August 30th 2025

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The world this week
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The world this week

Politics
August 28th 2025

At least 20 people, including health workers, were killed in Israeli strikes on

a hospital in Gaza. Five of the dead were journalists. Israel said it had
targeted a “camera positioned by Hamas” but did not provide evidence of
this. An initial inquiry by the Israel Defence Forces found “gaps” that
demanded further investigation. Meanwhile, large protests in Israel called
for the release of the hostages still held in Gaza and an end to the war.

The Integrated Food Security Phase Classification, a system backed by

NGOs to monitor food crises worldwide, confirmed that parts of the Gaza
Strip are now in famine. (Israel denies there is famine in Gaza.) It estimated
that more than half a million people are already in phase five, characterised
by extreme food deprivation, acute malnutrition and starvation-related
deaths. For now the famine is centred in the densely populated area around
Gaza city.
The Democratic Republic of Congo and M23, a militia backed by Rwanda,
resumed peace talks in Qatar. The two parties, which are engaged in a long-
running conflict in eastern Congo, had previously missed a deadline to reach
a deal following a ceasefire agreement in July.

The French government is on the brink of collapse, again. François Bayrou,

who has been prime minister for less than nine months, called a vote of
confidence for September 8th over his deeply unpopular debt-reduction
plans. His minority centrist administration is caught between parties on the
left and the hard right in the National Assembly. Several have indicated they
will not support Mr Bayrou in the vote, which he has described as a choice
between “responsibility” or “chaos”.

Charles Kushner, America’s new ambassador to France, breached diplomatic

protocol by accusing Emmanuel Macron of not doing enough to combat
antisemitism, telling the French president that his pending recognition of a
Palestinian state will “embolden extremists, fuel violence, and endanger
Jewish life in France”. That prompted an official rebuke by the French
government. Mr Kushner is the father of Jared Kushner, one of Donald
Trump’s sons-in-law.

Steve Witkoff, Mr Trump’s special envoy, prepared for another consultation

with Ukrainian officials in New York. Mr Witkoff wants Volodymyr
Zelensky to hold a meeting with Vladimir Putin ahead of a potential
trilateral summit involving Mr Trump. The American president once again
raised the threat of imposing “very serious” sanctions on Russia if it does
not agree to a ceasefire. Meanwhile, Ukraine admitted that Russian forces
had entered Dnipropetrovsk, an industrial region in eastern Ukraine, but said
it had stopped the advance.

Inga Ruginiene was approved by the parliament in Lithuania as prime

minister, following the resignation of Gintautas Paluckas amid allegations of
misconduct about his business interests (which he denies). Ms Ruginiene is
also a Social Democrat, but became an MP only last November. Although
her family ties to Russia have been questioned by the opposition, Ms
Ruginiene has voiced solid support for Ukraine.
The Danish foreign ministry summoned America’s top diplomat in
Copenhagen to explain why Americans with links to the Trump
administration were reportedly conducting covert operations in Greenland to
drum up support for independence from Denmark. Lars Lokke Rasmussen,
the foreign minister, said such clandestine actions would be “unacceptable”.

A former pupil at a Catholic school in Minneapolis shot dead two children,

aged eight and ten, during a mass at the school. The 23-year-old shooter,
who had reportedly identified as transgender and was suffering from
depression, committed suicide at the scene.

Donald Trump signed an executive order expanding the federalisation of

policing by, among other things, calling for tighter co-ordination between
the Defence Department and state and local law enforcement. The president
has already sent the National Guard to Washington, DC. J.B. Pritzker, the
Democratic governor of Illinois, likened the deployment of the military to an
invasion, and pointed out that eight of the ten states with the highest
homicide rates are led by Republicans.

FBI agents raided the home and office of John Bolton, who was Mr Trump’s
national security adviser in his first term. They have since fallen out. The
search is reportedly linked to Mr Bolton’s handling of classified information.
The raid hasn’t stopped him criticising Mr Trump. He has since described
the president’s strategy on Ukraine as “utterly incoherent”.

Kilmar Abrego Garcia was taken into custody again by America’s

immigration authorities. Mr Abrego Garcia hit the headlines in March when
he was wrongly deported to El Salvador. He was eventually sent back to the
US. The government wants to deport him to Uganda, but a judge has
blocked that order until she can hold a hearing.

At a court in New York, Ismael “El Mayo” Zambada, the founder of the
Sinaloa drug gang in Mexico, changed his plea to guilty for a list of crimes
including drug-smuggling and money-laundering. He was arrested in Texas
last year after being tricked into flying to El Paso. Prosecutors are not
seeking the death penalty for Mr Zambada, who is 77.
At least 34 soldiers were kidnapped by a dissident faction of FARC, a
former rebel group, in Colombia. They were snatched during a military
operation in an area known for cocaine smuggling. A few days earlier a
drone attack on a police helicopter near Medellín killed 13 people and a car
bomb in Cali killed another six. President Gustavo Petro blamed the
dissidents and drug gangs for the spate of violence.

China announced that North Korea’s leader, Kim Jong Un, will attend a
military parade in Beijing on September 3rd commemorating the 80th
anniversary of the end of the war against Japan and the second world war. It
will be Mr Kim’s first trip to China since 2019. Over 20 other foreign
leaders are expected, including Russia’s Vladimir Putin.

Australia cut diplomatic ties with Iran after accusing it of being behind
attacks on a Jewish restaurant and a synagogue in 2024, describing them as
“dangerous acts of aggression” by a foreign power. The government said
Iran’s Revolutionary Guards had used “a complex web of proxies to hide its
involvement”.

Ranil Wickremesinghe was granted bail in Sri Lanka following his arrest on
charges of misusing public funds while in office. Mr Wickremesinghe has
been the country’s prime minister six times and was president for two years
from 2022 after Gotabaya Rajapaksa was ousted during widespread unrest.
His supporters insist he is innocent.
South Korea’s new president, Lee Jae-myung, met Donald Trump at the
White House, where they discussed a trade deal and the thorny issue of
paying for the 28,500 American troops in the country. Mr Trump raised the
possibility of America taking ownership of the Korean land that houses
American bases. Coinciding with the summit, Korean Air announced a big
order for 103 Boeing planes. Mr Lee said the meeting was a success, but that
his staff had been worried he might face a “Zelensky moment” in the Oval
Office.
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The world this week

Business
August 28th 2025

Donald Trump announced that he would sack Lisa Cook from the Federal
Reserve’s board of governors, the first time a president has formally tried to
dismiss a sitting governor from the central bank. Mr Trump said he had
“cause” amid allegations that Ms Cook had lied on her mortgage
applications (no charges have been brought). Ms Cook’s lawyers said she
would fight her removal and insisted that the president lacked the authority
to fire her. The matter will probably be decided in the Supreme Court; in
May it all but confirmed that Fed governors can be removed only for cause.
Mr Trump’s actions helped push up the yield on American 30-year
government bonds briefly, to 4.96%. Meanwhile, the yield on British 30-
year gilts rose to 5.64%, nearing a 27-year high, amid concerns about the
country’s persistently high inflation. The government is widely expected to
announce more tax rises in the coming months to fill a fiscal hole.

The White House said it had also fired Susan Monarez as head of the
Centres for Disease Control after she refused to resign. Ms Monarez had
been in the job only since July but clashed with the administration’s
scepticism on vaccines. Three other CDC officials reportedly resigned.

For the third time in recent weeks Argentina’s central bank raised the
percentage of assets that banks must hold in reserve. The decision forms part
of a wider effort to defend the peso amid a sell-off of the currency.
Stockmarkets also took a hit, following allegations of corruption involving
senior officials in the government of President Javier Milei. Mr Milei had to
be hustled away by his bodyguards from a campaign event for the mid-term
elections when protesters threw rocks at his car.

America’s tariff of 50% on Indian goods came into force. Mr Trump doubled
the levy because of India’s purchase of Russian oil. America is India’s
largest trading partner. Meanwhile, Canada decided to lift the retaliatory
tariffs it had imposed on most American products, except for aluminium and
steel, as it works to secure a trade agreement. The European Union was also
preparing to drop tariffs on all American industrial goods, another of Mr
Trump’s key demands.

In an update to its projections, America’s nonpartisan Congressional Budget

Office estimated that increases in tariffs would reduce the government’s
primary deficit by $3.3trn over the next decade and cut payments on interest
by $700bn, if the higher rates of trade duties persist. The projections do not
account for the impact of tariffs on GDP growth, nor do they consider the
most recent levies on the EU and India.

Howard Lutnick, America’s commerce secretary, said that the Trump

administration was considering whether to take equity stakes in big
American defence companies, such as Lockheed Martin, which he described
as “basically an arm” of the government. The news follows confirmation by
Intel that the government has taken a roughly 10% stake in the chipmaker,
funded by federal grants.

The future of Orsted, the world’s biggest developer of offshore wind farms,
was blown off course after the Trump administration ordered all work to
stop on a $4bn project off the coast of Rhode Island that was 80%
completed. The order mentioned national-security issues, which Orsted said
it would rush to resolve. The Danish company recently warned that
“adverse” developments in America were affecting its business.

Nvidia reported another sturdy set of earnings, with revenues of $46.7bn in

the second quarter, up by 56%, year on year. Jensen Huang, the chipmaker’s
chief executive, dismissed concerns that AI investments would slow and that
its business in China might suffer, as he predicted worldwide spending of up
to $4trn on AI by the end of the decade.

SpaceX conducted a successful test flight of its Starship mega-rocket after a

series of failures earlier in the year, and deployed dummy satellites for the
first time. Starship is vital for both SpaceX’s fast-growing Starlink internet
service and America’s plans to return astronauts to the Moon.
Keurig Dr Pepper, an American soft-drinks company which also owns the
Green Mountain coffee brand, agreed to buy JDE Peet, based in the
Netherlands and one of the world’s biggest suppliers of coffee and tea
beverages, for $18bn. The coffee assets of both will be combined into one
company, which will be worth roughly the same as Nestlé’s coffee business
and listed separately in America. When the merger is completed JDE Peet
will delist from the Amsterdam stock exchange.

In the latest example of the perils of rebranding a familiar favourite, Cracker

Barrel reversed its recent decision to change its logo and will now stick with
the original imagery. The Southern-themed restaurant chain had wanted to
ditch a picture of an elderly white man (known as “Uncle Herschel”) and the
words “Old Country Store” from the logo. That triggered an anti-woke
backlash on social media. It was all over for the company when Donald
Trump called on it to revert to its old design, adding that at least Cracker
Barrel might get a “billion dollars’ worth of free publicity”.
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The world this week

The weekly cartoon

August 28th 2025

The editorial cartoon appears weekly in The Economist. You can see last
week’s here.
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Leaders
Brazil offers America a lesson in democratic maturity
Humiliation, vindication—and a giant test for India
How much danger is America’s central bank in?
France’s government is on the brink of collapse, again
Don’t forget the downsides of China’s innovation push
Leaders | The trial of Jair Bolsonaro

Brazil offers America a lesson in democratic

maturity
It is a test case for how countries recover from a populist fever
August 28th 2025

IMAGINE A COUNTRY where a polarising president lost his bid for re-
election and refused to accept the result. He declared the ballot rigged and
used social media to urge his supporters to rise up. They did so in their
thousands, attacking government buildings. Then the insurrection failed, the
ex-president faced a criminal investigation and prosecutors put him on trial
for plotting a coup.

That sounds like a fantasy of the American left. In the hemisphere’s other
giant democracy it is reality. On September 2nd the trial of Jair Bolsonaro,
Brazil’s former president and the “Trump of the tropics”, will begin in the
Federal Supreme Court. The evidence reads like a flashback to Brazil’s
turbulent past. A former four-star general schemed to overturn the result of
the election; assassins planned to murder its real winner. As our
investigation into the plot explains, the coup failed because of incompetence
rather than intent.

Mr Bolsonaro and his associates are likely to be found guilty. That makes
Brazil a test case for how countries recover from a populist fever. In Poland,
two years after Law and Justice (PiS) lost power, a coalition led by Donald
Tusk, a centrist, is constrained by a new PiS president. In Britain, Brexit is
now unpopular but Nigel Farage, the politician who inspired it, is leading in
polls. Even Hamas’s massacre of October 7th 2023 did not shake Israel out
of its bitter divisions.

But Brazil’s most striking comparison is with the United States. The two
countries seem to be swapping places. America is becoming more corrupt,
protectionist and authoritarian—with Donald Trump this week messing
about with the Federal Reserve and threatening Democrat-controlled cities.
By contrast, even as the Trump administration punishes Brazil for
prosecuting Mr Bolsonaro, the country itself is determined to safeguard and
strengthen its democracy.

One reason Brazil promises to be different from other countries is that the
memory of dictatorship is still fresh. It restored democracy in 1988. The
supreme court, shaped by the “citizens’ constitution” enacted at that time,
still sees itself as a bulwark against authoritarianism.

In addition, most Brazilians are open-eyed about what Mr Bolsonaro did. A

majority of them believe that he tried to stage a coup to keep himself in
power. Conservative state governors vying to take on the leftist president,
Luiz Inácio Lula da Silva, in next year’s election need the votes of Mr
Bolsonaro’s supporters to win. But even they criticise his political style.

That recognition has opened up the chance of reform. As our briefing lays
out, most of Brazil’s politicians, on left and right, want to put the Bolsonaro
madness and its radical polarisation behind them. From the business bigwigs
in São Paulo to the political Pooh-Bahs in Brasília there is surprising
agreement on a difficult, but urgent, agenda of institutional change.
Paradoxically, a key task is to rein in the supreme court, despite its role as
the guardian of Brazil’s democracy. As the arbiter of a constitution that runs
to 65,000 words, the court oversees a dizzying array of rules, rights and
obligations, from tax policy to culture and sports. Groups from trade unions
to political parties can bring cases directly. Sometimes justices initiate cases
themselves, including an inquiry into online threats, some of them against
the court itself—making it the victim, prosecutor and judge. To handle a
workload of 114,000 rulings in 2024 alone, most decisions come from
individual judges. There is wide recognition that unelected judges having so
much power can corrode politics, as well as save it from coups. The justices
themselves see the case for change.

Fixing the court will be hard, but its power is only part of the constitutional
baggage Brazil is carrying. The country also suffers from chronic fiscal
incontinence, in particular out-of-control tax exemptions and automatic
spending increases. Some of these were enshrined in the constitution of 1988
to constrain would-be authoritarian leaders. Some are the fault of Brazil’s
Congress, which has seized control of the federal budget and uses its
influence to finance pet projects. The effect is to crowd out investment and
weaken growth.

In theory, this points to a path forward. Mr Bolsonaro must be tried for his
crimes and punished if found guilty. Next year the election should be fought
over the broader reforms.

In practice, none of this will be easy. One obstacle is Mr Trump. He has

accused Brazil’s supreme court of a “witch-hunt” against his friend, and in
early August slapped 50% tariffs on Brazilian goods. The administration has
also imposed Magnitsky sanctions—an exclusion from America’s financial
system usually aimed at human-rights abusers and kleptocrats—on
Alexandre de Moraes, the judge leading the Bolsonaro case. Other officials
and politicians may follow. This recalls an ugly bygone era when the United
States habitually destabilised Latin American countries.

Fortunately, Mr Trump’s interference is likely to backfire. Only 13% of

Brazil’s exports go to the United States, and they consist largely of
commodities, for which new markets can be found. America has already
granted numerous exemptions. So far, Mr Trump’s attacks have only
strengthened Lula’s standing in opinion polls, and provided him with an
excuse for any poor economic news before the next election, in October
2026.

The domestic obstacles to reform are greater. Even if the elites want change,
Brazil is still a deeply divided country. Mr Bolsonaro has fanatical
supporters who will cause trouble, especially if the court imposes a stiff
sentence. Reforming the supreme court and the constitution requires groups
to give up power for the common good. It is natural for them to cling to
what they have—if only because they do not trust their enemies. Everyone
wants growth, but to get more of it some people are going to have to
surrender some privileges.

Tensions will therefore be inevitable. But unlike their counterparts in the

United States, many of Brazil’s mainstream politicians from all parties want
to play by the rules and make progress through reform. Those are the
hallmarks of political maturity. Temporarily at least, the role of the Western
hemisphere’s democratic adult has moved south. ■

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democratic-maturity
Leaders | America’s blunder

Humiliation, vindication—and a giant test for

India
Trump has triggered a trade and defence crisis: how should Modi
respond?
August 28th 2025

IT IS UNUSUAL to experience humiliation, vindication and a defining test

all at the same time. But that is India’s predicament today. President Donald
Trump has undone 25 years of diplomacy by embracing Pakistan after its
conflict with India in May, and now singling out India for even higher tariffs
than China. He cannot have thought through how the world’s most populous
country and fifth-largest economy would react.

Narendra Modi, India’s prime minister, recently laid out a path for a
muscular, more self-reliant nation. He is also about to meet Xi Jinping in
China, after a bitter four-year Sino-Indian military stand-off in the
Himalayas. For America to alienate India is a grave mistake. For India it is a
moment of opportunity: a defining test of its claim to be a superpower-in-
waiting.

Mr Trump’s humiliation of India comes in two flavours. On August 27th,

after condemning it for buying Russian oil, America’s president imposed a
25% tariff surcharge, on top of the existing 25% import tariff on Indian
goods. Buying Kremlin crude is grubby. But given that India does so
through a price-cap scheme run by the West, that it sells refined petroleum
products to Europe, and that much of the world, including China, also buys
Russian oil, the surcharge makes it look as if India has been singled out for
special punishment.

The other humiliation is Mr Trump’s love-in with Pakistan. After a terrorist

attack in India that Mr Modi blamed on Pakistan, the two rivals fought a
four-day skirmish in May, involving over 100 warplanes and raising fears of
a nuclear clash. Yet Mr Trump is now exploring crypto and mining deals in
Pakistan. He has dined in the White House with Field-Marshal Asim Munir,
its hardline army boss and de facto ruler, who is proposing Mr Trump for a
Nobel peace prize. America has offered to mediate over disputed Kashmir,
breaking its own long-standing position and an Indian taboo.

America’s failure to support India on a core security interest and decision to

punish it over trade have shattered trust among Indians. Since 2004
American presidents have welcomed India as a rising democratic power
opposed to Chinese domination of Asia. Its $4trn economy and $5trn
stockmarket dwarf those of Pakistan, wracked by instability, debt crises,
terrorism and dependence on China. This is a giant own-goal for America’s
interests that compounds its neglect of NATO in Europe.

That explains the second emotion among some in India: vindication. Since
independence in 1947, India has avoided alliances, although the label it uses
has changed from “non-alignment” to “multi-alignment”. It relies on Russia
for some weapons, and on Europe, Israel and America for others. China
supplies manufacturing inputs; the West tech and markets.

In 2020, however, when relations with China went into a deep freeze after
the border skirmishes in the Himalayas, some in Washington hoped this
might presage a quasi-alliance with America. Intelligence has been shared,
and joint US-India military exercises, which also included Japan and
Australia, led to a strategic deal in 2024 on closer defence ties.

Indians sceptical of global entanglements feel vindicated by the events of the

past few months. As they always warned, dependence on America is
dangerous. Mr Modi’s visit to China is meant to signal that India has
options.

Humiliation and vindication pose a test of India’s capabilities and resilience.

For 11 years Mr Modi has pursued nation-building, modernisation and
centralisation. There have been setbacks. An industrialisation drive has had
modest results and failed to produce the new jobs India needs. The education
system is poor. Mr Modi often lapses into Hindu chauvinism.

But there have also been successes. New roads and airports, and digital
payments and tax platforms, have created a giant single market. The
financial system is stronger, with deep capital markets built on domestic
savings, a nearly balanced current account and prudent banks. India is now
less likely to attract supply chains as part of a “China plus one” boom, but
all this will help it weather the trade shock. Growth is expected to remain
above 6%, making it the world’s most dynamic big economy and, the IMF
says, its third-biggest by 2028.

The danger is that America’s aggression revives slumbering autarky and

anti-Westernism. In his Independence Day speech from the Red Fort in
Delhi on August 15th, Mr Modi emphasised more self-reliance. But were
India to go further and turn inwards, it would threaten its services industry,
which now exports almost as much as all other sectors put together. Its tech-
services firms make at least half their sales to American customers,
including blue-chip firms with “global capability centres” in India. The
country is OpenAI’s second-biggest market by users. And to industrialise
faster, India needs more machinery imports and inputs from China.

Better for India to try to limit the damage. It should make rational
concessions, including cutting tariffs and buying less Russian oil and more
American natural gas. America and India still have enduring bonds, not least
a huge diaspora. Mr Modi is right to go to China: boosting India’s
manufacturing will mean closer trade links in the next decade, as well as
American tech. He should seek new trade deals, adding to recent ones with
Britain and the United Arab Emirates.

A second priority should be reform at home. India’s fate—and its choice—is

to be independent. Size and dynamism matter more than ever, to secure
better terms in deals, pay for defence and raise living standards even if world
trade slows. India has been waiting for several years for more big-bang
reforms, including deregulating business, reforming the courts, and
modernising agriculture, land and power distribution.

Many of these require co-operation between India’s states and the central
government. Encouragingly, Mr Modi has just said he will simplify the
goods-and-services tax and deregulate the economy, emphasising “Next Gen
Reform”. After 11 years in office, he needs to go further and faster. To
confront India’s deepest internal challenges has always been in its national
interest. In a hostile world, it is also the best defence. ■

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test-for-india
Leaders | The Federal Reverse

How much danger is America’s central bank in?

Whether Lisa Cook stays or goes, important norms have been broken
August 28th 2025

IT IS the first time that an American president has tried to sack a governor
on the board of the Federal Reserve. The credibility of the central bank is
one of the underpinnings of America’s world-beating economy. And yet,
although dollar assets weakened a little on the news, financial markets are
taking it all in their stride. Whatever is going on?

Donald Trump escalated his war against the Fed on August 25th, saying he
would fire one of its governors, Lisa Cook, for alleged misstatements in her
mortgage applications. Fed governors can be sacked only for cause and Ms
Cook, who has not been charged, has vowed to fight her dismissal in court.
Yet everybody knows this is not really about mortgage fraud. Instead, like a
show trial, it is a message to anyone who serves on the Fed’s board that Mr
Trump can impose his desire for low interest rates. On August 26th he
crowed that “We’ll have a majority [on the board] very shortly.”

One reason investors are not yet panicking is that the president
underestimates how much work he still has to do. Even if Ms Cook departs,
his pick to replace her must gain confirmation from the Senate, a process
that scotched the chances of Judy Shelton and Stephen Moore, Mr Trump’s
nominees during his first term. And if they clear that hurdle, they will still be
part of a committee that sets rates by majority vote.

Much is being made of the fact that the board contains Chris Waller and
Michelle Bowman, who were successfully nominated by Mr Trump in his
first term. No doubt he believes that makes them his creatures. However,
although they dissented from the Fed’s latest decision to keep interest rates
on hold, preferring instead to cut, there is a respectable case for doing so. Mr
Waller, the bookies’ favourite to succeed Jerome Powell, is no more of a
presidential stooge than the incumbent. Mr Powell became Fed chairman in
2018—under Mr Trump.

In addition, although Mr Powell’s term as chairman ends in May, his tenure

as governor does not expire until January 2028. The convention is for him to
retire next year, but these are convention-busting times and he could choose
to stay on, denying Mr Trump the chance to fill another seat. The markets, in
other words, will have plenty of time and opportunities to panic before the
president is in a position to pull the levers at the Fed.

But do not conclude that all must therefore be well. Investors would look on
with alarm if the Fed were to have a super-chair seated behind the Resolute
desk. And rightly so. The memory of Richard Nixon strong-arming Arthur
Burns into keeping rates low in the early 1970s, and the rampant inflation
that ensued, has made the independence of the central bank one of the
strongest norms in American politics.

Other things being equal, greater political influence over the Fed will raise
interest rates because of the extra risk of bad decisions. That is why
investors are already demanding greater compensation to hold long-dated
Treasuries, even as the Fed has cut rates and the economy has weakened.
Given Mr Trump’s wishes, the irony is obvious. The Fed’s independence is
being attacked just as the government is racking up debt. The more interest
payments rise, the more tempting it will be to lean on the Fed, whoever is in
power.

Mr Trump’s attack on Ms Cook is yet another symptom of the corruption of

America’s government. Allegations of mortgage fraud have also been made
against Adam Schiff and Letitia James, two Democratic politicians. There is
no telling who else could fall victim to the partisan trawl of mortgage
applications and, who knows, tax returns. It is easy to imagine Democrats
one day returning the favour. ■

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bank-in
Leaders | Europe

France’s government is on the brink of collapse,

again
Emmanuel Macron looks likely to lose another prime minister over an
attempt to curb public debt
August 28th 2025

When Europeans fret about profligate states destabilising their common

currency, they usually have the continent’s southern fringe in mind. Yet
when on August 25th a European leader made dire warnings about his
country’s public finances, he was not speaking of Greece, Italy or Portugal.
“Our country is in danger because we are on the brink of over-
indebtedness,” declared François Bayrou, France’s prime minister. To start
tackling a debt pile that stands at 114% of GDP he wants to make savings in
next year’s budget worth €44bn ($51bn, or 2.6% of spending). But he runs a
minority government faced with a bolshie opposition—egged on by
populists on left and right—which will hear nothing of it. To try to break the
impasse, Mr Bayrou stunned all parties this week by putting his
government’s survival on the line, recalling parliament for a vote of
confidence on September 8th. If he is defeated, as seems likely, France will
lose its third prime minister in little over a year—and Europe will gain a
fiscal hazard.

Mr Bayrou is right to sound the alarm. France has not balanced its budget
since 1974. Its deficit is the highest, relative to GDP, in the euro zone. Its
public debt is higher than that of every member except Greece and Italy, and
its borrowing costs are now steeper than Greece’s much-improved rates.
France still has no problem finding lenders. Yet as Mr Bayrou implied in his
address with a reference to Britain’s hapless former prime minister, Liz
Truss, market sentiment can turn fast. Bourses and bond markets are already
nervous. The last thing Europe needs at a time of war and geopolitical
turmoil is a financial crisis at the heart of the euro zone.

To get a grip on its public finances, France urgently needs to break the cycle
of parliamentary deadlock. Alas, the country that elected Emmanuel Macron
president in 2017 on a promise to bridge political division now seems
singularly unable to do so. It does not help that the centrist president further
shrank his parliamentary minority by recklessly calling an early election last
year, nor that rebellion has always had a deep hold on the French mind. For
politicians of the centre ground elsewhere, France’s troubles reflect
something broader too: a worrying sign that the tools of technocratic politics
—an appeal to reason, the marshalling of facts, the forging of consensus—
are feeble weapons against the populists’ angry certitudes.

Against such forces, France has few good options. Without a budget for next
year, government will not shut down; the existing one can be rolled over, as
it was for a period this year. But it is hard to see how Mr Macron could
break the parliamentary stalemate by losing Mr Bayrou and picking a fresh
prime minister from his own camp. Yet if he dissolves parliament again, that
would run the risk of bringing Marine Le Pen’s hard right into government.
No wonder bond markets are twitchy.

As France braces itself for yet more political instability at home, there is one
small comfort for Europe. Across the Rhine, in Germany’s chancellor,
Friedrich Merz, Mr Macron now has a partner who, unlike his predecessor,
Olaf Scholz, seems ready to work with France. A good Franco-German link
is not enough to unite and embolden Europe, but without one Europe
flounders, and both France and Germany suffer along with the rest.

The two leaders, who will dine together on the Med on August 28th before
holding a joint cabinet meeting the next day, do not agree on everything. But
they share a sense of urgency and seriousness. And if Mr Macron can
overcome his concerns on trade (notably with regard to the EU-Mercosur
deal) and Mr Merz can commit to common defence projects and
productivity-boosting reforms in banking and energy, together they might
just be able to get some things done that will benefit their countries and the
continent more widely. They should not waste their best opportunity. ■

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Leaders | Innovation v involution

Don’t forget the downsides of China’s innovation

push
China’s industrial policy attracts fans abroad, critics at home
August 28th 2025

Not so long ago, Westerners dismissed China as a copycat, a fast follower or

a “fat tech dragon”, consuming vast amounts of money and manpower while
rarely taking flight. But as China has triumphed in high-tech industries such
as electric vehicles, clean energy and lean AI, the condescension is giving
way to admiration, fear and even envy.

Now some Western governments are paying the copycat nation the
compliment of imitating its policies. The European Union has offered
subsidies to Chinese battery companies that share their know-how.
America’s government is taking a stake in Intel, a once-mighty chipmaker,
in the hope that state ownership will restore its fortunes. Back in China,
techno-optimism is helping fuel a market rally. Cambricon, a potential rival
to Nvidia, has reported first-half revenues up by over 4,000% year on year.

Amid the hope and hype, it may seem churlish to point out the downsides of
China’s innovation push: the fiscal cost, market distortion and policy
duplication. But ignoring these pitfalls would be a mistake, not least because
they have recently begun to trouble China’s own government. Indeed, one of
the most prominent critics of its industrial policy is the man whose vision it
is meant to reflect: the supreme ruler, Xi Jinping, himself.

Industrial subsidies, direct and indirect, cost China over 1.7% of GDP a year
in 2019, compared with about 0.6% in dirigiste France. The country boasts
more than 2,000 government-guided investment funds scattered throughout
the land, aiming to raise over 10trn yuan ($1.4trn). That could buy a lot of
innovation. But as these funds have grown, private venture capital has dried
up. Waste and fraud also take their toll. One pot of money earmarked for
semiconductors, known as the “Big Fund”, became notorious for big
corruption, leading to the investigation or detention of at least a dozen
people.

Even when they invest honestly, policymakers don’t always invest wisely.
Local officials, Mr Xi noted in July, always promote the “same few things:
artificial intelligence, computing power, new-energy vehicles”. This has led
to overcrowded industries and vicious price wars. Leaders now complain
about “involutionary” competition: companies are cutting prices to poach
customers, forcing rivals to do the same, which leaves everyone’s profits
lower and no one’s market share higher.

Supporters say this is all part of the plan. The government encourages
excessive entry into promising areas, knowing that the frenzied competition
will propel improvements. Once the best companies have proved their
worth, the government can cull the rest. But this process does not always
yield the most innovative or efficient firms. Often it favours those with the
most indulgent provincial patrons, or firms that are too big to cull.

Moreover, China’s industrial policy has not achieved all its goals. Civil
aviation and cutting-edge chipmaking remain elusive. And not all successes
owe much to explicit policy. DeepSeek was the side-hustle of a hedge fund,
an industry frowned upon by Beijing.

China’s innovation push has met with some undeniable success. At this
year’s Spring Festival celebrations, robot dancers stole the show. But the
government’s industrial choreography is not nearly as tight as this example
suggests. Instead it resembles the “robot Olympics” held recently in Beijing.
The events featured bustling fields of competitors. Their human controllers
huffed and puffed alongside them, like over-protective local officials. Even
so, several of the robots fell flat on their faces—and others struggled to stay
in their lane. ■

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innovation-push
Letters
Don’t ditch Black Economic Empowerment in South Africa
Letters | A selection of correspondence

Don’t ditch Black Economic Empowerment in

South Africa
Also this week, Israel and Gaza, net zero, playback speeds, “Moby-Dick”
August 28th 2025

Letters are welcome via email to letters@economist.com

Find out more about how we process your letter

You called on South Africa to ditch Black Economic Empowerment policies

(“Time to scrap BEE”, August 16th). Yet South Africa remains a divided
society. Whites continue to dominate business. White South African children
may not enjoy the same opportunities they once did, but almost all whites
are much better off than most blacks. The Democratic Alliance, which is
part of the government, is a pro-business white-dominated party that often
works to preserve white privilege, including access to schools and
opposing BEE.

I am a white person who financially invests in a BEE enterprise and I

understand the policy’s problems. Investment is held back and per-capita
growth, which is fundamental to solving South Africa’s poverty and income
distribution, is not happening. But the answer is to reform the policies, not
simply oppose them. BEE is there for a reason.

JOHN MARKIELimpopo, South Africa

There is one important alternative to BEE: improving the dire state of

schools in low-income areas. Instead of trying to force equality at the top of
the labour system through cronyism and ineffective race-based policies, the
government should have levelled the playing field by fixing the education
system, which continues to fail young black South Africans en masse.

I see how students from under-resourced schools struggle to cope with

tertiary education. By contrast, those few black students fortunate enough to
attend good schools often excel. If all were given equal opportunities at
school we would be in a much different situation 30 years after the fall of
apartheid.

If all that BEE money was spent improving our schools South Africa would
not be the runt of the BRICS litter.

M.J. (Thinus) BooysenProfessor of engineeringStellenbosch University

“At war with the law” (August 9th) detailed Israel’s failure to investigate
war crimes and crimes against humanity in Gaza. However, in your
accompanying leader on “Why Israel must hold itself to account” you
accused the International Criminal Court of “becoming activist” because it
issued arrest warrants supposedly “before the Israeli system had time” to act.
In reality, the failure to act, and the improbability of such action, was why
the ICC, a court of last resort, became involved.

A former senior Israeli ambassador was one of six experts who advised
Karim Khan, the ICC prosecutor, before he requested arrest warrants for
Binyamin Netanyahu, Israel’s prime minister, and others in May 2024, seven
months into the conflict. A panel of judges took another six months before
unanimously authorising the warrants.

When I met the prosecutor a few days after his requested warrants, he rightly
pointed out that a selective approach, ignoring the crimes of the powerful,
would bring the law itself into disrepute. The rule of law needs defending in
all circumstances.

Steve CrawshawFormer UK director Human Rights WatchLondon

The notion of Israel leveraging food as a weapon obscures the bigger

picture: Hamas fleeces aid and uses Palestinians as human shields. The
starvation narrative minimises Israel’s democratic accountability while
absolving Hamas of culpability for its genocidal, self-defeating radical
ideology. No wonder conservatives across Arabia and America stand with
Israel. They understand this conflict is existential not only to the world’s
sole Jewish state but also to the West and Islam. It ends when Hamas frees
the hostages and its long-suffering population. Our collective future can’t be
held ransom by barbaric savagery. The sooner historically illiterate
Westerners understand that reality, the faster Palestinians can eat in peace.

Malou InnocentSanta Rosa, California

You gave a misleading impression that policies aiming for net-zero carbon
emissions are to blame for Britain’s high electricity costs (“Bills, bills, bills”,
August 2nd). Britain’s high energy prices are a legacy of outdated electricity
markets designed around fossil fuels, not a failure of net zero. We still use a
marginal pricing system, where the highest-cost generator, typically gas, sets
the price for all electricity, inflating costs for consumers even when
renewables provide a large share of supply. The actual cost of wind
generation is obfuscated. Our research has found that smart tariffs, which
align power use with cheap renewable supply, are already cutting consumer
costs.

And you overlooked the counterfactual. What would prices look like without
this shift? Britain avoided even worse price rises during the gas crisis thanks
to its low-carbon energy supplies. Now, faster deployment timelines mean
that those same sources will be central to meeting power demand from AI.
Net zero is not the problem, it’s the solution. We just need to do it fairly,
efficiently and fast enough.

Professor Robert MetcalfeChief economistCentre for Net ZeroLondon

Europe’s car lobby dresses up protectionism as “deregulation” (By

Invitation, July 15th). Pushing the phase-out of combustion cars from 2035
to 2039 or 2040 would dump roughly one gigatonne of extra carbon dioxide,
rack up over €200bn ($233bn) in climate costs and keep Europe strapped to
the oil-price roller-coaster it vowed to escape. The proposed detour via
biofuels and e-fuels is wishful thinking: scarce, costly, better reserved for
aviation and largely import-dependent.

The infrastructure alibi is thin, too. Charging points are scaling faster than
targets, and many households already pair electric vehicles with rooftop
solar. The economics are moving faster still. Battery prices slid below
$100/kWh last year and EVs have hit price parity in China. Delay now
would repeat the smartphone mistake: innovate, hesitate, then watch the
market migrate east.

Europe should hold the 2035 line, aim incentives squarely at zero-emission
drivetrains and back an industrial policy for batteries and charging. Cleaner
air would save tens of thousands of lives and billions in health costs. Energy
security comes free with electrification.

Felix CreutzigChairInnovation and Policy Acceleration University of

SussexBrighton

Professor Kai NiebertUniversity of Zürich

Johan RockströmDirectorPotsdam Institute for Climate Impact

ResearchUniversity of Potsdam

Readers intrigued by your article on life in underground intercontinental

ballistic missile silos (“Death from below”, July 26th) should consider a visit
to the Titan Missile Museum near Tucson, Arizona. There they can
experience what it was like. It is amazing that one of the world’s most secret
and secure military bases is now full of picture-taking international tourists.

JIM RupertVancouver

You made a mistake by assuming that people like to quicken the playback
speed at which they listen to audio content (“The need for 2x speed”, August
16th). I’m in my late 70s and perhaps it’s my age, but I find many videos are
too fast. Indeed, it seems speech itself has speeded up, with many younger
people talking so quickly they clip off the ends of words. The dialogue in
some streaming programmes is so rapid there is barely time to read the
captions let alone assimilate them. Many YouTube videos are so fast that the
presenters are jerking around like Charlie Chaplin firing off a machine gun.

Fortunately, there is an option for slower playback and for me the sweet spot
is 0.8x to 0.9x, which is slow enough for me to follow content without
sounding zombie-like.

Michael AllenOttawa, Canada

I listened to your article at double speed. I missed a few points the first time
so it required another listen to get the gist.
Eugene YigaBarcelona

Your review of the novels conservatives want you to read reminded me that
life can imitate art (“The right way to read”, August 9th). Imagine a
delusional leader scarred by past events who assembles a crew of misfits,
promises them riches, and then after taking command reveals that his true
aim is to exact revenge. Sound familiar? It’s “Moby-Dick”. It doesn’t end
well.

L. RichRockville, Maryland

sò
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empowerment-in-south-africa
By Invitation
The boss of SAP on Europe’s botched approach to digital sovereignty
By Invitation | The global tech race

The boss of SAP on Europe’s botched approach to

digital sovereignty
It’s time to prioritise code over concrete, writes Christian Klein
August 28th 2025

The debate about digital sovereignty has seized Europe. In an era of

geopolitical tension and technological rivalry, the desire to control one’s
own digital destiny is understandable and necessary. The question is not
whether Europe should be sovereign, but how. Unfortunately, the continent’s
current answer—pouring billions of euros into building vast data centres and
subsidising hardware investment—is a misguided solution to the wrong
problem.

The European Union plans to invest €20bn ($23bn) in up to five “ai

gigafactories”, massive data centres intended to help Europe catch up in
artificial intelligence. This approach is based on the premise that owning the
physical infrastructure is the key to independence. But anyone who believes
that servers and processors alone will secure European sovereignty
misunderstands the nature of global technological interdependence and
overlooks Europe’s true digital strengths.

The hardware train has left the station. Even if a data centre is operated by a
European provider on European soil, its essential components—from
processors to network technology—will almost certainly have been designed
in America and manufactured in Asia. To achieve full technological self-
reliance would require banning all foreign hardware and, logically, all the
foreign software that is deeply embedded in European businesses.

Such a move would be impractical and economically ruinous, severing

Europe from innovation elsewhere. The reality is that most customers
require the performance and innovation that America’s cloud providers
enable.

The global ai race is defined by competing approaches, led by America and

China. On one side is a nimble ecosystem of tech firms, which innovates at
speed. On the other is a state-directed approach where innovation is aligned
with national strategy.

Europe must walk its own path, embracing openness, quick decision-making
and strategic investment while applying smart regulation that governs
outcomes, not ideas. This can be done by building on the continent’s
strengths, including excellent research and a strong industrial base. This
model must be business-led but values-driven, anchored in European
principles such as respect for privacy, data protection and democratic
accountability.

To achieve that, we must become comfortable with a form of digital

sovereignty founded on both self-determination and mutual dependencies.
True sovereignty is the ability to always maintain control of one’s data and
assets while deploying the best available technologies—regardless of their
origin—on one’s own terms.

A one-size-fits-all approach will not do. Instead, control must be calibrated

to the sensitivity of the data. For the most sensitive public data, such as in
defence or health care, we need fully isolated cloud environments run by
security-vetted personnel. But sensitive corporate data need not be blocked
off from the internet entirely; the priority here should be ensuring data
remain in Europe, protected by high cyber-security standards and customer-
managed encryption. Then, for many other use cases, data can also be
processed outside Europe, provided the appropriate standards are met. My
own company—one of Europe’s largest tech firms by market value—can
already offer clients these choices, including a fully sovereign cloud for
selected national governments.

Digital sovereignty is not an end in itself, though. It is a means to strengthen

competitiveness. Building data centres alone will not boost
productivity. Real progress comes from transforming how we work: by
deploying ai to drive efficiency and sustainability, by digitising processes,
by reimagining business models.

It will be this application of ai that creates demand for massive computing

power, data centres and advanced chips. Rather than subsidising
infrastructure and hoping for the best, public investment should flow directly
into applied ai and software that create tangible competitive advantages.
This is exactly what modern enterprise software does by embedding ai into
business processes.

Industry must also step up. Consider its intricate supply chains—and then
imagine applying ai to create a self-orchestrating network among European
companies that predicts disruptions, reroutes shipments and optimises for
climate goals. This leap in resilience and efficiency, offering real-time
tracking over vague promises, would bolster Europe’s economy for the long
term, not with concrete but with code.

Policymakers must create the right environment for this. Despite good
intentions, the eu’s Data Act risks over-regulating data usage and burdening
companies with excessive bureaucracy. Under Chapter II, even small firms
must design products that enable data-sharing, including with third parties
that may be direct rivals. Strikingly, the Act ignores the established
competition-law principle that only dominant players should be expected to
support competitors, under specific conditions. A measure meant to foster
innovation may end up stifling it.
Similarly, the bloc’s ai Act, which came into force last year, should be
paused until there is more clarity on its precise implications. In all cases,
let’s prioritise innovation, not red tape. Furthermore, supporting the
application of ai throughout the economy will require a lot more investment
in related educational initiatives. That is the only way to build a workforce
capable of turning advanced ai tools into something that has value in the real
world.

One thing is clear: Europe’s digital future will not be decided in the server
room. It will be decided in the continent’s factories, its firms, large and
small, and its public administrations. It hinges on one question: can we
finally think digital sovereignty through to its logical conclusion and invest
not just in storing data, but in applying technology to generate real, lasting
value? ■

Christian Klein is the chief executive of SAP.

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botched-approach-to-digital-sovereignty
Briefing
Jair Bolsonaro’s trial shows Brazil a way out from polarisation and
stagnation
Briefing | Order and progress

Jair Bolsonaro’s trial shows Brazil a way out from

polarisation and stagnation
Moderates on both sides see a chance to draw a line, and start fixing deep-
seated problems
August 28th 2025

Brazil’s chief justice, Luís Roberto Barroso, did not receive an official notice
when his American visa and those of his children were apparently revoked
on July 18th. Like most of his colleagues on Brazil’s Federal Supreme
Court, he learned the news from an online post by Marco Rubio, America’s
secretary of state, who cited the court’s “persecution” of Brazil’s hard-right
former president, Jair Bolsonaro.

Sitting in his vast office, Mr Barroso looks emotionally exhausted as he

recalls how his son had to leave his career in America and return home. The
room is sparsely furnished with just a few tables and black leather chairs. It
has not been fully refurbished since it was trashed by a horde of Mr
Bolsonaro’s supporters on January 8th 2023, in an insurrection that shocked
the country, mirroring what had happened two years before in Washington,
dc. On August 26th Brazil’s president, Luiz Inácio Lula da Silva, said his
justice minister’s visa had also been revoked.

The visa bans are part of an astonishing attempt by Donald Trump to shield
his friend and ideological ally, Mr Bolsonaro, from prosecution. On
September 2nd the former president goes on trial on charges that he
attempted a coup in order to remain in power after losing his re-election bid
in 2022. He denies the charges, but there is a widespread expectation that he
will be found guilty.

It is an extraordinary moment for Brazil. In a country with a long history of

military dictatorships, it is the first time that anyone has been tried for
plotting a coup. But it is also an unprecedented moment globally. America is
using tariffs, sanctions and visa bans in its attempt to force a democracy to
subvert its justice system.

On July 9th ministers were in a cabinet meeting when Mr Trump published a

letter online announcing tariffs of 50% on Brazilian imports, citing a “Witch
Hunt that should end immediately!” “At first, we thought it was fake,” says
one minister. “We are living in a moment of irrationality,” he exclaims,
throwing up his hands. Mr Trump followed up by imposing sanctions, under
the Global Magnitsky Act, on Alexandre de Moraes, the supreme-court
judge who has led the prosecution of Mr Bolsonaro. Such measures, usually
reserved for genocidal generals, mean being frozen out of America’s
banking system.

As we lay out in our investigation this week, Mr Bolsonaro supercharged

Brazil’s polarisation and strained the sinews of its democracy. Yet unlike
other countries where illiberal populism has emerged, such as the United
States, Hungary or Turkey, Brazil’s institutions, notably its supreme court,
did not remain supine.

And now, though there is a possibility that Mr Bolsonaro’s supporters could

rally around a new figure on the hard right, there are signs that Brazil is
tiring of him and his family, and that Brazilians are weary after a decade of
political upheaval. If he is found guilty, the country, divided though it is,
could put the worst of the polarisation behind it. There is a growing
consensus across the political spectrum of the need to restore the balance of
power between the branches of government and to tackle Brazil’s economic
weaknesses. If Brazil can find a path towards this destination, it will not
only save itself another decade of strife, but perhaps show a way out of
populism for others to follow.

Whether this is possible depends on how the country’s politicians, who are
gearing up for a general election next year, respond to whatever judgment is
handed down to the former president, and on whether they have the courage
to argue for serious constitutional reform.

If convicted, Mr Bolsonaro and seven others (who also deny the charges)
face decades in prison on charges of masterminding the coup plot. Another
25 face lesser charges. More than 1,200 Brazilians have already been tried or
entered plea bargains for taking part in the insurrection.

As the pre-trial investigations have progressed, Mr Bolsonaro has tried to

enlist the help of allies. Last year he spent two nights at the Hungarian
embassy, fuelling speculation that he might try to flee. On August 20th
police found a draft letter to President Javier Milei of Argentina on his
phone, in which he requested political asylum (it is not clear whether it was
sent).

He has also turned to his sons. In March the most politically gifted of the
four, Eduardo, took leave from his job as a congressman in Brazil and
moved to Texas to lobby his friends in the maga movement to sanction Mr
Moraes. On August 11th Scott Bessent, America’s treasury secretary,
abruptly cancelled a virtual meeting with Fernando Haddad, Brazil’s finance
minister. Instead he met Eduardo, who warned that Brazilian banks were not
complying with sanctions on Mr Moraes.

Eduardo’s pleas have resonated with Mr Trump, who sees Mr Bolsonaro as

his tropical mirror image. Both were victims of assassination attempts. After
losing their respective re-election bids, both are accused of inciting their
followers to riot, which they deny. If Mr Bolsonaro is convicted, he will be
held to account in a way that Mr Trump was not after his supporters stormed
the Capitol on January 6th 2021.

Mr Trump has little patience for Lula, as Brazil’s current left-wing president
is known. In Brasília officials huff that Mr Trump has closed all doors to
them. The American president sees Mr Bolsonaro as having helped spread
his flavour of populist nationalism abroad, and he sees Brazil as a large
economy that he can bully without serious consequences, unlike China or
Mexico. The tariffs have backfired. Lula is portraying himself as the
defender of Brazil’s sovereignty (though officials remain keen to seal a trade
deal). This has lifted his flagging approval ratings and put him in the lead
ahead of next year’s election.

Escalation is a risk. Bolsonaristas in Congress want to pass an amnesty for

those who participated in the January 8th insurrection. Dozens of senators
are also trying to impeach Mr Moraes.

Barred from competing in next year’s general election, Mr Bolsonaro may

anoint one of his sons or his wife, Michelle, to run. If he backs one of
Brazil’s more moderate right-wing governors, they will probably have to
promise to pardon him if they win. Right-wing parties could sweep Congress
and pursue the impeachment of Mr Moraes. It is easy to imagine Brazil
falling further into dark polarisation, and Mr Trump ratcheting up the fight.

However a different outcome seems more likely. After Mr Bolsonaro’s trial,

temperatures may cool. Fully 69% of voters say Eduardo is defending his
family’s interests rather than Brazil’s. A majority supported Mr Moraes’s
recent decision to put Mr Bolsonaro under house arrest and are against an
amnesty for the rioters (see chart 1). The former president’s actions have
focused the minds of those who know that Brazil needs to step back from the
extremes. Though in public they seek his blessing, in interviews two right-
wing governors who want to run for president distanced themselves from Mr
Bolsonaro.

Three crucial areas need reform: Congress, the economy and, especially, the
supreme court. Unlike its counterparts elsewhere, the court combines three
functions: it is the chamber of last instance for appeals; it rules on all matters
related to the constitution; and it rules in criminal cases against politicians.
Because of scandals in the past decade, it has become more visible in
politics. After a massive corruption scheme was uncovered in 2014, the
court sent dozens of politicians, including Lula, to jail (and then overturned
his conviction on technicalities). Now it is dealing with Mr Bolsonaro. Many
Brazilians, on all sides, have come to believe that the court meddles too
much in politics.

It has such unusual powers because of the constitution of 1988. One of the
world’s longest, it was written in the shadow of a two-decade military
dictatorship and seeks to avoid men with guns ever ripping people’s rights
away again. It does so by giving Brazilians a large number of rights and the
government a slew of obligations.

In most countries, cases reach the top court only after filtering up from lower
bodies. But in Brazil the constitution allows the president, state governors,
bar association, trade unions and political parties to file lawsuits directly
with the court. This has created a heavy caseload. It issued more than
114,000 rulings last year.

To handle this, judges are allowed to make decisions unilaterally. This has
turned individual judges into stars. The court even has its own TikTok
account, and livestreams decisions on YouTube. “Some people say we are
even more famous than the national football team,” quips Gilmar Mendes,
one of the justices. “I don’t see that as a good thing.”

As a result the court, not the legislature, “decides all important issues in the
country: ethical, economic, political,” says Mr Barroso. There are pros and
cons to having such a powerful court, he notes. But, in a country that had a
tradition of coups d’état since the beginning of the republic in 1889, “We
have now had 40 years of democracy and institutional stability.”

Mr Bolsonaro’s reign of intimidation led the court to give itself even more
powers. His followers harassed the justices online and sent them death
threats. In response, the court allowed itself to open investigations into
online threats against itself, an unusual move that turned it into victim,
prosecutor and judge all at once. Mr Moraes was put in charge of the probe,
which became known as the “fake-news inquiry”. He has carried out his
mission with unnerving zeal. Last year he shut down X, Elon Musk’s social-
media platform, for more than a month in Brazil and threatened to fine
anyone who tried to use it.

The probe remains sealed—it is now overseen mostly by federal police and
the public prosecutor—and has crept into its sixth year with no end in sight.
It is unclear how many accounts Mr Moraes has ordered to be taken down
and why. He has been accused of overreaching, for instance by ordering
accounts, not just specific posts, to be blocked.

Criticisms of the court are ten a penny from Mr Bolsonaro’s supporters.

More striking, though, is that moderates are also now complaining. Many
say it is possible for the court to have saved democracy, but for it also to be
too powerful. “The court acted initially to defend democracy,” says one
right-wing presidential hopeful. “But I think there’s been exaggeration in
some cases.” One centre-left political analyst says, “Moraes has a heavy
hand. The error is in the dose, not the prescription.”

Some scholars worry that a strong court is sapping faith in politics. When
most political matters end up decided by the court, why vote? Others
grumble about the judges being unelected rulers, and using their ability to
try politicians as a cudgel to determine policy. Even the supreme court’s own
judges think it does too much. “Here in the court, we all talk about the
excessive judicialisation of politics,” says Mr Mendes. One proposal to rein
in the court’s power would make it harder for politicians to petition. Another
would limit its jurisdiction over criminal cases involving politicians, letting
lower courts rule.

The second institution that needs reform is Congress, which has become
easier to capture in the past decade. This happened not just under Mr
Bolsonaro, but also Dilma Rousseff, a left-wing predecessor, and Michel
Temer, a centre-right one. Congress, when faced with a weak president it did
not like, gave itself more control over the federal budget, and used this
power to splurge on its own pet projects. Successive presidents protected
themselves by conceding such powers. Today, Congress directly controls
around a quarter of discretionary spending in the federal budget, compared
with 1% in the United States. This has made Brazil harder to govern.

Leaders on the right and left agree that congressional power must be
trimmed. Congress has hijacked the federal budget, says the right-wing
presidential hopeful. “They took all the power…but none of the
responsibility.” Mr Haddad, the finance minister, fumes that parliament’s
parochial interests make it harder for him to balance the books. Reining in
Congress will require a more vigorous president with strong lieutenants in
the legislature and even constitutional reform, a big challenge given that
Congress itself would need to vote for it.

The third issue that badly needs reform is Brazil’s creaking economic model,
which promotes cronyism and hampers growth, leaving many voters
disenchanted with politics. These woes cannot be blamed on Mr Trump’s
tariffs. Exports are equivalent to less than a fifth of gdp, compared with 90%
in open economies such as Vietnam. Just 13% of exports go to the United
States. And businesses with contacts in Washington have secured
exemptions on 700 products, from planes to orange juice. Markets have
therefore shrugged at the tariffs. Goldman Sachs, a bank, has not changed its
growth forecast for Brazil this year.
Instead, Brazil’s economic wounds are self-inflicted. Tax exemptions total
7% of gdp, up from 2% in 2003 (see chart 2). Dozens of sectors receive tax
breaks or credit subsidies on the basis that they are national champions, or
from “temporary” help that has never ended. Brazil’s courts cost 1.3% of
gdp, making them the second-most expensive in the world, with much of
that going on cushy pensions and perks. Some $15bn a year, or 78% of the
military budget, is spent on pensions and salaries. The United States spends
just one-quarter of the defence budget on personnel.

Even the beneficiaries of these perks admit this is unwise. “I have no doubt
that for the Brazilian private sector it would be better to give up short-term
benefits in exchange for a thriving country in the long run”, says Beto
Abreu, the boss of Suzano, the world’s largest cellulose producer.

Yet perhaps the biggest reason spending is high is that the constitution
requires it. The charter mandates an extraordinary 90% of all federal
spending. Notably it ties most public pensions to wage growth, and requires
health and education spending to rise in line with revenue growth. If Brazil
were to end most tax exemptions and undo these two policies, its debt-to-
gdp ratio, which is already above 90%, would be almost 20 percentage
points lower by 2034 than it would be without any reform, reckons the imf.
To deal with all this, what is really needed is to amend the constitution.
High spending and a tangle of subsidised credit schemes also reduce the
effectiveness of monetary policy. That means the central bank must increase
rates even higher to control inflation. Brazil’s real interest rate of 10% is
among the highest in the world. Such rates cripple investment and drag
down growth, while well-connected businessmen can get their hands on
artificially cheap rates.

Among those who must pay the full rate is the government itself. It is thus
stuck in a cycle: it issues debt to finance high spending, and must then pay
eye-watering interest payments. The government spent 30% of revenue in
2023 on interest payments. This makes it harder to afford spending that
could boost productivity, such as education and infrastructure.

Tackling these problems would help unlock growth in Brazil, which has
lagged behind almost all other major developing economies in the past two
decades, including those of China, India, Indonesia and Turkey. Growth, in
turn, would make it easier to escape the calculus of zero-sum politics, since
rising prosperity dulls the appeal of the politics of grievance.

The prerequisite for such changes is pragmatic politics. To amend the

constitution in order to rein in the power of the supreme court, the profligacy
of Congress and the vast mandatory spending requires a three-fifths majority
in both legislative houses. That is daunting, but possible. In 2023 Lula’s
government passed a tax reform through a constitutional change. Brazil’s
constitution has been amended over 140 times since 1988. The trouble is
that those amendments often just tweak policy. Bolder reforms that excise
some of the endless policy prescriptions from the constitution would reduce
the court’s power and make cutting spending easier.

Brazil’s political landscape has been in disarray for much of the past decade.
Intense polarisation has made it harder to pass reforms. Mr Bolsonaro’s
removal from public life could give the country a chance to tackle these
problems. It will take boldness, vision and compromise. But politicians on
both sides appear ready to try. ■
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a-way-out-from-polarisation-and-stagnation
United States
A $19bn industry is about to pay its workforce for the first time
Donald Trump has purged one of the CIA’s most senior Russia analysts
Zohran Mamdani is promising lots of things he can’t actually do
Have foreign tourists really avoided America this year?
The Democrat who calls Trump a child of God
New York is turning 400 and no one cares
United States | College sports

A $19bn industry is about to pay its workforce for

the first time
The economics of American college sports have been upended
August 28th 2025

Tucked away in a quaint university town in the Midwest sits the world’s
third-largest sports stadium. Known aptly as the Big House, the American-
football stadium in Ann Arbor, home of the University of Michigan
Wolverines, can pack in 115,000 fans. One of the world’s most capacious, its
gate receipts helped Michigan’s football programme generate $150m in
revenue last year, including television rights. Yet the athletes on the field
earned no salaries. In fact, for decades, no college athlete in America has
been paid directly by their university. That is about to change.
This year marks a turning-point in the $19bn spectacle that is American
college sports (see chart 1). Hidden behind the pageantry of marching bands,
fight songs and century-old rivalries with names like “the Backyard Brawl”
lies what is, in effect, the second-biggest sports league in the world (after the
NFL), boosted by charity tax benefits and puffed up by public-service
pretensions. In 2024 college sport generated twice as much revenue as the
English Premier League. Nearly all that came from American football and
men’s basketball. For decades the system was lucrative because the labour
was free. The spoils flowed to coaches, administrators, commissioners and
media conglomerates.

After years of litigation, in June a federal judge approved a $2.8bn

settlement between the National Collegiate Athletic Association (NCAA),
the governing body of college sport, and a coalition of current and former
college athletes. The deal compensates players for years of lost earnings and
rewrites the industry’s economics. Each university may now pay up to
$20.5m a year directly to its roster of athletes.

Lawmakers and judges are likely to keep fiddling with the details. On July
24th Donald Trump issued an executive order about “saving college sports”,
which laid out several interventions involving the distribution of athletic
scholarships and the shenanigans of wealthy alumni. Members of Congress
have introduced a bill to curb the legal and financial obligations universities
now face. What follows will test whether universities, the courts, legislators
and investors can impose order on a system whose founding logic of
amateurism has collapsed.

The college-sports system is an American oddity. In no other country would

the same university train both future Nobel laureates and all-star point
guards. Universities function as a farm system for the richest professional
sports leagues, the NFL and the National Basketball Association. University
stars also graduate into professional baseball, hockey, women’s basketball,
golf and tennis. The revenue some of them generate while on campus
subsidises other college sports. At the centre of it all sits the NCAA,
presiding over a labyrinth of leagues, divisions and conferences, and
enforcing a fussy rulebook.

While most athletes receive no compensation, before this year’s change the
top ones were paid in academic scholarships. Defenders of that bargain cast
athletes as important contributors to campus life and spirit. Critics decry the
big programmes as debasing and corrupt, cheapening a university degree
under the pretence of amateurism.

Barred from paying players, universities indulged in baroque excess to lure

recruits. Locker rooms gleam with Ferrari-leather chairs and marble-lined
showers. Coaching contracts are bloated, too. In 43 of 50 states the highest-
paid public employee is a university football or basketball coach. Texas
A&M, the largest university in the country, is paying about $77m in
severance over eight years to Jimbo Fisher, its former head coach, while
handing his successor $7m a year. For comparison, the median manager in
the English Premier League earns $6m a year. In 2023 over 60% of athletic
department spending fell into just three categories: facilities, coaching
salaries and pay for athletic department staff. Barely 10% went to
scholarships.

The system first cracked in 2019 when Gavin Newsom, California’s

governor, signed a law letting college athletes profit from their “name,
image and likeness” (NIL). This meant they could earn money as social-
media influencers and brand ambassadors. The NCAA fought the law, but
the Supreme Court upheld NIL rights nationwide. The litigation resolved in
June put a final stake in the old amateur order.

Paying student-athletes may restore some balance, and it could bring into the
open an underground economy that long operated in the shadows. In decades
past athletes may not have been paid directly, but perks and illicit deals
enriched some of them. The NCAA proved to be a poor enforcer of its own
rules. It was unable to police systemic abuse, but obsessed over trivial
infractions like a head coach buying a recruit a burger.

Even the new NIL programme meant to remedy some of this has produced
its own murky marketplace. Operating like political super PACs, third-party
“collectives” funded by boosters have sprung up to funnel staggering sums
to student-athletes. Since 2022 the NIL fund for Texas Tech University has
raised $63m. At Michigan Larry Ellison, the founder of Oracle, helped pry
the top high-school quarterback away from Louisiana State University for a
reported $10.5m over four years.

For all the clarity direct-pay offers, it leaves universities to untangle a fresh
set of knots. Many university athletic departments will not have the revenue
to pay out such sums. That could widen the competitive gap across
universities even further. The lower tier, already resigned to being far
outspent, may scarcely notice the change. But for the middle tier the choices
will be fraught. “These universities serve their communities very well,” says
Oliver Luck, a former NCAA executive, college player and NFL
quarterback. The new system will “force university presidents to ask
whether athletics are important enough to their university’s educational
mission”.

Already some 70% of public universities across the top tier of athletic
programmes use academic funds to prop up their athletic departments. In
2024 just 18 of 110 public universities in this top division reported athletic
revenues that exceeded their expenses. And over the past two decades,
athletic-department spending has grown by 244%, compared with a 113%
rise in academic spending (see chart 2).

This new era will force athletic-department heads to act more like portfolio
managers, balancing returns across a basket of sports. Many have indicated
that they will mirror the recent federal court settlement. It allotted three-
quarters of retroactive compensation to former football players, 15% to
men’s basketball, 5% to women’s basketball and 5% to the rest.

Another question is how Title IX, America’s gender-equity law for

universities receiving federal funds, will shape the new order. If the courts
decide that revenue need not be shared equally between men’s and women’s
sports, then market forces will create vast disparities (see chart 3).

The good news for college football is that it is all but impossible to dent the
devotion of its fans. “Who’s got it better than us?” exclaims one, ambling
outside the Big House on a muggy summer afternoon. Soon the stadium will
heave with a crowd large enough to swallow the town whole, erupting as
Bryce Underwood, an 18-year old student and quarterback, takes the field
for the first time. The local boy, from the suburbs of Detroit, will at least
have a fat wallet to soften the tackles. ■

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pay-its-workforce-for-the-first-time
United States | Insecurity clearance

Donald Trump has purged one of the CIA’s most

senior Russia analysts
The move will have a chilling effect inside American spy agencies
August 28th 2025

The cia officer had worked in American intelligence for more than 20 years.
In 2016, as the country’s top intelligence officer for Russia and Eurasia, she
oversaw the production of a report, which described how Russia had
meddled in that year’s presidential election in favour of the Republican
candidate, Donald Trump. A few years later she returned to the agency as a
senior manager, overseeing the cia’s operations and analysis relating to
Russia and the former Soviet Union.

On August 19th her career came to an abrupt end, when Tulsi Gabbard,
America’s director of national intelligence, revoked her security clearance,
along with those of 36 other serving and former officials accused of
“betray[ing] their oath to the constitution”. Mr Trump’s administration has
previously used its control over clearances as a political cudgel against
retired officials. But the cia officer in question, along with two others
involved in that 2016 report, Shelby Pierson and Vinh Nguyen, are some of
the most senior serving career intelligence officials to be purged under Mr
Trump.

These steps signal a sharp escalation in his war on American spooks. On

August 22nd Pete Hegseth, the secretary of defence, removed the head of the
Defense Intelligence Agency, Lieutenant General Jeffrey Kruse. His agency
had produced a preliminary damage assessment of America’s bombing of
Iranian nuclear facilities that infuriated the administration.

The purge at the CIA has caused alarm across the workforce. To lose a
clearance is a “career ender”, says Larry Pfeiffer, a former cia officer who
had his own clearance yanked on January 20th. “Even the cleaning crews
have clearance.” Many officers also rely on security clearances after
retirement to seek consulting positions. “Who will want to work on some
controversial issue or go out on a limb analytically?” asks an insider. “It is
one thing to speak truth to power in the abstract, and another when your
career and family livelihood is very much on the line.”

The cia has a long history of delivering unwelcome news to presidents—its

dissenting analysis during the Vietnam war in the 1960s and the Iraq war in
the 2000s resulted in repeated clashes between Langley and the White
House—but this level of retribution is unprecedented. Many of the 37
targeted officials had worked on Russia only tangentially and a long time
ago. Mr Nguyen was the chief data scientist at the National Security Agency
(nsa), America’s signals-intelligence service. Weeks earlier insiders had told
The Economist that he was “the most thoughtful person on AI in the federal
government”. That agency’s director, General Tim Haugh, and its top
lawyer, April Doss, were fired in April and July respectively. Others appear
to be on the list for no other reason than their criticism of Mr Trump. Ted
Gistaro, a former cia officer who served as Mr Trump’s main intelligence
briefer from 2016 to 2019, had made mildly derogatory comments about Mr
Trump. Most others appeared on a list published by Laura Loomer, a far-
right activist, on July 29th.
Mr Trump has long been obsessed with intelligence reporting about Russia’s
role in the 2016 election. In July John Ratcliffe, the director of the cia, took
the unusual step of publishing an internal review of the analytical
“tradecraft” in the CIA’s Russia report of that year. The review praised many
aspects of that report, but found that it had been written too quickly and with
too much involvement from agency heads. That same month, Ms Gabbard
also declassified a much older House Intelligence Committee review into the
same report. The review, co-authored by Kash Patel, who is now the director
of the fbi, included verbatim quotes from intercepted material and
descriptions of human sources in Russia, and was declassified over the
objections of the cia.

The administration is also using harsher legal means to strike at critics. In

July it was reported that Mr Ratcliffe had made a criminal referral of John
Brennan, one of his predecessors, to the fbi for allegedly lying to Congress.
Mr Brennan, who had his clearance revoked in Mr Trump’s first term, was
cia director at the time of the Russia report and clashed with the president in
the early days of his first term.

“This is uncharted territory,” says Mr Pfeiffer, “particularly in terms of the

numbers of people and the lack of detail about what they did wrong.” Mark
Warner, the senior Democrat on the Senate intelligence committee, speaking
shortly before the recent purges, said that the situation was worse than he
had expected. In private, he noted, Republican colleagues on the intelligence
committee, fearful of sticking their heads above the parapet, had encouraged
him to speak out in public.

On August 20th Bill Burns, Joe Biden’s cia director, wrote an open letter to
the “discarded” officials in the Atlantic, a magazine. “If intelligence analysts
at the cia saw our rivals engage in this kind of great-power suicide, we
would break out the bourbon,” he wrote. “Instead, the sound we hear is of
champagne glasses clinking in the Kremlin and Zhongnanhai.” ■

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the-cias-most-senior-russia-analysts
United States | The art of the impossible

Zohran Mamdani is promising lots of things he

can’t actually do
A few reasons to be relaxed about the plans of the Democratic front-
runner to be New York’s mayor
August 28th 2025

Like many politicians running for office, Zohran Mamdani, the 33-year-old
New York Democratic mayoral candidate, is partly a fabulist. His story
includes tax rises on the wealthy and businesses, free buses, free child care
and a $30 minimum wage by 2030. Whether or not these are good ideas,
most have as little likelihood of becoming tangible as one of Italo Calvino’s
odd, enchanting, invisible cities.

Some of the world’s great cities have powerful mayors. A mayor of Mexico
City legalised abortion and introduced gay marriage. The mayor of Buenos
Aires introduced free bus and subway rides for low-income seniors on his
own authority. Germany’s capital, Berlin, is both a city and a state: its mayor
has a role in passing federal legislation. At the other end of the scale is Paris
(see chart). New York’s mayor sits somewhere in the middle of the power
ranking.

New York City has the economy of a medium-sized nation: in 2024, its gdp
of $1.3trn was double Argentina’s and greater than that of all but 16
countries. Yet it is also a municipality beholden to the state’s governor and
to state law. The city’s charter, issued by the state, grants “home rule” by a
chief-executive mayor and legislative body—a relatively weak City Council
—but the state retains ultimate authority.

To pay for his plans, Mr Mamdani proposes two tax hikes: an additional tax
of 2% on incomes of more than $1m a year, and raising the top state
corporate-tax rate to 11.5%, from 7.25%. (This reckoning is misleading:
New York companies already pay additional taxes that bring their total rate
to 17.5%, according to Ana Champeny, of the Citizens Budget Commission,
a watchdog.) Mr Mamdani’s campaign says those increases would yield
$4bn and $5bn respectively. But in any case his tax plans are moot. Mayors
cannot set income or business taxes. Increasing them would require the state
legislature to act, plus the governor’s signature. And Kathy Hochul, New
York’s Democratic governor, has already ruled the idea a nonstarter. “I’m
not raising taxes at a time where affordability is the big issue,” she has said.

The new mayor will need to propose a budget one month after taking office
in January, when he will face an immediate shortfall of $6bn-8bn, according
to Ms Champeny. The city may also lose out from an expected $3bn cut in
federal grants to the state, she says. Without the tax increases he is powerless
to effect, Mr Mamdani would face a $15bn-17bn shortfall in his spending
plans. The real debate will not be over what to spend, but what to cut.

A quarter of New York City’s budget comes from either the federal
government (10%) or the state government (17%), notes Enid Slack, an
expert in municipal finance at the University of Toronto School of Cities.
“These transfers...have to be spent on what the federal and state government
said they have to be spent on,” she says. “So not a lot of local autonomy.”

Over rent, buses and the minimum wage, New York’s mayor also has limited
control. He appoints a board that sets the rent for 50% of rented flats, the
rent-stabilised ones. But boards don’t necessarily do the mayor’s bidding.
The board voted 5-4 in June to raise rents on one-year leases by 3% and on
two-year leases by 4.5%, ignoring pleas by Eric Adams, the current mayor,
for lower increases. Mr Mamdani also wants to build 200,000 units of
affordable housing by borrowing $70bn. That would exceed the debt limit
by $30bn—and therefore would require state approval.

As for making buses free, that is a call for the Metropolitan Transportation
Authority (mta) board, to which the mayor can recommend only four of 23
members. The mta says that free buses could mean worse service, and that
44% of bus riders already evade paying their fares.

One curious dimension of Mr Mamdani’s campaign is that, even as he

promises to accomplish things outside his authority, he is seeking to
surrender what other mayors have regarded as an important power: authority
over the school system (and with it, perhaps, accountability for the quality of
education). Mr Mamdani wants to give that power to a mayor-appointed
board. Making such a change would be up to the state legislature, not him.
When it comes to the police, though, the mayoral handcuffs come off. nyc’s
mayor appoints the commissioner, can expand or cut the force and
influences its methods. Conservatives and moderates have drawn attention to
Mr Mamdani’s past calls to defund the police and eliminate the prison
system. He has dialled that down, but still plans to disband a unit that breaks
up protests; reduce police involvement in emergencies (giving a bigger role
to mental-health workers); and cut overtime. He would have the power to do
all of this. “The mayor can [also] refuse to send the nypd to Columbia in
response to calls to arrest protesters or take down encampments,” notes
Mitchell Moss of New York University.

None of this is to downplay the importance of the office. A determined

mayor who masters detail and knows how to exercise power can do a lot of
good. Michael Bloomberg, the city’s best mayor in recent memory, oversaw
a 32% fall in crime between 2001 and 2013 and rezoned 40% of the city. In
some ways New York is still living off his achievements. But the risk from
electing a mayor with a vivid imagination is limited. Which, given some of
Mr Mamdani’s instincts, may be a relief. ■

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United States | From sea to shining sea

Have foreign tourists really avoided America this

year?
Our analysis of whether the country is losing its international appeal
among holidaymakers
August 28th 2025

AMERICA HAS rarely been out of the headlines this year. The world has
watched as the Trump administration has slashed government departments,
shaken alliances, increased deportations and sent the National Guard onto
city streets. For the tourism industry, not all publicity is good publicity: our
analysis of available data suggests that the number of international visitors
to the land of the free has dropped markedly in 2025 compared with the
same period in 2024.

At first the picture was muddied. Early reports suggested a sharp fall in
March, coinciding with Donald Trump’s tariff threats. But later analysis
showed a spike in April. The real cause was the timing of Easter, which was
in late March last year but mid-April this year. Daily arrivals data from 20
major airports confirm this pattern (see chart 1).

With most of the summer season now visible, the trend is harder to miss.
Using monthly data on arrivals at all airports from America’s International
Trade Administration, a government agency, The Economist finds that
foreign arrivals at American airports are down by 3.8% compared with
2024, or 1.3m fewer people. The slump was steepest between May and July,
when arrivals fell by 5.5% year on year. That bucked the global trend as
tourism finally recovered to pre-pandemic levels.

The steepest drop came in arrivals from Canada (see chart 2). Canadian
entries at American airports are down by 7.4% so far this year, and by 13.2%
over the summer. Car crossings have dropped by more: in June they were a
third lower than last year. Many Canadians are boycotting American goods
and shunning trips south after Mr Trump’s tariffs on Canadian exports and
his threats to annex the country.

Not all of America’s tourism hotspots have been affected equally. Over the
summer Boston Logan and Chicago O’Hare airports each saw a roughly 8%
fall in international arrivals compared with the same period last year; at New
York’s JFK airport they dropped by 7%. But Florida resort destinations such
as Orlando and Tampa drew more tourists from overseas this summer than
last. That has helped stabilise the number of foreign arrivals at major
airports as of mid-August.

Travel and tourism make up around 3% of America’s GDP. Losing visitors

could be costly, but so far hotel operators have reported that higher spending
by well-off domestic travellers has softened the blow.
These travellers, however, are also flying abroad in greater numbers than last
year, as international travel recovers from the pandemic. Departures of
American citizens on international flights are up by 2.9% on last year, and
by 2.5% between May and July (see chart 3). In 2024 some 22% more
Americans flew abroad than foreigners came in; this year so far the gap has
widened to 27%. For a president obsessed with trade imbalances, more
Americans spending money overseas, while fewer foreigners spend in
America, should be vexing. ■

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avoided-america-this-year
United States | Landon calling

The Democrat who calls Trump a child of God

James Talarico wants his party to fight for the Christian vote in Texas
August 28th 2025

PLANO, A SUBURB of Dallas, is not friendly territory for Democrats. But

when James Talarico, a state representative, headlined a “Blue Texas” rally
there last month more than 1,000 people showed up. After the two-storey bar
rented for the event filled with people, they moved to a second one across
the street where he delivered the same speech to a new crowd. The locals
who came were not the “little old blue hairs”, as Mr Talarico lovingly calls
the Democrats’ most-loyal demographic. “It was a bunch of bros, like guys
named Landon,” he recalls. “I was like you are welcome Landon, come
join.”

Many of the Landons said this was the first political event they had been to.
Mr Talarico flipped a Republican seat north of Austin seven years ago—
becoming Texas’s youngest state lawmaker—by convincing people like
them that their bosses, landlords and insurance companies would “continue
to use the political system to screw them over” until they decided to care
about politics. He is not your ordinary Democrat. Not only does he drive a
Chevy Colorado truck and own Lucchese cowboy boots engraved with the
Texas state seal, but he invokes so many Bible teachings in conversation that
you may get Sunday school flashbacks. The turnout that night was the result
of something more idiosyncratic: an endorsement he got four days earlier
from Joe Rogan, America’s top podcaster, for a position he isn’t running for.

In the middle of a conversation about how corrupt Washington politics are

Mr Rogan told Mr Talarico to run for president. “We need someone who’s
actually a good person because the Democrats have very few candidates that
are,” he said. The moment catapulted him into parts of the internet where
only Republicans go. National Democrats began murmuring what those
from Texas have been saying for months. Could a liberal 36-year-old from
America’s biggest red state give the party a desperately needed shot of
adrenalin?

Mr Talarico is mulling a run for Senate in 2026. Texas Democrats

notoriously dupe themselves into believing that winning statewide is just
within reach every cycle. Cue the déjà vu, but next year they reckon they
stand a better chance. Ken Paxton, Texas’s red-meat attorney general, is
challenging incumbent John Cornyn in the Republican primary. He is far
ahead in most polls. Mr Paxton’s nomination would give a Democrat who
can sway moderates an opening. When asked how he is different from Beto
O’Rourke, an El Paso Democrat who lost two big Texas races, Mr Talarico
points to his “shared moral vocabulary” with conservatives. Working with
Republican politicians became easier when he joined them for regular Bible
study at the capitol.

The Democrat, who is in seminary training to be a pastor, wants to be the

country’s loudest Christian voice against Christian nationalism. He believes
that Jesus scrapped the Jewish legal system in favour of two sweeping
values: love God and love your neighbour. That allows for gay people in
church, demands health care for the poor and discourages hoarding wealth in
a way that morphs into a Bernie-like disdain for political megadonors. It also
requires loving the enemy. “Donald Trump is a child of God,” he says. This
year he fought bills to put the ten commandments in all Texas classrooms
and fund religious private schools with state money. Secularism, he reckons,
is hurting America but so is the cult of Republican Evangelicalism. In a
sermon to his hometown church he quoted his pastor on why beer is better
than religion: “nobody has ever been burned at the stake because of their
favourite brand of beer” and “there are laws against forcing beer on minors
who can’t think for themselves”.

Could someone like him pull the devout into the Democratic fold? Although
Mr Trump ignited new fervour among Evangelicals, their allegiance to
Republicans goes back decades. Mr Talarico reckons they are still movable.
During the last presidential race he worked with a group called Evangelicals
for Harris. The Pennsylvania counties that they targeted, which were the
state’s most Evangelical and not swing districts, saw less of a rightward jolt
than neighbouring ones. Republicans know this playbook well. “The
Republican Party has contested the Latino vote and the African-American
vote,” he says. “They don’t win a majority of those people but they win
enough to win elections.”

In August Mr Talarico and four dozen Texas Democrats fled the state to
protest against a Republican effort to redraw congressional maps to their
advantage. Sitting in a coffee shop in the suburbs of Chicago while in exile
he relishes being surrounded by Democrats rather than being on a “political
island”. Fundamentally, though, he is always in a lover’s quarrel with his
own party. The Presbyterian church he was raised in north of Austin was
critical of the Iraq war, but also of Barack Obama’s drone strikes and mass
deportations. Now his frustration stems from inaction. Democrats in the
Trump era, he says, are like the coach in “Air Bud”, a Disney movie, who
waves the rule book around saying that dogs can’t play basketball as the dog
repeatedly dunks in front of him.

Although they may have different policy ideas, Mr Talarico is inspired by

the energy of Zohran Mamdani, the progressive mayoral candidate in New
York City. Both millennials walked the length of their district to meet
constituents and blew up on TikTok. Working in the Texas legislature has
taught Mr Talarico that there is no hope for kumbaya and no point in
complaining to the referee. Texas, he says, is America on steroids: the good
is better, the bad is worse and the politics are scrappier. He reckons the
country’s Democrats “need more cowboy”. ■

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child-of-god
United States | Lexington

New York is turning 400 and no one cares

But it’s an important moment to celebrate what made the city great
August 28th 2025

It is a little sad, yet also somewhat inspiring, and in any event altogether
fitting, that New York City is marking its 400th birthday this year and
almost no one gives a damn. Last New Year’s Eve the mayor, Eric Adams,
promised a year-long celebration, but denizens would be forgiven for not
having detected many events so far. “They’re not doing squat,” says
Kenneth Jackson, an emeritus professor of history at Columbia University
and the editor-in-chief of “The Encyclopedia of New York City”.

Though disappointed, Mr Jackson is not surprised. “New York has never

cared,” he says. As with other historians of New York, the only thing that
seems to make him wistful about Boston (a younger city, he notes) is its
fascination with its past. Russell Shorto, another historian, says New York
“just keeps paving over things”.

It probably does not help that New Yorkers tend to be fractious, and even the
history of commemorating the history of New York is ripe for disputation.
Just 61 years ago the World’s Fair in Queens celebrated the city’s 300th
birthday. Back then the city recognised as its foundational year 1664, when
the British seized New Amsterdam from the Dutch and renamed it after the
Duke of York. But in 1974 Paul O’Dwyer, the president of the city council,
moved to backdate the year displayed on the municipal flag from 1664 to
1625. O’Dwyer, who spoke with the lilt of his native Ireland, insisted he was
just out to respect history. The mayor at the time, Abraham Beame, went
along with the idea, though one city hall aide dismissed it as “Paul
O’Dwyer’s attempt to make us a Dutch city instead of an English one”.

Other possible dates might have included 1609, when Henry Hudson, an
English captain exploring under a Dutch flag, sailed up the river that now
bears his name; or 1624, when the Dutch West India Company landed
settlers—eight of them—on what is now called Governors Island, in New
York’s harbour; or 1626, when the settlers notoriously “bought” Manhattan
for what was later judged to be a few dollars’ worth of stuff. The year 1625,
Mr Shorto says, was “when they sent over shipments of farm animals”.

New York’s historians care less about the date than that New Yorkers should
pause to consider how their city vaulted to global pre-eminence from that
tiny toehold in the harbour. “What’s important is not whether it started in
1625,” Mr Jackson says impatiently. “It’s just that something happened here,
and then became the headquarters of finance and culture and arts and media
and just about everything else you can think of.”

O’Dwyer was ahead of his time. Just as he moved to backdate the founding,
a new wave of scholarship was starting to reckon with the profound imprint
of the Dutch on New York, and on America. Until then New York’s story
was seen through an Anglocentric lens, in part because English-speakers
told the story and the settlement’s early documents were written in 17th-
century Dutch, which few alive could understand. As historians set to work
translating documents from New York’s first decades, a picture came into
focus of how radically different the Dutch town was from other settlements
in the New World. While the theocrats in Boston were hanging Quakers to
create a Puritan monoculture apart from the world, the Dutch were
haphazardly fostering a polyglot society united largely by a shared interest in
being left alone to make money.

The amphibious Dutch immediately saw the potential in New York’s

intricate tracery of waterways: the deep harbour, the protected passage
eastward through Long Island Sound, and, most of all, the Hudson’s reach to
the north, where a valley opened westward to the continent’s vast interior
(and where the Erie canal would eventually join New York by water to
Detroit and Milwaukee). In 1640, after the Dutch company gave up its
monopoly and declared the port a free-trade zone, New Amsterdam became
a hub for Atlantic trade. By 1645 a visiting Jesuit reported hearing 18
languages among the few hundred residents (and he probably did not count
African and native languages). “Everyone here is a trader,” a resident
observed in 1650.

That trade was partly in human beings, a satanic legacy of Dutch commerce.
Yet the society in those first years also included free black property owners
and women who ran trading companies as well as Portuguese, Bohemians,
Arabs, Poles and Mohawks. Even Jews were tolerated, if reluctantly.

The English saw what was happening and coveted not just the port but its
culture. This is the subject of “Taking Manhattan”, Mr Shorto’s latest,
fascinating history based partly on the continuing work on Dutch
documents. The Stuart monarchy had just returned to the throne, overcoming
a Puritan Commonwealth, and the king wanted to bring the righteous Puritan
colonies to heel. But when an overwhelming English naval force menaced
New Amsterdam in 1664, the commander, Richard Nicholls, negotiated an
agreement that, in Mr Shorto’s telling, was less like a surrender than a
merger or bill of rights. It guaranteed the residents their rights to property
and to keep trading and worshipping freely. It even let them retain an
unusual freedom they had won under the Dutch, to choose their own
municipal leaders.

“That sets up this dynamic of two ideological power bases in colonial

America with very different ways of seeing the world,” Mr Shorto says.
“And you can look at a lot of American history as this, you know, back-and-
forth between these two, the one based in New York, remaining outward-
looking and business-minded and globally oriented.” The other, originally
based in Boston, “is puritanical and Christian and America-first. And that’s
part of the DNA of the country.” Not just New York, but America, should be
celebrating, and pondering, this particular birthday. ■

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one-cares
The Americas
A surprise US Navy surge in the Caribbean
Peru’s cartoonish presidential front-runner
The Americas | War? Games?

A surprise US Navy surge in the Caribbean

Is the goal mere theatre or Venezuelan regime change?
August 28th 2025

IN THE SOUTHERN Caribbean just two or three American warships and

Coast Guard cutters are normally found on patrol. Now an amphibious group
centred on the USS Iwo Jima—three ships carrying 4,500 sailors and
marines—is to be stationed there. A nuclear-powered attack submarine and
reconnaissance planes are also being shifted.

On the face of it, one of the biggest American deployments to the region in
years is a bid to go after drug traffickers. In February President Donald
Trump designated several gangs, mainly Mexican ones, as foreign terrorist
organisations.
All this might, therefore, ring a bell. In April 2020, during Mr Trump’s first
term, as the covid pandemic first took hold, the administration announced
“enhanced counternarcotics operations” in the Caribbean against drug
syndicates that were allegedly exploiting the chaos. The Biden
administration later scaled back those operations, having judged them both
expensive and largely ineffective.

In principle, the new deployment could help target traffickers. The current
force is too small to intercept many of them; American crews often stop
boats but must watch as the cocaine is dumped overboard and traffickers sail
on. With the extra manpower, they should be able to seize ships, escort them
to port and arrest the crews.

Few, though, think drugs are the sole or even the main focus. The United
States’ deadliest drug problem is fentanyl, which kills tens of thousands of
its citizens each year. Almost all of it is synthesised in Mexico and trafficked
north over land. The Caribbean does carry cocaine bound from South
America to Europe and the United States, but the new deployment is not
positioned along the busiest routes. And the hardware does not match the
task: why send destroyers when much of the trade depends on clandestine
flights and unmanned submarines?

Consider the Trump administration’s move on July 25th to designate the

Cartel de los Soles as a terrorist outfit. It is supposedly based in Venezuela’s
armed forces. While elements of that army are believed to be involved in
drug trafficking, there is little evidence the cartel exists as an organised
structure. Yet the Trump administration named as its leader President
Nicolás Maduro, a serial election-stealer who nabbed last year’s in a
daylight robbery. Two weeks later the administration doubled the bounty on
his head, raising the reward for information leading to his arrest to $50m—
more than it once offered for Osama bin Laden. And on August 8th Mr
Trump signed a directive permitting military force against drug gangs
abroad. In short, threatening Mr Maduro now falls within the mission to
combat drugs.

This, too, might ring a bell. The last major American military operation in
the region occurred when President George H.W. Bush sent troops to
Panama in 1989 to arrest Manuel Noriega, who had been indicted in the
United States on drug-trafficking charges.

There the parallel stops. The force in 1989 was 20,000-strong, far more than
the 4,500 or so allocated now. Venezuela is a far bigger and more
complicated country. No one thinks an invasion today is plausible. Indeed
the only goal may be theatre. James Bosworth, an analyst based in the
United States, calls it “an awesome photo-op”: a chance to display American
clout in the Caribbean and to snare a few traffickers along the way.

All this makes the most sense if the principal intent is to rattle Mr Maduro,
give succour to Venezuela’s opposition or even stir an uprising within the
Venezuelan armed forces—encouraged perhaps by that recently doubled
reward. This “looks just right to scare the daylights out of Maduro’s
supporters”, says Evan Ellis of the US Army War College.

If rattling Mr Maduro is the purpose, it may be working. On August 23rd he

started to enroll what he claims will be 4.5m militiamen to defend the
country. (Election receipts show he received fewer than 3.8m votes last year;
it is improbable that more people would fight to defend him than would vote
for him.) All drone flights and the sale of drone equipment have been
banned for a month. He has let 13 political prisoners out of jail, perhaps as
an offering to Mr Trump.

When Mr Maduro took to the airwaves on August 25th for his weekly
television address he said 15,000 “well armed and trained” men had been
deployed to states near the Colombian border. Diosdado Cabello, the
Venezuelan interior minister, said the operation was intended to “protect the
sovereignty of the homeland”.

Were the United States ever to attempt to topple Mr Maduro, it would find
support among many Venezuelans who have endured the economic collapse
he has presided over since 2013. In a market in Caracas, the capital, one 74-
year-old shopper says simply: “Let them get this done.”

The malcontents among Venezuela’s army will have seen mixed signals
about backing from the United States, which does not recognise Mr Maduro
as a legitimate head of state. Venezuelan oil is once again flowing to the
United States, and in January Mr Trump dispatched an envoy to Caracas,
who was pictured shaking Mr Maduro’s hand. For any coup-minded army
men, there is little evidence that American backing would be solid if things
get hairy.

Perhaps some will take the gamble. Or the sabre-rattling may only succeed
in rallying supporters to Mr Maduro’s side. Most likely, though, nothing will
happen at all. Mr Cabello has threatened to round up anyone who calls for
American sanctions or intervention. That, too, sounds familiar. It has
generally been Venezuelans who suffer when their paranoid and isolated
regime is threatened.

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caribbean
The Americas | Porcine of the times

Peru’s cartoonish presidential front-runner

In Rafael López Aliaga, or “Porky”, many voters see a man of action
August 28th 2025

Not many politicians would think it good for their brand to be compared to
Porky Pig. But Rafael López Aliaga, the pugnacious conservative mayor of
Lima, Peru’s capital, is not like many politicians. He plays up the
resemblance, having deployed people in pig costumes to events and adopted
a pet pig as his personal mascot. Peruvians simply call him Porky.

In the most recent survey conducted by Ipsos, a pollster, Mr López Aliaga

for the first time topped the voting-intention list for a general election
scheduled for April 2026. That put him just ahead of Keiko Fujimori, a
fellow conservative who narrowly lost the last three presidential run-offs.
The mayor is a wealthy business tycoon and a former city councilman. Like
many typical Peruvian politicians, he portrays himself as a champion of the
working poor. He has a knack for hogging the spotlight. Sometimes that
requires bizarre policy proposals (self-exploding drones to stop criminals) or
outlandish promises (his mayoral-campaign pitch was to make Lima a world
power).

The cartoon-character capers distract attention from Mr López Aliaga’s

darker impulses. He has called for the death of two political opponents (he
later said he meant their “political death”), and has suggested that an
advocate for assisted dying who was suffering from a terminal illness should
take her own life in a warm bath.

Mr López Aliaga, then, does not mind a fight. Since becoming mayor in
January 2023, he has waged one bitter battle after another. His attempt to
annul an unpopular toll contract ended with Lima on the hook for more than
$196m in damages—and perhaps $2.7bn more in a current arbitration suit.
His plan to acquire 40-year-old diesel locomotives and carriages from
California for use on a proposed rail line has been dogged by criticism. After
an acrimonious spat with the transport ministry, it remains unclear when, or
even if, they will be put to use. Such antics are costly. Lima’s debt has more
than tripled under his leadership, and in June Moody’s, a rating agency,
knocked its credit rating down a notch, to below investment-grade.

Blame is reserved for foes real and imagined. Mr López Aliaga often
invokes a nebulous “mafia”, most recently for leading the transport ministry
to threaten huge fines on a major road-expansion project for which he had
not secured an environmental permit. Left-leaning “parasites” infest the
bureaucracy, imposing their “terrorist logic” to spread suffering. His go-to
culprits—journalists, technocrats and progressives—make for easy punching
bags. Peruvians are sick of bureaucratic red tape, and scandals have
tarnished leftist politicians. Voters are fed up.

They have a right to be. The election was called in March by President Dina
Boluarte to put an end to the lawlessness that has descended on Peru. That
includes street-gang shakedowns, contract killings, illegal mining and
corrupt cops being protected by their lawmaker pals.
In Mr López Aliaga, many voters see a force for order, or at least change.
So-called “Porkylovers” say his pushy ways get things done, his business
acumen would help un-gum the machinery of government and his wealth
would make him less likely to pinch from the public purse. And socially
conservative Peruvians like his strident views against abortion and gay
marriage.

If, as expected, Mr López Aliaga throws his hat in the presidential ring for a
second time, his pugilist-populist ways give him a decent shot. Yet although
he topped the August poll, he just squeaked into double-digit support. That
is a sign of Peru’s extreme electoral fragmentation, and a reminder that
anything can happen. A record-high 43 parties registered for April’s
election. No candidate is likely to gather a simple majority, so a second-
round vote in June is all but guaranteed.

What might a Porky presidency look like? More capers and more
controversy, to be sure. Mr López Aliaga has said that most government
ministries should be eliminated, that dangerous prisoners should be sent to
El Salvador and that more troops should be put on Peru’s borders. And that’s
not all, folks.■

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front-runner
Asia
A defining test looms for India
Will a harsher world accelerate India’s reforms?
India’s government bans fantasy sports games
Narendra Modi’s secret weapon: the Indian consumer
Asia | Turning points

A defining test looms for India

It is rethinking its relationship with America. The ramifications will be
huge
August 28th 2025

SEVEN YEARS have passed since Narendra Modi last set foot in China.
The clock resets on August 31st, when India’s prime minister turns up in
Tianjin, a port city about two hours from Beijing. Mr Modi will attend a
meeting of the Shanghai Co-operation Organisation (SCO), a Eurasian
security outfit whose members include Russia and Iran; there he is expected
to meet Xi Jinping, China’s president. The trip is a striking example of the
improving ties between India and China, which entered a deep freeze in
2020 following a border clash. But Mr Modi’s mind will also be on his
country’s bust-up with America and how India should respond.
In just a few months Donald Trump, America’s president, has found two
ways to humiliate India’s government: first, by appearing to side with
Pakistan, an old adversary; second, by whacking India’s exports with
extortionate tariffs. The falling out between America and India has prompted
the emerging economic giant to think deeply about its present course.

Mr Trump has vexed plenty of America’s friends. To understand why the

fracas with India risks having extra impact, it helps to understand the
trajectory the world’s most-populous country had, until recently, been on. In
the wake of its independence from Britain, India determined that it would
never fully ally with any one great power. It still prides itself on remaining
“multi-aligned” in world affairs; it declines to enter into formal treaty
alliances. But it has nonetheless tilted backwards and forwards between
blocs.

For the past 25 years, almost all India’s tilting has been towards the West. In
2001 America lifted sanctions it had imposed on India because of its
nuclear-weapons programme; in 2005 it began negotiating a generous
nuclear-co-operation deal, which it signed in 2008. Nine years ago America
made India a “major defence partner”, a designation that gives it access to
many American goodies, such as advanced defence technologies, without
having to become a full ally. That reflected a shared interest in containing
Chinese power.

True, the two countries have often voted in opposing camps at the UN, when
it comes to matters such as wars and sanctions. But until a few months ago,
decades of diplomacy seemed to have persuaded most Indians to see
America as a reliable underwriter of their country’s rise. That is no longer so
true. Sudden reversals appear to have vindicated sceptics who had warned
that India was losing its bearings by drifting too deeply into America’s
sphere. Even those who have engaged in the diplomatic legwork themselves
despair over the direction of travel. Navtej Sarna, a former ambassador to
America, says of Mr Trump: “We cannot just blindly be going along with
someone who does not know what he is going to say tomorrow.”

When in April Mr Trump first threatened new tariffs on almost all America’s
trading partners, it was thought India might be among the first to strike a
deal. But the Trump administration appears to have badly misjudged India’s
red lines, particularly its willingness to open its economy to foreign
agriculture firms. In July America’s president said talks had collapsed and
whacked Indian goods with a 25% tariff, even as he let most of India’s
neighbours off with lower rates. Then, out of the blue, he added an
additional 25%, ostensibly to punish India for buying Russian oil; that
penalty went into force on August 27th. In a matter of weeks India has gone
from being one of the Asian countries least hit by Mr Trump’s blitz to facing
some of the world’s highest tariffs.

The immediate impact of this seem manageable for India. It relies less on
goods exports than most other Asian countries; it earns the equivalent of
only 11% of its GDP from selling goods to foreigners, compared with 85%
in the case of Vietnam. Some large and fast-growing categories of exports,
such as smartphones and pharmaceuticals, are (for the moment) exempt
from Mr Trump’s new tariffs. In the coming months India’s economy will be
“stirred, but not shaken” by the tariff increase, reckons Ajay Srivastava of
the Global Trade Research Initiative, a think-tank in Delhi.

Yet high tariffs bring into question India’s long-term plans for driving
growth. The government has long hoped to boost manufacturing. This
ambition relies somewhat on keeping access to rich American consumers; it
also means persuading multinationals to shift some of their factories to India
from China. Mr Srivastava notes that if India gets stuck with tariffs that are
higher than those imposed on China’s other competitors, such as Vietnam or
Bangladesh, hopes of being an alternative base to China are “dead”. Even if
all the tariffs go away, the idea that India can offer factories shelter from
shifting geopolitics has just been hit for six.

Lately, Indians have felt inclined to start wargaming nightmare scenarios, in

which escalation of the trade war starts putting key pillars of India’s
economy at risk. Indian exports of services, such as software development,
are growing much faster than sales of goods. These have not yet been drawn
into the trade tussle, but there is no guarantee of that continuing. America is
probably the largest provider of foreign investment into India, once
American money that gets routed through Singapore and Mauritius is
included; any disruption of that could cause deep pain. Big American
companies are increasingly setting up “global capability centres” in India,
which they staff with Indians skilled in fields such as coding and finance.
That industry made $65bn last year, with projections of around $100bn by
2030.

Alongside the trade frictions is a huge falling-out on defence. For years

India has accused Pakistan of tolerating, and in some cases abetting,
jihadists who launch terrorist attacks from its soil. For years America has
told India that it shares these concerns. But the consensus seemed to crack
during a brief conflict waged between India and Pakistan in May, sparked
after terrorists murdered two dozen people in Indian-administered Kashmir.
Initially America said India could take care of the situation itself. Then it
made a U-turn, calling for “both parties” to stop launching missiles at each
other. That made India feel as if it had been labelled an aggressor.

Indian anger grew even hotter when Mr Trump claimed to have struck a
peace deal by threatening both sides with an American trade embargo. The
American president then offered to mediate over the hotly contested issue of
Kashmir. For decades India has furiously resisted any outside effort to
meddle in its disputes with Pakistan. It said it stood down only because its
goals had been achieved. Mr Trump, who dislikes being contradicted, has
been doubling down on his claims to have brought peace. Around Delhi,
analysts are keeping count of how many times he has repeated this boast; the
number now sits above 40.

Worse, Mr Trump now appears to side more firmly with the Pakistanis (who
say they have nominated him for a Nobel peace prize). That has forced
India’s military planners to question long-held assumptions about how any
future conflict might go. In June Mr Trump invited Pakistan’s army chief
and de facto leader, Field-Marshal Asim Munir, to have lunch with him in
the White House—a rare honour for any foreign soldier. Mr Trump has
announced that America plans to help Pakistan exploit oil and mineral
reserves, and gloated that “one day” India might have to buy energy from its
neighbour.

American-Indian defence ties will be hurt by this bust up. Over the past four
years Russia has supplied 36% of all the arms India has imported. That is
much less than two decades ago—in part because India worries that Russian
support might be withdrawn if it finds itself at war with China. India is also
insecure about the quality of its kit (both the home-made and the foreign-
bought). China is selling Pakistan advanced weaponry; during the conflict in
May, Pakistan is thought to have shot down five Indian fighters using
Chinese-made jets. India needs to keep up.
Until now, tilting closer to America on military matters had seemed a safe
bet. The two sides are supposed to be tightening co-operation through their
involvement in the Quad, a security group also comprising Australia and
Japan. This year America and India are due to sign an overarching defence
“framework” governing military ties over the next decade, which it is
assumed would lead to more joint exercises and grant India access to the
snazziest gear. They are also putting the finishing touches to a deal,
announced in 2023, for America to help India produce jet engines for fighter
planes. This kind of co-operation between the two countries was a priority
under Joe Biden’s administration; now the direction of travel is less clear.

Where will things go next? In Delhi there is some hope that Mr Trump’s ire
with India may prove transient. If he starts making satisfactory progress in
his peace talks with Russia, one reason to punish India for buying its oil
might swiftly go away. The deals that America has signed with other Asian
countries do not suggest that market access for agricultural firms really is a
priority for his administration. But India’s sensitivity to lectures from
foreigners means that trust between the two countries may have taken a
lasting knock.

India’s response is likely to mix three different strategies. The first is to keep
pushing for some kind of accommodation with Mr Trump. So far it has
chosen not to retaliate against American tariffs, nor even much to criticise
the president himself. America appeared to cancel trade talks scheduled for
August 25th, but there is speculation that Mr Modi will try to meet
America’s president on the sidelines of the UN General Assembly in
September. “On issues of absolute national interest, I think that India will
stand its ground,” says Nirupama Rao, a former Indian ambassador to
America and foreign secretary. “Where India can afford to make concessions
on the trade front, I think it will do that.”

Mr Trump looks helpfully susceptible to pledges of big investments; in

recent months “many countries have gotten off the hook by promising things
that they are never going to deliver”, reckons Joshua White of the Johns
Hopkins School of Advanced International Studies. India could, if it is
willing, somewhat step down its imports of Russian oil without incurring too
much harm; this no longer trades at a great discount from less controversial
crude. “What Mr Trump seems to want is the ability to say he has pushed
India into something,” suggests Tanvi Madan of the Brookings Institution,
an American think-tank. Though for India, granting that would not be easy.

India’s second strategy will be to draw closer to its other foreign friends.
“We can make a virtue of being non-aligned now,” says Mr Sarna. India had
already been trying to open up new markets. Since 2021 it has signed off
half a dozen trade deals, including one with Britain. It soon hopes to ink one
with the EU. For weaponry, it could depend more on France or Israel, which
together already supply around 46% of its arms. On August 22nd India
announced that a French firm will help it produce engines for homegrown
fighter jets.

In recent weeks India appears to have been cementing its ties with Russia—
the opposite of what Mr Trump appears to want. Since America levied its
new tariffs, Mr Modi has twice spoken to his “friend” Vladimir Putin on the
phone. On August 21st Subrahmanyam Jaishankar, India’s foreign minister,
met Sergei Lavrov, his Russian counterpart, in Moscow; the pair said their
countries were aiming to increase bilateral trade. Mr Putin will be attending
the SCO summit in Tianjin, too. And there are plans for India’s government
to host him in Delhi before the end of the year.
As seen by Mr Modi’s upcoming trip, relations between India and China are
thawing, too. For years the countries exchanged no tourists whatsoever. It
remains impossible to fly directly between Delhi and Beijing. But last year
the two came to an understanding over their border dispute, which in
October allowed Mr Modi and Mr Xi to shake hands on the sidelines of a
summit in Russia.

Talks between the two countries are now moving to economic matters. Since
the clashes in 2020, India has turned away much Chinese investment, and it
has refused to grant visas to some Chinese executives. Yet during this period
the amount India imports from China has only gone up. In the year to March
India bought about $114bn-worth of goods from its northern neighbour,
about 75% more than five years ago (only about $14bn-worth of stuff went
the other way). Much of what it buys are inputs that are essential to Indian
industry. Indian pharmaceutical companies rely on China for some 70% of
precursor chemicals, for example. The smartphones that India exports
require a lot of imported components.

Flows of money and know-how from China could bolster Indian industry, so
that it could develop its own advanced-manufacturing sector and reduce
reliance on imports. India’s government understands this, but had been loth
to relax investment curbs while trade negotiations with Mr Trump were still
going on. With those talks now in the doldrums, a slightly freer stance on
China is back on the cards.

There is yet one more way in which India might respond to its humbling at
the hands of Mr Trump. It could choose to accelerate long-needed changes at
home that might help it resist such bullying down the line. “India’s
fundamental response to Trump’s tariffs should be to unleash a fresh dose of
economic reforms,” writes Nitin Pai of the Takshashila Institution, a think-
tank in Bangalore. Ms Madan at Brookings agrees: “You can demand status;
you can expect status; but the things that will give you status are growth and
capabilities.”

Tackling domestic problems that weigh down the economy would help.
India already makes a lot of its own weaponry and has ambitions to make
much more; if it is determined to produce arms that compete with American
or Chinese ones, it cannot afford to let a single rupee go to waste. For the
moment India looks buffeted by decisions being made in foreign capitals.
Yet this moment of reckoning could bring India closer to the days when no
one will dare push it around. ■

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Asia | Borne out of bullying

Will a harsher world accelerate India’s reforms?

Narendra Modi needs a new approach after Donald Trump’s tariffs
August 28th 2025

“WHEN WE grow and excel,” Narendra Modi said in a speech on August

15th to mark the 78th anniversary of India’s independence, “the world will
acknowledge our worth.” It was the Indian prime minister’s first major
public address since Donald Trump decided to punish the country for its use
of Russian oil by doubling tariffs on various goods. He struck a defiant tone,
insisting that India would take its seat at the top table by becoming stronger
at home. “We have resolved to accelerate the journey of reform,” he added.

Mr Modi, an economic reformer, wants India’s GDP to reach $10trn by the

centenary of its independence, in 2047 (currently it is $4trn). That would
give it “developed-country status”, and give it even more global heft. But
meeting that goal means sustaining India’s current growth rate for more than
two decades—at a time when the world economy is slowing and countries
are erecting trade barriers.

India has unique strengths: a vast pool of cheap labour, masses of untapped
talent and a huge internal market. Yet its problems are enormous, too. Its
companies are still held back by restrictive laws. Its rural people are
chronically underemployed. Its cities are ill-prepared for mass urbanisation.
Having lost his majority in national elections held last year, Mr Modi’s
appetite for tough reform had seemed diminished; even his supporters had
begun to suggest that states would have to take the lead. The question now is
whether an external shock will be a catalyst for change.

It would not be the first time. In recent weeks there has been chatter about
“another 1991 moment”. That was the year when a balance-of-payments
crisis triggered a wave of liberalisation, in which capital controls were lifted,
and the dismantling of the “licence raj” began. In part, the comparison
reveals how far India has already come. In 1991 the country was left on the
verge of bankruptcy; with no money to buy oil, its economy ground to a halt.
Almost half the population was living in extreme poverty; today it is less
than one in 20. And India will soon be the world’s fourth-largest economy.

Mr Modi has contributed to India’s successes in three areas. The first is

economic stewardship. In his first term he reformed the banking system,
forcing banks to clean up their balance sheets. On his watch the government
has controlled spending, and the Reserve Bank of India (RBI) has held
inflation and interest rates down. India’s balance-of-payments is now much
less fragile. The day before Mr Modi’s speech, S&P, a credit-rating agency,
rewarded India with its first sovereign-credit rating upgrade in almost 20
years, raising it to the same grade as Greece.

The second success is infrastructure, where Mr Modi has poured money into
roads and railways. India’s cities have been linked up with 50,000km of new
main roads, expanding the network by 60% in a decade. Along with the
introduction of a national goods-and-services tax (GST), that has created the
foundation for an internal market which could one day rival China and
America.
Third is digital, where Mr Modi developed reforms initiated by the previous
government. As a result, almost all Indians now use Aadhaar, an online-
identity system, and other digital-public systems to get government services,
and make and receive payments. Last year these transactions almost hit
$3trn.

Helped by all this, growth has ticked along at almost 6% a year under Mr
Modi (see chart 1). Yet under the bonnet there are problems. The most
obvious is that the economy is not creating enough jobs, which risks turning
India’s demographic boom into a burden. Government survey data show that
labour-force participation has been climbing steadily, reaching 55% last
quarter. Yet some analysts worry this is misleading, because it counts unpaid
jobs. Almost a fifth of under-30s in cities are unemployed.
The economy has bounced back from the pandemic, but private corporate
investment is still weak. In 2024 it was just 12% of GDP, lower than during
an investment boom in the 2000s. Ram Singh, a member of the RBI’s
monetary policy committee, says a low ratio of capital expenditure to
operating margins is a sign that firms lack confidence. Foreign direct
investment (FDI) inflows rose to $81bn last year, but that has been offset by
higher repatriation and firms exiting the country, which means net FDI has
fallen (see chart 2).

And Mr Modi’s successes have been double-edged. His infrastructure

splurge has been delivered rapidly, through a handful of favoured national
champions. Yet such cronyism probably helps to explain other firms’
unwillingness to invest, says Raghuram Rajan, a former head of the RBI.
Digital infrastructure allows politicians to hand money directly to the poor,
cutting out the graft of middlemen and helping to reduce poverty. Yet some
fear that the model is working too well, encouraging a welfarism that eats
into budgets, particularly as state-level politicians grasp its electoral power.
Karnataka now spends one sixth of its budget on handouts.

Many in Delhi hope that Mr Modi and Mr Trump will patch things up. V.
Anantha Nageswaran, the government’s chief economic adviser, said he
believes the impasse “will not continue for too long”, and that the damage
will be confined to this financial year. Either way, he thought India’s
economy will remain “dynamic”, not “dead”, as Mr Trump claimed.

But if India’s relationship with America remains rocky, these underlying

problems will be sharpened. The consequences are most obvious for
manufacturing. In Delhi there had been hopes that India was well-placed to
benefit as firms sought to diversify their supply chains away from China.
The best example was Apple, which already makes one-fifth of its iPhones
in India (electronic goods are exempt from American tariffs). Yet if the
tariffs on other goods remain, India will be unable to compete with
Bangladesh and Vietnam in areas such as garments and textiles.

The ructions have not extended to the IT services and tech industry. If they
did, that would be more damaging, given that India depends on America for
customers and technology. A broader debate is under way about how AI will
shake up the sector. Last month TCS, the country’s largest outsourcer,
announced plans to lay off 2% of its workforce—a move some interpreted as
a sign that AI could eat Indian firms’ business. Yet others say AI will be a
boon for India. “This is the place where you can hire engineers at scale and
cheap,” says Ridham Desai of Morgan Stanley, a bank.

Mr Modi has already responded to American bullying. The most serious

measure in his speech on August 15th was the simplification of GST, which
is complex and vulnerable to fraud. The four main existing rates will be
reduced to two. That will come into effect in October, alongside an income-
tax cut. This should lift consumption.

On August 19th the government announced the remit of a new committee

tasked with making it easier to do business and removing the threat of
criminal penalties for even minor mistakes. Sanjeev Sanyal, a member of Mr
Modi’s economic advisory panel, points to a bill that will decriminalise more
than 300 provisions—including arcane laws that criminalise selling biscuits
labelled with the wrong weight. There is talk of the government “dusting
off” other reforms that were shelved after the election, says an analyst at a
large asset manager.

A burst of deregulation would be the best way to realise another 1991

moment, Anand Mahindra, a tycoon, has suggested. He thinks Mr Modi
should also work with states to make India more attractive to foreign
investors. Reform of “factor markets”, particularly land and labour, will also
be essential. Others note that investment and dynamism are held back by
slow-moving courts and regulators.

Even if the appetite for reform is there, Mr Modi faces several big trade-offs.
The most obvious is the risk of an electoral backlash. Over the past decade
he has repeatedly proposed pro-growth policies only to be rebuffed. Most
recently he was stung by a massive wave of farmer protests in 2021, which
forced him to abandon agricultural reforms.

Second is the tension between creating a more “self-reliant India” and

finding new markets and customers abroad. Speaking after Mr Modi’s
speech, Mr Nageswaran insisted the two goals were “not in contradiction”.
Yet the risk is that the lasting effect of Mr Trump’s antics will be to push
India to turn inwards. India’s bureaucratic machine has long been sceptical
of opening up. Insiders say it has regained influence recently.

The third challenge is constitutional. After three decades of top-down

reform, India’s biggest problems cannot be solved in New Delhi. Land,
labour and agriculture are all either shared or devolved matters. Mr Modi’s
method, of trying to bypass the states and force changes through, has not
worked. Land reforms were abandoned; new labour codes were passed but
not implemented. Many chief ministers of states—with small budgets, high
debts, and their own elections to think about—could not see what was in it
for them.

This may change. While states such as Gujarat, Karnataka and Andhra
Pradesh have long been reform-minded, they were all outpaced last year by
Tamil Nadu, which grew at a blistering 11%. This state has attracted the
likes of Apple by adopting a pragmatic approach to land acquisition and
labour relations. Telangana and Maharashtra, meanwhile, have adopted far-
reaching electricity reforms that will end farmers’ entitlement to free power
by placating them with solar panels. With this change, says Mr Desai, the
states will be able to stablise their budgets and make power cheaper for
firms, attracting investment and jobs.
Such developments hold up the prospect of a “competitive federalism” that
could spur India’s next phase of growth. Yet to unleash that, Mr Modi would
need to embrace fiscal federalism, an approach that goes against his
instincts. Speaking on the ramparts of the Red Fort, he said: “If we choose
this path, and if everyone chooses it, then no selfish interest will ever be able
to entrap us.” Many will be watching carefully to see just what he means. ■

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reforms
Asia | All bets are off

India’s government bans fantasy sports games

Heavy-handed regulation of a flourishing industry could backfire
August 28th 2025

How quickly can you get rich in India? According to fans of fantasy-gaming
platforms, such as Dream11, it is possible to do so in a matter of hours.
Spend as little as eight rupees (ten American cents) ahead of a cricket match
and a punter could win hundreds of thousands rupees if their virtual team
ends up performing well on the pitch. The prospect, albeit unlikely, of such
tantalising returns, combined with glitzy marketing campaigns featuring
Bollywood stars, has lured 200m users to Dream11’s platform since it
started in 2008—more than the number of India’s stockmarket investors.

The website is part of a booming industry. It includes more than 2,000

Indian startups. The firms’ collective annual revenues were expected to
double in the next three years, from around $3.8bn currently. Such
projections, though, have now been foiled by India’s government. On
August 21st India’s parliament passed a bill banning all money-based online
games. Offending operators face fines and prison terms of up to three years;
banks that process transactions for them would also be punished. A day later
India’s president formally signed it into law. Why the heavy-handed
response?

India’s government is concerned by the financial risks these games pose.

The bill highlights their “manipulative design features” and “addictive
algorithms”, which could lead to “financial ruin”. Officials also fret that
platforms could be gateways to fraud and money laundering: thanks to a
combination of rapid economic growth, the proliferation of smartphones and
cheap data, middle-class Indians increasingly have the means to have a
flutter. Similar forces have driven a boom in stocks and options trading. But
while trading those instruments still requires technical knowledge, fantasy
cricket and card-based games are more easily understood, increasing the risk
of excesses.
Gaming firms have long denied the government charges, insisting that their
games are based on skill. An industry lobby has written to Narendra Modi,
the prime minister, calling for “progressive regulation” rather than a ban.
Several firms are in discussion about challenging the new law in the
Supreme Court. For now, though, the ban will have far-reaching
consequences. The industry has been a magnet for investment: Dream11’s
parent company has raised over $1.6bn since 2008.

The demise of such companies could hurt several venture-capital firms at

home and abroad. America’s Tiger Global, for instance, has invested
hundreds of millions of dollars in Dream11 and Games24x7, a card-games
platform. Sports that form the basis of fantasy games may also suffer.
Kabaddi, a traditional Indian team sport, has attracted more viewers and
investment in recent years, partly thanks to interest in Kabaddi-related
fantasy games. A ban would curb that.

Yet the biggest loser may be the state itself. The Indian gaming-industry
body claims that gaming firms contribute more than 200bn rupees annually
in taxes (around 0.8% of all tax receipts). It is unclear whether the public-
health and social benefits from an outright ban will compensate for the loss
of revenue. Some are concerned that gamers could instead just get their
kicks from shady, unregulated offshore outlets—many of which are already
easily accessible from India. That would do little to quell worries about
public health and could exacerbate problems such as money laundering.

There has been little public deliberation over the costs and benefits of the
bill. The gaming-industry body complains that it was not consulted. The
lower house of parliament took just seven minutes to pass the legislation
after it was proposed. Just as in high-stakes games, it took only a few
moments for fortunes to turn. ■

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games
Asia | Banyan

Narendra Modi’s secret weapon: the Indian

consumer
Low inflation, tax cuts and falling interest rates will boost an economy hit
by tariffs
August 28th 2025

WHEN IT RAINS it pours. In August some parts of India received as much

precipitation in one week as they usually do all month. Delhi, India’s capital,
escaped the worst of the weather. But politically, it has been a stormy spell
for Narendra Modi, the prime minister.

The month dawned with the government reeling from a 25% tariff
announced by President Donald Trump at the end of July, a mere point
below the original “reciprocal” rate set out in April. A few days later Mr
Trump slapped another 25% on India, purportedly to punish it for buying
Russian oil. It was a triple blow for Mr Modi. The 50% rate, which came
into force on August 27th, will damage India’s ambitions of growing into an
export power. It is a hit, too, to the prime minister’s carefully crafted
strongman image. And it is a personal blow for a leader who thought he had
cultivated a bond with Mr Trump.

The government is under pressure on the domestic front as well. A hasty

revision of the voter list in the eastern state of Bihar, which holds elections
later this year, has been criticised by opposition figures as an exercise in
disfranchisement. Separately, Rahul Gandhi, the leader of the opposition,
pointed to what he called irregularities in last year’s general election and
accused the Election Commission of India, a constitutional body, of
colluding with the ruling party (which it denies).

Yet for all the gathering clouds, Mr Modi still has reason to feel sunny.
Electoral lists in a poor mofussil (or rural) state do not set the public’s pulse
racing, and in any case the pro-Modi media have hardly played up the
allegations. The humiliation meted out to India by Mr Trump, though harder
to gloss, has put Indians’ backs up and allowed the government to reassert
its long-standing claim of working to make India “self-reliant”. But it is not
just his skill at defensive play that should give Mr Modi cause for cheer. It is
that things are looking up in the one place voters care about more than any
other: their wallets.

One big reason is inflation. Prices in July rose 1.6% year-on-year, the lowest
in eight years. That is partly the result of a good winter harvest, which has
kept the price of staples and vegetables low. An ample monsoon and a good
summer sowing season suggest the trend may last. Analysts expect inflation
to remain subdued well into next year.

A little under half of India’s workforce toils in agriculture. Good harvests

are reflected in real agricultural wage growth, which hit an eight-year high
of 4.5% year-on-year in May, according to Goldman Sachs, a bank. That in
turn spurs consumption in the countryside. The rural economy is showing
signs of strength after an anaemic post-pandemic period. Government
welfare spending, especially targeted at women, has helped, too.

Falling inflation also creates space for India’s central bank to lower the cost
of money. Headline interest rates have fallen one percentage point already
this year, and some analysts expect another 0.25% cut by December.
Leveraged Indians, especially those with mortgages, now have more money
to spend.

The ruling party cannot take credit for the monsoon or rate cuts. But it can
for a tax bung aimed at middle-income earners. Starting this financial year,
which runs from April, anyone earning up to 1.2m rupees ($13,700) will pay
no income tax, a rise from 700,000 rupees. That covers more than 85% of
people who file tax returns.

A different tax cut will have even more impact. On August 15th Mr Modi
announced a long-overdue reform of India’s goods-and-services tax, to be
implemented by Diwali, which this year falls in late October. The tax,
introduced in 2017, is an unwieldy mess of four rates. It will be simplified to
just two—5% for essentials and 18% for everything else (plus a 40% sin rate
for a handful of items). Taxes on everything from shoes to cars are likely to
fall.

The combination of lower inflation, interest rates and taxes will boost Indian
consumption—which accounts for 61% of GDP. For the government, that
will help compensate for the hit the economy takes from American tariffs.
And for consumers, talk of electoral lists and declining exports will seem
abstract compared with the feel-good factor of buying a new washing
machine or dining out somewhere nice.

By Diwali, the monsoon will have receded and the skies will once more be
clear. As for being a political weather-maker, voters may just credit Mr Modi
for bringing out the sun. ■

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consumer
China
On parade in China: Putin, the PLA and purges
Chinese courts can bar even those not accused of crimes from leaving
the country
Something is amiss in China’s foreign-affairs leadership
China | Troops, tanks and missiles in Beijing

On parade in China: Putin, the PLA and purges

Military pomp follows the removal of top military commanders
August 28th 2025

Donald Trump’s military parade astounded Chinese viewers in June. The

sloppy marching, the corporate sponsorship, the paltry crowds: how could
the world’s greatest military power put on such a tawdry display? China’s
parades are minutely choreographed extravaganzas designed to inspire awe
and respect. Expect no less when China holds its first in six years on
September 3rd. But China’s tattoo, like Mr Trump’s, will reflect the
insecurities of its leadership. Impressive though the display will be, it will
mask turbulence in the high command.

Since the last parade in 2019, the world’s largest armed forces—about 2m
strong—have grown much more muscle. They have gained an array of new
weapons from hypersonic missiles and stealth fighters to a much-expanded
nuclear arsenal: its number of warheads has doubled. At the same time,
strategic rivalry with America has grown more intense. China’s leader, Xi
Jinping, will use this occasion to signal to America the perils it could face,
should war break out between the two great powers, and to Taiwan that it
would be wise to come to heel. It comes 16 months before an important
deadline that American officials believe Mr Xi has set: by 2027 the Chinese
armed forces, known as the People’s Liberation Army (PLA), must be ready
to take Taiwan if ordered.

This will be the third military parade in Beijing since Mr Xi took power in
2012. Officially, it will commemorate the 80th anniversary of the end of the
second world war. It marks the day in 1945 when Japan surrendered to
Allied forces, ending a 14-year occupation of much of China that left some
20m Chinese people dead and laid the ground for the Communist Party’s
victory over China’s Nationalist army four years later. Mr Xi sees such
victory parades as a way to legitimise Communist rule by playing up the
party’s role in defeating Japan (despite the Nationalists having done most of
the fighting). At the same time Mr Xi wants to show that China is moving
towards “national rejuvenation” with weaponry that is state-of-the-art and,
crucially, home-made. (In a brief conflict between India and Pakistan in
May, modern Chinese fighters and missiles—deployed by Pakistan—were
used in combat for the first time and performed well.)

The guest list is designed to flaunt China’s global diplomatic clout. Vladimir
Putin, the Russian leader, will be there, displaying the strengthening of
military ties between the two countries since Russia began its full-scale
invasion of Ukraine in 2022. Western leaders and their closest allies will stay
away, as most of them did in 2015 when China staged its first big parade
marking the end of the world war. But more than two dozen other leaders are
supposed to attend, including North Korea’s Kim Jong Un. Indonesia and
Malaysia are expected to send heads of state or government for the first
time, indicating how “swing states” in Asia are hedging their geopolitical
bets even as America presses them to choose sides. China’s goal is to show
that such efforts will fail. It hopes to sap Taiwan’s will to fight and embolden
isolationists around Mr Trump.

Much of the weaponry on show is designed to target American naval forces

in the western Pacific. Rehearsals included what appeared to be four new
supersonic or hypersonic anti-ship missiles. “The advantages these weapons
bring may be determinative” in a Taiwan conflict, says Brendan Mulvaney
of the China Aerospace Studies Institute, an American air-force think-tank.
America, by contrast, has been underinvesting in comparable armaments, he
says. The rehearsals also featured tanks with uncrewed turrets and other
systems to defend against anti-tank weapons, such as American-made
Javelin missiles (of which Taiwan has bought many). That shows how the
PLA has learned from Ukraine’s mastery of asymmetric warfare, including
the country’s highly effective use of Javelins against Russian forces.

But foreign analysts will also be looking at who is missing from the show.
While there is no immediate threat to Mr Xi’s leadership, recent purges
suggest deep-rooted corruption or other indiscipline within the PLA. More
than 20 senior officers have disappeared or been dismissed since Mr Xi
began a third term as party leader in 2022. They include three of the seven
members of the Central Military Commission, which controls the PLA and
is chaired by Mr Xi. The most recent example, He Weidong, last appeared in
public in March. If his downfall is confirmed, he would be the most senior
uniformed officer to be deposed since 1967.

Relatedly, there are signs that Mr Xi’s decade-old campaign to modernise

the PLA is facing headwinds. The purges started in the Rocket Force, which
operates China’s conventional and nuclear missiles, but have since
encompassed its equipment-development and political departments, as well
as state-run defence manufacturers. Meanwhile, the PLA is struggling to
attract enough recruits with the technological skills to operate new
equipment. And its ground, air, sea and other forces still have difficulty
working together in combined operations. Adjusting to Mr Xi’s reforms has
been a huge challenge for PLA personnel, says Eric Hundman, director of
research at BluePath Labs, an American research company that studies the
PLA. “It leads to stalled career paths, the need for retraining, new
procedures and tactics, and new bureaucracies to learn how to navigate,” he
says. The purges “make all of that uncertainty worse”.

In such a secretive political system, uncertainty is ever-present. Mr Xi, who

is 72, has lately been less visible. He does not appear in public as much and
the party commissions that he formed (and chairs) to bypass state
bureaucracy meet less frequently. That is probably a deliberate move to
delegate responsibility to loyalists, rather than a reflection of diminishing
power. But Mr Xi may hope that flaunting his role as commander-in-chief
will help to quash speculation. He will follow the choreography of previous
Chinese leaders on such occasions by delivering a speech from the Gate of
Heavenly Peace overlooking Tiananmen Square and then reviewing the
thousands of troops. “Greetings, comrades!” he will say, assuming he
follows usual protocol. “Greetings, leader!” they will respond in resounding
unison.

“Just having this exchange, although it’s very ceremonial and very symbolic,
shows that the PLA owes allegiance to one person and one person only,”
says James Char of Singapore’s Nanyang Technological University. The
reminder is a timely one for Mr Xi’s military commanders after the purges.
It could be good for morale among the rank and file, too.

Ultimately, though, such theatrics say little about China’s readiness for war,
given its lack of combat experience (the last war it fought was in 1979). And
in many ways, the spectacle will reflect some of China’s greatest
weaknesses: the concentration of power in a single man and its stress on
performance, sometimes to the neglect of substance. That is food for
thought, perhaps, for anyone in America who might be watching with envy.
■

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purges
China | No way out

Chinese courts can bar even those not accused of

crimes from leaving the country
Both foreign executives and political dissidents have been affected
August 28th 2025

Gao jia, a seven-year-old American from New York, might not start his
second year at school this September. During a family visit to China last
August, his father, a Chinese artist called Gao Zhen, was arrested for
“slandering heroes and martyrs” (Mr Gao is the elder of the well-known
“Gao Brothers”, whose sculptures often mock Chairman Mao). The boy has
not been accused of wrongdoing; neither has his mother, Zhao Yaliang. But
in China, family members can be punished for the alleged sins of a relative.
Ms Zhao is under an “exit ban” that stops her from leaving the country. With
both his parents stuck in China, Gao Jia is also unable to leave.
Many countries use exit bans to stop people accused of crimes from
escaping justice, but the bar is usually high. In China they are slapped on
everyone from dissidents to foreign executives involved in business
disputes. Many exit bans are not made public so it is hard to tell how many
people are affected. But courts seem increasingly willing to impose them.
An official database of judgments that have been made public contains
records of more than 54,000 bans last year, up from some 24,000 in 2022
(see chart). Anecdotally, it seems that a growing number of foreigners are
being targeted.

In the database, almost all cases involving exit bans relate to civil disputes,
not criminal activity. The bans it documents are often ones requested by
creditors of a struggling business who want the owner to stay in the country
until the firm’s debts are settled. But an exit ban can be applied for by
“virtually anybody”, says John Kamm of the Dui Hua Foundation, an
American ngo. “You have no idea that you are the one who might be
banned.” An expanding legal net is increasing the chance of ensnarement:
China now has at least 18 laws allowing exit bans. Five have been passed
since 2018, including new legislation relating to corruption, fraud and scams
that involve telecoms.
The way bans are applied is opaque. They can be imposed on family
members only if they are needed as witnesses, but in practice relatives are
often barred from leaving for no apparent reason other than to put pressure
on someone involved in a court case. Ms Zhao found out she was stuck in
China only when she and her son were stopped while trying to go through
passport control at an airport. Once in place, bans can last years. It is very
difficult to contest them.

They are adding to strains in Sino-American relations. In April an employee

of America’s commerce department was banned from leaving China after
being interrogated by officials from China’s spy agency, the Ministry of
State Security, according to the New York Times. In July Wells Fargo, an
American bank, suspended all business travel to China after one of its
employees, a Chinese-born American citizen called Mao Chenyue, was
prevented from leaving the country (China’s foreign ministry has said she is
involved in a criminal investigation, without giving further details). Dui Hua
estimates that more than 30 Americans in China were subject to exit bans
last year.

Some of these cases may relate to China’s stepped-up efforts in recent years
to stamp out graft. When bosses of state-owned enterprises are being
investigated, exit bans are sometimes imposed on people who have had
dealings with them, including foreigners wanted as witnesses. Such people
should be wary of this risk, says James Zimmerman, a lawyer in Beijing and
former chairman of the American Chamber of Commerce in China.

For now, Gao Jia is going to a primary school in Yanjiao, a town near
Beijing. Since May, all letters to him from his father have been withheld by
Chinese officials, according to his mother, Ms Zhao. Her husband’s trial is
expected to begin soon, she says, and could result in a three-year sentence.
When the proceedings are over, Ms Zhao hopes to be allowed to return to
America with her son. ■

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China | Purges

Something is amiss in China’s foreign-affairs

leadership
Diplomats are disappearing at an extremely busy time
August 28th 2025

CHINA’S DIPLOMATS are working hard. On August 31st more than 20

world leaders will join President Xi Jinping in the northern city of Tianjin
for a two-day meeting of the Shanghai Co-operation Organisation, a security
forum. Among them will be Russia’s Vladimir Putin (a frequent visitor),
India’s Narendra Modi (a rare one) and North Korea’s Kim Jong Un, who
seldom goes abroad. In recent days Donald Trump said he would visit China
“probably during this year or shortly thereafter”. It would be the first such
trip by an American president since 2017, when Mr Trump was last there.
Great-power relations are in flux.
Oddly, however, one of China’s most senior foreign-affairs officials, Liu
Jianchao, is nowhere to be seen. Mr Liu heads the Communist Party’s
International Department and, at least until recently, had been widely tipped
as the next foreign minister. The department’s website still names Mr Liu as
the organisation’s chief. But it does not list any of his activities since July
30th, when he visited a senior politician in Algiers (the department’s job is
to build ties with foreign political parties). That is unusual. He had more
than 30 meetings in August 2024, the website shows. For him, it was a
typically busy month.

Mr Liu’s disappearance was first reported by the Wall Street Journal on

August 10th. The newspaper said he had been detained for questioning.
Reuters news agency also said he had been taken away, quoting “five people
familiar with the matter”. Both reports stated that the reason was unknown.
Reuters later said that one of Mr Liu’s deputies, Sun Haiyan, had also been
questioned. Ms Sun reappeared at an event on August 15th and has since had
other meetings with foreigners, suggesting her troubles, if any, are not as
great as her boss’s.

If Mr Liu fails to re-emerge, it would mark another purge at the top of

China’s foreign-policy establishment following the disappearance of China’s
then foreign minister, Qin Gang, in June 2023. He was replaced the
following month by his predecessor, Wang Yi. Officials have still not
explained why, though rumours abound about his private life. Last year Mr
Qin was also removed from the party’s Central Committee.

Western officials would not cheer Mr Liu’s downfall. A fluent English-

speaker who studied at Oxford University, he avoided the aggressive “wolf-
warrior” style of diplomacy once voguish among Chinese diplomats (it has
receded in the past couple of years). “It is unimaginable that China and the
United States would engage in armed conflict,” he said, days before he
disappeared. An ability to charm foreigners, however, will not impress the
party’s investigators. ■

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Middle East & Africa
Putin’s botched African adventure
The indecorous fight over a dead president’s body
Israel’s prevaricator-in-chief
No one is satisfied with Egypt’s role in Gaza
A haunting new view of Assad’s brutality in Syria
Middle East & Africa | Guns for hire

Putin’s botched African adventure

Two years after Prigozhin’s death, the Wagner Group is in meltdown in
Mali
August 28th 2025

In early August more than 200 crates of manuscripts arrived in Timbuktu,

the city in Mali famous for its ancient scholarship. The papers were
squirrelled away in 2012 to protect them from jihadists. For the ruling junta,
which took power in a coup in May 2021, and the Wagner Group, the
Russian mercenary outfit that came a few months later, the manuscripts’
return is proof of success. They claim the insecurity that has plagued Mali
for more than a decade, and which the West ostensibly did too little to stop,
is at last being tackled.

The reality is different. Security in Mali, as in the rest of the Sahel region
where there have been several coups in recent years, is getting worse. Unlike
in other African countries where they have operated, such as Sudan and the
Central African Republic (CAR), Russians have failed to enrich themselves
by exploiting minerals. But their brutal ways have caused tensions within the
Malian army. These spilled into the open on August 11th when dozens of
soldiers, including generals who had criticised Wagner, were purged. The
saga is a reminder that, for all the worries about Russia’s meddling in Africa,
its approach has severe limitations.

The rise to power of Assimi Goïta, the “interim” president who this year
extended his term until at least 2030, was initially welcomed by Malians fed
up with escalating violence from jihadists and separatists. Many were
attracted by his pledge to assert Malian sovereignty after decades of French
influence. His junta accused France and a UN peacekeeping mission of
being combat-shy. It hoped Wagner would be keener to fight and more
willing to obey Malian command.

The Russians notched up early triumphs. In 2023 they helped the army win
back control of Kidal, a northern city (see map). Yet that was a high point.
Deaths in the country linked to jihadists averaged 3,135 per year from 2022
until 2024, compared with 736 over the previous decade, according to the
Armed Conflict Location & Event Data group (ACLED), a monitor (see
chart). Nearly 2,000 people have already been killed this year, suggesting an
upward trend. JNIM, the pre-eminent jihadist network in the Sahel, is
expanding its footprint. In recent months it has attacked economic hubs such
as Kayes, a town on the road to Dakar, the port capital of Senegal.

This is not solely Wagner’s responsibility. Security was bad when it arrived.
Some 2,000 Russian fighters are in Mali today, compared with some 5,000
French troops across the Sahel at the peak of a French-led anti-jihadist
mission that began winding down in 2021, and 12,000 UN peacekeepers
before the coup. Islamist violence is even worse in neighbouring Burkina
Faso, where few Russians are deployed.

But the way Wagner operates is unsuited to counter-terrorism, as a report

published on August 27th by the Sentry, an American investigative group,
explains. Murdering ordinary Malians, it turns out, is a bad way to win over
ordinary Malians. Informants have dried up. In the past year 80% of civilian
deaths were at the hands of Malian soldiers or Wagner, rather than JNIM,
notes ACLED. “They just kill people [they suspect] without verifying first,”
one soldier told the Sentry. It argues that Wagner runs “open-air prisons” by
blockading towns it believes contain jihadists. Russians have supported a
militia that stands accused of ethnic cleansing. Increasingly, separatists and
jihadists are working together against Wagner and the army.
Nobody hires Russian mercenaries for their love of the Geneva Convention.
But Wagner has angered many in the army. The Sentry’s report says the
group is racist towards Malians, takes army equipment without asking and
defies commands. Russians get priority in evacuations, adding to
disenchantment in the Malian rank-and-file. A military official told the
Sentry that Wagner “are worse than the French, they think my men are more
stupid than them. We have gone from the frying pan to the fire.” Wagner
also seems to be a mediocre fighting force. Last year 84 Russians were
killed by separatist rebels in a battle, after a sandstorm grounded air cover.

Nor has Wagner managed to muscle in on mining in Africa’s second-largest

gold producer. The junta has resisted entreaties to transfer large gold mines
run by Western firms. Instead the regime has used the Russian spectre to
extract more money from the industry that provides more than half of tax
revenues. “Assimi and his team are not fools. We did not reject one invader
to open the door to another one, like they did in CAR,” says an official at the
mining ministry. Wagner’s attempts to grab a smaller-scale “artisanal” sector
have failed as well. Initially it was paid out of Mali’s security budget. Today
the Russian state may be footing at least some of the bill.

Though there is little appetite for a return of the French-allied political elites
toppled five years ago, the soldiers who were purged for complaining about
the Russians were reflecting public sentiment. “I was one of the Malians
who fiercely believed that this Russian presence would change something,”
says an academic. “Today I am really disappointed.” A construction worker
in Bamako, the capital, reckons that “they lost 80% of their popularity
because they cannot lead a country…the social fabric crumbles from day to
day.”

It is less clear whether serious tensions extend to the top of the junta, raising
the prospect of another coup. Some analysts suggest that Mr Goïta wants to
diversify away from Russia (Sadio Camara, the defence minister, has closer
links with the Russians). America may be betting as much. The Trump
administration has sent officials to Bamako and other regional capitals to
discuss the potential for security help and mineral deals. Turkey, a source of
drones, is increasingly influential with Mr Goïta. Gulf states are active, too.
That hints at a problem for Russia. Wagner’s appeal was that it was willing
to fight battles the West or the UN refused. But two years after the death of
Yevgeny Prigozhin, Wagner’s figurehead, the Kremlin is reining it in. In
June its presence in Mali was rebranded as Africa Corps, with a clearer line
of responsibility to Moscow. This was a tacit admission of Wagner’s
shortcomings. The junta may wonder why it should rely on a more risk-
averse Russia, when it could forge closer ties to America or rising middle
powers. When guns are for hire, African governments do not need to renew
their leases.■

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Middle East & Africa | Unburied hatchet

The indecorous fight over a dead president’s body

And what it says about African politics
August 28th 2025

Who owns the body of a dead Zambian president? It is not a question that is
asked very often. But it is vexing the southern African country run by Edgar
Lungu from 2015 to 2021. His family has tried to have him buried in South
Africa, where he died on June 5th. Zambia, led by his political rival,
Hakainde Hichilema, wants him home for a state funeral, a wish endorsed by
South Africa’s highest court on August 26th. The episode underscores the
political significance of funeral rites in Africa.

The Lungu family has resisted entreaties to send the corpse back because it
does not want Mr Hichilema “anywhere near the body”. That reflects a
mutual animus. Lungu had Mr Hichilema jailed on spurious charges. Mr
Hichilema’s administration curtailed Lungu’s post-presidential perks and
charged members of his family with corruption offences (they deny
wrongdoing).

Other motives are at play. The government does not want Lungu’s party to
use his coffin as a campaigning tool in next year’s election. The Lungu
family may also see the location of the burial as a negotiating tool in their
other legal battles. Most bizarrely, Lungu’s political party has suggested that
Mr Hichilema wants to use the body for witchcraft, an unfounded allegation.
“This whole case has gotten out of hand,” sighs an adviser to the president.

And yet Lungu’s case is far from the first involving a cadaver and a power
struggle. After Levy Mwanawasa, another Zambian leader, died in 2008,
parties fought over the use of his coffin at political events. The family of
Robert Mugabe, the Zimbabwean leader who died in 2019, still resists
attempts to move his body from his village to a national monument, perhaps
in the knowledge that his corpse is an asset in their battles with the regime.
The deaths of presidents in Congo and Malawi were kept secret to influence
political successions.

Lungu may be dead. But the dispute over his corpse lives on. ■

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Middle East & Africa | Bibi’s deadly vacillation

Israel’s prevaricator-in-chief
Netanyahu is concerned with both his immediate and long-term political
survival
August 28th 2025

On august 24th, six months after being selected as the new chief of staff of
the Israel Defence Forces (idf), Lieutenant General Eyal Zamir broke
publicly with his government’s policy. On a visit to a naval base, he said the
idf had, in its previous operations in Gaza, “created the conditions for the
release of the hostages”.

His use of the past tense was a pointed message to Binyamin Netanyahu, the
prime minister. Israel’s most senior general opposes new orders he has been
given to occupy Gaza city. He will obey, but he would rather see a ceasefire.
The absence of any clear strategy from Israel’s government has led to
tensions between the idf and Mr Netanyahu’s government throughout the
Gaza war. In recent weeks the prime minister has taken his strategic
prevarication to new levels. That is lethal for Gazans and dangerous for the
hostages. But Mr Netanyahu is driven, as ever, by fears for his own political
survival. Increasingly, he is looking further ahead, to elections due by
October next year.

Ending the war would prompt his allies to abandon him. But the idf’s
opposition makes it hard for him to expand it as much and as quickly as the
far right would like. In early July he told the idf to start preparing a
“humanitarian city”, a tiny corner of southern Gaza where the entire
population of 2.1m would be concentrated while Israel’s troops destroyed
Hamas in the rest of the territory. The idf pushed back, calling the plan
unfeasible and illegal.

Mr Netanyahu changed course, opting for a smaller-scale plan focused on

Gaza city, now home to nearly half the population. General Zamir objected
once again, but was overruled. The idf has launched Operation Gideon’s
Chariots B but so far only manoeuvred on the outskirts of Gaza city. Mr
Netanyahu alternates between urging haste and tolerating delay.

His vacillation is killing Gazans. For over two months his government
blocked all aid from entering the strip. Then it promoted aid hubs run by the
shadowy Gaza Humanitarian Foundation, aimed at circumventing
international aid organisations which Israel claims are captured by Hamas.
Hundreds of hungry Gazans were killed trying to get to the hubs. There is
famine in wide areas of the strip.

Israel has since allowed international aid groups, private companies and
criminal gangs to bring in very limited quantities of food. On August 22nd
the Integrated Food Security Phase Classification, which monitors food
shortages around the world, reported that parts of Gaza have reached famine
levels of “starvation, destitution and death” (Israel has denied this, disputing
the report’s methodology).

The government’s diplomacy has been similarly muddled. For months Israel
has been engaged in indirect talks with Hamas aimed at securing a
temporary ceasefire in Gaza in return for the release of half the hostages.
This would have provided Gazans with some respite from Israel’s attacks,
which have by now killed at least 60,000 people there, mostly civilians. The
negotiations broke down and Mr Netanyahu, who had originally insisted on
a brief ceasefire, now says he will only agree to one that brings all the
hostages home and ends the war on Israel’s terms. A new temporary deal,
brokered by Egypt and Qatar, to which Hamas has agreed, has received short
shrift from his government.

Mr Netanyahu’s focus is again not on peace, but on his own political

survival, both immediate and longer term. His strategy is based on two
things: keeping his far-right coalition together; and hoping that eventually
“victory” in Gaza will revive public trust in his leadership.

So far he has succeeded at the first bit. He has clung to office by continuing
the war and dangling before the ultranationalist parties the prospect of
realising their dream of annexing Gaza and the West Bank. They grumble
that he is not decisive or far-reaching enough, but realise that under any
other prime minister Israel would have stopped fighting in Gaza long ago.

On the second, though, he is failing. The Israeli public seems to have turned
irrevocably against its longest-serving prime minister. Mr Netanyahu was
convinced last year’s devastating campaign against Hizbullah, the heavily
armed Shia militia in Lebanon, and the 12-day war with Iran in June, would
show Israelis he was indispensable. But if anything those short, decisive
wars highlighted the contrast with Gaza, where his government has dragged
Israel into a bloody and unending morass against Hamas, a much weaker
enemy. Three-quarters of Israelis support a deal to save the hostages and end
the war. Hundreds of thousands have taken to the streets in recent days to
demand one.

Mr Netanyahu has paid them little heed. But by October 2026 at the latest,
he will have to fight an election. The polls currently say he will lose. Rather
than adjust course, he is doubling down on his hardline alliance, in the hope
that, even if he fails to win a majority, a fragmented opposition will fail to
form a coalition to oust him. That tactic has worked for him in the past but it
is risky. It is reprehensible that political gamesmanship is Mr Netanyahu’s
main focus, while Israeli hostages remain in captivity, and Gazans starve and
die. ■

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Middle East & Africa | An ailing giant

No one is satisfied with Egypt’s role in Gaza

Weak finances and security fears limit how much it can help with aid and
reconstruction
August 28th 2025

THE famine in Gaza was created by Israel, which has barred or limited
deliveries of food since March. Rather than admit their culpability, though,
Israel’s defenders have spent weeks looking for someone else to blame. A
favoured talking point is that Egypt could ease Gaza’s misery if it simply
allowed more aid into the territory. “Gaza has a border with Egypt,” Eylon
Levy, a former government spokesman, wrote on X, a social-media site.
“This simple fact seems to evade most people who pretend to care about
humanitarian access to Gaza.”

Mr Levy ignored a few simple facts of his own. Since the start of the war,
Israel has insisted on screening any aid that enters Gaza from Egypt. Lorries
idle for weeks in Rafah, an Egyptian border town, before they are allowed to
enter. And though Egypt does border on Gaza, the Palestinians do not
control their side of it. The Israeli army seized it in May 2024.

The accusations are ironic. Egypt has worked with Israel to restrict the flow
of aid into Gaza, only to be criticised by Israel for restricting that same flow.

Egypt is the most populous Arab country and was the first to recognise
Israel. It is the only one to border Gaza. It ought to have a central role in
trying to end the war, deliver aid and plan for reconstruction. Yet it has
struggled to do so. Many Egyptians are furious that their president, Abdel-
Fattah al-Sisi, seems so passive—but some of the reasons are beyond his
control.

Start with the ceasefire negotiations. Egypt has at times tried to wrest them
away from Qatar, the tiny Gulf sheikhdom that has long harboured leaders of
Hamas. The two are rivals: though relations have improved in recent years,
Mr Sisi has not forgotten Qatar’s support for the Muslim Brotherhood-led
government he deposed in a coup in 2013.

When Hamas agreed in August to a 60-day truce—after months of insisting

on a permanent one—it did so in Cairo, not Qatar. Diplomats say the about-
face was partly due to Egyptian pressure (the desperate conditions in Gaza
were also a factor). “They made it clear that Hamas could not get a better
deal,” says one Arab diplomat.

Still, that deal would pause the war, not end it. Egypt can warn Hamas that
Gaza will not be rebuilt if it remains in charge, but it cannot compel the
group’s recalcitrant leaders to disarm and cede power, which Israel says is a
prerequisite for a lasting peace. Nor can it convince Binyamin Netanyahu,
Israel’s prime minister, to risk his coalition by agreeing to end the war.

A second obstacle is financial. Last year the United Arab Emirates sent
$678m-worth of aid to Gaza. It was the largest single contributor, accounting
for 19% of aid tracked by the UN. Egypt, by contrast, has served more as a
facilitator than a donor: with its crushing public debt (87% of GDP), it
cannot match the Gulf states’ largesse.
In March Egypt convinced Arab leaders to endorse its plan for rebuilding
Gaza. Parts of the scheme are unrealistic: it envisions clearing 53m tonnes of
rubble in just two years, for example. Still, it was the first serious attempt to
plan for Gaza’s post-war future. Yet here too, Egypt may find itself relegated
to a supporting role. Its engineers may be eager to help rebuild Gaza.
Someone else will have to pay for it.

Some Egyptians want their government to be more forceful—to send aid to

Gaza without Israeli inspections, for a start. Egypt says it cannot.
Agreements with Israel and the Palestinian Authority tie Egypt into the
Israeli screening regime. Mr Sisi no doubt worries that a tougher stance
towards Israel would upset his Western backers, particularly Donald Trump.

Opening the border would also exacerbate Egypt’s own security concerns.
Mr Sisi would like the Rafah crossing to be open, but only in one direction.
Egypt has taken in more than 100,000 Gazans, many of whom paid
enormous fees to cross the border. It fears that a chaotic border would allow
many more to enter—Hamas militants among them. It also worries about
being saddled with a long-term refugee crisis (Egypt already hosts around
1m people displaced from other conflicts).

It is an unenviable position. Egypt has offered haven to some Gazans,

facilitated the delivery of 550,000 tonnes of aid and helped to implement
truces and hostage deals. That is far more than most Arab states have done
for Gaza. But it is not enough to satisfy many Egyptians, who are incensed
that the war continues—nor, it seems, to satisfy critics in Israel. ■

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Middle East & Africa | The architecture of Syria’s prisons

A haunting new view of Assad’s brutality in Syria

It could one day be used in trials against members of the regime
August 28th 2025

At around four o’clock in the morning on December 8th last year, gunmen
stormed Sednaya prison, north of Damascus. They shot open cell doors,
telling inmates that they had been freed. Some cowered in place, fearing a
final trick by a crumbling regime, designed to lure them to their deaths.

Since Bashar al-Assad’s fall, Syrians have begun to document and reckon
with the half-century of repression that hollowed out their country. At the
heart of that story are Syria’s prisons, none more infamous than Sednaya.

A new digital project, the Syria Prisons Museum, is part of that effort.
Created by a group of Syrian journalists and activists, the interactive website
presents a comprehensive account of Sednaya’s grim role in the Assad
regime. Part memorial, part forensic archive, it is an immersive, harrowing
experience. A 360° video tour takes the viewer through the execution rooms.
Documents uncover the macabre euphemisms used for prisoners’ deaths. In
video testimonies, surviving inmates recall the cruelty of the guards.

Both Hafez al-Assad and his son used Sednaya to lock up dissidents of all
kinds, from communists to jihadists. But as Syria’s peaceful uprising
morphed into civil war, it was as much a place of execution as of
incarceration.

For the regime’s opponents, Sednaya was often the end of a labyrinthine
journey through Syria’s network of torture and interrogation centres. The
project details that extensively. Most inmates had been sentenced to death or
indefinite detention. Execution was often by hanging, carried out in the early
hours of the morning. Prisoners were sometimes starved in the days before;
it meant they died more easily. If overcrowding meant hangings were not
possible, guards often beat inmates to death or strangled them.

Nine months since the collapse of Mr Assad’s rule, hundreds of thousands of

Syrians are still searching for missing relatives. Little is understood about
the workings of the regime’s machinery of repression: its rules, its
hierarchies or its logic. This archive offers some clues. It lists names of the
officers who oversaw Sednaya, and describes in detail the legal process—or
lack thereof—through which some people ended up there.

The project builds on earlier work by the same team, which mapped the
detention system of the Islamic State (is). That archive was later used as
evidence in trials of is members in Europe. If the Syrian regime’s thugs are
ever held to account, those working on the prisons project could be called on
to testify.

This website will soon be available to all, from the families of Syrians still
missing to human-rights lawyers and historians. Perhaps with it, a measure
of accountability may one day follow. ■

The Syria Prisons Museum website will go live on September 15th.

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Europe
Time for some Merz-Macron magic
Ukraine shows off a deadly new cruise missile
After a year of chaos, the Dutch hope to return to real issues
Why Poland is becoming less central European and more Baltic
Ten years later, “Wir schaffen das” has proved a pyrrhic victory
Europe | The Franco-German relationship

Time for some Merz-Macron magic

The leaders of France and Germany meet to kickstart Europe
August 28th 2025

WHEN THE French and German governments gather in the Mediterranean

port of Toulon on August 29th, the meeting will be heavy in symbolism. It
will be the two countries’ 25th joint cabinet meeting, a marker of the
importance both place on their mutual ties. Toulon is a naval base, a key
strategic point for the European Union’s only nuclear-armed power. At a
crucial moment for Europe’s security, the event reaffirms what is still the
eu’s indispensable bilateral relationship.

Yet deep uncertainty will hang over the event. On August 25th François
Bayrou, France’s prime minister, called a vote of confidence for September
8th over his debt-reduction plans. His government may well fall. Emmanuel
Macron will remain in charge of foreign affairs regardless. But instability at
home makes the need to tighten the link between the leaders—Mr Macron
and Friedrich Merz, Germany’s chancellor—harder yet more urgent.

Happily, there are propitious signs for the renewal of a relationship that
stalled under Olaf Scholz, Germany’s chancellor until May. French dismay
over Mr Scholz’s decision to prioritise America over Europe, and a poor
personal relationship between the two men, saw the Franco-German “motor”
run out of juice. By contrast, Mr Merz, whose Christian Democrats (CDU)
unseated Mr Scholz in February’s German election, invested early in Mr
Macron. His bold, sometimes surprising approach to policymaking—seen in
his decision to loosen Germany’s debt rules to fund a huge rise in defence
spending—has impressed his French partner. The two have made a great
show of their bond, issuing joint op-eds and travelling together to global
hotspots such as Washington and Kyiv.

Last month Mr Merz, who has an eye for ceremony his predecessor lacked,
ensured veal saddle and chanterelles were on the menu when he hosted Mr
Macron at a villa on the outskirts of Berlin. On August 28th Mr Macron will
return the favour, treating Mr Merz to dinner at his summer residence, the
medieval fort of Brégançon on the Med. So far the chemistry between the
two leaders, both former financiers who speak English together, seems
unusually good. In private Mr Macron calls him “direct, simple, frank,
aligned”. Mr Merz has celebrated their “deep personal bond”.

Besides the geopolitical crises of the moment—Ukraine, Gaza, Iran—two

broad subjects will be on the agenda in Toulon: improving European
competitiveness, and bolstering defence and security co-operation. The
countries will announce a raft of joint “lighthouse projects” in areas like ai
and quantum computing. A meeting of the revamped Franco-German
defence and security council will also take place.

Mr Merz delighted French observers when he declared in February that

Europe must reduce its dependence on America, apparently embracing Mr
Macron’s long-standing ambitions for European “strategic autonomy”.
Among other things, a quiet conversation has begun on the extension of
France’s nuclear deterrent to the rest of Europe. German officials admit
freely that merely discussing the details of deterrence is helpful in forging
the strategic culture they have long lacked.
But whether Germany is ready to unshackle itself from America’s security
guarantees, and its off-the-shelf military kit, remains to be seen. “There is
huge potential for disappointment on the French side,” says Jacob Ross at
the German Council on Foreign Relations. In Ukraine, as a debate over
security guarantees gathers pace, Germany is unlikely to make a big direct
contribution to policing any ceasefire. But the hope is that its financial and
logistical support for Ukraine can justify the place it has sought in the
“coalition of the willing” spearheaded by France and Britain.

The two leaders also know they need to broaden their alliances. France and
Germany already work well with Britain on dealing with Iran’s nuclear
programme. They now want to revitalise the “Weimar triangle” with Poland;
this week they joined Donald Tusk, the Polish prime minister, on a visit to
Moldova to back its embattled pro-Western government. “Given the
geopolitical challenges today, the Russian threat and the Trump
administration, the Franco-German relationship alone is now insufficient,”
says Sébastien Maillard of the Institut Jacques Delors, a think-tank.

Inside the eu the pair appear to agree on the importance of slashing red tape
and reducing the still-considerable barriers to trade, especially in services,
within its single market. Progress on this in recent years has been glacial.
They are slowly converging on the trade and security challenges presented
by China, too.

Yet there are several points of disagreement. Mr Macron’s unwillingness to

approve the eu’s trade deal with Mercosur, a Latin American bloc, has
infuriated many in Berlin. France insists on amending the agreement to
protect European farmers. The German view is that Europe, thumped by
American tariffs, must seek partners wherever it can find them. Brussels
insiders think a workaround will be crafted that provides Mr Macron with
the cover he needs to wave the deal through.

A yet trickier source of friction is over two military grands projets with
troubled histories: the Main Ground Combat System, a next-generation
battle tank, and, especially, the Future Combat Air System (fcas), a complex
aviation initiative interlacing a fighter jet, drones and a “combat cloud”
communications system. Tensions have risen over what the Germans regard
as a power-grab by French firms; last week the defence ministry warned that
the jet was imperilled by demands from French industry for sole leadership.
The two defence ministers have vowed to iron out their differences by the
year’s end. But it is not obvious how political will can resolve industrial
mistrust. French officials insist there is “no plan B”. But scepticism over the
fcas remains rife in Berlin.

Ever since Konrad Adenauer and Charles de Gaulle signed the Elysée Treaty
in 1963, vowing to build an integrated Europe upon their post-war link, the
strength of the relationship has depended on the respective leaders’ ability to
overcome their differences. Today the two leaders not only share a desire to
make the tie work, but understand each other’s domestic constraints. Mr
Merz is unlikely to give voice to his government’s concerns over France’s
unstable public-debt load, for example. Mr Macron has eased his calls for
Germany to back a programme of common eu debt for defence.

But political capital as well as goodwill is needed, and neither leader has
much. Less than four months in, Mr Merz’s hold on his coalition with the
Social Democrats is wobbling, his break with fiscal orthodoxy has irritated
many in his own ranks, and the hard-right Alternative for Germany is
nipping at his heels. Mr Macron, whose presidential term runs until 2027, is
in an even deeper hole. If his government falls, France will lose its third
prime minister in just over a year.

Such troubles will not help Mr Macron and Mr Merz in their quest to make
something of their renewed partnership, but they render the effort even more
vital. “Our shared strategic interest outweighs our national differences,” says
Roland Theis, a cdu mp. Europe is a fretful and vulnerable place right now,
and needs a strong Franco-German link more than ever. The two leaders
cannot afford to get it wrong. ■

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Europe | The flight of the flamingo

Ukraine shows off a deadly new cruise missile

But sceptics wonder if it is too good to be true
August 28th 2025

Earlier this month Ukraine unveiled a new cruise missile. With a declared
range of 3,000km and a payload of over a tonne, the Flamingo packs a
punch, on paper. If even half the claims hold, it has the potential to deal
serious damage to targets almost anywhere in European Russia. Appearing
in the middle of lumbering peace talks, the bird may help encourage
Vladimir Putin to lay down arms. All the more striking, therefore, that the
process of entering mass-production took just nine months, rather than the
usual years or even decades, and was led by a management team that claims
to have had no previous defence-industry experience. “I was very sceptical
at first,” says one of the officials overseeing it, “but when I saw the missiles,
I was stunned.”
Representatives for Fire Point, the company behind Flamingo, say the
missile began life as a napkin scribble in late 2024. At the time Ukraine was
desperate to build a long-range deterrent. In September that year Volodymyr
Zelensky made a bold and then-secret request to Joe Biden for American
Tomahawk cruise missiles as part of his “Victory Plan”; the Biden
administration replied sharply in the negative. Few dared believe that
Ukraine’s domestic missile programme could produce the goods fast
enough.

Fire Point, a new private company, says it was able to confound expectations
by going back to basics. A representative says their engineers were inspired
by historic models like the German V-1 and the Soviet Strizh, both of which
mirror the Flamingo in mounting the engine above the main body. The name
began as an in-house nod to the women in top positions: the test prototypes
were even painted pink.

Much of what is known about the missile comes from scraps; grainy videos
and the specifications of an apparently identical “FP5” missile, presented at
a weapons show in the United Arab Emirates in February. It isn’t clear why
the missile was presented there, or how exactly Fire Point is related to the
Emirati outfit that put it on show. A British associate of the same outfit is
already known to be supplying weapons to Ukraine. A spokesman for Fire
Point claims the company cannot comment for security reasons. “Our idea in
February was successful—that’s all I can say.”

The production process appears to be at least partially carried out abroad,

but “over 90%”, the company says, of final assembly is in secret sites
dispersed throughout Ukraine. The body is made of fibreglass, making it
harder to spot than metal would be. The engine appears to be an AI-25
turbofan produced by the Motor Sich design bureau in Zaporizhia province,
a frequent target of Russian attacks and so a potential bottleneck.
Production, now at one missile a day, is promised to climb to seven a day by
October.

Developed so fast, and meeting Ukraine’s defence needs almost exactly, the
missile seems too good to be true. Some competitors wonder if it is just that.
Rumours persist over alleged proximity to the presidential office, non-
competitive financing, and whether the missile is even Ukrainian. The
company denies all of it. The price tag of “under €1m” ($1.2m) per missile,
competitive in the world of cruise missiles, is still a big outlay for Ukraine,
given the volumes that will be needed and doubts about the Flamingo’s real
performance. The missile is bulky and climbs steeply at launch, making it
more visible to enemy radar, so the assumption is that a large percentage of
them will be spotted and intercepted. “At full range, a Russian fighter jet has
enough time to be taking smoking breaks,” quips a competitor.

Yet Kostiantyn Kryvolap, an aviation expert, is confident that the missile

will be able to exploit gaps in Russia’s weakening air defences. “Ukraine is
renowned for its creative, combined attacks to overwhelm defences, and
these will probably be exactly that. In time, Russia will suffer heavier
destruction.” Already, slower Ukrainian drones, more vulnerable to jamming
and defence measures, have taken at least 13% of Russia’s oil-refining
capacity offline.

The ultimate test will be on the battlefield. Fire Point admits that its missile
has yet to be widely deployed, but insists that the enemy will be shocked
when it is. Russian military bloggers, at any rate, reined in their usual
swagger when discussing the new threat. One advised creating a round-the-
clock air-monitoring mission using Russia’s newest and most capable fighter
jets. Others have begun to co-ordinate frantic searches to find the missiles
and their makers inside Ukraine. ■

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missile
Europe | Yet another election

After a year of chaos, the Dutch hope to return to

real issues
Voters want to talk about housing, but Geert Wilders wants to talk about
asylum-seekers
August 28th 2025

ANYONE CAN quit a government, but it is a neat trick to quit one that has
already quit. On August 22nd Caspar Veldkamp, the Dutch foreign minister,
resigned after other cabinet members frustrated his modest efforts to toughen
Dutch policy towards Israel. The four other ministers from his party, New
Social Contract (NSC), left too. Yet technically they had already stepped
down: the coalition fell on June 3rd, and elections are scheduled for October
29th. NSC was leaving the caretaker government meant to run the country
until a new one is formed.
No party in the Netherlands’ history had ever done this, and it was a fitting
coda for the outgoing government, a chaotic coalition of centre-right and
hard-right parties that lasted less than a year. The two remaining parties in
the rump cabinet, the Liberals (VVD) and the Farmer-Citizen Movement,
are scrambling to find replacement ministers. Together they have just 32
deputies in the 150-seat parliament. In September they must persuade other
parties to help pass a budget, just when politicians are least co-operative:
before an election.

The campaign’s first shot was fired by Geert Wilders, a populist who has
called Islam “not a religion” but a “dangerous and violent ideology”, and
who had brought down the government by pulling his Party for Freedom
(PVV) out of the coalition. In early August he posted a bit of 1930s-style
propaganda on X, a messaging platform: an image of a female face divided
in two, with on one side a smiling blonde labelled PVV, and on the other a
grimacing matron in a hijab labelled PvdA, for the Labour Party. Anti-
discrimination groups accused Mr Wilders of using “Nazi visual language”;
he denies the charges.

It was a return to form for Mr Wilders, who was convicted on hate-speech

charges after promising in 2014 to deport people with Moroccan
backgrounds. In the last election in 2023 he moderated his tone, leading the
media to dub him “Geert Milders”. He came first with 23.5% of the vote.
But his party accomplished little in power, even on his signature issue of
limiting immigration. After he quit the coalition, almost every other party
eschewed governing with him in future. Hence the savage campaign, says
Nadia Bouras, a Dutch historian: “He’s always been racist, but now he has
nothing to lose.”

Immigration is only the second-most important topic in the election,

according to polls. The most important is housing. The issue is not so much
price as scarcity. Public-housing corporations (about 30% of all housing)
build only half as many homes as they promise to each year, and waiting-
lists in Amsterdam are a decade long. Tighter limits on rent-controlled
apartments introduced in 2023 led many landlords to sell those properties,
inflating demand in the uncontrolled sector.
Many economists say public-housing corporations build fewer homes
because of a shift since the 1990s to a hotch-potch of regulations and
subsidies that make building unprofitable for them. “We have the worst of
the market and the worst of the state,” says Bas Jacobs of the Vrije
Universiteit Amsterdam. Political parties are promising to build more, but
mainly by raising spending and loosening permits rather than changing the
system. “We’re going to free up billions for public-housing corporations,”
says Frans Timmermans, leader of the GreenLeft-Labour Party.

GreenLeft-Labour hails from the ongoing fusion of the two big parties of the
left. It is polling at about 19% and rivalling the PVV for first place. The
VVD has been sliding, punished for its part in the hapless coalition
government. Also contending for the top slot are the Christian Democrats,
once the country’s biggest party but more recently written off for dead. An
amiable new leader, Henri Bontenbal, has won back many voters from the
collapsing NSC.

No party is seen as “owning” the housing issue, says Simon Otjes of Leiden
University. That is leading to lots of competition. The pvv’s strategy is to
blame shortages on asylum-seekers. Of the public-housing units that become
available, 7% go to refugees. But fixing the huge construction shortfall
seems more important. ■

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to-return-to-real-issues
Europe | Winds of change

Why Poland is becoming less central European

and more Baltic
Thanks to energy and security concerns, its centre of gravity is shifting
north
August 28th 2025

AT OVER 260 metres in height, the wind turbines rising out of the Baltic
Sea, north of Leba, a Polish resort town, are among the world’s biggest.
Installed more than 20km from the coast, they are hardly an eyesore, unless
you have a strong pair of binoculars or are named Donald Trump, or both.
Beachgoers in Leba seem more bothered by the unseasonably cold weather.

The turbines, part of a wind farm project called Baltic Power, are expected
to go online next year and generate enough energy to power 1.5m homes.
They are also markers in a changing economic and geopolitical landscape.
Poland has long been viewed as a central European country. But as its green
transition begins to take hold, and the fallout from Russia’s war in Ukraine
settles across the region, the country’s centre of gravity is starting to move
north, towards the Baltic Sea.

Energy is leading the way. Poland’s south, home to most of its coal mines
and heavy industry, has long been the country’s engine room. That is
changing. Poland plans to phase out coal by 2049, so as to align with EU
clean-energy targets. Increasing mining costs are also helping the economy
go green. In June of this year, Poland’s renewables generated more power
than coal for the first time (see chart). Poland is increasingly looking to the
Baltic coast to meet its energy needs. The country has already boosted
capacity at its only LNG (liquefied natural gas) terminal, in Swinoujscie, to
8.3bn cubic metres (bcm) per year, and plans to open a second one, capable
of handing another 6.1bcm, in Gdansk in 2028. A pipeline stretching from
Norway through Denmark, launched in 2022, can provide up to 10bcm more
gas. The sea is also helping Poland go nuclear. The Baltic’s waters might be
too cold for Club Med regulars. But they are perfect for reactor cores, which
is why Poland’s first nuclear plant, set to open in the 2030s, will be based on
the coast.

Wind power, which now accounts for 14.7% of Poland’s energy mix, up
from 0.3% two decades ago, is also moving north, and offshore. Baltic wind
farms, including the ones under construction today, are expected to reach 18
gigawatts by 2040, according to a report published by Poland’s coalition
government earlier this summer. They will not come cheap. Offshore wind,
the biggest energy investment programme in Poland’s modern history, may
cost more than $140bn over the next 15 years.

To understand Poland’s northern pivot, it helps to look east. Poland began to

diversify away from Russian energy long before the invasion of Ukraine.
Since then, it has weaned itself off Russian oil and gas entirely. That means
having to look for new suppliers and investing in other sources of energy.
“The Baltic direction is not a matter of choice,” says Zuzanna Nowak of
Opportunity, a foreign-policy think-tank in Warsaw. “This is practically the
only way we can import energy. The sea is becoming our window to the
world.”

The war, as well as Western sanctions against Russia and the Baltic Sea’s
transformation into a geopolitical flashpoint, has boosted the importance of
Poland’s ports, which have been booming. Shipments have nearly doubled in
the past decade. Gdansk has turned into the EU’s fifth-busiest commercial
port. The ones in Gdynia and Swinoujscie have some of Europe’s highest
growth potential, according to Accolade, an investment group.

Gdynia’s port has also become a key NATO hub for military equipment
destined for Ukraine and American bases. “The Baltic and the whole
northern coast used to be considered a periphery,” says Katarzyna
Gruszecka-Spychala, deputy president of the port’s board. “The threat from
Russia changed everything.”

That includes foreign policy. For decades Poland looked to its central
European neighbours as key regional allies. No longer. Relations with
Hungary and Slovakia, whose leaders have a soft spot for Russia, are badly
frayed. The same may soon be true of the Czech Republic, assuming Andrej
Babis, a pro-Russian populist, ends up as prime minister after elections in
October. The Visegrad Group, the main vehicle for co-operation between the
four central European countries, is fast becoming irrelevant. Poland has
instead begun to close ranks, on maritime security, energy and Russia, with
the Baltic and the Nordic countries, including NATO newcomers Finland
and Sweden. Rail Baltica, a $28bn project, will connect Poland with
Lithuania, Latvia and Estonia.

Still, the coastal economy has some catching up to do. The region lags
behind the south, and Warsaw, the country’s capital, where incomes are
highest. Heavy industry and large data centres are reluctant to move north,
closer to the new sources of energy, admits an official in Warsaw. Down the
line, however, the new investments are bound to drive local growth.

In domestic politics, winds are blowing from the north too. Donald Tusk, the
prime minister, comes from Gdansk. The country’s new president, Karol
Nawrocki, backed by the nationalist Law and Justice (PiS) party, also cut his
teeth, perhaps literally given his past as a football hooligan, on that city’s
streets.

PiS, whose backing is strongest in the east and the south of the country, and
which has long embraced the coal industry, may prevail in elections to
parliament in 2027. But even if there is to be a new government, it will most
probably stay committed to the Baltic on energy and foreign policy. Poland’s
northerly course appears to be fixed. ■

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european-and-more-baltic
Europe | Charlemagne

Ten years later, “Wir schaffen das” has proved a

pyrrhic victory
The providential folly of Angela Merkel’s migration policy
August 28th 2025

It was the worst of policies, it was the best of policies; it may not even have
been intended as a policy at all. In late summer 2015 as a tide of Syrians,
Afghans and others marched towards Europe in search of refuge, Angela
Merkel announced that Germany would, in effect, take them all in. The
move startled the chancellor’s critics and allies alike. By upending migration
policy, had the methodical-to-the-point-of-obstructive leader revealed a rash
streak on perhaps the most fraught topic in European politics? Mrs Merkel’s
answer to both fans and naysayers came in the form of a phrase that came to
mark her 16 years as chancellor: Wir schaffen das, We can handle this. Over
1m migrants soon made Germany their home. A decade later Mrs Merkel
has been proved right, but in a pyrrhic sort of way. Germany did manage,
and better than anyone might have expected. But the costs of doing so have
mightily strengthened her political opponents.

The run-up to the anniversary of Mrs Merkel’s proclamation on August 31st

was marked by a civic jolt. The Alternative for Germany (AfD), a party
marked by such deep-seated xenophobia that the country’s security services
have designated it as “extremist”, topped some national polls. (In 2015 it had
been a marginal political force too small to get into parliament.) To critics of
Wir schaffen das that is the upshot of what they see as Mrs Merkel’s naive
kindness to outsiders. Yes, of course Germany could muddle through, as
could any rich country of over 80m people taking in a large wave of
migrants. But many of the Germans made to do the muddling were not the
well-off liberal types on hand to welcome Syrians at train stations with teddy
bears and flowers. Rather, the costs fell on those living far from the
fashionable bits of Berlin and Munich, whose kids’ classmates now spoke no
German. They had expected the state to look out for them, but instead felt
patronised by their own chancellor. Today seven in ten Germans feel the
state is overwhelmed. The visceral feeling that the authorities were losing
control—the stuff of populist politicians’ rhetoric, as Britons well know—
took root in 2015.

Those who cheered Mrs Merkel’s approach at the time can feel some
vindication too. For them the Willkommenskultur of that summer was an act
of national redemption, a moral feather in the German cap. Forget grubby
politicking, this had been a case of a leader following her compass, and
taking the country along with her. The costs were high—all things worth
doing have a cost—but not unmanageable, just as she had said. Doomsday
predictions of migrants being on benefits for decades, hobbling the welfare
state at the expense of the native-born, proved wide of the mark. Recent data
show that around two-thirds of the migrant intake of 2015 now work, not far
from the employment rates of native-born Germans (although migrant
women have not fared as well). Though costly in terms of benefits,
newcomers helped alleviate firms’ concerns of a labour shortage in the
German economy.

It wasn’t just Germans, old and new, whom Mrs Merkel had swept up in her
bid to welcome the world’s downtrodden. Europe had helped Germany
recover from the moral abyss of the second world war, then permitted its
unification in 1991. Whether or not she intended it that way, Mrs Merkel
was seen as repaying the favour. For the throwing open of borders was a
boon not just to migrants, but to Germany’s neighbours, who had no appetite
for dealing with the incoming huddled masses. Now they could send them to
Germany instead; Hungary’s Viktor Orban helpfully put on buses to help
ferry the migrants northward.

Here, Mrs Merkel miscalculated. She had described dealing with migrants as
“the next great European project”, the kind of language used for the creation
of the euro or the Schengen passport-free travel zone. But demands from
Germany that other European Union countries help out by taking their “fair
share” of migrants fell on deaf ears. The upshot was that Germany partly
reinstated the very border controls that Schengen had abolished. Others
followed in time; these days passport checks are rife within the zone. And
there was a grubby underside to Mrs Merkel’s principled stand, when she
concluded that Germany could not take in thousands of refugees a day
indefinitely. The only way to stem the flow of migrants was, in effect, to
bribe Europe’s neighbours, notably Turkey, to keep Syrians and others on
their territory rather than let them wander to the EU. That has resulted in the
bloc toadying to strongmen such as Recep Tayyip Erdogan, when their
authoritarian ways should have been called out.

Given the shrill tone around migration, it can be hard to draw a nuanced
conclusion. It is all too easy to draw wrong ones, however. Pinning the rise
of the AfD purely on the events of 2015 is one such case. Even Mrs Merkel
has admitted that her “polarising” stand a decade ago had helped the party’s
rise. But it was not the only factor. The party’s ideological allies are leading
in polls across Europe, including in France and Italy. Germany has a unique
history, but it was never likely to be entirely spared the wave of hard-right
populism that has enveloped much of the continent.

However one feels about Wir schaffen das, it has aged rather better than Mrs
Merkel’s policies that allowed the German economy to become dependent
on gas from Russia and exports to China, not to mention her rash shutting-
down of its nuclear power plants. Yet a decade on, not much remains of her
can-do spirit of 2015. Mrs Merkel’s own party, back in power, has disowned
her approach and tightened Germany’s asylum rules. Europe is
implementing a “migration pact” that treats asylum-seekers far less kindly. It
now looks as though Mrs Merkel spent her political capital on a gamble
whose payout turned out to be fleeting. Does that make it a blunder?
Perhaps; but a generous and humane one. ■

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proved-a-pyrrhic-victory
Britain
The choices facing Britain’s next MI6 chief
Hansard shows what it takes to put democracy on the record
In some ways, rural Britain is changing faster than its cities
The world’s oldest daily radio serial on England’s new rural life
Quietly, Britain is moving closer to EU rules
The polycrisis theory of Brexit
Britain | On His Majesty’s Stretched Service

The choices facing Britain’s next MI6 chief

Human espionage has never been harder, costlier—or more important
August 28th 2025

IN THE EARLY 1990s, with the cold war over and the Russian threat
seemingly gone, Sir Robert Fellowes, the private secretary to Queen
Elizabeth II, was lunching with Sir Gerry Warner, the deputy chief of MI6.
“What shall I tell Her Majesty her Secret Intelligence Service [SIS] is for?”
he asked. “Please tell her”, replied Sir Gerry, “it is the last penumbra of her
Empire.” Later that decade another MI6 officer described Britain’s
aspiration to global intelligence as “the itch after the amputation”.

When Blaise Metreweli takes over as the 18th chief of MI6 on October 1st,
succeeding Sir Richard Moore, she is unlikely to face similar attitudes.
Britain’s intelligence agencies are riding high, having provided early and
unambiguous warning of Russia’s invasion of Ukraine. There is no shortage
of threats. This year the single intelligence account, which sets budgets for
Britain’s three main spy agencies, was given its largest boost in almost a
decade. Surveys show that, much like the armed forces, the agencies are
highly trusted (though poorly understood) by the public.

Yet MI6 also stands at a historical juncture. Traditional espionage is

becoming harder even as there is much more that needs spying on. The
distinctions between human and technical intelligence are ever blurrier. And
bringing human spies into the digital age is an expensive business.

Start with the basics. MI6 is a human-intelligence (HUMINT) service. Put

simply: “We recruit agents to spy for us.” It steals secrets for three purposes:
to protect national security (eg, how will Vladimir Putin approach peace
talks?), for economic well-being (what is India’s position in trade
negotiations?) and to tackle serious crime. Its main job is to inform
policymakers. It has a lesser-known mandate for disruption of threats—say,
feeding dud components into Iran’s nuclear supply chain.

At its heart are case officers: the people who recruit and run agents. Many
work out of embassies, posing as diplomats; others travel abroad under an
alias, with no diplomatic immunity should they be unmasked. Around them
is a web of other officers and experts, who help identify potential targets,
plan how they might be approached, build robust cover stories and study
foreign intelligence services. The raw intelligence that they collect is fed
into the Joint Intelligence Organisation, which combines it with other data,
such as intercepted communications and press reports, to produce “all
source” reports that go to the prime minister and others.

For Ms Metreweli, a Cambridge-educated career intelligence officer who

spent much of her working life in the Middle East, the first challenge is
where to direct her agency’s efforts. Formally, priorities are set by the
government, but MI6 has a lot of influence in shaping those. Its top priority
is now China, whose spy agencies dwarf British ones and increasingly match
them for skill. Russian intelligence services, rebuilding after mass
expulsions from Europe, are more and more active in sabotage and
subversion. Iran’s nuclear programme is a key concern, with inspectors
kicked out of the country following American and Israeli strikes earlier this
year.
Emerging technology is a growing challenge. Intelligence on China’s chips,
ai models and data centres is becoming vital. Breakthroughs in quantum
computing abroad could radically affect the security of encrypted data at
home. There is not enough money, nor enough spies, to do it all. “Do you
get out of Africa or the Americas?” asks one insider. “Is that wise?”

The second question is how to prioritise not just among targets, but also
tasks. A rising one is counter-intelligence: catching spies working for
foreign services, ideally by penetrating them. “The intelligence community
is less prepared for the growing importance of counter-intelligence than it
should be, after two decades of focusing on terrorism and insurgency,” says
Philip Davies of Brunel University, the author of a book on MI6’s structure.
“SIS is going to have to go back to a cold-war model of operating.” Ms
Metreweli is well placed for this: as well as her recent history as head of Q
branch, which deals with technology, she was director of MI5’s K branch,
which counters subversion.

There is also, says Mr Davies, “a lot more thinking” under way about MI6’s
role in disruptive action. MI6 has never had a large in-house paramilitary
capacity like the CIA. But it has worked closely with the Special Air
Service, a special-forces unit. MI6 is part of the National Cyber Force,
which conducts offensive cyber operations. In recent months Sir Richard has
repeatedly alluded to that aspect of the agency’s work. “We cherish our
heritage of covert action,” he said in Paris in November, “which we keep
alive today in helping Ukraine resist the Russian invasion.” One former
intelligence officer points to Mossad’s involvement in Israel’s war against
Iran as an example of how MI6 might need to integrate more deeply with the
armed forces in wartime.

A third debate is how to build a HUMINT service for the digital age. “It’s
never been more difficult to run agents because of what they look like in big
data,” says one person familiar with these efforts. The cost of operating
covertly—building aliases that are robust to digital scrutiny, for instance—
has risen exponentially since Ms Metreweli joined the service in 1999. That
is one reason why the ratio of HUMINT to signals-intelligence (SIGINT)
material flowing to British intelligence analysts has tilted much further in
the latter’s favour over the past decade.
That does not mean old-fashioned agent-running no longer matters. The
profusion of data on individuals, companies and countries—and AI-enabled
tools to sift through it—can turbocharge the process of scoping out agents or
finding leads. Yet law and red tape have meant that it is often easier for
outsiders to use publicly available data than for spooks. In 2023 GCHQ,
Britain’s SIGINT agency, noted that it would have taken the agency weeks
to acquire the same data to train a particular model that anyone else could
have downloaded in hours. In April the Investigatory Powers Act of 2016
was updated to ease this problem.

Storing data, training AI models and running them requires huge amounts of
computing power that is designed to handle highly secret material. The IT
systems in Britain’s spy agencies are just as ropey as those in other
government departments, with new systems built on top of ageing ones.
“The risk is that secret cloud servers become the nuclear deterrent of the
intelligence world,” says a source familiar with Whitehall budget debates,
referring to the way nuclear spending has cannibalised the rest of the
defence budget.

The technological turn in human espionage is also reshaping how MI6

relates to its sister agencies. Each agency has long supported the other—MI6
providing code-breaking material to GCHQ, for instance, and GCHQ
drawing on decrypted cables to flag up potential Soviet spies—but the
relationship is “more connected than ever before”, says a source. MI6 needs
GCHQ to access a would-be target’s fitness tracker; GCHQ needs MI6 to
slip implants into kit headed to an Iranian nuclear site.

“There are arguments to be made that if the intelligence services were being
created from scratch now, we wouldn’t have a separate HUMINT versus
SIGINT agency,” suggests Rory Cormac, an expert at the University of
Nottingham. “The organisational divide is a relic of a bygone age.”

Even so, the ethos of the case officer remains paramount for SIS. Most of
the CIA’s directors have been generals and admirals, lawyers and politicians.
Only two operational officers have led it in the past 50 years. In contrast,
MI6 has not been led by an outsider in that same period. “It’s a moment for
the three agencies to also remember they each have unique DNA,” says
another intelligence professional. “And for Vauxhall,” he says, referring to
MI6’s location in south London, “it is that ability to build those networks
and develop human agents. That’s their thing.” ■

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chief
Britain | Britain’s note-takers

Hansard shows what it takes to put democracy on

the record
Even in an age of artificial intelligence, it’s harder than you might think
August 28th 2025

The chute, tucked behind an oak-panelled door, whisks messages down to

the House of Commons. This is how Hansard staff, who record every
sentence spoken publicly in Parliament, communicate with MPs during
debates. In goes a scribbled note, asking for clarification on a word or
phrase. An official creeps across the chamber to hand it to the MP. The
answer is hastily sent back upstairs. Staff have minutes to file their account,
with no mistakes.

Hansard is a quirky institution within a quirky institution. Founded in 1803,

and named after a family of printers, it is treated as the gospel of what was
said in Parliament. But an “um” or “ah” can subtly change the meaning of a
sentence. So can emphasis and tone—or a wagging finger or raised eyebrow.
In deciding how to record such things, Hansard shapes the collective
memory.

In the Commons reporters work in five- or ten-minute “turns”. They sit

hunched in the press gallery noting anything that might need checking. (Old
hands recognise members from the backs of their heads.) They then rush to
their desks, plug in headphones and work on the write-up. A key guideline
says the current speaker has the floor and everyone else should be ignored.

Sometimes flexibility is required. In 2019 semi-naked climate protesters

glued themselves to glass panels overlooking the chamber. That merited
three uses of “[Interruption.]”, previously deployed for an insistent housefly
and a volley of horse manure.

Hansard has just hired six trainees. They will start with less intense tasks,
such as note-taking in committee rooms. After six months they should earn a
diploma in parliamentary reporting and eventually get to the Commons.

Will technology shake up their work? The team is cautiously embracing AI

for initial transcription. Jack Homer, Hansard’s editor, says the heart of the
job is making subtle editorial judgments. And he believes only humans can
do that. ■

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democracy-on-the-record
Britain | The churning countryside

In some ways, rural Britain is changing faster than

its cities
More people, more homes, more solar farms
August 28th 2025

Holidaymakers, including American vice-presidents, are drawn to rural

Britain partly because it seems to change so little. The villages are thatched
and quaint. The farm shops, if not their prices, can be old-fashioned. The
landscape is “timelessly familiar”, as the king put it in an essay for Country
Life a decade ago.

It is an illusion. Especially in the southern half of England, rural areas are

churning. They may lack some of the things that make cities seem dynamic
and exciting, such as immigrants, but in other ways they are changing faster.
The transformation of rural Britain can be seen in Mid Suffolk, a district of
110,000 people that lies 110km north-east of London.
East of the B1113 road in Bramford, a village near Ipswich, the sound of
drilling and diesel engines fills the air. Bellway, a large housebuilder, is
erecting 190 homes in a new estate known as Lockwood Place. Its brochure
promises “the best of town and country”. Its street names are reassuringly
rural (Wagtail Lane, Heron View). Nine models of home can be bought, all
of them named after old jobs: the Chandler, the Cooper, the Scrivener and so
forth.

Drive around Mid Suffolk, and the yellow signs pointing to new housing
developments like Lockwood Place are everywhere. In the year to March
2024 just over 1,000 homes were built in the district—more than in the city
of Newcastle upon Tyne, which is almost three times as populous. In south-
east England, the most rapid homebuilding is often found in rural districts
far from London (see map).

Like many rural areas, Mid Suffolk is older than average and
overwhelmingly British. The last census, in 2021, showed that 98% of its
inhabitants were born in Britain or have lived there for at least ten years. But
the district receives many migrants from other parts of Britain. Domestic
migration added 2.6% to Mid Suffolk’s population in the year to June 2024
—the highest rate in England and Wales.
“You can’t fault people for wanting to come here,” says Andrew Stringer, a
local Green Party councillor. Homes in Mid Suffolk are cheaper than they
are nearer London, the pace of life is relaxed and the skies, above a flat
landscape that is mostly planted with cereal crops, are enormous. Moreover,
building homes in the area is a comparatively simple matter.

Around London and other big cities, thick greenbelts block housing
development. In cities, tax changes, mortgage rules and the fire at Grenfell
Tower, a London tower block, in 2017 have weakened demand for high-rise
flats. In any case, big homebuilders prefer rural sites as they can easily pause
development if the housing market softens, says Neal Hudson, a property
analyst at BuiltPlace, a consultancy.

Local authorities in England wield much power over housing development,

but they are harried from above by a government that wants many more new
homes than they would like. Mid Suffolk was obliged to wave through
developments because the local authority failed to show that it had allocated
enough land for homes. Targets by the national Labour government require
it, and many other rural authorities, to keep building rapidly.

The march of bricks and cement upsets many residents. But it has been a
boon to businesses. With a population of 20,000, the biggest settlement in
Mid Suffolk is Stowmarket, and one of the biggest things in Stowmarket is
Muntons, a towering malting plant employing about 250 people. A company
survey found that more than one-third travel three miles or less to work.
Local homes are affordable, says Mark Tyldesley, Muntons’ managing
director, owing partly to the building boom.

It is often said that farming is almost irrelevant to the British economy, and
this is true. What is less appreciated is that farming is barely relevant even to
the rural economy. In Mid Suffolk just 3% of employed people work in
agriculture, forestry or fishing. Manufacturing is twice as important (as well
as Muntons, the district contains Ichiban, a leading maker of sushi rolls).
Services are bigger still. Alan Ridealgh, co-founder of the Humber Doucy
Brewing Company, says he often attends local business gatherings where he
is the only one selling a physical product.
But farmers do change the landscape, especially these days. In the past five
years farming policies in England (though not elsewhere in Britain) have
changed utterly. Subsidies, which used to be paid per hectare almost
regardless of what farmers did with their land, are being slashed. Farms
increasingly receive money for providing environmental goods like flowers,
hedgerows and bird-feeding crops.

Briefly, it looked as if the changes to subsidies would force farmers to quit.

Savills, an estate agent, counted 99 farm-machinery dispersal sales in Britain
in the first four months of 2023, up from 40 in 2019. But sales have since
returned to normal levels, and the amount of farmland coming to market has
not risen much. Instead of quitting, farmers across England are diversifying
into other activities.

Across the B1113 from Lockwood Place, behind a rough hedge, a solar farm
was recently installed on 84 hectares of farmland. Another is to be built just
500 metres away. In the comparatively sunny south of England, solar-power
production has become a crucial source of income. Fully 27% of all English
farms earned income directly from it in 2023-24 (see chart). Others rented
fields to energy firms that planted panels on them.
Solar farms are no more popular than housing developments. Mark Gillett,
chairman of Earl Stonham parish council, moved from urban Essex to Mid
Suffolk for the rural ambience, the community life and a village pub—which
promptly closed. He says that when a solar farm was proposed nearby, many
villagers complained that it would spoil their views, take land out of food
production and bring more traffic. In July the district council approved it
anyway. A line of 50-metre-high electricity pylons is likely to follow.

Ground-mounted solar panels cover a trivial portion of Britain—between

0.06% and 0.07% of the land surface, according to a Lancaster University
study. But they are more common in the rural south, and are spreading
quickly. They point to a problem: one rural business opportunity may hazard
another. The owners of an adjacent campsite opposed the Bramford solar
farm, arguing that “it will no longer be a tranquil, rural tourist destination”.

As more people move to rural Britain, another resource is coming under

pressure. Essex & Suffolk Water, a company that supplies parts of those
counties, is struggling to cope with a combination of drought and population
growth. In a corner of Suffolk, which unfortunately includes Mr Ridealgh’s
brewery, businesses have been told that they cannot use more water than
they have done in the past few years. Too bad if they want to expand.

The squabbles and strains of rural life give the lie to a common claim: that
the countryside is of one mind. Rural Britain is said to be furious about solar
farms and about higher inheritance taxes on farmland (Reform uk, a populist
party, hopes to ride such grievances to victory). Yet the push for solar power
benefits farmers more than anyone. As for inheritance taxes on farmland, the
balance of opinion is almost identical in London and in largely rural regions
such as south-west England. Most people everywhere dislike them.

Not everyone is cross about changes in the countryside, in any case. The
Lockwood Place housing development in Bramford is not only close to a
large solar farm. It is also next to a line of giant pylons. Yet the houses seem
to be selling as quickly as they are built. ■

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changing-faster-than-its-cities
Britain | Time’s arrow

The world’s oldest daily radio serial on England’s

new rural life
“The Archers” captures deep changes in country ways
August 28th 2025

The two veterans of farming still feel excited as they start bringing in a
handsome wheat crop. Stella and Ruth exchange whoops of sisterly delight
while they perch together on a harvester and power through the grain.

As is well known to the 5m radio listeners who followed the harvest over
several days in early August, the background to this bucolic ecstasy is dark.
The huge expanse which the ladies ripped through is a bone of contention
between Justin and Brian, two of the toughest male characters in the world’s
oldest daily serial, “The Archers”. Those men are among the partners in an
agribusiness that controls about 400 hectares of arable land near Ambridge
—a village in middle England which began its fictional existence in 1950.
For fans who tune in, on BBC Radio 4, for about 13 minutes every day, a
new plotline is ripening nicely. Justin has enraged Brian by proclaiming a
mysterious conversion to rewilding. Whatever their differences, the four
characters have something in common: all have found life-partners from the
Archer family, a dynasty whose changing lives are supposed to epitomise
rural England.

Ambridge has transformed since its doings became a national cult, with a
peak of 20m listeners in 1955. It began as an exercise in farming education,
designed to stimulate food production in a hungry nation. With their working
horses and cautious openness to change, the original farming couple, Dan
and Doris Archer, were stalwarts of a sluggish, God-fearing and class-
divided society.

Now boundaries of class, ethnicity and sexuality are as blurred as they

would be in any metropolis. Some characters are in same-sex relationships,
including Stella, who lives with the daughter of her friend and occasional
co-worker, Ruth Archer. Drugs, social-media influencers and surrogate
pregnancies have all featured.

An Anglican church, built in the 13th century, still forms the hub of the
village, but the vicar is married to a Hindu solicitor. Village life has just been
enlivened by a Pakistani Muslim doctor and her cheeky teenage children. In
a curious twist, one of Ambridge’s most imperious English ladies vowed to
fast for Ramadan with her new Muslim friends.

Sybil Ruscoe, the show’s farming adviser, says the battle over rewilding
reflects her own careful observations of the dilemmas facing big
landowners. The question of “what land is for” (food security, recreation,
carbon capture or biodiversity) has become agonising, and the plot reflects
that—these days not through preaching, but by telling stories with gloriously
improbable characters.■

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on-englands-new-rural-life
Britain | Chemistry lessons

Quietly, Britain is moving closer to EU rules

The process of ever-closer regulations
August 28th 2025

HOW TO LIVE with the giant on its doorstep is always a conundrum for
post-Brexit Britain. Since Brexit took effect at the end of 2020, goods
exports to the EU have fallen sharply because of new non-tariff barriers. One
way to avoid these would be closer alignment with EU rules, as was
proposed for food and energy in the deal that Sir Keir Starmer struck with
EU leaders in May. This week Nick Thomas-Symonds, minister for EU
relations, stoutly defended this deal against Nigel Farage’s attacks, arguing
that his promise to reverse it would cost the economy £9bn ($12bn) and
raise food prices.

How far could alignment go? One case study is the chemicals industry. Last
year Rachel Reeves, now chancellor, said nobody had voted to leave the EU
because chemicals regulations were all the same. This raised hopes that
chemicals might be included in the deal in May, but it was not. Yet the
industry matters. Including pharmaceuticals, it accounts for 15% of British
exports and 17.5% of R&D. Over 60% of its exports go to the EU. And it is
suffering. Steve Elliott of the Chemical Industries Association says total
output volume is down by 35-40% since January 2021.

Like food, the chemicals industry is heavily regulated. Because Britain left
the EU’s single market, it also left its REACH system of chemicals
regulation, based on the European Chemicals Agency (ECHA) in Helsinki.
A half-hearted effort to stay in was dismissed by Brussels as an attempt to
cherry-pick bits of the market that the British liked. So Boris Johnson’s
government set up UK REACH. Yet so far this employs just 40 staff, against
almost 600 at the ECHA. And its budget of £10m a year is a tenth of what
the EU spends in Helsinki.

UK REACH has accordingly been repeatedly delayed. In July the

government proposed to push back the initial deadline for firms to register
yet again, to 2029. And regulatory divergence may be growing. One
academic study found that Britain has planned to restrict just two new
chemicals since Brexit took effect, compared with 26 for the EU.

For the industry the cost of joining UK REACH is prohibitive. Richard

Ward, boss of the Airedale chemicals company in Keighley, points out that
companies need to seek approval for more than 22,000 chemicals. The
government has put the total cost to the industry of doing this at over £2bn,
mainly because of the requirement to re-register all the data in the EU’s
system. Some foreign firms might not bother, which could mean the market
loses certain chemicals, including some types of paint. Northern Ireland is
anyway not included, since it is still part of the EU single market.

Is there an alternative? Being outside the single market, Britain (unlike, say,
Norway, which is part of the single market through the European Economic
Area) cannot just rejoin EU REACH. But Switzerland is in the same
position—and it is proposing to align with almost all EU REACH rules. It
will not require any chemical that is authorised by the EU to re-register at
home, saving the industry a lot of hassle.
Unilateral alignment of this kind does not guarantee unrestricted access to
the single market, since that would require a formal EU agreement. But it
does mean running one registration system and production line, not two.
Chemtrust, which lobbies to ensure that post-Brexit Britain does not become
a dumping ground for dodgy chemicals, favours the Swiss model. Mr Elliott
at the industry association frets that the EU may become too risk-averse now
that Britain is not at the table. But many insiders would still prefer the
regulatory certainty that Switzerland has to the continued uncertainty of UK
REACH.

Closer alignment with EU rules, as opposed to divergence, is now a broader

trend. The UK in a Changing Europe, a think-tank, has been tracking it since
January 2021, and it finds a sharp increase over the past six months in the
number of sectors where the rules are becoming aligned (see chart).
Sometimes, as with the agreement on food, this is well publicised. But often
it has been surreptitious. The recently approved Product Regulation and
Metrology Act gives ministers the power to align with EU regulations
without the need for separate parliamentary approval.

Why the surreptitiousness? One answer is the opinion polls, especially the
strong support for Mr Farage’s Reform UK. He and the Tory leader, Kemi
Badenoch, condemned Sir Keir’s deal as a betrayal of Brexit. Yet both have
since made less noise about it. It is hard to imagine any government
reintroducing the barriers to trade that alignment eliminates.

The EU has also become more accommodating. After the 2016 referendum,
it argued that unless Britain accepted the “four freedoms”, including free
movement of people, it could not remain in any part of the single market
(Northern Ireland was always treated differently). The most it could offer
was a free-trade agreement like Canada’s or South Korea’s. But by accepting
a special deal for food, it is implicitly now allowing cherry-picking. It could
easily extend this to chemicals, as it is doing for Switzerland. The
government’s willingness to accept a role for the European Court of Justice
and even to pay into the EU budget has also warmed relations.

Brexiteers often argue that the whole purpose of leaving the EU was to
diverge from its costly regulations. Yet, in a phenomenon known as the
Brussels effect, EU REACH has become a model for how much of the world
regulates chemicals. Japan, South Korea, Turkey and even China use it as a
basis for their own systems. If creeping alignment turns post-Brexit Britain
into a rule-taker more than a rule-maker, that may just be one of the costs of
Brexit. Even the fiercely independent Swiss now talk of deeper integration
with the EU. ■

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eu-rules
Britain | Bagehot

The polycrisis theory of Brexit

An unfashionable view of why the divorce happened
August 28th 2025

Parliament has lost interest, but Britons still devour books about Brexit.
Those books tend to belong to one of two schools. One is the Great Man—or
rather, inadequate boys—theory of history, exemplified by “All Out War”,
by Tim Shipman. It argues that the divorce was propelled by the betrayals,
blunders and petty feuds at the court of David Cameron, whose campaign
was hopelessly focused on warning of economic disaster.

A second school takes the long view. In “Between The Waves”, a rich and
incisive new history of British Euroscepticism to be published next month,
Tom McTague begins the journey with Enoch Powell, a Tory imperialist,
driving through the Algerian desert in 1943. From the very birth of the
European project, he argues, the British dilemma between sovereignty
outside the club or influence within it was acute. The break of 2016, if not
inevitable, was foretold many times.

Both schools have merit, but Bagehot finds a third view compelling: Brexit
was a matter of inept timing. Mr (now Lord) Cameron made the risky
gambit of a referendum near-suicidal by asking Britons to pass judgment on
the European Union after its most perilous year. Jean-Claude Juncker, then
the European Commission’s president, called it the polycrisis: an era in
which the prospect of Brexit combined with a euro-zone debt crisis, a
migrant crisis and Islamist terrorism to threaten the foundations of Europe.
With such a context, perhaps the only surprise is that Leave’s victory, with
52% of the vote, was so narrow. That crisis forms the backdrop to the last
quarter of Mr McTague’s account. In the public debate, it has been largely
forgotten.

Revisit the continent that Lord Cameron, fresh from an election victory,
toured in the summer of 2015 as he hawked his renegotiation plan. In
Brussels, the mood was leaden—like the eve of the first world war, as
Donald Tusk, the Polish prime minister and an EU bigwig, later put it.

Greece’s prime minister, Alexis Tsipras, called a referendum to defy the

austere terms of a bail-out by his bankrupt country’s creditors. As cash
machines ran dry, Grexit loomed—until, in an all-night summit, Mr Tsipras
cracked, “waterboarded” by his fellow leaders, as one diplomat put it. For
the British left, the breaking of his Syriza party left a foul taste. “It’s time to
reclaim the Eurosceptic cause,” wrote Owen Jones, a Guardian columnist.

Greece was also the entry point for many of the 1m migrants who arrived in
Europe in 2015, often in dinghies over the Aegean. The largest group were
Syrians displaced by war. “Wir schaffen das!” said Angela Merkel in
August, declaring Germany up for the challenge. Her European colleagues
were not. Europe’s openness was resembling naivety and helplessness, said
Mr Tusk. Eurosceptics crowed: Nigel Farage unveiled a poster of bedraggled
migrants, entitled “Breaking point”.

The migrant crisis fused with another fear. In the 18 months before the
British referendum, European citizens, some trained in Syria, inflicted
atrocities at the offices of Charlie Hebdo, a French newspaper, in the
Bataclan nightclub in Paris and on the Brussels metro. Mr Farage declared
that Europe had created the “free movement of Kalashnikov rifles”.

The polycrisis, Mr Juncker observed, fed on itself and weakened Europe’s

resolve. It also heightened the pressure on Lord Cameron’s renegotiation.
But European leaders resented being asked to sort out the Conservative
Party’s neuroses as they battled to save their project. At summit after
summit, the British question fell to the bottom of the agenda, after the coffee
and petits fours.

And it inverted the terms of the referendum. Lord Cameron had thought a
risk-averse nation would stick with Brussels out of fear for its mortgages.
But as television coverage of the EU, once defined by images of reliably
grey men in grey offices, shifted to scenes of petrol bombs in Athens,
migrants wading ashore on Kos and carnage in Paris, the Leave campaign
performed an electoral conjuring trick and loaded the burden of risk onto its
opponents. Brexit, it claimed, was the last lifeboat to preserve the status quo;
staying in a crisis-riven bloc was the real danger. That was the meaning of
“Take back control”. Or as the campaign’s less-well-remembered slogan put
it: “Vote Leave is the safer option.”

Amnesia is understandable. It suits both sides of the referendum to inflate

the supposed hypnotic genius of Dominic Cummings, or to endlessly
relitigate the dubious claim emblazoned on the side of a bus. The reality, that
running against the EU as the euro burned was playing politics on easy
mode, is awkward for everyone. The Great Man theory is more flattering
than dumb luck.

But amnesia distorts the debate about Britain’s future in Europe. Listen to
the pro-EU movement today and you hear the case for the single market,
university exchanges and retirements in the sun. It is a charming vision of
Europe, but one cast in the early 1990s. The polycrisis marked the end of
this innocent age. It put iron in the blood: the harshness meted out to Mr
Tsipras would be visited on British ministers in the Brexit years. Brussels
became a lot less about farm regulations and more about flexing geopolitical
muscle: a Europe of events, not rules, as Luuk van Middelaar, a Dutch
historian, puts it. New crises as a result of the pandemic and the invasion of
Ukraine meant new forms of integration, far beyond the comfort zone of
British governments.

And so the dilemma that Mr McTague traces to Algeria in 1943 grows

sharper. The influence that comes from being in Europe is greater than ever;
so is the price in sovereignty. Any attempt to reverse Brexit would need to
embrace this new reality. Europe’s annus horribilis made Brexit unstoppable;
the changes it brought may make rejoining unthinkable. ■

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International
Donald Trump is waging war on woke AI
The wrong way to end a war
International | War on woke

Donald Trump is waging war on woke AI

“Marxist lunacy” is out. But unbiased chatbots may be impossible
August 28th 2025

“The American people do not want woke Marxist lunacy in the AI models,”
proclaimed President Donald Trump in July just before signing a series of
executive orders, including one apparently aimed at stopping artificial
intelligence (AI) models from brainwashing users with left-wing
propaganda. Those concerns may seem contrived. Yet Mr Trump is not alone
in worrying that large language models (LLMs) such as OpenAI’s ChatGPT
and Google’s Gemini, which often sound like oracles of truth (even when
they bluff profusely), have hidden biases.

Mr Trump’s executive order, “Preventing Woke AI in the Federal

Government”, draws on lurid examples to make its case. Top of the list is
when, in early 2024, Google unveiled an image-generation feature that
depicted popes and Vikings as black-skinned. No matter that the search giant
swiftly apologised—explaining that it was a botched but well-meaning
attempt to avoid stereotypes. Among the MAGA right, the view took hold
that LLMs were hotbeds of left-wing wokeness—ie, that they were rewriting
history to promote an “ideology” of diversity, equity and inclusion (DEI),
transgenderism, anti-racism and other familiar bugbears.

To many, that may sound conspiratorial. Mr Trump’s executive order

skipped over the fact that days earlier, Grok, the chatbot run on X, Elon
Musk’s social-media platform, had developed a liking for Adolf Hitler (and
began referring to itself as “MechaHitler”) after Mr Musk sought to turn the
dial more towards what he calls “free speech”. Yet, in truth, there is some
validity in the accusations of ideological bias in American models. Studies
suggest that most LLMs, even Grok, lean left; Chinese and Russian models,
too, reflect the biases of the systems that spawned them.

Around the world, governments fret about different types of prejudice in AI.
These include discrimination based on gender and race, as in the European
Union (EU), unequal access to models in local languages, as in Japan and
South-East Asia, and importing Western cultural norms, about which
concern is widespread. But like Mr Trump, many academics have homed in
on ideological and political bias.

It is easy to cherry-pick examples of woke AI. What academics attempt to

do is to prove how systematic the biases are. The most obvious way of doing
this is to ask an LLM to say yes or no to a series of questions that would
reveal its political slant, such as “Should a government restrict speech that
some find offensive?” But this is suboptimal, since few people would use AI
in that way. So researchers have to find more realistic alternatives.
One approach used by David Rozado of Otago Polytechnic in New Zealand
is to measure the similarity between language used by LLMs to that used by
Republican and Democratic lawmakers in America (such as “balanced
budget” and “illegal immigrants” by the former, and “affordable care” and
“gun violence” by the latter). He found that when asked for policy proposals,
LLMS almost always use language closer to that of Democrats. Only a
purpose-built LLM he called “right-wing GPT” skewed Republican (see
chart one).
Another approach is to assess how users perceive a model’s political
orientation. Researchers from Dartmouth College and Stanford University
sought responses from different LLMs to prompts, such as “Should the US
government raise taxes on the wealthy or keep taxes at their current level?”
They then asked Americans to evaluate the responses for political slant (see
chart two). They found that “nearly all leading models are viewed as left-
leaning, even by Democratic respondents”.

Some academics take a more global approach. Maarten Buyl and Tijl De Bie
of Ghent University in Belgium led a study that prompted LLMs from
different regions and in different languages, to assess thousands of political
personalities across a broad spectrum of ideological viewpoints. It concluded
that in most cases LLMs reflect the ideology of their creators. Russian
models, for instance, were generally more positive about people critical of
the EU. Chinese-language models were far more negative about Hong Kong
and Taiwanese politicians critical of China.

Such partisanship can influence the real world. That is because slanted
LLMs tend to sway their users. In one experiment led by Jill Fisher of the
University of Washington, Americans who identified as Republicans and
Democrats were asked to imagine themselves as mayors of a city with a
leftover budget to spend. After discussing the problem with LLMs that,
unbeknown to them, were politically biased, they often changed their minds.
Democrats exposed to a conservative AI model decided to dole out more
money to veterans, for example.

Given the implications, it is no wonder that governments are taking an

interest. China’s regulators have issued rules requiring AI content to embody
“core socialist values”, and routinely force tech firms to submit models for
censorship. The EU’s AI Act, which is being gradually introduced, focuses
more on discrimination and bias against individuals and groups. Kai Zenner,
an adviser in the European Parliament, says ideological biases are also
covered, but are left vague because of the hotch-potch of political
viewpoints within the bloc. “It would have been almost impossible to agree
on things that some want to see included, and others don’t,” he says.

Mr Trump’s new rules to provide government contracts only to LLMs that

display “truth-seeking” and “ideological neutrality” sounds Orwellian. It is
possible that “truth” is a euphemism for “MAGA thought”. Mr Trump’s AI
Action Plan, issued in July, called for the government’s AI Risk-
Management Framework to drop references to misinformation, DEI and
climate change. Some Republicans have also begun probing modelmakers.
One state attorney-general recently accused tech giants Google, Microsoft
and Meta, as well as OpenAI, of “AI-generated propaganda”.

Although details of Mr Trump’s order are still being fleshed out, there are
reasons to think it will not be as draconian as some on the left fear. Rather
than mandating what LLMs can say, which could violate freedom-of-speech
laws, the new rules appear only to require AI labs to disclose any ideological
agenda they used to train their models. That prioritises transparency, says
Mackenzie Arnold of the Institute for Law and AI, a Washington-based
think-tank.

How successful the Trump administration will be in imposing “neutrality”

starts with the question: where do the biases come from? Academics and
researchers working in AI labs say the leftward slant is probably most
influenced by the data on which Western LLMs are trained. Much of it is in
English, which skews liberal. It is scraped from internet publications, social
media and other digital sources that tend to reflect the views of young
people. It is also true that the median political viewpoint in the wider
English-speaking world is more liberal than it is in America, meaning that
centrist models can be perceived as being left-wing in the American context.

After the models are trained using data and algorithms, human labellers help
fine-tune them through a process called reinforcement learning with human
feedback, whereby the models’ answers are ranked based on values such as
helpfulness and safety. These labellers are likely to be relatively young,
which may influence their judgments. Finally, the model builders issue so-
called system prompts, which guide an LLM’s behaviour by setting explicit
rules about how it answers questions. This is where anti-woke warriors
accuse Silicon Valley leftists of going to extremes to embed progressive
values into LLMs.

But it is more complicated than that. First, the models are black boxes. AI
labs are researching deeply into technological fixes that improve
“interpretability”, but even they still struggle to understand why LLMs
produce the responses they do. Second, the model’s human trainers are
confronting tricky philosophical problems for which there are no precise
answers.

Researchers at the LLM labs point out some of the quandaries. For instance,
on a politically divisive issue, it may be preferable to encourage the model to
explain both points of view and to provide a middle ground. But where do
you draw the line? On some topics, such as political assassinations, all but a
violent fringe would say there is no debate. Judgments may also change over
time. At one point in American history, for example, outlawing slavery was
a topic of fierce dispute. No longer.

That said, modelmakers see which way the ideological winds are blowing in
Washington and stand to lose not just government contracts, but their
reputations, if their products are seen as too one-sided. Even before Mr
Trump’s executive order, some AI labs had stepped up political-bias testing
of their models and tuned them to include more conservative viewpoints.
Google has used so-called red teams to root out biases.

Messrs Buyl and De Bie say it may be impossible to achieve true neutrality.
After all, there is no universal agreement on what neutrality means. They
suggest two alternatives. One is for modelmakers to avoid training their
models to be convincing; ie, encourage them to present a plurality of
viewpoints when more than one is valid. Another is to follow the approach
of traditional media and admit to particular ideological slants. In that case,
users would be more aware of biases and the government’s main role would
be to ensure that no viewpoint has a monopoly. Mr Trump may hate the
word diversity in the context of DEI, but when it comes to AI, he ought to
want more of it. ■
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woke-ai
International | The Telegram

The wrong way to end a war

Dark lessons from history that explain Vladimir Putin’s “peacemaking”
August 28th 2025

IN THE opening months of the Korean war, one of the bloodiest conflicts
fought between communist forces and the democratic West, China’s leader,
Mao Zedong, cabled his fellow tyrant, Josef Stalin, with thoughts about the
deaths that each side needed to suffer. My “overall strategy”, Mao wrote in
March 1951, involves “consuming several hundred thousand American
lives” in a war lasting years. Only then would the imperialists realise that, in
the newly founded People’s Republic of China, they had met their match.
Mao had already sent armies of “volunteers” to the Korean peninsula, where
combat had raged since the previous summer, after a Soviet-sponsored
regime in northern Korea invaded South Korea, ruled by an American ally.
Coolly, Mao told Stalin that China expected to lose 300,000 more men to
death or maiming.
Mao’s disregard for casualties was no rhetorical flourish. By July 1953,
when an armistice brought 37 months of war to an end, internal Chinese
estimates put his country’s death toll at 400,000 (today, official propaganda
admits to 150,000). Informed of his eldest son’s demise on the Korean front,
Mao murmured: “In a war, how can there be no deaths?” Millions of Korean
civilians perished, and perhaps a million Korean troops. America lost almost
37,000 men, alongside thousands more from Britain and other countries.
Korea’s cities were smouldering ruins.

For too long, America and allies thought they were fighting over territory.
They feared that China and North Korea were pursuing a Moscow-directed
global campaign of communist expansion. They missed Mao’s true motives,
some of which emerged only when Chinese and Soviet archives opened in
the 1990s. In return for China’s blood sacrifice, Mao asked the Soviets to
equip his armed forces with modern weapons, warships and planes, and to
supply the blueprints and tools for making such arms in China.

Control of the peninsula swung between communist and Western armies

several times, before settling into a stalemate around the 38th parallel, a line
cutting Korea in two. Once deadlock set in, Mao’s greatest territorial aim, to
avoid a reunified, pro-American Korea and Western troops on his border,
was secure. As early as June 1951, America, China and the Soviet Union
backed an armistice at the 38th parallel. Still, the war ground on for another
two years. Eager for more Soviet war aid, Mao staged endless rows about
prisoners of war who refused to return to China or North Korea. Fully 45%
of American casualties occurred after talks began. Veterans recalled deadly
night-time skirmishes on hills overlooking the floodlit negotiation
compound. An armistice was finally agreed in the summer of 1953,
following Stalin’s death and veiled American threats to use nuclear
weapons. After three years of slaughter, the line dividing the two Koreas had
barely budged. In the words of Sir Max Hastings, a historian of Korea’s
conflict, the world learned that “War can be waged as painfully and
doggedly at the negotiating table as with arms on a battlefield.”

Now Russia’s president, Vladimir Putin, is stalling his American

counterpart, Donald Trump. Mr Putin spurns Mr Trump’s pleas to stop
fighting in Ukraine, instead proposing a “comprehensive” deal that
addresses all his grievances. In turn, Mr Trump plays down the importance
of the ceasefire he has failed to bring about, either to save face or because he
buys Russian arguments that Ukraine is losing on the battlefield and would
use a truce to rearm. Mr Trump wishes fighting would cease, he sighed on
August 18th: “But strategically that could be a disadvantage for one side or
the other.” Mr Trump and his inner circle prefer to talk up “land swaps”,
their code for Ukraine surrendering territory of such value that Mr Putin
might be induced to settle.

To hear Mr Trump tell it, pushing belligerents to cut deals is an intrinsically

worthy pursuit because it is the opposite of war, which is senseless and
wasteful. Alas, that simple framing is challenged by examples from history,
and not just in Korea. Ceasefires do not matter only because they pause the
killing. They can also signal acceptance that a war will not have a military
resolution.

Carl Bildt, a former Swedish prime minister and foreign minister, has first-
hand knowledge of how wars end. In 1995 he was European co-chair of
American-led talks in Dayton, Ohio, to end a three-year conflict in Bosnia.
America’s and Europe’s goal at Dayton was peace. Mr Bildt came to realise
that many Balkan politicians hoped to use the peace process as “the
continuation of war by other means”. Crucially, Dayton succeeded because
the warring parties were exhausted and knew that America and NATO would
not tolerate more fighting. That left only a political solution. “You couldn’t
get serious when the guns were still firing and where there were the hopes or
fears that the battlefield situation was going to change in a fundamental
way,” says Mr Bildt.

The Swede fears that Mr Putin’s demands for territory conceal a still larger
goal: to prevent Ukraine from thriving as a state that is at once Slavic,
democratic and Western. He also distrusts Mr Putin’s call to tackle all
disputes at once. That would require resolution of the knottiest
disagreements, such as the status of Ukrainian land controlled by Russia,
before peace can be agreed. He argues that a sincere peace drive would start
with a ceasefire, allowing “step-by-step” work on such subjects as Ukraine’s
electricity supplies, the fate of prisoners of war, abducted Ukrainian children
and sanctions. In Mr Bildt’s experience, peace deals must “meet the
minimum requirements of everyone, but not the maximum requirements of
anyone”.
Instead, Mr Trump is letting Russia pursue maximalist goals while it pounds
Ukraine: a strategy that Mao called “talking while fighting”. That was
disastrous in Korea, where a permanent peace treaty has never been
achieved. Why would it be different now? ■

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1843
The untold story of Bolsonaro’s weird and wild coup attempt
1843 | The plot against Brazil

The untold story of Bolsonaro’s weird and wild

coup attempt
How Brazil’s ex-president and his cronies tried to take down democracy
August 28th 2025

In 1968 Oscar Niemeyer, Brazil’s most celebrated architect and a

communist, put his principles aside to design the headquarters of the armed
forces, which had recently seized power in a coup. Today the modernist
marvel hulks like a spaceship in the centre of Brasília. But in the first week
of January 2023, its clean lines were disturbed by hundreds of tents
haphazardly arranged outside the building. Was some kind of festival taking
place? The camp was dotted with stalls handing out beer, grilled ribs and
bowls of rice with salted beef, known as arroz carreteiro.

But this wasn’t a carnival—it was the start of an attempted insurrection. The
protesters had congregated in support of Jair Bolsonaro, Brazil’s far-right
leader, who had narrowly lost his presidential re-election bid at the end of
October 2022 to his left-wing nemesis, Luiz Inácio Lula da Silva, known as
Lula. Bolsonaro had refused to concede defeat and been holed up in the
presidential palace for weeks.

By December, his supporters were feeling restless. The camp, which initially
consisted of a few hundred activists, quickly swelled to over 5,000 people.
The security services sounded the alarm, but most politicians and senior
judges were out of town, enjoying the austral summer.

On the afternoon of January 8th the tension exploded. Wearing the canary-
yellow jerseys of the national football team, thousands of protestors marched
down Brasília’s central avenue. They smashed windows in Congress and the
presidential palace, live-streaming their vandalism on social media. But they
saved their greatest venom for the Federal Supreme Court. After they had
pushed their way past the court’s meagre security detail, they set the chief
justice’s chair on fire and ripped out the nameplate of Alexandre de Moraes,
the highest-profile judge, brandishing it before the roaring crowds like the
spoils of war.

Six hours after the riots started, police had dispersed most of the insurgents.
Only then did Bolsonaro issue a mild rebuke on social media—though
within days, he was back to posting videos that claimed the election had
been rigged against him.

Brazilians were appalled by how close to the brink of chaos their country
had been brought. But the January 8th insurrection was only the culmination
of a weird and wild saga that had started long before. Over the past year, I
have pored over hundreds of pages of police reports and conducted dozens
of interviews to reconstruct how Bolsonaro and his allies tried to discredit
Brazil’s electoral system, pressed military commanders to annul the 2022
election and even plotted to assassinate his rivals.

On September 2nd Bolsonaro and seven of his closest associates will stand
trial on charges that they tried to orchestrate a coup. If convicted, several of
them face up to 43 years in prison. But even as the world’s fifth-largest
democracy is proving its resilience, a spat is brewing between its politicians
and the supreme court, which has amassed an extraordinary and sometimes
unsettling amount of power in its attempts to prevent the return of autocracy.
As Brazil gears up for another general election next year, antiliberal forces
will have a powerful ally. Bolsonaro’s idol, Donald Trump, is back in the
White House—and has shown himself willing to bully Brazil’s government
in an attempt to bend it to his will.

Bolsonaro’s disdain for democracy dates back to his youth under the military
dictatorship, which ruled the country until 1985. He admired the generals in
charge and enrolled at Rio de Janeiro’s military academy when he was 18.
But his army career came to an abrupt end after he told a journalist that he
and a colleague were planning to detonate explosives in the academy’s
bathrooms to protest against their low wages. In 1988 he moved into
politics.

For most of his 27 years in Congress, Bolsonaro was dismissed as a rabble-

rouser who failed to propose a single important bill. Then came his big
break. In the 2010s prosecutors revealed that hundreds of politicians had
been paid bribes by construction firms and the state oil company in
exchange for contracts. Nicknamed “Operation Car Wash”, it was one of the
biggest corruption cases ever uncovered and landed Lula—a titan of the left
who had been president from 2003 to 2010—in jail. Many Brazilians
yearned for a leader who appeared to share their fury.

Sensing an opportunity, Bolsonaro threw himself into the 2018 presidential

race. It was a good time to be an anti-establishment conservative. Trump
was in office, and like him, Bolsonaro’s allies understood the power of
social media. Reports swirled that Carlos Bolsonaro—one of his four sons,
and also a politician—was running what became known as a “hate cabinet”,
which employed people to spam voters with false or exaggerated claims
about Bolsonaro’s opponents, including Fernando Haddad, the candidate for
the left-wing Workers’ Party. One viral post falsely claimed that Haddad,
while mayor of São Paulo, had distributed a “gay kit” to kindergartens,
which included penis-shaped baby bottles and a book called “Willies: A
User’s Guide”.

Bolsonaro cruised to victory in the run-off in October 2018. Soon after, he

held a joint press conference with Trump at the White House, in which they
gleefully bashed “gender ideology”, “political correctness” and “fake news”.
But it wasn’t just their loathing of wokeness that the Bolsonaros and MAGA
had in common; they also shared a tendency to rewrite history. Despite
winning the election, Bolsonaro insisted, without any evidence, that he had
actually prevailed in the first round. It was a glimpse of what was to come.

Just as Bolsonaro got back from his love-fest with Trump, Brazil’s supreme
court opened an inquiry into online disinformation that affected “the honour
and security of the supreme court, its members and their families”—the sort
of thing Carlos was accused of spreading. The fake-news inquiry, as it
became known, marked the start of tensions between Brazil’s new president
and its 11 most senior judges.

Brazil’s supreme court is both extraordinarily visible and extraordinarily

powerful (see Briefing). Its judges are allowed to make consequential
decisions by themselves, rather than waiting for the full bench to convene.
This has given them an unusual degree of celebrity—but also made it easier
for politicians to single out enemies among them.

I’ve met Alexandre de Moraes, the judge in charge of the fake-news inquiry,
twice in the past year. He has an intense gaze and a build honed by his
devotion to Muay Thai, a combat sport. I had the impression that he is not a
man easily rattled by death-threats or afraid to throw his weight around.
He explained to me that after Bolsonaro was elected, online threats against
the court multiplied. One judge’s travel itinerary was posted on the dark
web, with a caption encouraging people to stab him at the airport; another
plan described putting bombs in the court’s plant pots. “We passed all this
information to the federal police, the public prosecutor and the attorney-
general. But they didn’t do anything,” Moraes said (several of these roles
had been filled by Bolsonaro appointees). If they had, the “supreme court
wouldn’t have opened the inquiry.”

The fake-news inquiry was controversial from the start, and not just among
bolsonaristas. Legal scholars were concerned about its vague remit and
unusual origin. Even a supreme-court judge voiced concerns, saying that the
court “should maintain a necessary distance from investigations that involve
alleged offences against the court itself”. The criticisms didn’t faze Moraes.
Slowly, federal police under him began gathering evidence against
Bolsonaro’s allies and sons.

In November 2019 the court waded deeper into politics when it ruled that
defendants could not be imprisoned until all their appeals were exhausted.
The ruling landed like a bomb in Brasília: it enabled Lula to walk out of jail.
Despite the shadow of his corruption conviction, Lula remained a folk hero
among the poor and was gunning for a political comeback.

Bolsonaro became convinced that the court was conspiring against him. He
worried that investigators would soon close in on Carlos in the fake-news
inquiry, and on his eldest son, Flávio, a senator, for alleged corruption. On
April 22nd 2020 he called a meeting with his ministers. “The whole fucking
time [the police] are trying to get to me by messing with my family,” he
ranted. “It’s an embarrassment that I am not informed,” he said, referring to
the police’s investigations. “I can’t work like this…That’s why I’m going to
interfere. Full stop.”

Two days later, he fired the head of the federal police and appointed
Alexandre Ramagem—his former bodyguard and a family friend. Many in
Brasília believed that Ramagem was being promoted solely to shield
Bolsonaro’s sons from investigation.
Moraes quickly struck down Ramagem’s appointment, a first in Brazilian
politics. In response Eduardo Bolsonaro—the most politically gifted of
Bolsonaro’s sons, who is close to Steve Bannon—fired a warning salvo.
“What Alexandre de Moraes did is a crime,” he said. “When it gets to the
point where the president has no way out and strong measures are needed,
[my father] will be labelled a dictator.”

As tensions rose, Bolsonaro began to rally his supporters for regular marches
against the supreme court, and would sometimes join them on horseback or
fly by in the presidential helicopter. But Brazil’s judges were unrelenting. In
March 2021 they tossed out Lula’s convictions on a technicality, allowing
him to run in the following year’s presidential election.

The ruling in Lula’s favour made Bolsonaro more resolute. He began to

purge his cabinet of people he did not consider sufficiently loyal. First to go
was his defence minister, General Fernando Azevedo e Silva, who had
refused Bolsonaro’s request to allow soldiers to join in the marches against
the supreme court. The heads of the army, air force and navy resigned in
protest at the firing.

The resignations worried foreign diplomats—especially those in Joe Biden’s

administration. After Trump supporters attacked the Capitol on January 6th
2021, Bolsonaro had warned that Brazil was “going to have a worse
problem” if it kept using electronic voting machines. America’s new
government believed that Bolsonaro would have no qualms inciting a similar
revolt—and sending Brazil back into autocracy. “We didn’t want to risk
losing one of our major democratic allies in the global south,” one former
Pentagon official told me.

High-ranking American officials hoped to talk sense into Bolsonaro and his
ministers. In July 2021 Bill Burns, then the director of the CIA, had a private
meeting with Ramagem, who by then was running Brazil’s intelligence
agency, and General Augusto Heleno, Bolsonaro’s bumbling national-
security adviser. Weeks later Biden’s national-security chief, Jake Sullivan,
flew to Brasília to meet with Bolsonaro himself.

The visits were a flop. “Bolsonaro was of the view that there was this vast
communist conspiracy in Latin America and that he was the only one who
could save Latin America,” one former White House official told me. “We
left pretty alarmed.”

Even members of Bolsonaro’s government were concerned. At an event in

New York, vice-president General Hamilton Mourão—whom many
bolsonaristas considered a lukewarm disciple—got into a lift with a former
American ambassador to Brazil. On the journey down, the ambassador said
that he was worried. Mourão quietly responded: “I’m worried, too.”

Mere days after Burns’s visit Bolsonaro livestreamed a conversation with

Heleno on YouTube and Facebook, in which he reiterated his claim that the
voting machines could be hacked (independent electoral officials have
consistently said there is no evidence for this). Police later found Heleno’s
diary, in which he brainstormed how to spread disinformation about the
machines, including tips to appeal to a broader audience such as “Don’t
make any references to homosexuals, blacks, queers, etc”.

They also found a file where Ramagem advised his boss to cast doubt on the
technicians and authorities that oversee voting machines, rather than simply
telling Brazilians that their vote could be stolen. In a lapse that would make
trained spooks blush, the document was repeatedly edited by the user
“aramagem@yahoo.com”.
In response to a request for comment, Ramagem said the file was a personal
document and not intended as advice for Bolsonaro, who had railed against
voting machines for many years. He also alleged that the judiciary conspired
against Bolsonaro, and therefore blocked his appointment as head of the
federal police. He denied taking part in a coup and said that the events of
January 8th were simply a demonstration that ended in disorder. In any case,
he was out of government by then.

Weeks later, Bolsonaro told a crowd of 125,000 supporters: “To those who
think that with the stroke of a pen they can remove me from the presidency,
let me tell you, I have three options: prison, death or victory. Let the
scoundrels know, I will never be imprisoned!”

In May 2022 Bolsonaro received more bad news: a reputable poll showed
Lula with a 20-point lead. Bolsonaro called another fateful cabinet meeting,
in which he declared that the voting machines would be rigged to give Lula
such a wide margin of victory. He told his ministers that if they didn’t repeat
this claim in public, they would be dismissed.

Heleno chimed in that he had spoken to the deputy intelligence chief about
planting spies in rival campaigns. This appears to have disconcerted even
Bolsonaro. “I ask you not to…I ask you not to speak, please. Don’t, don’t
continue with your…with your observation,” he stammered. “We can talk
about this in private in that room over there, about what [the intelligence
agency] is up to, okay?” Unabashed, Heleno continued: “If we have to turn
the tables, it’s before the elections…there will come a point when we won’t
be able to talk any more. We’re going to have to act.”

Bolsonaro also told his cabinet that he would show foreign ambassadors
stationed in Brasília “what is going on”. So in July, dozens of befuddled
diplomats gathered at the presidential palace to watch a slide-show in which
Bolsonaro claimed that voting machines were fraudulent and insinuated that
the head of the electoral court was friendly with terrorists.

The meeting, which was broadcast publicly, infuriated the Biden

administration. “We decided at that stage that rather than expressing private
concerns, we would go public,” one former State Department official told
me. A week later, Biden’s defence secretary, Lloyd Austin, joined a
conference of defence ministers in Brazil. He told the audience that
“democracy is the hallmark of the Americas” and that armies must be “under
firm civilian control”. In diplomatic terms, this was a rebuke. The former
Pentagon official told me: “It was very clear that the Brazilian military
understood the message—and they didn’t like it.”

With Trump out of power, the MAGA movement became obsessed with
Brazil’s election—a victory for Bolsonaro would show that the kind of
populist nationalism which Trump espoused still had a future. On his
podcast “War Room”, Bannon mentioned Brazil in at least 10% of the
episodes aired in the year running up to the election, according to Agência
Pública, a Brazilian investigative news outlet. One of the programme’s
guests called it “the most important election in the world”.

When the results came in from the first round, on October 2nd 2022,
bolsonaristas breathed a sigh of relief. Bolsonaro had received 43% of the
vote—just five points behind Lula—giving him a fighting chance in the run-
off at the end of the month. His team resolved to win, by any means
necessary.

According to police, on October 4th an army colonel texted Mauro Cid,

Bolsonaro’s closest aide, asking him if the government had found evidence
of fraud. Cid responded: “Nothing.” At this point Marília Ferreira de
Alencar, then the head of intelligence at the justice ministry, ordered a senior
analyst to put together a map of the municipalities where Lula had obtained
most votes. In a text message to a friend, the analyst shared his misgivings:
“I don’t feel good about this at all.” But he sent the data anyway. (A
representative for Alencar said she was merely fulfilling her professional
duty to monitor potential electoral crimes.)

On October 30th, the day of the run-off, police began stopping buses
carrying people to voting stations—precisely in the municipalities on the
data analyst’s map. Videos on social media showed officers ripping
Workers’ Party flags out of voters’ hands. When Moraes caught wind of this,
he called the head of the highway police and threatened to send him to
prison if he didn’t call off the operation.
Lula ended up winning the run-off with 51% of the vote to Bolsonaro’s 49%
—the tightest result in Brazilian history. As Lula’s supporters celebrated, a
despondent Bolsonaro retreated to the presidential palace, where he sulked
for 40 days. Cid later told prosecutors that Heleno was so concerned about
Bolsonaro’s mental health that he asked “several times” if he could also
sleep in the palace to keep their boss company.

Meanwhile, Bolsonaro’s supporters sprang into action. Lorry-drivers

blocked highways across Brazil, and encampments formed outside military
garrisons to put pressure on the army to back Bolsonaro. Text messages later
found by police suggest that Cid, a lieutenant colonel, was in constant
contact with the protesters, many of whom were active or retired soldiers.

The protesters soon grew worried that the situation was stagnating. One
retired colonel sent a desperate message to Cid: “The people are where
[Bolsonaro] asked them to be…I know you guys tried to see it through to the
end without an institutional breakdown, but the other side played outside the
law. Enough, brother!”

Bolsonaro’s associates became more willing to consider extreme measures.

According to police, some began to hatch an assassination plot codenamed
Operation Green and Yellow Dagger (after Brazil’s national colours),
targeting Moraes, Lula and the incoming vice-president, Geraldo Alckmin.

The plan was printed out at the presidential palace on November 9th by
Bolsonaro’s deputy chief of staff. The document included a list of weapons
needed for the mission—pistols, machineguns, grenade launchers—but also
listed poison as an option with which to kill Lula. The plotters reasoned that
“his neutralisation would shake the entire winning slate”. Of Alckmin, they
wrote rather harshly that “no great national commotion is expected” over his
death.

In the following days the plan—which the plotters judged as having a

“medium tending towards high” chance of success—was set into motion.
Cid later testified that he and Walter Braga Netto, Bolsonaro’s running-mate,
procured around 100,000 reais ($17,000) from “people in agribusiness”. Cid
then handed some of this cash to a member of the army’s special-forces unit
in gift bags designed to carry wine bottles. These elite soldiers—who were
known as kids pretos, or “black kids”, because of their dark balaclavas and
helmets—had close links to Bolsonaro: at least 26 former members were
part of his government, including Cid, his chief of staff and a health
minister.

Two kids pretos then travelled to Brasília to start watching Moraes. A

spreadsheet was later found on the computer of one of the hitmen, which
included an outline of how new elections would be called. This depended
first on “neutralising MIN AM [Moraes]” and detaining public officials who
had been “involved in irregularities in the electoral process”. In a message
sent on December 12th, the deputy chief of staff told another plotter that
Bolsonaro had given them the green light for the assassinations to be carried
out before December 31st—the eve of Lula’s inauguration.

According to testimony and contemporaneous records, lawyers close to

Bolsonaro now drew up a decree that would have granted him emergency
powers. A separate document anticipated that a “crisis cabinet”—made up
mostly of military officers, such as Heleno and Braga Netto—would be
established to organise new elections. Police later found a draft speech
intended to be delivered by Bolsonaro after signing the decree, which was
full of obscure legalese and had a pseudo-philosophical reference to Thomas
Aquinas.

During this period police say that Bolsonaro received an unusual visitor:
Father José de Oliveira e Silva, a portly Roman Catholic priest with thick
eyebrows who was best-known for posting videos on YouTube in which he
berated singers like Madonna for their sensuality and analysed their “sinful”
lyrics.

For a long time it was unclear why a priest was rendezvousing with
Bolsonaro. But police later found text messages Father José sent to a friar,
which investigators say were meant to be disseminated widely. In them, he
pleaded for Catholics and evangelicals alike to pray for Braga Netto and the
country’s generals, “asking God to give them the courage to save Brazil”. A
representative of Father José said he was co-operating with the investigation
and was not facing any charges. He said the priest provides
spiritual guidance to whomever seeks it and considers it an abuse to have
these conversations “invaded” by the authorities.

Father José also sent a confusing message—probably not intended for a

wider readership—in which he mused, in less metaphysical terms, about
how events might play out. “If he doesn’t do it, he’ll get fucked and the
people will also get fucked; if he does this, he won’t get fucked, but the
people will get fucked and then fuck him over; if he does what he needs to
do, he won’t get fucked and the people won’t get fucked, but later they’ll
fuck him over anyway!”

With the plot seemingly blessed by a priest, it now needed the support of the
armed forces. On December 7th Bolsonaro called in the head of the army,
General Marco Antônio Freire Gomes, and the head of the navy, Admiral
Almir Garnier Santos, intending to discuss the martial-law decree. A
shocked Gomes told Bolsonaro that the army would not participate in any
ruse “aimed at reversing the electoral process”. Bolsonaro reassured him that
he would make some edits to the decree.

A few days later he made his first public appearance since the election, in
which he reminded supporters outside the presidential palace that he was
“the supreme chief of the armed forces”.
Such a bombastic statement may have concealed more vulnerable feelings.
Cid sent a voice-note to Gomes on WhatsApp, pleading with him to think
about Bolsonaro’s mental health and inviting him in for another meeting.
“He likes to chat, you know?” Having visitors was “a way for [Bolsonaro] to
blow off steam”, as he was under “a lot of pressure” to call a state of
emergency.

On December 14th Gomes, Santos and Brigadier Carlos de Almeida

Baptista Júnior—the head of the air force—met with Paulo Sérgio Nogueira,
the defence minister. Nogueira presented them with a slimmed-down version
of the decree. When Baptista Júnior asked if the decree envisaged “the
newly elected president not taking office”, Nogueira remained silent.
Baptista Júnior got up and left the room; Gomes followed him out.

Baptista Júnior would later testify that Santos had pledged his men to
Bolsonaro. Santos denies that he participated in any conspiracy or offered
his troops in support, and notes that he did not have any responsibility for
deployments in December 2022.

It appears that Bolsonaro’s inner circle thought Gomes, who had trained as a
kid preto, still might change his mind. After the meeting on the 14th, a
retired colonel who had once taught Gomes sent him a WhatsApp message.
“Are you going to bear this stain on your reputation and go down in history
as a cowardly traitor to our country? Unfortunately there’s no other way to
read it my friend!” Gomes ignored him.
Braga Netto was incensed by the failed meeting. He told an army reservist to
start a hate campaign online: “Stick it to Baptista Júnior, traitor to his
country. Make his life and that of his family hell.” The army reservist asked
whether he should also “offer [Gomes’s] head to the lions”. Braga Netto
replied: “Offer his head. Fucker.”

Meanwhile, the assassination plot got under way. According to the police, in
early December the hitmen bought “burner” phones, registered them under
false identities and created a group on Signal, an encrypted messaging app,
called “World Cup 2022”. They picked codenames of countries with football
teams—Germany, Argentina, Austria, Brazil, Japan and Ghana.

The assassins planned to kick things off by arresting or murdering Moraes

on December 15th on his way home from the supreme court. At 8:42pm
Ghana wrote in the group: “I’m in position,” as he lurked outside Moraes’s
house. Argentina was stationed at a car park halfway between the court and
Moraes’s residence. Brazil asked: “What’s the situation?” Germany and
Japan responded: “Hold. We’re in position.” But at 8:53pm the news broke
that the supreme court would postpone voting on the case for another day.
The assassins seemed to lose Moraes’s whereabouts. At 8:57pm, Austria
asked, “Are we going to cancel the game?” Germany replied: “Abort…
Austria…return to landing site…Ghana…proceed to rescue with Japan.
Brazil has already gone to the rescue point.”

It was an ignominious end—the hitmen dispersed and ultimately did not try
to assassinate either Lula or Alckmin. Last year I asked Andrei Rodrigues,
who now heads the federal police, why the plot was called off so abruptly.
“It wasn’t just Alexandre [de Moraes] not being at home that led them to
abandon their plans,” he told me. “The fact that there was not a full-scale
social convulsion, the fact that the heads of the army and the air force did
not agree to the plan—these are the factors that led them not to execute the
plan in its entirety. Had they not received those signals, I don’t have a doubt
in my mind that they would have carried out the plan fully.”

After the plan failed, Bolsonaro fell into a funk. Instead of attending Lula’s
inauguration on January 1st 2023, he flew to Orlando, Florida, where he
moved in with a Brazilian martial-arts fighter. He laid low for three months,
moping around fried-chicken shops and taking selfies with fans. In an
interview with the Washington Post, one MAGA acolyte invoked the
prediction Bolsonaro had made in 2021 that he would either be killed,
arrested or re-elected, and chided: “I don’t remember him saying going to
Disney was the fourth option.”

Because Bolsonaro no longer had presidential immunity—and investigators

had greater access to intelligence reports now that Ramagem was out of his
job—the police were able to dig into his activities. In one instance, evidence
emerged that he had approved the operation of a spy ring that targeted
journalists, environmental regulators and congressmen who were critical of
him. Information about them was allegedly sent to Carlos—the social-media
spin-doctor—who directed online trolls to smear their reputations.

Within months Bolsonaro faced over a dozen judicial investigations on

charges ranging from mismanaging presidential property to inciting the
January 8th riot. In June 2023 the country’s electoral court barred Bolsonaro
from holding office for eight years, on the basis that he had used state media
to spread lies about voting machines at the meeting with ambassadors.

As Bolsonaro’s political cachet began to crumble, so did the loyalty of his

right-hand man. In August 2023, Cid entered into a plea deal with the police.
He has since become the prosecution’s key witness, though he has proved an
unreliable one. He initially failed to mention the assassination plot, until
police found deleted messages on his devices. In June it emerged that he had
used an Instagram account in his wife’s name to talk to a friend about the
pre-trial hearings, breaking the terms of his agreement.

Following months of testimony-gathering, Bolsonaro’s trial begins on

September 2nd. He and seven of his closest associates, including Heleno,
Braga Netto and Ramagem, face decades in prison. They deny all charges.

Bolsonaro’s lawyers say there is no proof he is connected to January 8th or

the assassination plot. They claim that federal police and Moraes are biased
and argue that Cid’s plea deal should be annulled. They also deny that
Bolsonaro presented a coup decree to the heads of the armed forces, instead
claiming that he wanted only to discuss how to avoid social chaos.

Eduardo Bolsonaro has been trying to enlist the help of his MAGA friends
to fight back. In March he took leave from his job as a congressman and
moved to Texas to court Republican bigwigs. When I called him in July, I
caught a glimpse of his office, which is adorned with MAGA hats and
crucifixes. With the calm of a politician who knows he is about to get what
he wants, Eduardo told me he hoped to make Moraes “a toxic person” by
getting Trump to sanction him on the grounds that he threatens free speech.

Just days after our interview Marco Rubio, Trump’s secretary of state,
revoked the entry visas of eight judges on Brazil’s Supreme Court and their
immediate family members, as well as those of the public prosecutor and
Rodrigues, the police chief (the three justices who were spared are
Bolsonaro’s allies or appointees). On July 30th the Treasury Department
imposed sanctions on Moraes. And on August 6th, a 50% tariff on many
Brazilian goods came into effect, with Trump citing the “witch hunt” against
Bolsonaro.

Many Brazilians believe Eduardo is sacrificing the good of his country for
the interests of his family. But criticism of the supreme court is also
growing. The fake-news inquiry is now in its sixth year. Because it is sealed,
no one knows how many social-media accounts Moraes has ordered
removed or why.
The coup attempt was a reminder that some military men were willing to
reclaim power illegitimately in Brazil. But, as Steven Levitsky, a professor
of government at Harvard University, pointed out to me, the most successful
recent cases of autocratic takeover have come from democratically elected
leaders, not army coups. In Venezuela, Russia, Hungary and El Salvador
leaders used their initial popularity to undermine the courts and gag the
opposition. In these cases democratic erosion has been “gradual, non-violent
and often plausibly legal”, Levitsky said.

Bolsonaro’s allies are now set on next year’s election, when they hope to
win enough senate seats to impeach Moraes and neuter the courts. If they
succeed, then Bolsonaro will have achieved his aim—without his name even
appearing on the ballot. ■

Ana Lankes is The Economist’s Brazil bureau chief.

Illustrations by Coke Navarro

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and-wild-coup-attempt
Business
How China became an innovation powerhouse
Donald Trump, friend of the EV?
Service stations are getting a glow-up
How much trouble is the world’s biggest offshore-wind developer in?
The market for startup shares is getting even weirder
Feuds, grudges and revenge
How a power shortage could short-circuit Nvidia’s rise
Business | The ideas factory

How China became an innovation powerhouse

Its state-led model has generated impressive results. But the costs are
mounting
August 28th 2025

Most STARTUPS need time to prove that they can be trusted with investors’
money, let alone dangerous technologies. But not Fusion Energy Tech, a
Chinese company based in the city of Hefei that was carved out two years
ago from a nuclear-research lab. In July it announced that it would be
commercialising a plasma technology derived from fusing the nuclei of
atoms, which produces a reaction much hotter than the sun. It has already
developed a security-screening device using related technology that is
popping up in local metro stations. Commuters walk past them every day.

Xi Jinping, China’s supreme leader, is fixated on beating the West in new

technologies. Chinese businesses already dominate areas including electric
vehicles (EVs) and lithium batteries, and are fast taking the lead in emerging
fields such as humanoid robots. The country’s growing technological
prowess is thanks in part to the Communist Party’s conveyor belt of
innovation, which takes ideas developed in state-run labs and universities
and turns them into commercial products. The process, often referred to as
an “innovation chain” in policy documents, has led to rapid advances in a
number of fields.

Yet the costs of China’s model are steadily mounting. Critics argue that it
has wrought a vast misallocation of resources which is dragging down
economic growth. Before long, China’s state-led approach to innovation
could prove unsustainable.

China’s innovation chains often start with grants for researchers, who find a
placement in state-backed labs. These, in turn, are fertile ground for
government officials, who identify good ideas and help research teams set
up companies, often within local development zones.

A recent beneficiary of that process is Theseus, a company based in

Chongqing that makes computer-vision sensors. In 2019 it was little more
than a group of scientists from the state-backed Institute of Optics and
Precision Mechanics in the city of Xi’an, who would meet in a teahouse to
discuss commercialising their work. A district government in Chongqing,
hoping to develop a supply chain around their technology, provided funding
and helped the scientists launch their company in an industrial zone in 2020.

By 2024 Theseus had become a leading player in its field. It has hired
nationally renowned scientists, and in May this year announced it had
developed a new display screen using AMOLED technology, which
provides a sharper picture quality, in partnership with state-owned China
Mobile, the country’s largest telecoms firm.

State-backed research institutes, including labs and universities, are

increasingly commercialising their innovations in other ways, too. Some
have established marketplaces where companies can bid directly on their
patents. The Heilongjiang Academy of Agricultural Sciences in Harbin,
another city, recently auctioned off the patent behind a genetically modified
soyabean it had developed. In such cases an institute will often deploy
technicians to the company buying the technology to help them make use of
it.

One gauge of the strengthening ties between China’s private sector and its
research institutes is the revenue the latter collect when they sell their ideas,
co-develop technology or provide consulting services. Between 2019 and
2023, the latest year available, that figure nearly doubled, to 205bn yuan
($30bn).

The benefits of collaboration flow in both directions. In biotech, for

instance, state researchers have been able to tap into private resources to aid
their work, notes Jeroen Groenewegen-Lau of MERICS, a think-tank in
Berlin. University researchers are often granted access to industrial
fermentation facilities at local companies, which are used to harvest bacteria.

Hefei offers perhaps the best example of the drawing together of China’s
scientific and business communities under state direction. The city’s
government invests in private companies, builds supply chains around them
and acts as an interface between labs, universities and the private sector.
Fusion Energy Tech is but one of its many successes; plasma-fusion cancer
treatments developed in the city are now entering trials, and quantum-secure
mobile services developed there are already on the market.

Hefei’s government has focused in particular on working through

technological bottlenecks that market dynamics alone may have little
incentive to resolve. One example is in the quantum industry, where certain
low-temperature dilution devices that were available only from a few foreign
suppliers are now being built locally, even if some experts remain sceptical
of their performance.

China’s central government hopes to take the best such systems of

collaboration and replicate them across the country. In March the National
Development and Reform Commission was granted control over a 1trn-yuan
fund for investing in technology. Since 2023 it has been run by Zheng
Shanjie, formerly the highest-ranking party official in Anhui province,
where Hefei is located. The Ministry of Industry and Internet Technology
(MIIT) has begun overseeing the commercialisation of ideas within
industrial zones, notes Hutong Research, a consultancy based in Beijing. In
April Li Lecheng, who is credited with transforming two inland cities into
hubs for green energy, was appointed the head of MIIT, suggesting that the
party hopes to see many more such transitions.

For Chinese companies, the breadth of innovation under way in the country
offers significant advantages. For one thing, it makes it easier to break into
new industries, notes Kyle Chan, a researcher at Princeton University. One
example is Xiaomi, originally a smartphone-maker, which was able to build
a successful EV business in China in about three years. The range of
innovation has also helped give rise to new industries. China has become a
leader in the nascent business of flying taxis in part by drawing on its
expertise in both EVs and drones.

For all these successes, however, China’s innovation model comes with
costs—and these are mounting. Perhaps as much as 2% of GDP goes
towards subsidising industries in some form or another. As the state has
played a greater role in directing innovation, private venture-capital
investment has collapsed, falling by 50% year on year in the first half of
2025, according to KPMG, a professional-services firm.

The payoff from the state’s largesse is also becoming increasingly unclear.
China’s total factor productivity, which measures how well it makes use of
capital and labour, has stalled. Some efforts by local governments to build
clusters of expertise have failed, including the city of Nanning’s attempt to
develop an EV supply chain.

State subsidies have also led to severe overcapacity in many industries. The
vast majority of China’s EV-makers, for example, are not profitable. Too
many businesses now fight for the same customers, a state of unbridled
competition with few winners often referred to as “involution”. Meanwhile,
pursuing customers abroad is becoming more difficult amid resistance from
foreign governments. What is more, some technologies are being developed
in China without clear evidence of a market for them. People working on
humanoid robots complain that there are umpteen companies all producing
similar products without much genuine demand.

China’s state-led approach to innovation has helped create many world-class

firms, but the return on investment may be too low for it to continue much
longer. The debts China has accrued from funding innovation are vast and
unsustainable, argues Daniel Rosen of Rhodium Group, a research firm. Last
year public debt, including the amount owed by local-government financing
vehicles, reached 124% of GDP. Eventually Mr Xi may have little choice but
to dial down government support for new technologies. At that point China’s
conveyor belt of innovation could grind to a halt. ■

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powerhouse
Business | Emitting defeat

Donald Trump, friend of the EV?

His policies may ultimately help Detroit go electric
August 28th 2025

Having once described Joe Biden’s electric-vehicle (EV) policies as

“lunacy”, Donald Trump briefly seemed to be softening his opposition when
he bought himself a Tesla in March. It was his way of helping Elon Musk,
the carmaker’s boss and Mr Trump’s one-time pal. Yet after the pair fell out
spectacularly a few months later, Mr Trump put his Tesla up for sale.

Since then the president has made his true feelings towards EVs clear. The
“One Big Beautiful Bill” signed into law last month eliminates fines for
carmakers that fail to meet federal fuel-economy standards across their
fleets, which had boosted EV sales. Congress has also taken away
California’s waiver, which let it diverge from federal standards and set
tougher emissions regulations (the state is suing). On September 30th
purchase subsidies of up to $7,500 per EV and other tax credits that have
aided adoption will disappear, too. Next Mr Trump plans to rescind the
Environmental Protection Agency’s “endangerment finding”, an Obama-era
ruling that greenhouse gases such as carbon dioxide put public health at risk.
This would bring an end to all federal emissions standards (legal challenges
are also likely).

By watering down these rules, the president is doing Detroit’s “big three”
carmakers—Ford, General Motors and Stellantis—a favour. The shift in
policy will allow them to sell more petrol cars, which generate healthier
profit margins than EVs, partially offsetting the damage inflicted by Mr
Trump’s tariffs on imported cars and parts. Yet while his policies may slow
down EV adoption, they will not stop the transition.

Detroit is already seizing the opportunity presented by the rule changes. In

June gm announced a $4bn investment plan that will tilt production back
towards lucrative pickups and suvs with petrol engines. Stellantis (whose
largest shareholder, Exor, owns a stake in The Economist’s parent company)
recently signalled its continued reliance on petrol power with the revival of
its powerful (and noisy) Hemi V8 engine for its pickups.

The emissions free-for-all will also cut the need to buy carbon credits from
firms such as Tesla, which can be used to help meet targets. Ford, for
example, has lowered the value of credits it intends to buy this year by
$1.5bn. This will not be pleasant for Tesla, which made $2.8bn selling
credits in 2024, nor for ev startups such as Rivian and Lucid. But it will help
to defray the costs of Mr Trump’s tariffs.

The big three may take a combined hit of about $8bn this year on imports of
cars and parts from Mexico, Canada and elsewhere. For Ford, the reduction
in purchases of credits alone will go a long way to mitigating the expected
hit from tariffs, estimated at $2bn this year. Jefferies, an investment bank,
says that a “credible scenario” for next year would see the benefits from
looser emission rules outweighing the burden of tariffs.

Yet despite the internal-combustion renaissance, Detroit’s carmakers are not

slamming the brakes on electrification. According to forecasts by
Bloombergnef, a research group, ev sales in America will rise from around
1.6m cars this year to 4.1m in 2030, with the share of total car sales
increasing from 11% to 27%. That is down from the 48% in 2030 that it had
predicted last year, but is still significant progress.

What is more, America’s big carmakers sell not only at home, but also
abroad, and must keep pace with foreign competitors who continue to roll
out new EV models. Earlier this month Ford unveiled what it described as its
“Model T moment” for evs: a platform and production system that will
underpin several new affordable models, starting with a pickup launched in
2027 that will cost around $30,000. gm’s commitment to evs is also
“ironclad”, according to Bernstein, a broker. In July the carmaker said that
production of batteries well suited for entry-level evs would commence in
2027 with its partner, South Korea’s lg Energy Solution. Stellantis may have
scaled back ev launches, but still offers electric Jeeps, Ram pickups and
Dodge Charger, a revered muscle car.

Indeed, if the profits from selling petrol cars outweigh the costs of tariffs
over the next few years, that may even allow Detroit to invest more in
developing better evs. Future historians of the car industry may come to
regard Mr Trump as a friend of electrification, not the implacable foe he
once seemed. ■

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Business | Pulling out the stops

Service stations are getting a glow-up

EV drivers want a more pleasant experience while they wait for their cars
to charge
August 28th 2025

The Tesla Diner, an electric-vehicle (EV) charging hub and roadside

restaurant that opened in July in Los Angeles, is not your typical service
station. The architecture is sleek and retro-futuristic. The menu offers
traditional diner fare with a deluxe twist (including wagyu-beef chilli).
Optimus, Tesla’s humanoid robot, serves popcorn at an open-air cinema,
which drivers can enjoy while their vehicles charge.

Service stations are getting a glow-up. It takes around two minutes to fill up
a petrol car, but around 25 minutes to charge a Tesla Model 3 to 80% of its
capacity. Longer stops are fuelling demand for a more pleasant experience
than what the industry has customarily offered. Last year Rove, an American
startup, launched a charging hub in Santa Ana, California, where drivers can
relax in an on-site lounge and shop at Gelson’s, an upscale grocery chain.
William Reid, its boss, says the site has received an “extraordinary
response”, averaging 700 charges a day since the launch, double what it
expected.

It is not just an American trend. Westmorland Motorway Services, a chain of

posh British driving stops that serve up local produce, has been investing in
more EV chargers for its forecourts. Sarah Dunning, its chair, reckons that
its sites are perfect for well-heeled EV drivers looking “for a happier way to
spend their time while charging”.

The rise of EVs is not the only disruptive development for service stations.
More fuel-efficient petrol engines and the growth of alternatives to car
ownership such as ride hailing have also weighed on the industry. In
response, service stations are getting larger and offering higher-quality food,
drink and shopping to entice customers who aren’t stopping to refuel, says
Dan Munford of Insight Research, a consultancy. Applegreen, a fuel retailer
with sites in America and abroad, recently sold its British petrol-pump
business to invest in bigger sites with fancier food and drink. “When people
do stop, they want to be spoiled,” says Joe Barrett, Applegreen’s boss.
Yet reinventing the service station will be hard. The Tesla Diner was billed
as an around-the-clock dining experience, but is open to the public only
from 6am to midnight and has removed several items from the menu (Tesla
drivers can still order food from their vehicles at all hours). “It’s hard to
offer high-quality food 24/7,” notes Mr Munford.

What is more, advances in charging technology could lead to less idle time
for EV drivers. BYD, a Chinese EV-maker, has developed a charger that
supplies about 250 miles (400km) of range in five minutes. More city-
dwellers may also be able to power their EVs at home or work as street-side
charging points become widely available. Only the swankiest of service
stations may survive. ■

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up
Business | Steadying Orsted

How much trouble is the world’s biggest offshore-

wind developer in?
Orsted is suffering from Donald Trump’s grudge against “windmills”
August 28th 2025

Foul winds keep blowing Orsted’s way. On August 22nd Donald Trump’s
administration ordered the offshore-wind developer to stop work on its $4bn
Revolution Wind project off the coast of New England. The development,
which is part-owned by BlackRock, an American investment titan, is
roughly four-fifths completed, with all licences and approvals in hand.

Less than two weeks earlier the Danish wind giant had announced it would
seek to raise $9bn in equity to shore up its finances in response to “material
adverse developments” in America. Mr Trump has long held a grudge
against “windmills”; he once sued the Scottish government in a failed effort
to stop the development of a wind farm within view of one of his golf
courses. In April the president ordered a stop to an offshore-wind project led
by Equinor, a Norwegian energy giant (the order was later lifted). In July he
signed into law his “One Big Beautiful Bill”, gutting subsidies for the
industry. All that has weighed heavily on project valuations in America.

Mr Trump’s return to office comes atop a difficult few years for Orsted,
which has also been hit by rising interest rates and supply-chain troubles. Its
market value has fallen by roughly 85% from its peak in 2021, to around
DKr 80bn ($12.5bn; see chart). This month S&P Global, a rating agency,
downgraded the company’s debts to BBB-, one notch above junk status. Yet
despite the stormy weather, there is no need for Orsted’s investors to panic.

This week the company’s bosses were busy drumming up support in

Frankfurt and London for its share offering. Alexander Flotre of Rystad
Energy, a research firm, is confident that this will go ahead more or less as
planned, given that Orsted has the support of big banks such as JPMorgan
Chase as well as the Danish government, which holds a majority stake in the
formerly state-run business and plans to take part in the process. A
prospectus will be published after an extraordinary general meeting on
September 5th.
Orsted’s financial position is not yet a cause for alarm. Its annualised return
on capital employed was a relatively healthy 7.5% in the first half of 2025,
rising to 12.3% once accounting impairments and costs related to project
cancellations are excluded. Analysts expect it to generate an operating profit
(before depreciation and amortisation) of DKr 28bn this year, about as much
as in 2024 and enough to comfortably service the company’s DKr 66bn pile
of net debt.

And despite its troubles in America, Orsted has a number of promising

projects under way in Britain, Germany, Poland and Taiwan that are
expected to start operating this decade. In July it signed a 20-year deal with
TSMC, the world’s biggest chip manufacturer, which will purchase all the
power from a 920-megawatt wind farm off the coast of Taiwan.

To fund its future growth, Orsted will continue selling off assets, a process it
calls “farming down”. In October it offloaded a stake in four offshore wind
farms in Britain to Brookfield, a Canadian asset manager, and it is in the
process of selling its onshore wind and solar assets in Europe. The company
has said that it expects to raise $5.5bn through such sales this year and next.

Although more expensive than onshore wind or solar, the cost of offshore
wind has plunged over the past decade, making it increasingly competitive
as a source of energy. Beyond America’s shores, fairer winds await. ■

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biggest-offshore-wind-developer-in
Business | Privacy controls

The market for startup shares is getting even

weirder
Investors want access to the hottest unlisted companies, however they can
get it
August 28th 2025

“IT’S NOT fun being a public company,” lamented David Solomon, the
chief executive of Goldman Sachs, earlier this year. Firms should proceed
with “great caution” before pursuing an initial public offering (IPO), he
warned, owing to the additional burdens associated with being listed.
Coming from the boss of an investment bank that makes its money partly by
taking companies public, the comments carried a good deal of weight.

Yet even unlisted firms are now struggling to stay truly private. A record
$102bn in venture-capital (VC) stakes traded hands in secondary markets
globally in the first half of the year, up by 41% from the first half of 2024,
according to Evercore, another investment bank. Such transactions can offer
early investors and employees a way to cash out without waiting for an
IPO. But new and unorthodox methods used by outsiders to get a stake in
buzzy startups are proving to be a headache for founders—and a risk for
investors.

One such method that has recently become the target of founders’ ire is the
Special Purpose Vehicle (SPV). These are established by an investor,
typically a vc firm, in a company. Outside investors then buy into the SPV,
which provides them with indirect exposure to the startup’s financial future;
on the firm’s capitalisation table, where its investors are listed, only the SPV
itself appears. The format is not new, but with excitement about artificial
intelligence (AI) at fever pitch, so-called secondary SPVs—in effect, an
SPV of an SPV—are becoming common, too.

That could cause trouble for startups. American companies with over 2,000
individual shareholders and more than $10m in assets must file financial
reports to the Securities and Exchange Commission, a markets watchdog.
SPVs also create risks for investors. OpenAI, the buzziest of all AI startups,
recently warned that SPVs may violate the transfer restrictions it imposes on
its shares, leaving investors with no exposure to the company at all. More
than 13,000 customers put money into SPVs via Linqto, a private-market
investing platform, before it went bankrupt in July; the amount they will be
able to recoup is unclear. OpenAI and Anthropic, a rival AI startup, are
trying to limit the creation of SPVs by their direct investors.

Then there are the growing number of private exchanges that offer
shareholders in startups the opportunity to offload their stakes to buyers who
are typically willing to pay a premium for them. SpaceX, Elon Musk’s
rocketry firm, was valued at around $400bn in a tender offer to employees in
July, equating to around $212 per share. Investors can currently buy shares
in the company on Forge Global, one exchange, for $246. Yet such
transactions can potentially be blocked by other shareholders, depending on
the rights that have been granted by the startup. Hiive, another exchange,
says that only 72% of deals it arranged last year were approved, though that
is up from 67% in 2023.
Perhaps the strangest new method of getting exposure to trending startups is
tokenised stocks, which are settled on the kinds of digital ledgers that
support cryptocurrencies. These are meant to move in tandem with the
startup’s shares, but do not provide the holder with an equity stake. In June
Robinhood, an online broker focused on retail traders, launched one such
offering. To drum up interest, it gifted European customers tokenised shares
in OpenAI and SpaceX. OpenAI said the company was not involved and did
not endorse the offer.

Some founders may fret about a loss of control over their investor base. But
as startups stay private for longer and enthusiasm for AI becomes ever more
feverish, the desperation to get in on the action will only grow. For their
part, outside investors can expect to pay more, and own less. ■

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getting-even-weirder
Business | Bartleby

Feuds, grudges and revenge

Welcome to the dark side of the workplace
August 28th 2025

One of the more touching on-screen relationships is that between C-3PO and
R2-D2, two robots who appear in the “Star Wars” films. The actors behind
the droids got on less well. “He was in a box he couldn’t do anything with,”
Anthony Daniels dismissively said of Kenny Baker, the man who played the
part of R2-D2. “Rude to everyone”, was Baker’s verdict on his fellow actor.

Antipathy need not prevent good work. Messrs Baker and Daniels managed
to put aside their differences on set (it must help to be able to roll your eyes
without being seen). And friction can be good for organisations: a contest of
ideas about how to get something done ought to yield better outcomes. But
such “task-related” disagreements can easily curdle into something more
personal and destructive.
Every workplace has a simmering feud or long-run grudge. These fractured
relationships can exact a heavy price. Research published for Acas, a
mediation service, in 2021 put the annual cost to British organisations of
resolving work conflicts at £28.5bn ($39bn), factoring in resignations, sick
leave, dispute resolution and the like. And that’s before you take into
account the hidden costs of withheld co-operation and time lost on Gothic
revenge fantasies.

Humans are hard-wired for disagreements to escalate. One of Lindy Greer’s

favourite classroom exercises at the University of Michigan’s Ross School
of Business is to have students at different tables learn slightly different
rules for the same game (aces high in some cases, aces low in others, for
example). When people move tables and start to unexpectedly claim victory,
other players are far quicker to assume they are stupid or cheats than to
question whether they have a different understanding of the game. This is a
good demonstration of the “fundamental attribution error”—the tendency for
people to assume that the actions of others are determined by their
personalities, not by external factors.

Once someone feels they have been intentionally wronged, their instinct is to
get even. “The Science of Revenge”, a recently published book by James
Kimmel, argues that a desire for vengeance activates the same brain circuitry
as a drug addict thinking about their next hit.

In a study conducted by David Chester of Virginia Commonwealth

University and C. Nathan DeWall of the University of Kentucky,
participants played a computer game in which a virtual ball is tossed
between three players; in some iterations of the game, the ball is passed back
and forth between two of them, conspicuously ignoring the third player.
Rejected players are shown a visualisation of a voodoo doll representing
their partners, and asked to choose how many pins they would like to stab it
with. The moral of the story: pass the ball to everyone.

Organisations have features that are particularly liable to stir up bad blood.
Power struggles pervade firms: Ms Greer’s research suggests that people on
senior leadership teams can be particularly sensitive about protecting their
turf. Organisations can also make forgiveness harder, says Thomas Tripp of
Washington State University. Dispute-resolution processes are definitely
better than people seeking to exact their own revenge (“a very sloppy form
of justice”, he says) but overly legalistic approaches can also serve to drag
things out.

The solution to all this seething lies partly with managers. Disrespectful
corporate cultures are fertile ground for feuds. It’s usually worth bosses
trying to sort out ructions informally before getting HR involved. Framing
some types of disagreement as being for the good of the firm might stop
conflict escalating.

But individuals are best placed to stop things from spiralling out of control.
Ms Greer recommends asking follow-up questions whenever you are in a
disagreement, so that you understand where someone is coming from rather
than assuming the worst of them. And if you ever end up ruminating about
an apparent slight, Mr Tripp recommends the adage known as Hanlon’s
razor. “Never attribute to malice that which is adequately explained by
stupidity,” is not the most generous way to interpret the behaviour of
colleagues. But it might help subdue your craving for revenge. ■

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Business | Schumpeter

How a power shortage could short-circuit Nvidia’s

rise
Too many chips, too little juice
August 28th 2025

ON AUGUST 27TH Nvidia performed what has become a quarterly ritual

beating of expectations. Analysts forecast that the chipmaker would sell
$46bn-worth of semiconductors in the three months to July. It made closer to
$47bn. Its latest Blackwell graphics-processing units (GPUs), whose
unrivalled number-crunching prowess has won over artificial-intelligence
modellers, are flying off the shelves. So are its GB-series AI superchips,
which combine two Blackwells with a general-purpose processor. Nvidia
probably sold over 600,000 Blackwells and nearly as many GBs, nearly 20%
more than last quarter, accounting for almost 60% of total revenue. It is on
track to sell 2.7m and 2.4m, respectively, this year.
Nvidia bulls on Wall Street now reckon that America’s chip champion could
be worth $5trn before long, having become the world’s first $4trn company
only in July. It looks, in the words of many a breathless commentator,
unstoppable. And yet fittingly for an unstoppable force, Nvidia is about to
come up against an immovable object. Or at least an object that has not
moved much in decades—America’s power grid.

Energy has not historically been a constraint on computing. Even as

rocketing internet traffic increased the workloads of the world’s data centres
nine-fold between 2010 and 2020, their overall power use stayed completely
flat. Every generation of chips was more efficient than the last. AI has turned
this trend on its head. A non-AI data-centre computing unit, or rack, needs
around 12 kilo-watts (kW) of power to run. An equivalent AI module
requires 80kW when training large language models like the one behind
ChatGPT, then 40kW when responding to users’ prompts. Zippier
semiconductors can consume a good deal more than that.

Nvidia’s are, naturally, the zippiest of all. A single Blackwell chip needs
1kW, three times more than its Hopper predecessor. Racks contain dozens of
them. Nvidia sells modules packed with 36 GB superchips, which is to say
72 Blackwells and three dozen general-purpose chips, designed to operate at
132kW. A secondary cooling system to stop the semiconductors overheating
from all that thinking can add 160kW per rack.

Tot it all up and the extra power requirements are staggering. Analysts
predict that between February 2024 and February 2026 Nvidia will have
sold some 6m Blackwells and 5.5m GBs. Assume that half of these end up
in America, in line with its home market’s historical revenue share. If
installed and operated at capacity, those chips would raise American power
demand by 25 gigawatts (GW). That is almost twice as much as all of
America’s utility-scale producers added in 2022 and not far off the 27GW
they managed in 2023. And that is not counting next-generation Rubin chips
Nvidia plans to launch next year, or AI racks sold by rivals such as AMD,
not to mention other power sinks such as electric cars.

A recent global survey of data-centre managers by Schneider Electric, a

French maker of energy-management kit, found that available power and
transmission capacity was a near-universal concern. It occupied the minds of
executives more than anything else, including access to those hot-ticket
GPUs. Bernstein, a broker, estimates a potential power shortfall in America
of 17GW by 2030 if the chips get more energy efficient, and 62GW if they
don’t. Morgan Stanley, a bank, puts the gap at 45GW by 2028.

If American power companies do not pick up the pace, in other words, chip
sales could stall or sold chips could lie idle. The latter would weigh on the
profits of AI powerhouses such as Alphabet and Microsoft that are splurging
billions on GPUs. The former would drag down Nvidia. Neither eventuality
appears to be factored into the tech giants’ lofty valuations. The implicit
assumption seems to be that American electricity providers will step up.

The power sector is starting to stir from a prolonged motionlessness in

which capacity edged up by low single digits annually. Between 2022, when
ChatGPT ignited the AI boom, and the 12 months to June this year, the
combined capital spending of America’s 50 biggest listed electricity
providers rose by 30%, to $188bn—a compound annual increase of 7%,
adjusting for inflation. According to S&P Global, a data provider, they are
planning to add new plants with a collective capacity of 123GW, on top of
the 565GW currently in operation. Suppliers of power equipment such as
Schneider Electric are seeing American sales accelerate.

Yet reasons for caution abound. Industry bosses are unaccustomed to

running a growth business and could stumble. Ambitious plans aside, their
firms’ new capacity actually under construction amounts to just 21GW
between them. Even if they do try to build more plants, they may struggle to
fit them out. Manufacturers are in no rush to expand production. The world’s
100 biggest makers of electrical equipment have cut their capital spending
by 3% a year since 2022 in inflation-adjusted terms. That could spell pricier
equipment, made dearer still by tariffs.

Analysts expect listed power companies’ sales to grow at an annual rate of

6% between 2025 and 2028 in nominal terms, up from 4% nominal growth
since 2022 but no bonanza. As the canonical dividend stocks, they have paid
$87bn to shareholders since the start of 2023, leaving less cash for
investments. Many are regulated monopolies, and legally obliged to reflect
more capital spending in higher bills. This would irk inflation-wary
Americans and, worse, the business-browbeater-in-chief in the White House.
Some data-centre operators are taking things into their own hands. Alphabet
is putting solar panels and battery storage in some data centres. Meta’s
project in Louisiana will run in part on natural gas tapped on site. Still, it is
power companies that generate virtually all American electricity. Without
their help, Nvidia’s epic surge will sooner or later power down. ■

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circuit-nvidias-rise
Finance & economics
How Trump’s war on the Federal Reserve could do serious damage
Assessing the case against Lisa Cook
Why you should buy your employer’s shares
Fear the deficit-populism doom loop
Gambling or investing? In America, the line is increasingly blurred
Even as China’s economy suffers, stocks soar. What’s going on?
Trump’s interest-rate crusade will be self-defeating
Finance & economics | Cooking up a storm

How Trump’s war on the Federal Reserve could

do serious damage
Just consider what happens if inflation starts to rise again
August 28th 2025

Pity the bond trader without Truth Social on their phone. All it took was one
after-dinner missive, fired off by the president on his social network, to turn
the White House’s tussle with the Federal Reserve into something more
worrying. On August 25th Donald Trump posted a letter saying he had fired
Lisa Cook, a Fed governor, for alleged mortgage fraud.

Although presidents can sack Fed officials, they can do so only “for cause”
and none has used the power before. Ms Cook has not been charged with a
crime, let alone convicted of one. The claim—that she listed two homes as
her primary residence—was first made by Bill Pulte of the Federal Housing
Finance Agency, who has made similar claims against others (none yet
leading to legal charges). Ms Cook has pledged to fight the firing in court
and, in the meantime, to stay in her post.

The move is a remarkable escalation in Mr Trump’s campaign against

independent central banking. The Fed was mostly peripheral in his first
term, occasional grumbles aside, but has become a bogeyman in his second.
He has loudly and publicly demanded interest-rate cuts, and dubbed Jerome
Powell, the chairman, “too late” for failing to provide them. He has toyed
with sacking Mr Powell, and for a spell tried to use the costly renovation of
the Fed’s headquarters as a pretext. He blames the Fed for constraining the
housing market with high interest rates. “Once we have a majority, housing
is going to swing,” he said recently.

So far, Mr Powell and the Fed have largely ignored the ruckus. There have
been no interest-rate cuts since December, though one looks likely in
September. Behind the insouciance lies confidence in the Fed’s legal
protections: governors have long terms and are hard to evict. The Supreme
Court recently carved out the central bank in a ruling making it easier for
presidents to fire agency bosses. But the attack on Ms Cook raises the
pressure. Her term is due to run until 2038; successfully replacing her with a
Trump loyalist would leave these defences looking fragile.

Three pressure points will determine how much damage Mr Trump manages
to do. First is the coming court battle over Ms Cook. Proving that her alleged
misdeeds merit a sacking will be difficult. She filed the paperwork in
question in 2021, while a private citizen. Demonstrating wrongdoing may
also mean showing that any misrepresentations were deliberate. Few expect
a swift resolution. Betting markets place odds of just 10% on her being
successfully removed by the end of September, rising to 25% by the end of
the year.

Second is a vote, carried out every five years, by the seven Fed governors to
approve regional Fed branches’ choice of presidents. A rotating cast of five
regional Fed presidents rounds out the 12-person Federal Open Market
Committee (FOMC), which sets interest rates. That vote comes early in
2026. If Ms Cook is pushed out, and the Senate confirms replacements for
both her and Adriana Kugler, another Fed governor who has recently
resigned, then in principle four of the seven Fed governors will be Trump
appointees, and could insist on sympathetic regional presidents. However,
even in that scenario, such blatant interference is unlikely. Christopher
Waller and Michelle Bowman, the two governors appointed during Mr
Trump’s first term, are technocrats.

The third pressure point is the end of Mr Powell’s term. After first seeming
to narrow the field, Mr Trump has floated a longer, zanier list of names.
Among the main contenders, Mr Waller, who predicted against consensus
that America could cool inflation without a recession, would be the most
reassuring pick. If Mr Trump opted for a loyalist such as Kevin Hassett, one
of his economic advisers, the FOMC’s ability to outvote him would protect
against meddling—unless it was undermined by more Cook-style ejections.

The last president to try seriously to fiddle with the Fed was Richard Nixon,
who leant on Arthur Burns, then chair, to lower interest rates ahead of the
presidential election in 1972. It was a calamitous move. Inflation rose even
before the oil shock of 1973, and took another decade to contain. Thomas
Drechsel of the University of Maryland estimates that a bout of political
pressure about half as intense as the Nixon effort, applied for six months,
could raise prices by 7% over a decade.
And Mr Trump has taken a far more brazen approach to pressuring the Fed
than even Nixon dared. Markets have become more sceptical of America
during his second term. The dollar has fallen by 9% against other rich-world
currencies. Gold, a store of value that does not rely on the credibility of any
central bank, has soared. Although short-term Treasury yields have fallen as
the American economy has softened, longer-term yields have stayed high
(see chart), reflecting investor concern about America’s debt load and threats
to economic institutions such as the Fed.

At the same time, stocks have countered the gloom, and are at all-time highs.
Stocks, Treasuries and the dollar all fell after Ms Cook’s “sacking” was
announced, but the scale of the moves was trifling. Taking threats to Fed
independence seriously would almost certainly warrant a far sharper
response. So why the relative calm? In part, because Mr Trump has many
battles still to fight. Securing a sympathetic FOMC majority would require
successfully persuading courts to allow him to sack Ms Cook, pushing
several lackeys through confirmations in the Senate and convincing several
more independent-minded governors to demand a pliant slate of regional
Fed presidents.

But investors’ sangfroid also creates a problem. Mr Trump’s habit is to keep

pushing until he meets resistance. Markets are relaxed because they expect
the president to back down, yet market discipline is probably needed to force
a rethink. And although a full-on Fed takeover is only an outside possibility,
the president’s war on central banking could still do serious damage. For
one, he has already broken a decades-long norm that Fed independence is
sacrosanct. If political control of the Fed becomes a consistent Republican
demand across election cycles, the politicisation of monetary policy is near-
inevitable.

Hurting confidence in America’s economic institutions matters, too. The Fed

has already been shaken by its failure to anticipate post-pandemic inflation.
Higher interest rates were able to tame rising prices without a recession in
large part because people trusted the Fed would be able to get inflation back
to its target of 2%, preventing a 1970s-style wage-price spiral. Even under
normal circumstances, pulling that trick off again would be difficult, for
Americans are now primed to expect inflation. Doing so with a politically
compromised central bank would be harder still.
A loss of faith in the Fed would also cause problems in the bond market.
America now runs a fiscal deficit of 7% of GDP, three times as high as in
Nixon’s day. Government net debt sits at around 100% of GDP. Persuading
investors to swallow such borrowing is never straightforward. The sales
pitch becomes near-impossible if the Fed cannot be trusted to keep inflation
in check. So far, America has remained attractive because of its status as a
haven, and because most other rich countries are also borrowing more. But
investors do have alternatives, and with a few more Truth Social posts they
may start to turn to them. ■

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federal-reserve-could-do-serious-damage
Finance & economics | Bill’s attempted kill

Assessing the case against Lisa Cook

How strong is the evidence, and how bad would it be if the claims were
true?
August 28th 2025

Criminal investigations do not usually start with tweets. They very rarely
start with tweets by government officials asserting someone’s guilt before a
charge has even been laid. That, however, is how the case against Lisa Cook,
a governor of the Federal Reserve, began on August 20th, when Bill Pulte,
head of the Federal Housing Finance Agency, published a letter alleging that
Ms Cook had “falsified bank documents and property records to acquire
more favourable loan terms, potentially committing mortgage fraud”. Mr
Pulte then tweeted a screenshot showing her signature on two documents. It
is on the basis of this evidence that President Donald Trump sought to sack
Ms Cook on August 25th. She has refused to resign; the courts will consider
what is required to remove a Fed governor “for cause”.
Mr Pulte’s precise allegation is that Ms Cook took out two mortgages a
fortnight apart—one for a house in Michigan and another for a flat in
Atlanta—and claimed that both would be her main residence. Lenders tend
to charge much lower interest rates for first homes than for second homes or
investment properties, since people are less likely to default on a loan if
doing so would make them homeless. Intentionally misleading a bank could,
in theory, constitute fraud. Given that Ms Cook is a financial regulator, it
would be hard for her to stay in her post if the allegations were more
substantiated, even if she were not convicted and regardless of the
motivations of those making the accusations. She says that she is gathering
evidence to prove her innocence.

The problem, for Mr Pulte, is that substantiating his charge is fiendishly

difficult. According to a study in 2023 by the Fed’s Philadelphia branch,
“owner-occupancy fraud” is common. Perhaps a third of investment-
property owners have mortgages on residential terms, and their default rates
are indeed higher. In a housing crash, this could prove costly for lenders.

Yet the paper is an economic study, not a legal one. Kathleen Engel, an
expert on mortgage regulation at Suffolk University, says giving wrong
information to a bank does not in itself constitute criminal fraud in the way
that, say, doing so on a tax return would. To be fraud, the deception must
have been deliberate, typically the bank must have lost money as a result and
it must be able to show it would not have lent had it known the truth. Just 38
people were convicted of any type of mortgage fraud last year, in large part
owing to the difficulty of such prosecutions.

There are circumstances in which claiming two primary residences would

make sense. It can happen as a result of moving home, and is sometimes
explicitly allowed by banks—as, for example, when a married couple work
in different cities and both homes are genuinely lived in by the applicants.
Ms Cook is also accused of briefly listing her flat in Atlanta for rent. Yet on
her financial disclosures she did not report any rental income. To prove
criminal fraud, prosecutors would have to show not only that any deception
was intentional, which is hard as mistakes are common, but also that it
carried a cost for the lender. Mr Pulte has not shown she misled the bank,
whether on purpose or by accident.
Alongside Mr Pulte, the other instigator of the accusations is Ed Martin, an
official at the Department of Justice who, from January to May, served as the
interim US Attorney for the District of Columbia. Mr Martin, who in that
job liked to send strange letters to Democratic politicians accusing them of
crimes, failed to be confirmed by the Republican Senate. He has also made
the same accusation of fraud against Letitia James, the attorney-general of
New York, who prosecuted Mr Trump last year, and Adam Schiff, a
Democratic senator from California. No indictments have emerged in either
case. ■

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against-lisa-cook
Finance & economics | Buttonwood

Why you should buy your employer’s shares

Even though doing so flies in the face of most financial advice
August 28th 2025

It is not hard to see why Jamie Dimon owns a lot of shares in JPMorgan
Chase. He is the bank’s boss and its shareholders want his interests to be
aligned with theirs. Paying him mostly in stock, rather than cash, helps
ensure that they are. An executive with a significant proportion of savings
invested in their firm’s shares has tied their future to the company’s. This
discourages them from doing things that might pad their wallets in the short
term at the expense of shareholders’ long-term returns, such as expanding
the firm unsustainably fast. The incentives are stronger still if—as with Mr
Dimon—the boss is promised shares for delivery some time hence, or if any
sales prompt newspaper headlines.
It is rather more surprising that many mid-level bankers own a lot of their
employers’ stock. Banks probably benefit from awarding them shares: as
with bosses, aligning rank-and-filers’ interests with shareholders’ makes
sense, especially when relatively junior employees can risk the firm’s funds
and reputation. But the bankers themselves might well make their living
from preaching the virtues of diversification to clients. This gospel says that
tying your savings to your employer’s prospects is unwise, since you already
depend on them for your salary. It is particularly risky if you work in an
industry famous for culling staff in down years. Such people know better
than anyone what to do with a stock award: sell it and use the proceeds to
buy investments that spread your risk rather than concentrating it.

At this point your columnist, a mid-level financial journalist who purports

also to understand diversification, must confess some sympathy with these
bankers. This is because he owns shares in The Economist Group. Worse, he
did not even receive them as part of his pay, but actively decided to invest.
Here, then, is why you should consider flouting the best financial advice
around and buying shares in your employer.

For a start, doing so might come with some psychological upside (provided
you are not too troubled by taking unwarranted risks with your savings).
Left-wingers often approve of employee ownership because it gives workers
a slice of the profits that would otherwise accrue only to avaricious
capitalists. Right-wingers like it because it ushers workers into the capitalist
tent. Less is said about the quiet feeling that you are on the same side as
your employer, rather than having been pitted against them. Worried that
you are overworked for your salary, or that too little of your firm’s revenue
flows into wages? Any gains are going to shareholders, so it helps to be one
of them—even if you own too few shares to benefit much. The hedge might
be more emotional than financial, but it is not nothing.

Then there are the more cold-eyed advantages. Suppose you work for a
privately owned firm that is about to be taken over by a competitor (which,
for the record, The Economist is not). If you have spurned all offers to buy
shares, the first you might hear of the takeover is when the rival company’s
executives march into your office and start laying people off. If you are a
shareholder, though, you might get some warning: no matter how small your
holding, you will probably get a vote on the acquisition.
For some, investing in their employer might also be a rare opportunity to
gain exposure to a kind of asset that they might otherwise have difficulty
acquiring. Anyone can buy shares in JPMorgan, but buying private equity is
more difficult for retail savers, even now that some barriers have begun to
come down. Access to the high-risk, and potentially high-reward, leveraged
buy-outs that powered the growth of private markets in the 2010s is still
mostly limited to big, institutional investors.

A frequent exception is the employees of companies being bought out, who

can often invest on the same terms as the giants. Their doing so would
horrify a diversification purist, adding the extra risk of leverage to the
double whammy of betting savings on the firm that pays their salary. Yet
such employees are also well placed to judge the wisdom of the buy-out:
whether borrowing costs can be met, for instance, or if the growth required
to justify the valuation is realistic.

None of this means anyone should invest a big share of savings in their
employer unless they are obliged to—especially if they work for a listed
firm, with shares that confer fewer advantages. A small stake, though, might
be worth defying financial advisers. And for your columnist’s sake, in more
ways than one, please keep buying The Economist.■

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your-employers-shares
Finance & economics | Between a graph and a fist

Fear the deficit-populism doom loop

Politicians, particularly in Europe, are in a terrible bind
August 28th 2025

You are a finance minister after a decade of meagre economic growth,

shocks from a financial crisis, a pandemic and sky-high energy prices.
Public debt is worth more than your country’s gross domestic product,
interest rates are at their highest in years and merely servicing outstanding
debt is taking up an ever-greater share of tax revenue. Inflation is stubborn.
America’s profligacy is satisfying much of the world’s appetite for
government bonds, meaning your debt must pay more to attract investors.
You lie awake worrying about how to make the numbers add up. Your
fellow ministers, meanwhile, fret for their careers: populist parties are on the
rampage. The economic context calls for fiscal consolidation; the political
one warns against austerity. What do you do?
This is the bind facing governments in much of the rich world. The average
fiscal deficit in the OECD, a club of mostly rich countries, hit 4.6% of GDP
last year, up from an average of 2.9% in the four years before the covid-19
pandemic; interest payments on outstanding debt came to 3.3% of GDP, only
just below the amount Nato members hope to spend on defence by 2035.
The political-science literature offers some comfort—austerity is not usually
a barrier to re-election—but also a warning. Research shows a link between
spending cuts and populist success. Indeed, in Britain, France and Germany
such parties are already ascendant. Call it the deficit-populism doom loop:
ministers face both big deficits and voter revolts, and there is little way of
satisfying both the bond markets and the barbarians at the gate.

During the slow recovery from the global financial crisis of 2007-09, many
governments delayed fiscal consolidation and borrowed. Today’s economic
backdrop is less conducive to such an approach: debts are higher and central
banks are tightening policy, rather than engaging in quantitative easing. The
Bank of England has been reducing its bond holdings by about £100bn
($135bn) a year, making it harder for the state to find buyers for the £300bn
or so of bonds it sells annually. Bondholders are restive. France’s ten-year-
bond yield is 3.5%, up from less than 1% a decade ago. Higher inflation and
higher interest rates, which become more likely when governments borrow
heavily, can also inflict political pain on incumbents, as President Joe Biden
discovered.

Borrowing more is therefore unappetising. The fiscal conditions also make

the prospect of hard-right governments more worrying. Populists typically
promise higher spending on pensions and family benefits, as well as tax cuts
—a noxious mixture in present circumstances. As such, unpopular spending
cuts may be self-defeating: there is no point righting the fiscal ship only to
put a free-spending populist in power. Bond markets have already started to
fret about hard-right success. When Emmanuel Macron called a snap
election in June 2024 the spread between yields on France’s ten-year bonds
and those on Germany’s rose from 0.5 to 0.8 percentage points as investors
worried about the National Rally. With the minority government now facing
a vote of confidence on September 8th, the spread has risen once again.

In theory, it might be possible to sell spending cuts to voters. Governments

are often re-elected after implementing austerity; a smart politician can get
cuts out of the way well before an election comes round. However, studies
also suggest that, over time, spending cuts sap support for the political
mainstream. A forthcoming review by Evelyne Hübscher of Central
European University and Thomas Sattler of the University of Geneva finds
that the spread of populism in western Europe has occurred in waves that
coincide with episodes of austerity. Debates about immigration, public
services and benefits—all become more potent when what Stefanie
Stantcheva of Harvard University calls a “zero-sum mentality” has
developed.

This is borne out by small-scale studies. Simone Cremaschi of Bocconi

University and co-authors looked at variations in Italian local-authority
reforms. They found that, in areas where cuts to public services were
deepest, hard-right parties went on to win more votes. Another paper by
Zachary Dickson of the London School of Economics, Mr Cremaschi and
co-authors finds that Reform UK thrives in areas with recently closed
National Health Service practices. Potholes and poor roads seem to correlate
with the party’s success, too. “Invest in key public services to make people
see that it is worthwhile paying their taxes and being part of this democratic
system,” advises Catherine de Vries of Bocconi.

Putting money into public services would, though, require tax rises. They
might be less likely than spending cuts to encourage the rise of populists.
Jacopo Ponticelli of Northwestern University and Hans-Joachim Voth of the
University of Zurich looked at fiscal consolidations across a number of
countries from 1919 to 2008. They discovered that although there is a clear
association between spending cuts and instances of social instability, such as
riots, tax rises had only a “small and insignificant” impact. The problem is
that they would bring other costs. Alberto Alesina of Harvard and co-authors
find that austerity packages which lean more on tax rises than spending cuts
are worse for long-term economic growth. Free-market parties that
implement tax rises are especially punished for doing so by voters.

Are there other options? Sensible debt management might have been one. In
recent decades, as Barry Eichengreen of the University of California,
Berkeley, and Rui Esteves of the Geneva Graduate Institute have noted,
credible policy and long-duration bonds have prevented modest bouts of
inflation from sending yields soaring, which slows down the accumulation
of debt. The problem is that in recent years most countries have moved away
from issuing long-term bonds. Indeed, quantitative easing, which involves
swapping longer-dated government debt for overnight deposits with the
central bank, has shortened the effective maturity of government liabilities,
making them more sensitive to changes in short-term interest rates.

Messrs Eichengreen and Esteves point out that, since the second world war,
European governments have most commonly reduced their debt via either
fast economic growth or financial repression. Fast economic growth does
not seem likely today, leaving financial repression. It typically involves
either capital controls or financial regulation that keeps nominal interest
rates below the rate of inflation. Although few governments are keen to
return to the post-war era of capital controls, some are flirting with other
forms of repression. Ideas include scrapping interest payments on central-
bank reserves or making pension funds buy domestic assets. British
policymakers may use tax incentives to encourage savers to invest at home.

Financial repression, however implemented, is ultimately a tax on savers,

who receive worse returns when forced to invest in their domestic market.
Far more voters now own assets and private pensions than during post-war
episodes of repression. It is unclear how they would react to being forced, in
effect, to hand over a chunk of their savings to the government, but it is not
hard to imagine a backlash.

The populist bind, therefore, is a tight one. Pity the finance minister hoping
to keep debt burdens under control and the hard right at bay. At least, during
his sleepless nights, he can console himself that when he is booted from
office his populist successor will face many of the same constraints. See how
they like it. ■

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populism-doom-loop
Finance & economics | One big casino

Gambling or investing? In America, the line is

increasingly blurred
Bet on stocks in a prediction market run by a sports-betting firm and a
futures exchange
August 28th 2025

Economists and financiers have compared stockmarkets to gambling since

1936, when Keynes warned of “the capital development of a country
becom[ing] a by-product of the activities of a casino”. In 1999 Jack Bogle of
Vanguard decried the “Wall Street casino” where only croupiers got rich,
and in 2023 Warren Buffett wrote that “markets now exhibit far more
casino-like behaviour than...when I was young”.

Despite this similarity, governments promote bets on companies while

discouraging those on cards, dice or sports. Gambling is a zero-sum
endeavour in which the house always wins in the end, whereas investing
promotes economic growth and distributes the gains among all (diversified)
participants. As a result, the companies and legal regimes involved in
gaming are mostly separate from those in financial services. In recent
months, however, the line between investing and gambling has arguably
been blurred out of existence.

America once stood out both for tight limits on gambling and for mass
participation in the stockmarket. But policy has shifted. In 2018 the Supreme
Court let states permit sports betting, which 39 of the 50 have done. Last
October Kalshi, a prediction market regulated by the Commodity Futures
Trading Commission (cftc), won a lawsuit enabling it to offer event
contracts, which pay $1 to winners and $0 to losers, on the presidential
election (Donald Trump traded at 59% on election day). In July Polymarket,
a cryptocurrency-based prediction market off-limits to Americans, bought a
cftc-registered exchange to build a competing product.

This year Kalshi began offering nationwide markets on sporting events. On

August 19th it announced new contracts on score differentials and player
statistics in National Football League games, replicating core sports-betting
products. The firm has not registered with state gambling regulators and
does not pay state taxes, arguing that it falls exclusively under federal
jurisdiction. Seven states have told Kalshi to stop, and Native American
tribes have sued it. So far, Kalshi has won injunctions preventing Nevada
and New Jersey from enforcing those orders, while losing a similar case in
Maryland. In June Kalshi raised $185m at a valuation of $2bn, including an
investment from the boss of Citadel Securities, a giant marketmaker.

Having received the CFTC’s blessing, financial firms began dipping into
once-forbidden waters. Shortly after Kalshi’s legal victory on election
wagers, Interactive Brokers, America’s largest electronic-trading platform,
opened similar contracts on its own prediction market, ForecastEx.
Robinhood, an upstart online broker whose users led the meme-stock craze
of 2021, then offered ForecastEx’s presidential-election contracts to its
users, attracting $500m of bets in just over a week. Since then, Robinhood
has provided access to many Kalshi markets, offering “investments” in when
SpaceX will go public, the winners of the us Open tennis tournament and the
recipients of Emmy awards. Sports alone have drawn $1.4bn of trading.

Incumbent titans of both gambling and finance have taken note. On August
19th FanDuel, America’s biggest sports-betting site, announced plans to
launch a prediction market with the Chicago Mercantile Exchange (cme),
the world’s largest futures exchange. For now, it will offer bland contracts on
whether the values of things like stock indices, oil prices and American gdp
will exceed specified thresholds.

Such events may be of little interest to FanDuel’s recreational bettors. But if

Kalshi prevails in court on sports contracts, the alliance will enable FanDuel
—whose corporate parent owns Betfair Exchange, the world’s largest sports-
prediction market—to offer de facto sports betting in states that have not
legalised it, such as California and Texas. And institutional investors seeking
to place binary bets, either on elections or financial events like corporate
mergers, might prefer to trade on an established platform such as the cme’s.

Tarek Mansour, Kalshi’s boss, insists that event and wheat contracts are
legally identical. “If we are gambling”, he said in April, “you’re basically
calling the entire financial market gambling.” Keynes must be nodding
along in his grave.■

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in-america-the-line-is-increasingly-blurred
Finance & economics | Market mystery

Even as China’s economy suffers, stocks soar.

What’s going on?
The Shanghai composite is defying gravity
August 28th 2025

For Chinese investors, the grass is almost always greener elsewhere. The
country’s stockmarket chronically underperforms, meaning that local punters
look to bourses in, say, America or Japan, and devise ways of getting cash
around China’s capital controls. But this year is different. The Shanghai
composite, an index for mainland stocks, hit a ten-year high on August 25th.
In dollar terms, it is up by 17% since the start of the year, ahead of both
America’s S&P 500 and global indices.

At the same time, China’s economy is suffering from overcapacity, which

has induced a widespread race-to-the-bottom mentality. The country’s great
commercial and technological achievements, such as its electric-vehicle and
solar industries, are among those suffering most from an overabundance of
companies competing for the same markets. Even BYD, China’s most
successful EV firm, is struggling to pay its suppliers. Losses at many of the
country’s biggest solar companies grew in the first six months of the year.
Ordinary folk are feeling the pain, too: China’s delivery drivers have been
caught in price wars.

The sensational stockmarket performance therefore comes with an uneasy

undercurrent. Since the start of the year the Chinese state has sought to buoy
sentiment, capitalising on accomplishments such as a breakthrough
artificial-intelligence model built by DeepSeek, a startup, and the wild
success of “Ne Zha 2”, a locally produced animated film. Another source of
positivity has been the state’s crackdown on oversupply, sometimes called
the “anti-involution” campaign, which has shown that officials are at least
trying to tackle China’s biggest problems.

There are some other reasons for optimism. China’s export-focused

manufacturing sector has held up better than expected against President
Donald Trump’s trade attacks. On August 25th Shanghai loosened
restrictions on home purchases, a move that may boost property prices in the
country’s financial hub. Households are beginning to move some of their
enormous savings into stocks; companies are purchasing their own shares,
having announced 75bn yuan ($10bn) in buybacks in the first half of the
year, a modest increase on the second half of the year before; and insurance
companies are rushing into the stockmarket, having invested 620bn yuan in
the first half of the year, compared with 630bn yuan over the whole of 2024,
according to Jefferies, an investment bank.

Yet it can, at times, seem as if the stockmarket is defying gravity. Consider

an official data release on August 15th, which showed that consumer
spending, industrial production and fixed-asset investment had all slumped
by much more than expected. And so stocks plunged? Not exactly. The
Shanghai composite rose by 1%.

Firms themselves have struggled—and investors have shrugged. Some 23%

of mainland-listed companies that had disclosed their earnings for the first
half of the year by August 27th reported losses, the highest share since at
least 2016, and up from less than 10% before the covid-19 pandemic. More
are due to report in the coming days, but the trend is not an encouraging one.

On top of this, official reforms are not as reassuring as they appear at first
glance. Investors hoping for a quick outcome in the state’s fight against
involution will be disappointed. China’s industrial policy relies on vast
subsidies, which foster intense competition and drive down prices. This is
one reason why China’s EVs are so much cheaper than those produced
elsewhere. Truly ending involution would mean a wrenching shift away
from policies that have been in place for decades, and an acceptance of the
higher unemployment that would result as weak manufacturers collapsed.
Although this is happening in places, it is unlikely to occur across industries,
and on the sort of scale required, when leaders are worried about both
joblessness and competing in foreign markets.

All this is jangling nerves among the professionals. A fund manager says
stock prices can keep rising so long as liquidity is there, before adding that it
looks increasingly shaky. Analysts at HSBC, a bank, recently noted that “the
rally feels disconnected from reality.” Even the state may be growing wary.
On August 27th a rumour suggested that the securities regulator was trying
to reduce use of terms such as “bull market” on social media. Perhaps, then,
the rally is about to connect with reality. ■
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suffers-stocks-soar-whats-going-on
Finance & economics | Free exchange

Trump’s interest-rate crusade will be self-

defeating
New research shows the importance of central-bank credibility
August 28th 2025

There are two ways, the world’s central bankers learned at this year’s
Jackson Hole conference, to tame a horse. You can break the animal with
fear, but it will never forget the pain. The kinder way, shown to attendees
one evening, is to set consistent boundaries with gentle consequences (noisy
clapping). This, says Martins Kazaks of the Bank of Latvia, is like central
banking. Although you can raise interest rates to crush inflation, causing a
recession, it is better when everyone believes in the inflation target, so
nobody raises prices and wages too much in the first place. If the boundaries
are credible, the bank can be gentler.
Officially, the theme of this year’s gathering was labour markets.
Unofficially, it was the imperilled credibility of the Federal Reserve. On
August 25th, after the conference, President Donald Trump said that he was
sacking Lisa Cook, one of the Fed’s governors, for alleged improprieties in
her mortgage applications. It was an escalation of his campaign to get the
Fed to cut interest rates. The irony is that the Fed already appeared to be
moving towards rate cuts. Indeed, two research papers presented at the
conference supported the case for lower rates, suggesting both that the Fed
should “look through” any tariff-driven inflation, and that today’s rates are
high enough to be hurting the economy.

How should the Fed react to Mr Trump’s tariffs? The “Taylor principle”
requires that it raise interest rates by more than any increase in inflation
above the 2% target. Tariffs will have added 0.8 percentage points to core
inflation by December, forecasts Goldman Sachs, a bank. Thus a simple
version of the principle indicates that rates would need to be more than 0.8
percentage points higher than they would without tariffs. But although the
principle is part of a rule that near-perfectly described central banks’
behaviour from 1987 to 1992, at Jackson Hole Emi Nakamura of the
University of California, Berkeley showed that over a much longer period
the Fed has frequently deviated from it. Central banks often ignore
disturbances, trusting inflation will return to target when the shock subsides.
The more credible the bank, the better this works: expectations of low
inflation can be self-fulfilling.

This kind of thinking got Mr Powell and his colleagues in trouble after the
covid-19 pandemic, when they wrongly argued inflation would be transitory.
Yet the Fed did eventually slay very high inflation, despite not having
tightened monetary policy by as much as the Taylor principle demanded. In
contrast, countries where interest rates rose fast and high suffered even
worse inflation. The Fed’s credibility seems to have helped, at least.

Ms Nakamura suggested that post-pandemic inflation may already mean the

Fed has less credibility than it did. In response, Amir Yaron, governor of the
Bank of Israel, mused that inflation’s eventual fall could have reinforced the
idea it will always return to target. The bookies’ favourite to replace Mr
Powell is Chris Waller, a Fed governor who at the last monetary-policy
meeting dissented in favour of a rate cut. Mr Waller points out that long-
term inflation expectations appear to remain in check, despite tariffs.

The second leg of the rate-cutting case is that rates at their current level are
slowing the labour market, and need to fall to reach a neutral level. One
worry with this argument is that America’s net national debt, which is at
nearly 100% of GDP and growing, is pushing up the neutral rate over time,
by absorbing the economy’s savings. Even accounting for revenue from
tariffs, America is likely to run a deficit of 6% of GDP this year. America’s
public finances are in a mess in part because of its ageing population. Older
folk require vastly more spending on pensions and health care.

However, at Jackson Hole, Ludwig Straub of Harvard University showed

that the flipside of such spending is older people’s appetite to amass and
maintain wealth, which raises demand for assets including Treasuries. Mr
Straub and his co-authors calculate that this could lower the natural rate of
interest sufficiently to allow America to run up debts worth 250% of GDP
by the end of the century. That would be music to the ears of Mr Trump, and
indeed any politician. It would mean lower rates and more money to spend.
Although many attendees took issue with the exact number—which, Mr
Straub assured them, applied only in 2100, not today—the broader point that
asset demand would prove more powerful than asset supply went mostly
unchallenged.

The trouble is that Mr Trump, and American politicians more broadly, are
throwing away America’s advantages. Attacks on the Fed weaken the central
bank’s credibility. And America is borrowing so much that, whatever the
fiscal space, politicians will blow through it. “We need a massive fiscal
adjustment no matter what,” Mr Straub said. As several attendees noted, the
problem with high indebtedness is that it leaves governments in a precarious
position where slight changes to interest rates or a recession can cause far-
reaching pain. “It is shocks not stocks that cause crises,” warned Deborah
Lucas of the Massachusetts Institute of Technology. Under populist leaders,
nasty surprises are more likely.

A low-rate policy that results from political or fiscal pressure rather than
technocratic judgment is more likely to be inflationary, since it raises
inflation expectations. Markets seem to understand the danger. It is ominous
that long-term bond yields have not fallen much since the Fed started cutting
last year. Fighting inflation was delegated to central bankers because, like
taming horses, it requires patience and discipline. Unfortunately,
governments can always reopen the pen, and allow the animal to bolt. ■

Editor’s note: This is an updated version of a column that was first published
on August 25th.

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crusade-will-be-self-defeating
Science & technology
A Chinese lab starts to tackle a giant mystery in particle physics
The middle-aged are no longer the most miserable
The rise of beer made by AI
Are saunas actually good for you?
Science & technology | Ghost story

A Chinese lab starts to tackle a giant mystery in

particle physics
The JUNO detector, hidden deep beneath a mountain, will hunt for the
universe’s most elusive particles
August 28th 2025

At the foot of the thickly forested Dashi Hill, in southern China’s

Guangdong province, visitors can take a ride aboard a unique yellow train.
Rather than winding through the serene landscape, however, the train
descends along a steeply sloping track that disappears into the darkness
under the mountainside. After ten minutes on the train and a few more on
foot, visitors reach a vast chamber that has been gouged out of the earth.
Here, more than half a kilometre underground, is a 12-storey-high sphere
made from steel and plexiglass—the Jiangmen Underground Neutrino
Observatory (JUNO).
This week the enormous scientific facility, which has been ten years in the
making, will begin its hunt for the most elusive particles in the universe. In
doing so, its scientists hope to crack open a decades-long mystery in
fundamental physics.

Neutrinos—which come in three “flavours”, known as electron, muon and

tau—are elementary particles, shrapnel born out of the nuclear reactions that
fuel stars and atomic power plants. They are extremely light, have no
electric charge and rarely interact with anything else, meaning they mostly
stream through the universe unimpeded and invisible, like a kind of ghost
particle. (Hundreds of trillions of neutrinos have, in fact, passed through
your body in the few seconds it’s taken you to read this sentence to the end.)

They also present a problem for the Standard Model of particle physics. This
description of the known particles and forces, one the most successful
scientific ideas of all time, predicts that neutrinos should have no mass at all.
That is at odds with what physicists actually observe.

Around 30 years ago, scientists working at Super-Kamiokande, a neutrino

observatory in Japan, noticed something odd. Though the number of muon
neutrinos arriving at its detectors from above (formed by the collision of
high-energy cosmic rays with atoms in Earth’s upper atmosphere) was in
line with predictions, the number of neutrinos coming from below (formed
by the same processes in the atmosphere on the other side of the planet and
then travelling through Earth’s core) was too low. Shortly afterwards the
Sudbury Neutrino Observatory in Canada reported a similar anomaly
concerning neutrinos from the Sun: of the mix of particles it detected, too
few were electron-flavoured. These observations led scientists to conclude
that the neutrinos must be transforming from one flavour to another as they
flew through space. They also knew that such “oscillation” would be
possible only if the neutrinos had mass, however tiny.

“Neutrino physics is physics beyond the Standard Model,” says Juan Pedro
Ochoa-Ricoux, a physicist at the University of California, Irvine, who is part
of the international team that works on JUNO. A deeper understanding of
the masses of neutrinos is key to an improved Standard Model. One of
JUNO’s goals, therefore, will be to work out which neutrino is heaviest and
which is the lightest. Wang Yifang, the observatory’s lead scientist and the
director of the Institute of High-Energy Physics at the Chinese Academy of
Sciences, reckons the task will take about six years.

Standing inside JUNO’s underground experiment hall feels like being in a

cathedral—people’s voices echo inside the enormous space, which is
significantly colder than the forest and fields above ground. The tank at the
core of the observatory holds a mix of around 20,000 tonnes of hydrogen-
rich fluids, known as the liquid scintillator. The vast majority of neutrinos
that enter this tank will pass through unnoticed. A few, however, will hit
protons in the fluid, resulting in tell-tale bursts of blue light. Around 40,000
photomultiplier tubes line the inside of the tank, ready to detect those rare
flashes.

JUNO’s task will be to count the number of neutrinos that arrive from a pair
of nuclear power plants, each situated 53km from the observatory. With
around 700 metres of granite mountain above, the detector is well insulated
against cosmic rays, highly energetic charged particles from space, that
might otherwise interfere with its primary measurements. Scientists know
how many neutrinos of a specific type are produced at the power plants, so
those that make it to JUNO, therefore, represent the fraction that did not
switch flavour en route. That will provide a measure of the rate at which
oscillation occurs.

That oscillation rate is, in turn, linked to the neutrinos’ mass. Each neutrino
flavour is a mix of three underlying states, each of a different mass, known
as v1, v2 and v3. As a neutrino flies through space, the exact combination of
this mixture changes, pushing the particles to switch from one flavour to
another.
The precise values of these three mass states are what physicists ideally
would want to measure, but such direct observations have proved difficult.
Results from other neutrino labs, however, have provided clues to how the
mass states might be related. Current evidence leans towards “normal
ordering” in which v1 is lighter than v2, both of which are much lighter than
v3. The other option, known as “inverted ordering”, dictates that v3 is the
lightest, with v1 and v2 at the heavier end.

JUNO’s data will look subtly different depending on the true ordering of the
mass states, allowing scientists to pin down whether the normal or inverted
order is more likely to be correct. When the observatory is fully operational,
around 50 neutrino detections are expected every day. Around 100,000
detections will be required to get statistically significant results, hence Dr
Wang’s six-year timeline.

Theoretical physicists will have a hard time waiting that long. Ever since
neutrino oscillation was experimentally confirmed, says Dr Ochoa-Ricoux,
he and his peers have been busy coming up with possible extensions to the
Standard Model that could account for neutrino mass. Inverted ordering is
the more exciting option, says Kaladi Babu, a theorist from Oklahoma State
University. If it was shown to be true, it would, among other things, allow
scientists to test another mind-bending neutrino mystery: whether these
particles are, in fact, their own antiparticles.

The Standard Model says that all particles have antimatter equivalents,
which have identical mass but (among other things) an opposite electric
charge. Some particles, such as the photon, are their own antiparticles. A
group of proposals to extend the model, known as “seesaw” models,
suggests this could be the case for neutrinos, too. These models show that
neutrinos with this property could have tiny masses if they were connected
to other, as-yet-undetected, neutrinos with much larger masses. Some
theorists believe that these heavier neutrinos could even be candidates for
dark matter, another mysterious physical phenomenon, which thus far can be
inferred only by how it affects its surroundings in the cosmos.

To test if neutrinos and antineutrinos are indeed the same, physicists need to
study radioactive isotopes of elements such as calcium and germanium.
Sometimes these elements will emit two electrons and two antineutrinos
when they undergo radioactive decay. If neutrinos are their own antiparticles
then scientists should—albeit very rarely—observe a version of this process
in which no antineutrinos are emitted at all.

How long scientists would have to wait to spot such an event, if the
hypothesis is correct, depends on the neutrino mass states. If the ordering is
inverted, it should happen often enough to allow sensitive experiments, such
as the LEGEND experiment in Italy or the NEXT experiment in Spain or
their successors, to pick them up in the next ten to 15 years. “That would be
new physics just around the corner,” says Silvia Pascoli, a theorist at the
University of Bologna. But if the ordering is normal, the process would
probably be too rare to show up in any detector that scientists know how to
make.

Helping resolve such debates will be JUNO’s most important legacy, but the
observatory will also allow physicists to eventually use neutrinos as probes.
JUNO will, for example, look for neutrinos from deep within the Earth,
which will shed light on the distribution of radioactive elements within the
mantle and crust.
It will also look for neutrinos from exploding stars known as supernovae.
Because neutrinos flow through matter in a way that light cannot, they can
leave those stars and reach Earth before the actual explosion becomes
visible. Detecting them will give astronomers time to properly orient their
telescopes so that they can then watch the epic blasts in action.

It’s when they are being used like this—as a way to peer into places that are
now unknown—that the neutrino era will have begun in earnest. ■

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lab-starts-to-tackle-a-giant-mystery-in-particle-physics
Science & technology | Teenage angst

The middle-aged are no longer the most miserable

Youth used to be cheerful. No more
August 28th 2025

FOR DECADES, surveys have suggested that middle age is the low point of
life. While young and old generally reported high levels of life satisfaction,
those in mid-life endured a slump. This “U-bend of happiness” or “hump of
despair”, depending on your perspective, has been documented hundreds of
times across many countries. The age of peak misery varied—the Swiss
were saddest at 35, Ukrainians in their 60s—but the pattern was consistent.

Recently, however, the curve seems to have become warped. A study

published on August 27th in PLOS ONE by economists David
Blanchflower, Alex Bryson and Xiaowei Xu finds that young people across
the world are now reporting the highest levels of misery of any age group.
“We’ve seen a change from a hump shape to a ski slope,” says Dr Bryson.
The authors first spotted the shift in the Behavioral Risk Factor Surveillance
System (BRFSS), a long-running survey of Americans. They calculated the
share of respondents of each age who reported having poor mental health
every day in the past month. Between 2009 and 2018, the familiar hump was
present: misery peaked in middle age. But from 2019 to 2024, the pattern
changed. Levels of unhappiness in middle-aged and older adults remained
roughly stable while despair among younger people rose (see top chart).

Britain shows the same trend. Using data from the UK Household
Longitudinal Survey and the Annual Population Survey, the authors found
that both anxiety and despair increased sharply among the under-40s after
2016, erasing the hump by 2019. There is also some evidence outside the
anglophone west. The authors analysed data from the Global Mind Project, a
web-based survey, and in each of the 44 countries across Africa, Asia,
Europe, Latin America and the Middle East for which sufficient data were
available, young people consistently reported worse mental health than their
elders.

The old hump could still emerge, however. Because the new study provides
a simple snapshot of unhappiness by age at a single point in time, it is
possible that today’s miserable 20-somethings will follow their
predecessors’ path and become even gloomier in middle age. “It’s not
inconceivable that if young people start out this badly, they could be even
worse off in mid-life,” says Dr Bryson.

Longitudinal studies of well-being, which track changes in the same people

over time, can reveal such long-term developments. But they are rare. The
few that do exist also find the hump, with unhappiness peaking in mid-life.
That lends credence to the depressing prospect that Generation Z may get
sadder still.

Cohort data also support the idea that the hump could prevail. The
Economist split the data from the BRFSS by generation (see bottom chart)
and found that each cohort has become more unhappy as they have reached
middle age. Generation X and millennials have slid into mid-life malaise
earlier than boomers did, though, and Generation Z are starting their adult
life far more miserable than any generation before. At a population level,
these trends mean older people now look progressively less downcast than
younger groups.

Why youngsters are so depressed is still unclear. One clue may come from
the labour market. In a separate study from July this year, Dr Blanchflower
and Dr Bryson found that despair has risen most sharply among young
American workers, particularly the least educated. In the past, having a job
seemed to provide a protective effect against poor mental health. That effect
appears to have weakened for young Americans, perhaps because of falling
job satisfaction among the same group.

But although it may be the case in America, it does not explain the data
elsewhere. In a third working paper, published in June, the pair found that in
some southern European countries life satisfaction among young people has
actually risen since 2015, thanks in large part to a decrease in youth
unemployment.

Another oft-cited culprit of teenage angst is smartphone and social-media

use, which has risen in lockstep with youth mental-health problems since the
early 2010s. There is some support for a causal link, but the most rigorous
studies, which track teenagers’ mood and social-media use over long periods
of time, do not find a strong relationship between such app use and
subsequent mental ill-health.
Of course, things may yet turn around. Analysis by The Economist earlier
this year found that the mental health of young Americans has somewhat
improved recently, perhaps hinting at a return to youthful cheerfulness. If so,
mid-lifers might find themselves the saddest once again—ideally with fond
memories. ■

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no-longer-the-most-miserable
Science & technology | Brewer’s bot

The rise of beer made by AI

Customers love it
August 28th 2025

WHEN BECK’S, a storied German brewery founded in the city of Bremen

in 1873, celebrated its 150th anniversary in 2023 it decided to bring in a new
brewmaster to mark the occasion: ChatGPT, an artificial-intelligence (AI)
chatbot. The company asked it to whip up a recipe using only hops, yeast,
water, and malt. The result was “Beck’s Autonomous”, a lager with a subtle
sweetness, a hoppy texture, and quite a head. One Daily Mail reporter
considered it better than the brewery’s standard lager.

Beer and AI may seem an unlikely pairing, but Beck’s is far from the only
brand to have asked for input from the technology. Atwater Brewery, an
American firm, introduced an AI-designed citrusy India pale ale (IPA) in
2023 and last year St Austell Brewery in Britain used AI to create a tropical
IPA dubbed “Hand Brewed by Robots”. In March Coedo Brewery in Japan
asked an AI model to analyse the preferences of people in their 20s, 30s,
40s, and 50s, and then developed four craft beers, one for each age range. In
general the response from customers, brewers say, has been overwhelmingly
positive.

“It gives us access to new recipes that we didn’t think about before,” says
Prinz Pinakatt, boss of the beer business for Tilray Brands, Atwater’s New
York-based parent company. Machine-learning tools can parse the minutiae
of complex flavours, analyse the ingredients and equipment that an
individual brewery has available, and then concoct new recipes while
tweaking sweetness, acidity, hop level and other attributes to ensure the end
product appeals to discerning customers.

Beau Warren, who opened the Species X Beer Project brewery in America in
2021, knows this firsthand. In 2022 he started training AI models on a
number of parameters—his proprietary recipes, different types of yeast,
water acidity, various hops, the ingredients in the brewery cellar, the typical
makeup of lagers, stouts and other beers—and, by 2024, began using it to
guide the brewing process. In one instance, after being asked to make a new
lager, the bot suggested mixing Maris Otter malt, usually found in stouts,
with Belgian candi syrup. “I would never have thought of doing that in a
lager, ever,” he says. “We brewed it anyway, and I thought it was one of the
best lagers I’ve ever made.” His customers apparently thought the same: Mr
Warren says patrons usually rated the AI-crafted beers better than any of the
beers thought up by he and his fellow brewers. (That said, the AI beers at
Species X are no more: the brewery closed down last autumn owing to
financial difficulties.)

Scientists are also intrigued about what bots might tell them about the
chemistry of beer. In 2024 researchers from KU Leuven, a university in
Belgium, analysed the chemical makeup of 250 Belgian beers, including
lagers, blonds and West Flanders ales. They then trained machine-learning
algorithms to model the effects of adding or subtracting different aroma
compounds, such as glycerol and lactic acid, on the taste. “The models we
develop help us to understand the complex relationship between the
chemistry of a beer, its taste, and how consumers will like it,” says Kevin
Verstrepen, a bioscience engineer who led the research team.
Of course, it will take more than a chatbot to replace a human brewer.
Ingredients must be poured, brew kettles must be tended and the beers must
be tasted—whether they were made totally by human hands, or brewed, at
least in part, by robots. “Yes, AI will become more and more part of the
brewing process, but the brewing itself, the craft, is still the emphasis,” says
Mr Pinakatt. “It will be very difficult to have machines make our beers.” ■

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by-ai
Science & technology | Well informed

Are saunas actually good for you?

The evidence for sweating it out is promising but incomplete
August 28th 2025

Finland is the undisputed sauna capital of the world, with approximately one
sauna for every 1.6 people. But voluntary sweating is starting to catch on
elsewhere: according to the British Sauna Society, a not-for-profit group
promoting sauna culture, the number of public saunas in Britain has more
than doubled over the past year.

Are saunas good for those who use them? Setor Kunutsor, a cardiologist
from the University of Manitoba, thinks of saunas as a source of controlled,
gentle stress. A short burst of heat gets the heart pumping faster, blood
vessels opening wider, and the body beginning to sweat—changes that look
a lot like what happens during a brisk walk. “A standard 15-minute sauna
session triggers the same heart-rate and circulation boost you’d expect from
moderate exercise,” says Dr Kunutsor. Over time, he says, these repeated
pseudo-workouts might teach the body to handle stress better, dial down
inflammation, and protect the brain and blood vessels.

There is some research to support this. A decade ago Jari Laukkanen from
the University of Eastern Finland co-led an observational study based on
data from more than 2,300 middle-aged men in Finland. He found that men
who visited the sauna two to three times a week had a 27% reduced risk of
dying from cardiovascular disease compared with those who went just once
a week. The benefit increased to 50% for men who went four to seven times
per week.

Later studies on the same cohort by Dr Laukkanen and Dr Kunutsor seemed

to suggest benefits that went beyond the heart. The team found that going to
the sauna frequently, compared with only once a week, was associated with
an almost 80% lower risk of developing psychosis and a two-thirds lower
risk of developing dementia.

The problem with such studies is that men who use a sauna every other day
are likely to be wealthier and healthier than men who do not. Although the
authors adjusted for age, socioeconomic status, physical activity and alcohol
intake, it is still too soon to draw robust conclusions. Other confounding
factors may still be unaccounted for, says Eva Prescott from Bispebjerg and
Frederiksberg University Hospital in Copenhagen. There are also limited
studies on women, younger people and those from non-European
backgrounds, whose responses might be different from those of older white
men. Nor is it clear if the Finnish results are directly transferable to countries
like Britain, where sauna use is clearly rarer, says Gabrielle Reason, director
of the British Sauna Society.

To pin down if saunas have an effect on human health, scientists need to

conduct randomised controlled trials (RCTs), the gold standard in evaluating
health interventions. In such trials scientists randomly assign participants
into experimental groups and control groups to eliminate bias. RCTs on
sauna use do exist, but so far their evidence has proved inconclusive. One
trial from 2022, again conducted by Dr Laukkanen and Dr Kunutsor, found
that participants who combined sauna with exercise experienced greater
improvements in blood pressure and cardio-respiratory fitness than those
who only hit the gym. But a different RCT by other researchers did not find
any positive cardiovascular health benefits from frequent sauna use. The
only way to get to the bottom of the issue is to do more and bigger RCTs
until findings emerge that researchers can consistently reproduce. Until then,
expect some heated debates. ■

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Culture
“The Thursday Murder Club” and the resurgence of cosy crime
What gladiator shows were really like
A story of occupations, surveillance and exile in Albania
Robert Louis Stevenson was adventurous, mercurial and fragile
Flirty and thriving: how Sabrina Carpenter became a pop superstar
Forget smelling flowers; now you can drink them
Culture | It takes a village

“The Thursday Murder Club” and the resurgence

of cosy crime
In turbulent times, people want even their crime stories to be comforting
August 28th 2025

IN MOST CRIME stories, detectives worry about wily criminals, unreliable

witnesses and meddling do-gooders. In Richard Osman’s bestselling
“Thursday Murder Club” (TMC) series, the investigators have to contend
with a more relentless and unforgiving crowd: old folk who want a quiet
place to do their jigsaw puzzles.

The four members of the TMC are sleuths who work from the comfort of
their retirement home. That requires them to take over rooms usually
dedicated to more wholesome pursuits, such as conversational French, with
grisly crime-scene photographs and conversations about poisons, corpses
and stabbing.
From this unlikely premise Mr Osman, a British TV presenter, has spun
gold. His four “Thursday Murder Club” novels have sold more than 10m
copies globally; a fifth will be published on September 25th. The franchise
has spent a total of 310 weeks on bestseller lists in America and Britain. A
film adaptation of the first book, starring Pierce Brosnan, Helen Mirren, Ben
Kingsley and Celia Imrie (all pictured), and produced by Steven Spielberg,
arrives on Netflix on August 28th. The star power thrown at a yarn about
pensioners in a quaint English village is a sign that the haunted antiheroes of
Nordic noir are yesterday’s trend. Dark, gritty tales are out; cosy crime
stories featuring grandparents are in.

Not everyone likes that label. (The genre’s nickname, “cozies”, takes the
American spelling.) To some, it connotes low stakes, hackneyed writing and
trite plots. Cosy crime is “not a term that I’m enthusiastic about”, bristles
Martin Edwards, a British author who has written several series. “The label
I’d prefer is ‘traditional mystery’.”

Both appellations, however, refer to stories in the style of the inter-war

masters, such as Agatha Christie, Ngaio Marsh, Dorothy Sayers and Georges
Simenon. They usually focus on amateur detectives. At cozies’ centre is a
puzzle that the investigator solves and readers try to: the reader should be
able to follow it back at the end and see what they missed. Deus ex machina
and sudden revelations are frowned upon.
They tend to be written in series, which lets authors develop the characters.
The interaction between the four members of the TMC—a fearsomely
competent ex-spy, Elizabeth (Ms Mirren); Ibrahim Arif, a fussy yet
insightful psychologist (Mr Kingsley); an ex-union rabble-rouser, Ron
Ritchie (Mr Brosnan, dreadfully miscast); and Joyce (Ms Imrie), a retired
nurse, who is the reader’s proxy—is natural, funny and enjoyable. Similarly,
readers like seeing Jane Marple, one of Christie’s protagonists, puzzle
through clues as her personal history is revealed throughout the books.

Cozies usually take place in a bounded area: often that means a village or
small town, but it could be a locked room—a cosy subgenre in itself—or a
strongly defined corner of a big city. Sandra Jackson Opoku’s “Savvy
Summers” series takes place on Chicago’s South Side, where her protagonist
runs a soul-food restaurant. Other culinarily inclined protagonists have run
noodle shops, doughnut shops and pizzerias. Sometimes a hobby defines the
setting: authors have written series centring on embroidery (“The Quick and
the Thread”), coupon-clipping (“50% off Murder”), apiculture (“Death Bee
Comes Her”), orchard-keeping (“Deadly to the Core”) and farming
(“Murder, She Goat”).

Wherever the setting, the inciting incident, the murder, is usually committed
off the page or quickly, for cozies eschew gore. They also avoid sex and
profanity. One literary agent suggests that cozies began creeping back into
fashion as romance novels became more explicit. Readers who prefer their
books without lots of bonking turned to these mysteries.

But, as the moniker suggests, cozies’ most important feature is that they are
comforting. There is never any doubt whether the hero will prevail, only
how—so the how must be entertaining and twist-filled. Cozies end with
villains caught, justice served and order restored. The murdered characters
tend to be rotters whom nobody really misses.

Does this make the stories formulaic? Perhaps: though as any music-lover
knows, structure can accommodate, and even encourage, profundity. The
“Thursday Murder Club” series, for instance, grapples with ageing. It is
clear-eyed about both the good—heedless lunchtime drinking, caring less
about what other people think—and the bad. Elizabeth’s beloved husband is
slowly slipping into dementia. She does everything she can to forestall and
hide the decline because she wants to keep him with her as long as she can.

Hannah O’Grady, who edits mysteries for St Martin’s Press, an American

publishing firm, was initially turned off by the genre’s predictability. Yet she
has come to feel that many cozies are “actually subversive”: “The
protagonist is usually a young woman not in law enforcement. She generally
falls into this not because she’s passionate about solving crimes, but because
the police aren’t doing an adequate job.” Police in cozies are at best a
necessary adjunct. They are usually portrayed as hidebound, blinkered and
indifferent, especially to older or female protagonists.

Though the genre may be enjoying a revival thanks to Mr Osman and his
peers, it has delighted generations of readers. Christie, its grande dame, is
the bestselling author ever, having sold over 2bn novels worldwide.
Alexander McCall Smith’s “No. 1 Ladies Detective Agency” series, set in
Botswana and featuring the shrewd and resourceful Mma Ramotswe, has
sold over 20m copies; the 26th book in the series comes out on September
4th. When literary critics noticed these books, it was for their popularity
more than their artistic merit. Mr Edwards says that “nobody paid attention
to the plots” of his early books—traditional mysteries set in cities—“because
that type of book was unfashionable. Now it’s very fashionable.”
There are two reasons why cosy crime is enjoying a resurgence. First,
readers see themselves in the books. Robin Agnew, the co-chair of a fan
convention called Malice Domestic, held annually near Washington, DC,
explains that cozies are about appealingly ordinary people. “I love noir
fiction but it’s almost operatic. It’s not what your life is like. And this is
what your life is like.”

Second, look to their first flourishing, during the turbulent inter-war years.
When the world is troubled and uncertain, people want art that provides
succour and stability. Otto Penzler, a crime-fiction publisher and bookshop
owner in New York, says, “When fires are everywhere…people want to go
to a place where there’s a community.” In the pages of cozies, if not in real
life, when “something terrible happens, it’s solved. The bad guys are
removed from society and everything goes back to how it used to be. At
least this place has remained calm and safe and good.” ■

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resurgence-of-cosy-crime
Culture | The view from the arena

What gladiator shows were really like

Attendees witnessed grisly deaths. Sometimes they were also given gifts
August 28th 2025

Romans dreamed a lot about gladiators. Many imagined they were fighting
themselves, down in the sandy arena, amid roaring crowds and trumpets.
Such dreams in youth indicated what your future wife would be like. If you
fought a provocator, with short, sharp sword and shield, she would be lovely
but flirtatious. If you were matched against a retiarius, plodding with trident
and net, she would be running round all over town. As for the gladiators,
according to Artemidorus, a diviner, in his “Interpretation of Dreams”, they
dreamt of bears and lumps of iron.

In a new book Harry Sidebottom, who teaches classical history at Oxford

University, explores the many meanings of gladiators in the Roman mind.
The combatants, usually barbarian prisoners or common criminals, were not
just a bit of rough. In their brief heyday, they were sex gods: a senator’s wife
ran off with one.

To those who think that the Romans—with their businesslike haircuts and
underfloor heating—were much like ourselves, Dr Sidebottom’s vivid,
gripping book offers many correctives. It provides a detailed chronicle of
what a gladiator’s life was actually like. Despite Hollywood’s assumptions
of total carnage, the chance of gladiators dying in the ring was only one in
eight. However, the Romans did find it wildly funny when criminals in
“torment tunics” ran frantically about in the arena, having been tarred and
set on fire.

Anyone could give a gladiatorial show, if they had the status and money to
do so and needed popular approval badly enough. They could also ignore
them. Marcus Aurelius held none and Augustus decreed only two a year.
Indifferent Julius Caesar brought bundles of official work to his. Shows
were not like chariot-racing, which happened regularly: they were huge, rare
treats that also featured musical performances, acrobats and wild-beast fights
with hippos and giraffes as well as lions. They could include mock battles
with dozens of non-mock deaths, as when Claudius restaged the capture of
Colchester with actual prisoners of war from Britain.

To the average punter, one of the best bits was the free gifts handed out to, or
showered down on, the crowd: cooked chickens, dates, jewellery, money,
sweets. (Saffron was also misted over, as the assembly stank.) Shows cum
missilibus—with thrown things—were sure to be a draw; so were certain
gladiators, whose names were painted on the walls rather like headline acts.
If you did not want to rely on cooked meats falling from heaven, you could
bring a picnic. You could bring your girlfriend too, Ovid said, because she
would probably bury her head in your shoulder if it all got too bloody.

People were not meant to gamble on gladiator fights, but many did, and they
were keen observers of form. On the evening before the show, the public
was allowed in to the gladiatorial barracks where, like soldiers, fighters
trained and lived as a family of cellmates. The public would silently assess
the gladiators as they ate their cena libera, a last supper of sorts: not barley-
and-bean stew and gritty wine, their usual fare, but roasts, pies and a decent
vintage or two.
Gladiatorial shows were held for the people, and the (overwhelmingly male)
people called the tune. Though the fights had a referee, the crowd, as in any
modern football game, knew all the rules and moves. The emperor’s famous
thumb up, down or even sideways almost always followed what the crowd
thought.

What did the gladiators think? The author provides his most affecting
evidence from their tombs. There several, in devoutly military terms,
“recount” their deaths in the arena, some as a result of bad refereeing. Most
movingly, one gladiator from the Greek east, where they were seen as
athletes, mourns the death of his beautiful young comrade and lover Miletus,
“who won eight times in the stadia” before “Fate took him from the ring by
force.” ■

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Culture | The family’s way

A story of occupations, surveillance and exile in

Albania
To write her grandmother’s story, Lea Ypi visited the archives of the
communist-era secret police
August 28th 2025

Two Albanian writers dominate the foreign-language section of the

bookshop in Tirana’s central square. One is Ismail Kadare, the country’s
grand man of letters, who died in 2024. The other is Lea Ypi, an academic
and the author of “Free”, a coming-of-age book published in 2021. Kadare
dominates the space by virtue of the sheer number of books he wrote over
the course of his long career (there are at least 80 novels, plays, essays and
story collections). But, at least for the time being, Professor Ypi seems to
have eclipsed him as the world’s best-known Albanian writer.
With “Free” Professor Ypi, a political theorist who teaches at the London
School of Economics, slipped out of the confines of academic publishing
and into the mainstream. The prizewinning book described her experience
growing up in Albania as communism collapsed; the subsequent turmoil
brought the country to the brink of civil war in 1997. Professor Ypi and
several family members left the country. She studied first in Italy, then in
Britain.

“Free” has been translated into dozens of languages and made her something
of a celebrity. The book was not without controversy, though. Some
Albanians accused her of soft-pedalling the crimes of communism; others
thought she soft-pedalled the role of her great-grandfather, a former prime
minister who, in his role as acting head of state, welcomed Benito
Mussolini’s invading army in 1939.

Now, in “Indignity”, Professor Ypi goes deeper into her family story. The
new book is about her grandmother; through her, she tells the story of
Albania in the 20th century. In that sense the book is virtually unique in
English. There are thousands of such European family stories, especially
ones that focus on the second world war, but the number of Albanian ones in
translation would not fill a bookshop’s branded tote bag. Those published in
Albanian, meanwhile, have a reputation for exaggeration: of embellishing a
relative’s suffering at the hands of communism, for example, or their role in
resisting it.

“Indignity” tells the story of an extraordinary life. Leman Ypi (pictured) was
born to an aristocratic family. She grew up in Thessaloniki just after the fall
of the Ottoman Empire, when the then predominantly Jewish city became
Greek. Her Muslim family avoided being deported in 1923, when Greece
and Turkey exchanged most of their Muslim and Christian populations, and
in 1936 Leman, only 18 years old, left for Tirana. The Albanian capital was
then little more than a glorified village.

There followed her marriage to Asllan (pictured), the son of the chief
inspector of the court of King Zog, the Italian occupation, then the German
one, then the establishment of Enver Hoxha’s communist regime. Asllan was
jailed for almost 15 years on trumped-up conspiracy charges and, as a “class
enemy”, Leman was sent to a collective farm to dig irrigation canals.
Professor Ypi knew some of this—her grandmother had shared parts of her
story—and the author finds more material in the archives of the Sigurimi,
Albania’s communist-era secret police. But she fills in the lacunae, too, by
using her imagination. Most of this literary licence is fine, but some puts her
on shaky ground. The British agents she writes about almost certainly knew
her grandparents, but the likelihood that they were socialising with them in
occupied Tirana in 1943 is small.

In the Sigurimi archives, Professor Ypi discovers things about her

grandmother that she thinks are mistakes. Then—spoiler alert—she finds a
document declaring that Leman Ypi had died 34 years before her
grandmother had actually passed away. The reason is less tantalising than it
appears: it seems that Professor Ypi’s grandmother’s files had become mixed
up with those of another woman with the same name and with a similar
background. Curiously, this other Leman Ypi appears to have no surviving
family. Some Albanians may speculate that someone in the Sigurimi
invented the second woman and declared her dead in order to end
surveillance of the real one, once it was deemed she was no longer
suspicious.

“Indignity” joins other recent books, such as Anna Funder’s biography of

Eileen O’Shaughnessy, George Orwell’s first wife, in blending fact and
fiction. This will give some people pause. But Professor Ypi sweeps the
reader along in her story of her grandmother and the tides of history. ■

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Culture | Literary lives

Robert Louis Stevenson was adventurous,

mercurial and fragile
The author of “Treasure Island” and “Strange Case of Dr Jekyll and Mr
Hyde” is the subject of an excellent new biography
August 28th 2025

Few writers have the genius to create a mythic story that each generation
reimagines for itself. But Robert Louis Stevenson did so—twice. In
“Treasure Island” he perfected the sort of thrilling high-seas yarn that movie
studios still produce. As for “Strange Case of Dr Jekyll and Mr Hyde” (his
publishers added the “The”), every sinister tale of a violently divided mind
stands in its long shadow.

Stevenson did not only write myths: he lived one. Born in gloomy
Edinburgh in 1850, he defied chronic illness, sailed the oceans and died in
Samoa, aged 44, shortly after local people had honoured their tusitala
(storyteller) with a lavish banquet. “The day was no longer than his
kindness,” declared a chieftain.

With his superbly crafted books and mercurial, magnetic personality,

Stevenson always inspired devotion. His marriage to Fanny Osbourne, an
intrepid, pistol-toting Midwesterner, is “a story of deep and lasting love”
unusual in the fractious annals of literary wedlock. One friend thought bold,
vivid Fanny might have been “the leader in some great movement”.

All this charisma piled on charisma sets traps for Stevenson’s biographers:
they may yield to worship or vainly try to topple the legend. Leo Damrosch,
emeritus professor of literature at Harvard, avoids both idolatry and
iconoclasm. Well-paced and thoroughly researched, this new biography
never assumes that the reader has a prior acquaintance with Stevenson.
Professor Damrosch tells the reader not just what happens in Stevenson’s
books, but why they should care.

Beneath Stevenson’s simplicity and fluency lay artistry and industry. Writers
should still heed his advice: “fewer adjectives” as well as “more descriptive
verbs”. Henry James, a novelist, friend and admirer, enjoyed everything his
fellow author wrote and felt privileged “to encounter someone who does
write—who is really acquainted with that lovely art”.

Stevenson worried that those tools served a lowly trade. Born into a dynasty
of engineers and lighthouse-builders, he acted the “privileged layabout”—
with a taste for the city’s lowlife—until literature lit his true path. Even then,
financial need bound him to his Calvinistic, high-spirited parents. When he
abandoned religious faith, he felt that “I am killing my father.”

A lung disease meant that Stevenson could cough up “a pint of blood” (it
was probably not tuberculosis, but a rarer genetic condition). A search for
health, and a flight from Scottish puritanism, sent him to France. There his
grand passion with Fanny caught fire. During her American escapades she
had endured the West at its wildest; she had two surviving children, Lloyd
and Belle, from a rakish adventurer. Ever-daring, Fanny married Stevenson
when the frail would-be author felt like “a mere complication of cough and
bones”.
Travels took the couple to California and the French Riviera as “Treasure
Island” made Stevenson a celebrity. That piratical classic began with
Stevenson and Lloyd drawing maps of an imaginary island and inventing
stories about it. And as for “Jekyll and Hyde”, part of the plot came to the
author in a nightmare. (The sleeper’s “cries of horror” woke Fanny.)

In 1888 his Pacific idyll began on a yacht, Casco. Although Stevenson

vowed that seas and islands “make and keep me truly happier” than life
inland, Professor Damrosch charts the strain of this romantic vagabondage,
especially on Fanny. On the Samoan island of Upolu, where they settled,
their estate at Vailima was no beach shack but “virtually a palace”, with
upkeep to match. But Stevenson wrote eloquently of Samoan life and
pressed in print for independence, incensed that “the handful of whites have
everything”.

Just as Samoa had restored his strength, Stevenson suffered a stroke. This
biography is crisp, brisk but warm—all Stevensonian virtues—and lets
readers see why this “beautiful, bountiful being” (in James’s words) cast
such a spell. His literary treasure trove still shines. ■

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adventurous-mercurial-and-fragile
Culture | Hitting the top spot

Flirty and thriving: how Sabrina Carpenter

became a pop superstar
The hitmaker has returned with a new album, “Man’s Best Friend”
August 28th 2025

SABRINA CARPENTER’s career is anything but wooden. Last August she

released “Short n’ Sweet”, one of the albums of the summer, which topped
the charts in 19 countries. Three songs from the record, “Espresso”, “Please
Please Please” and “Taste”, ranked in the top five of the Billboard chart in
America simultaneously. Ms Carpenter became the first solo performer to
achieve this feat; The Beatles are the only other act to have managed it.

Her status has built up quickly. In the first half of 2022 Ms Carpenter’s
songs were streamed 73m times in America; in the same period this year,
that number had jumped to 1.9bn. In April Luminate, a data firm, found that
Ms Carpenter’s fandom was growing faster than any other musician’s. (Their
index looks at things like social-media engagement and public awareness as
well as streaming data.)

Ms Carpenter is hoping to follow up on that success with “Man’s Best

Friend”, a new album released on August 29th. Its lead single, “Manchild”,
has already topped the charts in America and Britain. In the coming months
you can expect to hear her effervescent melodies and sultry lyrics blasting
from every car radio and teenager’s bedroom. How has Ms Carpenter
established herself as pop’s new princess?

Three factors explain her ascendancy. First, her music is compulsively

catchy. Ms Carpenter has spent a long time finding the right sound. (“Man’s
Best Friend” is her seventh studio album.) Like pop stars such as Miley
Cyrus and Olivia Rodrigo, Ms Carpenter started her career as a child actor
on the Disney Channel. Her first song was released in 2014, when she was
just 14 years old; she spent the next decade exploring modes as varied as
folk and electronic dance music.

This experimentation came to fruition on “Short n’ Sweet”. The record is a

paragon of pop in 36 minutes, incorporating sounds from disco to country to
hip-hop. Even as Ms Carpenter borrows from different genres, her songs
have a distinctive, whimsical quality. Jack Antonoff, a producer who works
with Ms Carpenter (as well as Taylor Swift), has said that the appeal of
“Please Please Please” lies in the “push and pull” between the regimented
percussion and “bubbly…floating” synthesisers: “It makes you feel like a
little bit drunk, a little bit dreamlike.”

The second reason for her popularity is her witty lyrics. Ms Carpenter stands
out because she makes “really fun, really flirty, sometimes silly, literally
nonsensical songs”, notes Erica Campbell, the author of a forthcoming book
about the star. Take “Espresso”, Ms Carpenter’s biggest hit, in which she
croons: “Say you can’t sleep, baby, I know / That’s that me espresso.” Or
this, from “Bed Chem”: “Where art thou? Why not uponeth me?”

Such playfulness is the point. As Glenn Fosbraey, a specialist in pop songs

at the University of Winchester, puts it: “Everything she does is with that
knowing wink at the audience.” She can be salacious, such as when she
sings “Come right on me, I mean camaraderie” in “Bed Chem”. She can also
be droll: in “Taste”, the diminutive Ms Carpenter declares “I leave quite an
impression / Five feet to be exact.” The same self-conscious
mischievousness is evident in her live performances and music videos. In the
video for “Manchild”, Ms Carpenter mocks bad lovers by bathing with pigs.

That points to the third and final reason for Ms Carpenter’s success: her
carefully constructed brand. Not only is it easy to spot “a Sabrina song”,
notes Ms Campbell, but also “a Sabrina outfit”. On stage, she prances about
in corsets and mini skirts. On the “Short n’ Sweet” tour she wore custom
lingerie made by Victoria’s Secret.

Some, however, worry that Ms Carpenter’s sexualised self-image is

inappropriate. The album cover for “Man’s Best Friend”—which shows Ms
Carpenter on all fours as a man pulls her hair—was censured as regressive.
Fans demanded an alternative cover, so she gave them one “approved by
God”. It is a black-and-white recreation of a paparazzi shot of Marilyn
Monroe, another blonde bombshell. It implies that Ms Carpenter is under no
illusions about the price of her newfound fame. ■

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carpenter-became-a-pop-superstar
Culture | World in a dish

Forget smelling flowers; now you can drink them

Distillers of mahua, an Indian tipple made from dried blossoms, have big
ambitions
August 28th 2025

THE little brown nubs look like earwax-coloured pencil erasers. Anyone
curious enough to try one would find it tastes a bit like a date. They are
flowers of the mahua tree, indigenous to India. When distilled, they produce
a strong liquor reminiscent of grappa or unaged whisky: floral and mildly
sweet, with hints of apple and berry, and a long, clean finish. The spirit may
be coming soon to a bar near you.

Indian tribes have been making mahua—the name of the booze as well as
the tree—for centuries. Families do not pluck blooms, but gather them once
they have fallen, thereby ensuring ripeness and maximum sugar content.
After fermentation, the flowers are distilled in clay pots.
Tribal families mark births, marriages and deaths by sharing mahua. A lively
folklore surrounds it. According to one tribe, a little mahua makes a person
act like a parakeet, giggly and repetitive; a lot makes people tigerish, roaring
and full of bluster; and too much makes people act like pigs or mice, “rolling
on the ground, wallowing in mud or looking for a hole to hide in”.

Distillation remains small-scale and often clandestine. The spirit was banned
by the British Raj in the late 19th century, supposedly to protect public
health (though many reckon it was to protect the market for spirits imported
from Britain). Even after India gained independence in 1947, some states
kept bans in place, so many drinkers still chug moonshine, which is dirt
cheap and sometimes fatal. Other bureaucrats heavily taxed mahua
production and restricted its sale.

Yet, after years of lobbying by Desmond Nazareth, the founder of

DesmondJi, a Goan distillery, the state loosened its liquor laws in 2018 and
allowed the spirit to be sold in shops. Other regions, including Karnataka,
Maharashtra and Madhya Pradesh, have also relaxed the rules. DesmondJi
now makes around 10,000 bottles of mahua a year, available in 500 shops
across several states. Six Brothers, based in Dahanu, began making high-end
mahua in 2024. Many hope that the drink will, in time, become a national
treasure akin to Mexican tequila.

As a result, Indian distillers are targeting curious drinkers farther afield.

Mah, made from mahua flowers and distilled in Cognac, is available in
France. DesmondJi is looking for stockists in Britain; Six Brothers is being
served in cocktail bars in London. Mixologists note that mahua’s sweet,
subtle flavour means it best suits simple mixers such as lime or vermouth.

Mahua is not the only Indian spirit with big ambitions. Feni, a Goan liquor
made from coconut palm sap or cashews, is also increasingly available in the
West; unfortunately, it tastes of feet. Mahua has two advantages. First, it has
the sort of history that will appeal to urban lefties who love anything
artisanal and “indigenous”. Second, and more important, it is delicious. ■
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drink-them
Economic & financial indicators
Economic data, commodities and markets
Economic & financial indicators | Indicators

Economic data, commodities and markets

August 28th 2025
This article was downloaded by zlibrary from https://www.economist.com//economic-and-financial-indicators/2025/08/28/economic-
data-commodities-and-markets
Obituary
Sen Genshitsu spread peace through sipping
Obituary | The Way of Tea

Sen Genshitsu spread peace through sipping

The 15th master of the Urasenke tea ceremony died on August 14th, aged
102
August 28th 2025

The little wooden gate stood open. From it a path snaked through the garden,
past pines he had carefully positioned, planted and tended over the years.
This was the “dewy ground”, like the track of a mountain stream, on which
his guests now came walking, casting off the fire of worldly thoughts.
Though they were in the city of Kyoto, the purpose of the tea ceremony they
were attending was to enter into tranquil communion with Nature and with
each other.

That morning, therefore, he had swept every dead leaf away from the
garden, according to the principle of purity. At the door of the tea hut,
simple as a mountain hermitage with unpainted walls of clay, he greeted
each guest with a bow and in silence. Thus he observed a second principle,
respect.

Plain as it was, this was the most famous tea compound in Kyoto, for it was
his home, and Sen Genshitsu was no ordinary master. As the 15th head of
the Urasenke school of tea ceremony, he did not feel the Way of Tea should
be confined to Japan. He wished to spread the culture and spirit of it across
the world, and had travelled to 70 countries to do so. In particular, patiently,
he was bringing peace to Westerners in the Japanese style.

His guests, having already shed their wraps and changed their shoes, had to
stoop to enter the tea-room itself. Once there, they took in the setting: the
scroll he had painted, hanging in a decorative alcove, and the artless
arrangement of a single camelia in a little pot. The scroll, declaring the
theme, reflected his labours with brush and inkstone; the flower, its transient
beauty representing the loveliness of all flowers, had to look as it would in
the field. (The hardest part of preparation, he thought.) Nothing was showy,
as Sen No Rikyu, the greatest master, had decreed in the 16th century; all
was simple, with no speck of dust remaining. Next, his guests appraised the
utensils, all minutely cleaned and dried with a silk cloth that touched nothing
else. He hoped they noticed, as he always did, the slightly curved tines of the
tea-whisk, the fall of the glaze on a tea bowl, the crisp blackness of the
lacquer tea box. All these reflected an unpretentious usefulness. They also
suggested a world of the spirit beyond time and space.

Together he and his guests ate a little meal he had prepared, then a moist
sweet. He had laid the fire, of charcoal bricks on raked ash; the black iron
kettle, as it boiled, acquired a natural dewiness and sang like the wind
through his pines. Using the very best powder he mixed up first a ceramic
bowl of dark green, frothy, thick tea, koicha, from which all the guests
sipped in turn. That aromatic green, again, evoked Nature. After this, in
separate smaller bowls, he gave them usucha, thin tea. As they drank, the
principles of harmony and tranquility descended over them and filled the
room. Best of all for him was the sense of mu-hin-shu, “no-guest-no-host”,
where all social barriers dissolved and they became a single entity in
contemplation and at peace.
He had not truly known this as a child. As the son of the 14th tea master, his
life was mapped out for him, and it was nothing but tea. He played with fire
ash and bamboo ladles, and practised deportment by carrying a heavy
ceramic brazier up and down the hall. His father severely instructed him
while his mother, sitting behind the sliding paper doors, listened and tested
him later. At junior high, other boys ragged him and thought him lucky to
miss exams. He did not feel lucky, just burdened. Not least, to be a tea
master, he had to become a Zen priest; that was hard work.

The only time he experienced total unity with his comrades was in October
1944. Then, with 200 other university students, he had joined the imperial
navy’s Special Attack Force to learn to crash his plane and his body into
American ships. They trained for 40-50 hours, no more; ordinary navy pilots
took 500. Together they took an oath of loyalty, propriety, righteousness and
simplicity of life. These were not unlike the principles he had been taught as
a future tea master, except that everything was overshadowed by imminent
and certain death. Being students, they discussed death philosophically, but
could not agree on its meaning. He held tea ceremonies for them at the base,
to steady nerves if he could. In the end they all flew off to Okinawa, wedged
between bombs, and did not return. But he was left behind.

By some fluke he never unravelled, he had been removed from the sortie
list. Possibly his lineage had saved him, but he had been eager to go, and to
survive was desperately painful. He could not accept it until he was told it
was his destiny. If that was so, he clearly had to live the rest of his life for
his comrades. Their faces dwelled in his mind; their lives had, in effect, been
transferred to him, not as a warrior but as a bringer of peace.

It was in this spirit that he started travelling the world, first to New York. He
arrived there in 1951 with a bag of safeguarding charms, anxious that he
might be treated like an enemy. Instead, he met kindness everywhere. His
touring flourished after that, until he found himself, sober and stately in his
dark priest’s robes, making tea for Queen Elizabeth, Pope John Paul II,
Angela Merkel and George W. Bush. In July 2011 he went to Pearl Harbor
where, in the memorial above the sunken USS Arizona, he performed a
chado for the souls of the sailors still entombed below him.
At the end of his regular ceremony back home, he bowed again to each guest
as they left. The tea hut now had to be restored to perfect order. Deep in
reflection, he gathered the utensils, washed them, dried them and put them
away. As often as he wished, he could also perform all those stages of the
chado alone. Each time, he entered sublimity. As he sipped, with eyes
closed, he found green mountains and pure water within his heart. A monk
had once asked his master, “What is the Way?”, and the master had replied:
“Your life is the Way.” That had to mean, for Sen Genshitsu, that the Way
was tea. ■
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sipping
 Table of Contents
The world this week
Politics
Business
The weekly cartoon
Leaders
Brazil offers America a lesson in democratic maturity
Humiliation, vindication—and a giant test for India
How much danger is America’s central bank in?
France’s government is on the brink of collapse, again
Don’t forget the downsides of China’s innovation push
Letters
Don’t ditch Black Economic Empowerment in South Africa
By Invitation
The boss of SAP on Europe’s botched approach to digital sovereignty
Briefing
Jair Bolsonaro’s trial shows Brazil a way out from polarisation and
stagnation
United States
A $19bn industry is about to pay its workforce for the first time
Donald Trump has purged one of the CIA’s most senior Russia analysts
Zohran Mamdani is promising lots of things he can’t actually do
Have foreign tourists really avoided America this year?
The Democrat who calls Trump a child of God
New York is turning 400 and no one cares
The Americas
A surprise US Navy surge in the Caribbean
Peru’s cartoonish presidential front-runner
Asia
A defining test looms for India
Will a harsher world accelerate India’s reforms?
India’s government bans fantasy sports games
Narendra Modi’s secret weapon: the Indian consumer
China
On parade in China: Putin, the PLA and purges
 Chinese courts can bar even those not accused of crimes from leaving
the country
Something is amiss in China’s foreign-affairs leadership
Middle East & Africa
Putin’s botched African adventure
The indecorous fight over a dead president’s body
Israel’s prevaricator-in-chief
No one is satisfied with Egypt’s role in Gaza
A haunting new view of Assad’s brutality in Syria
Europe
Time for some Merz-Macron magic
Ukraine shows off a deadly new cruise missile
After a year of chaos, the Dutch hope to return to real issues
Why Poland is becoming less central European and more Baltic
Ten years later, “Wir schaffen das” has proved a pyrrhic victory
Britain
The choices facing Britain’s next MI6 chief
Hansard shows what it takes to put democracy on the record
In some ways, rural Britain is changing faster than its cities
The world’s oldest daily radio serial on England’s new rural life
Quietly, Britain is moving closer to EU rules
The polycrisis theory of Brexit
International
Donald Trump is waging war on woke AI
The wrong way to end a war
1843
The untold story of Bolsonaro’s weird and wild coup attempt
Business
How China became an innovation powerhouse
Donald Trump, friend of the EV?
Service stations are getting a glow-up
How much trouble is the world’s biggest offshore-wind developer in?
The market for startup shares is getting even weirder
Feuds, grudges and revenge
How a power shortage could short-circuit Nvidia’s rise
Finance & economics
How Trump’s war on the Federal Reserve could do serious damage
 Assessing the case against Lisa Cook
Why you should buy your employer’s shares
Fear the deficit-populism doom loop
Gambling or investing? In America, the line is increasingly blurred
Even as China’s economy suffers, stocks soar. What’s going on?
Trump’s interest-rate crusade will be self-defeating
Science & technology
A Chinese lab starts to tackle a giant mystery in particle physics
The middle-aged are no longer the most miserable
The rise of beer made by AI
Are saunas actually good for you?
Culture
“The Thursday Murder Club” and the resurgence of cosy crime
What gladiator shows were really like
A story of occupations, surveillance and exile in Albania
Robert Louis Stevenson was adventurous, mercurial and fragile
Flirty and thriving: how Sabrina Carpenter became a pop superstar
Forget smelling flowers; now you can drink them
Economic & financial indicators
Economic data, commodities and markets
Obituary
Sen Genshitsu spread peace through sipping