how dark is it going to get?’” ■
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ignored
International | The Telegram

How to write laws of war for a wicked world

The post-1945 order is crumbling. History offers a glimpse of alternatives
that might work
August 7th 2025

WHEN lists are compiled of great military commanders, Gustavus

Adolphus, Sweden’s king from 1611 to 1632, is often near the top.
Innovation and daring were his watchwords, and had to be. Aged 16 when
he took the throne, he inherited a realm embroiled in three separate wars.
Sweden has “no friends” and “all our neighbours are our enemies”, the
teenage king bleakly wrote.

It was a fearful, blood-soaked time. Institutions that once claimed universal

moral authority—notably the papacy and the Holy Roman Empire—were
crumbling under assault from Protestant rulers and rebels. To survive this
age of disorder the young king put his faith in the new. Leading his own
armies into the field (and eventually dying in battle), he vanquished stronger
opponents with the help of advanced weapons and fast-moving mobile
tactics, prompting some historians to dub him “the father of modern
warfare”. He took new-fangled ideas into combat, too. By the grim standards
of his day, Gustavus Adolphus stood out for the strict discipline and
(relative) martial restraint that he imposed on his troops. In this, no papal
edict guided Sweden’s king, a Protestant intent on making his country one of
Europe’s great powers. Instead he was following both his conscience and
arguments set out in a work that—it is said—he kept under his pillow while
on campaign: “On the Law of War and Peace”. This remarkable treatise was
published in 1625 by Hugo Grotius, a Dutch lawyer, historian and poet. For
more than a century, Grotius has been hailed as “the father of international
law”, for setting out detailed, universal rules to determine when wars are just
and lawful.

Strange to say, the image of an ambitious warrior-king studying Grotius in

his tent should offer some comfort four centuries later. Once again the world
is entering an age of disorder. Multilateral institutions founded after the
second world war, from the United Nations to international courts that hear
charges of crimes against humanity, are losing their authority. The final fate
of the post-1945 system will not be known for some time. That is no reason
to wait, resignedly, for the world to slide into anarchy and unconstrained
violence. If new arguments are needed to limit harms committed by men of
violence, the past is a good place to look.

The Telegram has praised Grotius before, and makes no apologies for
revisiting his wisdom now. He stands out for his ability to craft arguments
that appeal to the powerful, reflecting his own contacts with kings and their
counsellors as a diplomatic envoy. He also worked at an important turning-
point in intellectual thought. Medieval theologians and church leaders
focused on lawful and unlawful reasons for going to war. Sovereigns and
soldiers fighting “just” wars faced few limits on their conduct, while
opponents without justice on their side had no inherent right to use force at
all. But a problem lurked in that approach. Grotius lived at a time of brutal,
often sectarian wars, in which all sides were sure they had God’s blessing
and were fighting for a just cause. He offered a solution. During a war, he
wrote, identical rights and obligations should apply to each belligerent, who
should fight as if they were upholding justice. That advanced his real aim:
the crafting of laws to govern the conduct of war.

Grotius would have been startled by such modern bodies as the International
Criminal Court, which claim the right to haul errant generals or political
leaders into the dock. Outsiders are ill-qualified to judge the limits of just
war or self-defence, he wrote, calling it “altogether preferable” to leave such
decisions “to the scruples of the belligerents rather than to have recourse to
the judgments of others”. He believed that necessity could justify harsh acts,
such as bombarding a besieged city. That did not make him an apologist for
war crimes. Acts which do not hasten a war’s end can never be justified, he
counselled, including rape and the wanton killing of women and children.
Crucially, he argued that using gratuitous and reckless cruelty, for instance
during the taking of cities and towns, is both morally repugnant and also
counter-productive. Instead he urged “moderation” and the sparing of all
enemy property not needed for the war effort, as well as precious assets such
as fruit trees used for food. In his telling such forbearance is wise because it
avoids inducing “despair” in an enemy, which can be turned into a “great
weapon” against an attacker.

A man of his time, Grotius applied different standards to European and non-
European rulers. Critics grumble that he used his legal skills as an apologist
for colonial expansion by the Dutch East India Company. Still, his moral
arguments about the laws of war rested on universal foundations. People are
social beings, he said, with such a “desire for society” that their love for
humanity trumps the selfish pursuit of advantage seen among lesser beasts.

For good or ill, self-interest has inspired rules regulating violence for
millennia. In her fine book “The Rule of Laws: A 4,000 Year Quest to Order
the World”, Fernanda Pirie, a professor of the anthropology of law at Oxford
University, writes that the biblical injunction of “an eye for an eye” is not a
demand for revenge. It is, she suggests, a law designed to define the limits of
acceptable retaliation, with clear echoes in still-older Mesopotamian legal
codes that also sought to prevent blood feuds from escalating. Her book
notes how ancient rulers sought legitimacy by writing laws. The oldest laws
found by archaeologists, dating from 2112BC, were proclaimed by Ur-
Namma, an “ambitious military leader” who had just toppled a ruthless
warlord. “I did not deliver the orphan to the rich. I did not deliver the widow
to the mighty,” he is said to have boasted.

This is not to say that ancient honour codes are a substitute for the Geneva
Conventions. It is an appeal to be practical. To protect the weak, convince
the strong that rules serve them, too. ■

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wicked-world
Business
How McKinsey lost its edge
Do consultants make good CEOs?
How loyalty programmes are keeping America’s airlines aloft
How to greet people at work
American businesses are running out of ways to avoid tariff pain
The Elon Musk theory of pay
Uber is readying itself for the driverless age—again
South America is fast becoming the world’s hottest oil patch
McDonald’s secret sauce—plus a pickle or two
Business | Management consulting

How McKinsey lost its edge

As it nears 100, is the world’s most illustrious consultancy past its prime?
August 7th 2025

“Business has been forced to adjust itself to staggering acceleration in the

rate of change,” observed McKinsey, a consultancy, in a promotional
pamphlet it published in 1940. “What period in history has ever presented
more difficult problems for the executive?” Naturally, demand for
McKinsey’s advice was soaring, it wrote.

These too are times of upheaval. Geopolitics is forcing companies to rethink

where and how they operate. Artificial intelligence (AI) is filling bosses with
excitement at the opportunity to replace costly humans with bots, and fear
that their business models may be disrupted. And yet McKinsey, the most
illustrious of consultancies, finds itself in the doldrums.

McKinsey has long regarded itself as operating in a league of its own. Ron
Daniel, its boss from 1976 to 1988, talked of an “organisation of genuine
greatness” filled with “superior people”. Bob Sternfels, McKinsey’s current
leader, prefers to describe it as “distinctive”. This sense of superiority,
though nauseating, is not entirely without justification. McKinsey is the
biggest and best known of the strategy advisers. Its alumni run 24 of
America’s 500 most valuable companies, according to Altrata, a data
provider; the figures for Bain and BCG, its two principal rivals, are seven
and five, respectively.

Until recently, “the Firm”, as it calls itself, was growing at a stunning pace.
Its revenue last year, at a little over $16bn, was more than double the figure
in 2012. Yet after a phase of rapid expansion, its revenue growth in 2024
was a meagre 2%, according to estimates from Kennedy Intelligence, an
industry watcher. Since the end of 2023 it has shrunk its workforce from
45,000 to 40,000. Economic uncertainty is only partly to blame; McKinsey
has bled market share to rivals. How did the legendary consultancy, which
turns 100 next year, lose its edge?

McKinsey likes to pretend that its services are “sought, not sold”, in the
words of Marvin Bower, who led the firm from 1950 to 1967. Yet that was
hardly the case in its recent frenzied expansion. At a partner meeting in
Berlin in 2013, Dominic Barton, McKinsey’s leader from 2009 to 2018,
made it clear that growth was now the priority. “Ask for forgiveness, not
permission,” he instructed, according to a former grandee who attended the
meeting.

Plenty of forgiveness would be needed, as the firm expanded partly by

throwing caution—and qualms—to the wind. Throughout the 2010s
McKinsey helped opioid manufacturers peddle their drugs to addicts in
America and profited from ill-gotten contracts with state-owned companies
in South Africa (it has admitted wrongdoing and settled with prosecutors in
both cases). Kevin Sneader, who took over from Mr Barton, introduced new
controls in an effort to stamp out misbehaviour, only to be ousted in 2021
and replaced by Mr Sternfels, who promised to “return McKinsey to the
partners”. To his credit, McKinsey’s boss, who speaks of the need to balance
“empowerment” with “accountability”, has persisted with the effort to keep
partners on the straight and narrow.

The scandals of the past decade tarnished McKinsey’s public image. But any
deeper impact on its business was obscured by the surge in demand for
consultants during and immediately after the pandemic, as bosses sought
help with diversifying their supply chains, greening their operations and
dragging their businesses into the digital age.

McKinsey was well placed to meet the moment thanks to another source of
its growth over the preceding years: the expansion of its digital practice. In
the 2010s, as many chief executives grew increasingly nervous that their
companies would be the next victims of digital disruption, McKinsey
invested to broaden its offerings. Between 2013 and 2023 it acquired at least
16 specialist technology consultancies, giving it the ability to assist clients
not only with their digital strategies, but everything from developing
prototypes of new products to building whizzy data-crunching tools.
That points to the final source of the firm’s recent expansion, as it has
pushed more widely into implementing its own advice. Having counselled a
client to spruce up its technology, sharpen its operations or squeeze its
suppliers, McKinsey will often now hold their hands through the process.
That has meant muscling in on a segment of the consulting market
traditionally dominated by Accenture and the “big four” professional-
services giants, which charge considerably lower rates, notes Tom
Rodenhauser of Kennedy Intelligence. To compete, McKinsey has had to
rethink how it charges clients (fees are now often tied to the results of a
project) and whom it hires (focusing less on generalists, more on geeks and
grizzled executives).

The trouble is that BCG has done much the same thing, but to even greater
effect. A former McKinsey heavyweight explains that its closest competitor
has been more adept at deploying and retaining specialists. Perhaps it is
unsurprising that an organisation of “superior people” has struggled with
this. But the consequences have been striking. McKinsey’s revenue in 2012
was more than twice BCG’s; in 2024 it was only a fifth larger (see chart).
BCG’s revenue grew by 10% in 2024, five times as fast as McKinsey’s
(Bain, the smallest of the three, expanded about as quickly as BCG).
BCG has recently faced criticism of its own over its work with the Gaza
Humanitarian Foundation, an Israeli-American aid initiative, which
reportedly included modelling the cost of relocating Palestinians from the
war-torn region. BCG has fired the two partners responsible and disavowed
the work, which it says was unauthorised. A tightening of controls will
probably follow, which might slow the firm down. But if it doesn’t, BCG is
on track to become the strategy trio’s top dog by revenue in 2027.

And it is not the only competitor looming. As bosses look to AI to transform

their businesses, they are asking McKinsey and other consultancies for help.
But they are also turning to less conventional partners. Palantir, an analytics
firm, offers tools to feed enterprise data into AI models, and embeds its so-
called forward-deployed engineers with its clients to get them up and
running. Its revenue is still small (just under $3bn in 2024) but is growing at
a blistering pace (48%, year on year, in the second quarter of 2025).
Although it began by serving governments, it now makes over two-fifths of
its revenue from businesses. Its market value has septupled over the past
year, to more than $400bn.

Analysts at UBS, a bank, describe Palantir as “McKinsey meets Databricks”,

alluding to a software firm whose tools also help enterprises connect their
data with AI models. That sounds a lot like QuantumBlack, McKinsey’s
own AI unit and the crown jewel of its digital practice. Other AI companies
are taking inspiration from Palantir, too. OpenAI, maker of ChatGPT, has
begun offering a consulting-like service to help businesses deploy its
models.

Some argue that consulting will always be a sideshow for these firms, which
would much rather be valued by investors as software companies. Yet with
businesses struggling to take advantage of AI, those developing the
technology may conclude that it is necessary to be in the trenches with their
clients, not least because it will help with improving their software. In time,
this may force McKinsey and its traditional competitors to revert to their
role as strategic advisers.

For now, that core business is continuing to grow healthily at McKinsey.

Eventually, however, the AI revolution may come for it as well. Strategy
projects combine deep cogitation with a good deal of grunt work, notes
Fiona Czerniawska of Source Global Research, another industry watcher.
Consultants must comb through spreadsheets and prepare reams of
PowerPoint slides in order to make their recommendations look as robust as
possible.

Before long a bot may be able to do a good chunk of that; after all, plenty of
consultants already sound like one. At first that may be advantageous for
McKinsey. Kate Smaje, its technology chief, says that AI will make its
teams faster and better. Sooner or later, though, clients may start to wonder
why they are paying such enormous sums when much of the work is being
done by a technology they could use themselves. McKinsey’s corpus of
intellectual property, which it has already fed into its own bot, Lilli, might
shield it for a time. But AI models are becoming cleverer with startling
speed. To survive its second century, let alone thrive, McKinsey will have to
be distinctive indeed. ■

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Business | Practising what they preach

Do consultants make good CEOs?

We run the numbers for McKinsey, BCG and Bain
August 7th 2025

There are few more frequent visitors to the executive suites of America’s
biggest companies than the strategy whisperers at McKinsey, BCG and Bain.
It helps that the corner office is often occupied by one of their alumni.
Among the chief executives of America’s 500 most valuable companies, 36
spent time at one of the three elite consultancies, according to Altrata, a data
provider, up from 25 in 2018. Household names from Alphabet and Coca-
Cola to Citigroup and Visa are run by former consultants. But are they any
good at the top job?

To study the question, we used a list compiled by Altrata of alumni of the

strategy trio who have run a company in the S&P 500. We built an index of
these firms weighted by market value, and a benchmark that re-weights the
S&P 500 to ensure the same mix of industries as for the firms run by ex-
consultants.
Since January 2010 companies run by former consultants have generated a
cumulative return for shareholders of 677%, including dividends, compared
with 584% from our benchmark index (see chart). There have been some
notable flops: the tenures of John Donahoe (a former Bainie) at Nike and
Laxman Narasimhan (an ex-McKinseyite) at Starbucks were disastrous. But
on the whole, the gap in stockmarket performance is meaningful enough to
suggest that consulting may have been helpful training for the top job,
particularly amid the turmoil of the past few years.

Consulting firms have long claimed to be “CEO factories”. Clever graduates

are rotated through projects lasting a few weeks to a few months, exposing
them to a wide range of business problems, from entering new markets to
cutting costs. Most leave after a couple of years of punishing work, with the
consultancies often helping them line up their next role.

McKinsey, the biggest of the trio, performed particularly well in our

analysis. Not only has it nurtured the largest number of S&P 500 bosses,
accounting for 24 of the current lot. Its alumni also did best in the top job,
both in absolute terms and relative to their industry mix. That may be a
welcome source of comfort for the firm, which has bled market share to its
biggest rival, BCG.
This is, of course, not a comprehensive analysis. For a start, figuring out the
precise imprint of a chief executive is tricky; other things can drive stock
prices. There are all the makings of a promising project for an enterprising,
spreadsheet-wielding consultant. ■

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Business | Miles-high club

How loyalty programmes are keeping America’s

airlines aloft
Many carriers now make their money from credit-card deals
August 7th 2025

You might expect America’s most valuable airline to earn its keep flying
passengers. But you would be mistaken. In the second quarter of the year
Delta Air Lines notched up an operating profit of $2.1bn, comfortably ahead
of its domestic rivals. Buried in the financial statements, however, was a
more revealing figure. Had it relied solely on revenue from passengers, it
would have operated at a loss.
Delta is hardly unique in this regard. Last year American, Southwest and
United—America’s other big airlines—also lost money from flying
passengers, even as the four jointly made around $14bn in operating profits
(see chart). To be sure, airlines earn revenue from other sources such as
cargo. But what keeps them aloft is a vast loyalty business that binds
together consumers, airlines and credit-card issuers. In recent years frequent-
flyer programmes in America have grown ever larger and more lucrative.
How much bigger can they get?

The model is simple: airlines sell miles to card issuers; cardholders earn
miles by spending; and those miles are eventually redeemed for travel. Each
party benefits. Banks and other financial firms gain loyal customers,
travellers enjoy flights and perks, and airlines secure a steady stream of
profits. In the quarter from April to June American Express, a credit-card
giant, wrote a cheque to Delta for roughly $2.1bn—equivalent to the
airline’s total operating profit. Citigroup, a bank, paid American about
$1.4bn and JPMorgan Chase, another lender, handed some $800m to United.
Such transfers, in turn, allow airlines to lower their fares.

When American launched the first mass-market frequent-flyer programme in

1981, the aim was to reward repeat business travellers with free flights and
upgrades. The subsequent involvement of card issuers turned these schemes
not just into significant sources of revenue, but also useful tools of corporate
finance. Aviation is volatile, subject to fluctuations in fuel prices, business
cycles and the demand for premium travel. At the same time, airlines must
make long-term capital investments in aircraft and infrastructure. Selling
miles to issuers helps manage the mismatch; carriers receive cash upfront
and deliver the service later. Because they control the rules of redemption,
they can steer passengers towards off-peak flights and unsold seats.

These days the frequent-flyer schemes of America’s big airlines command

valuations in the tens of billions of dollars, sometimes exceeding the equity
value of the company itself. During the pandemic, when airlines faced a
collapse in travel and a liquidity crunch, they did not pledge aircraft to raise
funds; they borrowed against the future cashflows of these programmes.

The growth of these schemes has been fuelled over the past decade by a
proliferation of credit cards dangling ever more lavish travel perks. Delta
and American Express now offer no fewer than seven co-branded cards.
Entry-level versions earn SkyMiles—Delta’s loyalty currency—for every
dollar spent; premium tiers come with lounge access, free checked bags and
complimentary upgrades. Delta says that roughly 1% of America’s GDP is
spent through its co-branded cards. Even ones that are not co-branded, such
as Chase’s Sapphire Reserve and American Express’s Platinum cards, are
closely tied to air travel. They grant access to exclusive lounges, now
fixtures in major American airports, and allow cardholders to convert points
into airline miles with a range of carriers.

These cards have been remunerative for financial firms, too. Annual fees are
one source of revenue. Chase recently announced that its Sapphire Reserve
will cost $795 a year, up by 45% from the year before, and American
Express is expected to hike the charge for its Platinum card, currently $695 a
year, in the autumn. But the real money comes from the interchange fees
collected on transactions. When a consumer uses a credit card to spend $100
at a retailer, for example, roughly $2 flows to the issuer. A little under $1.50
is returned to the customer in rewards or rebates. Total interchange fees
amounted to $187bn in America last year, and help explain why the loyalty
business has not reached the same altitude elsewhere; in Britain, for
instance, they are capped at a rate of 0.3% for credit-card transactions.
How much bigger will America’s loyalty nexus get? Over the past eight
years both Delta and American have more than doubled the revenue they
earn from selling miles to card issuers. United has seen growth of around
70%. Many airlines now award loyalty status based on how much customers
spend, rather than how often they fly. Today a customer can reach
American’s top loyalty tier without ever having stepped on one of its planes.
New partnerships are expanding the loyalty networks. Delta has teamed up
with Uber to award miles for rides; United lists a growing roster of retail
partners offering bonus points for spending with them.

Yet the system is also showing signs of strain. Lounges are overcrowded.
Card fees keep climbing. And changes to how loyalty is rewarded have
ruffled some flyers’ feathers. Then there are the regulatory threats. In June a
consortium of carriers successfully lobbied against an amendment to the
GENIUS Act, America’s new law on stablecoins, that would have capped
interchange fees. But the proposal may re-emerge soon enough. Airline
bosses will need to keep a close eye on the engine that now keeps their
companies flying. ■

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americas-airlines-aloft
Business | Bartleby

How to greet people at work

Max Flannel, our office agony uncle, answers a bulging postbag on a vital
subject
August 7th 2025

Dear Max, At the start of virtual meetings, should I say hello to everyone? It
seems to absorb a lot of time, but I don’t want to be unfriendly.

Virtual calls put the hell in hello. Every greeting prompts other participants
to spend ages unmuting before saying “hello” back. Some people then ask
“how is everyone?”, forcing everyone to unmute again and say something
wildly insightful like “fine”. By the time that’s over, someone else has
joined the call and the whole cycle starts again. Use the rule of three. If there
are three or more other people already on the line, just wave.
I am a germophobe and hate shaking hands with people. I pine for the days
of the pandemic, when no one touched each other at all. What do you
advise?

Your best bet is to wear a mask: there’s no more cost-effective way to get
people to keep their hands to themselves. You could also ask your employer
if you could work from home, or from an iron lung. If that is a step too far,
you could do that pandemic-era thing of extending the point of your elbow
towards people, and hope they will reciprocate. But what made some sense
then looks weird now: like you don’t know what those things at the end of
your arms are for, or have been in a coma for five years.

I suffer from anxiety over how to greet people, particularly those I know a
bit but not well. I spent some time in Japan in my youth, and to avoid
deciding whether to hug someone or not, I stop before I get within touching
distance and bow. It’s amazing how often people will bow back. Is this a
sensible strategy?

It depends a bit on whether you are still in Japan. But the pre-emptive
greeting is a good tactic wherever you are. Another variant of this approach
is to do a lot of performative stuff as you get close to someone: saying hello
loudly, waving madly and smiling like an idiot. Stop about two metres short
of the other person, well out of range, and if necessary keep waving and
saying hello for a bit. If you are in a meeting room, move quickly to the
other side of the table as you wave. If you appear to be unhinged but
extremely friendly, you will have hit the right mark. No other greeting will
be needed.

I don’t know how to greet female colleagues I have worked with for years. I
could shake hands with them, as I do with other men, but it seems a little
formal. Do you have any advice?

This question is one of the ones I get most often, at least from people in
America and western Europe. The classic advice is to shake hands with
everyone, regardless of how well you know them. It works as a greeting
between men, so should work as a greeting between sexes, too. If you want
to add a bit of familiarity, use both hands to project extra warmth. Imagine
you are a political leader after signing a peace treaty.
But there are times when handshaking feels genuinely awkward: when you
see a close colleague socially, for example. My advice in these
circumstances is never to be the first mover: wait and see what the other
person does and match them. The risk is that you sacrifice some agency, and
end up in an unwanted clinch. But at least you didn’t start it.

I was recently involved in an unfortunate hugging incident at work. I got my

timing and targeting all wrong, and ended up with the other person’s ear lobe
in my mouth. Where did I go wrong, and what should I have done?

If you do end up at close quarters, remember that an embrace at work is not

meant to be an actual embrace, just a faint echo of one. If you are hugging
someone, behave as though you are playing that children’s game called
“Operation”. Put your arm around the other person without actually touching
any part of their body. Keep your face well away from theirs: unless they
have unusually big ear lobes, you should never find yourself in that kind of
horrendous situation again.

In a recent cheek-kissing greeting, we did not agree on the number of head

movements and I ended up with the other person’s nose in my mouth. What
should I have done?

You could count down out loud. But I notice that this comes from the same
address as the lobe-eater. Since you seem unusually prone to nibbling your
colleagues, please just approach everyone with your hand already fully
extended for a handshake. You should look like a Dalek. Write in and let me
know how you get on. I’ll be back with another postbag later in the year. ■

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Business | The noose tightens

American businesses are running out of ways to

avoid tariff pain
A big squeeze on profits may be coming
August 7th 2025

CoRPORATE America’s profit engine has been remarkably robust over the
past few years, even amid stubborn inflation and elevated interest rates.
Faced with Donald Trump’s assault on global trade, however, it is starting to
sputter. Companies from General Motors, a carmaker, to Nike, a sportswear
brand, have seen their profits plummet owing to Mr Trump’s levies on
imports. Goldman Sachs, a bank, reckons that American businesses are
absorbing around three-fifths of the cost of the duties.

More bad news came on July 31st, as the president announced a fresh
barrage of tariffs on many of America’s trading partners, along with new
measures to prevent companies from dodging the duties. Bosses, who seem
reluctant to pass the cost of tariffs on to already stretched consumers, are
running out of ways to avoid the pain.

Stockpiling has so far helped. American imports of aluminium, steel and

cars, for example, rose to an annualised $400bn in the first quarter of the
year, well above trend, as companies raced to get ahead of new duties.
Eventually, however, this inventory will be depleted. And holding it comes
at a cost. Mattel, maker of Barbies, saw its free cashflow in the second
quarter fall by around a fifth, year on year, as it stocked up.

Companies have also been tinkering with their supply chains. The boss of
GE Healthcare, a maker of medical equipment, recently noted that his firm
manufactures ultrasound probes in four locations around the world, and can
choose where it ships to America from based on whichever has the most
favourable tariff rate. The company will also begin making an orthopaedic
product in Utah that it previously produced only in China. General Motors is
similarly planning to increase car production at an underutilised factory in
Indiana, hiring temporary workers to man the shifts. Yet for many
companies, building more manufacturing capacity in America is likely to
take years. Mr Trump’s volatile policymaking has also sapped many bosses
of the confidence needed to make big changes to their production footprints.

Then there are the craftier tactics to soften the blow from higher tariffs.
Firms have been poring over the Harmonised Tariff Schedule (HTS), a
4,439-page rulebook on customs duties, searching for ways to reclassify
where goods come from, how they are made and what they are used for in
order to secure lower levies. Requests for rulings by America’s customs
agency have surged this year. Take Dermasil, a facial cleanser made with
ingredients from various countries which are blended in Malaysia or
Vietnam, then sent to China for bottling, before being shipped to America.
In June Dermasil’s maker successfully petitioned to allow the cleanser to be
labelled as a product of Malaysia or Vietnam, rather than China, thus
lowering the applicable tariff. Wagner Spray Tech, a purveyor of paint
sprayers, likewise successfully protested the classification of heat guns it
imports into America.

Some attempted workarounds have been particularly creative. The Nairobi

Protocol, a trade agreement from the 1950s, allows importers to bring in
goods used by handicapped people duty-free. Already this year more
companies have applied for dispensation under the protocol than in all of
2024. One importer attempted to use the rule to bring in steel handrails from
Taiwan that aid in getting out of beds and baths; another sought an
exemption for bowls and spoons for feeding babies. Neither was successful.

The Trump administration seems eager to clamp down on such manoeuvres.

It has said that it plans to modify parts of the HTS, leaving companies with
less wriggle room. It is also introducing an additional 40% duty on products
that use “circumvention schemes” to enter America via third countries with
lower duties, which it plans to watch closely. For American businesses, there
are ever fewer places to hide from the president’s punitive tariffs. ■

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of-ways-to-avoid-tariff-pain
Business | Hostage situation

The Elon Musk theory of pay

The worse Tesla performs, the more its boss ought to earn
August 7th 2025

Delaware’s chancery court stands between Elon Musk and investors

willingly offering him a fortune. In 2018, when Tesla was worth around
$50bn, the carmaker’s shareholders approved a plan to link Mr Musk’s pay
to the value of the company. By January 2024, when the court ruled that the
pay package was illegal, the carmaker and Mr Musk’s stock options were
worth more than $600bn and $50bn respectively. Tesla’s board of directors
had not been transparent about how Mr Musk’s pay was set, the judge said.
That summer Tesla’s shareholders voted to reincorporate the company in
Texas and reapprove the compensation package. The court killed it again in
winter.
On August 3rd Tesla’s board handed Mr Musk an insurance policy. If his old
package is not revived, he can cash in new options worth $24bn. That’s
much less than his original award but still the largest pay cheque in history,
and more than Tesla’s net profit during the past two years. “It’s not a money
thing,” Mr Musk has said. Nor is it about giving the finger to judges in
Delaware (though the exodus of companies from the state has quickened
since Tesla left). Instead, it is about control.

Under the new deal, Mr Musk’s stake in the company will rise from 13% to
15%. The 2018 package entitled him to 20%. Mr Musk has said he wants
25% if he is to advance Tesla’s artificial-intelligence (AI) and robotics
capabilities—enough control, he thinks, to prevent him being ousted by an
activist investor. Put differently, Mr Musk fears someone doing to Tesla
what he did to Twitter, the social network now called X, which he bought in
2022.

It is one thing for shareholders to tolerate the continued control of someone

who built a firm, as they do when investing in Warren Buffett’s Berkshire
Hathaway or Mark Zuckerberg’s Meta (both companies have dual-class
share structures). It is quite another for them to hand over power willingly.
Where does Mr Musk’s Svengali-like sway over investors come from?

Economists disagree about whether huge compensation packages in

corporate America reflect a competitive market for scarce executive talent or
extraction of rents by bosses courtesy of weak boards. Mr Musk is certainly
a rare talent. But his latest pay package supports the second, more cynical,
view of executive pay.

Whereas many bosses can negotiate a raise by threatening to walk across the
street to a competitor, Mr Musk needs only to change tabs on his computer
screen. His investment in Tesla makes up less than half of his astronomical
paper wealth. Mr Musk holds large stakes in SpaceX, a rocket company,
xAI, an AI startup, which he has merged with X, and various other
enterprises. The boundaries between these businesses are blurring. In June
SpaceX invested $2bn in xAI. Tesla’s investors will vote on a similar deal
later this year. Mr Musk’s time is not the only resource firms compete for in
this internal market: Nvidia chips ordered by Tesla were recently diverted to
xAI.
If shareholders assume Mr Musk will allocate attention to the firm where he
has the most to gain, it may be rational for them to submit to his demands
for more control. The stakes are particularly high at Tesla because the
electric-vehicle (EV) manufacturer is performing poorly. It is losing ground
to cheaper Chinese competitors and suffering from the reputational carnage
wrought by Mr Musk’s foray into politics. Its valuation is supported not by
fundamentals, but Mr Musk’s futurism, including his promises of fleets of
self-driving taxis and legions of humanoid robots. By tanking Tesla, Mr
Musk has made it even more dependent on his pixie dust. The worse the
carmaker performs, the more its mercurial boss ought to be paid.

No other chief executive benefits from such topsy-turvy incentives. But Mr

Musk will not be the last boss to claim that AI is too important a technology
to risk losing command over it in a battle for corporate control, and that the
usual rules of corporate governance must be suspended. After all, every king
tries to limit his parliament’s powers when going to war. ■

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Business | Confirming destination

Uber is readying itself for the driverless age—

again
The ride-hailing giant strikes a flurry of deals
August 7th 2025

“Always be hustlin’, ” was the credo of Travis Kalanick, co-founder and

former boss of Uber. That mindset helped turn the company into the world’s
largest ride-hailing platform, with operations in more than 70 countries and
10,000 cities. Its name has now become a commonly used verb. But while
Uber hustled, investors had to be patient. Although founded 16 years ago, it
first turned an annual operating profit only in 2023. Disrupting personal
transport while fighting legal battles over flouted regulations and weathering
sexual-harassment scandals proved tremendously costly.

Shareholders are at least reaping the rewards. After posting an operating

profit of $2.8bn in 2024, Uber’s results for the second quarter of 2025,
unveiled on August 6th, put it on course for an even better year. To the
delight of investors, the company also announced that it would buy back
$20bn-worth of shares. Yet most analysts on the earnings call with Dara
Khosrowshahi, Uber’s current chief executive, were more concerned with
what he had to say about a topic his predecessor, Mr Kalanick, once
described as an “existential threat” to the company: driverless cars.

Mr Khosrowshahi concedes that the commercialisation of robotaxis is still in

the “very, very early” stages. Perhaps 1,500 of them operate in America and
around 2,000 in China, the two biggest markets, with a handful elsewhere in
the world. But those numbers could surge; Goldman Sachs, a bank, reckons
35,000 may be on the road in America alone by 2030. Uber’s boss is clear
that his company wants to be in the (vacant) driving seat.

During Mr Kalanick’s reign Uber began to develop self-driving technology

in-house. It reportedly sank some $3bn into the project before deeming it too
difficult and risky after one of its vehicles hit and killed a pedestrian, in what
was the first death caused by a self-driving car. It sold the unit in 2020 to
Aurora, a startup focused on autonomous lorries.

Now, as other companies begin to master the technology, Uber’s new

strategy is to make deals with as many of them as possible. It offers them an
immediate way to access passengers at scale by allowing customers to book
robotaxi rides through the Uber app. Its partners so far include Volkswagen,
a carmaker that will start offering a robotaxi service in Los Angeles next
year; WeRide, a Chinese startup that will collaborate with Uber in 15 cities
worldwide over the next five years; and Apollo Go, the autonomous-vehicle
(av) arm of Baidu, a Chinese tech giant, which offers trips in Asia and the
Middle East and hopes to do so in Europe.

Uber has also been putting capital to work. Last year it invested an
undisclosed sum in Wayve, a British av startup, and in June announced that
together they would begin trialling robotaxi rides in London next year.
Reports have also emerged that Uber may help Mr Kalanick finance a deal
to buy the American operations of Pony.ai, another Chinese av firm with
which it already has a deal to deploy robotaxis in the Middle East.
To get a better understanding of a business that may be critical to its future,
Uber, supposedly an “asset-light” company, is also purchasing self-driving
cars of its own. In July it signed a deal with Lucid, an electric-vehicle maker,
and Nuro, one more av startup, to supply the ride-hailing company with
20,000 robotaxis over the next six years, in an effort to “prove out the
economics” of operating such fleets, in the words of Mr Khosrowshahi.

Uber’s relationship with Waymo, the self-driving unit of Alphabet, may

prove the most consequential. Waymo, which operates in five cities and has
a dozen more in its sights, is the clear robotaxi leader in America. Rides can
be booked on its own app, but also on Uber’s in Atlanta and Austin. Uber
hopes the partnership will grow, but Alphabet may conclude that Waymo has
enough name recognition to go it alone. As it expands its services across
America and beyond, it may start to pose a problem for Uber.

The wildcard in all this is Elon Musk. The serial entrepreneur improbably
claims that the robotaxis developed by Tesla, his carmaker, which have so
far been deployed in only one small pilot in Austin, will be available to half
the American population by the end of the year. Many analysts doubt the
robustness of Tesla’s self-driving technology, and Mr Musk’s expectation
that owners of the company’s cars will put them to work as robotaxis. Still,
Mr Musk has defied his doubters plenty of times before. Mr Khosrowshahi
also wants Tesla on Uber’s platform, but thinks that Mr Musk will go it
alone.

The road to widespread adoption of robotaxis may yet be a long one. Getting
the technology and business model right is only part of the challenge.
Regulators in many countries still have reservations. Consumers, too, will
need to be convinced. Nonetheless, Uber will keep hustling to ensure it is
the platform of choice when the robotaxi future eventually arrives. ■

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driverless-age-again
Business | Crude awakening

South America is fast becoming the world’s hottest

oil patch
BP’s big new discovery in Brazil adds to the excitement
August 7th 2025

It was a rare day of good news for Britain’s beleaguered oil giant. On
August 5th BP not only announced a quarterly profit of $2.4bn on its
preferred measure, a third higher than analysts had expected. It also unveiled
an enormous oil discovery, dubbed Bumerangue, some 400km off the coast
of Rio de Janeiro. It is the company’s largest find in 25 years.

BP is not the only driller betting big on South America, which last year
produced around two-fifths as much crude oil as North America. It is the
world’s fastest-growing region for oil and gas, says Mark Oberstoetter of
Wood Mackenzie, an energy consultancy. By 2030 production is forecast to
increase by roughly a third, compared with around a quarter in the Middle
East and a tenth in North America.

Three South American countries stand out. The first is Brazil. Rystad
Energy, another consultancy, forecasts that crude production there will surge
by 10% this year, to above 3.7m barrels per day (b/d). Analysts view the
Bumerangue discovery as a positive sign for the country’s oil prospects
more generally. Equinor, Norway’s national oil company, owns two sites
nearby. The find should also boost interest in an auction for oil rights to be
held in October. Oil giants including Chevron, Shell and TotalEnergies all
have growing operations in the country. Petrobras, Brazil’s state-owned oil
giant, is also investing to expand exploration and production.

Guyana, with a population of less than 1m, has emerged as another hotspot
in South America. Rystad expects oil production there to increase by 12%
this year, to around 690,000 b/d, rising to some 1.2m b/d by 2030. Stabroek
Block, a gargantuan oil field some 200km off the coast of Georgetown,
Guyana’s capital, was the cause of a recent spat between America’s two
largest oil companies. Chevron’s acquisition of Hess, a smaller American
rival with a stake in the project, was initially blocked by ExxonMobil, which
also owns part of Stabroek Block. After lengthy wrangling, an arbitration
court in Paris ruled last month that Chevron could proceed with its
acquisition.

Then there is Argentina. Its oil sector, which had long been held back by
overbearing governments, is now roaring to life under President Javier
Milei. Fuelling the boom is Vaca Muerta (“dead cow” in Spanish), a shale
region in the west of the country. Oil production there leapt by 26%, year on
year, in the first quarter of 2025. Its prospects are helped by a big pipeline
project, due to start in 2027, that will eventually transport some 700,000 b/d
of oil to the Atlantic coast to be exported.

America’s shale revolution, which took off in the early 2010s, turned it into
the world’s largest oil producer. But the country’s shale fields are now
ageing. The next chapter in the growth of the global oil industry may take
place to its south. ■
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worlds-hottest-oil-patch
Business | Schumpeter

McDonald’s secret sauce—plus a pickle or two

Hearty quarterly results conceal a dual challenge for the burger behemoth
August 7th 2025

THE success of the Golden Arches rests on three simple, sturdy foundations:
a menu of reliably decent grub, at a decent price, shored up by catchy
marketing. Ever since it went public in 1965, McDonald’s has done best
whenever it stuck to this original blueprint. When one or more of these
pillars crumbles, the fast-food fortress looks shaky. A quarter of a century
ago this led to a near-collapse. Overly rapid expansion in the number of
outlets and, at the same time, of products on offer made it harder for burger-
flippers to keep up, hurting reliability. A price war with Burger King turned
downright indecent. And the ads were stale, too. The result was acid reflux
for investors. Between late 1999 and early 2003 the company shed two-
thirds of its market value.
The wobble in the first six months of 2024 was mild by comparison. But it
still made investors nauseous. McDonald’s shares lost 16% of their value
between January and July, their worst half-yearly run since the global
financial crisis of 2007-09. This time the wonky pillar was affordability,
especially in America. Post-pandemic inflation had pushed average
McDonald’s prices up by 40% from 2019. Videos of $18 Big Mac combos
went viral. The company’s own forgettable marketing efforts did not.

Realising its mistake, in July 2024 McDonald’s launched a $5 meal deal,

comprising a burger, fries, nuggets and a fizzy drink. In January it packaged
this together with a “buy one, add one for $1” offer and digital-only
promotions in its app, which it called the McValue menu. McValue’s
memorable face is John Cena, a beefy wrestler turned Hollywood superstar.
In another marketing coup, in March and April diners ate up Minecraft
Movie Meals, promoted in collaboration with the video-game-inspired
blockbuster, so fast that the included collectibles ran out a fortnight into the
weeks-long campaign. A food-safety snafu affecting outlets in 14 states in
October proved mercifully short-lived.

All this has worked a treat. On August 6th McDonald’s unveiled hearty
results for the second quarter. Revenue, derived primarily from the licence
fees, royalties and rents which franchise operators hand over to headquarters
in Chicago, rose by 5%, year on year, to $6.8bn. The preferred industry
measure of same-store sales increased by 3.8% globally and 2.5% in
America, a big improvement on four consecutive quarters of no growth or
worse. McDonald’s operating margin, already the industry’s envy, topped
47% for only the fourth time in the company’s history.

Investors are lovin’ it, sending McDonald’s market value up by 3% after the
earnings announcement, to $221bn. They are certainly preferrin’ it to its
fast-food rivals. The day before, Yum! Brands, which owns KFC, Pizza Hut
and Taco Bell, saw its stock slip after its latest results came in less than
finger-lickin’ good. Those of Shake Shack and Chipotle, slightly fancier
“fast-casual” chains, crashed by a fifth in the past month after each reported
fewer takers for their burgers and burritos as middle-class American diners
stayed away amid mounting uncertainty over the health of the world’s
biggest economy.
As the earlier meagre quarters showed, McDonald’s is not unshakeable. But
aspects of its business model do allow it to withstand recent shocks better
than its competitors.

Take tariffs, which President Donald Trump is slapping on trading partners

left and right. Given that America imports lots of food, from Brazilian beef
to Colombian coffee, these levies are bound to raise restaurants’ costs. In the
case of Chipotle, which runs all its own outlets, or Shake Shack, which
operates 329 of its 579 eateries, tariffs result in a direct hit to the bottom
line. For McDonald’s, these costs are borne by franchisees, who manage
95% of its 13,500 American stores (and a similar share of its 30,000 or so
foreign outposts).

Since their payments to McDonald’s are a function of sales rather than

profits, franchise operators’ margins can shrink without necessarily hurting
the brand owner’s earnings. JPMorgan Chase, a bank, calculates that it
would take cost inflation of 7.5% for McDonald’s to feel any hit to net
profit, and then only of about 1%. A cost increase of just 2.5% would dent
Chipotle’s net profit by 4% and Shake Shack’s by 9%.

For less global rivals the tariff pain is compounded by a weaker dollar, the
result of Mr Trump’s chaotic economic stewardship, which makes imports
dearer still. McDonald’s, by contrast, peddles burgers in over 100 countries
and earns 60% of its revenues in other currencies, compared with 43% for
Yum! Brands, 3% for Shake Shack and 2% for Chipotle. A softer greenback
boosts the dollar value of these foreign sales.

Yummy, indeed. Still, as investors digest the good news, they should
consider two potential snags. First, McDonald’s frugal menu
disproportionately attracts lower-income consumers. These diners, as the
company’s chief executive, Chris Kempczinski, admitted on the latest
earnings call, continue to feel “a lot of anxiety and unease”. Rather than eat
out, some are opting for groceries, notes Dennis Geiger of UBS, a bank.
Diners with fatter wallets may prefer rival joints such as Chili’s, which
offers a starter, main and drink for $10.99—and has waiters. McDonald’s
risks ending up too pricey for the poor and not posh enough for the less so.
Keeping prices in check is, then, vital. Yet so is keeping franchisees happy.
These two imperatives are in tension. Franchise operators are permitted to
set their own prices—which explains why a Big Mac will set you back $4.36
(the same in today’s dollars as the 45 cents the first one cost in 1967) in
Austin but $7.06 in Seattle. Urging them to flog McValue menus may
squeeze them to breaking point, especially as their costs balloon.
McDonald’s may be in a sweet spot right now. But this doesn’t mean things
can’t sour. ■

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pickle-or-two
Finance & economics
Buy now, pay later is taking over the world. Good
America’s fertility crash reaches a new low
If America goes after India’s oil trade, China will benefit
Xi Jinping’s city of the future is coming to life
Want better returns? Forget risk. Focus on fear
An economist’s guide to big life decisions
Finance & economics | Giving credit

Buy now, pay later is taking over the world. Good

Buy that burrito, and don’t let anyone judge you
August 7th 2025

BURRITOS ORDERED online, tickets to Coachella and Botox injections.

These are not just must-haves for some American consumers—they can now
all be bought using buy-now, pay-later financing.

Such purchases are often the subject of derision. Paying for lunch in
instalments is, to some, consumerism at its most ludicrous. Others see
something darker: lending that skirts the edge of mainstream finance,
preying on precarious borrowers.

Neither mockery nor anxiety have dented the industry’s growth, however.
Worldpay, a payments firm, suggests that BNPL accounted for $342bn in
spending around the world last year, up from just over $2bn a decade earlier.
Older financial firms, such as JPMorgan Chase and PayPal, have entered the
market, just as BNPL companies are taking on tasks that were previously
left to banks. The opportunity for BNPL in business-to-business loans—a
fragmented, old-school market—may be even larger than that for consumers.
And a new market is emerging for portfolios of BNPL debt, which are
securitised and bought up, often by asset managers.

The idea of a loan at the point of sale is an old one. In 1856 Isaac Singer and
Edward Clark, an entrepreneurial duo, began selling sewing machines in
instalments, with great success. The modern industry operates in a similar
manner. When a customer buys a product for $100, they can pay in stages.
The BNPL lender—perhaps Klarna, a Swedish company, or Affirm, a large
American provider—pays the merchant upfront, in exchange for a cut of,
say, $3. This is attractive to retailers, since it boosts sales. Customers with
access to loans spend at least 20% more than those without access, even as
the sticker price stays the same. The customer pays back the sum over time,
often six weeks, in four instalments and with zero interest.

Despite the industry’s recent success, there is reason to think it is still in the
foothills. Fewer than 2% of Bank of America customers born before 1965
have an outstanding BNPL payment, compared with 10% of the bank’s
millennial and Generation Z clients. As younger cohorts come to account for
more consumer spending, the market should grow. In countries where BNPL
has been around longer, it contributes to more sales: over one in five of those
made online in Sweden, against less than one in sixteen in America. Local
and regional firms are popping up to offer the service: Addi in Colombia,
Atome in Singapore, Tamara in Saudi Arabia.

As the industry grows, the borders between BNPL and mainstream finance
are blurring. Klarna, an early mover, has been a bank in Europe since 2017.
Sebastian Siemiatkowski, the company’s co-founder and boss, says he wants
it to become a digital financial assistant enabled by artificial intelligence.
Affirm launched a debit card two years ago, and has seen uptake soar of late:
the firm now reports almost 2m cardholders. Customers can use the cards in
shops, either to pay in full or in instalments, bringing a financing method
synonymous with e-commerce into the real world. In the past two years,
both the BNPL giants have been integrated into Apple’s and Google’s digital
wallets.

Established financial firms are moving in the opposite direction. PayPal

began offering BNPL services in 2020, capitalising on its strong
relationships with merchants. Last year the payments giant processed $33bn
in BNPL spending, an amount it says is growing at about 20% a year.
Several banks now allow customers to split larger payments into smaller
chunks after purchases. And Klarna’s recent deals with firms such as Adyen,
JPMorgan Payments and Stripe mean that its services are now provided to
millions of merchants.

Several fast-growing startups hope to disrupt trade credit, a vast market in

which suppliers lend money to firms that buy their products. American
companies alone report about $4.9trn in trade payables, money owed to
other firms for supplies purchased on credit. The market is about four times
the size of the $1.2trn in balances on American credit cards. It is also
antiquated and ripe for innovation. Suppliers doing the lending are forced to
manually assess whether each of their clients is creditworthy, with little
information to go on, and chase buyers for payments.

Matthias Knecht, co-founder of Billie, a firm specialising in business-to-

business BNPL loans, suggests that such lending is roughly 15 years behind
the consumer market. Richard Thornton, co-founder of Hokodo, another
startup, believes that the potential impact on business spending is greater
than with consumers, because of the limited alternatives available to young
firms. He says that when small companies gain access to BNPL, shopping
baskets grow by around 40% on average.

For BNPL providers, expanding as fast as possible means keeping a light

balance-sheet. The idea of burrito-securitised bonds may be the subject of
mockery, but the relatively opaque market for BNPL portfolios is booming.
Asset managers and private investment firms that are snapping up the debt
believe they have found an appetising asset class in which underlying assets
mature quickly. In October, Elliott Advisors, a British affiliate of a
mammoth hedge fund, purchased Klarna’s $39bn British loan portfolio. In
2023 KKR, a private-markets giant, agreed to buy as much as $44bn in
BNPL debt from PayPal. Affirm has issued around $12bn in asset-backed
securities. One BNPL insider calls the market “a feeding frenzy”, where
there is not enough debt to satisfy demand.

Some difficult questions linger over the industry, which has ballooned over
the past decade—a period without a prolonged downturn. Chief among them
is whether it is facilitating risky borrowing by consumers living beyond their
means.

BNPL customers undoubtedly have lower incomes than those using credit
cards. And there have been worrying snippets of news. Klarna’s consumer-
credit losses rose by 17% year-on-year in the first quarter of this year.
Research by the Federal Reserve suggests that the share of BNPL users who
have made a late payment climbed from 15% in 2021 to 24% in 2024.

All the same, default rates remain lower than for other forms of consumer
credit. The Consumer Financial Protection Bureau (CFPB), a regulator,
notes that default rates for BNPL loans were 2% from 2019 to 2022, against
10% for credit-card debt held by similar borrowers. Although Klarna’s credit
losses have grown in the past year, so have its balances. The firm’s overall
default rate is lower than the industry norm.

Could a growing pile of distressed consumer debt be hidden from view,

beyond the sight of banks and policymakers? Some lenders worry about
loan-stacking (borrowing from many sources at once). Such behaviour can
cause a downwards spiral, with consumers taking on more and more loans in
order to pay off earlier ones. Yet other research by the CFPB offers
reassurance. It finds that measures of financial distress—such as revolving
debt on credit cards or extra charges on credit-card loans—do not rise after
BNPL use. Nor are BNPL users more likely to borrow from other sources in
the 18 months after agreeing to pay for something in instalments.

In June, FICO, America’s main provider of consumer-credit scores,

announced it would begin providing scores based on borrowers’ BNPL
histories. Julie May, an executive at FICO, notes a surprising finding from
its year-long study with data from Affirm: for the most frequent borrowers,
credit scores were improved or unchanged when BNPL loans are included.
Research in Scandinavia finds similarly positive results. Christine
Laudenbach of Goethe University Frankfurt and co-authors recently looked
at 1m loan applications to an unnamed Nordic bank that makes use of BNPL
data. Clients with a history of BNPL use, as well as a strong repayment
history, were able to borrow at an average interest rate of 1.4 percentage
points below the level suggested by their credit ratings.

The final verdict on BNPL will come only in a severe downturn. But
although its users are young, and many are new to borrowing, there are
reasons for optimism. As this new form of finance becomes increasingly
mainstream, it looks safer and more useful than its critics argue. Buy that
burrito, and don’t let anyone judge you. ■

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taking-over-the-world-good
Finance & economics | Baby slump

America’s fertility crash reaches a new low

Even once-fecund states are having fewer children
August 7th 2025

When a woman of child-bearing age in Salt Lake City was growing up, her
parents were typically religious, had married before they turned 25 and
would go on to stay together. Her life today is similar: Utah is even more
religious; more children grow up in two-parent households than anywhere
else in America. There is just one difference. Today’s mother would have
grown up as one of three siblings, yet she has fewer than two children
herself.

In 1960 America’s total fertility rate, or the average number of children a

woman could be expected to have, was 3.6. By 2022 it had fallen to 1.7.
Recent data released by the Centres for Disease Control and Prevention
(CDC), an official body, show a further drop since then, to just under 1.6—
the lowest rate on record. Women in every state are having fewer children.

Inspect the distribution of births, and a revealing patchwork of plateaus and

plunges emerges. In recent years, birth rates have dropped only slightly in
places where they have long been low. Four of the five least fertile states in
2014, including Connecticut and Massachusetts, have seen their rates
decrease by less than the national average. It is in states that have been
historically the most fertile where the fall has been precipitous; Alaska,
North Dakota and Utah have seen some of the steepest declines. All told,
states that had above average fertility rates in 2014 are responsible for more
than 80% of the collapse in American birth rates over the past decade.

The latest stage in America’s long-running fertility crash presents a

challenge for pro-natalist policymakers and researchers. They have long
focused their attention on states with low fertility rates, which are often
urban and educated. For instance, Lyman Stone, an economist who has
advised the Trump administration, has urged other states to follow “the Utah
way”. In his view, relatively few women in the state want to delay childbirth
for a professional career, and its high levels of religiosity increase family
stability. Indeed, the White House is now said to be considering reserving
college places for couples who put their education on hold to have children.
Troublingly for such policymakers, the recent fall in birth rates is
concentrated in rural parts of the country and places where people tend to
have less education. Although Utah has plenty of worshippers, they are
having fewer children. Pro-natalist types often argue in favour of supplying
homes with space for big families; now, even in places with abundant space,
birth rates are dropping. This mainly reflects changing behaviour among
young women, who are having fewer unplanned births. Whereas in 2005
most women in Utah had their first child before the age of 25, today fewer
than one in four do.

Policymakers looking to prompt more births have few tools at their disposal.
America’s fertility rate dropped firmly below 2.1—the level required to keep
the population stable without immigration—almost two decades ago. In the
years since, few convincing explanations for the trend have emerged. The
CDC’s recent data have therefore alarmed researchers and the White
House. Both worry that the lower birth rates fall, the lower the chance they
will ever recover. In their search for a fix for America’s falling birth rate,
they may have to start looking in new places. ■

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crash-reaches-a-new-low
Finance & economics | Sweet and sour

If America goes after India’s oil trade, China will

benefit
A crackdown on Russian crude would have knock-on consequences
August 7th 2025

WHEN WESTERN countries began boycotting Russian oil in 2022, India

saw an opportunity. Some 2.6m barrels a day (b/d) of crude once destined
for Europe were available—at a sweet discount. India, which bought next to
no oil from Russia in 2021, pounced. It has remained one of Russia’s biggest
customers ever since. Today it imports nearly 2m b/d of Russian “sour”,
heavy crude, representing 35-40% of its crude imports. This reduces India’s
import bill at a time when the world’s fastest-growing big economy burns
ever more petroleum. Local refiners make a killing by processing the stuff
into fuels that they then export at full cost.
For three years Ukraine’s allies did not object, and the strategy looked savvy.
Now it is in jeopardy. Irked that Vladimir Putin is making no effort to end
his campaign in Ukraine, on August 6th President Donald Trump slapped an
extra 25% tariff on India, which he accuses of funding Russia’s “war
machine”. A bill vowing levies of up to 500% on countries that buy Russian
oil is making its way through Congress. Meanwhile, the European Union’s
18th package of sanctions is due to ban refined products made from Russian
crude in January.

The tariffs will hurt but the bans lack bite. Indian refineries—other than
those backed by Rosneft, a Russian oil giant—source most crude from
outside Russia; they can argue their products are not made from Russian
stuff even if there is some in the blend. That makes the EU measure hard to
enforce. Mr Trump’s hope is to bring down Russia’s oil revenues in order to
force Mr Putin to halt his offensive. Preventing Russian oil from reaching
foreign markets, however, could push up global prices, and thus be
politically uncomfortable for America’s president, which might explain why
the market remains calm.

There is still potential for a storm. Unlike China, which imports 2m b/d from
Russia, India does not have a history of defying American sanctions. When
Uncle Sam pledged to penalise anyone buying Iranian oil during Mr
Trump’s first term, India swiftly complied. This time the White House is
“serious about pressuring India to go to zero”, says a source familiar with its
thinking. Placid markets may embolden Mr Trump. He could supplement his
tariffs with threats that any bank, port or firm facilitating Russian sales will
be cut off from American finance.

What if he did? First, India would race to find new supplies. Its refiners have
already cut Russian orders by 40-50%, estimates a trader. In theory, Middle
Eastern countries, which have 3.5m b/d in spare capacity, could provide
additional help, along with producers from Africa and elsewhere. In
practice, a lot of Gulf supply is already committed to East Asia through
long-term contracts, and much is a lighter type than the “Urals” for which
Indian refiners would be looking. Russia, meanwhile, would struggle for
buyers. Chinese refiners could absorb more oil: the country’s leaders have
shown they can retaliate successfully against Mr Trump’s tariffs, making
them less vulnerable, but they also do not want to end up reliant on any
single supplier.

Such analysis dictates that, were America to insist on immediate

compliance, global oil prices would jump, perhaps to over $80 a barrel. Mr
Trump could not countenance that for long. Very soon he might introduce
waivers phasing in the restrictions over six months, allowing markets to
adjust—a repeat of 2018-19, when soaring prices in the wake of Mr Trump’s
sanctions against Iran forced America’s president to soften his approach. An
oil glut is expected early next year, which might accommodate tough-but-
phased-in Russian sanctions.

Given enough time, India would probably manage to replace most of its
current Russian supply, albeit at a higher cost (Urals crude currently trades
at a $5-10 discount to comparable grades). The margins of Indian refiners
would be crushed. As they retreated from the market, the winners would be
their Chinese rivals, which have been restocking fast in recent months,
giving them plenty of firepower. Being less exposed to American sanctions,
they would also continue to buy Russian crude—at a growing discount. ■

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indias-oil-trade-china-will-benefit
Finance & economics | One-thousand-year vision

Xi Jinping’s city of the future is coming to life

It is both impressive and worrying
August 7th 2025

Xiongan, China’s “city of the future” and a pet project of Xi Jinping, the
country’s supreme leader, has become a byword for costly vanity projects.
Central-government and provincial planners have spent at least 835bn yuan
($116bn) on the city since 2017, when they broke ground in what had been
marshy farmland 125km south of Beijing. It has been touted as a solution to
China’s urban maladies, with residents promised short commutes through
leafy parks instead of cough-inducing traffic jams. The city is part, officials
say, of a “one-thousand-year plan” in civilisation-building. A book about
Xiongan from a state publisher lists its creation alongside the works of
mythical emperors who supposedly lived 5,000 years ago.
Critics have pointed out that rather than showcasing China’s smart-city
technology and ecological friendliness, as is the intention, Xiongan has
looked more like the country’s greatest ghost town. In 2023 reports,
including one in this newspaper, noted that it was a large building site with
few signs of inhabitation.

Now, however, the area is changing fast. A discernible city centre has
appeared. On a recent humid summer evening a handful of people strolled
among impressive buildings housing the local government and a
mesmerising data centre resembling a giant eyeball. Xiongan’s business
districts are starting to add companies. At the end of last year, China
Satellite Network Group became the first state-owned firm to officially
relocate from Beijing. China Huaneng, a state energy giant, is following its
lead. A handful of other state companies are slated to make the move soon.

What until recently resembled a ghost town is therefore filling with

residents, who are attracting services in their wake. A handful of China’s
leading hospitals have opened branches. So have well-known high schools.
Local universities are adding to their student bodies. By early 2024 more
than 100,000 students had been relocated from campuses in Beijing, as part
of a continuing process. There are said to be 15,000 or so new students this
year. All told, by the end of last year official statistics put the city’s
population at around 1.4m.

As people move in, the real policy experiments are getting under way.
Xiongan’s planners are indeed taking aim at some of China’s stickiest
problems. One trial involves the hukou, China’s residency system that
manages population growth (and excludes rural migrants from urban public
schools and other benefits). Rapid population growth is not Xiongan’s goal.
In fact, city officials want to keep the population below 5m in 2035, to avoid
sprawl. To this end, they have created a merit-based residency system that
takes into account an applicant’s educational level, skills, employment
experience and tax contributions. Most permits will be allocated to staff at
the largest state firms, students at the best universities and high-skilled
workers in industries such as artificial intelligence, biotech and fintech. For
those who do not qualify for the local hukou, the city will also run a parallel
system resembling America’s green-card lottery. Card-holders will get some
of the local benefits and free public transport, but these rights will expire
after five years.

Those who make it into Xiongan will benefit from a new pension scheme.
China lacks a strong safety-net; its pensions system faces shortfalls across
much of the country. In February the city’s local government announced that
it would require companies to enrol all employees in state pensions and
“enterprise annuities”, contributed to by both firms and employees. It is the
first regional government in China to push employers to pay into their
workers’ retirement funds. This will be an incentive for anyone
contemplating a post in the city. Staff relocating from Beijing will be able to
retain pension benefits they had in the capital—another perk in a country
where holding on to pensions when moving between regions is difficult.

The city’s residents may also avoid the booms and busts of China’s property
market, which is in crisis. Not everybody can buy a home in the area.
Prospective buyers must be among a group of talented workers holding
either a Beijing or Xiongan hukou or a green card. Those who have paid into
the local social-security system for at least five years can also buy. But
nobody can own a property elsewhere in the country—a clear disincentive to
speculators who hoard flats. Homes are distributed through a lottery system,
which workers must get permission from their bosses to enter. These
measures will hold down demand for homes, in turn suppressing prices. All
of this is very much in keeping with one of Mr Xi’s refrains: “homes are for
living in”, not speculation.

Even land supply is subject to experiments. For decades, local governments

have relied upon land-leasing for revenues, often drawing up contracts with
developers that last for decades. This gives them an incentive to drive up
prices by restricting supply. Developers, too, sometimes hoard land in order
to raise the price of other properties. To avoid this, Xiongan is
experimenting with leases of five years or fewer, even if such an approach
reduces their value. Developers that hoard land might not have their
contracts renewed.

These are lofty undertakings. They are also probably a blueprint for building
similar cities. An exhibition centre in Xiongan is said to contain the layouts
of a similarly planned development that has yet to be officially announced.
(The centre is closed to the public; your correspondent was turned away at
the door.)

But although the city is no longer a ghost town, it is not without flaws. The
Xiongan model is undeniably statist. Officials are seeking much more
control over residents’ lives, which will appeal to Communist Party cadres,
but might make it harder to attract China’s most talented individuals.
Moreover, despite all the money that has been lavished on Xiongan, officials
appear to be making a mistake which is all too common in the party’s big
plans for the future. Locals who were born in the area say they have scarcely
benefited from the city’s development. Just a decade ago the region was
similar to most other rural areas in northern China; residents describe it as
having been a poor place dotted with small farms and factories. Now that
has been upended. In order to meet strict ecological standards, almost all of
the area’s factories have been shut down, and only meagre compensation has
been offered to those who have lost out.

One local says he had saved for years in the hope of buying flats for his
sons, but that new regulations and higher costs have priced him out of the
market. As it stands, the city is becoming an elite enclave, home to the
government’s most privileged workers. If it survives 1,000 years, that might
be how Xiongan is remembered. ■

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the-future-is-coming-to-life
Finance & economics | Buttonwood

Want better returns? Forget risk. Focus on fear

A recent study suggests a new paradigm for asset pricing
August 7th 2025

An investor will take on more risk only if they expect higher returns in
compensation. The idea is a cornerstone of financial theory. Yet look around
today and you have to wonder. Risks to growth—whether from fraught
geopolitics or vast government borrowing—are becoming ever-more
fearsome. Meanwhile, stockmarkets across much of the world are at or
within touching distance of record highs. In America and Europe, the extra
yield from buying high-risk corporate bonds instead of government debt is
close to its narrowest in over a decade. Speculative manias rage around
everything from cryptocurrencies and meme stocks to Pokémon cards.

A common explanation for effervescent markets is that investors have

become reckless or outright irrational. Or perhaps the relationship between
risk and return simply is not there, posits a working paper by Rob Arnott of
Research Affiliates, an investment firm, and Edward McQuarrie of Santa
Clara University. They argue that over the past two-and-a-bit centuries, risk
(as conventionally defined) has done a lousy job of explaining the relative
returns of stocks and bonds. In its place, they propose fear—a more complex
thing—as the real driving force of markets.

Standard portfolio theory says a stock’s uncertain future returns are

distributed along a bell curve. The expected return lies under the peak, and
risk is equivalent to the curve’s variance, or spread. These assumptions make
the maths elegant and, more important, tractable. But they are also flawed.
Stock returns do not in fact follow a bell curve: they take extreme values too
often and are asymmetric. Investors, meanwhile, do not regard the curve’s
full spread as risky, but just the side of it corresponding to losses. Who,
however risk-averse, would be upset by an outsize return?

What is more, risk theory gives an inadequate account of historical returns.

A core prediction is the “equity risk premium”, meaning the tendency of
stocks, being riskier, to deliver better long-term returns than government
bonds. To test this, Mr McQuarrie compiled American stock and bond prices
going back to 1793, using data from newspaper archives. Previous studies
had seemed to establish the equity risk premium as a persistent, relatively
stable property of markets; his new database calls that into question.

An investor who bought American stocks in 1804 would have had to wait 97
years before their return beat that of bonds. By 1933 they would have fallen
behind again. A statistical test of the relationship between variance and
return, over the database’s full timespan, failed even to find a “modest or
inconstant” risk premium. The cumulative equity risk premium (up to 2023)
has nevertheless been large. But 70% of it came from an exceptional period
between 1950 and 1999; the rest of the time, stocks’ relative performance
was middling or poor. And these, after all, were results for one of the
world’s best-performing stockmarkets. Other researchers have shown that,
since 1900, those of other countries have on average returned far less.

Realised variance and returns contain both expected and unexpected

elements, so no theory is likely to match the data perfectly. Even so, the
scale of these departures from what risk theory would predict, over such a
long timespan, warrants a search for a new framework. Messrs Arnott and
McQuarrie propose that instead of pricing assets by their variance, investors
price them according to two fears: fear of loss (FOL) and fear of missing out
(FOMO). Whereas risk is measured by variance, FOL refers only to its
downside (or “semivariance”). An asset inspires FOMO if it has the chance
of wild, unexpected gains that those shunning it might miss. This is
measured by the “skewness”, or asymmetry, of its return distribution.

Rather than working through fear theory’s maths, which they admit is
formidable, the authors hope to tempt others to investigate it with them.
They might just succeed. As well as being a widespread, often rational
impulse, FOMO helps explain why people would buy overpriced stocks, or
even speculative assets with no fundamental source of returns. Its absence
from conventional theory seems like an error. And FOL describes how
people actually think of risk far better than variance does. Just like investors’
mood and market dynamics, the balance between the two can vary
dramatically with time and circumstance. The historical record suggests that
portfolio theory needs some new ideas. Fear might be just the thing. ■

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forget-risk-focus-on-fear
Finance & economics | Free exchange

An economist’s guide to big life decisions

Forget your trip to the dentist. A new check-up is required
August 7th 2025

Time for your annual check-up. After what feels like an eternity in the
waiting room, flicking through dog-eared copies of the world’s finest
publications (did you know Indonesia is at a crossroads?), your name is
called at last. A smiling professional awaits you, only this time the room
smells not of disinfectant, but of the solvents used in whiteboard markers.
Instead of a fold-out bed, there is a Bloomberg terminal behind the modesty
curtain in the corner, flashing green or red with every tick of the market. The
economist will see you now.

Economists should behave in a manner that would lead the public to think of
them as “humble, competent people” akin to dentists, wrote John Maynard
Keynes, a not-very-humble economist. If they could get the public to see the
profession as being on a similar level to their white-coated peers, he wrote,
that would be a “splendid thing”. Keynes was referring more to a
technocratic consensus about how to run the economy, rather than to the sort
of personalised care and attention provided by a medical professional. But
what if the profession took his idea both seriously and literally? Could a trip
to the economist make your life better?

On arrival, the first question is what seems to be the matter: income or

happiness? The good news is that more money should make you jollier.
Although economists once worried there was a point at which gains to
emotional well-being from higher incomes plateaued—a study in 2010
pegged it at $75,000 ($110,000 today)—research by Matthew Killingsworth
of the University of Pennsylvania has overturned this idea. He finds that for
all but a small minority, well-being typically increases along with income,
and that there is no upper limit to the trend. Modern economic research
therefore confirms that Kingsley Amis, a British novelist, was correct when
he wrote there is “no end to the ways in which nice things are nicer than
nasty ones”. But even if there was a point at which more money did not
make you happier, the vast majority of an economist’s patients would still
benefit from earning more in other, non-happiness-related ways. Better the
economist focuses on the tangible and leaves the transcendental to the priest.

With many patients, the economist might take a look at their chart and tut, “I
wouldn’t start from here.” A person’s place of birth has the biggest impact
on their life outcomes. The 83% of the world’s population who live in non-
rich countries hold a bad hand. At least the prescription is simple: move if
you can. Returns to migration are sky-high. A paper in 2016 by Michael
Clemens, then at the Centre for Global Development, Claudio Montenegro
of the World Bank and Lant Pritchett, then of Harvard University, calculated
the benefits of moving from the poor world to America for a typical 30-year-
old man with a secondary education. They came to $14,000 or so a year,
adjusting for the different price levels. Such benefits are also likely to be
passed down to any offspring. Indeed, the puzzle among economists is why
so few people move rather than so many. (Border fences explain only so
much.)

The rest of the advice will depend on how old you are and what has already
gone wrong. A handful of big decisions—whether to go to university and
what to study, what career you pursue, whether to start a family and with
whom—matter more than others. A college education is usually a good bet.
In 2020 the Institute for Fiscal Studies, a British think-tank, found that, after
accounting for individual characteristics and taxation, university leads to a
typical bump of 20% in lifetime earnings. But the returns depend on what
you study: entrants to creative-arts courses can expect no financial benefits.
Male medics and economists both enjoy a lifetime wage increase of around
£500,000 ($625,000).

An economist should point out that, although wages do vary widely between
occupations, a rising share of the variation is explained not only by what you
do but by the company for which you work. Best, then, to get a job at a
superstar employer. Unionised companies may pay more than their non-
unionised counterparts, but if you are a high-flyer you might want to opt for
the latter. Unions tend to ensure that low performers get paid more while
high performers get paid less. When it comes to relationships, later
marriages are typically more stable, but much of this is what an economist
might call a “selection effect”. The timing of marriage has little effect in
itself—instead, the pattern reflects the type of person who waits for just the
right partner. Research also suggests that it may be better to delay having
children, and in this case it might not be a selection effect: the later a
woman’s career break, the smaller the impact on her lifetime earnings.

For older patients, the economist has less advice. Saving for retirement is
more valuable the earlier you start. The economist might get out their
whiteboard markers for an impromptu refresher on compound interest for
youngsters. Older folk do not have much time to improve their earning
power, so they should focus on becoming happier instead. Loneliness is the
big risk. Perhaps a second degree in the creative arts could help?

All of this comes with a caveat: economic research tends to deal in averages.
Much of the advice will be generic, rather than tailored to the individual. So,
too, is a dentist’s: brush your teeth, floss regularly, avoid sugar and do not
smoke. But the dentist at least can carry out remedial work and fix things
after they have gone wrong. The economist has few tools to fill in career
gaps or polish a grubby CV. They can provide some helpful guidance to
those who lose their jobs—retraining is helpful but think carefully about the
precise course; if the whole region is suffering then those who move earlier
are likely to suffer the least—but little in the way of direct help. To live up to
Keynes’s metaphor, economists need more than data. They need drills. ■

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big-life-decisions
Science & technology
Astronomers cannot agree on how fast the universe is expanding
Fraudulent scientific papers are booming
Microphones can spot radar-evading hypersonic missiles
Should you take collagen?
Science & technology | Cosmic horror

Astronomers cannot agree on how fast the

universe is expanding
This suggests cosmology might be wrong about something fundamental
August 7th 2025

IT IS ONE of the biggest mysteries in cosmology—and getting bigger all the

time. Ever since Edwin Hubble, an American astronomer, published
observations of distant galaxies in 1929, scientists have known that the
universe is expanding. For almost 30 years they have known that the
expansion is accelerating (that discovery, made in 1998, was honoured with
a Nobel prize in 2011). What they cannot agree on, though, is how fast it is
currently growing.

That present-day rate of expansion is known as the Hubble constant.

Measure it one way, and it comes to around 73 kilometres per second per
megaparsec (km/s/mpc; a megaparsec is the distance travelled by light in
about 3.3m years, and a value of 73 means that objects 1mpc away recede
from an observer at 73 kilometres per second). But measure it another way
and the answer is closer to 67km/s/mpc.

That cosmologists cannot agree on one of the most elementary facts about
the universe is striking enough. But that uncertainty produces others, too: it
makes it impossible to calculate an exact age for the universe, for one thing,
or to be certain of its exact size. And the discrepancy refuses to go away, no
matter how many times astronomers re-check their measurements, upgrade
their instruments, or think of new ways to attack the problem.

The Hubble tension, as the discrepancy between the two sets of

measurements is known, “has got stronger every year for the past decade”,
says Dan Scolnic, an astronomer at Duke University, in North Carolina.
Some astronomers think one set of measurements or the other will turn out
to be wrong. Others believe that the tension is a hint of deeper
problems with the scientific description of the universe, known as the
standard model of cosmology.

There are, broadly speaking, two ways to work out the Hubble constant. One
involves measuring the modern universe directly, working out how far away
distant galaxies are and how quickly they are receding. It is this technique
that gives the higher value of 73. The second is to look at the cosmic
microwave background radiation (CMB), an aftershock of the Big Bang.
The CMB reflects the large-scale structure of the early universe. Given those
starting conditions, astronomers can crank the handle on their cosmological
models to predict how fast the universe should be expanding today. This
kind of work is where the figure of 67 comes from.

So which is correct? One possibility is that astronomers in the first camp are
getting their measurements of the modern universe wrong. The speed with
which distant galaxies are receding is relatively straightforward to measure.
Just as the pitch of an ambulance’s siren appears to change as it approaches
and then speeds away, light emitted by galaxies will have longer
wavelengths—and so appear redder—the faster they are receding. For that
reason, it is measurements of distances that come in for the most scrutiny.
Distance measurements on galactic scales are notoriously tricky. The most
common method is to combine several different techniques into something
called the cosmic distance ladder, in which the farthest object measurable by
one technique is used to calibrate the next. The lowest rungs are nearby
stars, Earth’s distance from which can be measured by trigonometry. Higher
rungs are formed by what astronomers call standard candles—stars known
as Cepheid variables, for example, or certain supernovae—whose absolute
brightness is known, and whose distance can therefore be inferred by how
dim or bright they appear from Earth.

There are plenty of subtleties that can skew such measurements, says Wendy
Freedman, an astronomer at the University of Chicago, who specialises in
measuring the Hubble constant. Interstellar dust absorbs light in some
wavelengths more than others, which has to be corrected for. The
“metallicity” of individual Cepheids—astronomer-speak for the degree to
which they contain elements other than hydrogen and helium—can influence
their brightness. The specific kind of supernovae needed for distance
measurements are relatively uncommon, so the sample used for distance
measurements is rather small. Extraordinary claims, says Dr Freedman—
such as the idea that two sets of bulletproof measurements disagree with
each other—require extraordinary evidence. But the evidence so far, she
says, is not quite extraordinary enough.

Others take the opposite view. “I think the idea that these measurements are
wrong was more viable a few years ago,” says Adam Riess, an astronomer at
the Space Telescope Science Institute in Baltimore (and one of the winners
of that 2011 Nobel). As more astronomers have become interested in the
Hubble tension, they have cross-checked the distance ladder measurements
in other ways. Every rung has been double-checked using different standard
candles, says Dr Riess, and yet the tension persists.

A paper published in June further complicated matters. It did not rely on a

distance ladder of any sort. Instead it examined beams of light from bright
astronomical objects called quasars. If a massive object lies between the
source of that light and Earth, its gravitational effects will cause different
beams of light to take different amounts of time to travel to Earth.
Examining those differences lets astronomers work out how far the beams
have travelled. The method came up with a value of the Hubble constant
very similar to studies that rely on the old-fashioned distance ladder. That
means, says Dr Riess, that if some unknown confounder is throwing off the
distance measurements, it would have to be throwing off several
fundamentally different sorts of measurements at once.

Some astronomers, therefore, think it is the early-universe technique that is

at fault. The worry here is less about erroneous readings—the CMB has
been measured and re-measured with increasing accuracy by a string of
satellites since the 1990s, as well as ground-based telescopes in Chile and at
the South Pole, all of which agree. The suspicion is rather that something
may be wrong with the cosmological theory into which those measurements
are fed.

That theory, called Lambda-CDM (LCDM) holds that the visible portion of
the universe—galaxies, planets, starlight and the rest—makes up just 5% of
the total. The remainder is supposedly split between “dark energy”, a force
that opposes gravity at long distances and which drives the expansion of the
universe (the “lambda” in LCDM), and “dark matter”, which cannot be seen
but whose presence can be inferred from its gravitational effects on galaxies
(CDM stands for “cold dark matter”).

LCDM might be counterintuitive. But it is very successful at predicting

everything from the abundance of simple chemical elements to the
distribution of galaxies and patterns within the CMB, all with high precision.
Replacing it with something that is equally good but which can also predict
a Hubble constant in line with present-day measurements is a tall
mathematical order.

Still, there is no shortage of candidates. Some speculate that dark energy’s

potency might change over time. That would mean that attempts to model
today’s universe from the CMB—which assume that the nature of dark
energy has not changed since the Big Bang—have been misguided. A paper
presented at a meeting of the Royal Astronomical Society last month
suggested that the Milky Way might sit within a giant, comparatively empty
region of space, which would make the Hubble constant appear larger than it
really is.
For now none of these theories has knocked LCDM off its perch.
Astronomy, then, is at an impasse. It is possible that some inspired
theoretician will emerge tomorrow with an idea that can solve the problem.
Failing that, astronomers must fall back on the hope that yet more data will
provide some vital clue. A string of new telescopes, such as the Vera Rubin
Observatory in Chile or the Nancy Grace Roman Space Telescope, due to fly
no later than May 2027, may offer a vital insight. But if the past few decades
are any guide, they are as likely to simply re-confirm the Hubble tension as
they are to resolve it. ■

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agree-on-how-fast-the-universe-is-expanding
Science & technology | Inside job

Fraudulent scientific papers are booming

A subset of journal editors may be partly responsible
August 7th 2025

SCIENTIFIC JOURNALS exist to do one thing: provide accurate, peer-

reviewed reports of new research to an interested audience. But according to
a paper published in PNAS on August 4th, that lofty goal is badly
compromised. Scientific fraud, its authors conclude, happens on a massive
scale and is growing quickly. In fact, though the number of scientific articles
doubles every 15 years or so, the number thought to be fraudulent has
doubled every 1.5 years since 2010 (see chart). If nothing is done, says Luís
Nunes Amaral, a physicist at Northwestern University in Chicago and the
study’s senior author, “The scientific enterprise in its current form would be
destroyed.”
It has long been clear that publication fraud rarely comes from lone
fraudsters. Instead, companies known as paper mills prepare fake scientific
papers full of made-up experiments and bogus data, often with the help of
artificial-intelligence (AI) models, and sell authorship to academics looking
to boost their publication numbers. But the analysis conducted by Dr Amaral
and his colleagues suggests that some journal editors may be knowingly
waving these papers through. Their article suggests that a subset of journal
editors are responsible for the majority of questionable papers their
publications produce.

To arrive at their conclusion, the authors looked at papers published by

PLOS ONE, an enormous and generally well-regarded journal that identifies
which of their 18,329 editors is responsible for each paper. (Most editors are
academics who agree to oversee peer review alongside their research.) Since
2006 the journal has published 276,956 articles, 702 of which have been
retracted and 2,241 of which have received comments on PubPeer, a site that
allows other academics and online sleuths to raise concerns.

When the team crunched the data, they found 45 editors who facilitated the
acceptance of retracted or flagged articles much more frequently than would
be expected by chance. Although they were responsible for the peer-review
process of only 1.3% of PLOS ONE submissions, they were responsible for
30.2% of retracted articles.

The data suggested yet more worrying patterns. For one thing, more than
half of these editors were themselves authors of papers later retracted by
PLOS ONE. What’s more, when they submitted their own papers to the
journal, they regularly suggested each other as editors. Although papers can
be retracted for many causes, including honest mistakes, Dr Amaral believes
these patterns indicate a network of editors co-operating to bypass the
journal’s usual standards.

Dr Amaral does not name the editors in his article, but Nature, a science
magazine, subsequently made use of his analysis to track down five of the
relevant editors. PLOS ONE says that all five were investigated and
dismissed between 2020 and 2022. Those who responded to Nature’s
enquiries denied wrongdoing.

Compelling as Dr Amaral’s analysis is, it does not conclusively prove

dishonest behaviour. All the same, the findings add to a growing body of
evidence suggesting some editors play an active role in the publication of
substandard research. An investigation in 2024 by RetractionWatch, an
organisation that monitors retracted papers, and Science, another magazine,
found that paper mills have bribed editors in the past. Editors might also use
their powers to further their own academic careers. Sleuths on PubPeer have
flagged papers in several journals which seem to be co-written by either the
editor overseeing the peer review or one of their close collaborators—a clear
conflict of interest.

Detecting networks of editors the way Dr Amaral’s team has “is completely
new”, says Alberto Ruano Raviña of the University of Santiago de
Compostela in Spain, who researches scientific fraud and was not involved
with the study. He is particularly worried about fake papers remaining part
of the scientific record in medical fields, where their spurious findings might
be used to conduct reviews that inform clinical guidelines. A recent paper in
the BMJ, a medical journal, found that 8-16% of the conclusions in
systematic reviews that included later-retracted evidence ended up being
wrong. “This is a real problem,” says Dr Ruano Raviña.
Yet the incentives to commit fraud continue to outweigh the consequences of
being discovered. Measures including a researcher’s number of publications
and citations have become powerful proxies for academic achievement, and
are seen as necessary for building a career. “We have become focused on
numbers,” says Dr Amaral. Some journals, for their part, make more money
the more articles they accept.

All the same, pressure is growing on publishers to root out bad papers.
Databases of reputable journals, such as Scopus or Web of Science, can “de-
list” journals, ruining their reputations. It’s up to the publishers to bring
about a relisting, which means tidying up the journal. “If we see
untrustworthy content that you’re not retracting, you’re not getting back in,”
says Nandita Quaderi, editor-in-chief of Web of Science. But whether
publishers and the many editors who work hard to keep bad science out of
their journals can keep up with the paper mills remains to be seen. ■

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papers-are-booming
Science & technology | Safe and sound

Microphones can spot radar-evading hypersonic

missiles
It is a new implementation of an old idea
August 7th 2025

For decades, the state of the art in long-distance warfare was the ballistic
missile. Fast and capable of intercontinental ranges, it remains a mainstay of
national arsenals. But the predictability of these weapons’ high, arcing
flightpaths makes them vulnerable to detection and interception. In recent
years America, China and Russia have begun developing hypersonic
missiles as an alternative. These fly inside Earth’s atmosphere, below the
coverage of long-range radar, and can manoeuvre unpredictably. That makes
them trickier to spot coming.

But not impossible. The Pentagon, for example, is pursuing a multipronged

approach towards detecting them. One of the approaches being explored
involves cameras that use visible and infrared light to pick up the telltale hot
glow caused by air friction. Though satellite-borne cameras would have the
best coverage, they would miss hypersonic missiles flying beneath cloud
cover. Full coverage may therefore require a network of EO/IR (electro-
optical/infrared) sensors, as they are known, lower down, on aircraft,
airships or floating platforms. America’s Navy has commissioned Surface
Optics of San Diego to develop new EO/IR sensors with resolutions and
refresh rates capable of tracking hypersonic targets, a task beyond the ability
of existing systems.

Another Navy contract, with HyperKelp of San Clemente, California, takes

a more innovative approach. This involves buoys equipped with
microphones in the deep ocean. The reason, says Graeme Rae, HyperKelp’s
boss, is that hypersonic missiles produce a sonic boom audible over great
distances. The buoys are also equipped with hardware that can run artificial-
intelligence models capable of analysing sound in real time. Even so, the
signal processing is still challenging: the faint boom of a hypersonic missile
can be difficult to pick out from the background noise of waves, shipping
and aircraft.

Acoustic detection of air vehicles predates radar. In the 1930s the Royal Air
Force deployed parabolic concrete “sound mirrors” along the British coast
(pictured on next page) so observers could hear incoming bombers,
providing detection at night and in bad weather. Faster aircraft and radar
rendered these obsolete. But a similar principle has been applied elsewhere
to tackle other low-speed intruders. Ukraine’s Sky Fortress has thousands of
microphones mounted on poles across the country to track Shahed drones by
their distinctive “moped” engine sound.

Tracking hypersonic missiles in this way may seem of limited use; after all,
a projectile travelling at Mach 5 will be long past by the time it is heard. But
HyperKelp’s plan is to fit thousands of low-cost buoys with microphones
both above and below the surface, allowing them to triangulate the position
of the source. Even more accurate locations can be obtained by combining
data from multiple buoys. If the buoys are located far enough away from
American territory, the system could function as a tripwire, providing an
initial detection so that other sensors can be pointed towards the threat.
Earlier research has already shown that such a system works. Researchers at
Sandia National Laboratories in New Mexico have used data from the
International Monitoring System, a network of microphones designed to
detect nuclear tests, to successfully track spacecraft re-entering Earth’s
atmosphere.

Dr Rae notes that whereas space-based detection systems are visible and
vulnerable to enemy action, the buoys are hard to take out. In addition, they
could be deployed in sufficient numbers—and over so great an area—that it
would be hard to destroy enough to disrupt the network. They are also far
more affordable than satellites.

This is, however, likely to be a temporary solution to the challenge of

hypersonics. Things rarely stay still for long in an arms race, and the next
counter-move is never far away. Hypersonic missiles were developed to
evade the radar that spotted ballistic missiles. As they become visible in
turn, it is just a matter of time before new means of evasion emerge. ■

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radar-evading-hypersonic-missiles
Science & technology | Well Informed

Should you take collagen?

There are simpler ways to get smoother skin and stronger joints
August 7th 2025

WOULD YOU pay £40 ($53) for some powder made from the ground-up,
chemically processed skin, bones and connective tissues of cows or fish?
Marketed that way, perhaps not. But stick it in a bottle labelled
supplementary collagen, and things might start to look more appealing.
Collagen supplements are in vogue, taken both by athletes (who hope for
stronger, more injury-resistant joints and ligaments) and the beauty-
conscious (for its alleged ability to smooth wrinkled skin and restore lustre
to hair). How much good they do, though, remains unclear.

Collagen is a structural protein that provides shape and support to everything

from skin and bones to muscles and tendons. One estimate is that it makes
up 25-30% of all protein in the body. And since the body is constantly
growing new skin and hair and remodelling its bones, it gets through quite a
bit of the stuff every day.

Exactly how much it needs—and whether it can get it all from a healthy diet
—is hazy. Like all proteins, collagen is built up from smaller amino acids, a
set of chemical Lego bricks that can be assembled in an endless variety of
ways. Nine of those amino acids are classified as “essential”, meaning
humans cannot produce them internally and must get them directly from
food. But glycine and proline—the two most abundant amino acids in
collagen—are not among them. Both can be produced by the body from
other chemicals, suggesting that supplements might not be necessary after
all.

There are, appropriately enough, wrinkles. Collagen synthesis declines with

age, for one thing. Sunbathing, cigarettes and too much booze also seem to
slow its production. And some researchers have tried to argue, from
biochemical first principles, that glycine may be “semi-essential”: although
the body can produce some of the stuff, it may not be enough to properly
meet demand. For all these reasons, taking supplements might be useful.

The empirical evidence is decidedly mixed, and of uneven quality. Still, one
review paper in the International Journal of Dermatology, published in 2021,
examined 19 other articles to conclude that taking collagen supplements did
seem to decrease skin wrinkling. Another, published earlier this year
in Orthopedic Reviews, looked at 14 studies on the effects of collagen on
joints and found around half reported positive effects.

But the focus on collagen may be misguided. Collagen supplements are

really just a glycine- and proline-rich subspecies of standard protein powder.
One possibility is that the benefits from taking collagen are really just the
benefits of taking protein in disguise. If so, a complete protein like whey (or
a more protein-rich diet) may well be better than a lower-quality source like
collagen.

There is evidence to support this. One notably rigorous—albeit short-term—

study, published in 2023 by researchers in the Netherlands, measured the
effects on connective tissue of having a group of athletes take either a
placebo, collagen or whey. It found that, though neither collagen nor the
placebo seemed to boost tissue growth during recovery from exercise, whey
protein did.

For now, those keen on collagen can take comfort from the fact that no study
has suggested the stuff is harmful. In the meantime, those looking for a
useful hack might consider gelatine, a processed form of collagen used to
make things like jelly, sweets and marshmallows. It can be bought at a
fraction of the cost of the pricey supplements. ■

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collagen
Culture
The novels conservatives want you to read
America’s barmy battle to ban bawdy books
Why “Wednesday” is wickedly successful
Swimming pools are cauldrons of envy, danger and lust
Provence is not just a destination. It is a lifestyle brand
Culture | Literature and politics

The novels conservatives want you to read

It is not just “The Pilgrim’s Progress” and works by Ayn Rand
August 7th 2025

ON A RAINY summer’s morning, eight students and a professor sat around

a table at Thomas Aquinas College, a Catholic institution north-west of Los
Angeles. They were formally dressed—the men wore ties—and they
addressed each other as “Mr” and “Ms”. For hours the group debated “The
Bear”, William Faulkner’s tale of a young hunter disillusioned with
mankind’s efforts to subdue the land and its creatures. The scene would have
delighted anyone who despairs that university students do not, will not and
cannot read.

The discussion would have pleased right-leaning Americans in particular,

and not just because Thomas Aquinas has America’s most conservative
student body. For this was not a conversation about identity politics dressed
up as literary theory: instead, students kept close to the text of the story and
talked of fear, courage, goodness and other virtues. In recent years some
American conservatives have devoted lots of time and energy to banning
books they hate. But others strive to promote the ones they love. What sorts
of novels fit the bill, and why?

Inevitably, the answer depends on which conservative you ask. George H.W.
Bush was fond of “War and Peace”: he said Leo Tolstoy’s vast,
philosophical novel taught him “a lot about life”. (He presumably read the
book before taking office: any president who gets through a gargantuan epic
on Napoleon’s wars while in the White House is a little too fond of
delegating.) Greg Abbott, the governor of Texas, has two favourites: “Atlas
Shrugged”, Ayn Rand’s paean to individualism, beloved by many on the
right; and “Brave New World”, Aldous Huxley’s dystopian fable set in a
godless, family-less, centrally planned future (ie, the sort of world
Republicans like to pretend Democrats want to create).

J.D. Vance, the vice-president, has called himself “a big ‘Lord of the Rings’
guy”. J.R.R. Tolkien’s trilogy tells the story of four hobbits—avatars of the
traditional English country life that was swiftly giving way to
industrialisation as he was writing—who reluctantly set out to save the
world from Sauron, an evil wizard. Mr Vance’s memoir, “Hillbilly Elegy”, is
also an account of how his rural small town was destroyed by forces beyond
its control including, ironically, deindustrialisation. No doubt Mr Vance sees
himself as a virtuous hobbit reluctantly taking up arms to defend his people’s
way of life.

The novel most often mentioned in your correspondent’s informal survey at

Thomas Aquinas was “My Ántonia” by Willa Cather. Published in 1918, the
book tells a story of pioneer farming families in Nebraska. Its central
character is Ántonia Shimerda, as seen through the eyes of her childhood
friend, Jim Burden, an orphaned boy sent to live with his grandparents. It is
a spare and beautiful account of maturation and missed romantic
opportunities.

Cather’s work gets a full chapter in a new book, “Thirteen Novels

Conservatives Will Love (but Probably Haven’t Read)”. In it Christopher
Scalia, a former literature professor and son of the late Antonin Scalia, a
Supreme Court justice, discusses novels and the lessons he believes they
impart. He praises Cather’s gift for description and for dignifying the values
of diligence, stoicism and domesticity. Ántonia is poor, and even more so
after her father commits suicide; she is harassed and betrayed by men, but
earns her independence through toil. Her story, Mr Scalia says, is about “the
complexity of the American dream, the reality of individual agency and the
rewards of hard work and sacrifice”.

Mr Scalia is too thoughtful a reader to reduce novels to parables: he

understands that good fiction provides pleasure in at least equal measure to
instruction, and he treats each of his 13 choices separately. Still, three main
virtues recur in his survey.

The first is faith. But rather than choosing something obvious like, say, “The
Chronicles of Narnia”, or another such work in which the devout are
rewarded and the impious damned, he understands that there is something
strange and mysterious about religious belief.

Muriel Spark, who abandoned her son, is not an obvious pick for a
conservative literary critic who presumably champions family values. But
Mr Scalia includes her novella of 1963, “The Girls of Slender Means”, in his
selection for showing that fierce, sincere religious conversions can be
prompted by experiences other than heavenly visions and weeping statues.
One of Spark’s characters, Nicholas, an intellectual with a taste for
anarchism, is so appalled by the selfish, morally vacuous women he meets in
wartime London that he moves to Haiti to become a missionary. Those who
do not enjoy the company of their fellow Americans, it is implied, may
prefer the company of Christ.

The second virtue is something between resilience and anti-victimhood. Mr

Scalia praises Zora Neale Hurston’s “Their Eyes Were Watching God”
(1937) for the enterprising toughness of its main character, Janie, who is
determined to make a life for herself on her own terms. Similarly he admires
V.S. Naipaul’s magnificent “A Bend in the River”, published in 1979. Set in
an unnamed African country, the story follows Salim, a Muslim Indian
merchant, who watches as it gains its freedom from European rule. The
novel rejects the simplistic and fashionable view that Africans are all
virtuous because they are oppressed, and all Europeans who lived in Africa
were evil and rapacious. The book, Mr Scalia argues, “helps counter the
groupthink that seeks to diminish the achievements of Western culture”.

Third, and finally, Mr Scalia commends novels about how to live in society.
(Rand, a writer of didactic pabulum, does not rate a mention here.) Nathaniel
Hawthorne’s “The Blithedale Romance” (1852) sets the utopian goals of an
agrarian commune against the selfishness of human nature. Frances
Burney’s “Evelina” (1778) illustrates the importance of manners: for the
titular character, the illegitimate daughter of a nobleman, politeness is not
just hollow social convention, but shows “social maturity and good
judgment”. Understanding the rules of British high society is key to Evelina
succeeding in it by making that all-important match.

Plenty of readers will disagree with Mr Scalia’s readings—Hurston is a

feminist hero, too, and Tolkien has plenty of fans on the left—but good
novels should provoke arguments and conflicting interpretations.
Conservatives such as Mr Scalia understand that literature can still affect a
polity. As Bertolt Brecht, a playwright, put it: “Art is not a mirror held up to
reality, but a hammer with which to shape it.” ■

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Culture | Prudes with attitude

America’s barmy battle to ban bawdy books

Organised puritans are invading school libraries
August 7th 2025

“With one long claw, he shredded through silk and lace, and my
undergarment fell away in pieces.” Sex with a shape-shifting fairy who is
sometimes part-wolf, part-bear is not everyone’s cup of tea. But many
teenagers and young adults love reading about such things. Sarah J. Maas, a
leading writer of “romantasy” fiction, has sold more than 75m novels. This
horrifies those who think both witchcraft and fornication are detestable in
the eyes of God. Which is why five of Ms Maas’s works—including “A
Court of Thorns and Roses”, from which the quote above is taken—are
among the most-banned books in American schools.

Book bans are increasingly common in America. According to PEN

America, a free-speech group, there were roughly 10,000 in 2023-24, a four-
fold rise in two years. PEN defines a ban as the removal or restriction of a
title from school libraries because of its content, often at the behest of
worried parents or bossy politicians.

The themes that get books banned are as predictable as the use of phrases
like “a ravenous, unyielding sort of hunger” in wolf-fairy bedroom scenes.
Of the titles barred from two or more school districts, more than half had
sexual content (see chart). Some of this was pretty mild. Monroe County,
Tennessee, proscribed a work that had a classical nude statue on the cover.

Titles that deal with teenage trauma upset parents. Ellen Hopkins has three
novels in the most-banned top ten for her frank depictions of drug-taking,
self-harm and prostitution. Stories about racism raise hackles, too: some
schools shield pupils even from classics by Maya Angelou (“I Know Why
the Caged Bird Sings”) and Alice Walker (“The Colour Purple”).

Books that allude to homosexuality are vulnerable; those that deal with
transgender issues, even more so. The most banned book of all is Jodi
Picoult’s “Nineteen Minutes”, a novel about a school shooting. The chief
objection to it is not that it might inspire copycat murders but that it depicts
a date rape. Another often-purged work is “The Handmaid’s Tale”, which
describes a dystopia in which women are not allowed to read. Irony is lost
on book-banners.

Some states, such as Florida and Iowa, are especially censorious. Florida’s
governor, Ron DeSantis, is on a mission to expel wokery from schools.
Iowa’s “parental rights” law holds teachers personally liable if students have
access to inappropriate books, prompting time-pressed administrators to ask
ChatGPT whether volumes include naughty bits. This method is quick but
unreliable: just as humans fantasise about sex, AIs hallucinate about it.

The debate over which books are suitable for children has been as calm as
werewolf sex. Martha Hickson, a school librarian in New Jersey, was asked
by the school superintendent to remove a graphic novel with a lesbian
protagonist. She refused, noting that the protocol for challenging it had not
been followed.

A furious group of parents accused her of being a pornographer and a

paedophile. Videos spreading these baseless allegations circulated on social
media. “They’re working from a script,” Ms Hickson says of the
campaigners, whom she describes as organised Christian nationalists. Her
car was vandalised and she had to install security cameras in her home. She
says some librarians shun controversial titles to avoid similar harassment.

Reasonable people can disagree about what should be taught in schools.

Plenty of moderate parents object when their kids are taught contentious
theories about gender identity or collective racial guilt, which is why
Republicans have made it a campaign issue. However, activists cannot hear
what is said in class, so books are an easier target than teachers. Anyone can
find which volumes are in a library and search them for keywords.

Partisanship inflames matters. In years between elections, activists can keep

their side angry and energised by picking battles with librarians who
supposedly debauch innocent young minds. President Joe Biden thought
censorship was a problem and appointed a “book ban co-ordinator” to look
into it. One of the first acts of Donald Trump’s education department was to
call this “Biden’s Book Ban Hoax” and eliminate the position.
Culture warriors cheered. Others fear that senseless censorship seriously
damages your shelf. ■

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Culture | The glow of woe

Why “Wednesday” is wickedly successful

The Addams family has a secret—but it is not what you think
August 7th 2025

WHEN YOU think of Netflix’s biggest English-language dramas, you

probably imagine matchmaking, monsters or malignant young men. Seasons
of “Bridgerton”, “Stranger Things” and “Adolescence” all rank in the
platform’s top ten releases, having racked up hundreds of millions of views.
But the streamer’s breakout hero is a gloomy girl who has long plaits,
psychic visions and a knack for sarcasm.

“Wednesday”, about the eldest child of the Addams family, is a supernatural

smash. Viewers spent 1.7bn hours—roughly 200,000 years—watching the
show in the three months after its debut in November 2022. According to
Parrot Analytics, a data firm, “Wednesday” made $360m in advertising and
subscription revenue for Netflix between its release and March of this year:
that is $40m more than the first season of “Squid Game”, Netflix’s biggest
title in any language, did in an equivalent period. “Wednesday” returned to
screens for a second season on August 6th. What explains its otherworldly
power?

Part of its appeal is its mix of the ordinary and the eerie. Wednesday (Jenna
Ortega) is, in some ways, a typically sullen teenage girl. She bickers with
her family, made up of a brother, Pugsley (Isaac Ordonez), an eccentric
uncle, Fester (Fred Armisen), and her parents, Morticia and Gomez
(Catherine Zeta-Jones and Luis Guzmán, whose hairpiece looks like a
flattened chinchilla covered in asphalt).

Wednesday finds most people annoyingly, boringly conformist, and prefers

the company of Thing, an ambulatory severed hand. She loathes school—in
this case, the Nevermore Academy, which specialises in educating outcasts.
Like many of her real-life peers, she enjoys true crime—but, unlike them,
she is able to help solve local murders on account of her premonitions.

The show shares traits with “Stranger Things” in that both follow a group of
winsome teenagers investigating strange happenings in a small town. (And
both are the scrubbed-up children of David Lynch’s “Twin Peaks” without
the originality or genuine existential dread.) As in “Harry Potter”, the school
is replete with coloured uniforms and houses filled with unusual characters,
from gorgons to werewolves.

But “Wednesday” looks different from those shows thanks to the

involvement of Tim Burton, a film-maker famous for wry gothic fantasies
such as “Beetlejuice” and “Edward Scissorhands”. He has helped produce
“Wednesday” and directed half of its episodes. (His longtime musical
collaborator, Danny Elfman, has also written some of its unsettling score.)
The script is snappy: combined with the quick, tortuous plotting, it provides
laughs, jump scares and creepy moments. “Want to take a stab at being
social?” Wednesday’s perky room-mate asks her in the first season. “I do
like stabbing,” Wednesday retorts.

It has no doubt helped “Wednesday” that its characters have been mainstays
of Halloween costumes for decades. The family, nameless to begin with,
first appeared in a single-panel cartoon in the New Yorker in 1938. In 1964 a
tv executive brought them to the small screen. Charles Addams, their
creator, lamented that the family was only “half as evil” as in his comics, yet
the show made the Addamses twice as popular—and Addams himself a
much wealthier man. Subsequent black-comedy films in the 1990s boosted
their fame again.

Addams would be pleased that, over the years, the oddball family has
become increasingly macabre, as well as zany and camp. In the first series
Gomez staged train crashes with model trains. In the current one,
Wednesday punishes the boys who bully Pugsley by releasing hungry
piranhas into a swimming pool during water-polo practice.

Yet the Addamses are not popular because they are wicked or weird: in the
current series, they are kinder, better people than the “normies” who hate
them. They have endured across generations because, beneath the
idiosyncrasies, they are a functional family. If you ignore the severed hand,
the household is made up of two parents, two children, an uncle and a
grunting servant. Wednesday’s family is both what every teenager fears—
cringeworthy—and what they wish for: loving and accepting. Gomez and
Morticia are besotted with each other and they dote on their children, who
love and torture each other in equal measure, as siblings often do.
“Wednesday” is heartening as well as spooky viewing, on any day of the
week. ■

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Culture | Back Story

Swimming pools are cauldrons of envy, danger and

lust
Holiday-makers love them. So do storytellers
August 7th 2025

It culminates in homicide, by way of skinny-dipping, underwater

handstands, erotic rivalry and lots of seafood. But the twisted drama of “A
Bigger Splash”, a film starring Ralph Fiennes, opens with an inquiry
familiar to many holiday-planners. Flying into an Italian island for a fateful
reunion with an ex, Mr Fiennes’s character brings along his devious
daughter (Dakota Johnson). She has a question: “Is there a pool?”

Especially for denizens of rainy places like Britain, summer holidays and
swimming pools are inseparable. A pool is cool comfort on a hot day,
delicious indolence in a frantic world. You may find yourself in one soon (or
now). But dip your toe into fictional pools, and this simple pleasure seems
more complicated. A pool can be an oasis, a theatre, a mirror or a tomb. It is
a cauldron of opposites: success and regression, life and death, innocence
and lust.

A swimming pool means you’ve arrived. Excited children strip off and leap
into the blue as parents grapple with the luggage. But it also connotes arrival
in a social sense. In the visual language of heist movies, for instance,
reclining by a pool is a sign that a mobster has got away with it. Think of
Ray Winstone’s oily crook in “Sexy Beast” or the thieves on the lam in the
television series “The Gold”.

Conversely, other people’s pools can measure your disappointments. When

John Cheever introduces his protagonist in “The Swimmer”, the supreme
pool-based short story, one of his hands dangles in the water, the other clasps
a glass of gin. On a whim he decides to swim to his suburban home via his
neighbours’ backyard pools; his reduced status becomes hazily visible on his
odyssey, glimpsed through his self-delusion as if at the bottom of the deep
end.

Characters are thrust together in a swimming pool, as at a ball in a Jane

Austen novel, only with an undertow of danger and hardly any clothes.
Propriety requires that you pretend not to notice the exposed flesh—but
everyone does. In shows like “The White Lotus”, the pool is an arena of
ogling and flirtation; for male viewers of a certain age, the poolside scene in
“Fast Times at Ridgemont High” was an awakening. The pool-party
bacchanal is a staple of teen movies.

Yet a pool is also a splashy portal to the purer joys of childhood, and a draw
for actual children, including other people’s. Like a jungle watering-hole, it
brings strangers and generations together, sometimes messily, as hardcore
lap-swimmers collide with youngsters playing Marco Polo. At a kids’ party
in “Rushmore”, Bill Murray’s disintegrating character lobs golf balls into the
water, then cannonballs in with a cigarette between his lips.

A pool is an idyll of glamour and possibility, as in David Hockney’s

painting, also called “A Bigger Splash”, after which the film is named. Look
closely, though, and you may spy a scuzzy film of sunscreen on the surface
or dead insects gathering in the filters. Contamination in pools is a harbinger
of trouble. In “The Swimmers”, a true-life tale of Syrian sisters, the foreign
object is a bomb. In “The Sopranos” it is a family of ducks.

In “Sunset Boulevard”, it is a corpse. “The poor dope”, the dead man says of
himself in a posthumous voice-over, “he always wanted a pool.” The body
in the pool has often been a metaphor for the drowning of American dreams.
In “The Great Gatsby”, a murdered Gatsby winds up floating on an air
mattress in the marble pool he hadn’t used all summer, trailed by leaves and
ghosts. Some fictional dips are rebirths; other pools are slippery crime
scenes or damp graves.

Ultimately, everyone dives alone. This summer your pool may have an
infinity edge and a swim-up bar, or a view of cracked tarmac and a wasp
problem. You may be a diving-board exhibitionist or a habitué of the steps.
Either way, the moment comes when the cold first prickles your skin and the
chlorine stings your eyes. For a second it is you—and only you—beneath
the enigmatic spray in Mr Hockney’s picture.

Among on-screen pools, the one in “The Graduate” best conveys the truth
that, for all their conviviality, they can be oceans of loneliness too.
Struggling with adulthood and adultery, Dustin Hoffman’s ingénu (pictured)
is circled by his shark-like parents as he unwinds in their pool, escaping their
hectoring only when he sinks down in his scuba gear. Above the water or
below it, however, there is no refuge from his thoughts—nor, alas, from
yours. On your laps or on a lilo, if you drift in a swimming pool long
enough, what it reflects is yourself. ■

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danger-and-lust
Culture | Summer in pink

Provence is not just a destination. It is a lifestyle

brand
The region, associated with a relaxed way of life, has become a marketing
tool
August 7th 2025

IN A hilltop village in Provence, clinging to a rocky ledge above the

Luberon valley, is the hotel Airelles Gordes, La Bastide. It is a place of sun-
blanched stone, hanging gardens and quiet luxury—so picture-perfect that
the producers of “Emily in Paris”, a glitzy Netflix series, picked it as the
setting for a lunch featuring the titular character and a former fling. This
year the hotel rebranded its fine-dining restaurant to lend it a more relaxed
style. Under a new chef, La Table de La Bastide offers creative but less
formal cuisine “celebrating the Provençal spirit”.
To most people, Provence is a region of France. Increasingly, it is also a
lifestyle brand. The word “Provence” evokes the sound of cicadas, the smell
of pine and the feeling of the sun on your skin: few other parts of Europe
conjure quite the same sensory mix in a single word. It beckons seductively,
promises simplicity and seems to slow life down.

In the French mind Provence is distinct from the Riviera, or the Côte d’Azur,
the coastal strip of resorts on the Mediterranean. The Riviera is about yachts,
partying and showiness; Provence is about rugged timelessness and natural
style. Gordes lies nearly 150 kilometres inland from Saint-Tropez. “Here,
you find elegance but you can be hyper-relaxed,” says Angela Kreuz,
general manager of the hotel. “That is the experience clients come to
Provence for.”

To attach the word Provence to a product or place is to hitch the humdrum to

understated chic. Marseille’s international airport, for instance, is called
Marseille Provence. Provence can be drizzled on salads: Georgetown Herbes
de Provence Olive Oil, infused with lavender, rosemary and thyme, promises
“to transport you directly to the French countryside”. It can be massaged
onto cheeks: Provence Beauty, a firm based in Los Angeles, uses “coveted
natural extracts from the south of France”.
What explains the emergence of brand Provence? Not French administrators,
who merged it into the graceless modern region named Provence-Alpes-Côte
d’Azur. The Romans called it “Provincia”; by the medieval period Provence
reached from the river Rhône to Nice on the Mediterranean and as far north
as the Alps. Its borders have fluctuated with wars and empires, before it was
annexed by the French crown in 1487. Today, Provence has no formal
boundaries but you know it when you are there: it is a landscape (olive trees,
vineyards), language (provençau) and culture (pétanque) that defy
bureaucratic lines.

Nor has Provence always charmed its visitors. “Provence, with its sunny sky,
is too arid to deserve general praise,” wrote John Murray in 1843 in his
“Handbook for Travellers in France”. Early British and American visitors
preferred the Riviera. In the 19th and 20th centuries it was French artists
who turned eyes away from the Med and towards the charms of its
hinterland. “A Year in Provence”, a bestseller by Peter Mayle, was not
published until 1989.

In more recent times Hollywood has helped lend glamour to the brand.
Johnny Depp liked the region so much that he bought an entire village. A
Provençal wine estate has become a celebrity accessory: big-screen stars
including Brad Pitt and George Clooney have snapped up vineyards
complete with historic châteaux.

That points to an important part of the region’s reputation: rosé. No country

in the world produces more of the pink tipple than France, and no part of
France produces it quite like Provence. Exports of Provençal rosé have
nearly tripled over the past decade, most of it shipped to America and
Britain. “There are a lot of great rosés out there, but in the end the customer
wants to have Provence on the list,” says Guillaume Harel, an ex-sommelier
and export director for Maurel Frères, a wine distributor. Rosé can be a
flashy brand statement—think LVMH’s Whispering Angel or Minuty—or it
can speak more quietly of a sense of place. This year Maurel Frères acquired
Domaine Saint-Jean de Villecroze, in the Provence hills, which had
rebranded one of its rosés as “Selladore en Provence”, with an image of a
tractor on the bottle.
Brand Provence, suggest some, is a counterpoint to the stresses of the
modern world. Provence “is really this idea of a lifestyle, a way to take one’s
time, to savour time passing,” says Isabelle Brémond, director of Marque
Provence, a regional marketing body. Seasons and sunlight dictate daily
rhythms, in the fields or en terrasse. And the region practises a centuries-old
culinary art de vivre—local produce, fresh markets, simple ingredients—
now in vogue. Provence grew fat purple tomatoes long before they were
labelled “heirloom”.

Paradoxically, of course, the brand is also dependent on—and sometimes

undermined by—the agitations and compulsions of the small screen. On
Instagram the hashtag #Provence features on over 7m posts. In 2023 an
American travel magazine named Gordes the “most beautiful village in the
world”. Only 1,664 people live there, but now 1m tourists crowd into its
narrow streets each year.

In all this pampering and posting, Provence gets purified. Up in the hills,
poverty stalks the rocky land. As people glug less wine, the region will take
a knock. But summer is a time for fêtes in Provence, when smallholders lay
down their tools, villagers lay out the trestle tables and rosé is drunk by all,
whether from a jug or a bottle. In August, at least, Provence sets the rhythm
for those who live there—and those who want a slice of that life. ■
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it-is-a-lifestyle-brand
Economic & financial indicators
Economic data, commodities and markets
Economic & financial indicators | Indicators

Economic data, commodities and markets

August 7th 2025
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data-commodities-and-markets
Obituary
Fr Patrick Ryan, the “Devil’s Disciple”, improved IRA bomb-making
Obituary | Old Father Timer

Fr Patrick Ryan, the “Devil’s Disciple”, improved

IRA bomb-making
The former Catholic priest died on June 15th, aged 94
August 7th 2025

Tick, tick, tick. The sound as he stepped into the shop was overwhelming.
There were simple clocks and fancy clocks, pocket clocks and—this was
Switzerland, after all—cuckoo clocks. A cacophony of ticking. But Father
Patrick Ryan wasn’t interested in cuckoo clocks. His eye had been caught by
the small, round timers in the window. Locals used them to remind
themselves when their parking meter was about to run out: set the timer
going—tick, tick, tick—and when it went off, your time was up. He asked
the shopkeeper for one. The shopkeeper laughed: what a cheap thing to
choose. Father Ryan smiled. The world could laugh. In time, it would see
that the joke was on it.
And, in time the world did see. But it didn’t laugh. Father Ryan bought
about 900 of those timers. Then the Irish Republican Army (IRA) set them
going: tick, tick, tick—and when they went off, your time was up. Time up
for the 12 soldiers killed by a timed bomb in Warrenpoint in 1979 (that one
was set for 5.12pm). Time up for the two people killed by bombs in Canary
Wharf in 1996 (7.01pm). Time up for the five killed in 1984 in the Grand
Brighton Hotel (2.54am). Almost time up for Margaret Thatcher, who
staggered out, cement dust still in her mouth. They had had to set that one
for 24 days, 6 hours and 36 minutes. They were ingenious things, really: the
little timers that made all the difference.

They certainly made all the difference to him. He had been born in Tipperary
and grown up in a world that was clockwork with Catholicism. Fish on
Fridays, fasting on Saturdays, mass on Sundays, the rosary every night: O
my Jesus, forgive us our sins, save us from the fires of hell. His mother
brought him up to love Jesus and hate “the enemy”—the English. Who
would in time hate him back: he became known as the “mad priest”, the
“Terror Priest”, the “devil in a dog collar”, the “Devil’s Disciple” and, more
prosaically, as one of Britain’s most wanted men.

He’d not started out to be a devil—though he’d never been too saintly,
either. He signed on to be a priest at 14, worked hard at his studies and
played hard, too, at hurling. He showed his roguery in that. They nicknamed
him “Sorry” because he would hit another player, say “Sorry”, then hit him
again straight after and say “Sorry” again. But he really wasn’t ever sorry.
They could all see that. Then he’d been shipped out to be a priest in
Tanganyika, in Africa, where he’d helped locals with engineering projects. It
was when he was sent back home that, as Jennifer O’Leary records in her
book “The Padre”, the iRA approached him: would he, perchance, like to
work for them? Perchance he would.

At first he helped by ferrying money across Europe: Paris, Rome (he liked
the gelato), Geneva. Swiss banks, he learned, had to guard your secrets like
a priest. That pleased him. But it was clear to him that the IRA needed not
just more money but better engineering. The number of bombs was
increasing—they’d planted 153 by the end of 1970, then 1,300 in 1972—but
not their accuracy. They went off all the time: in cars, in kitchens, in
people’s hands. They called them the “own goals”. There was never much
left of someone after an own goal: just bits and pieces under a car. It was in
Geneva that he saw the timers. He instantly realised their worth: Swiss
timepieces for an enemy that ran like clockwork.

Take the Household Cavalry’s changing of the guard. At 10.28am they

would start to leave their Hyde Park barracks. Out by 10.30am, on past
Buckingham Palace, at Horse Guards Parade by 11am. So regular you could
set your watch to them. So regular you could set your timer to them. For that
one he used a different detonator but the result was the same. When the
bomb exploded four men were killed and seven horses. That bomb, Father
Ryan later said, was his work. Absolutely one hundred per cent. Oh yes.

Father Ryan’s timing wasn’t always perfect. On August 27th, 1979, he

happened to be in County Sligo. It was a lovely sunny day—so lovely that
Lord Mountbatten, King Charles’s great-uncle, had gone out on his boat
with his family and a local boat boy. The IRA bomb was so loud that the
boat boy’s father heard it from his house. He drove to the shore, arriving in
time to see his son’s body pulled from the water. “Look what you’ve done to
him,” he kept saying. “Look what you’ve done.” There was more than one
way to score an own goal. Father Ryan left Sligo briskly.

In a war you didn’t just need timing, you needed luck. The British knew
that, the IRA knew it. Few bombs showed it better than the Brighton bomb
of 1984. That bomb had been tricky: the Grand hotel had been crawling with
police all week; it had been known for years that the IRA wanted to
assassinate Thatcher. So the IRA planted their bomb, with its little Swiss
timer, early: 24 days early. The timer worked but the assassination failed:
they had right time but the wrong suite. The IRA’s statement reflected on the
role of fortune. Remember, it read, “we have only to be lucky once. You will
have to be lucky always.”

And then it was over. There was the Good Friday Agreement in 1998 and
peace in Northern Ireland and handshakes with the queen and the Troubles
were suddenly less troubling. Gerry Adams, the former leader of Sinn Féin
(formerly the political wing of the IRA) took to Twitter and started issuing
whimsical, avuncular tweets. He tweeted about cupcakes; about his dog;
about how bothersome it was switching off all the fairy-lights in one’s home
at Christmas. Not everyone was charmed. “Surely,” someone tweeted back,
“you know someone who can fit a timer?”

And the man who had provided the IRA with its timers? He was less
avuncular. A few years before he died, he was interviewed about his past. He
was, by then, no longer a priest (the Catholic church had booted him out) but
he still wore Bible-black; still had that priestly, authoritative air. Did he, the
interviewer asked, have any regrets? Oh yes, he said. “I have big regrets.”
Ever a one for timing, he paused. “I regret that I wasn’t even more
effective.” ■
This article was downloaded by zlibrary from https://www.economist.com//obituary/2025/08/07/fr-patrick-ryan-the-devils-disciple-
improved-ira-bomb-making
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Obituary
Fr Patrick Ryan, the “Devil’s Disciple”, improved IRA bomb-making