OCTOBER 31ST–NOVEMBER 6TH 2020 Why it has to be Joe Biden

Contents The Economist October 31st 2020 5

The world this week Britain 9 A summary of political 29 Data and government and business news 30 Brutalism and beauty 31 New stately homes Leaders 32 The Tories and race 13 America’s election Why it has to be Biden 34 Prison visiting 14 Green innovation Breaking through Europe 16 Furlough schemes 35 Covid-19 crushes culture Zombified Britain 36 Italy’s tax breaks 18 Germany’s CDU 37 Abortion in Poland The long farewell 37 A new Albanian princess On the cover Letters 38 The fighting in Nagorno-Karabakh Donald Trump has desecrated 20 On Indonesia, Colombia, America’s values. Joe Biden human rights, Nagorno- 40 Charlemagne Macron’s offers the prospect of repair Karabakh, the Arctic, beer mission and renewal: leader, page 13. Two briefings look at what Mr Briefing United States Trump’s presidency has meant 41 Amy Coney Barrett at home, page 22, and for 22 The Trump audit, part I American foreign policy, What his presidency has 42 Flipping state legislatures page 25 meant for America... 43 California’s referendums 25 The Trump audit, part II • Baby boom, baby bust The 43 The Hunter Biden tale ...and for the world pandemic may be leading to 44 Latino men and the GOP fewer babies in rich countries, 45 Trump and corruption and perhaps more in poor ones, 46 Lexington Battle-hymn page 61 of the Never Trumpers • Green venture capital Innovation is an essential part of The Americas dealing with climate change. 47 Argentina’s breadbasket More of it is needed: leader, page 14. Climate-conscious 48 Brazil’s race-shifting venture capitalists are once politicians again placing big bets on clean 49 Bello Fighting Mexico’s technology. Can they both make Coke habit money and help the planet? Page 63 Middle East & Africa • What Rishi got wrong Why the chancellor should not have 50 Fighting malaria extended the furlough scheme: 52 A bloody vote in Guinea leader, page 16 52 Sudan makes new friends 53 An airport divides Israel Johnson A tantalising book of puzzles that doubles as an introduction to linguistics, page 83 We are working hard to ensure that there is no dis- ruption to print copies of The Economist as a result of the coronavirus. But if you have digital access as part of your subscription, then acti- vating it will ensure that you can always read the digital version of the newspaper as well as all of our daily jour- nalism. To do so, visit economist.com/activate 1 Contents continues overleaf 6 Contents The Economist October 31st 2020

Asia Finance & economics 54 Centre v state in India 69 The world’s best banker 55 Singapore’s hawkers 70 China’s banks go global 56 Japan’s climate pledge 71 QE in emerging markets 56 Press freedom in Pakistan 71 Keeping a lid on the yuan 57 Banyan Sri Lanka’s 72 The EU’s fiscal rules all-powerful president 73 Buttonwood The case for bitcoin China 74 Free exchange Notorious 58 The missing successor GDP 59 The world’s largest census 60 Chaguan High-tech Science & technology chickens 77 Water on the Moon 78 Marine protected areas 79 Rats, palms and Palmyra

International 61 Birth rates and the pandemic Books & arts 80 A history of conservatism 81 Matisse in lockdown 82 Exorcism 82 A Kenyan novel in verse Business 83 Johnson The puzzle of The return of green VC 63 language 65 Samsung after Lee Kun-hee Economic & financial indicators 66 Uber’s catch 22 84 Statistics on 42 economies 66 Opioids Inc in court 67 Bartleby Hotel offices Graphic detail 68 Schumpeter Jeff Bezos in 85 Italian towns and herd immunity space Obituary 86 Hawa Abdi, the doctor who reimagined Somalia

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Arceau, L’heure de la lune Time flies to the moon. The world this week Politics The Economist October 31st 2020 9

The number of people who By a large majority, Chileans have already voted in Ameri- voted in a referendum to scrap Coronavirus briefs ca’s election passed 76m as of the constitution written under To 6am GMT October 29th 2020 October 29th. In Florida, a key the dictatorship of Augusto Weekly confirmed cases by area, ’000 state, 7m people have voted Pinochet, who governed Chile early, only 2.4m fewer than the from 1973 to 1990. They also 1,500 Europe total turnout in 2016. Early voted to summon an elected 1,200 voting is less prevalent in assembly, half of whose mem- India 900 Latin America Pennsylvania and other swing bers must be women, to draft a 600 states in the Midwest. new one. Critics of the current Other 300 constitution say it gives private US 0 Israel and Sudan agreed to firms too big a role in provid- The second wave of covid-19 normalise relations in a deal ing public services and con- OSAJJMAM worsened across Europe, brokered by America. As part of centrates too much power in Confirmed deaths* leading a number of countries the agreement, Sudan is being the presidency. Per 100k Total This week to impose stricter measures. A taken off an official list of Peru 103.9 34,257 382 second national lockdown was countries sponsoring Leopoldo López, a leader of the Belgium 96.4 11,170 631 announced in France; Emman- terrorism. It is the third Arab opposition to Venezuela’s Spain 75.9 35,466 1,100 uel Macron, the president, said country to recognise Israel in dictator, Nicolás Maduro, Bolivia 74.5 8,694 136 the country had been “over- the past two months. secretly left the residence of Brazil 74.5 158,456 3,053 whelmed” by the spread of the the Spanish ambassador in Chile 73.4 14,032 313 Ecuador 71.5 12,608 155 virus. In Germany restaurants, Libya’s warring factions agreed Caracas, where he had taken Mexico 70.0 90,309 2,894 un cafés and bars were ordered to to cease fire. The envoy, refuge, and fled to Spain. United States 68.5 226,775 5,462 close during November. Spain Stephanie Williams, said all Britain 67.3 45,675 1,517 announced a new state of foreign fighters must leave A judge in Bolivia annulled the Sources: Johns Hopkins University CSSE; UN; emergency, and much of Italy Libya within three months. arrest warrant for the former The Economist *Definitions differ by country has introduced curfews. A president, Evo Morales, clear- study in England suggests that Russian air strikes killed ing the way for him to return America hit 83,000 new daily 100,000 people are catching dozens of Turkish-backed from exile in Argentina. The infections on two consecutive the disease there every day. fighters in northern Syria. The decision does not end in- days, the highest numbers attack threatens to undo a vestigations into allegations since the pandemic began. A suspected Islamist killed truce, brokered by Russia and that Mr Morales committed three people at a church in Turkey, in Idlib province, acts of “sedition and terrorism” Russia broke records for both Nice, virtually beheading one which is partially controlled by by helping to foment unrest a the daily number of cases and of his victims. He was shot, rebels. year ago. deaths in the country. Some injured and arrested by French 27,000 people have officially police. On the same day police Police in Nigeria arrested over Japan pledged to reduce its net died in total, though the true shot dead a man near Avignon 800 people in connection with emissions of greenhouse gases figure may be much higher. who had threatened passersby the looting and burning of to zero by 2050, in line with with a gun. The attacks came shops and warehouses. Angry promises made by Britain and Iran said it would extend the soon after the decapitation of a young people targeted govern- the eu. Two days after the closure of schools, mosques, teacher near Paris, after he had ment facilities believed to be announcement, South Korea shops, restaurants and other shown cartoons of the Prophet storing food and other supplies made a similar pledge. public institutions in Tehran Muhammad to his pupils. meant to be distributed as until November 20th. State covid-19 relief. The unrest Sri Lanka’s parliament ap- television reported that a Large demonstrations in follows recent protests against proved an amendment to the person was dying from the Poland greeted a decision by police brutality. constitution that enormously virus every four minutes. the Constitutional Tribunal to strengthens the powers of the make it even harder for women Over 20 people were killed in presidency. The amendment Taiwan went 200 days without there to have abortions. They violence that erupted after a reverses changes made in 2015 any locally transmitted cases. will no longer be allowed to disputed presidential election to rein in the president. It has had just seven deaths. cite serious foetal defects as a in Guinea. Alpha Condé won a justification. Abortions are third term, according to the The king of Malaysia declined Melbourne came out of a now legal only in cases of rape, official results. But his main the government’s request to lengthy strict lockdown, which or incest, or to protect the opponent also claimed victory. declare a state of emergency. has been credited with sup- mother’s life. That means the government pressing the spread of the Tanzania’s election was also will have to put a budget to disease in the Australian city. Amy Coney Barrett was sworn marred by violence and allega- parliament, in a vote it might Its 5m residents had been in as a justice on America’s tions of vote-rigging. In the lose, triggering an election. largely confined to home. Supreme Court. The Senate had semi-autonomous island voted to confirm her just a region of Zanzibar, opposition China tested all 4.7m residents week before the presidential leaders accused the police of of Kashgar for covid-19 in a For our latest coverage of the election. All Republican sena- killing at least nine people matter of days, following a virus and its consequences tors except Susan Collins of during protests. John spike in infections. Some 183 please visit economist.com/ Maine, approved her nomina- Magufuli, the incumbent, is people tested positive in the coronavirus or download the tion. The court now has a 6-3 expected to be declared the city, which is in China’s auto- Economist app. conservative majority. winner of the presidential race. nomous region of Xinjiang. 10 The world this week Business The Economist October 31st 2020

The prospect of a resurgence in ly lower credit losses. The bank had said it wanted to pull out of semiconductor industry. amd covid-19 and new lockdowns is considering whether to the acquisition, arguing that hopes its acquisition will help made it a rocky week for stock- resume dividends. It cut them Tiffany’s post-pandemic pros- it move into new markets, and markets. On Wall Street the in March at the behest of Brit- pects are poor. Both sides are to compete with Intel, its s&p 500 and Dow Jones Indus- ish regulators, causing outrage trying to avoid an expensive arch-rival, in the lucrative trial Average each fell by 3.5% in Hong Kong, where a third of court case to solve the matter. market for data-centre chips. in a day, the Nasdaq by 3.7%. its shareholders are based. The ftse100 dropped by 2.6%. Lee Kun-hee, a giant in the A surge in demand for com- The sell-off was even sharper world of South Korean busi- mercial cloud services helped in French and German mar- Turkish lira per $ 2020, inverted scale ness, died at the age of 78. A Microsoft rack up a quarterly kets. Oil prices also plunged; son of the founder of Samsung, profit of $13.9bn, a 30% in- 5.5 Brent crude fell to $39 a barrel. Mr Lee transformed the crease year on year. The com- 6.0 6.5 sprawling group into the pany said it expects cloud Ant Group set the share prices 7.0 world’s biggest manufacturer computing will become ever for its forthcoming dual listing 7.5 of smartphones, televisions more important as firms rely it in Hong Kong and on 8.0 and memory chips. He was less on systems physically Shanghai’s tech-focused Star 8.5 considered to be South Korea’s located in their offices. The market. The Chinese fintech OSAJJMAMFJ most powerful man before a number of daily active users of firm’s initial public offering Source: Refinitiv Datastream heart attack in 2014 confined Microsoft’s Team message- could raise more than $34bn, him to bed. He officially re- and-chat service, a rival to which would vault it ahead of The Turkish lira hit a new low mained chairman of Samsung, Slack, has risen to 115m, from Saudi Aramco’s debut last year against the dollar, in part though the de facto leadership 32m at the start of the crisis. to make it the world’s biggest- because Turkey’s central bank passed to his son, Lee Jae-yong, ever ipo of stock. did not raise its main interest who, like his father, has been rate at its recent meeting, tarnished by allegations of Aloha leading to more speculation corruption. Japanese tourists are to be A spanner in the works about the extent of political allowed to enter Hawaii, and America rejected the candida- interference in its decisions. Aston Martin, a struggling avoid the American state’s cy of Ngozi Okonjo-Iweala, a Recep Tayyip Erdogan, the British maker of sports cars, strict two-week quarantine, if former Nigerian finance min- country’s president, is opposed announced that Daimler will they test negative for covid-19 ister, as the next head of the to rate rises. Investors are also increase its stake in the com- in an approved programme. World Trade Organisation, nervous about America’s warn- pany to a maximum of 20% in Japanese visitors, many of instead throwing its weight ings to Turkey about deploying exchange for access to the whom have family connec- behind Yoo Myung-hee, South an anti-aircraft missile system German car group’s electric- tions with Hawaii, are the Korea’s trade minister and the it has bought from Russia. vehicle technology. islands’ second-biggest source only other person running for of tourism revenue, after the job. Both candidates are lvmh and Tiffany reportedly amd, a chipmaker, announced travellers from the American women. Ms Okonjo-Iweala negotiated a new deal with a that it would buy Xilinx, mainland. How many will go is would also be the first African lower price tag for the French another chip firm, for $35bn. unclear, as they will still have to lead the wto and has the luxury-goods group’s takeover The deal is the latest in a to self-isolate when they backing of its selection com- of the American jeweller. lvmh banner year for mergers in the return to Japan. mittee. But America wants the organisation to be overhauled, and says it “must be led by someone with real, hands-on experience in the field”.

A report from the Intergovern- mental Science-Policy Platform on Biodiversity and Ecosystem Services, based in Bonn, warned that future pandemics will do more dam- age than covid-19 to the world economy unless measures are taken to reduce contact be- tween wildlife, livestock and people, because increasing human activity is driving transmission. It estimates that between 540,000 and 850,000 unknown viruses in nature could still infect people.

hsbc’s net profit declined by half, to $1.4bn, year on year, though it recorded significant-

Leaders Leaders 13 Why it has to be Biden

Donald Trump has desecrated America’s values. Joe Biden offers the prospect of repair and renewal he country that elected Donald Trump in 2016 was unhappy bad for America, Mr Trump made it central to his office. He has Tand divided. The country he is asking to re-elect him is more never sought to represent the majority of Americans who did not unhappy and more divided. After almost four years of his leader- vote for him. Faced by an outpouring of peaceful protest after the ship, politics is even angrier than it was and partisanship even killing of George Floyd, his instinct was not to heal, but to depict less constrained. Daily life is consumed by a pandemic that has it as an orgy of looting and left-wing violence—part of a pattern registered almost 230,000 deaths amid bickering, buck-passing of stoking racial tension. Today, 40% of the electorate believes and lies. Much of that is Mr Trump’s doing, and his victory on No- the other side is not just misguided, but evil. vember 3rd would endorse it all. The most head-spinning feature of the Trump presidency is Joe Biden is not a miracle cure for what ails America. But he is his contempt for the truth. All politicians prevaricate, but his ad- a good man who would restore steadiness and civility to the ministration has given America “alternative facts”. Nothing Mr White House. He is equipped to begin the long, difficult task of Trump says can be believed—including his claims that Mr Biden putting a fractured country back together again. That is why, if is corrupt (see United States section). His cheerleaders in the Re- we had a vote, it would go to Joe. publican Party feel obliged to defend him regardless, as they did in an impeachment that, bar one vote, went along party lines. King Donald Partisanship and lying undermine norms and institutions. Mr Trump has fallen short less in his role as the head of America’s That may sound fussy—Trump voters, after all, like his willing- government than as the head of state. He and his administration ness to offend. But America’s system of checks and balances suf- can claim their share of political wins and losses, just like ad- fers. This president calls for his opponents to be locked up; he ministrations before them. But as the guardian of America’s val- uses the Department of Justice to conduct vendettas; he com- ues, the conscience of the nation and America’s voice in the mutes the sentences of supporters convicted of serious crimes; world, he has dismally failed to measure up to the task. he gives his family plum jobs in the White House; and he offers Without covid-19, Mr Trump’s policies could well have won foreign governments protection in exchange for dirt on a rival. him a second term (see first Briefing). His record at home in- When a president casts doubt on the integrity of an election just cludes tax cuts, deregulation and the appoint- because it might help him win, he undermines ment of benchloads of conservative judges. Be- the democracy he has sworn to defend. fore the pandemic, wages among the poorest Partisanship and lying also undermine poli- quarter of workers were growing by 4.7% a year. cy. Look at covid-19. Mr Trump had a chance to Small-business confidence was near a 30-year unite his country around a well organised re- peak. By restricting immigration, he gave his sponse—and win re-election on the back of it, as voters what they wanted. Abroad, his disruptive other leaders have. Instead he saw Democratic approach has brought some welcome change governors as rivals or scapegoats. He muzzled (see second Briefing). America has hammered and belittled America’s world-class institu- Islamic State and brokered peace deals between Israel and a trio tions, such as the Centres for Disease Control and Prevention. As of Muslim countries. Some allies in nato are at last spending so often, he sneered at science, including over masks. And, un- more on defence. China’s government knows that the White able to see beyond his own re-election, he has continued to mis- House now recognises it as a formidable adversary. represent the evident truth about the epidemic and its conse- This tally contains plenty to object to. The tax cuts were re- quences. America has many of the world’s best scientists. It also gressive. Some of the deregulation was harmful, especially to the has one of world’s highest covid-19 fatality rates. environment. The attempt at health-care reform has been a de- Mr Trump has treated America’s allies with the same small- bacle. Immigration officials cruelly separated migrant children mindedness. Alliances magnify America’s influence in the from their parents and limits on new entrants will drain Ameri- world. The closest ones were forged during wars and, once un- ca’s vitality. On the hard problems—on North Korea and Iran, and made, cannot easily be put back together in peacetime. When on bringing peace to the Middle East—Mr Trump has fared no countries that have fought alongside America look on his leader- better than the Washington establishment he loves to ridicule. ship, they struggle to recognise the place they admire. However, our bigger dispute with Mr Trump is over some- That matters. Americans are liable both to over- and to under- thing more fundamental. In the past four years he has repeatedly estimate the influence they have in the world. American military desecrated the values, principles and practices that made Ameri- power alone cannot transform foreign countries, as the long ca a haven for its own people and a beacon to the world. Those wars in Afghanistan and Iraq proved. Yet American ideals really who accuse Mr Biden of the same or worse should stop and think. do serve as an example to other democracies, and to people who Those who breezily dismiss Mr Trump’s bullying and lies as so live in states that persecute their citizens. Mr Trump thinks ide- much tweeting are ignoring the harm he has wrought. als are for suckers. The governments of China and Russia have al- It starts with America’s democratic culture. Tribal politics ways seen American rhetoric about freedom as cynical cover for predated Mr Trump. The host of “The Apprentice” exploited it to the belief that might is right. Tragically, under Mr Trump their take himself from the green room to the White House. Yet, suspicions have been confirmed. whereas most recent presidents have seen toxic partisanship as Four more years of a historically bad president like Mr Trump 1 14 Leaders The Economist October 31st 2020

2 would deepen all these harms—and more. In 2016 American vot- confrontational than Mr Trump, but more purposeful. ers did not know whom they were getting. Now they do. They Wavering Republicans worry that Mr Biden, old and weak, would be voting for division and lying. They would be endorsing would be a Trojan horse for the hard left. It is true that his party’s the trampling of norms and the shrinking of national institu- radical wing is stirring, but he and Kamala Harris, his vice-presi- tions into personal fiefs. They would be ushering in climate dential pick, have both shown in the campaign that they can change that threatens not only distant lands but Florida, Califor- keep it in check. Ordinarily, voters might be advised to constrain nia and America’s heartlands. They would be signalling that the the left by ensuring that the Senate remained in Republican champion of freedom and democracy for all should be just an- hands. Not this time. A big win for the Democrats there would other big country throwing its weight around. Re-election would add to the preponderance of moderate centrists over radicals in put a democratic seal on all the harm Mr Trump has done. Congress by bringing in senators like Steve Bullock in Montana or Barbara Bollier in Kansas. You would not see a lurch to the left President Joe from either of them. The bar to Mr Biden being an improvement is therefore not high. A resounding Democratic victory would also benefit the Re- He clears it easily. Much of what the left wing of the Democratic publicans. That is because a close contest would tempt them into Party disliked about him in the primaries—that he is a centrist, divisive, racially polarising tactics, a dead end in a country that is an institutionalist, a consensus-builder—makes him an anti- growing more diverse. As anti-Trump Republicans argue, Trump well-suited to repair some of the damage of the past four Trumpism is morally bankrupt (see Lexington). Their party years. Mr Biden will not be able to end the bitter animosity that needs a renaissance. Mr Trump must be soundly rejected. has been mounting for decades in America. But he could begin to In this election America faces a fateful choice. At stake is the lay down a path towards reconciliation. nature of its democracy. One path leads to a fractious, personal- Although his policies are to the left of previous administra- ised rule, dominated by a head of state who scorns decency and tions’, he is no revolutionary. His pledge to “build back better” truth. The other leads to something better—something truer to would be worth $2trn-3trn, part of a boost to annual spending of what this newspaper sees as the values that originally made about 3% of gdp. His tax rises on firms and the wealthy would be America an inspiration around the world. significant, but not punitive. He would seek to rebuild America’s In his first term, Mr Trump has been a destructive president. decrepit infrastructure, give more to health and education and He would start his second affirmed in all his worst instincts. Mr allow more immigration. His climate-change policy would in- Biden is his antithesis. Were he to be elected, success would not vest in research and job-boosting technology. He is a competent be guaranteed—how could it be? But he would enter the White administrator and a believer in process. He listens to expert ad- House with the promise of the most precious gift that democra- vice, even when it is inconvenient. He is a multilateralist: less cies can bestow: renewal. 7

Green innovation Breaking through

Innovation is an essential part of dealing with climate change. More is needed overnments are lining up to set new climate targets for the than tripled this year. This month NextEra, a clean-power utility, Gmiddle of the century. This week Japan said that it would surpassed ExxonMobil to become America’s biggest energy firm. eliminate all greenhouse gases (see Asia section). In the past In the past four years venture-capital (vc) deals have more than month or so China and South Korea have declared that their doubled (see Business section). economies will be carbon-neutral, meaning that they will put no Yet nowhere too little capital is being channelled into innova- more carbon dioxide into the atmosphere than they take out. In tion. Spending on r&d has three main sources: venture capital, March the European Union unveiled a “net-zero” plan of its own. governments and energy companies. Their combined annual in- Britain and France have enshrined their targets vestment into technology and innovative com- into law. A victory next week for Joe Biden could CO2 emissions from fossil fuels panies focused on the climate is over $80bn. For put America on a similar path. Share of global total, 2018, % comparison, that is a bit more that twice the r&d Targets are easier set than met. Today around 0 302010 spending of a single tech firm, Amazon. 85% of the world’s industrial energy comes from China One of the world’s most pressing problems United States fossil fuels. Getting consumption to near zero EU28 thus receives perhaps just 4% of the global total will involve enormous economic shifts. It will Japan spent on r&d. Governments are falling short of require huge changes in how energy is generat- South Korea their targets. vc investment in green startups ac- ed and used. And it will also require a sustained counts for about a tenth of all vc investment and barrage of innovations to improve how steel or cement are made, firms which sell goods or services that cut emissions made up say, or how buildings are designed and managed. just five of the top 100 firms in this year’s public-listing bonanza. The world’s green-innovation machine likes to make a big The private sector’s record on climate innovation has been a hit- noise about its successes. The share prices of firms with climate- and-miss affair, at best. Having boomed in the mid-2000s, green sustaining technologies have soared. Tesla’s value has reached vcs went bust a few years later. $385bn, overtaking the combined total of the next three biggest What can be done? The first step is to think clearly about the carmakers. The value of byd, a Chinese competitor, has more division of labour between governments and the private sector. 1 Actual investors build relationships. Not just portfolios.

SEARCH FOR ACTUAL INVESTORS Actual Investors 16 Leaders The Economist October 31st 2020

2 Governments need to get involved in several ways, because the r&d over four years, with an emphasis on renewable-energy market on its own will not do enough to bring about the shift technology. At the moment, the federal government spends less from fossil fuels. It starts with the state funding not just basic re- than $7bn a year on such green r&d. search but also some development and the deployment of tech- The private sector still has a crucial role to play. Investors and nologies. Some projects are too risky, too large, or both, to be entrepreneurs are best at commercialising new ideas, from effi- countenanced by private investors on their own. cient grids to hydrogen-powered forklift trucks. The public mar- In practice that means the government should expect to foot kets provide a vast source of capital for more mature firms, help- some or all of the bill for new nuclear power plants, new charg- ing them scale up fast, as Tesla has demonstrated. Yet so far the ing grids for electric vehicles, or thorough investigations of new asset-management industry has stuck to marketing its green technologies such as geoengineering. Governments also need to credentials in superficial ways. In the latest quarter the net in- enact policies that encourage greener consumption. Pricing car- flows of cash into “sustainable” funds, which often track the bon is an essential step, forcing firms, and ultimately consum- shares of big firms that have little effect on climate change, were ers, to bear the cost of their emissions, and in turn leading inves- twice the size of the annual investments into green vc. tors to allocate capital more efficiently. More companies and billionaire-backed funds are eyeing up The good news is that governments may be at last changing climate-friendly vc. But institutional investors, who have far their tune. Carbon taxes are spreading and will soon cover over a larger sums to play with, need to embrace the opportunity, too. fifth of global emissions. A slice of the eu’s €750bn ($880bn) re- The forthcoming energy transition will be one of the biggest covery plan is likely to be directed towards r&d that is related to business opportunities of the next decades. Instead of piling reducing greenhouse-gas emissions and their effects. If he is into Tesla’s shares 17 years after the company was founded, in- elected on November 3rd, Mr Biden plans to spend $300bn on vestors should be striving to find the next superstar. 7

Furlough schemes The zombification of Britain

Why the government should not have extended the furlough scheme magine if, 20 years ago, the British government had vowed to by government restrictions, the scheme will pay two-thirds of Iprotect every job in the country. Today an extra 30,000 Britons workers’ salaries. would be working as high-street travel agents, 30,000 or so Politically, Mr Sunak’s move is shrewd. The opposition La- would earn their crust by repairing fax machines, and 40,000 bour Party can hardly criticise a policy that it itself had called for. would still be stacking shelves and ringing the tills in Wool- And by making it easier for bosses to keep workers on the books, worths, a chain of stores that went bust in 2009. Britain will for the time being sweep the pent-up rise in unem- Allowing obsolete jobs to wither and new ones to blossom is ployment under the carpet. That, in turn, will blunt the criticism one of the main ways in which capitalist economies get richer coming from those on the right wing of Mr Sunak’s Conservative and more productive. Governments interfere with this process Party, who worry that restrictions on movement and socialising of creative destruction at their peril. That is why the direction are strangling the economy. that Britain is taking in its efforts to mitigate the economic ef- But the about-turn makes it more likely that the government fects of the pandemic is so mistaken. will protect jobs for which there is no demand. The economy is Since March Britain has been shielding work- changing fast. Fewer sandwich-sellers will be ers and their families from the ruinous effects of Furloughed workers needed in city centres in future, since more peo- the pandemic primarily through its furlough 2020, % of workforce ple will work from home. The growth of online 30 scheme, which pays 80% of workers’ salaries. Britain shopping, and the decline of the bricks-and- Britain’s approach is similar to that of other 20 mortar sort, has accelerated. At least 1m jobs France European countries, but its scheme is more gen- 10 supported by the new furlough scheme, repre- erous than those elsewhere. In the deepest days Germany Italy 0 senting about 3% of the workforce, are unlikely of lockdown, close to 10m workers—a third of Feb Mar Apr May JulJun to survive in the long run. the labour force—were benefiting from it. More The cost of supporting these jobs, which is than twice as many Britons remain furloughed as Italians, Ger- probably around £1bn a month, is a problem in itself. But in a mans or French. world in which the budget deficit is that size every day it is a mi- Until recently Rishi Sunak, the chancellor of the exchequer, nor one. What is more worrying is the likelihood that the govern- had been planning to introduce a stripped-down replacement ment is retarding economic recovery by discouraging the re- for his furlough scheme. But at the last minute, as it became clear allocation of workers from dying industries to growing ones. It is that infection rates are rising alarmingly fast across large parts of leaving the country stuck with the post-pandemic equivalent of the country, the chancellor changed his mind and opted instead fax-repairmen and Woolies’ sales staff. to continue with an adjusted scheme that is due to start on No- America is doing better. Across the Atlantic, politicians have vember 1st and is almost as generous. focused less on preserving jobs than on preserving incomes, Under the new rules, workers need put in only 20% of their posting stimulus cheques to households and temporarily bump- normal scheduled hours, and the government will cover half ing up unemployment-insurance payments (these have since their normal pay. For companies that have been forced to close lapsed, but after the election Congress will probably decide to 1 What if food packaging were carbon-neutral?

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2 reintroduce them). Earlier this year, government top-ups were the American example. It should not just cancel a planned reduc- worth $600 a week, so generous that seven out of ten unem- tion in the value of universal credit, but sharply increase its val- ployed Americans earned more from benefits than they had ue, so as to ensure that workers whose jobs disappear earn the done when they were still in work. same as those who stay on furlough. If so, they would get 85% of This largesse has given people the financial security to ex- their previous earnings in benefits, up from 55% at present. That periment with new ways of earning money. As the economy has would allow the necessary reallocation of resources without reopened, America has seen an explosion of small-business cre- forcing people into penury. ation, with laid-off workers finding gaps in the market. Europe’s economic recovery is weaker than America’s, and Britain lags Build it to last still further behind. The furlough scheme, which encourages In the spring, when it was still unclear how long the pandemic workers to cling to old jobs rather than looking for new ones, is would last, Britain was right to try to hold the economy in sus- almost certainly part of the reason. pended animation. Now that the world knows the impact of co- It is not too late to change course. The government should vid-19 will be deep and enduring, the task for politicians is to wind down the furlough scheme, as it had planned to, and follow protect workers, and leave the market to work its magic. 7

Germany’s Christian Democrats The long farewell

Germany’s biggest party is making a hash of choosing its next leader, and probable next chancellor urope’s most important election next year will take place in leader—nor, should he win, with the German electorate. EGermany. So will the runner-up. In the autumn of 2021 Ger- Yet Mr Merz is right that one of Europe’s most successful par- mans will elect a new government, and Angela Merkel has prom- ties ought to be able to handle a leadership election without ised that she will step down after 16 years as chancellor. Before melting down. Postponing the vote could delay other staging- that, though, Mrs Merkel’s centre-right Christian Democratic posts before the general election. First, after choosing its leader, Union (cdu) must choose a new leader—and the winner of that the cdu must get together with its Bavarian sister party, the vote will be in pole position to succeed her in the chancellery. Christian Social Union (csu), to pick a joint candidate to run for The cdu’s internal election is therefore crucial for Germany, and chancellor. Second, that candidate—who will be odds-on to re- beyond. And yet the party is making a monumental hash of it. place Mrs Merkel—will need time to introduce himself to Ger- The immediate cause is covid-19. The pandemic scuppered man voters: neither Mr Merz nor Mr Laschet has much of a na- the cdu’s first attempt to elect its leader, in April. This week the tional profile (unlike Markus Söder, the popular csu leader, who party scrapped a second party congress, planned for December has an outside chance of taking the candidacy). There are also 4th. Despite a detailed health protocol, including buzzers that two crucial state elections to manage in March. No one wants an would have been triggered whenever those attending got too American-style drawn-out campaign. But next year’s political close to one another, it was considered impossible to organise a calendar is starting to look squeezed. mass event just when the virus was rampant. Two years ago Mrs Merkel stepped down as Mrs Merkel has just announced sweeping new cdu leader, marking the beginning of her long restrictions. The cdu now plans either to hold farewell from German politics. The party has an in-person event early next year, or to conduct since botched its management of her succes- a digital congress and ask delegates to vote by sion at almost every stage. Annegret Kramp-Kar- post, which will take weeks. (Absurdly, German renbauer, Mrs Merkel’s protégée and her succes- law appears to rule out an online election.) sor as leader, resigned earlier this year after Worse, the plan has triggered a bitter party failing to stamp her authority on the party. Mrs dispute. The chief source of trouble is Friedrich Merkel’s capable handling of covid-19 has lifted Merz, the leadership candidate with the strongest backing from the cdu’s poll ratings. But the contest among the three middle- cdu conservatives. He seems to believe that delay will hurt his aged men who are vying to replace her has been dispiritingly chances against his chief rival, Armin Laschet, who is a centrist dull. At times the party has appeared nervous of allowing too in the Merkel mould. (A third candidate, Norbert Röttgen, has lit- lively a debate for fear of exposing its own divisions. tle chance of victory.) Mr Merz accuses the cdu establishment of Yet such splits make debate all the more important. As Mrs using covid-19 as a pretext to damage his candidacy; the party Merkel’s reign enters its last year, Germany confronts a fresh set congress was postponed, he says, to help Mr Laschet, who is of challenges—immigration, the deepening of euro-zone co-op- struggling to gain a following despite his perch as premier of eration, Germany’s policy towards Russia and China, climate North Rhine-Westphalia, Germany’s largest state. change, defence spending and pensions. The cdu urgently It is not the first act of political clumsiness by Mr Merz, a for- needs to talk about the future. mer cdu bigwig who quit politics in 2009 only to change his The leadership contest ought to be a chance for the party to mind and return to the fray two years ago. Party barons are infu- thrash out its differences before rallying for a general election riated by his antics as Germany grapples with the steep accelera- that the polls say it is likely to win. But what should be a discus- tion in covid-19 caseloads. Mr Merz’s self-pity will not help his sion about vital issues has become a splenetic row over proce- case with the 1,001 cdu delegates who must choose their new dure. German voters deserve better. 7

20 Letters The Economist October 31st 2020

the poorest people (though the day laid the basis for 250 dresses that occupation, and Indonesia’s politics salmon, for example, is classi- years of carefully constrained upholds international law. It is said that Javanese dynas- fied as a basic staple). In reality, competition by adopting the tahir taghizade ties rarely last100 years. This the payment of vat does not Westphalian principle under Ambassador of Azerbaijan must have been on the mind of reach much beyond com- which countries did not London President Joko Widodo, or merce; the government has not interfere in each others’ Jokowi, when, as Banyan even been able to implement internal affairs. It wasn’t described, he pandered to the the tax electronically. perfect. But its collapse at the Where the land runs out country’s elite to form a grand The real issue in Colombia start of the 20th century gave “Water all around”, (October coalition to govern an unruly is that taxes, especially direct us two catastrophic world wars 3rd) alas promulgated a chal- country (October17th). In such taxes like income tax, are not and 40 precarious years on the lengeable superlative in citing a fractured country as levied on the richest portions nuclear tightrope. Perhaps we a description of Moffen Island, Indonesia, leaders must con- of society and the solution has should revive it. off Spitsbergen, as being “the tend with entrenched power been to try to increase the tony brenton last spot before the North Pole”. bases, then cultivate patronage number of people, namely the Cambridge In so far as the Svalbard archi- networks of their own if they poorest, who pay vat. pelago is concerned, that claim are to govern at all. camilo blanco more assuredly goes to the Aspiring reformers who do Former economic adviser to Nagorno-Karabakh island of Rossoya, which lies not play by these rules risk the Colombian congress Thank you for drawing atten- within a small cluster of seven following in the footsteps of Bogotá tion to the situation around the islands (Sjuoyane) that consti- Abdurrahman Wahid, toppled Armenia-Azerbaijan Nagorno- tute part of the Nordaust as president by a hostile parlia- Karabakh conflict in “Heavy Svalbard nature reserve. ment, or of Jokowi’s erstwhile Wither human rights metal” (October 10th). How- It was among these rocky ally, Basuki Tjahaja Purnama Sadly, your assertion that ever, Nagorno-Karabakh is not outcrops that the Royal Navy’s (“Ahok”), jailed under a human rights are universal a disputed territory. It is an first attempt at reaching the dubious and politically feels more like wishful think- integral part of Azerbaijan, North Pole became beset in ice charged sentence for blasphe- ing than proven fact (“Torment together with seven adjacent in 1773. And it was within hail- my. Disgraced reformers are of the Uyghurs”, October 17th). regions, occupied and ethni- ing distance of the four-man hardly useful to their constitu- Certainly there is lots of inter- cally cleansed by Armenia. party of the British Trans Arctic ents. Courting the opposition national human-rights Various un Security Council Expedition that made landfall allowed Jokowi to defang the machinery, established at the resolutions demand the imme- in 1969 to complete the first Islamists without jailing any- high point of Western power. diate, unconditional and com- crossing of the surface of the one, making his job slightly But all recent studies show that plete withdrawal of Armenian Arctic Ocean from the north- more manageable. Moreover, its grip is weakening. On a occupying forces from the ernmost point of contiguous his economic programmes are huge range of core issues—the territories of Azerbaijan. The land in the New World (Point not anti-democratic in their death penalty, treatment of map in your article is falsified. Barrow, Alaska) to the north- own right; they are in line with gays and women, protection The real map of Azerbaijan, ernmost land of the Old World his campaign promise, which for religious and other minor- showing Nagorno-Karabakh (the Sjuoyane Islands). is what the people voted for. ities, democracy, freedom of within its internationally ken hedges In a region where aspiring speech—the nations of the recognised borders, can be Sole surviving member of the despots eliminate term limits world are making their own, found on the website of the four-man crossing party of the or imprison critics, it is rather often illiberal, choices whatev- un’s cartographic department. British Trans Arctic Expedition disingenuous to say that er the West may think. We categorically reject the Barrie, Canada Indonesia is sliding back into Your demand that the West allegations on the use of Syrian authoritarianism. After all, the act against Chinese persecu- mercenaries. Azerbaijan’s country is a flawed democracy tion in Xinjiang spotlights the armed forces are ranked 64 The beer necessities of life at best. It is simply remaining policy dilemma this poses. The according to Global Firepower Milk, beer and sweets were one. These point not to Western view that it has the in terms of military strength listed as “basic necessities” Jokowi’s contradictions, but to moral right to interfere in and are perfectly capable of supplied by corner shops, Indonesia’s. other countries’ often deplor- providing every protection which are thriving during the elang adhyaksa able human-rights practices is Azerbaijan needs. Armenia, pandemic (“Turning a corner”, Jakarta running out of political road. however, is ranked 111. October 17th). Two of the three Such action is becoming We have had no problem can hardly be considered counterproductive (Turkey, rallying our people. On July necessities. Sweets are bad for A tax burden on the poor Russia, India) even when it is 15th, amid yet another Arme- you, and many people live Even though Colombia’s value- not glaringly inconsistent nian aggression against Azer- perfectly happily without added tax (vat) rate has in- (Saudi Arabia, Egypt) or simply baijan along the international drinking milk. creased over the years, the disastrous (Iraq, Libya, Syria). border, an estimated 30,000 colin mills share of taxes to gdp has stayed China is the perfect case in people gathered in Baku’s Basel, Switzerland about the same, even falling point. We could easily turn a Azadliq Square demanding slightly under Alberto Car- confrontation that at the mobilisation and war to bring rasquilla, the finance minister moment is principally about an end to the occupation of Letters are welcome and should be (“vat half-empty”, October such issues as trade and tech- Azerbaijan’s territories. The addressed to the Editor at The Economist, The Adelphi Building, 17th). The reason the list of nology into something much international community 1-11John Adam Street, London WC2N 6HT exempt items is so long is that less negotiable, and so more should not expect to resolve Email: [email protected] this is seen as the best way to dangerous, about ideology. this conflict by simply calling More letters are available at: reduce the impact of the tax on Back in 1648 the powers of for a ceasefire, unless it ad- Economist.com/letters Executive focus 21

The World Health Organization (WHO) is the United Nations specialized agency for health. WHO is seeking applications for membership positions on its Independent Expert Oversight Advisory Committee (IEOAC).

▪ The primary purpose of the IEOAC is to provide expert advice on financial and accounting policy, risk management and the effectiveness of oversight mechanisms within WHO. ▪ Service on the Committee is without compensation, except for travel and per-diem expenses. ▪ Members are expected to attend an average of three sessions each year. ▪ Applicants must be independent, including from the WHO Secretariat and the Executive Board. Once appointed by the Executive Board, they shall serve in their personal capacity and shall neither seek nor accept instructions from any government or other authority. Shortlisted applicants will submit a confidential declaration of interest to WHO to disclose any relevant business interests, positions of authority or other connections with organizations relevant to the work of WHO. ▪ Applicants should have relevant professional financial qualifications and recent senior-level experience in accounting, auditing, risk management and other relevant and administrative matters. ▪ Interested applicants are invited to submit an application by email to [email protected] containing the following information: a curriculum vitae not exceeding four pages, including a brief statement of not more than 250 words on what he or she considers their membership would contribute to the Committee. Further information on WHO and the IEOAC’s full terms of reference and recent reports can be found on the following website: http://apps.who.int/gb/ieoac/PDF/TORB132_R12-en.pdf

Deadline for applications: 14 November 2020

WHO is a non-smoking environment. 22 Briefing The Trump audit The Economist October 31st 2020

promised, but it did do better than many had forecast, and his tax cut in 2017 turned out to be a well-timed fiscal stimulus. At the end of last year unemployment was at its lowest level for half a century. The wages of the less well paid were rising swiftly. What was more, he had made good on other parts of his agenda. Trade deals he disliked had been abandoned or rewritten, tariffs had been slapped on countries ac- cused of stealing jobs and immigration had fallen dramatically. He had appointed two conservative justices to the Supreme Court, a number which he has now brought up to three. “Promises made, promises kept” is one of the slogans of Mr Trump’s re- election campaign. The president tells out- right lies with remarkable frequency. But in this he is stretching the truth no further than any politician might. If Mr Trump does indeed lose the elec- tion, it seems likely that his main legacies will be the further polarisation of Ameri- ca’s politics, a guide to how the country’s democratic norms can be subverted and se- rious damage to its reputation overseas (see next story). But the past four years have also seen achievements beyond that sad litany. Some of them are distinctive, not all are bad and some may prove long-lived.

Give the public a song and dance In 2016 Mr Trump distinguished himself not just in how he talked but also in what he said. Like all Republicans since Ronald Reagan he was in favour of tax cuts, dereg- ulation, conservative judges, safer streets, stronger armed forces and lower govern- ment debt; he was against Obamacare and open borders. But on many issues he stood out as un- orthodox, extreme or both—and in so do- ing captured voters’ imaginations in a way Four years on that his rivals did not. He pledged to deport all 11m undocumented immigrants in the country and build a wall on the border with Mexico. He derided the party’s foreign- policy and free-trade orthodoxies as fail- ures, and held that trade deficits were pure- WASHINGTON, DC ly a sign of weakness and poor negotiat- The first of two articles looks at what Donald Trump’s presidency has meant for ing—which, as the master of the deal, he Americans at home could set right. He bashed Wall Street and merica hardly feels great again. anything else, seems likely to cost Presi- was against making Social Security and AThere are 11m fewer people working dent Donald Trump his job. As The Econo- Medicare, the pension and health-insur- than in February. Barely more than one- mist went to press our election model gave ance programmes for the elderly, less gen- third of pupils are attending school nor- him less than a 5% chance of winning. erous. He mocked and disparaged not just mally. Hunger and poverty have risen; the Were it not for the epidemic, though, Mr his opponents, but also revered Republi- memories of a turbulent summer of prot- Trump might be on the brink of re-election. cans such as the late Senator John McCain ests and racial unrest are still raw. Official In 2016 he told voters he would keep the (a “loser”). figures show 227,000 people dead due to economy growing; until the epidemic hit it Given that disparagement it is ironic, if covid-19; excess-mortality data suggest the had done just that. Growth never quite not surprising, that many of his achieve- true total is over 300,000. And both case- reached the lustrous annual rate of 4% he ments have been those of a generic Repub- loads and hospitalisations are surging for a lican. His tax cuts, indeed, look modest third time. On October 23rd America re- measured against those of other first-term corded nearly 84,000 new cases, the high- Also in this section Republican presidents. According to the est daily tally so far. Tax Foundation, a think-tank, the Tax Cuts 25 A contentious foreign policy The mismanaged epidemic, more than and Jobs Act of 2017 reduces the govern-1 The Economist October 31st 2020 Briefing The Trump audit 23

2 ment’s annual revenue by $150bn, or 0.7% Mexico while decisions are made. “It may of current gdp, over ten years. They were Without a wall 1 not be the physical wall that Trump initial- thus smaller than the tax cuts made under United States, south-west border apprehensions* ly touted, but there is now a bureaucratic George W. Bush in 2001 (about 1.5% of gdp) ’000 wall that expels every unauthorised immi- or under Reagan in 1981 (2.6%). Mr Trump’s 900 grant on the southern border,” says Sarah cuts included some welcome reforms, Single adults TRUMP Pierce, an analyst at the Migration Policy such as a curb on the deduction for mort- Unaccompanied Institute. In its revised form the Muslim gage interest and state and local taxes, but minors 600 ban remains in place, with little dissent. no deep rewriting of the tax code. Families† Apprehensions at the border with Mexi- Mr Trump’s judicial appointments, too, co have risen to their highest level in 12 were those that any other Republican 300 years (see chart 1), and in 2019 there were might have made, given the chance. That 360,000 deportations. That was not a re- he got that chance was thanks to Mitch cord—there were 432,000 in 2013—but it McConnell, the Senate majority leader, 0 was more than there were in 2016, and the who held up the confirmation of a number 201918171615142013 share of the deported who had no criminal of Barack Obama’s judicial nominations— Source: US Customs *Fiscal years ending Sep †Multiple records, 14% in 2016, had risen to 36%. The and Border Protection family members travelling together most notably that of Merrick Garland for administration also increased the bureau- the Supreme Court in March 2016. The re- cratic hurdles faced by those trying to im- sultant backlog allowed Mr Trump to fol- such debits on the other side of the ledger. migrate legally. Applications for temporary low the recommendations of the Federalist On the signature issues which set the visas and permanent-residency permits Society, a fraternity of conservative jurists, Trump campaign apart from the Republi- have both declined by 17% since 2016. The in appointing about 30% of the federal ju- can establishment, the successes look annual ceiling of refugee admissions has diciary. Sandra Day O’Connor, Antonin Sca- more vulnerable to revocation. Take immi- been slashed. The White House recently lia and Anthony Kennedy—the three jus- gration. Xenophobia was the raison d’être proposed just 15,000 admissions for 2021, tices whom it took Reagan two terms to put for his campaign in 2016, which he compared with 85,000 admitted in 2016. on the bench—shaped the court’s rulings launched with a speech warning that Mexi- for decades. It is likely that Neil Gorsuch, co was sending rapists and drug-dealers A pile of debris Brett Kavanaugh and Amy Coney Barrett across the border; later on, Mr Trump In the trade arena Mr Trump renegotiated will do so too. called for a “total and complete shutdown nafta, abandoned the nascent Trans-Pa- When it comes to deregulation Mr of Muslims entering the United States”. His cific Partnership, imposed tariffs on alumi- Trump can credibly claim to have outdone administration’s aggressive restriction of nium and steel and launched a trade war all predecessors. He pledged to eliminate migration was therefore no surprise, even with China. By his own standards, the two old regulations for every new one. He if the shock of seeing children alone in de- benefits were sparse. Though the bilateral now boasts that the ratio he has actually tention camps because of a policy of family trade deficit with China has fallen, Ameri- achieved is 22 to one. The list of those separation caused an outcry ca’s trade deficit with the rest of the world scrapped is inflated with some pretty small What is perhaps less appreciated is the was steadily increasing even before co- fry; rules on Uruguayan mutton, Japanese degree to which it has succeeded. The vid-19 sent it through the roof. Tariffs have persimmons and the like. But it is un- “Muslim ban” issued in the first days of his helped some targeted industries, but at doubtedly true that the pace of new regula- presidency ran afoul of the courts and had great cost. American consumers are reck- tion has slowed dramatically. Since Mr to be reworked; the border wall Mr Trump oned to have paid $900,000 for every steel- Trump’s inauguration, the estimated num- promised has not been built, let alone paid industry job saved. Manufacturing em- ber of federal rules has grown very slightly, for by Mexico. But eligibility criteria for ployment seemed to slump after tariffs by 0.5%. That is one-twelfth the pace of asylum have been tightened, and asylum- with China went into effect in 2018, though growth during the Obama and Bush years. seekers at the border must now wait in Mr Trump’s advisers insist that in the long 1 In some areas losing rules was benefi- cial; in few was it fundamental. In finance, for example, though some rules were streamlined, Dodd-Frank, the sweeping law passed after the Great Recession to rein in banks, was not thrown out (although the Consumer Financial Protection Bureau, a watchdog agency set up by Elizabeth War- ren, was effectively neutered). The excep- tion was environmental regulation, which has been thoroughly savaged. Of the 225 major executive actions in a studiously catalogued list of the Trump ad- ministration’s deregulations 70—a clear plurality—are environmental rollbacks. These are rules that will increase the amount of lung-damaging fine-particulate matter belched by coal-fired power plants, methane leaked by oil and gas wells and carbon dioxide emitted from the exhaust pipes of cars with new, less ambitious fuel- economy standards. When the White House claims to have saved $51bn—0.25% of gdp—in regulatory costs it ignores all 24 Briefing The Trump audit The Economist October 31st 2020

Term time 2 The presidency of Donald Trump, selected events 30,000 Domestic Dow Jones Industrial Average Inauguration Muslim travel ban signed 25,000 First US coronavirus cases: Supreme Court appointee “Like a miracle, it will disappear” Supreme Court Neil Gorsuch Republicans lose control of Mueller appointee Amy confirmed House of Representatives investigation Senate acquits Trump of Coney Barrett ends impeachment charges confirmed Obamacare repeal Supreme Court appointee fails in Senate Brett Kavanaugh confirmed House of Representatives Trump tests positive 20,000 Mueller votes to impeach Trump for coronavirus inquiry Describes Charlottesville Family-separation begins protests as “very fine policy adopted Obama’s Clean 1m covid-19 cases people on both sides” along border Power Plan Death of Tax cuts passed with Mexico rescinded George Floyd 15,000 2017 18 19 20*

Trans-Pacific Withdrawal from Announces steel Summit with Announces Import tariffs Killing of Announces Abraham Partnership Paris agreement and aluminium Kim Jong Un withdrawal placed on Abu Bakr intention Accords trade talks on climate change tariffs on trading in Singapore from INF $300bn of al-Baghdadi to withdraw signed abandoned announced partners treaty with Chinese goods from WHO Russia Foreign Withdrawal from US embassy in Israel Qasem Soleimani US-Mexico-Canada Agreement Iran nuclear deal relocates to Jerusalem killed in drone strike signed (replacing NAFTA) Sources: Refinitiv Datastream; The Economist *To Oct 28th

2 term the policy will reverse that. the murder rate nationwide. Mr Trump’s politics seem the strongest candidates. Be- Other promises went unkept, most ob- most notable legislative achievement in yond his slim legislative record much of viously and predictably the pledge on the this area was signing the First Step Act, what he has done has been accomplished debt. Rather than putting America on the which seeks to reduce incarceration and through executive order and changes to path to eliminating its national debt in reform prisons; it was a priority of his son- regulation which could, in principle, be eight years, as he said he would, Mr Trump in-law, Jared Kushner. straightforwardly reversed. saw the budget deficit steadily increase And the swamp was not drained. In- On immigration, for example, the Mus- over the first three years of his administra- stead it spread to previously dry land as in- lim ban, family separation and the reduced tion. The rise was not as marked as those stitutional watchdogs and ethical norms refugee ceiling would be revoked at the seen in the first terms of Reagan and were swept away and new species moved very beginning of a Joe Biden administra- George W. Bush, but the starting point was into the murk. It was in these fetid waters tion. But the fact that things can be re- higher. After covid-19 hit the deficit that the administration pursued what versed does not mean that everything will jumped far further; America’s debt is set to Steve Bannon, a former senior counsellor be. It is hard to imagine the Democratic exceed its gdp. to the president, called the “deconstruc- president completely unwinding the new Nor was Obamacare repealed and re- tion of the administrative state”. A weak- asylum rules on the south-west border, placed. Mr Trump has been promising to ened and destabilised state apparatus, in which would undoubtedly invite a new publish a serious health-care plan immi- which independent inspectors-general are surge of migrants. And there will be other nently for his entire tenure, during which removed or sidelined, the civil service is scarring. Prospective immigrants may look the share of Americans without health in- less independent and personal loyalty par- elsewhere to study or start businesses even surance rose from 8.6% in 2016 to 9.2% in amount is just the sort of government that if the country seems welcoming again. 2019. He eventually laid out something of a Mr Trump wants. There would be a more thorough at- second-term health-care agenda on Sep- How much of that which Mr Trump has tempt to undo loosened environmental tember 24th, when he declared in an exec- done will outlast him should he lose office? protections. But this could be complicated utive order that under an “America-first” The judges and the change in the tone of by Mr Trump’s judicial legacy—the courts plan it will “continue to be the policy of the he leaves behind will probably take a cagier United States…to ensure that Americans attitude to constraints on business. And as with pre-existing conditions can obtain This one counts 3 with immigration, there will be scarring the insurance of their choice”. If a lawsuit United States, registered voters who agree that that is not easily reversed. People whose against Obamacare that the Supreme Court when it comes to making progress on the lungs were damaged by fine particles will will hear on November 10th goes the way important issues facing the US, % replying not be cured spontaneously. According to the plaintiffs want, though, that coverage 100 calculations by the Rhodium Group, a re- guarantee will disappear—and that is the It really matters who wins search outfit, greenhouse gases equivalent side Mr Trump’s Department of Justice is the presidential election to 1.8bn tonnes of carbon dioxide will be 75 taking in the case. emitted over the coming 15 years solely be- Mr Trump also wooed voters with a pro- cause of Mr Trump’s deregulations. mise to “restore law and order” to cities 50 When it comes to the body politic, the that he portrayed in his inaugural address scars run deep. The bitterly divided coun- as crippled by “American carnage”. Crime 25 try of the 2016 campaign is more bitterly di- in American cities was actually at a low ebb Things will pretty much stay the vided than ever. Voters tell pollsters they same regardless of who wins at the time. But after the tumult of a long 0 see the stakes in this election as greater summer of protests over racial injustice, than those in any before (see chart 3). A re- 2000 04 08 12 16 20* some of them violent, they hardly seem markable 73% of Americans say Republi- Presidential election years safer. Preliminary estimates from the fbi cans and Democrats cannot agree on basic Source: Pew Research Centre *Poll Jul 23rd-Aug 4th suggest that 2020 will see a 15% increase in facts. There is a detectible rise in new 1 The Economist October 31st 2020 Briefing The Trump audit 25

2 strains of extreme partisanship. Data from The international stage the Voter Study Group, a research outfit, show one in five Americans saying that vi- Realism and the wrecking ball olence could be justified if the other party wins the impending election—a minority, but one that has increased markedly since 2017. Surveys by Lilliana Mason and Nathan Kalmoe, two political scientists, reveal dis- Donald Trump has given American foreign policy a bracing jolt. He has also turbing levels of antipathy for fellow Amer- undermined it in ways both shabby and reckless icans: 60% of voters think members of the other party constitute a threat to America, oreign affairs played an important, judge Mr Trump’s foreign policy. At home more than 40% would call them evil, and Fand murky, role in Donald Trump’s pres- many Republican foreign-policy experts 20% think they are animals. idency from before it even began. Russia’s hold similar views; dozens are supporting This trend towards the hyper-partisan meddling in the election that brought his his Democratic challenger, Joe Biden. predated Mr Trump and went a long way to- unexpected victory, and Mr Trump’s happi- Some who have observed from ringside wards explaining his election. He in turn ness in snubbing the findings of his own as Mr Trump has been swayed by flattery has amplified it—both “a product and an intelligence services on the subject, set an and greed feel that to dignify his foreign accelerant of the partisan doom loop” in invidious context for all that followed. His policy with any sort of conventional analy- the words of Lee Drutman, a political scien- later attempt to inveigle political favours sis is to grant it strategic and ideological tist. In 2016 party affiliation had already from Volodymyr Zelensky, the president of heft that it lacks. On this view Mr Trump’s come to dominate where Americans live, Ukraine, led to his becoming the first presi- big decisions have been driven by narcis- where they got their news and even whom dent ever to be impeached over his conduct sism and a desire for personal gain: Trump they married. But to carry that tendency of foreign policy. Only Republican support First, not America First. But those who through to what would seem to be basic in the Senate saved him from losing office. stick by him give a different account. public-health measures—80% of Biden Such things do not go unnoticed. Amer- These supporters are consequentialists. supporters say they have always worn ica’s reputation abroad has plunged during They argue that the detractors give too masks in the previous week compared with Mr Trump’s presidency. Around the world, much weight to Mr Trump’s unseemly just 43% of Trump supporters—took a gift judging by a 13-country survey published in taunts and tweets; a focus on his actions for division unlike any before. September by Pew Research Centre, the and their likely results, some not yet felt, Mr Trump’s decision to rule as the share of people with a favourable view of will tell a different story, one which will be- leader of a faction, rather than the whole America is in many cases at its lowest since come clearer and look wiser as time goes by nation, has been supported by the Republi- Pew began such polling nearly two decades but which critics are currently blind to. can Party’s base and much of its elected ago (see chart 4 on next page). In Britain As Matt Pottinger, deputy national se- elite. The unconvinced have mostly kept si- America’s approval rating has dropped curity adviser, puts it, “a lot is written about lent on the matter. This has allowed him to from 61% in 2016 to 41%; in Japan it has fall- the sacred cows Mr Trump has gored, but trample the norms of politics and good en from 72% to 41%. less about the rabbits he’s pulled out of the government in any number of ways, from a Confidence in Mr Trump to do the right hat.” Nadia Schadlow of the Hudson Insti- culpable lack of response to the devasta- thing in world affairs is even lower, espe- tute, who served as deputy national securi- tion wrought on Puerto Rico by Hurricane cially in Europe: a dismal 11% in France and ty adviser for strategy in 2018, argues in For- Maria to describing protests against neo- 10% in Germany, compared with a score of eign Affairs that since the end of the cold Nazis in Charlottesville, Virginia, as having 84% and 86%, respectively, for Barack war American policymakers have been “be- “very fine people on both sides” to seeing Obama in 2016. European foreign-policy guiled by a set of illusions about the world people tear-gassed to enable a photo op- types do not mince their words. “Calami- order”; Mr Trump’s “series of long-overdue portunity. The most pertinent of these out- tous, cataclysmic, catastrophic, pathetic,” corrections” has shattered those illusions. rages at the moment are his attempts to de- says François Heisbourg of the Foundation To assess that claim one must first note legitimise the election result. Almost 40% for Strategic Research, a French think-tank, the degree to which Mr Trump’s course is, of Republican voters say they do not think when asked to describe how history will in fact, a continuation of that on which the the upcoming election will be fair; half of country was already set. The increased pre- Democrats are worried that there will not occupation with Asia (to which Mr Obama be a peaceful transition if Mr Biden wins. “pivoted”); the recognition that America If Mr Trump were to keep his address on needed to pay more attention to its domes- Pennsylvania Avenue, what then? There is tic troubles (“nation-building here at no real programme for four more years of a home”, as Mr Obama called it); the weari- Trump presidency. The Republican Party ness with “forever wars”: in all these areas chose to eschew a party platform this year; Mr Trump has been following a public in its place the campaign released a bom- mood which has been shaping America’s bastic list of bullet-pointed aspirations foreign policy for years. such as “Drain the Globalist Swamp by Tak- Despite his alarming bluster Mr Trump ing on International Organisations That has not so far turned out to be a bellicose Hurt American Citizens”. Without a major- president. In Afghanistan he is winding ity in the House, Mr Trump would be able to down the longest war in American history pass little if any significant legislation. But (if not as fast as he promised to). In the Mid- the administrative and regulatory changes dle East he continued the fight against Is- brought about in the past four years would lamic State, hunting down its self-pro- be taken further, as would the erosion of claimed caliph, Abu Bakr al-Baghdadi, but standards in public life. And the divisions he started no new wars. In 2019 he caused he both embodies and exacerbates would some consternation among hawks in his become yet more destructive. 7 administration when he drew back from a 1 26 Briefing The Trump audit The Economist October 31st 2020

2 counter-attack against Iran after it downed ported within his party—has put America an American drone. A Trump slump 4 at loggerheads with its allies and eased He makes an exception for trade wars; Population who have a favourable view of the Iran’s route to becoming a nuclear power. they provide a form of combat, brash and United States, % The policy of “maximum pressure” on Iran, performative, which he positively relishes. lacking any achievable aims, has little to His campaign against China is the most BUSH OBAMA TRUMP 100 show for itself save the deterrent effect of heavyweight fight—one in which he Japan South the uncharacteristically bold action which Britain Korea claimed victory with the “phase one” trade 75 saw the country’s top general, Qassem Su- deal reached in January. But he was also leimani, killed by a drone. It is a similar happy to enter into hostilities with Ameri- story with maximum pressure on Venezue- ca’s North American neighbours, achiev- 50 la. That country’s dictator, Nicolás Maduro, ing what one observer called “the rare dip- Canada remains firmly in place, as does the com- lomatic feat of pissing off the Canadians” France 25 munist regime of his Cuban backers. in order to renegotiate the trade deal that The area where Mr Trump has shaken binds the two countries and Mexico. In his 0 things up most is in relations with China, attempts to protect America’s steel indus- the single biggest issue in American for- 2000 05 10 15 20 try he went as far as to call the European eign policy. Such a rattling may have been Source: Pew Research Centre Union—composed almost entirely of nato coming anyway because of China’s grow- allies—a “foe” on trade. ing aggression. But Trumpists believe the It has not been his only beef with Eu- yielded nothing. Nicholas Burns of Har- president’s new realism marked a decisive rope. Presidents from John F. Kennedy on- vard University, a former nato ambassador break with the Democrats’ tendency to fa- wards have complained about America’s who now advises Mr Biden and gives the vour process over outcomes. nato allies failing to carry a fair share of president a “failing grade” on foreign poli- According to this narrative, Americans the burden of defending themselves. Mr cy overall, nevertheless reckons Mr Trump naively thought that opening up to China Trump has done so with particular force— was right to meet Mr Kim. It is true that Mr and letting it join the wto in 2001 would in and to significant effect. It is one of the Kim gained recognition as a peer summi- time encourage it to become more liberal more salutary of the shocks he has admin- teer while carrying on with his nuclear pro- and democratic. The opposite has hap- istered to the basic assumptions of foreign- gramme. But there has been no subsequent pened. China exploited the West’s open- policy wonks around the world. crisis, and the de facto recognition of North ness in order to steal its intellectual prop- Korea’s nuclear status has put to rest previ- erty. Under its increasingly authoritarian The fancy and the plush ous talk of pre-emptive military counter- president, Xi Jinping, it has become a fierc- The “rules-based world order” beloved of proliferation strikes. er economic rival, as well as a more power- those professionals (and this newspaper) Mr Trump’s bullying of nato allies has ful one. It has continued to build up its was hardly in good shape when Mr Trump certainly concentrated minds. He claims armed forces and to bully its neighbours. It came to power. Rivalry with Russia and credit for their increased defence spend- was left to Mr Trump to challenge the idea China had already rendered the un Securi- ing, which in 2020 is expected to be 19% that this was unstoppable. ty Council largely dysfunctional. Mr higher than it was in 2016, a cumulative ex- Obama had undermined America’s credi- tra spend over four years of $130bn (see Allegiance is ruled by expedience bility as an ultimate enforcer when he de- chart 5 on next page). But by failing to ex- Toughness towards China has become a clared that the use of chemical weapons by press unequivocal support for the mutual- rare area of bipartisan consensus in Ameri- Syria’s president, Bashar al-Assad, would defence guarantee at nato’s heart he ca. The administration has started to shift constitute a “red line” and then adminis- caused real damage, even as his adminis- attitudes elsewhere, too. It successfully tered no retribution when it was crossed. tration increased its defence spending in urged Britain to shun Huawei, a Chinese te- Mr Trump has undercut that creaky es- Europe, deployed forces in front-line states lecoms giant, for its 5g telecoms network. tablished order in large part by giving new and took part in some of the biggest exer- More allies are expected to fall into line. Mr voice to an old strand in American think- cises since the end of the cold war. Pottinger says that Europe is “18-24 months ing: a belief that America should act be- In the Middle East Mr Trump can claim behind us, but moving at the same speed yond its borders only in furtherance of spe- bragging rights for the Abraham accords, a and direction”. In Asia, America’s embrace cific short-term interests. From its first peace agreement between Israel and the of the phrase “a free and open Indo-Pacific”, decades as superpower until a few years United Arab Emirates since joined by Bah- expressing resistance to Chinese hegemo- ago America sought to be a power not just rain and, after some American arm-twist- ny, has found favour from India to Indone- in the world, but for the world. It would fre- ing, Sudan. He pleased the Israeli govern- sia, much to China’s annoyance. quently restrain itself in deference to rules ment and many American supporters by There is, though, no evidence that Mr and the concerns of allies. In Mr Trump’s moving America’s embassy to Jerusalem. Trump has plans to build any new structure assessment, though, America comes first, But he has shown no interest in using his on the ground he has opened up. And he might is right, and saying so is fun. influence to press the Saudis to end their has deprived himself of the tools whereby Mr Trump’s brashness has not had all brutal war in Yemen—instead, he vetoed a he might do so. America’s foreign service, the dire consequences that critics predict- bill that would have helped do so. Rather skilled in the patient work of erecting insti- ed. Witness North Korea. When handing than punishing Saudi Arabia’s crown tutions and nurturing relationships, has over power Mr Obama is said to have told prince, Muhammad bin Salman, for his been gutted; functionaries still in place him that the country’s nuclear weapons suspected role in the murder of Jamal know that anything that they, or indeed the would be his most urgent problem. Mr Khashoggi, a Washington Post columnist president, have negotiated could be un- Trump instinctively addressed it with critical of the Saudi regime, Mr Trump pro- done at any time in just 280 characters. great-man theatre, meeting and corre- tected him. “I saved his ass”, he boasted to The damage wrought by the president’s sponding with Kim Jong Un in what he de- Bob Woodward, a veteran reporter, who wrecking ball has mounted up in three par- scribed as a “love affair”. It was an unusual duly recorded the claim in his book “Rage”. ticular areas. The first is institutional. For approach, and one many of his advisers Mr Trump’s decision to pull out of the more than half a century the world has run disliked. But the usual approaches had Iran nuclear deal—a move widely sup- on the basis of a system established amid 1 The Economist October 31st 2020 Briefing The Trump audit 27

ternational efforts and wilful negligence at champion of democracy and human rights, What went down came back up 5 home. Every such American retreat from and the best hope for the aspirations ex- Canada and NATO Europe, defence spending the international system is seen in Beijing pressed in its constitution. Now the world $bn, 2015 prices as a chance to advance China’s claims. sees the workings of America’s own de- 325 The second area of damage is Mr mocracy called into question under a presi- Trump’s sidelining of his allies, who have dent who stokes racial divisions and slams 300 frequently had no prior warning of major the door on those yearning to breathe free. developments such as America’s abandon- Corruption at home makes it harder for 275 ing of the Kurds in Syria or its reduction of American officials to be taken seriously forces in Germany. America’s alliances can when they preach about kleptocracy. As for 250 act as a force-multiplier, turning its quarter human rights Mr Trump has maintained a or so of world gdp into a coalition account- public silence on abuses from Belarus to 225 ing for some 60% of the world economy, far Hong Kong. In private, according to John harder for China or Russia (neither of Bolton, his fourth national security advis- 20*1510052000951989 which has a network of permanent allies) er, he told Mr Xi that building detention Source: NATO *Forecast to resist. Yet Mr Trump has taken allies for camps for Uyghurs in Xinjiang was “the granted and belittled their leaders while right thing to do”. An America which can flattering Presidents Putin and Xi. Foreign- only claim to be stronger than China, not 2 the ruins of the second world war, led by policy get-togethers are awash with wor- better, is one that has weakened itself. America. Now that system’s chief architect ries over “Westlessness”. is undermining it. In some cases—nato, Encouraged by his inattention, Turkey, Try to stay serene and calm the wto, the un itself—Mr Trump has under the authoritarian leadership of Re- How permanent is the damage? Some merely weakened the foundations. In oth- cep Tayyip Erdogan, is in the process of un- things can be put back together quickly if, ers he has turned tail. His rejection of arms bundling itself from the West. “The Ameri- as seems likely, Mr Biden wins the election. control goes beyond renouncing the Iran cans have gone awol and the Turks have America would rejoin the Paris agreement deal. When Russia broke the Intermediate run amok,” says Mr Heisbourg. In Asia, on climate change right away. America’s fa- Nuclear Forces treaty he scrapped the where, as in Europe, Mr Trump has treated vourability ratings around the world might treaty completely. He flirted with allowing mutually advantageous defence relation- bounce back, as they did when Mr Obama New start, America’s one remaining nuc- ships like protection rackets, America re- replaced George W. Bush in the White lear treaty with Russia, to expire early next mains the most powerful country, accord- House. But the fact that America can elect year, though now seems to want a last- ing to an “Asia Power Index” compiled by rogue presidents won’t be forgotten. The ditch deal to save it. the Lowy Institute, an Australian think- late Samuel Huntington, a political scien- Mr Trump’s response to covid-19 has tank. But its lead over China has narrowed tist, suggested that two changes of power shown this approach at its worst. In the by half since 2018. Despite having raised were needed before a democracy could be midst of a global pandemic he chose to at- the stakes with China, Mr Trump has considered firmly entrenched. Perhaps tack and abandon the World Health Organi- shown little sense that he knows how to two changes of president will be needed to sation, the body responsible for tackling play the subsequent game, or to rally allies reassure the world about America. such crises. Where the world would nor- to his side. Mr Trump may have confronted a rising mally expect America to take a lead, or at Allied misgivings about America reflect China and created the conditions both for least to try to, it found an administration the third big casualty of Mr Trump’s wreck- some coalition-building in Asia and for Eu- more interested in blaming others and ing ball: the country’s power of example. rope to get serious about its own defence. shunning global efforts. Something simi- For much of post-1945 history many have But the destruction along the way has been lar goes for the greater crisis beyond covid, looked to America as a beacon—often enormous. The repair job cannot begin that of climate change: a repudiation of in- flawed, to be sure, but nevertheless a soon enough. 7 What is the outlook for vaccines, the world economy and geopolitics in the year ahead?

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Data and governance not been passed on for contact tracing. The system is still struggling to keep up with How the government lost its nerds the rising number of cases. In mid-Octo- ber, it managed to contact only 80% of those who tested positive, and reached only 60% of their identified contacts. Managing this sort of data is just what the gds was created to help the govern- Managing data is central to managing a pandemic. That’s not the only reason why ment with. So what went wrong? the decline of Britain’s digital governance is a problem Founded in 2010 by Francis (now Lord) n november 18th 2015 Barack Obama ing app for covid-19, ignoring the resources Maude at the suggestion of Martha Lane Owrote to Mike Bracken, the boss of the provided by the mobile-phone operating- Fox, the government’s “digital champion”, Government Digital Service (gds), a small systems makers, Apple and Google, had to gds made life easier for citizens in myriad part of the Cabinet Office, thanking Mr be shut down over the summer. Worst of small ways. It enabled Britons to use Bracken for his help in the development of all, it emerged earlier this month that part straightforward, cleanly designed websites the United States Digital Service, which had of the digital infrastructure for the test- to register to vote, pay car tax, sign up for been modelled on the gds. The work that and-trace system, which shuttled data be- benefits or register for lasting power of at- Mr Bracken and gds had done was “out- tween labs and teams of contact tracers, torney. The software written to facilitate standing”, Mr Obama wrote, adding that he was relying on—and misusing—Excel this was published under open-source li- trusted Mr Bracken took “pride in the dif- spreadsheets. As a consequence of the lim- cences, meaning it could be freely reused ference you have made thus far”. The fol- itations of that software, not designed for not just across the British state, but by any lowing year, Britain rose to the top of the use of this sort, 15,841 positive cases had government. Other techy democracies like United Nations e-Government Develop- New Zealand and Israel copied the code. ment Index, a measure of how well coun- gds’s early work mostly involved the tries are using information technologies to Also in this section peripheries of government, but by 2015 it deliver services. was flushed with success, and dreaming 30 The battle over brutalism Four years later, the British govern- bigger dreams. It wanted to start writing ment’s reputation as a data manager is not 31 Grand houses software that could be shared across de- quite what it was. It has slipped to seventh partments to perform common functions. 32 The Tories and race place in the un league, and there have been In the old system, departments had their mishaps at home. A £495m recruitment 34 Prison visiting own hr functions, for instance, running system for the army did not work well. An on large, expensive it systems and report- effort to develop a customised contact trac- — Bagehot is away ing to the department’s permanent secre-1 30 Britain The Economist October 31st 2020

2 tary. Instead, gds wanted departments to after its initial deployment ended in failure service’s lethal effect on innovation. use simple, cheap code to build systems in 2013, has performed well under stress. Mr Cummings has established a data- which reported to central government. The Notify, a gds service which makes it easy policy unit in Number 10. A dashboard concept, which gds called government-as- for any government body to send emails, which gds created to measure the digital a-platform, was that since citizens do not letters and texts to citizens, has sent 1.88bn performance of different departments died care which department their services come messages from thousands of government in 2017; Mr Cummings wants to get perfor- from, just that they work well, the organi- bodies since it was launched in 2017. There mance data flowing from departments to sational structures ought to reflect that in is also widespread praise for the work of central government again. He has told de- pursuit of efficient delivery. the Treasury, which gds barely touched, partments that they must embed analytics and which has managed to distribute mon- software into their online services, and The decline ey to small businesses across Britain rela- funnel those data into gds, so it can see One important vehicle for gds’s ambitions tively seamlessly, supporting an economy how services are working. was a piece of software called Submit. It wracked by covid-19. There have already been standoffs be- was designed, says Mr Bracken, so that Now there is new impetus behind the tween Mr Cummings and senior civil ser- “anyone in government could create an on- work of centralising and digitising the ma- vants over these data flows, and the control line tool in three clicks to send or receive chinery of government, for it has political they threaten to wrest from powerful information”. One of its main purposes backing from Dominic Cummings, Boris hands. It is a sign that the nerds, sidelined was to replace shoddy data-management Johnson’s chief adviser. The sidelining of for half a decade, are elbowing their way practices. Instead of emailed attachments gds lends support to his belief in the civil back to the centre. 7 and forms, different parts of government could send each other data using secure web pages designed for the job. Brutalism and beauty Submit needed a departmental sponsor, but it never got one. The gds was not pop- Demolition Derby ular with permanent secretaries, the bosses of departments, on whose fiefs it trampled. gds employees—referred to as “blue-jean kids” by one permanent secre- tary—would agree on a project with a de- partment, only to find that the department The war over a fashionable architectural style launched its own version of the service soon afterwards. gds was empowered to erby built the rb211jet engines, which willing to foot the £34m ($44m) repair bill; restructure the procurement of it systems Dmade Rolls-Royce a global leader in the it is that, like many buildings of its era, the across government, relying on its staffers’ aerospace industry, and the Advanced Pas- Assembly Rooms are unloved. They are “far technical nous to put better standards in senger Train, which set a railway speed re- too big for a Georgian marketplace”, ac- place, but often departments would ignore cord of 152.3 miles per hour in 1975. Given cording to a guidebook, “and entirely with- its advice and buy whatever big, expensive the city’s futuristic bent, it seemed appro- out grace”. The council agrees, and this systems they wanted. priate to replace an 18th-century leisure month published plans to replace them Permanent secretaries lobbied the gov- hall that burned down in 1963 with a sleek with green space and a pop-up market. ernment to deprive gds of powers over concrete structure designed by Hugh Cas- Many brutalist edifices have been torn spending and standards of service, arguing son, then Britain’s foremost architect. down in the past decade, among them Rob- that such matters should be under their Time has not been kind to the Assembly in Hood Gardens, a London housing estate, control. Two attempts were made to per- Rooms, which opened in 1977. The build- and Birmingham Central Library. It is a suade David Cameron, then prime minis- ing, a venue for concerts and graduation trend that may soon accelerate. In a recent ter, to remove Lord Maude. ceremonies, has sat empty since it was white paper, the government outlined It was understandable that permanent damaged by fire in 2014. The problem is not plans to make it easier for developers to secretaries should have been hostile to the just that Tory-led Derby City Council is un- flatten buildings. On October 6th at the 1 gds, for it undermined their autonomy. It also tended, says a civil servant who worked with it at the time, to oversimplify the complex tasks departments have to perform, and its web-only approach terri- fied ministries that depended on reliable mainframes. After the 2015 election Lord Maude was replaced by Matt Hancock, now health sec- retary, and the gds lost the political back- ing which was crucial to its ability to work across departmental boundaries. Mr Bracken, who is now a partner at Public Digital, a consultancy, left his job as gds’s boss soon after. Lord Maude, who has left politics and is now a consultant, says gds has been “hollowed out” since 2015. There are still bright spots in Britain’s digital governance. The system which runs universal credit, the main out-of-work benefit, rebuilt by a team led by gds coders Too cool for Derby The Economist October 31st 2020 Britain 31

2 Conservative Party conference, Robert Jen- rick, the housing secretary, said: “there’s going to be a big opportunity to demolish some of the mistakes of the recent past be- cause you do see quite a lot of empty derel- ict buildings in town and city centres that were put up, often poorly constructed not within the character of those places, partic- ularly in market towns in the 60s and 70s.” Beautification is part of the govern- ment’s plan to improve morale in de- pressed places, and Tory notions of beauty do not, by and large, encompass brutal- ism—a style associated with socialism and Europeans. Conservatives and their tradi- tionalist bedfellows think they have the public on their side. In a poll conducted by Policy Exchange, a right-wing think-tank, in 2018, 85% of respondents said new homes should either fit in with their more traditional surroundings or be identical to homes already there. “It’s true that the 20th Grand houses century birthed us with a huge range of ar- chitectural creativity,” says Ben South- Brideshead rebooted wood, head of housing at Policy Exchange. “But a lot of it is unpopular.” Brutalism’s friends do not mind being in a minority; indeed, that may be part of the appeal. The style has become fashion- able with fastidious types in their 20s, who Stately homes are thriving, but now the kitchens have views spend their lunch breaks ogling listings for concrete-clad flats. The Twentieth Century he title of the exhibition at the Victo- lebrities and Russians. Society (c20), a charity which campaigns Tria and Albert Museum in 1974 was de- Steve Gibson, a welder’s son who made for the preservation of post-1914 buildings, finitive: “The Destruction of the Country money in logistics and now owns Middles- criticises Historic England, an official House, 1875-1975”. A gallery was lined with brough Football Club, is typical of the new watchdog, for failing to protect modern pictures of some of the 1,200 mansions that breed. His home in North Yorkshire will be sites. “We are constantly fighting a battle had been demolished in a century—vic- the county’s largest house for 200 years. against people’s preconceived notions that tims of urbanisation, tax and neglect. One Christopher Boyle, a lawyer who helps architecture from that period isn’t any thing was clear: never again would the rul- newcomers obtain planning permission, good,” says Catherine Croft, c20’s director. ing elite build piles like Trentham, which likens them to “the nabobs of the 18th cen- Ben Derbyshire, an architect who as- the Shah of Persia told the future king Ed- tury”, who were keen to show off the riches sesses buildings for Historic England, ward VII should cost its owner, the Duke of of empire. They are, he says, “people of ex- hears c20’s argument. “The lesson of his- Sutherland, his head on the grounds that it tremely fine taste, who have found them- tory”, he says, “is that successive genera- was “too grand for a subject”. selves by good fortune to have lots of cash.” tions are too careless of their immediate That obituary now requires an epilogue. The paucity of ancient piles on the mar- heritage, so that it’s important for those in Stonemasons’ chisels are once again chip- ket, and the hefty heating bills and musty positions of power and influence to heed ping away at the top of long driveways as a smells they come with, make building expert advice capable of distinguishing new generation of monied Britons com- from scratch a good option. The new fashion from quality.” Historic England’s missions its own stately homes. Rebound- houses’ architecture usually offers more opinion matters, because it has the power ing demand has prompted a steady supply than a nod to that of their forebears. Brutal- to list buildings, thus protecting them of architects for whom being a classicist is ism is not a style much favoured. Mr Adam from demolition. Derby’s civic society no longer shameful. “Back in the 1980s if likes to lay out several plans for his clients, wants the Assembly Rooms to be listed. you wanted to build a good-looking classi- but “they almost always choose the Palladi- It is a cause that has even won over scep- cal building…there were about two or three an one.” Some people regard such houses tics. Maxwell Craven, the civic society’s architects in the country who could do as mere pastiches, but they are not carbon caseworker and author of the local guide- that,” says George Saumarez Smith, an ar- copies. For instance, whereas previous book, detests brutalist architecture. But he chitect. “Now there are lots.” generations hid their kitchens at the back thinks the council, which says it is devel- Just as the status symbols of old were of- of the house or below stairs, today’s lords of oping plans for the site’s long-term regen- ten built for that generation’s nouveaux the manor like to cook and, according to Mr eration, will inevitably build “something riches, so are today’s new-builds. “The Saumarez Smith, “want the kitchen in the much more deleterious to what was origi- peak of a lot of people’s ambition is to have best part of the house, where they will en- nally a medieval marketplace.” Higher-ups a country house, and that applies not just joy good views.” at Historic England are also sympathetic to to British people, but to people coming to And though such grand designs could the building’s cause, meaning there is still Britain,” says Robert Adam, a classical ar- hardly be described as modest, their own- hope for it. Yet they will not offer protec- chitect who designed Lea House in Surrey ers still claim to be. “Normally the first tion to every 1970s edifice campaigners (pictured), is currently building two coun- thing clients say is ‘we are just an ordinary want to save. If Mr Jenrick gets his way, Brit- try houses and has three more on order. His family and we just want a nice house,’” says ain’s bulldozers will be busy. 7 clients include self-made financiers, ce- Mr Saumarez Smith. 7 32 Britain The Economist October 31st 2020

The Tories and race are likelier than Indians or Chinese to de- scribe the Tory party as racist. Black and blue Yet there are deep differences in the views of mps from the two parties (see chart). That was evident in the debate on October 20th. Tory speakers emphasised meritocracy and the individual; Labour, what Marsha de Cordova, Mrs Badenoch’s opposite number, called “a systemic pro- A more diverse Conservative Party is taking a more assertive line on race blem [which] requires systemic solutions”. ccording to hansard, the official Tory speakers said Black History Month Aparliamentary record, the term “criti- should be part of a diverse island story, cal race theory” had not been uttered in the celebrating the role of black soldiers in House of Commons before October 20th. British victories. Labour speakers stressed The discipline, which holds racism as a black political struggles and Britain’s com- pervasive condition rather than merely as plicity in slavery as much as its role in end- hateful conduct, emerged in American aca- ing it. Labour mps accused Conservative demia in the 1980s, and crossed the Atlantic ones of naivety and evasiveness about in- two decades later. It uses the concept of equality; Tories accused Labour of foster- “white supremacy” to refer not just to ing division and grievance. hooded Klansmen, but to the everyday ad- During Mr Cameron’s tenure, the Con- vantages afforded to white people. It has servative Party would have hewed closer to shaped the thinking of many in the Black Labour’s line in such debates, reckon some Lives Matter (blm) movement. Yet it had black Tories. But the emergence of a “criti- not much stirred the Conservative Party cal mass” of non-white lawmakers has giv- until Kemi Badenoch, a Treasury minister en it the confidence to develop a distinc- who also speaks for the government on tively conservative line.“We are no longer equalities issues, declared the government willing to be pushed around on this by La- to be “unequivocally against critical race bour,” says one. Sunder Katwala, director of theory”, calling it “an ideology that sees my British Future, a think-tank which special- blackness as a victimhood and their white- ises in integration, says there’s a new “par- ness as an oppression”. Sunak and Cleverly, signs of the times tisan spikiness” to the debate. Munira Mrs Badenoch’s remarks in a debate on Mirza, head of the Number 10 policy unit, is Black History Month, an annual obser- were Ugandan Asians. Mrs Badenoch, first dubious of the concept of “institutional vance marked in Britain since 1987, are evi- elected to the safe Tory seat of Saffron Wal- racism”, a mainstay of British policymak- dence of a change in the Conservative Party den in Essex in 2017, has risen swiftly. ing since the 1990s. She accused Theresa that has accelerated since the last election. James Cleverly, a foreign-office minister, May, Mr Johnson’s predecessor, of appeas- There were just two ethnic-minority Tory was the first black chairman of the Conser- ing a “culture of grievance”. mps when David Cameron became leader vative Party. A second factor is America’s race debate, in 2005. He sought to fix that by parachut- Superficially, the Conservative and La- which has sharpened the parties’ long-held ing high-flying ethnic-minority candi- bour parties talk about race in similar views. Some Labour mps embrace the glo- dates into target seats. There are now 22 terms. Both celebrate Britain’s increased bal span of the blm movement. Mrs Bade- non-white Tory mps out of 365, and 65 alto- diversity, take pride in their non-white noch, by contrast, who spent much of her gether in the Commons. (If Parliament re- lawmakers and mark Black History Month. childhood in Nigeria, argues that “an im- flected Britain’s ethnic make-up, there Britain’s model of multiculturalism is no ported, Americanised narrative of slavery, would be 85.) Boris Johnson’s successor longer contested by any serious politician. segregation and Jim Crow” would displace may well be non-white. The family of the Labour heavily outpolls the Tories among Britain’s distinct black history. blm, she chancellor, Rishi Sunak, is from India; the non-white voters overall, but this masks says, is a “political” organisation whose parents of Priti Patel, the home secretary, broad gaps between groups: black voters protesters used racial slurs towards cops. 1

The race for office Britain

MPs agreeing with statement, % Ethnic diversity in Conservative and Labour constituencies September 2020 2019 general election White population*, % Conservative Labour 100 100806040200 80 Non-white people have the same opportunities to 60 succeed professionally 40 Government should do more to tackle racism 20

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2 Tom Hunt, a young Tory mp, accuses its Prisons leaders of promoting “cultural Marxism” and “the abolition of the nuclear family.” Locked up, locked down The third factor is the changing compo- sition of the Tory electorate. Labour does well in ethnically diverse seats, Tories in whiter ones (see chart on previous page), and the gap is growing. In the 2019 election, Prisoners have been spared the worst of covid-19. But their families are the Tories took control of a clutch of La- suffering the fallout bour’s whitest seats in northern England, including former industrial towns such as ife was hardly a doddle for Joanne be- policy of inmate isolation. Visits were Redcar, Blyth Valley, Workington and Sed- Lfore covid-19. Her partner has been in banned on March 24th and activities—like gefield, whose populations were recorded prison for two years, so she was bringing jobs in prison workshops or classes— as more than 98% white in the 2011census. up their two little boys—aged two and mostly scrapped. Prisoners stayed in their Despite the Tories’ diverse officer class, five—on her own, while trying to hold cells, often for 23 hours a day. their seats remain on average 93% white, down a job. But at least they could visit him Mark Turnbull of Out There, a charity compared with 87% for the country at for one precious hour a week, behind the that supports inmates’ families, says that large. Labour’s northern losses made its Victorian gates of hmp Manchester. As the in the initial stages of the pandemic, his seats on average more diverse. They virus began to spread, those gates swung phone was kept busy by relatives worried dropped from 78% to 75% white. shut, as at all 117 prisons in England and about how fast the virus might spread in Mr Johnson wants to shape his party Wales. For half a year, the children did not prisons. But the longer covid-19 restric- around the values of his new “red wall” vot- visit their father at all. They finally tions went on, the clearer the downside of ers. They are not necessarily hostile to blm, squeezed in two visits, but then infections the trade-off became. Visits resumed over says a Tory insider, but they find its cause picked up and the ban was reimposed. Her the summer, but have now been banned irrelevant to their lives and its jargon im- children are growing apart from her again at roughly a third of prisons, in areas penetrable. Mr Johnson has stirred the no- partner. “They’re not as close as they used with the most severe restrictions. tion that British traditions are under siege to be,” she says. Hardest of all, says Joanne, is not know- from censorious forces, promising to As covid-19 leapt around the globe, pri- ing how long it will be before her next visit. thwart a (never-credible) threat to topple sons faced an especially acute version of “At the start of covid, we said ‘There’s no Winston Churchill’s statue from Parlia- the familiar trade-off between protection way on Earth they can stop us seeing each ment Square. Some believe they can use from the virus and broader wellbeing. In other for more than six weeks’. Then it was these notions as a wedge to keep Labour, Britain, prison-reform charities warned of seven months.” Her partner calls her on the which cannot put much distance between “loss of life on an unprecedented scale”. telephone every day but, confined to his itself and blm, from winning back north- Prisoners were reckoned to be especially cell, he has “nothing to talk about…There’s ern seats. vulnerable to the virus because they were no hope for them.” The restrictions will Some Tory mps are keen to dabble in older and in worse health than the general also have a broader social cost. Since strong their own variety of identity politics, fus- population. Ministers were spooked by es- family ties predict a lower likelihood of re- ing Labour’s class rhetoric with racial iden- timates that 2,500-3,500 prisoners could offending, weakening those bonds could tity. Ben Bradley, Tory mp for Mansfield, die in English and Welsh jails (out of a total make it harder to get inmates back on the claims that equality legislation discrimi- population of about 80,000). straight and narrow. A government-com- nates against white working-class men. He That crisis was averted. Between March missioned report by Michael Farmer, a Tory regards the notion of “white privilege” as and the end of September, covid-19 claimed peer, argued in 2017 that positive interac- ridiculous when white working-class boys the lives of 23 inmates, but widespread out- tions between inmates and their families struggle academically. Matthew Goodwin, breaks were avoided. That can largely be were important in preventing prisoners’ a political scientist influential among the chalked up to a draconian but effective children going on to offend themselves. new generation of Tories, argues that “if In one way, though, the pandemic is you’re constantly referring to people not as bringing prisoners closer to their families. individuals but members of marginalised Diane Curry of pops, another family-sup- and victimised racial groups, then it is in- port charity, says relatives had been clam- evitable that the white working-class kids ouring to have video-calls with prisoners are going to see themselves in the same for years. In a matter of months, covid-19 lens.” Mr Bradley intends to boycott work- made that happen. Before the pandemic, place unconscious-bias training: he says the prison service had begun a tentative such schemes are “wildly unpopular with roll-out; now almost every jail has the kit. what is now the core Conservative vote”. Technical glitches abound and the ser- Mr Johnson is in power thanks to a co- vice cannot replace the intimacy of a meet- alition of people who want a fiscally re- ing, but it does offer prisoners a glimpse of sponsible government and people who normality. “Knowing the nitty-gritty of want big increases in public spending. each other’s lives keeps a relationship go- Identity politics may provide temporary ing across prison walls,” says Anna Kotova glue; but it is dangerous stuff. Hotheads of Birmingham University, who is studying like Mr Bradley may damage the Tories in these interactions. “Really small things more diverse seats such as Peterborough like ‘I’ve painted that wall’ or ‘Look at the and Portsmouth, and not just among eth- tree you planted, see how it’s growing,’ will nic-minority voters. Britons may not like help sustain relationships for people serv- imported academic theories, but if ugly na- ing long sentences.” Inmates may be con- tivism becomes a factor in their politics, fined to their cells but—virtually, at least— they may like that even less. 7 The loneliest time they can roam farther than ever. 7 Europe The Economist October 31st 2020 35

Culture tion and religion; in France and Germany that figure is 2.3%. Busking for bail-outs Covid-19 hit this cheerful scene like the last act of Götterdämmerung, even before this week’s news of fresh lockdowns on Germany and France. Exhibitions and live events have had to close or restrict admis- sions. In France output in the culture sec- AMSTERDAM AND CRANS-MONTANA tor is expected to shrink by 25% in 2020, Covid-19 sends the arts back into the arms of government compared with a drop in overall gdp of earing a long robe and a silver plas- than SFr100,000 ($110,200) in government 8.7%. Germany expects gdp to fall by 5.8% Wtic crown, Cameron Burg was danc- subsidies and loans. and cultural output to contract by 13-23%. ing on a Swiss mountaintop with a pair of In Europe, where there is culture, there Governments have responded with emer- djs and several hundred ecstatic electron- is government. Orchestras and museums gency spending to keep the arts from col- ica fans. Behind him, bubble-cars were dis- have long relied on state, not private, spon- lapsing, tying them even closer to the state. gorging men in leather jackets and women sorship. Theatres and art festivals are often Take Germany. For years its government inface paint. It was mid-September and Ca- owned or bankrolled by municipalities. has pressed cultural institutions to priva- prices, a dance-music festival in Crans- Audiovisual ventures benefit from film tise, with only modest results. Covid has Montana, had just kicked off after a five- funds and state broadcasters. Spending on pushed in the opposite direction. In June month delay. It had been cancelled by co- cultural services runs to about 1% of the to- the federal government announced a €1bn vid-19, along with the rest of Europe’s elec- tal government budget in the average eu “Restart Culture” programme, including tronica festivals, and fans were suffering country. An exact comparison is hard to €250m to help private institutions like cin- withdrawal. “After a while you miss the find, but in America 0.7% of government emas and theatres with social distancing, plur,” said Mr Burg, using a ravers’ short- spending goes to cultural services, recrea- €50m for various arts funds and €20m for hand for peace, love, unity and respect. dance. On top of that, the culture ministry’s Chalets and restaurants in Crans-Mon- budget for 2021 will rise by €120m, or 6.6%. tana count on Caprices, which usually Also in this section Germany’s states are helping too: North draws 6,000 festival-goers in April, to fill Rhine-Westphalia has set up an €80m co- 36 Italy’s tax breaks for the rich the gap between the end of the ski season vid-19 culture fund, significantly more and the start of the golf and mountain-bik- 37 Abortion curbed in Poland than its normal annual culture budget. ing ones. When the festival was postponed, France’s interventions are even bigger, 37 Albania’s new princess local businesses reworked it to satisfy some €5bn to the end of 2021. Fully €950m health authorities, limiting it to 1,000 38 The fighting in Nagorno-Karabakh goes to shore up a peculiar French institu- guests divided into three zones. In August tion: intermittents du spectacle, part-time 40 Charlemagne: Macron’s mission they got the go-ahead. They also got more performers and technicians who are the 1 36 Europe The Economist October 31st 2020

2 backbone of many shows, and get govern- tions. The Dutch practice of having stage ian income, are valid for 15 years. After that, ment pay when they have no work. Since productions tour every midsized town unless the programme is renewed, its ben- the cancellation of nearly all live events would be impossible without state subsi- eficiaries will become subject to Italy’s nor- makes it impossible to amass enough dies for local culture. So would the Euro- mal regime. Cristiano Ronaldo, a Portu- hours to qualify, the government has pean landscape of high-art festivals such as guese football star, is said to be among waived the minimums until August 31st those in Avignon, Montreux and Salzburg. those who have made use of the scheme. In 2021. Billions more are budgeted for loans When those festivals will have live au- 2018, the year after it came into force, he to cultural establishments and reimburse- diences again is anyone’s guess, the more surprised the footballing world by trans- ment for projects that cannot be staged. so as Europe is now deep in a second wave ferring to an Italian side, Juventus. In the Netherlands, arts institutions of covid-19. Caprices was not a promising Introduced by Matteo Renzi’s centre- have been cutting staff for decades, while sign. Between mid-September and mid- left administration, the programme is one liberal governments have provided tax in- October the number of daily new cases in of several southern European ploys to lure centives to go freelance. Almost 50% of Valais, the canton including Crans-Mon- wealthy foreigners. Some have proved in- Dutch in the culture sector are now self- tana, rose from a dozen to 275. A regional tensely controversial. On October 20th, the employed, compared with a third in Ger- hospital said it had found a link between European Commission opened infringe- many. When covid-19 hit, that caused pro- ten of those who tested positive: they had ment procedures against Cyprus and Malta blems: whereas the Dutch government attended Caprices. 7 over their investor citizenship schemes, guaranteed furloughed workers 80% of after two Cypriot parliamentarians were their salaries, freelancers got only €1,050 filmed agreeing to the issue of a passport per month. Meanwhile drama companies Italy for a fictitious Chinese person with a mon- and orchestras faced bankruptcy, which ey-laundering conviction. would leave the cities that own the coun- Rich pickings Last year Greece brought in a scheme try’s magnificent concert halls and theatres which, like Italy’s, involves a €100,000 flat with no tenants to pay the rent. To fend that tax, but requires applicants to invest off, the centre-left d66 party pushed €500,000 in Greek assets and spend half through two spending packages for the cul- the year in the country. Portugal cast its net ture sector totalling €700m, nearly dou- FLORENCE wider with a ten-year tax holiday on for- A flat-tax scheme is luring the wealthy bling the ministry’s budget. eign-sourced income aimed at luring re- to Italy Not all the responses to the virus have tired people. But after protests from some been defensive. When Italy’s centre-left h, italy! “The school as well as the in the eu the government tightened the Democratic Party replaced the hard-right Aplayground of the world,” as one of rules this year, making the unearned in- Northern League party in government last E.M. Forster’s characters described it: cities come of new arrivals subject to a 10% levy. year, it revived a scheme to liberate the packed with the greatest Western art and Italy also runs programmes for the less country’s museums from central control. architecture, ravishing landscapes, deli- well-heeled: incentives to lure back highly That persuaded Eike Schmidt, the German cious food and a sunny climate. What a qualified Italian expatriates and a 7% tax director of Florence’s Uffizi Gallery, to stay place to live—but for the tax, levied at 23% over six years on the pension and invest- on rather than returning to Vienna as he from the first euro earned and at progres- ment income of foreigners who settle in had planned. When the pandemic hit, the sively higher rates up to 43% on income the poorer south of the country in towns of museum reopened after a few months by over €75,000 ($89,000). fewer than 20,000 inhabitants. redistributing artworks and visitors to But a small number of very rich peo- “The flat-tax scheme is not just an iso- smaller museums in towns throughout ple—ultra-high-net-worth individuals, in lated measure, but part of a trend,” says Tuscany. Ticket revenues have recovered to the jargon of private offices and estate Giulia Cipollini of Withers Studio Legale, a within 90% of normal. agents—are living the Italian dream while law firm in Milan. In 2019 Italy approved Mr Schmidt sees this as an opportunity paying what, for them, are modest taxes. 421 flat-tax applications, against 264 the to spread culture around and shift away Several hundred belong to a scheme in previous year. “Britain is the jurisdiction from the mega-tourism that has blighted which they pay an annual €100,000, plus from which the largest number of people European cities. (“Venice, Florence and €25,000 for each member of their family. have relocated,” she says. Barcelona weren’t constructed as theme The flat rates, which apply only to non-Ital- Some are Britons fleeing Brexit. Others parks,” he says.) The virus is forcing other are citizens of third countries who had countries to think small, too. Hungary, been enrolled in Britain’s “non-dom” which under Viktor Orban’s populist rule scheme. Savouring an insalata caprese in a has become the European country that posh restaurant in rural Tuscany, a French spends the second-largest share of its bud- citizen cited one of the Italian scheme’s get on culture (2.7%), set up a €14.5m fund lesser-known provisions: exemption from for small rock concerts, live-streamed to gift and inheritance taxes. “That, for most fans. In the Netherlands, a 30-person audi- of us, is the reason for switching,” he says. ence limit has closed the national theatre Whether he and others like him will in Amsterdam. But avant-garde theatres benefit Italy in the long run will depend on with lower overheads that are happy to per- how much of their wealth trickles down to form to an audience of 30 are soldiering on. the rest of the population. But they are al- With or without the pandemic, the ready having an effect: booking private jets state’s role in culture was always going to for long weekends in Sicily, mooring their be big in Europe. It is hard to imagine priv- super-yachts in Italian marinas, restoring ate donors preserving the continent’s spec- Florentine palazzi to their former glory and tacular architectural heritage. Symphony hosting inspirational events for young en- orchestras lose money everywhere; Ameri- trepreneurs. As an Italian proverb has it, ca’s corporate sponsorships are partly gov- amor fa molto; il denaro fa tutto—love does ernment subsidies disguised as tax deduc- Came for the tax break, stayed for the view much; money does everything. 7 The Economist October 31st 2020 Europe 37

Albania’s royal family The birth of Baby Zog

A Ruritanian royal family hasn’t quite given up hope of regaining a throne n october 22nd Albania’s royal Switzerland. He resided—among other Ofamily was “delighted to announce” places—in Spain, the then Rhodesia, and the birth of Princess Geraldine. The South Africa, and married an Australian happy parents are Leka Anwar Zog Reza divorcee. Fascinated by guns, he tireless- Baudouin Msiziwe Zogu, or more simply ly hankered after a royal restoration. In Prince Leka II, who claims the throne, 1979 he was expelled from Spain for and his wife Princess Elia, an actress. flouting arms regulations. His only son Could the baby one day be queen? was born in South Africa. In 2002 Alba- In1997 Albania was the only former nia’s post-communist parliament invit- communist state to hold a referendum ed the family home, granting them privi- on restoring a monarchy. A third of vot- leges that included diplomatic passports. ers were in favour. Prince Leka’s father, Erion Veliaj, Tirana’s mayor, says Leka Abortion in Poland the self-proclaimed Leka I, who was let is “too nice” for Albania’s rough-and- back into his homeland in1993, marched tumble politics. Asked if he would like to Who is the strictest on the electoral commission in Tirana, be king, the prince says coyly in a lilting the capital, to complain of fraud. A man South African accent that he “would like of them all? was killed in an ensuing gun battle. to serve in any way that is possible”. In The longest-serving ruler of the state the “theoretical” case of a restoration it that emerged after centuries of Ottoman would be “very possible”, he says, to WARSAW Turkish rule was an exceptionally vi- imagine the latest Geraldine being A top court makes it even harder for cious communist, Enver Hoxha, who crowned Queen of the Albanians. Polish women to have abortions reigned from the end of the second world he law and justice (pis) party that has war until his death in1985. But in the Tgoverned Poland since 2015 has firm interwar years it was Ahmed Zogu, a ideas about how it wants people to live. It tribal chieftain, who ran the show. Rising champions the traditional family and from minister of interior to president, he paints gay people as a threat. Now the had himself declared king in1928. But country’s restrictions on abortion, already Mussolini’s Italians invaded in1939 and among the tightest Europe, are about to be- chased him out. He died in France in1961. come tighter. In a ruling on October 22nd King Zog was a rough-hewn mo- the pis-controlled Constitutional Tribunal derniser. Some Albanians hark back to said that women would no longer be able to his time with nostalgic sentimentality. cite severe foetal defects as a reason for Tirana, the capital, has a statue of Zog having an abortion. and a Zog Boulevard. But Zog’s son Leka, Abortion is already banned in Poland. the current claimant’s late father, though Until now there were three exceptions: as tall as a basketball player, was less when the mother’s life is in danger, in cases impressive. Born to a half-Hungarian of rape or incest, and in cases of severe and half-American aristocrat (also called irreversible foetal defects. Almost all the Geraldine) a few days before Zog’s flight, 1,000 or so abortions a year performed le- he was brought up in England, Egypt and A rough-hewn moderniser gally in Poland fall into the third category. In other cases, many women go abroad, of- ten to neighbouring Germany, where ter- pute with the European Commission over rights, suggests that rules about abortion minations are much easier to obtain. the rule of law—to rule on whether abor- should be made by parliament, potentially Social conservatives and the Catholic tion in cases of foetal defects is compatible with the involvement of a citizens’ assem- church have long called for Poland’s cur- with the Polish constitution. It will take ef- bly modelled on one in Ireland that recom- rent rules, in place since 1993, to be made fect as soon as it is published. Hospitals are mended legalising the procedure. stricter. Jaroslaw Kaczynski, pis’s veteran unsure how to proceed; one in Warsaw has For Mr Kaczynski, the timing of the ver- leader, said in 2016 that the party would already advised doctors to stop terminat- dict is convenient. It offers a distraction “strive to ensure that even very difficult ing pregnancies where there is a high prob- from the mounting number of coronavirus pregnancies, when the child is condemned ability of severe foetal defects. cases in Poland (over 18,000 new ones were to death, is severely deformed, will end in The verdict triggered women’s protests announced on October 28th) and from the birth, so that the child can be christened, across Poland, which continued into this recent crisis in the pis-led governing co- buried, given a name”. However, a bill that week. Polls suggest little support for the alition. Yet already some politicians in the year tightening the ban was shelved after it change: in one from 2018, 70% of respon- ruling camp are calling for the restrictions sparked unexpectedly large protests. dents were against banning abortion in in the ruling to be softened. As Jaroslaw Go- The new ruling follows a request last cases of foetal defects (even among pis vot- win, another deputy prime minister and year by lawmakers (mostly from pis) for the ers, the figure was 40%). The decision drew the leader of the more moderate of pis’s two Constitutional Tribunal—of which pis in criticism not only for its substance but also junior coalition partners, put it: “The law effect took control shortly after coming to for the way it was reached. Adam Bodnar, must uphold values. But the law cannot power in 2015, triggering a protracted dis- the country’s commissioner for human force women to be heroic.” 7 38 Europe The Economist October 31st 2020

Nagorno-Karabakh over the past two decades. Yet while Azer- baijan has gained in strength, its failure to The wheel turns, this time recover land around Nagorno-Karabakh which mediators have said since the mid-1990s should be restored to it has fos- tered deep frustration. The trigger for the current all-out offen- sive occurred in July, when Armenia and BAKU Azerbaijan clashed over the border in Tu- The latest fighting in Nagorno-Karabakh continues decades of conflict vuz, more than a hundred miles away from n a courtyard of half a dozen identical Areas of control Nagorno-Karabakh but close to a pipeline Iapartment blocks in Sumgait, a charm- GEORGIA October 25th 2020 that carries oil from Azerbaijan to Turkey less industrial town near Azerbaijan’s capi- Nagorno-Karabakh via Georgia. An Azerbaijani general was Armenian forces tal, Baku, a group of teenage boys are con- Tuvuz killed. Russia began to reinforce Armenian gregating around Elshan, who is recording Azerbaijan forces positions, bringing up a mass of military Pipeline Unclear/divided a YouTube video. Adopting a “radio voice”, Source: Polgeonow.com cargo. Turkey sent military planners, he proclaims the names of villages “liberat- Ganja troops and jets for a joint drill with Azerbai- ed” by Azerbaijan’s “glorious army” around Nagorno- jan. (Azeris are ethnically close to Turks.) Nagorno-Karabakh, an ethnic Armenian Karabakh In Baku tens of thousands took to the ARMENIA enclave inside Azerbaijan that is at the AZERBAIJAN streets demanding an end to the lockdown heart of a long and deadly conflict on the Khojali for covid-19—and calling for war. “Com- Stepanakert edge of Europe. Like most of the residents Shusha mander-in-chief, give us weapons,” they of the compound, Elshan’s family are refu- chanted. A small crowd broke into the par- Gubadli Sumgait gees displaced from their home in Gubadli, AZER. liament. Police sprayed tear-gas. Mr Aliyev, one of the seven districts adjacent to Na- an authoritarian leader who inherited his Baku gorno-Karabakh that were captured by Ar- 50 km IRAN post from his father in 2003, was rattled. If menians during a war in the early 1990s. he needed any more excuses to go to war, It was the first ethnic conflict to accom- one was promptly provided by Nikol Pashi- pany the break-up of the Soviet empire. But Azad Isazade, who fought in that conflict nyan, Armenia’s populist prime minister, Elshan and the boys, born after that war and later served as a spokesman for Azer- who went to Nagorno-Karabakh to deliver ended in an uneasy truce, know little about baijan’s army. “We failed to defend our an incendiary message: referring to it by its the Soviet Union. Nor were they ever told land, our children and our mothers.” Back Armenian name, Artsakh, he called for its that the descent into war began with a hor- then, he was obliged to announce the loss unification with Armenia proper. “Artsakh rific pogrom of ethnic Armenians in Sum- of Shusha, the citadel of Azeri culture and is Armenia, and that’s it,” he declared. gait in 1988. What the boys do know is that the highest major town in the Nagorno-Ka- “We came to a logical conclusion that four years later Armenian militias staged rabakh region. “Azerbaijan’s newsreaders Armenia has no intention of returning the the biggest massacre of that war outside refused to announce it on television news,” occupied territories or letting the [Azerbai- the village of Khojali, within the enclave. he says. Now all the talk is of “taking jani] refugees back,” says Hikmet Hajiyev, The Azerbaijanis say 600 of their kin were Shusha back”. an adviser to Mr Aliyev. So on September murdered. Although the boys have never This surge of national confidence is 27th Azerbaijan went to war. “It is not Ali- seen an Armenian in their lives, the talk in partly the result of an oil and gas bonanza yev’s war. It’s a people’s war,” says Zaur Shi- their homes is of trauma, hatred and a that has fuelled Azerbaijan’s economic riyev of the International Crisis Group, longing for home. “Armenians are not peo- growth and paid for vast military spending which seeks to resolve conflicts. “But it ple,” the adults say. “We cannot live togeth- could give him lifelong legitimacy.” er...They must leave our land...We did noth- Armed with Turkish and Israeli drones, ing wrong.” trained to nato standards by Turkish in- Two hours after Elshan has made his structors and fired with nationalist ardour, video, an announcement comes on Twitter Azerbaijan’s army has pummelled Arme- from Azerbaijan’s President Ilham Aliyev: nia’s Russian-made tanks and air-defence the army has “liberated” three villages in systems. Its troops have recaptured chunks Gubadli district. The compound, along of the seven districts, have come within fir- with the rest of Sumgait, erupts in jubila- ing-range of the corridor that connects Ar- tion. People pour out onto the streets danc- menia to Nagorno-Karabakh, and are set- ing and waving the flags of Azerbaijan and ting their sights on Shusha. Armenians in its main ally, Turkey. A member of Sum- the enclave have responded by launching gait’s local council delivers a message to a missiles at Azerbaijani towns, the latest tv camera: “We are no longer the refugees.” one killing 20 civilians in Barda. For a quarter of a century they have been What Azerbaijan sees as a war of libera- waiting for this moment, since Azerbaijan, tion, Armenians see as one for survival. an oil-rich country of 10m people, lost the Two-thirds of the population of Nagorno- war to Armenia, a poorer and smaller Karabakh, some 90,000 people, have fled. neighbour. At the time Azerbaijan was in a “A return to Shusha is essential for restor- state of turmoil, while Armenia had a bet- ing Azerbaijan’s sense of justice, but it can- ter army and received stronger backing not be achieved by causing injustice to oth- from Russia. The war ended in a ceasefire ers,” says Mr Shiriyev. Taking Shusha may that left Azerbaijan with a loss of territory be a great victory; preventing another spi- and pride. “We came back from that war ral of injustice will be harder. But try saying with a sense of deep humiliation,” says Blood will have blood that to the boys in Sumgait. 7 Allow us to show you around a rather different house. Ours.

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Your partners in property. 40 Europe The Economist October 31st 2020 Charlemagne Macron’s mission

A Biden presidency would offer Emmanuel Macron a tempting transatlantic opportunity duration of the campaign, the Biden team has closed the doors to all foreign diplomats, to thwart any future charges of outside inter- ference. But France has some unusually good connections. Antony Blinken, Mr Biden’s top foreign-policy adviser, spent his high- school years at a lycée in Paris, the Ecole Jeannine Manuel. He kept up his links, and was selected for the French-American Founda- tion “young leaders” programme, a few years before a certain Mr Macron was, too. Emmanuel Bonne, Mr Macron’s diplomatic ad- viser, knows Mr Blinken from his time at the French mission to the United Nations in New York. Mr Bonne’s predecessor at the Elysée, Philippe Etienne, is now France’s man in Washington. He took over from Gérard Araud, an energetic agent of French soft power, outspoken on Twitter and the host of memorable parties at the res- idence for le tout Washington. Berlin and Paris would both welcome an America no longer bent on dividing Europe, committed to curbing climate change, re- inforcing multilateralism and re-engaging with Iran. What sets France apart from Germany, though, is its ability to project mili- tary force. As it is, France relies on American backing for its coun- ter-terrorist operations in the Sahel, and would welcome the en- gagement of a fellow internationalist. Mr Macron has often been frustrated by a lack of muscular partners—in dealing with Turkey, he sound of crunched knuckles was an early alert. There he Libya, or other Mediterranean crises—and has ended up accused of Twas, freshly elected and not yet 40, clenching the hand of the acting unilaterally. Now he faces an ugly campaign of protests leader of the free world with the insouciant confidence of the neo- from Turkey to Qatar, following his defence of free speech and the phyte. Shortly after his election in 2017, Emmanuel Macron then right to caricature in response to the beheading of a schoolteacher treated Donald Trump to dinner (up the Eiffel Tower!) and a Bastille who had shown pupils caricatures of Muhammad. He needs all the Day parade (a military flypast!) as part of a courtship that led some defenders of liberal democracy he can find. observers to call the French president the “Trump whisperer”. “He’s a great guy…loves holding my hand,” enthused Mr Trump. Lone ranger In the end, it did not work out so well for Mr Macron. Mr Trump “The scene could be set nicely for Macron,” says Benjamin Haddad pulled America out of the Paris climate deal, and tore up the nuc- of the Atlantic Council in Washington. But there are two big cave- lear non-proliferation agreement with Iran. Although they still ats, beyond differences over Russia, China or even trade. One is talk regularly, and Mr Macron came tantalisingly close to bringing that Mr Biden might not seek to deal with a single dominant leader, America and Iran together last year, the pair have clashed over let alone one with a taste for showmanship. “Macron could emerge wine, tech, aeroplanes, nato and more. The American president as a favoured interlocutor,” suggests Mr Araud, “but on the condi- has proved largely immune to Mr Macron’s charm offensive. If Mr tion that he does this with others, and above all with Germany.” Trump is drawn to a European leader, it is Boris Johnson, whom he The other is that a President Biden seeking to revive old alli- once called “Britain Trump”—the highest praise he can imagine. ances through existing structures would swiftly come across the Yet with the prospect of the Trump years now drawing to a new ones that Mr Macron is trying to forge. The world has shifted close, a different opening beckons. Mr Macron is nothing if not since the Obama years. The centrepiece of Mr Macron’s geostrate- pragmatic, and should Joe Biden be elected on November 3rd, the gic thinking—his “operating software”, as a presidential adviser French leader could find himself well placed to seize a new oppor- puts it—is “European sovereignty”. The organising principle is tunity: to establish himself as America’s interlocutor of choice in that Europeans need to do and make more for themselves, includ- Europe. The circumstances are favourable. Mr Trump has trampled ing on defence. Its corollary is that Americans would have to ac- all over the transatlantic alliance, and left America without a cept that Europeans will act more by, and for, themselves. proper working tie to the continent. Brexit has rendered Britain This puts Mr Macron on a collision course with the instincts of “less useful” to America, in the words of Peter Ricketts, a British the American defence establishment. As Michel Duclos, a French former national security adviser. It is also perceived to be less ex-diplomat, notes in a paper for the Institut Montaigne, a think- trustworthy. Already Mr Biden, of Irish Catholic stock, has warned tank, the risk is that a Biden administration might default to “a po- Britain not to let the Anglo-Irish agreement become a casualty of lite practice of consultation in exchange for unequivocal align- Brexit. To be sure, the reflex for a President Biden might well be to ment with American positions”. Mr Macron’s case that he has no turn to Germany instead, not least to fix the damage wrought on intention of undermining nato remains to be made. that friendship by Mr Trump. As the doyenne of the European Un- If anything, France may need to dampen expectations. Under ion’s leaders, Angela Merkel would slip effortlessly into the part. Mr Obama, Europe was already fading from American sight. Yet Mr But the chancellor is also in her last year in the job. Her successor is Biden would still need allies. And the chance to supplant Britain is unknown, but the choices on offer are not inspiring. an old instinct. A keen student of history, Mr Macron knows that Hence France’s chance. As it happens, Mr Macron has never met France is America’s oldest ally—and that at a decisive moment for Mr Biden—although Barack Obama, just after he left office, called independence, at Yorktown in 1781, it was the Marquis de Lafayette the French candidate before his election to wish him well. For the who helped America to defeat the British. 7 United States The Economist October 31st 2020 41

Also in this section 42 Flipping state legislatures 43 California in play (sort of) 43 The Hunter Biden story 44 Latino men and the GOP 45 Trump and corruption 46 Lexington: On the breadth of the never-Trump coalition

Amy Coney Barrett ter agency that places children only with straight couples against a rule barring dis- Against the flow crimination on the basis of sexual orienta- tion. Fulton gives Justice Barrett the chance to reconsider Employment Division v Smith, a precedent written 30 years ago by Anto- nin Scalia, her mentor and one-time boss, NEW YORK that makes it difficult for plaintiffs to claim The newest Supreme Court justice cements a conservative majority as America laws are unconstitutional if they impinge appears to be moving left only incidentally on their religious lives. very appointment to America’s Su- ate chamber. Neil Gorsuch and Brett Kava- Six days later, the court will hear Califor- Epreme Court ushers in “a new court”, naugh had bitter confirmations, too, but nia v Texas, a lawsuit about the Affordable observed Byron White, a justice who wel- they each received crossover votes (three Care Act (aca), also known as Obamacare. comed 15 new colleagues in his 31 years on and one, respectively). Justice Barrett had Democrats made much of this case in Jus- the bench. But rarely does the arrival of a no Democrats on her side and one Republi- tice Barrett’s confirmation hearings be- justice herald a transformation as dramatic can—Susan Collins of Maine—opposed her cause she has spoken ill of Chief Justice as that promised by the confirmation on confirmation. With a 6-3 conservative ma- John Roberts’s reasoning in two previous October 26th of Amy Coney Barrett, a deep- jority, the court could dial back liberal vic- challenges to the aca. Yet the legal claims ly conservative judge, to take the seat of tories won during the past few decades. Re- this time are weaker, despite the full sup- Ruth Bader Ginsburg, a hero of the progres- cent rulings on the rights of gay, lesbian port of the Trump administration, and sive legal movement. This watershed mo- and transgender people appear vulnerable, there is no guarantee they will spur her to ment recalls the rightward shift in 1991 as are decades-old precedents protecting jettison a law that provides some 23m when the arch-conservative Clarence abortion rights. With a new colleague Americans with health insurance. Thomas succeeded a civil-rights icon, friendly to gun rights, Justice Thomas may The first potential abortion battle of Thurgood Marshall. Like Justice Thomas, have another partner for his mission to Justice Barrett’s tenure involves a ban in Justice Barrett could skew the ideological muscle up the Second Amendment. Mississippi on abortions after 15 weeks’ balance on the court for decades. Now that she has been confirmed, the gestation. An appeals court had blocked A mere 38 days after Ms Ginsburg’s views Justice Barrett kept shrouded in her this as inconsistent with Supreme Court death, Justice Barrett took up her seat amid confirmation hearing will begin to come to rulings barring such bans before fetal via- an election tinged by resurgent coronavi- light. On November 4th, the morning after bility (about 24 weeks). In their latest fil- rus. The Senate voted to confirm her as Do- election day, she will join her eight new ing, supporters of the ban point out a split nald Trump’s third appointee to America’s colleagues to hear a conflict between reli- among lower courts on how to read Chief highest court by 52-48—a tally mirroring gious liberty and lgbt rights in Fulton v City Justice Roberts’s Delphic opinion from America’s polarisation far outside the Sen- of Philadelphia. The case pits a Catholic fos- June striking down a clinic regulation in 1 42 United States The Economist October 31st 2020

2 Louisiana. The justices seem to have been a constitutional right it has previously re- 1870s. The 13th state Senate district, which awaiting Justice Barrett’s arrival to decide cognised. It would be a stunning about- stretches from Lancaster and its suburbs to whether to take Dobbs v Jackson Women’s face for the court to tell gay and lesbian rolling farmland, is probably the most Health Organisation: they have put off dis- couples that their marriages—blessed by a fought-over race in a fought-over state. Our cussing it three times since Justice Gins- 5-4 majority in 2015—are now null and modelling suggests that Pennsylvania is burg’s death. If they opt to hear the case, the void. Likewise, fully reneging on abortion the state most likely to determine who core of Roe could soon be on the docket. rights when half of the country is pro- wins the White House. It is also one of the Battles also loom involving Mr Trump’s choice—and tens of millions of women states the Democratic Legislative Cam- tax returns, “remain-in-Mexico” asylum have relied on Roe v Wade, the 1973 ruling paign Committee (dlcc) is trying to flip. policy and plans to exclude undocumented that legalised abortion on privacy grounds, Democrats need nine seats to win con- immigrants from the census count to de- over nearly half a century—could ignite a trol of Pennsylvania’s state House and have termine apportionment in the House of firestorm of protest and calls to rebalance a a shot at winning the Senate, too. The dlcc Representatives. But the most immediate bench that is far out of step with society. is spending a record $50m in 13 states in- questions facing Justice Barrett involve the Still, there is little doubt Justice Barrett cluding Arizona, Michigan, North Caroli- re-election effort of the president who ap- and her conservative colleagues will up- na, Pennsylvania and Texas. Other left- pointed her. As the gears turned on her hold restrictions on abortion, narrow lgbt leaning groups, such as the National confirmation, the justices considered sev- rights in the name of religious freedom, Democratic Redistricting Committee, eral lawsuits shaping how the torrent of strengthen the right to bear arms and cur- headed by Eric Holder, Barack Obama’s at- mail-in ballots in several states would be tail the autonomy of administrative agen- torney-general, are also spending heavily. processed and counted. Moments before cies. With a tenure that could easily stretch The Democrats have been trying to Justice Barrett was confirmed by the Sen- past 2050, she has plenty of time for that. 7 catch up since 2010, when they were out- ate, the court rejected, by a 5-3 vote, Demo- spent, outsmarted and lost control of 21 crats’ call to restore an extended deadline chambers. During Mr Obama’s two terms, for mail-in ballots in Wisconsin. In dis- State legislatures Democrats lost around 1,000 of the 4,000- sent, Justice Elena Kagan said the decision odd state seats they held in 2009 (there are “will disenfranchise large numbers of re- Flipping houses 7,383 in all). This cost them not only control sponsible voters in the midst of hazardous of the policy agenda but also, in many pandemic conditions”. states, control of the power to draw con- A week earlier, however, Chief Justice gressional-district boundaries. Roberts joined his three liberal colleagues A decade later Democrats control 39 out in rebuffing a request from Pennsylvania LANCASTER, PENNSYLVANIA of 98 chambers (not counting Nebraska’s If a Democratic wave breaks over state Republicans to block a state-court ruling unicameral, non-partisan legislature) and elections, its effects will be lasting that extended the deadline for mail-in bal- have regained 450 of those lost seats. On lots. Federal courts should not meddle with ost americans do not know who the watch of Jessica Post, head of the dlcc, state elections, he later explained, but nei- Mtheir state representatives are. Only they have taken ten state-legislative cham- ther should the Supreme Court tell state 12% could correctly name them in a Co-op- bers and made inroads in North Carolina courts how to interpret their own laws. Un- erative Congressional Election Study from and Texas. They are unlikely to match the deterred, and in apparent hopes that Jus- Harvard in 2018. But on a recent Saturday Republicans’ success in 2010, but only be- tice Barrett might tip the balance away when Janet Diaz, who is running for Penn- cause they have already won the easiest tar- from the chief’s position and set the dead- sylvania’s state Senate, knocked on doors gets. At stake, once again, is control over re- line at November 3rd, the same plaintiffs belonging to Democratic-leaning house- districting. David Abrams of the Repub- renewed their plea on October 24th. holds with (her data suggested) patchy vot- lican State Leadership Committee says this They were disappointed: on October ing records, the looks were not as blank as means “there’s a decade of power hanging 28th, the 115th justice sat out the case (she normal. Some even recognised her. in the balance” on November 3rd. said she did not have time to review the fil- If elected, Ms Diaz would be the first In addition to Pennsylvania, other ings) and the court unanimously rejected Democrat to win the district since the states to watch include Arizona, which has the Republicans’ last-ditch effort. (In a di- not had a Democratic chamber in more vided vote, they also turned back a similar than 40 years and where the party needs request out of North Carolina.) Yet in a only two seats to flip the House and three to move that seems bound to flummox voters, take the Senate. The Texas House needs Justice Samuel Alito, joined by Justice Gor- nine seats to change hands. Mark Jones of such, noted that the court might just recon- Rice University judges that Donald Trump’s sider the Pennsylvania matter post-elec- name at the top of the ticket “has put the tion—and hinted it could toss late-arriving Texas House in play”. ballots then. Would Justice Barrett join in It is not just the scale of spending which such a Bush v Gore redux? She has not com- is unusual. Run for Something, a political- mitted herself to sitting out these cases, action committee, has recruited 62,000 but now that she is in robes, and given Mr young Democrats to stand for office, with Trump’s insistence that his nominee be 500 on the ballot next week. Rita Bosworth, seated before the election, she may be a founder of the Sister District Project, swayed by the norm that “appearance of which pairs volunteers with swing dis- impropriety” is reason enough for recusal. tricts, points to Colorado as an example of Once the election is behind her, Justice the difference that candidate recruitment Barrett’s rightward influence on the court can make. Her group helped secure a may be more gradual than conservatives Democratic clean-sweep there in 2018. In hope and progressives fear. Although the June Colorado’s lawmakers passed broad court is not shy about reversing itself on police reforms. The opportunity for more occasion, there is no precedent for erasing No, not that Capitol of that is on the ballot, too. 7 The Economist October 31st 2020 United States 43

sity system’s freshmen. Even after two and a rather bad way to actually resolve the decades and a recent summer of protest state housing crisis. over racial injustice, the prospects for re- Despite the money at stake over proper- peal look tough. A poll in October from the ty-tax rules and the free-flowing Zucker- University of California, Berkeley, found berg dollars, the housing question is not that 38% of voters supported repeal against the costliest referendum campaign facing 49% who want to keep the affirmative-ac- Californians. That distinction instead goes tion ban (the rest are still unsure). Even if to Proposition 22, which would exempt this deficit is reversed, California may find app-based delivery workers from a recently the policy short-lived: the Supreme Court passed law that would relabel some gig is likely to revisit affirmative action, and, workers as full-time employees requiring given its more conservative orientation, paid benefits from companies like Uber, may severely limit the use of the practice Lyft and DoorDash (see Business). The ef- nationwide or strike it down altogether. fort is being funded by exactly those com- Polls show a better chance of success on panies, which have already spent $190m to the state’s property-tax quagmire. Proposi- escape what they see as a death-knell for tion 13 is perhaps the only state law well- their businesses in the state. Uber is so known by number alone across the coun- keen on the idea that it took the mildly dys- try. This too is facing a partial repeal. topian step of pushing its political ads di- Passed by 65% of voters in 1978, the mea- rectly to the phones of its customers, sure caps property taxes at 1% of real-estate claiming the measure will “save lives”. 7 value. As long as a property is not sold, its assessed value may grow only by the rate of Direct democracy inflation rather than the growth in market Information and elections prices. Since housing prices have surged in Gentle the past 40 years, this has meant enormous Big little lies benefits for incumbent landlords and for- propositions gone revenue for counties and schools. A repeal measure, Proposition 15, would link property tax back to reality for commercial plots, but not for residential ones. It is be- MARTINSBURG, PENNSYLVANIA California is in play on November 3rd The story of Hunter Biden and the ing richly funded by strange bedfellows: (well, sort of) diminishing returns to disinformation the teachers’ union, the seiu (another big ampaigns to ban affirmative action at labour union), and Mark Zuckerberg, Face- onald trump’s rally in Martinsburg— Cstate universities and reduce property book co-founder, who has spent around Dhis third of the day in Pennsylvania— taxes normally smack of Trumplandia. But $11m on the campaign. felt less like a political gathering than a after achieving majorities in statewide ref- The expected returns from partial re- greatest-hits concert of an ageing rocker. erendums, both these measures have actu- peal of Proposition 13 are large: just taxing Vendors selling t-shirts, buttons and ban- ally been in effect in deeply Democratic commercial property according to market ners lined the streets leading to the airstrip. California for decades. The disconnect be- prices should generate between $6.5bn and The talent trotted out all the golden oldies: tween this lingering, libertarianish regime $11.5bn in extra funds. The many million- “Crooked Hillary”, “They’ll confiscate your and the current left-leaning electorate in aires benefiting from residential exemp- guns”, “Mexico is paying for the wall”, and the state is the result of the unusually tions might be a plum subsequent target. abundant derision of a rival band (“Joe Bi- frothy version of direct democracy prac- That would exert downward pressure on den and the Democrat socialists”). tised in California, which can bind policy stratospheric housing prices in the state, As at many such events, the crowd liked decisions decades into the future. The which are stifling growth in some of Amer- his old stuff better than the new. The men- coming election is interesting less for who ica’s most productive places. tion of Mrs Clinton prompted “Lock her up” will win California’s 55 electoral-college But unless California can kick its addic- chants from the crowd. They booed duti- votes—Joe Biden will, barring apocalyptic tion to bureaucratic suffocation of new de- fully when Mr Trump mentioned his latest divine intervention—than for whether its velopment—through anonymous environ- target, Hunter Biden, his rival’s troubled liberal voters will reverse these measures. mental lawsuits, height limits, parking son. But allegations concerning the youn- Because of a ballot initiative approved requirements, land-use committee re- ger Mr Biden seem not to have shifted the in 1996 by 55% of voters, the prestigious views and zoning rules requiring some race in Mr Trump’s favour as those regard- University of California system has been apartments to be leased at well below mar- ing Mrs Clinton did four years ago. The tar- unable to deploy affirmative action for mi- ket rates—its housing crisis will continue. get is less enticing, and American institu- norities for nearly 25 years. Advocates say Already, it has made bad ideas like rent tions more prepared. that without such a scheme, minorities control more appealing. A state law called It helps that the allegations concern not have been and will continue to be perpetu- the Costa-Hawkins Rental Housing Act ex- the candidate himself, but his son. Rudy ally under-represented at the state’s lead- empts cities from many kinds of rent con- Giuliani, Mr Trump’s personal lawyer, gave ing universities. They are pushing a new trol; advocates are also aiming to revoke a cache of emails to the New York Post, a ballot measure, Proposition 16, to repeal this through the ballot box. It would be a tabloid owned by Rupert Murdoch. They the pre-existing one. Hispanics currently good way to restrict rental supply and in- seem to show Hunter exploring a Chinese make up a majority of the state’s high- crease prices for all except the lucky few, investment deal in 2017 that included a 10% school graduates, for example, but just 33% equity stake “held by h for the Big Guy”. of incoming undergraduates. African- One of Hunter’s former business partners, Americans are slightly less under-repre- Award: Idrees Kahloon, our public-policy Tony Bobulinski, stated that “the Big Guy” correspondent in Washington, has won a National sented—making up 5% of the state’s gradu- Press Foundation award for his reporting on poverty was the elder Mr Biden, who was aware of ating high-schoolers but 3% of the univer- and inequality in America. his son’s activities. 1 44 United States The Economist October 31st 2020

2 Another email purports to show Hunter Donald Trump and the Latino vote en (22%), according to Equis, a political arranging a meeting between his father consultancy. Although some pollsters dif- and an executive at Burisma, a Ukrainian Better hombres fer, most think the gender gap among Lat- energy firm that paid Hunter a lot of money ino voters is wider than those for whites or to occupy a seat on its board. Both Mr Bi- African-Americans. Latino men have den’s campaign and Hunter’s lawyer say no moved further towards him in this cycle such meeting ever happened. Mr Trump’s than just about any other group. The New camp has alleged that as vice-president Mr HOUSTON York Times/Siena College poll of Texas has A solid showing among Latino men is Biden perverted American foreign policy to Mr Trump down by 46 points with Latino a bright spot in a faltering campaign benefit his son and Burisma. The opposite women and up by a point with Latino men. appears true: Mr Biden pushed Ukraine to he last Republican presidential candi- Gender gaps between left-leaning wom- remove a corrupt prosecutor who had Tdate to lose the state of Texas, Gerald en and right-leaning men are a staple of scuppered an investigation into Burisma. Ford, choked on a delicious tamale during a voting in America and the rest of the West. Mr Biden’s 22 years of tax returns show campaign stop at the Alamo. He tried to eat But many Latinos have migrated from nothing fishy. He has called the allegations the Mexican speciality without removing countries, like Mexico and El Salvador, “garbage”, but neither he nor Hunter have its corn-husk wrapping. He won 18% of the where women tend to vote more conserva- denied that the emails were genuine. Latino vote, and the support of 130,000 tively than the men do. Foreign-born Lat- Whether they are real or fake is not the fewer Texans than Jimmy Carter. Many Re- inos are less divided by gender than native- main point, argues Marc Polymeropoulos, publicans still believe that the “Great Ta- born ones, says Rachel Stein, an analyst at the cia’s former acting chief of operations male Incident” cost him re-election. Al- Equis. This shows that Mr Trump’s outsize for the Europe and Eurasia Mission Cen- most half a century later, polls suggest a support among Latino men does not spring tre—one of more than 50 retired intelli- Republican may be on the verge of choking from some imported macho yearning for a gence officials who signed a letter arguing in Texas again. caudillo. Rather, it is a sign that Latinos are that the email dump “has all the classic ear- Donald Trump has found other ways to succumbing to American electoral quirks marks of a Russian intelligence operation”. offend Mexican-Americans. “He’s a bad as they integrate. He notes that “the use of actual material is a husband, he doesn’t pay his taxes and he Whereas Latino parents define a social hallmark of Russian disinformation cam- separated lots of children from their par- role for girls early on, boys are “left more to paigns”. In 2017 Russians hacked Emman- ents. How good that we can separate our- their own devices”, says Christina Bejarano uel Macron, then battling Marine LePen for selves from him!” says Santiago Ramos of Texas Woman’s University. Latinas are the French presidency, then released false García, a retired shoe-seller in Houston more likely to go to university, vote, volun- and genuine emails mixed together. who has already cast his vote for Joe Biden. teer and naturalise as American citizens. The hack failed to derail Mr Macron’s The fast-swelling ranks of Latinos, many of Latino men are likely to work in “quasi-par- candidacy; French law bans campaign re- whom feel that the Republican Party would tisan” industries such as border patrols, porting in the 44 hours before an election, prefer America without them, have trans- police, construction and oil, says Celeste and the emails were released just before formed Texas from a jewel in the Republi- Montoya of the University of Colorado. But that blackout took effect. No such law ex- can crown to a battleground. Mr Trump’s paths to the dignified traditional role of ists in America, but mainstream media sagging popularity among white women provider have narrowed for Latino work- outlets have been much more circumspect and the elderly is hastening the change. ing-class men just as they have for whites, than they were in 2016. Lesley Stahl, a If Mr Trump holds Texas he may have creating an opening for Mr Trump. He has prominent news anchor, told Mr Trump Latino men to thank. National polls place stopped referring to Mexican men as “bad that the allegations “can’t be verified”, so Mr Trump about seven percentage points hombres” in his rallies, and is more con- her show would not air them. Twitter behind his opponent compared with 2016. cerned with chasing the shadows of Antifa blocked the New York Post’s account, infu- But his support among Latinos has bucked than with the migration menace. riating many conservatives. the trend, even creeping up slightly. His Conversations with Latino male The allegations have been shared wide- polling in battleground states among men Trumpers in Houston reveal enthusiasm ly on Facebook, and Fox News has given (35%) is much stronger than among wom- for Mr Trump’s impenitent style and his 1 them more airtime than they did to the Wi- kileaks dump four years ago. But they have failed to spread much beyond Trump- friendly echochambers. Other bits of disin- formation from Mr Trump’s campaign, such as a deceptively edited video that pur- ports to show Mr Biden referring to Mr Trump as “George”—implying that he con- fused Mr Trump with George W. Bush, when in fact he was referring to his inter- viewer, George Lopez—have also flopped. Mr Trump brought up the allegations during his last debate with Mr Biden, but the references were unclear (nobody not al- ready steeped in the story, for instance, would have known what “the laptop from hell” was). Partisans may cheer disinfor- mation that confirms their views, as the crowd in Pennsylvania showed. But to change minds, disinformation has to catch on with a broader audience, and in this race it has not. 7 All hat and no cattle The Economist October 31st 2020 United States 45

2 business nous. Others see flaws, but also this year (the idea was scrapped), one of see past them. “You’ve got to look at the big many cases where he tried to steer official picture,” says Agustin Reyes, an Obama- business to his own firms. He has spent Trump voter who dislikes the president’s over 530 days at just one of his other re- anti-immigration stance but supports him sorts, Mar-a-Lago. As a result, officials, lob- “going after China”. Daniel Reyes Saenz, a byists, the secret service and others have fifth-generation Texan with a Led Zeppelin spent millions there. At his chandelier- tattoo on each forearm, recalls his journey heavy hotel in Washington, diplomats, from young Democrat to middle-aged Re- party operatives and businessmen have publican in a booth at Maga’s, a cosy restau- spent heavily. rant named after its Mexican owner, Mar- Outsiders’ views of America’s tolerance garita. Asked about Mr Trump’s description of corruption have shifted as a result. Tran- in 2015 of Mexican migrants as “rapists”, he sparency International said in January that replies: “I didn’t take it personally.” America ranks 23rd-cleanest of 198 coun- Latinos, who are now a larger bloc than tries, down from 18th in 2016. Since then, African-Americans, would have greater the sacking of five independent inspec- clout if they voted more. Some Democrats tors-general (who look into government grumble that the Biden campaign began se- corruption) and the forced removal of the riously courting them too late to turn them top federal prosecutor in New York (who out. Others hope that the Trump presiden- was studying people close to Mr Trump) cy is inducing a long-awaited stampede to probably heralds a further drop. the polls. The covid-19 epidemic has hit Corruption and conflicts of interest Worse than the venality has been the Latinos particularly hard. Some might weakening of institutions meant to keep wonder if certain misfortunes—a racist The art of the corruption in check. Take three examples. mass shooting in El Paso, or the botched re- The first relates to indictments of men— sponse to a hurricane in Puerto Rico— self-deal Michael Cohen, Michael Flynn, Rick Gates, would have happened under a different Paul Manafort, Roger Stone—who hung president. But not all apathetic Latinos close to Mr Trump. All were convicted of deem themselves Mr Trump’s victims. “He CHICAGO crimes. Steve Bannon, another close advis- Plain venality is bad; the kind of sleaze can build the fucking wall, I’m already on er, was charged with fraud in August. Scan- that weakens institutions is worse this side,” says Peter Macedo, a construc- dal has embroiled various cabinet officials. tion worker who has never cast a ballot. romising to “drain the swamp” was a A culture of rule-breaking is encouraged by Collecting just under a third of the Lat- Ppopular line in 2016. Four years on some the boss: in July he commuted the sentence ino vote would merely earn Mr Trump a par Republicans still cheer, pointing out ad- of Mr Stone, convicted of seven felonies. score for a Republican candidate. A defeat miringly that President Donald Trump for- Next are efforts to break those who may cause the party to conclude, not for the goes his $400,000 salary. Even critics con- would resist, such as the whistle-blowers, first time, that settling for this in the 21st cede that America continues to support professional civil servants, who testified century is a recipe for failure. An autopsy sanctions on corrupt foreigners. And de- against Mr Trump in his impeachment after defeat in 2012 called on the party to be spite Mr Trump’s widely reported wish to trial. An executive order he signed in mid- warmer towards Latinos and embrace im- scrap the Foreign Corrupt Practices Act, his October grants him the power to fire such migration reform. It cited advice on Latino government still energetically applies the officials. Matthew Stephenson of Harvard courtship from Dick Armey, a Tea Partier: law against paying bribes overseas. Law School says this “threatens to subvert “You can’t call her ugly all year round and Yet concerns about what swamp-drain- one of the most important bulwarks expect her to go to prom with you.” Mr ing really meant surfaced early in Mr against corruption in all of us law”. Trump binned that advice and won. But the Trump’s presidency. Federal prosecutors Last comes the slide of the Justice De- demographic sands will continue to shift— looked into questionable spending around partment (doj) under William Barr. One and faster still if a President Biden were to his inauguration. Among his first acts was corruption expert calls it “weaponised”, keep his promise to carve out a path to citi- to scrap a rule requiring oil and other firms saying it serves increasingly as a personal zenship for the 11m immigrants living in to say what they paid foreigners. As for defence team for the president, for exam- America illegally. those swamp-dwelling lobbyists, he ple in fending off subpoenas for his perso- Inroads should be possible into a group drained several directly into his cabinet. nal tax returns. More bizarre, the depart- that is no monolith. Earlier this year a sur- Mr Trump’s reluctance to cut ties to his ment had tried to replace Mr Trump as vey from Lake Research Partners, a Demo- business interests, or to reveal what they defendant in a defamation case, linked to a cratic pollster, asked Latinos to describe were, was unlike anything seen for over a claim of rape against him in the 1990s. A their racial identity. Are they “people of col- century. He concedes he owes hundreds of court this week rejected the manoeuvre. our” like African-Americans, endlessly millions of dollars, but will not name his This sort of creeping damage is disturb- battling discrimination? Are they, like Ital- creditors. Deutsche Bank, a German bank, ing, but can also be reversed. David Cay ians, “white ethnics” who will blend into is said to have loaned him $2bn over the Johnston, an author who has long studied society after a rancorous welcome? Or are past two decades. He is due to refinance Mr Trump’s finances, calls this moment an they “bootstrappers” who rise through some of this, but nobody knows how. Un- “anomaly”. Mr Trump’s bad behaviour hard work like Asian-Americans? Respon- like presidents since Gerald Ford, he has could yet provoke legislative changes, for dents split evenly between the three. The not released his personal tax returns. example by writing the expectation that first group is solidly progressive. The sec- He has continued to receive financial presidential candidates will disclose their ond and third groups are up for grabs if updates on the 100-plus entities—office tax returns into law and scrapping a rule treated with respect. Republicans who blocks, hotels, resorts and more—that that exempts the president from a federal want to hold Texas might heed the lesson of make up the Trump Organisation, and to law on conflicts of interest. Such talk is less Ford and his tamale: to entice Latinos prop- promote his brand. He pushed for one of thrilling than vows of swamp-clearance, erly, first remove the unpalatable parts. 7 his resorts to host a summit of g7 leaders but it could have more welcome effects. 7 46 United States The Economist October 31st 2020 Lexington Battle-hymn of the Never Trumpers

Renegade Republicans represent the breadth—and the admirable best—of Joe Biden’s coalition conspiracy” to bring down Bill Clinton, has become a liberal so- cial-media star. It helps, of course, that the Never Trumpers’ de- nunciations of Mr Trump and his Republican enablers tend to chime with long-standing Democratic criticisms. Only, given their superior knowledge of the subject-matter, they invariably im- prove upon them. A current example is “It Was All a Lie: How the Republican Party became Donald Trump”, in which Mr Romney’s former chief strategist, Stuart Stevens, analyses the degree to which the party he served for 30 years is fuelled by racism. More happily, Never Trumpers, freed of the partisan yoke, have provided most of the laughs in this grim campaign. The irreverent Lincoln Project (in which Messrs Conway and Stevens are in- volved) is chiefly dedicated to provoking the president to Twitter rage. With a nod to Michelle Obama, its pledge to Democrats is: “We go low so you don’t have to.” In their podcasts and articles—in- cluding in the Bulwark, a Never Trump news site—Mike Murphy and Tim Miller of Republican Voters Against Trump (rvat) have shown themselves to be two of the wittiest people in politics. This has addressed such a conspicuous cultural problem—the fact that American satire is dominated by lefties—that there is talk of the Lincoln Project being repurposed as an entertainment company. rvat has focused on the grittier business of moving votes to Mr he irony of the election that unleashed Donald Trump upon Biden. Its founder, Sarah Longwell, perhaps the Never Trumper- TAmerica was how normal it was. Contrary to early reports, he in-chief, began that task during the Democratic primaries. The was not elevated to the presidency by hordes of aggrieved non-vot- group’s signature ad—featuring an angry or sorrowful anti-Trump ers and Democrats. He won a similar (if slightly smaller) share of testimony from an ordinary Republican voter—may be the most the vote to Mitt Romney in 2012 from much the same Republican memorable of 2020. Having raised $40m, rvat has blitzed hun- voters. The election was decided more by Hillary Clinton’s failure dreds of such testimonies across the battlegrounds. According to to turn out Democrats in a few midwestern states than by Mr Mr Murphy, who heads the group’s Florida operation (codenamed Trump’s success in recruiting them. He won fewer votes in Wis- Orange Crush), its ads have influenced the Biden campaign’s there. consin—the state that sealed his victory—than Mr Romney. As the election looms, Democrats are having a hushed debate This time looks to be different. Joe Biden’s promise to restore about how long their discipline might outlive a Biden victory. An normality to the government has found support from an unusu- equally intriguing question concerns the Never Trumpers. Only a ally broad swathe of voters. If the polls are right, he is on course to couple would find jobs in a Biden administration. They are not win the biggest share of the vote since Ronald Reagan in 1984. Be- trusted by Democratic decision-makers. And there is no way back sides Democrats of all hues, he appears to have the backing of most to the Republican Party, where they are hated, for most. Yet some independent voters (millions of whom plumped for a third-party parts of their operations, including the Bulwark, will remain. And candidate in 2016) and around 10% of self-described Republicans. their record of raising millions of dollars for a centrist cause could Kamala Harris was right to boast in the vice-presidential debate of open up a role operating between the two parties (perhaps within Mr Biden having assembled “one of the broadest coalitions of folks the political constellation of Mike Bloomberg, an rvat donor). that you’ve ever seen in a presidential race”. Their post-partisan insights would make this as desirable as Notwithstanding the main explanation for this coalescence— their manifest capabilities. For example, even Never Trumpers the country’s overriding desire to sack Mr Trump—it is dramatic who are less critical of their old party than Mr Stevens have a and unpredicted. The Biden coalition stretches from Bernie Sand- heightened understanding of its flaws. Mr Kristol claims to have ers and the hard-left to “Never Trump” Republicans, including pol- shifted little in his politics—except in developing a new apprecia- iticians such as John Kasich and Carly Fiorina and operatives such tion of the threats African-Americans face to their lives and suf- as George Conway and Bill Kristol. Of all these diverse parts, the frage. Perhaps he might orchestrate a bipartisan drive to reform role of the Never Trumpers has been most remarkable of all. the country’s chaotic and sometimes exclusionary election laws. Not since Lyndon Johnson crushed Barry Goldwater in 1964 have so many leading lights in one party backed the nominee of the Never again other. And Goldwater was a reviled challenger. By setting them- Whatever their future holds, the Never Trumpers have played an selves against the sitting president of their own party—at a time of admirable part. Most followed their consciences into opposition more intense polarisation—the Never Trumpers have made them- at significant risk to their livelihoods. The predictable Republican selves heretics on the right while taking on the mantle of truth- slur, that they are in it for the money, is false. If they are now enjoy- tellers, authenticated by a willingness to commit career suicide, to ing success, it is because their consciences turned out to be a better almost everyone else. predictor of America’s response to Mr Trump than their cynical This has transformed their reputations. Mr Kristol, formerly former colleagues anticipated. John McCain liked to talk about the known on the left as the warmongering editor of the Weekly Stan- importance of backing country over party. Never Trumpers have dard, now gets practically mobbed on liberal campuses. Mr Con- provided an even more resounding demonstration of this than the way, a lawyer and proud former member of the “vast right-wing late senator. They deserve their brief celebrity and more. 7 The Americas The Economist October 31st 2020 47

Argentina lice demanded evidence of a negative co- vid-19 test taken within 48 hours. A harvest of grievance Such measures have not suppressed the disease. On October 19th Argentina record- ed its millionth case. It is among the ten countries with the highest cumulative caseloads. In terms of deaths as a share of CÓRDOBA the population, it ranks just outside the top A drive through the country’s breadbasket reveals that anger with ten. Whereas early in the pandemic nine- the government is intense tenths of new cases were in the capital, half orry-drivers at a roadside grill near ner, a populist former president, as his are now in the interior. Córdoba, Mendoza LVicuña Mackenna, a small town in cen- running-mate. Córdoba, the province and Santa Fe, with a fifth of Argentina’s tral Argentina, looked on appreciatively as where Vicuña Mackenna is located (see 45m people, have reported more than a Jorge Gutiérrez rode up bareback on a map on next page), voted strongly in favour third of new cases in the past fortnight. young stallion, doffed his blue boina (gau- of Mauricio Macri, the conservative in- The lockdown has weighed heavily on cho hat) and sat down to join them for cumbent who lost. The province, like most the economy. The imf expects it to contract lunch. “Normally a gaucho has little, or of the others along the route of this corre- by 11.8% this year, compared with 8.1% for nada, in common with truckers,” he said, spondent’s road trip in September west- South America as a whole. Next year it is ex- wiping sweat from his brow with a red scarf wards from the capital, is bound to pose pected to grow by just 4.9%. Despite price as he tucked into a flame-grilled matambre, problems for Mr Fernández’s Front for All controls, the inflation rate exceeds 36%. or flank steak, so rare that it was almost the coalition in crucial mid-term elections due That is partly because the Central Bank is hue of that scarf. “But now we agree this in October next year. printing money to finance the budget defi- pandemic is creating a disaster.” Aldo, a He imposed one of the world’s longest cit, which is forecast to be higher than 10% middle-aged trucker with a youthful pony- and strictest lockdowns. In addition to of gdp this year. More than half of children tail and the body of a prize-fighter, inter- shutting borders and shops it impedes in- are below the official poverty line. “This is jected: “My friend, all of us will be buried by ternal travel. To drive from Buenos Aires to an economy imploding,” says Federico this crisis if it goes on much longer.” the campo required permission from the Sturzenegger, a former president of the Discontent is louder in Buenos Aires, central government. At a roadblock on the Central Bank. “The pandemic has become the capital, and other big cities, where large border between Santa Fe and Córdoba, po- an excuse to avoid tough decisions.” protests have taken place since July. But it The toughest would be to devalue the is just as intense in the agricultural interi- peso, which would boost exports, includ- Also in this section or. That part of the country was never going ing of the grains that grow in central Argen- to be friendly towards Alberto Fernández, 48 Changing race in Brazil tina, and preserve scarce foreign exchange. the Peronist president. He was elected a But it would drive inflation still higher. The 49 Bello: MexiCoke year ago, with Cristina Fernández de Kirch- government’s policy is to control the cur-1 48 The Americas The Economist October 31st 2020

2 rency’s descent. It is officially valued at 78.3 city council in Guarulhos, in São Paulo to the dollar. On the black market the peso PARA- state, ran as white in an election in 2014, has slumped to 181. Rather than devalue to GUAY black in 2016 and brown in 2018. This year, the level set by the market, in September he is running as indigenous. the government introduced fresh currency ARGENTINA Racial categories are fluid in Brazil. It controls to restrain demand for dollars. was the last country in the Americas to Santa BRAZIL These have dismayed businesspeople and Fe abolish slavery (in 1888), but did not pass failed to stem the decline in the country’s Córdoba segregation laws or bar interracial mar- reserves. Economists believe the Central Vicuña riage. Today, a third of unions are across ra- San Bank’s net liquid reserves are close to zero. Mackenna cial lines. Many Brazilians like to think Luis URUGUAY To hold down domestic prices and fill CHILE their country is a “racial democracy”, where its coffers, the government has levied pun- Mendoza Buenos Aires discrimination is rare. Yet stark disparities ishing taxes on exporters. One landowner, persist. Non-whites earn less. They are whose family has grown soya, wheat and more likely to be shot by police and less maize near Vicuña Mackenna for genera- likely to win elections. Nearly half of candi- tions, fumes at a 33% tax on farm exports. 400 km dates in national polls in 2018 were black or His goal is to survive the country’s impend- brown, but they won just 18% of seats. ing “meltdown”. After this conversation To close the gap, the Supreme Court the government temporarily reduced ex- breadbasket believe it to be. “Collapse? Out ruled last month that parties must award port taxes on soyabeans. That seems un- of the question,” says one. The government public campaign funding and airtime to likely to improve the landowner’s mood. is striving to boost confidence and attract black and brown candidates. If 30% of a According to a recent opinion poll con- investment in dollars. It is cutting or cap- party’s candidates are black or brown, that ducted by Reale Dallatorre, 65% of people ping export taxes for minerals, oil and share of spending must go to their cam- in Córdoba and 54% in Santa Fe believe that some industrial goods as well as farm pro- paigns. Some crossovers might covet this the national government discriminates ducts. It plans to renegotiate its $44bn debt cash. “Many people who are socially white against them because they oppose the Pe- to the imf, a sequel to its deal on $65bn of become pardo when it’s politically advanta- ronists. In Córdoba 40% of respondents debt owed to private bondholders. Mr Fer- geous,” says Márcio André dos Santos, a po- said they favoured secession, a “stunning” nández has revived the idea of a “social litical scientist at Unilab, a university in finding, said the pollster. Nationally, the pact” with businesses, trade unions and the north-east. But there are other reasons. president’s approval rating has dropped civil-society groups to reduce inflation and Comparing statewide elections in 2014 from the 80s at the start of the pandemic to make labour law less rigid. with local ones in 2016, Andrew Januscz of 43% by late October. Reassurances from Buenos Aires mean the University of Florida found that candi- San Luis, west of Córdoba, is friendlier little in the interior. In Córdoba an old dates’ racial changes reflected shifts in towards the central government. Its gover- farmhand in a face-mask closes gates on a their constituencies. Candidates compet- nor, Alberto José Rodríguez Saá, is a scion herd of Aberdeen Angus cows as a young ing in a municipality that is darker than of a Peronist family. A brother was Argenti- trucker looks on, smoking a cigarette. “Do their state were more likely to change from na’s president for a week during an eco- we need a government to make the most of white to black or brown. In whiter munici- nomic crisis in 2001. San Luis’s 508,000 everything we have, as a country?” the gau- palities they tended to choose a lighter cat- people are accustomed to support from the cho wonders. His sigh is the answer. The egory. This may explain why nearly a third federal government, especially when Pero- trucker nods. At one in their sense of alien- of this year’s repeat contenders changed to nists are in charge, which is most of the ation, they tap elbows. 7 white, despite the possible financial boost time. Yet just outside the capital city Marta, to black and brown candidates. a young mother, sees little to like in its han- Race-shifting politicians are also re- dling of the pandemic. The lockdown cost Brazil sponding to the temper of the times. The her her job at a clothes shop. “Our president number of people declaring themselves talks about protecting our jobs, our health, Each race, a new black or brown in surveys by the govern- and putting food on the table,” she says as ment has recently risen much faster than she plays with her three children. “We race the population. This suggests that millions don’t see any of that.” A police escort hur- of Brazilians, including politicians, are ried visitors out of the province, “to pre- changing how they see themselves. De- vent you infecting us”, said an officer. SÃO PAULO cades of anti-racism campaigning and, Thousands of politicians are changing In wine-growing Mendoza, which re- more recently, affirmative-action policies their racial identities quires visitors to present national- and helped bring that about. provincial-government permits before en- razilian politicians hop like frogs They brought new challenges. Universi- tering, attitudes towards the government Bamong more than 30 political parties. ty quotas for brown, black and indigenous in Buenos Aires harden. There separatist Like chameleons, some change their skin students led to arguments. Students re- sentiment has a spokesman in Alfredo Cor- colour, too. More than 42,000 candidates ported each other for feigning blackness. nejo, a former governor who is now a con- in local elections scheduled for November Expulsions followed, and some admis- gressman and leads the opposition Radical 15th are running as members of a different sions panels started judging applicants on Party. In June he called for “Mendoexit”. race from the one they declared in 2016. physical features like nose-width and hair Mendoza, along with Córdoba and Santa Thirty-six per cent changed from white to type—a method uncomfortably similar to Fe, could be an “economic engine-room”, brown (pardo, mixed-race, usually with the old South African “pencil test”. (If a he says. (Currently they produce a fifth of black ancestry); 30% from brown to white; pencil placed in your hair stayed there, Argentina’s gdp.) But separation, Mr Cor- and 22% from brown to black (preto) or vice apartheid officials deemed you black.) nejo admits, will not happen any time versa. Fewer switched from white to black, Politicians who change their racial self- soon. Argentina’s constitution outlaws it. black to white, or to or from the less-com- description are also facing scrutiny. Some Mr Fernández’s advisers deny that Ar- mon categories of indigenous and Asian blame paperwork errors. Rodrigo Maia, the gentina’s plight is as dire as people in the (amarelo). Aloisio Gama, a candidate for speaker of the lower house of Congress, 1 The Economist October 31st 2020 The Americas 49

2 said he didn’t intend to change his race Civil-rights activists support the new He thinks parties should have to spend from white to pardo in 2018. Caio Miranda, campaign-financing rules. This year, for a minimum amount on all candidates. who is running for re-election as a São Pau- the first time since electoral authorities be- That would irk incumbents. Mr Miranda lo city councilman, says his party listed gan asking about race in 2014, there are advocates excluding pardos from racial him as white by mistake in 2016. His grand- more black and brown candidates than preferences, though many consider them- father was part-black, and he has come to white ones. But the policy may have unin- selves to be negro, an unofficial classifica- see himself as non-white. When he ran for tended consequences. One risk is fraud. tion whose meaning is akin to “black” as congress in 2018, he called himself par- Another is that a party could spend all the the word is used in the United States. Luiz do. The battering he has taken on social money reserved for non-white candidates Augusto Campos, of the State University of media is unfair, he says. He is not taking on a single person. It could skirt the rule by Rio de Janeiro, thinks that candidates’ ad- money from the public fund, and so does having no black or brown candidates. The verts should reveal whether they benefit not benefit from the Supreme Court’s judg- rule is well intended, but may not level the from race-based funding. Whether a politi- ment. “No one has the right to decide who playing field, says Bruno Carazza, the au- cian is “Afro-convenient” can be hard to de- is white and who isn’t,” he says. thor of a book about campaign finance. termine, he says. “Let the voters decide.” 7 Bello MexiCoke

The pandemic has strengthened politicians’ fight against Mexico’s national drink n a visit in July to Chiapas, a poor cine men light rows of candles before shire”. He gained a feel for Mexico that Osouthern state, Hugo López-Gatell, spilling Coca-Cola onto the flames to his predecessors had lacked. Mexico’s covid-19 tsar, condemned an vanquish bad spirits. Only in the 1960s and 1970s, as the unlikely culprit for deaths from the Mr López-Gatell has blamed free trade dangers of too much sugar became wide- disease. Fizzy drinks are “bottled poi- with the United States, which began in ly known, did Mexicans begin to view son”. Every year 40,000 Mexicans, the 1994, for Mexicans’ poor diets. But Coke Coca-Cola as a foreign brand. “The Secret number of recorded covid-19 victims at mattered a lot before that. Backlashes Formula”, a black-and-white film made the time, die from drinking too many, he predate Mr López Obrador’s presidency. in 1965, opens with a shot of Coca-Cola claimed. The country’s health “would be Since Mexicans popped open their first being injected into the veins of a hospital different had we not been fooled” by a bottles in the 1920s, Coke has become the patient from a hanging bottle. That pro- marketing machine that promotes pro- cornerstone of an industry. Bottlers, chief- duces “a series of nightmares” about his ducts “as if [they] were happiness”. ly Arca and Femsa, get the syrup from Mexican identity, in the words of Juan The blasé response to the pandemic Coca-Cola and handle the rest. Bottling Rulfo, who wrote poetry for the film. by President Andrés Manuel López Obra- and distribution directly employ 100,000 Those who would curb the habit are dor and his administration is a bigger people, says Joan Prats of Coca-Cola Mexi- now motivated more by concern for reason why the official death toll now co. All told, he claims, the company is public health than by anti-yanqui ideolo- stands at 90,000. But they are correct to responsible for 1m jobs and 1.4% of gdp. gy. Mr López Obrador’s market-friendly point out that sugary drinks contribute Mr López Obrador often expresses predecessor, Enrique Peña Nieto—a Diet to Mexico’s high rates of obesity and dismay that Coke reaches every village Coke drinker—imposed a fizzy-drinks diabetes, which make people more vul- while medicines do not. Vicente Fox, who tax of one peso (eight cents) per litre in nerable to the virus. Three-quarters of in 2000 became the first president of 2013. It seems to have curbed the growth Mexicans are overweight, up from a fifth Mexico’s democratic era, was Coca-Cola of consumption. In October this year Mr in 1996. Although fizzy drinks are a wor- Mexico’s boss in the 1970s. In his memoirs López Obrador’s administration thier target than some of Mr López Obra- he writes that his early years criss-crossing thwacked big black warning labels on dor’s nemeses (suppliers of renewable the country in a delivery lorry were “like Coca-Cola and other foods deemed un- energy, for example), they are also ines- those a us presidential candidate spends healthy. Oaxaca, a southern state, has capably part of the country’s culture. barnstorming from Iowa to New Hamp- banned the sale of packaged junk food to Mr López-Gatell did not single out any minors. Other states are following. brand. He did not need to. Although Coca-Cola is adaptable. According to Coca-Cola is popular across Latin Ameri- Mr Fox, the company fended off nation- ca, it is especially so in Mexico. In 2012, alisation in the 1970s with a promise the last time the Coca-Cola Company (never kept) to build a desalination plant. published data on the popularity of its In 2018 it cut a third of the sugar out of its beverages, Mexicans guzzled 50% more Coke recipe for Mexican consumers. At a per person than citizens of anywhere meeting with Mr López Obrador in Octo- else. Drinking Coke “is a ritual, like ber the company promised to buy more [drinking] red wine for the French”, says Mexican goods for its other drinks— Álvaro Aguilar, who owns burger joints juicing apples from Chihuahua rather in Jalisco, a western state. than from Chile, for example—and to Nowhere is the habit, damned by the support the country’s 1.2m pandemic- left as “Coca-colonisation”, more evident ravaged Coca-Cola-sellers. The quintes- than in San Juan Chamula, a town in the sentially American brand is determined hills of Chiapas. There four-month-olds to remain Mexico’s national drink. With suck Coke from baby bottles. In the a shove from politicians, it may succeed town’s church, indigenous Tzotzil medi- at a lower cost to Mexicans’ health. 50 Middle East & Africa The Economist October 31st 2020

Malaria and covid-19 multiple distribution points and staggered pickup times. Getting nets to all 15m Ken- Masked up, ready to battle bugs yans who live in malarial regions will take ages. There is no chance it will be done be- fore the rainy (ie, malarial) season ends in late November. As covid-19 started to spread around the DAKAR, MAIDUGURI AND THIBA world in March, malaria-watchers fretted. How covid-19 is disrupting the fight against malaria—and how health Supply chains for drugs and insecticide workers are heroically adapting were bound to be disrupted. Pandemic-in- ince covid-19 hit Kenya, Margaret ments hand out insecticide-treated bed- duced poverty was bound to make people SWanja has accumulated six grandchil- nets. Kenya does it every three years; and more vulnerable. “All the alarm bells start- dren and great-grandchildren. She lives in was scheduled to do it in April. Alas, co- ed ringing,” says Pedro Alonso of the World Thiba, a rice-growing village. Her new vid-19 scotched that plan. Kenya was under Health Organisation (who). In April a who brood are all evacuees from Nairobi, the curfew, movement was restricted and study predicted that, in a worst-case sce- Kenyan capital. Many city-dwellers believe health workers were on pandemic duty. nario, the malarial death toll would nearly it is safer to send their children to rural rel- Belatedly, as the insecticide on Ken- double in 2020, to 769,000. atives. Others hope to save money. The yans’ old bednets loses its potency, the gov- Governments and donors were jolted pandemic has destroyed jobs and closed ernment is trying again. On October 24th into action. Supply chains were indeed dis- schools, where poor children are often giv- hundreds of volunteers began a household rupted, but firms found workarounds, and en a free lunch. Dispatching kids to the census in Mwea, the electoral district that health workers found ways to fight malaria countryside, where it is easier to live off the includes Thiba, in preparation for a pilot while avoiding spreading covid-19. Some land, means fewer mouths to feed. programme handing out 60,000 nets with 90% of malaria-prevention efforts are now Yet there are hidden dangers. The irriga- social distancing. Instead of rolling up back on track, says the rbm Partnership to tion ditches in Thiba’s paddy fields breed with a truckload and letting villagers crowd End Malaria. The worst-case scenario now mosquitoes, which transmit malarial para- around to receive one, workers will have seems unlikely to come to pass, though sites from human bloodstream to human conclusive data are not yet available. bloodstream. So even if there is less coro- Still, huge challenges remain. The glo- navirus here than in a city, it is far more Also in this section bal death toll from malaria was falling be- dangerous for children. Worldwide, fore covid-19 struck (see chart on next 52 Blood and ballots in Guinea 400,000 people died of malaria in 2018, page). It would be a tragedy if progress two-thirds of them children under five. 52 Sudan makes some new friends stalled, especially since, as Philip Welkhoff Very few children die of covid-19. of the Bill and Melinda Gates Foundation 53 The battle over an airport in Israel To prevent mosquito bites, govern- notes, “Every malaria death is avoidable.” 1 The Economist October 31st 2020 Middle East & Africa 51

2 Governments in rich countries have Boko Haram to thwart vaccination cam- pushed a consistent message for covid-19. The plummeting peril of Plasmodium paigns, which its fighters imagine are a If your children have a fever, keep them at Malaria, global estimates plot to sterilise Muslims. home. “That message would be an unmiti- Some places cannot be reached, alas. Of gated disaster in countries with high ma- Cases, m Deaths, ’000 the 27 local government areas in Borno laria transmission, because a child with a 260 600 state, two have been struck off the anti-ma- fever can die from malaria in 24 hours,” larial campaign’s list. They are on the bor- says Melanie Renshaw of the African Lead- ders with Niger and Chad, which the terro- 240 500 ers Malaria Alliance, an intergovernmental rists cross at will, so they are too group. Such a child must quickly be tested dangerous. No one knows how many chil- for malaria and, if the test is positive, be 220 400 dren will die of malaria because the jihad- given anti-malarial drugs. In recent years ists think science is sinful. donors have done a good job of distributing 200 300 Most Africans disagree with Boko Ha- rapid diagnostic tests. These plastic de- ram. In a laboratory in Dakar, Senegal’s cap- vices look like pregnancy tests, only small- ital, technicians analyse the malarial para- 2010 1815 2010 1815 er. They can detect malaria within 15 min- sites found in people’s blood. Genetic Source: WHO utes, with just a drop of blood and no need information is fed into computers and for a doctor. However, each test can be used crunched. “Before genomics arrived, there only once, so donors have to keep supply- (though they cheerfully brandish modern were questions without answers,” says ing millions of them to African villages. weapons). In 2018 they murdered two Red Daouda Ndiaye, Senegal’s top malaria ex- Some of the difficulties health workers Cross midwives, for supposedly betraying pert, based at Cheikh Anta Diop University. face can be seen at El Miskin camp, near Islam by joining a Western charity. There is a correlation between the num- Maiduguri in northern Nigeria. Rows of They make it dangerous to save lives. ber of different parasites found in human small square houses of thatch and tarpau- Yet some health workers manage to distri- blood samples and the prevalence of ma- lin stretch into the distance. Kids mill bute anti-malarial drugs. They disguise laria itself. If only one kind of parasite is around. There’s a hand-washing station at themselves as villagers, sneak into jihadist found in the samples from a given village, the entrance, but no water or soap. territory, stay put for weeks or months and there may be only one source of infection. The people in the camp are among the only leave when the work is done. The who (The villagers are infecting each other.) 2m who have fled from Boko Haram, a calls them “trapped health workers”. Multiple different parasites suggests mul- slave-owning jihadist group. Because they When it is too risky to sneak in, they try tiple sources of infection: traders crossing are poor and their camp is puddle-pocked, a different ploy. Boko Haram’s subjects are a border, migrant workers coming home they are vulnerable to malaria. At one tar- not allowed to leave permanently. But they and so on. People on buses travel much far- paulin house Nana, a mother, grinds can make short trips to market towns, so ther than mosquitoes can fly. orange pills in water and presses the cup to long as they leave something valuable be- her son’s lips. Hussein, who is about four hind. “[Boko Haram] take their children A mix of old and new years old, grimaces at the bitter taste. The and tell them, ‘If you don’t come back, we Genomics yields precious information. It yucky pills were given to his family as part will kill them,’” says a local observer. So can show how the disease is being trans- of a campaign of “seasonal malaria chemo- health workers station themselves at mar- mitted around the country, and where in- prevention”. In the rainy season, when kets and, with the help of local informants, fection rates are likely to be high. This lets mosquitoes proliferate, children under make contact with the villagers for long health authorities concentrate resources five who live in the most malarial areas of enough to slip them anti-malarial pills. where they are most needed. It can also Africa are given a prophylactic cocktail of It feels odd to work in the shadows, like show where drug-resistant strains of ma- drugs once a month. It cuts the likelihood heroin dealers, but such tactics are effec- laria have popped up, so medics can change of each child falling sick by 75%. It has tive. In August Africa was declared free of the drugs they recommend in those places. helped Nigeria reduce malaria deaths from the wild polio virus, despite the efforts of By combining new tools with bednets, 153,000 in 2010 to 95,000 in 2018. pills and spraying, Senegal hopes to elimi- Many locals do not believe in covid-19, nate malaria by 2030. Ending it worldwide or dismiss it as a disease only for rich peo- The bitter burden of biting is further off. The Lancet, a medical journal, ple who fly in planes. Despite numerous Deaths from malaria, 2017 said last year that it could be done within a warnings, they crowd hazardously around Per 100,000 people 0.1 1 25 50 75 100 134 generation, if $6bn a year were spent on the health workers who come to the camps. prevention instead of $4.3bn. The covid- Those health workers must haul around No deaths driven global recession could make it hard- bags of masks and sanitisers. This costs a er to raise such sums. lot; and the masks create a psychological Anti-malarial campaigns must be sus- barrier between health workers and ordin- SENEGAL tained. “If you stop holding it down, it goes NIGER ary people, frets Ini Nglass, who leads a CHAD back up,” says Dr Welkhoff. An Asian spe- who malaria team in Borno, the state of cies of mosquito, Anopheles stephensi, has which Maiduguri is the capital. Masked found a foothold in Ethiopia and Sudan. people at the door look intimidating. And Unlike most African species, it thrives in whereas health workers would normally NIGERIA KENYA cities, where previously the disease was laugh and play with children before dish- rare. Since mosquitoes and parasites move ing out pills, this year they stand a metre and evolve, people must be adaptable. Mos- away, their reassuring smiles hidden. quitoes are being genetically modified to This makes it harder to build trust, and sire offspring that die before they are old that matters in north-eastern Nigeria, enough to start biting. In October the who where suspicion is rife. Some 1.2m people came out in favour of such research. Vic- are trapped in areas controlled by Boko Ha- tory against the vectors is not assured, but ram. The jihadists oppose modernity Sources: OurWorldInData; IHME nor is it fanciful. 7 52 Middle East & Africa The Economist October 31st 2020

Guinea down. Soon the parties became protests Condé,” tweeted Mr Diallo, after meeting and the government sent in the army. the delegation. “Let us continue our mobil- Ballots and The state admits that 21 people died in isation in the streets...NO RETREAT!” the days after the vote (including members As The Economist went to press, things bloodshed of the security forces, it says). The opposi- had calmed down—but they could easily tion claims at least 30 people, including heat up again. Guinea has a history of eth- children, have been killed. More than 100 nic trouble. Last week in Conakry a man have gunshot wounds. They were not just was stoned to death by Condé-supporting DAKAR struck by stray bullets, says Ilaria Alleg- youths, says Amnesty International, a A disputed election leads to violence rozzi of Human Rights Watch, an advocacy watchdog. His apparent crime was being of ong live democracy, long live peace,” group: “Some of them were clearly target- the wrong ethnicity in a government “Lsaid Kabinet Cissé, the head of Guin- ed.” As information trickles in from out- stronghold. Outside the capital there are ea’s electoral commission, as he an- side the capital, the death toll could rise. reports of score-settling along ethnic lines. nounced on October 24th that Alpha Condé Fatou Bensouda, the chief prosecutor of A deal that might keep things calm had won a third term as president. But on the International Criminal Court (icc), looks remote—and “will not be enough to the streets of Conakry, the capital, there says those perpetrating or inciting violence prevent another violent political crisis in was little sign of peace—perhaps owing to a are “liable to prosecution either by the the years to come”, says Gilles Yabi of the lack of democracy. Wounded protesters lay Guinean courts or the icc”. But that seems West Africa Think Tank in Senegal. If Mr next to charred vehicles. A fleet of police unlikely. For decades Guinea’s security Condé had just respected the constitution, trucks surrounded the house of Mr Condé’s forces have killed with impunity. As the democracy might have taken root. His deci- rival, Cellou Dalein Diallo, who was electoral commission prepared to an- sion to run again, says Mr Yabi, may have trapped inside for over a week after the vote nounce the results, the internet was shut set the country back decades. 7 on October 18th. down and international phone calls cut off. This is a crisis many saw coming. In It is difficult to say who really won the March the 82-year-old Mr Condé, who has election. Officially, Mr Condé gained 59% Sudan ruled for almost a decade, pushed through of the vote. But four electoral commission- a new constitution that allowed him to run ers (affiliated with the opposition) released General agreement for two more six-year terms. Dozens of peo- a report detailing “serious anomalies”. In ple were killed by security forces during one of Mr Condé’s strongholds turnout was protests about a referendum on the listed at over 100%, they say. Elsewhere changes. Guineans harbour other griev- votes were not counted because of alleged ances, too. Most of the country’s 13m peo- irregularities. The European Union also BEIRUT Sudan’s peace deal with Israel may be ple are poor, despite the presence there of questioned the result. Mr Diallo claims bad for democracy the world’s largest reserves of bauxite, there has been “massive fraud”. He says he from which aluminium is refined. will take his case to the constitutional hartoum, the capital of Sudan, holds The election pitted Mr Condé against Mr court, though he doubts its independence. Ka symbolic place in the history of the Diallo for the third time. Both draw support A delegation from the United Nations, Arab-Israeli conflict. It was there in 1967 from their ethnic groups; Mr Condé is Man- ecowas (a regional bloc) and the African that the Arab League declared their “three dinka, Mr Diallo is Fulani. The voting itself Union arrived in Guinea on October 25th nos”: no peace with Israel, no recognition, was relatively calm. The trouble started the hoping to mediate a solution to the crisis. no negotiations. Unity was short-lived. next day, after Mr Diallo claimed victory, But they lack credibility. ecowas said little Egypt said yes to peace in 1978, followed by citing photos his party had apparently tak- when Mr Condé changed the constitution, Jordan in 1994. But for half a century most en of results posted outside polling sta- and called the election lawful. “I do not ex- Arab states refused to recognise Israel. tions. When his supporters began celebrat- pect much from these emissaries who, in On October 23rd the government in ing in the streets, the authorities cracked reality, have always sided with Alpha Khartoum abandoned the Khartoum decla- ration, agreeing to normalise ties with Isra- el. It was the third Arab state to do so this year, after the United Arab Emirates (uae) and Bahrain. They saw a compelling strate- gic interest: Israel makes a reliable partner against both Iran and an emerging Sunni Islamist axis led by Turkey. For Sudan’s decision, though, one must credit President Donald Trump’s cynical style of diplomacy. In 1993 America labelled Sudan a state sponsor of terrorism and im- posed sanctions. In recent years, as Sudan sought to improve ties with the West, many in Washington argued that it was time to reverse the decision. Their case grew stron- ger after last year’s popular coup against Omar al-Bashir, the longtime despot. Sanc- tions seemed to punish the new govern- ment for the sins of the old. But the Trump administration insisted that Sudan must recognise Israel in ex- change. In public it has tried to make the Where there’s smoke, there’s ire quid pro quo less explicit. Sudan agreed to1 The Economist October 31st 2020 Middle East & Africa 53

2 pay $335m into a fund for American victims Israel’s new airport of terrorism to win removal from the state- sponsors list; the deal with Israel was pre- sented as separate. In private, though, one Not in my wetland was a demand for the other. And Sudan had little choice: it desperately needs foreign JERUSALEM An unlikely coalition takes on the Israeli air force aid and investment. The decision puts some of its leaders in ird-watchers in northern Israel are half of Israel’s territory. It likes that. an awkward position. Unlike Bahrain and Bspoiled for choice. Griffon vultures, But that site also makes it a good the uae, Sudan is meant to be a nascent imperial eagles and long-legged buz- choice for the new airport. Ramat David democracy. After the coup the army agreed zards swoop over the Golan Heights. is surrounded by marshlands, making to a power-sharing arrangement with civil- Cranes, cormorants and kingfishers building expensive. Nevatim, by con- ians, meant to culminate in 2022 with an congregate in the wetlands around the trast, already has runways long enough elected government. The transitional Sea of Galilee. And flying over them all for big passenger and cargo planes. prime minister, Abdalla Hamdok, insists are the biggest birds in the sky, Israel’s Moreover, it is surrounded by sand, that recognition of Israel must wait until f-16 fighter jets, which climb steeply leaving abundant space for terminals then. But the men in uniform want to from the runways of Ramat David air- and future expansion. plough ahead. base—in order to avoid sucking any Local officials in the south, most from Mr Bashir governed in concert with the feathered friends into their engines. But the conservative Likud party, are clam- Islamists who backed his coup in 1989. He the skies in the north may soon look ouring for the project, which they hope also kept close relations with Iran. The Gulf different, if the air force gets its way. will bring jobs and infrastructure. Miri states consequently treated him as a pari- Israel needs a new airport. About 90% Regev, the transport minister, also from ah. Around five years ago, however, they of all travel to and from the country Likud, stymied plans favoured by the spotted an opportunity to flip him. Sudan’s moves through Ben-Gurion Internation- fighter-jockeys and is working on new economy was floundering. The south se- al Airport, just outside Tel Aviv. It serves ones that put the airport in the south. In ceded in 2011, taking most of the country’s the entire population of 9.2m and most her previous post, as culture minister, oil reserves with it. The Sudanese pound of the millions of tourists who visit each Ms Regev was the bane of liberals. But lost more than 50% of its value between year. Before covid-19 the airport was now she has their support. Northern 2011 and 2015. Iran, an economic omni- close to full capacity. Nearly everyone farmers and nature-lovers, many of shambles itself, offered no succour. agrees that another is essential. They just whom are scions of the old Labour move- So in 2015 Mr Bashir sent troops to join can’t agree on where to build it. And the ment, don’t want to see their fields and the Saudi-led war in Yemen against the fight is making for strange bedfellows. wildlife sanctuaries paved over. Houthis, an Iranian-backed militia. Saudi With land in central Israel scarce, the Israel’s air warriors are not used to Arabia then deposited $1bn in Sudan’s cen- choice has come down to two air-force such opposition. “They want the Negev tral bank. The uae invested billions in the bases: Ramat David in the north or the to remain their playground, and will try country as well. Mr Bashir cut ties with much larger Nevatim in the south. The and wait this transport minister out,” Iran. Breaking with Islamists proved more air force would rather part with Ramat says an officer in the army (which some- difficult, though, as he feared alienating David, which hosts only two f-16 squad- times resents the better-equipped air powerful allies. In 2017 he refused to join rons. Nevatim, by comparison, hosts six force). Ms Regev, for her part, is talking to four Arab states (Bahrain, Egypt, Saudi Ara- squadrons, which include heavy-cargo the Ministry of Defence before bringing bia and the uae) in imposing an embargo and tanker-reconnaissance aircraft, as the issue to the prime minister, Binya- on Qatar. The small Gulf emirate, a suppor- well as f-35 stealth fighters. The location min Netanyahu (also of Likud). But she ter of Islamists across the region, was a big of Nevatim, in the middle of the Negev has made a point of saying that it is a investor in Sudan. desert, gives the air force almost exclu- “civilian airport”—the implication being When the army tossed out Mr Bashir sive access to airspace over more than that civilians will decide where it goes. last year, the uae was happy to see him go. It is not terribly eager to see democracy emerge in Sudan, though—or any other Arab country. It helped orchestrate the coup in 2013 that toppled Egypt’s only democratic government, led by the Muslim Brotherhood, and replaced it with an au- thoritarian general, Abdel-Fattah al-Sisi. It has also backed a wannabe Sisi, Khalifa Haftar, in his unsuccessful quest to con- quer Libya. If ties with Israel, unpopular with some in Sudan, undermine its transi- tion to democracy, the uae won’t mind. For Mr Trump the announcement seemed like a bit of pre-election politics. In a televised phone call he asked Binyamin Netanyahu whether “Sleepy Joe”—his op- ponent, Joe Biden—could have negotiated a similar deal. (He looked annoyed when the Israeli prime minister gave a dip- lomatic answer.) The agreement is unlikely to sway voters in Kenosha. But it may help Facing a new and fearsome foe—bird-watchers sway the balance of power in Khartoum. 7 54 Asia The Economist October 31st 2020

Indian politics it would no longer give the state an annual $135m earmarked for rural development. Central bark In theory, responsibilities are neatly di- vided between the different levels of gov- ernment, but in practice there are inevita- ble, contentious overlaps. Farming is ostensibly a state subject, for example, but in practice Punjab in particular has profit- DELHI ed mightily from the centre’s investment in Relations between the states and the national government are fraying irrigation and subsidies for grain. Hence its or three weeks farmers in colourful territories”, it is not just prickly Punjabis farmers are less keen on reforms than oth- Fturbans pitched camp atop the train who suspect other forces are at play. Their ers across India, a resentment Congress is tracks that stitch the paddies and wheat state happens to be governed by the Indian happy to stoke. fields of Punjab. Brewing chai, roasting National Congress, the staunchest foe of When provoked by states in earlier de- chapatis, playing cards or simply dozing, prime minister Narendra Modi’s Bharatiya cades, the centre frequently responded by the protesters froze traffic across the state’s Janata Party (bjp), which rules at the centre invoking a constitutional clause that al- entire 2,000km rail network. Their rail roko as well as in 17 states. Just as Mr Modi has lows it to declare a state government un- ended on October 21st, after the state legis- brought a new style of hardball politics to able to function properly, and so to disband lature voted to resist a barrage of contro- Indian elections, complete with sectarian it and impose direct rule from the centre versial farm reforms that India’s national incitement and online trolling, his govern- temporarily. That sort of disruption, typi- parliament had passed in September. Yet ment has taken a tougher line with disobe- cally made following an indecisive elec- the trains still did not move. The central dient states. In case Punjabis were in doubt tion or internal unrest, has grown rarer government’s rail ministry has held back that they were being punished for rejecting with time. But with covid-19 deepening an goods traffic, blocking deliveries of coal to the farming reforms, the centre announced economic slump, frictions have inevitably Punjab’s power plants, sprockets to its bi- grown. On issues ranging from taxes to the cycle factories and fertiliser to its farms. increased meddling of state governors Also in this section The centre, as Indians commonly call (who are appointed by the centre but the federal government in Delhi, cites se- 55 Street food in Singapore whose role is meant to be largely ceremoni- curity as the reason for the stoppage, which al), relations between the two levels of gov- 56 Japan’s climate pledge began to ease on October 28th. But with ernment have soured. tension on a range of issues mounting in 56 Evading censorship in Pakistan “This is the lowest ebb of federal rela- recent months between the national capi- tions in this country,” asserts Haseeb 57 Banyan: Sri Lanka’s potent president tal and India’s 28 states and eight “union Drabu, a former state finance minister who 1 The Economist October 31st 2020 Asia 55

2 once worked closely with the bjp. “Never Street food in Singapore put up with such conditions often live has the central government been so repres- hand-to-mouth. When Yu Ting Gay and sive, never so brazen.” Mr Drabu should Out with the new Alex Ho opened their Italian-Japanese fu- know. His state, Jammu & Kashmir, no lon- sion stall in 2017, they hoped to earn ger exists. In a series of moves that showed S$2,000 ($1,474) a month each. Most of the a breathtaking disregard for states’ rights, time they made half that. “Our pockets Mr Modi last year in swift succession im- were quite tight,” says Ms Yu. “For myself, posed direct rule on the state, sliced it into SINGAPORE it’s only going to work and going back The state helps old hawkers but not two parts, demoted each half to the status home, so we meet up with our friends less young ones, with predictable results of a union territory, and placed dozens of than before.” local politicians under house arrest. On Oc- ome countries build palaces or tem- Older hawkers have an unfair advan- tober 27th the centre announced a stun- Sples as monuments to their greatness. tage. Many of those who started out in the ning set of new measures for the rump ter- Singapore builds hawker centres. In these 1970s and 1980s pay discounted rents: $200 ritory of Jammu & Kashmir, unilaterally open-air food courts lined with stalls and a month on average. They still account for revoking a dozen local laws and modifying formica tables it is possible to taste Singa- 40% of the 5,500 stalls leased by the gov- another 26. pore’s history. Dolloped unceremoniously ernment. Younger hawkers must pay mar- For most states, money is the main bone on a plate or banana leaf or scooped steam- ket rates: $1,250 a month on average. But a of contention. The signal achievement of ing into a plastic bowl, dishes such as roti report published by the Ministry of Trade Mr Modi’s first term in office was the re- prata and Singapore laksa conjure up the in 2015 found that, even though younger placement of a hodgepodge of local sales Indian and Chinese migrants whose own hawkers pay more rent, and have on aver- taxes with a national goods and services tax cuisines, slowly over centuries, mingled age 15% higher operating costs, they do not (gst). In agreeing to it, states largely gave with that of the indigenous Malays. And pass those costs on to their customers, up their right to impose taxes in exchange since one can eat one’s fill at a hawker cen- probably because of stiff competition. for the promise of full compensation from tre for the price of a flat white, it is no sur- With classic dishes like Hainanese the centre. But as gst revenue has plum- prise that eight in ten Singaporeans visit chicken rice costing just S$3, hawker food meted—the economy shrank by an alarm- such establishments at least once a week, is cheaper than chips. The government ing 24% in the second quarter—the centre according to a survey conducted by the Na- wants to keep it that way. Singapore’s wel- has grown reluctant to pay. Meanwhile, be- tional Environment Agency in 2018. Singa- fare state is parsimonious, and the authori- cause public health and income support pore is so proud of its street food that it ties have long regarded hawker centres, are largely state rather than federal respon- hopes unesco will include it in its cata- with their “almost third-world prices”, as sibilities, it is the states that have had to logue of humanity’s most precious arts. “one of our safety-nets”, as Ravi Menon of boost spending the most. The un’s heritage inspectors had better the central bank has said. The expectation It does not help that the centre has re- tuck in fast. The median age of the chefs is that hawker food will be cheap is shared by sorted to threats, bluster and parsimony, 60. A government report published in 2017 consumers. Several months after Douglas insisting, for instance, that for every small warned that there were “too few [aspiring Ng opened A Fishball Story in 2013, he de- increase in the limit on what states may hawkers] to be able to sustain the hawker cided to increase the price of his S$3 fish- borrow from the central bank they must trade in the long run”. When old masters ball soup by 50 cents because his margins implement a new reform imposed from die, many take their recipes with them, were so thin. Sales fell by half, he says. Delhi. At the same time the centre has says K.F. Seetoh, a champion of hawker Many youngsters get noticed and pushed states to borrow commercially. The food. Only Singaporean citizens can work thrive. Mr Ng won an accolade from Miche- central bank projects that state borrowing in hawker centres managed by the govern- lin in 2016 and received a flood of offers of is likely to surpass the centre’s this year, ment, the vast majority. But young Singa- investment. Others are not so lucky. Just leaping from an expected 2.8% of gdp to poreans have little appetite for toiling in over a year after Ms Yu’s stall opened, her over 4%. piping-hot stalls for long hours and little hawker centre closed for renovations. She Money squabbles are bad enough, but pay. “It’s near impossible to get manpower and Mr Ho had not managed to save several states are also bridling at overbear- for this trade,” Mr Seetoh wrote in January. enough to weather the three-month hiatus, ing political interference from Delhi. After The few young Singaporeans willing to so were forced to close for good. 7 police in the state of Maharashtra launched a probe into the alleged manipulation of ratings by a pro-bjp television channel, the Central Bureau of Investigation, a federal agency, abruptly launched a similar probe in a different state. Fearing its probe would be subsumed, the government of Maha- rashtra, where the bjp is in opposition, abruptly withdrew consent for the cbi to operate in the state. Four other states have already erected similar barriers, and more are threatening to. Several may also follow Punjab in blocking federal laws, such as the farm reforms, that they don’t like. Such churn and agitation is part of the normal political back-and-forth in a huge, wildly diverse country. But the bjp’s fond- ness for subterfuge and coercion, instead of persuasion and consensus-building, is making that process more turbulent than it has been in decades. 7 No canteen for young men 56 Asia The Economist October 31st 2020

Climate policy in Japan and 27% from natural gas. Those bench- counts for 48% of industrial emissions, is a marks are set every three years by a com- laggard: only 24% of its output is made in Not a carbon copy mittee convened by the Ministry of Econ- cleaner electric furnaces, compared to 40% omy, Trade and Industry (meti). in Europe and 68% in America. Discussions on the next iteration began in In his speech Mr Suga spoke loftily of October; they will conclude by the sum- the power of innovation. But rei reckons mer. The assumption is that the target for that whereas the eu has directed 30% of its TOKYO renewables will jump. “In the past, they de- covid-19 stimulus package towards cli- The government promises to make veloped energy policy first, then thought mate-related projects, in Japan the figure is Japan carbon neutral by 2050 about climate reduction policy—this time less than 0.2%. Mr Suga reportedly plans to uga yoshihide, Japan’s new prime the order is reversed,” says Ms Kameyama. unveil new stimulus measures soon—a Sminister, came to office in September In the first half of the year, amid de- chance, perhaps, to prove his concern for promising continuity with his predeces- creased demand for power in the covid-19 the environment. As Mr Sugiyama puts it, sor, Abe Shinzo. But in one way he has al- pandemic, Japan reached the current target “If you’re serious, show us the money.” 7 ready distinguished himself: during his for 2030, generating 23% of its power from first speech to the Diet as prime minister, renewable sources. Pressure groups want on October 26th, he promised to reduce Ja- the target lifted as high as 50%. Such a rapid Press freedom in Pakistan pan’s net emissions of greenhouse gases to shift would require not just huge invest- zero by 2050, breaking with Mr Abe’s foot- ments, but also changes in the rules to News whose dragging on climate change. That brings Ja- make it easier to access the grid. Incum- pan, the world’s third-biggest economy bent power companies are sure to resist. printing causes fits and fifth-biggest emitter, with a relatively The rest of the energy mix is the subject poor record on emissions cuts (see chart), of similar debate. In July meti, typically a in line with Britain and the European Un- defender of fossil fuels, announced plans ISLAMABAD Despite the cowed media, journalists ion and slightly ahead of China, which last to shut 100 inefficient coal plants by 2030. find ways to get their stories out month promised zero emissions by 2060. Yet 17 new coal plants are still due to be Japan had previously pledged to be car- built in the next five years. Putting a stop to hen matiullah jan was abducted in bon neutral by an unspecified date in the that, as Mr Suga’s goal almost certainly en- WJuly outside the school where his second half of the century. That woolliness tails, would require the government to wife works, footage from security cameras had confused bureaucrats and investors stick its oar in. So too would rehabilitating captured much of what happened. A group alike. The new goal is clearer, but Mr Suga nuclear power. Nuclear plants account for of men jumped out of three cars and forced will have to prove it is not just an empty just 6% of electricity generation, down the freelance journalist into one of them pledge. “The government doesn’t yet have a from 25% before the Fukushima disaster in before zooming off. At least one of the as- clear vision as to how to achieve the target, 2011. Restarting plants that have been sailants wore a uniform and carried a gun. but the target is a way to start the conversa- mothballed since then would be popular What appeared to be a police car and an am- tion,” says Kameyama Yasuko of the Na- with power companies, but not voters, who bulance drove off with the attackers. tional Institute for Environmental Studies. see nuclear energy as dangerous. This week the authorities informed a There are reasons to be optimistic. By Japan also has ample scope to cut emis- court that they had not been able to ascer- the time of Mr Suga’s speech, more than 160 sions in construction, transport and indus- tain who had kidnapped Mr Jan, who was local governments, representing 62% of try. “It is a myth that Japan is an energy-effi- released unharmed 12 hours later. That, the population, had already pledged zero cient country,” argues Ohbayashi Mika of Pakistanis assume, is because Mr Jan was emissions by 2050, up from just four a year the Renewable Energy Institute (rei), a kidnapped by the armed forces, over which ago. Many leading Japanese companies, think-tank in Tokyo. Single-pane windows the civilian government has little control. from consumer brands like Sony and Pana- and thin walls are commonplace. A govern- The army has lots of ways of discouraging sonic to industrial firms like Sumitomo ment survey in 2015 found that only 8% of journalists from reporting on awkward Chemical, have adopted ambitious emis- housing met the latest conservation stan- topics. Phone calls or WhatsApp messages sions targets. Even Keidanren, a powerful dards, while 35% had no insulation at all. from unknown numbers will instruct business lobby that is a bastion of heavy in- Japanese carmakers pioneered hybrid ve- them to let certain subjects be. Colleagues dustry, has started talking about decarbon- hicles, but have been slow to make purely will pass on friendly advice. If all else fails, isation. “The energy-intensive industries electric cars. The steel industry, which ac- an abduction or beating by mysterious as- that oppose climate mitigation have be- sailants usually does the trick. Owners of come a minority,” says Ms Kameyama. media outlets are also pressed to skirt cer- The targets set by other countries seem A long and winding road tain topics and to silence or dismiss pesky to have influenced Mr Suga. “It’s kind of Greenhouse-gas emissions*, 2000=100 reporters. Those who resist find that shameful for Japan to be lagging behind 105 advertising dries up or, in the case of out- China,” says Sugiyama Masahiro of the spoken broadcasters, their channels are Japan University of Tokyo. Joe Biden has prom- 100 simply taken off the air. ised to make America carbon-neutral by Hearteningly, though, Mr Jan and oth- 2050 if elected president; Japanese officials 95 ers have carried on reporting, and have do not want to be left bucking a global con- found ways to communicate their findings sensus. (Two days after Mr Suga’s an- 90 outside the cowed media. In early October nouncement, South Korea also pledged to Mr Jan posted an interview on his YouTube United States be carbon-neutral by 2050.) 85 channel with Bashir Memon, a former head The obvious first step is to raise targets of the Federal Investigation Agency, Paki- European Union for renewable energy. The government cur- 80 stan’s answer to the fbi. Mr Memon alleges rently projects that 22-24% of electricity 2000 05 10 1815 that before his retirement last year he was will come from renewables in 2030, along Source: OECD *Excluding land use and forestry summoned to the “highest office” and in- with 20-22% from nuclear, 26% from coal structed to file trumped-up terrorism cases1 The Economist October 31st 2020 Asia 57

2 against opposition activists. The report revealed that the general’s eral Bajwa, who disputes several elements By the same token, Ahmad Noorani, a brothers, wife and sons had amassed busi- of Mr Noorani’s report, eventually resigned veteran investigative journalist, had to use ness interests worth tens of millions of as Mr Khan’s aide, although he remains the his own website to publish a report in Au- dollars as he rose through the ranks. Mr head of the cpec Authority. gust on the business empire of the family Noorani did not allege any corruption on The internet and social media are not a of Asim Saleem Bajwa, a retired general the general’s part, but did point out that panacea for Pakistan’s embattled reporters. who now heads the China Pakistan Eco- none of the holdings in question had been Mr Noorani’s website has suffered from nomic Corridor (cpec) Authority, a govern- mentioned in the general’s official declara- cyber-attacks. Allegations that he is an In- ment agency supervising a vast network of tion of assets. dian agent have scared off some collabora- infrastructure investments tied to China’s Newspapers and television channels at tors and donors. He is hesitant to return Belt and Road Initiative. At the time of pub- first ignored Mr Noorani’s and Mr Jan’s re- from America, where he is on a fellowship, lication, General Bajwa also advised the ports, but they spread like wildfire on so- because he has received death threats. In prime minister, Imran Khan, on matters re- cial media nonetheless. In the end, the 2017 he was badly beaten. The authorities lated to the media. mainstream media aired the stories. Gen- were not able to identify his attackers. 7 Banyan Gotabaya, caudillo

Sri Lanka’s president is amassing personal power ever say Gotabaya Rajapaksa leaves propelled him to the presidency. government and economic develop- Nthings to chance. After decisively Now the 20th amendment looks in- ment. In dealing with the pandemic, he winning the presidential election last tended to cement Rajapaksa rule for years has indeed introduced sensible mea- November, putting family in charge of (even though Gotabaya remains bound to sures to help the poor. Yet personalised important government departments, two terms). Sri Lankans with dual nation- rule is more the Rajapaksa mark. Recent- suspending Parliament and finally win- ality may now sit in Parliament, or indeed ly the president was indignant when, ning postponed elections in early August be president. This paves the way for anoth- having ordered that one village should in a landslide for his Sri Lanka Podujana er brother, Basil Rajapaksa, the family’s have access to another’s clay pit, a local Peramuna (slpp) and supporting parties, political strategist, to enter Parliament. official asked for written instructions— still the president insisted that “obsta- Mahinda, currently prime minister, is not was his verbal command not enough? cles” to his authority remained. Changes in good health, and Basil is his obvious Meanwhile, he has named 66 ministers. to the constitution were the only sol- replacement—and eventually perhaps Patronage networks are multiplying like ution. Parliament has granted his wish, Gotabaya’s. Curiously, several slpp mps the alimankada, wild-elephant pathways creating a near-absolute presidency with resented Basil’s grip on the party enough to that criss-cross the island. Such net- the 20th amendment. complain about the provision. (Why not works, writes Asanga Welikala of Edin- As so often in Sri Lanka’s turbulent simply renounce American citizenship? A burgh Law School, undermine “critical history, the amendment in effect annuls plan b is always advisable.) separations between state, society, econ- its predecessor. The 19th amendment As for the president, the amendment omy, and the private sphere”. was a reaction to the overweening rule of now allows him to dissolve Parliament A Gotabaya presidency makes a return Gotabaya’s brother, Mahinda Rajapaksa, early, hire and fire the prime minister and to the earlier hounding of critics pos- president from 2005 until his surprise appoint judges as well as the heads of the sible. Out of public view, Mr Rajapaksa’s defeat in 2015. With Gotabaya, a former election, anti-corruption and other sup- notorious irascibility—he flies off the army officer, in charge of defence and posedly independent commissions. Al- handle and bears grudges—is returning. intelligence, he had prosecuted the even though Parliament can opine on these More probably, his martinet notions of a more brutal end to an already bloody appointments, it cannot block them. “disciplined society” risk dashing 26-year civil war. After the war’s end, What will Gota’s absolutist presidency dreams of a plural, devolved Sri Lanka in triumphalism reigned and critics were mean? He promises brisk, technocratic which the Tamils who form a majority in intimidated. The amendment limited the north and Muslims who make up a the president’s powers, expanded those tenth of the population are as much a of the prime minister, accountable to part of the polity as Sinhalese. Parliament, and strengthened indepen- True, Mr Rajapaksa promises a whole dent oversight of the police and the new constitution in the coming year that judiciary. More was promised by Presi- “fulfils the people’s wishes” better. It is dent Maithripala Sirisena and his prime possible a new constitution could con- minister, Ranil Wickremesinghe, in- tain a kinder accommodation for Sri cluding inter-ethnic reconciliation and Lanka’s minorities. Yet for now, Mr Raja- devolved government. Yet so dysfunc- paksa has made explicit the link he sees tional became their relationship that between an all-powerful state and the intelligence about impending terrorist centrality of Buddhism, whose more attacks was ignored. Suicide-bombers chauvinist priests he courts. Of the 66 struck on Easter Sunday last year, killing ministers only three are Tamils and just 269. Gotabaya’s message of security and one is a Muslim (there is only one wom- competence, along with jabs at the Mus- an, too). The message is stark: in the lim and Tamil minorities designed to ethno-nationalist state, everyone must please the Sinhalese Buddhist majority, know their station. 58 China The Economist October 31st 2020

Leadership succession taking over. Mr Hu got the job three years before he became general secretary. With- Xi’s not going out experience of how military command works, a party chief may find it hard to as- sert control over the army. There are still two uniformed vice-chairmen. But the continuing absence of a civilian at that lev- el means China has no leader-in-waiting A meeting of China’s most senior officials has endorsed economic plans for years when time has all but run out to start learn- ahead, but left the question of succession unanswered ing the ropes before the party’s 20th con- lmost exactly ten years ago, in a typi- succession. Mr Xi had been expected to fol- gress in 2022. A civilian vice-chairman Acally roundabout way, China made low Mr Hu’s lead. would also be a member of the Politburo’s clear who its next leader would be. A man For anyone still in doubt about Mr Xi’s Standing Committee. But a reshuffle of that who, not long earlier, had been far less fam- intentions, the party’s just-concluded seven-member body in 2017 did not in- ous than his folk-singer wife was made meeting gave a hint as obvious as the one in clude anyone of the usual sort of age of vice-chairman of the Communist Party’s 2010 that heralded his rise to power. A com- someone being groomed for succession. Central Military Commission. Sure muniqué issued on October 29th, at the There are occasional complaints in Chi- enough, two years later, he took charge of end of the four-day conclave of its roughly na about Mr Xi’s seeming determination to the party and the armed forces and became 370-strong Central Committee, said the hold power indefinitely. In August Cai Xia, China’s most powerful ruler since Mao Ze- gathering had endorsed “recommenda- a public intellectual, was expelled from the dong. Were precedent to be followed, a tions” for a five-year economic plan and a party and stripped of her pension by its meeting of senior officials in Beijing this blueprint for China’s development until most prestigious academy for training week would have provided just such a clue 2035 (full details of these had yet to be pub- leaders, the Central Party School, where she about who would succeed Xi Jinping. It lished when The Economist went to press). had studied and taught for 20 years before provided nothing of the sort. But it made no mention of any new civilian retiring. Among comments that apparently That is no surprise. When China’s con- appointment to the military commission. resulted in her punishment was her de- stitution was revised in 2018 to scrap a limit The post of vice-chairman is an impor- scription of Mr Xi’s scrapping of the two- of two five-year terms for the post of state tant one for any future leader to hold before term limit as something the Central Com- president, which Mr Xi also holds, it was a mittee had been forced to swallow “like dog clear signal that he did not wish to step shit”. Ms Cai is now abroad. Also in this section down when his ten years were up. As head But in so far as can be guessed from Chi- of the party, he was not bound by any term 59 The world’s largest census na’s opaque political workings, Mr Xi re- limit. But his predecessor, Hu Jintao, had mains as powerful as ever and seemingly 60 Chaguan: Chicken and egg given up both party and state roles in quick fit enough to keep going well beyond 2022. 1 The Economist October 31st 2020 China 59

2 He will turn 69 that year—by convention crucially, who is close to Mr Xi. Leaving this plans to substitute door-to-door visits with too old to remain in office, but that is not a choice until closer to the time may not phone calls and online forms, if census of- hard-and-fast rule. While liberals like Ms bother him, however. Since Mr Xi became ficials in some places have to work around Cai grumble—as, no doubt, do those who leader, the prime ministership has become local outbreaks of covid-19. Whereas many have suffered as a result of his ruthless less important. He has taken over its core Chinese shy from the box-tickers, some are campaign against corruption and his polit- responsibility: directing the economy. hoping to use this year’s exercise to help ical purges—there is little sign of strong The biggest unknown is who would make themselves more visible. A gay- anti-Xi sentiment among the public. emerge as China’s paramount leader if Mr rights group in the southern city of Guang- In some ways this has been a good year Xi suddenly becomes unable to rule, as a re- zhou is encouraging people in same-sex re- for Mr Xi, with many Chinese proud of their sult of death or illness. There is no clear lationships to make sure census-takers re- country’s success in crushing covid-19 and line of succession within the party—with- alise they are a couple, and to insist that getting the economy back on track. Party out Mr Xi, no one in the currently 25-mem- they write this information into an open propagandists have been working hard to ber Politburo would stand head and shoul- field in the census form. boost such sentiment. The term “people’s ders above the rest. Younger leaders, such The findings from China’s previous leader”, rarely applied to his post-Mao pre- as the party chief of the south-western re- census helped persuade the party that it decessors, is sometimes used in state me- gion of Chongqing, Chen Min’er, who has had to loosen its one-child-per-family dia when referring to Mr Xi (the Politburo long been tipped as a forerunner for post-Xi policy. Since 2016 Chinese couples risk used it for the first time last December). leadership, may lack sufficient seniority to punishment only if they have more than It may also, however, be an anxious take over in an emergency. Mr Xi’s sudden two. Yet the total number of births is de- time behind closed doors. Party congresses departure could plunge China into politi- clining even faster than it was before the rubber-stamp decisions that have been cal turmoil. change. Last year the country produced the made in secret beforehand. Even though The Central Committee’s just-conclud- fewest babies since 1961, when its popula- the next one is still two years away, the ed meeting may have made Mr Xi’s plan to tion was only half as large. The birth rate, of build-up is a tense time in Chinese politics retain power in 2022 even more certain. It 10.48 babies per 1,000 people, was the low- as leaders bargain over policy and appoint- has done nothing to instil confidence in est since the party took power in 1949. ments. The party’s 18th congress, at which China’s political future. 7 The government reckons that China’s Mr Xi came to power, followed a protracted working-age population has been shrink- political struggle highlighted by the dra- ing since 2012. The share of people aged 60 matic downfall of Bo Xilai, a contender for Demography and over has risen from 10.4% at the census highest office. There is no sign that Mr Xi in 2000 to an estimated 18% last year; this faces another such challenge. But in July Go figure group could make up one-third of the pop- the party launched a pilot scheme in a ulation by 2050. The Chinese Academy of handful of places for a new purge, this time Social Sciences, a government think-tank, aimed at the judiciary, police and secret po- guesses that the number of Chinese will lice. One stated aim is to root out “two- peak at 1.44bn in 2029. But some demogra- faced people” who are disloyal to the party. phers think that the population may al- It will be rolled out nationwide next year ready have started to shrink. The world’s largest census begins and wrap up early in 2022, a few months Preliminary results from this year’s before the 20th congress. n the coming weeks nearly every Chi- census will not be released for some It is not yet clear how Mr Xi intends to Inese house will receive a knock on the months. But it does not require an army of exercise his power beyond the congress. He door. On November 1st 7m functionaries enumerators to see that the coercive regu- could simply keep his current positions. will begin carrying out the country’s ten- lation of Chinese couples’ fertility is as ab- Another rumoured option is that he might yearly census, a task that will take them un- surd as it is cruel. In June Chinese journal- prefer an even grander title than that of til December 10th. The last such count, in ists reported that a couple in Guangzhou general secretary, which has not always in- 2010, found that China’s total population had been fined 320,000 yuan ($48,000) dicated that the holder wields supreme was growing only half as swiftly as it did after declining to abort their third child—a power. In the 1980s Deng Xiaoping, whose between 1991-2000. This year’s megacount sum equal to nearly three years of their authority stemmed from his position as will provide further details about the coun- household income. Someday, perhaps, chairman of the military commission, try’s demographic crunch. Chinese people will be allowed to make sacked two general secretaries; Mr Hu be- Censuses are difficult everywhere, but their own reproductive choices. 7 came general secretary in 2002 but re- China’s is especially fraught. Its hundreds mained overshadowed by his predecessor, of millions of migrant workers are tricky to Jiang Zemin, who held on to the crucial count, not least because some fear repri- What goes up military position until 2004. Mr Xi could sals for having moved to parts of the coun- Total population*, bn revive the title of party chairman (abol- try that the Communist Party would like 2.0 ished in 1982) and raise himself to the great them to leave. Some people do not want of- helmsman’s hallowed level. ficials to find out that they have had more India He will certainly use the congress to in- children than family-planning policies al- 1.5 stall more of his protégés. By that time the low. Fraudsters and thieves who have China prime minister, Li Keqiang, will have posed as census-takers during past counts 1.0 served his constitutionally mandated have given enumerators a bad name. And maximum of two terms. Mr Li was not in- local governments have sometimes sought stalled by Mr Xi, who may look forward to to inflate population figures in order to 0.5 appointing someone closer to him. Unusu- claim more subsidies from Beijing. FORECAST ally, there is no obvious person who has the This time, says the government, new 0 experience (serving as deputy prime min- paperless systems will help to protect peo- 1950 2000 50 2100 ister is usually a prerequisite), is the right ple’s information and make it harder for Source: United Nations *Five-year average kind of age (67 or younger is the norm) and anyone to fiddle the count. There are also 60 China The Economist October 31st 2020 Chaguan Chicken and egg

To see why China may struggle to achieve high-tech self-reliance, visit an industrial chicken farm (based in Alabama and owned by the ew Group of Germany) and Cobb (owned by Tyson, an American poultry giant). The most valuable pedigree birds never leave maximum-secu- rity farms in America and Britain: a single pedigree hen may gener- ate 4m direct descendants. Their second-generation offspring are flown to breeding sites dispersed between such places as Brazil, Britain and New Zealand, in part to hedge against supply shocks when avian influenzas and other diseases close borders. Day-old third-generation chicks are air-freighted to local partners such as Jinghai, which spend six months growing them and breeding them in climate-controlled, artificially lit indoor facilities. In all, China imports 1.6m third-generation white-feather chicks a year. Jinghai hatches 8m fourth-generation, “parent stock” chickens annually. The company sells some to other agri-businesses. It breeds from the rest to produce fifth-generation chicks like those cheeping at Chaguan. These are “meat chickens”, consumed in fast-food outlets, schools and factory canteens, or as chicken parts sold in supermarkets. Yellow-feather chickens, deemed tastier by Chinese cooks, account for most whole birds sold in markets. Chinese breeders have long tried to create local varieties with bloodlines available in-country. Breeding from imported third- or fourth-generation chickens is a bad solution: their genes are less t takes an effort—a small hardening of the heart—to see day-old desirable than those of their elite grandparents, making them a IJinghai Poultry chicks for what they are. These, for all their plain- poor starting-point for a new variety. In September the State Coun- tive cheeping and soft, fuzzy plumage, are tiny, high-performance cil, China’s cabinet, issued a paper on livestock-rearing that set meat factories. The product of decades of genetic research in self-sufficiency in poultry as a goal, calling meat-chicken breeding American and European laboratories, they hatch in China thanks a priority. Big foreign firms have resisted appeals from officials to to global supply chains, involving the air-freighting of eggs and send second-generation stock to China. A poultry firm with 10% of chicks between secure breeding sites on five continents. the domestic market, Fujian Sunner, says it has bred all-Chinese Those chains are more fragile than once supposed. Animal dis- broilers: their performance is a source of some debate. eases, the us-China trade war and covid-19 have all disrupted, or Dependence on foreign bloodlines does carry risks. For several threatened to disrupt, industrial chicken supplies. That makes months recently New Zealand was one of the only countries able to those chicks a window onto something interesting: China’s in- send third-generation chicks to China, after other exporters suf- creasingly complicated relationship with high-tech globalisation, fered bird-flu outbreaks. Li Jinghui, president of the China Broiler a force that has made the country more prosperous, but also reliant Alliance, an industry association, calls conditions ripe for China’s on the outside world in ways that trouble Communist Party bosses. “brilliant” scientists to develop local birds. Mr Li adds that Chinese The unsentimental logic of high-performance poultry-rearing diners do not share the West’s love of breast meat and think chick- is easy to grasp. Standing this week in the loading bay of a factory en feet a delicacy, so that Chinese-bred broilers might have bigger farm in the coastal province of Jiangsu, Chaguan heard Jinghai ex- thighs and feet. But Mr Li suggests that the government’s aim is di- ecutives explain how “white-feather meat chickens”, as they are versifying meat supplies, rather than literal self-sufficiency. Let known in China, grow to 2.5kg in 40 days. Homegrown varieties of Chinese and foreign chicken breeds compete like Huawei and Ap- “yellow-feather chicken”, descended from backyard fowl, take ple smartphones, he urges: market forces should decide the result. twice as long to mature and will only ever weigh half as much. Cli- ents collect cardboard trays holding 102 chicks, peeking through Don’t even ask about animal rights slats in the sides. Four trays can generate a tonne of chicken. Wang Hongsheng, a boss at Jinghai, admits to fretting about inter- Nor is China’s interest in cheap protein mysterious. Half a cen- ruptions to chick supplies, even wondering if President Donald tury ago meat was a rare luxury. Now, many see it as a daily necessi- Trump might curb American exports. But to develop a domestic ty. In the meantime, the country’s supplies of farmland and clean breed from scratch would take years, and if it does not meet market water have not grown. Agriculture remains blighted by food-safety needs, a firm could spend a fortune “without much to show for it”. scandals, the rampant use of fake or illegal animal medicines, and High-tech chickens are not as sleek as high-speed trains or as disease outbreaks. Small surprise, then, that Chinese leaders give clever as quantum computers. Still, they are a case study of why frequent speeches about food security. A puzzle lurks, though. self-reliance is hard. China’s poultry market has room to grow: Leaders also call for self-reliance in key technologies. And in the Westerners each eat far more chicken than Chinese do. But with- case of broiler chickens, those two ambitions—rearing meat effi- out a stronger animal-health system and environmental controls, ciently and avoiding dependence on imports—are in tension. biotechnology alone cannot help China to develop world-class ag- The chicks cheeping at Chaguan are the fifth-generation de- riculture. Moreover, a long-standing Chinese strategy—bullying scendants of pedigree birds whose bloodlines represent 80 years foreign firms to hand over intellectual property—is counter-pro- of selection for such traits as efficient food-to-meat conversion, ductive now. Western trust in China is low, and official talk of self- rapid growth, strong leg bones and disease resistance. After waves sufficiency is one cause. The politics of globalisation get tricky of consolidation, the industry is dominated by two firms, Aviagen when one side feels it is being readied for the pot. 7 International The Economist October 31st 2020 61

Birth rates adding to sexual activity. In refugee camps, where people rely on informal work that Baby bust, baby boom dried up during lockdowns, transactional sex is expected to rise. When India an- nounced an abrupt lockdown in March millions of urban workers lost their jobs and fled to their home villages across the NEW YORK, SÃO PAULO AND SINGAPORE country, and in Nepal, Bangladesh and be- The pandemic may be leading to fewer babies in rich countries, yond. They were reunited with lovers they and perhaps more in poor ones usually see just a few times a year over pub- hen kampala went into covid-19 ments and savings schemes. For Keith, lic holidays. That could be enough to throw Wlockdown, singletons in the Ugandan even that doesn’t make up for the cost of off population forecasts, says Vinit Sharma capital were looking for “lockdown part- becoming a father. “I know that me and my of the unfpa. “We had not expected so ners”, says Allan Creed, who works in digi- wife will have a very good time in the next many couples to be together for such a long tal marketing. He and his friends couldn’t 30, 40 years without kids,” the 36-year-old period of time,” he adds. get to their local shops to buy contracep- says. “Do we want to risk that?” More sex doesn’t necessarily mean tives. Mr Creed has been relying on free It is too early, by a few months at least, more babies. But covid-19 has disrupted condoms doled out by the United Nations to be sure what the effect of covid-19 will be supply chains for contraception. Poor peo- Population Fund (unfpa) via a local motor- on fertility rates. But different patterns ple rarely buy several months’ worth of bike ride-hailing app called SafeBoda. But seem to be emerging in rich and poor coun- contraceptives at once. Even a short break three of his friends now have unplanned tries. Few women want to have a child in a can lead to unwanted pregnancies. Data pregnancies in the midst of their universi- time of uncertainty. In the rich world many from health facilities in India show that be- ty degrees. “We were not moving, we were are holding off starting a family or adding tween December and March the distribu- not working, nothing was happening, so to it. But in the poorest places, where wom- tion of contraceptive pills and condoms you had a lot of time on your hands,” the 26- en often have less choice in the matter, a dropped by 15% and 23%, respectively. In- year-old explains. baby boom may be in the offing. Govern- sertions of intrauterine devices for long- Meanwhile in wealthy Singapore, ments are already trying to adapt. It is not term birth control also tumbled. where contraception is easy to come by, just Singapore trying to boost birth rates. The Guttmacher Institute, a pro-choice young people who were already reluctant Japan’s new prime minister, Suga Yoshi- think-tank, points out that the strain to start a family before the pandemic are hide, last week called for health insurance placed on health-care systems in develop- even more so during a global recession. to cover in vitro fertility treatment. Japa- ing countries by covid-19 is likely to disrupt The government is trying to coax people nese government figures showed an 11% sexual-health services. It estimates that a into reproducing with a one-off grant of fall in new pregnancies in the three fall of 10% in the use of such services in 132 S$3,000 ($2,200) for having a child in the months from May relative to last year. low- and middle-income countries will next two years on top of pre-existing pay- In poor countries mass displacement is mean that 50m more women will not get 1 62 International The Economist October 31st 2020

2 the contraceptives they need this year, medical clinic, a laboratory, a hospital.” leading to 15m unintended pregnancies. It Putting it off 1 The big question is how long-lasting the estimates that 28,000 mothers and 170,000 United States, women aged 18 to 34 with incomes impact on birth rates will be. History sug- newborns will die, and there will be an ex- of less than $75,000, reporting effects from the gests the decline in birth rates could be rap- tra 3.3m unsafe abortions. pandemic and the 2008 recession,% idly reversed. Those who conceived un- In the rich world, by contrast, women Covid-19 pandemic 2008 recession planned babies during the pandemic tend to have greater control over family might have fewer children later in life. planning. This means that anxiety caused Fertility preferences 403020100 Women in rich countries who put off preg- by the pandemic looks likely to cause a Want to have children nancy might start trying again once the jit- sharp decline in birth rates. A survey by the later than previously ters around covid-19 calm down. Fertility Guttmacher Institute of American women planned fell after the 2003 Severe Acute Respiratory aged 18 to 34 in families earning less than Want to have fewer Syndrome (sars) outbreak in Hong Kong children than previously $75,000 found that a third want to get preg- planned and Hurricane Katrina in America (see nant later or have fewer children because chart 2), but recovered soon after. The 1918 of covid-19 (see chart 1). A paper published Contraceptive use Spanish flu epidemic also led to a baby bust by the iza Institute of Labour Economics Are more careful than the next year, but birth rates increased predicts a 15% drop in America’s monthly before about again in 1920. The effect held globally, sug- contraceptive use births between November and February, gesting it was not just the end of war driv- Are more worried than 50% larger than the decline following the before about affording ing the resurgence. Couples were having 2007-09 financial crisis. contraception the babies they put off. Covid-19 threatens to speed up a de- Have delayed or cancelled In New York there are already signs that cades-old trend towards smaller families sexual or reproductive couples are trying for sprogs once again. in rich countries. In Singapore the fertility health care Edward Nejat, a fertility doctor at Genera- Source: Guttmacher Institute rate (ie, the number of children that a wom- tion Next Fertility in Manhattan, saw a an can expect to have during her lifetime) drastic drop-off in patients in March that was 1.14 (far below the replacement rate of Brazil, a middle-income country where he puts down to uncertainty. His practice 2.1), even before the pandemic. When New half of all pregnancies are unintended in did not close but 95% of his patients chose York City went into lockdown, many peo- normal times, the number of births not to pursue treatment during the first ple stopped fertility treatment. Some hos- dropped after Zika hit. This is a sign that wave. He is now seeing more patients than pitals did not allow partners into delivery many women managed to obtain contra- before the pandemic. “For most people this rooms. The prospect of going through birth ception (or illegal abortions). Births fell was a pause,” he says. alone put some women off starting a fam- furthest in the north-east, where the Zika But that might not always be possible. ily, according to Brian Levine, founder and epidemic struck first and hardest, accord- In southern Europe the effects of the last director in New York of ccrm Fertility, a ing to research led by Letícia Marteleto at economic crisis are still being felt among a network of fertility clinics in America and the University of Texas at Austin. This year, generation that reached adulthood then, Canada. “You’re not going to see a bunch of with covid-19, it is black women and other who have struggled to find stable jobs or people being born in December and Janu- minorities in Brazil who find it hardest to buy homes. For those now in their late 30s, ary because [people] were home and bored access health care, even after taking ac- biological clocks are ticking, says France- and having sex,” he says. “They were home count of their poverty. sca Luppi of Università Cattolica del Sacro and bored and scared.” In May Malu Sícoli, a lawyer in São Pau- Cuore in Milan. Recent research by Ms Women are worried about catching co- lo, Brazil’s largest city, decided to stop try- Luppi found 29% of 18- to 34-year-olds in vid-19 while pregnant, since medics say it ing for a baby until the pandemic subsided. Spain and 37% in Italy who were planning is possible to pass the virus on to an unborn Days later she found out she was already to have a child in 2020 in January had aban- child. Others have found themselves tak- pregnant. Memories of Zika added to her doned those plans by March. ing on a disproportionate share of house- anxiety about having the child. “The first Government policy has a role to play work during the lockdown and can’t face time I went for a prenatal screening I was here. Besides trying to tackle the pandemic looking after a newborn, too. “It’s not peo- sick with nerves,” she says. “I was nervous itself, states can seek to ease the economic ple saying they don’t want kids—it’s them about being on the street, let alone in a hardship that covid-19 has caused. They saying they can not and should not,” says can also subsidise access to contraception, Karen Benjamin Guzzo at Bowling Green giving women more control of family plan- State University in Ohio. The circle of life 2 ning. And they can craft policies for educa- At Planned Parenthood, the country’s Births by months before/after mortality spike tion and child care that make it easier to largest provider of abortions and reproduc- Selected events, % change on a year earlier start a family. tive services, the number of medical abor- 60 Disasters, like Tolstoy’s unhappy fam- tions has gone up. Gillian Dean, who works ilies, are all disastrous in different ways. Mortality spike in obstetrics and gynaecology for the group 40 Comparing covid-19 to past wars, pandem- in New York, says patients are terminating ics or natural catastrophes is only so use- SARS, pregnancies they would have continued in 20 ful. Never before has the world faced such other circumstances. “I’ve had patients Hong Kong widespread lockdowns for such a long per- who are frontline workers, who are the 0 iod of time. While people may be more ner- only people in their homes who are em- vous about having children during a crisis, Average* ployed, and they feel like they need to do -20 being thrust indoors and banned from everything they can to not step away from Hurricane Katrina, mixing with other households might the workforce right now,” Dr Dean says. Southern Louisiana, US -40 nonetheless make them want them more, Evidence from an outbreak in 2015-16 of suggests Rachel Snow, head of the popula- 363024181260-6 Zika, a disease that causes birth defects, tion and development branch at the Months before/after mortality spike suggests covid-19 won’t have a uniform im- unfpa. “Maybe we’re going to see a new ap- Source: Institute for Family Studies *20 events pact across the developing world either. In preciation of family life.” 7 Business The Economist October 31st 2020 63

Climate change and innovation the sector is defined, and Europe for anoth- er 15%. This should spur innovation and, Greenbacks for greenery hopefully, lower the relative price of cli- mate-friendly technology even in the ab- sence of regulations making carbon-heavy ones dearer. And it needs to happen across the board, not just in energy and transport. “When we think about decarbonisation we Climate-conscious venture capitalists are once again placing big bets on clean have to remind ourselves that this is the technology. Can they make money and protect the planet? entire industrial economy”, says Mr Gates. o some extent, we try to scare off in- Ventures (bev), a fund set up by Bill Gates The International Energy Agency (iea), “Tvestors,” admits Mateo Jaramillo, co- and supported by other billionaires; Eni a global forecaster, predicts that a quarter founder of Form Energy. The startup is try- Next, the Italian oil firm’s vc arm; and The of the reductions in emissions needed to ing to solve one of renewables’ knottiest Engine, a fund run by the Massachusetts put Earth’s climate on a sustainable path by problems. Solar and wind power are inter- Institute of Technology. This reflects the 2070 come from mature technologies, mittent, so green utility firms must store evolving nature of the green vc ecosystem, such as hydropower. A further 41% come excess energy and release it when no sun which is teeming again after years in rela- from relatively new technologies with less shines or breeze blows. Large lithium-ion tive hibernation. than 1% of a given market, such as offshore batteries can discharge energy for up to In 2019 investors poured a record $36bn wind in electricity generation. Technology four hours. Form Energy, founded in 2017, into climate-related technology, up from at the demonstration or prototype stages wants to extend that to days with a differ- $17bn in 2015, according to Cleantech (battery-powered ships or aircraft, respec- ent, and undisclosed, battery technology. Group, a research firm. Half the money tively) account for 17% apiece. That pre- In May it announced a pilot project with flowed into North American startups (see sents a huge opportunity for investors—so Great River Energy, a Minnesotan utility. So chart 1 on next page). China accounted for long as they have a strong stomach. star-studded is its team of founders that a between 15% and 30%, depending on how Green vc has a chequered past. In the rival’s boss calls it “the Travelling Wilburys late-2000s it experienced a boom and bust of energy storage”, in reference to the 1980s cycle in America and, to a lesser extent, Eu- supergroup featuring George Harrison and Also in this section rope. vc funds took a financing model de- Bob Dylan. Still, Mr Jaramillo does not ex- signed for software firms and applied it to 65 Samsung after Lee Kun-hee pect to start scaling up until 2025. companies producing physical products, The combination of long wait times and 66 Uber’s catch 22 mostly solar panels and biofuels, that take unproven technology would give many plenty of time and money to generate rev- 66 Opioids Inc in court venture capital (vc) investors the jitters. enues. Many companies went bust. Their Most want to see returns in five to seven 67 Bartleby: Luxury with your laptop vc backers lost more than half of the $25bn years. Form Energy has more patient back- they had bet. Capital dried up. 68 Schumpeter: Jeff Bezos in space ers. They include Breakthrough Energy Now it is flowing again. This time inves-1 64 Business The Economist October 31st 2020

2 tors are looking at a broader range of clean has enlisted abou 20 fellow plutocrats, tech. About half the deals by value go to The grass is greener 1 among them the richest men in America low-carbon transport, encouraged by Tes- Clean-tech venture-capital deals* (Jeff Bezos), China (Jack Ma) and India (Mu- la’s credulity-stretching success. In 2004 kesh Ambani). The fund is backing 40 Elon Musk bought a 14% stake in the elec- Value, $bn Number of deals, ’000 firms and will last for 20 years. tric-car maker for $6.5m. Six years later it 40 3 Régine Clément, who heads Clean, Re- went public and is today worth $385bn, US newable and Environmental Opportuni- more than any other carmaker. Mr Musk’s Europe 30 ties (creo), a network of 200 or so family stake alone is worth perhaps $72bn, just China 2 offices, says that many families are trying shy of General Motors and Ford combined. Rest of 20 to be “catalytic”. Some support risky pros- world Investments are not confined to Tesla 1 pects and when a product is established, as wannabes. Impossible Foods, a $4bn plant- 10 is happening with low-carbon protein, based-protein firm backed by Mr Gates and they take their capital and move to the next Google, and Beyond Meat, its listed rival 0 0 nascent market. The Emerson Collective, a now worth $10bn, have whetted investors’ 20†152010 20†152010 foundation founded by Laurene Powell appetite for agricultural technology. Form *Excluding outliers above $350m Jobs, the ex-wife of Steve Jobs, Apple’s late Source: Cleantech Group †Jan 1st-Sep 28th annualised Energy and other developers of grid-scale boss, has invested in perhaps a dozen cli- storage are also in demand. mate-tech startups through an incubator. So is software. pwc, a consultancy, esti- to Cleantech Group, big business is in- Mr Gates has separately founded Terra- mates that of the biggest 5% of early-stage volved in about a quarter of deals, up from Power, a company developing advanced vc deals between 2013 and 2019, one in ten 16% in 2010. They either invest through nuclear reactors, and invested in Carbon involved pure software firms. Another six their vc arms or by providing capital di- Engineering, a firm that builds machines in ten involved startups that integrate clev- rectly. Oil majors including ExxonMobil which suck carbon dioxide from the air. er algorithms with clean hardware. The have created a clean-investment fund Green innovators are also attracting in- falling cost and commoditisation of things (though it pales in comparison to their oily novative financing methods. pe firms like like solar panels or batteries, the price of capital spending). Energy Impact Partners Spring Lane Capital and Generate Capital which has dropped by 82% and 87%, re- is trying to set one up on behalf of two doz- are using new funding models to help spectively, between 2010 and 2019, allows en utilities, such as Southern Company, an startups escape valleys of death. In 2019 such firms to offer auxiliary goods and ser- American one, and Britain’s National Grid. Generate lent $100m to Plugpower to in- vices. Software innovations make it possi- This year non-energy firms have an- stall its hydrogen-powered forklift trucks ble to take this cheaper hardware and push nounced around $5bn-worth of climate vc. in warehouses of Amazon and Walmart. it beyond its previous limits, observes Va- Amazon, an e-commerce empire, has The retailers pay Plugpower for the service, run Sivaram of Columbia University. Some backed five firms, including Rivian, an and it uses the proceeds to repay the loan. startups are, for instance, trying to use electric-van startup, and Redwood Materi- Specialised insurance firms, such as New clever programming to aggregate distri- als, a battery-recycling firm. Microsoft, a Energy Risk, an affiliate of axa, a giant in- buted energy sources, such as rooftop solar software colossus, Unilever, a consumer- surer, help financiers manage the risk. panels or batteries, and provide electricity goods giant, and ikea, a furniture-maker, In September QuantumScape, a battery to the grid like a virtual power plant. have also loosened their purse strings. startup which counts Mr Gates and Volks- Investors, too, have grown more di- wagen among its investors, said it planned verse. vc firms are increasingly rubbing High net-zero worth to list through a reverse merger with a spe- shoulders with governments, corpora- So have rich individuals, who, like cor- cial-purpose acquisition company (spac) tions, climate-conscious billionaires and porate vc funds, tend to represent more pa- of the sort that have been all the rage on private-equity (pe) firms. tient capital. Family offices participate in Wall Street this year. spacs allow startups In 2015, 24 countries, including Ameri- around 8-10% of deals, up from 4% in 2010. to negotiate the purchase price directly. ca, China and Germany, and the eu pledged Many act in concert, as with Mr Gates’s bev. Deals are faster and more predictable. So to double r&d spending on clean energy Launched in 2015, the $1bn vehicle invests are exits, which may encourage climate- over five years. Many will fall short of that only in startups with the potential to cut tech vcs to support more startups. goal. But the decline in spending in the annual greenhouse-gas emissions by at Many are already heartened by the rapid mid-2010s appears to have been reversed. least the equivalent of half a gigatonne of rise of green stocks. In the past year the s&p Last year taxpayer-funded green-energy CO2—some 1% of the world’s total. Mr Gates clean-energy index, which tracks around r&d around the world rose for the third 30 firms, outperformed the s&p 500 index consecutive year, to a record $25.4bn, ac- of big American companies (see chart 2). croding to the iea. Fertilised 2 Liqian Ma, of Cambridge Associates, a con- Governments are trying to fill funding Stockmarket indices, January 1st 2020=100 sultancy, notes that between 2014 and 2018 vc gaps at a later stage, too, when deep-pock- 200 green investments around the world eted banks are reluctant to hand out $50m generated annual returns of 20%. That is for a factory-scale project and less risk- 175 double what typical vc firms manage, and a averse vc firms cannot afford to do so, ob- S&P Global Clean Energy vast improvement over the mid-2000s, serves Emily Reichert of Greentown Labs, 150 when the average green vc lost money. eu an incubator. Initiatives such as the ’s 125 Deep decarbonisation will mean chang- long-standing innovation fund and a new ing heavy industries, too, says Mr Sivaram scale-up fund within arpa-e, an American 100 of Columbia. For that, says Mike Perry, the programme for advanced energy technol- S&P 500 chief technology officer of vionx Energy, ogy, aim to help startups escape this “valley 75 “You need someone with deep pockets.” of death”. 50 His company, which makes large-scale Corporations, for their part, are on the flow batteries and has struggled to get fi- OSAJJMAMFJ lookout for new technologies to help them nancing to build its fourth plant, is now go- Source: Refinitiv Datastream decarbonise or cut energy costs. According ing through a restructuring process. “This 1 The Economist October 31st 2020 Business 65

2 is not-for-the-faint-of-heart investing,” Mr The rise of Samsung mirrors that of Perry concedes. South Korea. When Lee père took over from Part of the problem is that, as Mr Gates his father in 1987, the country was an explains, “the demand side for innovation emerging economy that had yet to make is missing.” That is particularly the case for the transition to democracy. When he fell high-emitting products bought by busi- ill in 2014 it was rich, thriving and demo- nesses, such as cement (which accounts cratic. On his watch Samsung abandoned for around 8% of global greenhouse-gas the “fast follow” strategy adopted by South emissions) and steel (7-9%). Unlike soft- Korean firms since the 1970s and allowed ware, which is easy to differentiate from ri- himself “to imagine that his company vals, “green steel is not going to be any bet- could be number one in its own right”, says ter than steel,” notes Mr Gates. “So there is Park Ju-gun of ceo Score, a corporate no market for early innovation.” watchdog. This entailed some mistakes, Targeted government procurement such as an expensive foray into carmaking. could boost green products, as happened But it mostly brought success. when the Pentagon enlisted Silicon Valley Although the group maintains busi- to make computers. In the private sector nesses from shipbuilding and life insur- Mr Gates is planning a fund that uses auc- ance to amusement parks, the younger Mr tions to buy clean tech with the lowest Lee, de facto boss since 2014, has kept a fo- price. This, he argues, will stimulate de- cus on electronics. Today Samsung is the mand and lower costs. With ideas like this world’s biggest maker of smartphones and the latest green-vc boom may protect the its second-biggest of memory chips. It has planet—and avoid another bust. 7 defended its position in mobile devices against competition from China. Lee fils Larger than life has forged global partnerships, including Samsung with competitors such as Apple, which ing stock prices to facilitate the merger. Mr Samsung Display, a subsidiary, supplies Lee and Samsung deny wrongdoing. The Lee way with screens for iPhones. He has also be- If either case lands Mr Lee in prison, his gun to move the company away from pro- leadership may be in jeopardy. That need ducing solid but unsexy hardware towards not spell doom—the day-to-day running of an emphasis on design and software, the company is in the hands of profession- which accounts for American big tech al managers. But it may make it harder to SEOUL firms’ trillion-dollar valuations. perform the late patriarch’s occasional, Where the death of its patriarch leaves It has not all gone the Lees’ way. Wield- sweeping changes of direction. South Korea’s biggest firm ing economic influence to preserve a cor- Some of his son’s bets seem to be work- n the spring of 1995 word got to Lee porate structure that benefits the founding ing. Samsung Biologics, the listed biotech IKun-hee that a batch of Samsung’s brand- family has landed them in trouble. Lee père subsidiary, is building a new $1.5bn factory. new mobile phones, which it had doled out was twice convicted for corruption, includ- Its share price is up by 50% this year. That as new-year gifts, did not work. Incensed, ing bribing the president—and twice par- of Samsung sdi, a battery affiliate, has the group’s chairman ordered employees at doned when politicians deemed his con- nearly doubled (see chart); it has invested the factory that had made the offending de- tinued involvement in Samsung to be in $2.1bn since January and is eyeing the elec- vices to pile up tens of thousands of them the national interest. His son has already tric-car market. It is planning to expand a in a courtyard. A cool $45m-worth of spent time in prison, for bribing a confi- factory in China and build a new one in equipment then went up in flames. dante of Park Geun-hye, a former presi- Hungary. But at a combined value of $63bn The episode is emblematic of the way dent, to gain approval for a merger, which they look small next to Samsung Electron- Mr Lee (pictured), who died on October prosecutors allege helped him consolidate ics. And competition in both areas is hot. 25th aged 78, turned a South Korean maker control over the Samsung empire. Ms Park Samsung Electronics’ third-quarter re- of knock-off electronics into a technology was removed from office and Mr Lee is fac- sults on October 29th beat forecasts. It powerhouse. He was obsessed with quality ing retrial on those charges, plus a fresh plans to spend around $10bn on its con- and demanded total devotion from execu- one on related accusations of manipulat- tract-manufacturing chip business over tives. Every decade or so he made bold bets. the next ten years. American sanctions His last one, on smartphones and semi- against Chinese technology firms, which conductors, paid off handsomely. Sam- Three stars have already hurt its smartphone rivals sung Electronics, the group’s crown jewel, Share prices, January 1st 2020=100 such as Huawei, may help with that—and has a market value of $311bn, more than 600 with its flagging foray into 5g telecoms. But JPMorgan Chase, America’s biggest bank. the firm warned of lower chip demand in Samsung Biologics The patriarch’s death was not unexpect- 500 the short term. And the market share of its ed—he had been incapacitated since a chip “foundries” lags behind Taiwan Semi- 400 heart attack in 2014. It will not prompt lead- Samsung SDI* conductor Manufacturing Company, the ership changes. But it highlights two chal- 300 industry leader. No new mega-bet in the lenges facing South Korea’s biggest chaebol style of Lee père is on the horizon. (conglomerate). The group must find 200 Lee fils has apologised for his group’s growth beyond maturing smartphone mar- run-ins with the law and vowed to break 100 kets. And it has to grapple with Mr Lee’s with tradition and not pass control to his Samsung Electronics other legacy: an over-cosy relationship 0 own progeny. The Lee family says it plans with politics that has embroiled his com- 2017 18 19 20 to pay the full inheritance tax on the patri- pany, as well as his son and successor, Lee Source: Refinitiv Datastream *Battery-maker arch’s $16bn shareholdings. Honouring his Jae-yong, in corruption cases. positive legacy may prove harder. 7 66 Business The Economist October 31st 2020

Gig companies How much they earn per hour is a mat- classify drivers as employees. ter of hot debate. Whatever the pay, though, Even if Prop 22 wins, Uber’s business Catch 22 it comes with no benefits. This may not model needs work. It still loses money and matter to those who drive to make cash on investors are getting impatient. Its share the side, in addition to other jobs. Uber price is down by a fifth since it listed. Rev- claims the bulk of its drivers are such part- enue from rides fell by 75% in the second timers. Critics allege that most rides are quarter, year on year, as covid-19 lock- provided by full-time drivers. Sharing downs sapped demand. Mr Khosrowshahi SAN FRANCISCO these concerns, a year ago California wants to switch from moving passengers to Californians vote on the future of Uber passed a law, called ab5, which among oth- ferrying everything in cities. Quarterly rev- ven a half-eaten apple shoved in Dara er things redefined independent contrac- enues from its meal-delivery arm doubled EKhosrowshahi’s face by his young son tors as those who are free from the control as restaurant-goers self-isolated, and now during a Zoom interview does not ruffle and direction of the hirer. Gig firms argue account for nearly 70% of the total. “Just Uber’s boss. “Not now, sweetheart,” was his they meet ab5’s criteria. On October 22nd like Facebook built the social graph of con- calm response. Mr Khosrowshahi needs all an appeals court ruled they probably do nections between friends, we can build the the unflappability he can muster. Besides not, pending a full trial next year. local graph of the connections between picking their president, on November 3rd Complying with ab5 would turn Uber people and things,” Mr Khosrowshahi says. Californians will vote on a ballot initiative, from an online marketplace to something Until self-driving cars replace human driv- Proposition 22, that will shape the future of like a conventional black-car service, Mr ers—don’t hold your breath—that business the ride-hailing firm and other gig-econ- Khosrowshahi says. It would, he adds, have may not be viable in an ab5 world. 7 omy platforms. The companies have spent to fire 76% of its 200,000-odd drivers in nearly $200m promoting the measure, in California. The remainder would work an effort to preserve their business model. mostly at peak times—and no longer be Opioids and business At issue is whether freelance drivers, paid “exactly in proportion to the value that couriers and other app-based workers they bring to the system”, he argues, which Painkiller wars should be treated as employees, entitled to is “one of the underestimated features of benefits such as unemployment insurance the gig economy”. And, Uber warns, fares and sick leave. “Prop 22” is a stab at balanc- would rise by between 25% and 111%. ing worker protections with the flexibility Nonsense, say Uber’s opponents. Veena that lets people work when they want while Dubal of the University of California’s Has- NEW YORK Lawmen are coming after corporate ensuring that customers never have to wait tings College of the Law reckons ab5 would America for its role in the opioid crisis long for a ride or a meal delivery. raise cost per driver by a third. But, she Founded 11 years ago, Uber created the says, it would preserve flexibility and pro- n the shadow of their own profound template for the gig economy. Its software tect vulnerable workers. As for fare in- “Ifailures, doj and dea now seek to matches demand and supply in real time. creases, findings in New York, where ride- retroactively impose…requirements that At first riders and drivers benefited, as Uber hailing firms must pay the city’s minimum are not found in any law.” Unusually strong and Lyft subsidised rides in a battle for wage and respect other rules, suggest that words to hurl at America’s Department of market share. In the past few years the duo these could be lower than Uber’s estimate. Justice and its Drug Enforcement Adminis- began to cut costs, egged on since they Enter Prop 22. It would scrap ab5’s nar- tration. They come from an unusual law- went public last year by investors. Uber’s row definition of independent contractors, suit filed by Walmart on October 22nd. It is “take rate”, the share of fares it keeps for it- while providing such workers with some a pre-emptive strike against the Feds, who self, now averages 26%, up from 20% in benefits, including net earnings of at least are preparing to hammer the giant retailer 2017, according to New Street, a research 120% of the hourly minimum wage and for allegedly fuelling the opioid crisis. firm. Drivers get correspondingly less. health-care stipends. It could pave the way Opioids Inc is under legal assault on for portable benefits, which Mr Khosrow- several fronts. Drugmakers were first in the shahi has called a “third way” between the firing line. Last year a judge in Oklahoma status quo and ab5, and which prominent ruled that Johnson & Johnson (j&j) had economists, including the late Alan created a “public nuisance” by contribut- Krueger, have advocated (though it has no ing to opioid abuse and ordered it to pay provision for collective bargaining, which some $500m; j&j is appealing the verdict. Krueger also backed). Benefits would be The company also stands accused of based on “engaged time”; waiting between wrongdoing, along with other firms, in rides does not count. To qualify for a full lawsuits filed in federal courts by thou- health-care stipend, for example, drivers sands of local governments. While insist- must be “engaged” for 25 hours a week. And ing it did nothing wrong, j&j signalled this any amendments to the proposition would month that it is willing to cough up $5bn if require a seven-eighths supermajority in a comprehensive settlement can be agreed. California’s legislature. For the world’s largest drug firm, with Critics call Prop 22 lopsided. Califor- annual revenues of $56bn, such a hit would nians may still back it. They have been be a publicity nightmare but financially bombarded with ads and notifications in manageable. For smaller fry, litigation can their apps warning that a no-vote would prove fatal. On October 12th Mallinckrodt, a doom gig-working. Prop 22 has won the big purveyor of generic opioids, agreed to support of influential lobby groups such as pay $1.6bn in a settlement as it filed for Mothers Against Drunk Driving. Polls show bankruptcy. On October 21st the doj an- the measure winning. If it does, this may nounced that Purdue Pharma, the most bolster Uber’s case in other places, such as prominent opioids producer, which folded Ride-bewailing Switzerland, where authorities want to last year, had agreed to admit guilt and pay 1 The Economist October 31st 2020 Business 67

2 roughly $8bn. A number of state attorneys- country. The plaintiffs allege that the phar- The pandemic has led to big delays, re- general think the settlement lets the Sack- macies knew that opioids were being over- moving the pressure to settle quickly be- ler family, which controlled Purdue, keep prescribed but kept dispensing them. The fore trial begins. Mr Polster rejected the de- too much of the $10bn or so they have taken firms deny wrongdoing. mand made by plaintiffs’ attorneys that 7% out of the firm since 2008. For firms caught in the mess, the next of any settlement go into their pockets, so As the second phase of opioid litigation best thing to exoneration is a speedy reso- unhappy lawyers are now threatening to begins, “pharmacies are front and centre,” lution. A few months ago rumours swirled derail the big global deal. A federal appeals says Andrew Pollis of the Case Western Re- of a “big global deal”, in the words of an in- court recently rejected Mr Polster’s negoti- serve School of Law. Two counties in Ohio sider, involving counties and state attor- ation class as a jurisprudential innovation have sued three big chains, cvs, Rite Aid neys-general. To co-ordinate the 2,000- too far. Elizabeth Burch of the University of and Walgreens, and Walmart (which has plus lawsuits, Dan Polster, a federal judge Georgia School of Law, worries that the way pharmacies inside its big-box stores). The overseeing the Ohio cases, promoted a forward now “looks like a zigzag”. The end suits will be bellwethers for more than novel legal concept of a “negotiation class”. of the legal saga seems as remote as that of 2,000 similar complaints filed across the It would bind all parties to any settlement. the opioid crisis itself. 7 Bartleby Luxury with your laptop

Hotels are trying to attract remote workers he busy worker looks at the clock on table, two comfy chairs and a sofa. Nice tion. (Whether a pub would be a great Ther laptop and discovers that it is little touches included extra pens, sello- place to concentrate is another matter; nearly 1pm. Time for lunch. So she picks tape, scissors and a stapler. All the staff an open-plan office looks like a Trappist up the phone and asks to speak to room wore masks and kept a safe distance. The monastery by comparison.) service. A hot meal appears 20 minutes place was extremely quiet, which aided Few Britons live far from a pub. By later; no need to bother with the cooking concentration. contrast, though Bartleby enjoyed the or washing up. Nice as these facilities were, they would luxurious accommodation, his visit to St If that vision appeals, you could be a almost certainly be beyond the budget of James’s required a lengthy trip. For many potential customer for one of the many an ordinary worker who might be looking workers, the absence of the daily com- hotel groups that are trying to induce to escape the builders or the children mute has been one of the big bonuses of people to rent a room for use as an office. during school holidays. A cheaper Sofitel lockdown. So hotel rooms are most likely The idea makes a certain amount of option is available at £199 but that would to appeal to workers if they are a short sense. Hotel rooms are short of guests still require a company’s expense policy to distance away, meaning that they need to during the pandemic; some workers may be incredibly generous. If you are fully be in the suburbs rather than the city find it too difficult (or boring) to sit at the employed, you can probably retreat to the centres. Suburban hotels will also be a lot kitchen table every day. office for no extra cost. And if you are a cheaper. Hilton offers a work package in The big chains are rushing to test out freelance worker, you may simply head for a Hampton hotel in west London at a the size of this market. Hilton has the nearest coffee shop, where seating, bargain £45 a day. launched a new service called Work- subject to social distancing, can be ob- Even then, the market is likely to be a spaces in America, Britain and Canada tained for the price of a few cappuccinos. niche product. Being at home allows which gives workers the chance to use Another option for British workers is workers to have all their chosen comforts the gym or swimming pool (where avail- the traditional pub, with some trying to (books, snacks, favourite tea) to hand. able) and complimentary bicycle hire. drum up business by offering “hot-desk- They will be there if delivery or mainte- The Wyndham chain is offering worker ing” packages. One hostelry in Warrington, nance men come to call. And sitting packages at hotels in California, Florida a town in the north-west of England, is alone in a hotel room, good as it may be and South Carolina. offering a £12 daily package with a meal, for concentration, is more likely to in- Hotels have long made good money unlimited coffee and an internet connec- crease a sense of isolation than being in out of the business market, catering for the more familiar surroundings of one’s business travellers, conferences and own house. team get-togethers. They have also recog- Still, on occasion a bit of isolation nised that they need a good Wi-Fi signal might be welcome, just as authors retreat to appeal to laptop-toting business- to a cabin to finish their manuscripts. people. But renting rooms by the day has Workers who have a big project to finish traditionally been aimed at a rather might relish a hotel break, especially if different slice of the market from the their office does not have the covid-19 solitary desk jockey. protocols in place to ease their fears. Bartleby wrote part of this column in Hotels might also be a good place to Sofitel St James, a luxury hotel in the conduct job interviews, provided that heart of London’s West End. This certain- companies respect government social- ly would be an excellent bolthole, for distancing rules. those who can afford it—£299 ($388) a For humble drones like Bartleby, day, with breakfast, lunch and a cocktail however, home will continue to be the available for another £50. Your colum- office of choice, even if it means doing nist’s suite offered a lounge with a desk, the washing up. Indeed, time to stop printer and shredder, plus a four-seater writing and fill the kettle. 68 Business The Economist October 31st 2020 Schumpeter Jeff Bezos’s final frontier

Where is Amazon’s boss headed next? ing in space to benefit Earth”. It hopes to achieve this by making launch vehicles that can land and be fully reusable. New Shepard, its suborbital spacecraft, has completed more than a dozen flights. Yet it is years behind schedule for flying tourists to space. For now, Blue Origin’s main customer is the government. The two companies operate with different degrees of transpa- rency and velocity, too. Amazon has been a public company since it was three years old. Its founding motto was “get big fast” and its obsessive quest to innovate includes a willingness to fail. Blue Ori- gin was kept secret for years after its birth in 2000. It calls itself a tortoise not a hare. Its motto is Gradatim Ferociter, or “Step by step, ferociously”. As Mr Bezos has said, “If you’re building a flying vehi- cle, you cannot cut any corners.” Or take their approach to rivals. Amazon, which dominates e- commerce and the cloud, treats them with the haughtiness of a trailblazer. Mr Bezos tells employees to be terrified of customers, not competitors. Blue Origin is a laggard. It is trying to catch up with SpaceX, the rocketry business of Elon Musk, another space- mad plutocrat. Other rivals include Virgin Galactic, the listed ven- ture of Richard Branson, a British tycoon. Aerospace stalwarts such as Lockheed Martin and Northrop Grumman are both collab- orators and competitors. Boeing is a mighty incumbent. t has the largest windows in space. Six reclining seats. And blue Yet at Amazon, Mr Bezos has proved he can run businesses as Iedges that passengers can grab hold of as they float weightlessly diverse as one famous for brown boxes, and another for cloud more than 100km (62 miles) above Earth. If that is not rarefied computing. As he wrote in 2015, Amazon and aws may look differ- enough, imagine if one of the fellow passengers were Jeff Bezos, ent, but they share similar underlying principles on which they gazing down onto a planet that is spanned by his digital conglom- act. The same may be true of Amazon and Blue Origin. erate, Amazon, and of which he is the richest inhabitant. When the time comes for Mr Bezos’s private venture, Blue Origin, to send Stairway to heaven paying tourists into space, its proprietor will almost certainly be Their visions are communicated by a simple narrative. Amazon’s among them. “I suspect that he will be—and is, indeed, eager to is a focus on customer satisfaction, behind which employees, sup- be—one of the first private citizens to blast himself into space,” pliers and shareholders fall into line. Blue Origin’s core belief is writes Walter Isaacson, a biographer, in an introduction to the col- that reusable rockets will lower costs so that access to space is lected writings of Mr Bezos. Already you shudder to think of Mr Be- made possible for many. These mantras are endlessly repeated. zos’s peals of laughter ringing through the heavens. Second, the two businesses share breathtaking ambition. From It is easy to assume that for the 56-year-old man who has (and the Kindle and aws to Echo smart speakers and Alexa, their sooth- sells) everything, space tourism is the ultimate vanity project. He ing machine-learned voice, Amazon has frequently given custom- launches rockets from his ranch in West Texas. He has a rippling ers more than they ever thought they needed. With Blue Origin, Mr physique. His bald head resembles that of his idol, Captain Jean- Bezos hopes that he can unleash entrepreneurial activity allowing Luc Picard in “Star Trek”. He is fulfilling a childhood dream. In 1982 others to follow his “road to space” and create a new era for busi- he told his schoolmates: “Space, the final frontier, meet me there!” ness along the way. Yet dismissing his space quest as a combination of mid-life cri- Most important, both firms are imbued with Mr Bezos’s devo- sis and money to burn would be underestimating the missionary tion to the long term. In his missives about Amazon, he repeatedly zeal that drives Mr Bezos, and which “Invent & Wander”, a collec- reaffirms his intention to invest to win market leadership in a vari- tion of 23 years of letters to Amazon shareholders and other mus- ety of industries, rather than prioritising short-term profits. Blue ings, illustrates. His work on Earth is not yet done. Covid-19 has Origin’s horizons are measured in decades, if not centuries. Both brought him back squarely to Amazon’s helm. But the book, which benefit from Mr Bezos’s knack for burying himself in the day-to- is mostly backward-looking, leaves a tantalising hint that you day detail, without losing sight of the big picture. need to peer into the stratosphere to see what comes next. What What his fixation with the heavens says about Mr Bezos’s future that means for the future of Amazon is left frustratingly vague. at Amazon remains a vexing question. The book does not hint at On the surface, his twin obsessions are a puzzle. It is difficult to controversies such as the online empire’s treatment of third-party imagine more different ventures than retailing and rocketry. Revo- sellers, the hollowing out of high streets, or its quashing of union- lutionary as both firms are, there are few more hard-headed ones isation efforts. It repeats the cliché that it is “day one” for Amazon, than Amazon, and few more dreamy-sounding concepts than even though it seems late in the day as competitors in e-commerce space colonisation. Amazon is a utilitarian monument to the con- and the cloud up their game and political heat rises. It gives no sumer, worth $1.6trn. It promises relentlessly lower prices, speedi- sense of whether aws, its most profitable division, should be spun er delivery and greater variety—as well as faster cloud computing off, or of when Mr Bezos may step down. But it makes clear that power in the case of Amazon Web Services (aws). Blue Origin’s vi- Blue Origin, as Mr Bezos put it last year, is “the most important sion, funded by the sale of Mr Bezos’s Amazon stock, is Utopian. It work I’m doing”. One day it may take him not just into orbit but is “to enable a future where millions of people are living and work- away from the mother ship. 7 Finance & economics The Economist October 31st 2020 69

Also in this section 70 Chinese banks’ overseas empires 71 Emerging marketmakers of last resort 71 Is China manipulating the yuan? 72 Europe’s fiscal question 73 Buttonwood: The case for bitcoin 74 Free exchange: Notorious GDP

Aditya Puri Malaysia, where he had worked for Citi- group (Mr Dimon cut his teeth at the bank, The world’s best banker? too). Back then India’s banks were almost entirely state-owned. Licences began to be issued to private banks in the hope that these would operate without the corrup- tion and inefficiency that had held back the economy. Mr Puri received a call from Dee- pak Parekh, the head of Housing Develop- Jamie Dimon has competition ment Finance Corporation, a mortgage ho is the most impressive banker on mega-cities and rural backwaters alike. It lender, who offered him less than half his Wthe planet? Judged by their swagger serves consumers and firms and eschews Citi salary to set up a bank. He credits his and $20m-40m paypackets, the bosses of the wilder reaches of investment banking wife, Anita, for convincing him to say yes. Wall Street’s big firms are contenders; yet and foreign adventures. This unlikely for- So what is hdfc’s secret sauce? Being in several run firms that have delivered weak mula has produced spectacular results. India is no guarantee of success—the in- returns, been bailed out and left a toxic trail In order to assess Mr Puri’s performance dustry still features decrepit state lenders of scandals. Measured by sheer clout, the The Economist has compared total share- and wild-west chancers and is in the midst heads of China’s state lenders are in the holder returns during his tenure with of a slump that has only been aggravated by running. The boss of Agricultural Bank of those achieved by the chief executives of covid-19. Instead three factors stand out. China keeps an eye on a mere 23,000 the world’s top 50 banks, by market value First, Mr Puri’s management style, which branches and half a million staff. But he is (see chart on next page). Mr Puri has deliv- features a clear vision, microscopic atten- an instrument of the Communist Party. ered cumulative returns exceeding tion to detail, blunt speaking and a knack Measured by the hardest test of all— 16,000% over the quarter-century since his for retaining talent. Such was his dedica- creating something from nothing and de- bank went public. That is far more than any tion that, presented with a staggering bill livering long-term shareholder returns other boss in our sample, including Jamie for heart surgery, he sought to encourage while supporting the economy—the an- Dimon of JPMorgan Chase, widely viewed the doctor to bank more with hdfc. swer is someone of whom few outside Asia as the leading banker of his generation. The second factor is strategic disci- and the investment elite would have heard: This is not wholly a function of the length pline. Mr Puri intuited that Indian con- Aditya Puri, who on October 26th retired of Mr Puri’s tenure: annualised total re- sumers and firms would be a consistent from hdfc Bank. Now the world’s tenth- turns have been 22%, placing him among money-maker and has stuck to that view. most-valuable bank, it is worth about the top two. The power of compounding He took the sophisticated processes used $90bn, more than Citigroup or hsbc. means the absolute value created for share- by foreign banks and used them to target hdfc is Indian, headquartered in Mum- holders during his tenure is a giant $83bn. local retail and commercial clients. The re- bai, and has been run by Mr Puri since its Such returns seemed unimaginable in sult is a large branch network, half of which creation in 1994. Today it has branches in 1994, when Mr Puri returned to India from is outside cities. The firm’s cash-machine 1 70 Finance & economics The Economist October 31st 2020

Chinese banks provide 26% of all cross- Who’s the boss? border loans to developing countries to- Performance under current CEO, top eight banks*, to Oct 27th 2020 day, most of them in dollars (see chart). Bank (start year of CEO’s tenure) That is up from a fifth in 2016, and has risen since the pandemic. (Ms Koch points out Total returns†, % Average annual total return†, % Absolute value created‡, $bn that the bis’s figures cover only countries that report to it, and suspects that the true China Merchants JPMorgan share could be higher.) China’s share is still HDFC Bank (1994) 16,187 Bank (2013) 23 Chase (2005) 388 lower than that of European banks, which, China Merchants Bank of HDFC Bank (1994) Bank (2013) 345 22 America (2010) 175 though retrenching, account for 34% of Ping An Bank China Merchants cross-border lending to poor countries. In JPMorgan Chase 265 19 128 (2005) (2016) Bank (2013) half of these places, though, its banks are DBS (2009) 155 ICICI Bank (2018) 12 HDFC Bank (1994) 83 now the largest cross-border lenders. Bank Central Morgan Stanley Banks from emerging economies are 155 Nordea (2019) 12 82 Asia (2011) (2010) typically reluctant to lend far away from BB&T/Truist Bank Central 127 10 Citigroup (2012) 81 home, perhaps because their own markets Financial (2009) Asia (2011) are still growing and the creditworthiness BB&T/Truist PNC (2013) 104 PNC (2013) 9.9 Financial (2009) 56 of far-flung borrowers is harder to assess. Ping An Bank China Minsheng By looking at loans made by banks from 99 9.7 PNC (2013) 38 (2016) Bank (2020) their home base, as well as by their foreign Sources: Bloomberg; Refinitiv *Out of top 50 banks by market capitalisation. CEO or equivalent †$ terms subsidiaries, the researchers show that Datastream; The Economist ‡Gain in market value plus dividends and buybacks less new equity raised Chinese lenders are not so put off. In that sense they resemble banks from Europe 2 and credit-card networks are the largest holder, Mr Parekh’s Housing Development and America, says Mr Cerutti, even though among India’s private banks. Finance Corporation. The biggest question they are typically state-owned and their Mr Puri stayed away from foreign ven- of all is how Mr Puri got away with working overseas expansion is much more recent. tures and investment projects, avoided the sort of hours that get you laughed off In another respect, however, China’s lending to India’s indebted oligarchs, and Wall Street. He tended to take a lunch banks stand out. Cross-border loans tend financed hdfc’s balance-sheet through de- break, often at home with his wife, and to be correlated with trade and investment posits rather than debt. That all has proved would leave the office at 5.30pm. Perhaps flows, which give lenders more informa- prescient. Other banks chased a credit this was the secret of his success. 7 tion about foreign borrowers. The link be- boom in 2004-07, channelling funds into tween lending by China’s banks and bilat- infrastructure projects. Many proved to be eral trade is especially strong. But lending bad prospects, or were bogged down by red Cross-border lending bears little relation to investment flows. tape, leaving lenders with a pile of bad The authors suspect that this reflects Chi- loans. hdfc’s ability to take the long view Making inroads na’s capital controls, and the fact that its may have been helped by having an anchor portfolio investments target rich markets. shareholder in the form of Housing Devel- What does all this mean for borrowers? opment Finance Corporation. The rise of China’s banks brings both risk The final element is hdfc’s approach to and reward. One concern has been that the technology—though not a pioneer, it is a lending has added to some poor countries’ The overseas activities of Chinese fast follower. Mr Puri famously does not debt woes. In some places China’s banks banks shift up a gear own a mobile phone; Aseem Dhru, a former are now important enough that, if a shock hdfc executive, recalls meetings in Mr hina’s banking system, with $35trn in causes them to pull back, then a local credit Puri’s office taking place across a desk that Cassets, is the world’s largest. Its four crunch could ensue. But China could be a had no computer. But hdfc has invested biggest lenders, measured by assets, head source of needed capital too. Strong in- heavily in technology to automate its pro- the global league table. Yet Western banks flows into the country this year mean that cesses and keep costs low. Loan approvals rarely come up against Chinese peers in its banks are flush with dollars (see next have gone from days to seconds. Its credit foreign climes. That has fed the stereotype page). If recent form is a guide, a chunk will systems are particularly rigorous. that China’s banks are either uninterested be recycled into developing countries. 7 hdfc’s trivial write-offs for poor loans in global business or, staffed by staid bu- were once attributed to its small size. But it reaucrats and stuffed with bad loans, are has been the source of as much as a quarter uncompetitive abroad. A new study sug- Credit where it’s due of new credit in India since 2017 without gests that this portrait is wide of the mark. Share of cross-border claims by Chinese banks any sign of its standards slipping or bad In fact the global footprint of China’s on emerging and developing economies, % loans rising, says Ashish Gupta of Credit banks has grown to rival that of Western Suisse, a bank. Figures from Jefferies, an lenders. In June this year its deposit-takers, 2016 2019 Q2 2020 investment bank, suggest that hdfc’s gross including some of its policy banks, ac- 403020100 non-performing assets were 1.3% of total counted for 7% of total cross-border lend- assets in the year to March, compared with ing flows, up from 5% in 2015, and lent to Asia Pacific 2.3% for Kotak Mahindra and 6% for icici, 196 out of 216 countries. A recent paper by India’s other big privately owned banks. Catherine Koch and Swapan-Kumar Pradh- Middle East Mr Puri leaves behind some question an of the Bank for International Settle- and Africa marks. The man many saw as his most like- ments (bis) and Eugenio Cerutti of the imf ly successor quit in 2018; the bank’s new explains why the rich world hasn’t noticed: ceo is Sashidhar Jagdishan, another veter- China’s banks reign in poorer markets that All an. Some investors wonder if the bank will Western lenders either never entered or are eventually merge with its largest share- now abandoning. Source: Bank for International Settlements The Economist October 31st 2020 Finance & economics 71

the national treasurer, described the cen- their holdings of lira-denominated gov- tral bank’s purchases as an “extra lifeline” ernment bonds this year, according to the for the government. Institute of International Finance, a bank- A third group of central banks, includ- ers’ group, and the currency has plunged to ing those in India and South Africa, bought record lows in recent days. Turkey’s presi- bonds for a subtler reason: to help make a dent, Recep Tayyip Erdogan, harbours un- market for them. Their aim was not simply orthodox views on monetary policy and to lift bond prices, but also to reduce their the central bank manifestly lacks the inde- volatility and narrow a widening gap be- pendence needed to defeat inflation, tween the prices demanded by prospective which exceeds 11%. If Turkey’s central bank sellers and those offered by potential buy- were to expand its modest bond-buying ers. In addition, by acting as a buyer of last scheme, it would only make things worse. resort, central bankers hoped to embolden You cannot stop a run on a currency by other, private buyers of earlier resort. printing more of it and lowering the reward Sure enough, the announcement of for holding it. The unconventional and the these measures helped reduce bond yields, unorthodox are a poor mix. 7 says the imf’s latest global financial stabil- ity report, by about 0.2 to 0.6 percentage Emerging marketmakers of last resort points. They also helped to reduce the The yuan “term premium”, or the extra yield inves- Quite encouraging tors demand to hold a long-term bond rath- Caveat victor er than a series of short-term ones. More surprisingly, perhaps, these purchases added little, if any, downward pressure to currencies. This was partly because central HONG KONG banks often sold short-term claims even as Quantitative easing has not been a SHANGHAI they bought longer term assets, thereby disaster in the developing world Is China suppressing the yuan? mopping up the money they had created. It conomies, unlike people, become was also because investors seem to have hina, as its leaders like to observe, has Emore tolerant of excess as they mature. been comforted, not threatened, by the Cfared better than any other big country Thus America or Japan can get away with presence of the central bank as a fellow this year. It has all but halted the covid-19 fast-and-loose economic policies that buyer. Their purchases had a “catalysing ef- pandemic, got its economy back on track would spell disaster if less mature, “emerg- fect”, the fund says. and, to top it off, reaped a cash windfall ing” economies tried them at home. Quan- If these shopping sprees have been from abroad. The last has stemmed from a titative easing (qe) is often cited as an ex- helpful, should central banks make a habit surge in its trade surplus, thanks in part to ample. Buying government bonds with of them? And should they splash out as its factories running at full tilt, and a rush newly created money is surely the kind of freely as central banks in the rich world? of money into its bonds, thanks in part to indulgence best left to the rich world. Cen- The imf urges caution. The pandemic its growth outlook. Victors do, it seems, get tral banks in emerging markets have, after created exceptional circumstances. Inves- the spoils. In economic terms, victors all, spent decades trying to distance them- tors might react differently to larger, more should also have a much stronger currency. selves from gluttonous governments and routine forays into the bond market. Cen- But that has not happened. The yuan’s re- prove themselves careful stewards of the tral banks should also consider what priv- cent appreciation against the dollar has money supply. ate investors can buy instead. If a country’s merely kept it in line with the yen and the The emerging-market response to the markets offer few alternatives to govern- euro. This raises the question, sure to ran- covid-19 pandemic has, therefore, raised ment bonds, then the central bank might kle with officials in Beijing, of whether Chi- eyebrows. As well as cutting interest rates inadvertently push investors out of the na is again manipulating its currency. sharply, many central banks have experi- country’s assets altogether. It is much harder to answer than in the mented with their own versions of qe, buy- Unconventional policies help only if past. For two decades until mid-2014 Chi- ing government bonds and other financial central banks are credible. Turkey provides na’s prodigious accumulation of foreign- assets. Contrary to some fears, this has not one illustration. Foreigners have halved exchange reserves was the clear by-product so far brought disaster. Indeed the early ev- of actions to restrain the yuan, as the cen- idence suggests it has worked quite well. tral bank bought up cash flowing into the At least 18 central banks have carried out Shopping expeditions country. A sharp drop in reserves in 2015-16 asset-purchase programmes of some kind, Central-bank asset purchases, % of GDP was evidence of its intervention on the oth- according to the imf. Policymakers in Mar-Aug 2020 er side, propping up the yuan when inves- some countries, such as Chile, Hungary 129630 tors rushed out. Since then, China’s re- and Poland, resorted to them because they United States serves have been uncannily steady. This had already lowered interest rates about as Philippines year they have risen by just 1%. Taken at far as they could go. Others, however, had Croatia face value, the central bank seems to have different motives. In some countries the Poland Sovereign bonds refrained from intervening. That is certain- Primary market Chile authorities admitted that bond-buying had Secondary market ly what it wants to convey, regularly de- a partly fiscal aim. The central bank’s pur- Indonesia scribing supply and demand for the yuan Turkey Asset-backed chases would help finance the govern- securities/ as “basically balanced”. 1 ment’s efforts to fight the pandemic. The Ghana covered bonds Hungary Bank of Ghana, bought a “covid-19 relief Private/exchange- Correction: In last week’s story on benchmark India traded funds bond” worth 5.5bn cedi ($950m) from the providers (“The rule-makers”, October 24th) we said South Africa Other that debt issued by China’s policy banks is being government in May to help fill its financing Source: IMF included in JPMorgan Chase’s emerging-market gap. In the Philippines, Rosalia De Leon, local-bond index. It is not. Sorry. 72 Finance & economics The Economist October 31st 2020

2 The past half-year therefore presents a The fiscal rules have been periodically puzzle. Given that China has racked up big tweaked over the years. Brussels shifted inflows, how can the yuan have remained away from headline targets to focus on stable without an offsetting increase in for- “structural” deficits that sought to strip out eign-exchange reserves? One possible ex- the effect of the business cycle. But conjur- planation lies on the balance-sheets of its ing reliable estimates in real time has been commercial banks. Their foreign assets, impossible—often forcing governments to net of liabilities, have soared by $125bn tighten prematurely. In 2011 members since April. China’s big banks are all state- agreed that debt levels over the 60% limit owned, so it is conceivable that the govern- should be cut by one-twentieth each year. ment has used them as proxies. Adding The “fiscal compact”, passed at the urging their foreign holdings to official reserves of Germany in 2012, obliges governments paints a picture more suggestive of inter- to try to keep structural deficits close to vention to suppress the yuan (see chart). zero. In 2015 the commission clarified the Several currency traders sense the hand cases in which exemptions could be grant- of the state, albeit more discreet than in the ed, including structural reforms with up- past. “My guess is that the central bank now front costs, and public investment. has special trading accounts at the state All this gave birth to the monster Eu- banks,” says one. Yet it is not an open-and- rope knows today. This proliferation of shut case. Exporters themselves have rules has enabled more nuanced negotia- wanted to keep a large portion of their rev- tions between the commission and gov- enues in dollars, worried that friction with ernments, argues Gregory Claeys of Brue- America could end up hurting the yuan. gel, a think-tank in Brussels. The price is a China also has many tools for influenc- loss of accountability and transparency. ing the exchange rate beyond direct inter- The commission might instruct a finance vention. On October 12th the central bank Europe’s public finances minister, accountable to a national parlia- made it cheaper to short the yuan in for- ment, to shave a few points off their deficit ward trades, a signal that it wanted to limit The fiscal question while dangling the prospect of later invok- appreciation. Then on October 23rd a cur- ing an escape clause—and a few months rency regulator said that a “smart market” later, when the cyclically adjusted deficit would always consider upside and down- has been recalculated, say something dif- side risks, a reminder that China wants the ferent. “That’s when you start debating, yuan to be volatile but within a fairly tight BERLIN should I tell the prime minister or should I The suspension of the eu’s rule book range. “Chinese officials have perfected the just ignore the blighters?” says Thomas offers space for a wider rethink game of telling American officials that they Wieser, a former euro-zone official. Mis- are not intervening while persuading mar- he schleswig-holstein question, a trust is further fostered by governments ket participants that they will intervene if T19th-century diplomatic teaser, was that often find it easier to blame slow necessary,” says Brad Setser of the Council said to be so complicated that of the three growth on the constraints of Brussels rath- on Foreign Relations, a think-tank, who people who had ever understood it, one er than their unwillingness to reform. also advises Joe Biden’s team. had forgotten it all, another was dead and In February the European Commission If China is intervening, the most chari- the third driven mad. Readers of the Euro- announced another review of the rules. Co- table defence is that it views its big lead in pean Commission’s 108-page “Vade Me- vid-19 put it on ice, but could also affect its gdp growth as transient. A big jump in the cum” on the Stability and Growth Pact outcome. The sgp is suspended until the yuan when other countries are hobbled (sgp), the European Union’s fiscal rule end of 2021, in order to allow governments would set it up for a potentially destabilis- book, might sympathise. Over the years the facing plummeting revenues and huge so- ing fall when they recover. Leaning against rules have sprouted a head-spinning array cial bills to run large deficits. That offers appreciation helps prevent that. But if Chi- of exceptions, interpretative possibilities space for a broader debate. Italy’s govern- na’s outperformance endures without be- and get-out clauses. No finance minister in ment, with a debt load nearing 160% of gdp ing reflected in the yuan, charitable feel- Europe fully understands them, says a (see chart), will hardly be expected to cut it ings will quickly evaporate. 7 Brussels insider. by five percentage points a year. And with 1 Yet at the heart of the eu’s rules lie two simple figures, anchored in the Maastricht A reserve reservoir treaty of 1992: governments should aim to More of a guideline China, $trn run budget deficits no higher than 3% of Gross government debt, % of GDP gdp 5 and to cap the public-debt stock at 60% 160 Net foreign assets of of gdp. As countries prepared to enter a commercial banks Italy 140 4 monetary union without a central fiscal authority, rules were needed to bind the 120 3 hands of the spendthrift. The quid pro quo France 100 European for strict rules was a politicised process of 80 enforcement. In 2003 France and Germany Union 2 60 Foreign-exchange exceeded the deficit threshold and then EU public-debt Germany 40 reserves 1 cowed the rest of the eu into letting them ceiling escape unpunished; an early blow to the 20 0 rule book’s credibility from which some F’CAST 0 201816141210082006 say it never recovered. No country has ever 1998 2005 10 15 21 faced the fines that notionally apply to seri- Sources: People’s Bank of China; The Economist Source: European Commission ous miscreants. The Economist October 31st 2020 Finance & economics 73

2 monetary policy running out of ammuni- plying a debt-sustainability test to tinguish better between investment and tion, fiscal policy will have to do more for countries’ budgetary plans. current spending. the recovery. Such far-reaching schemes stand no France in particular is pressing for For some, the rules have wholly out- chance of becoming reality—and not only changes. But few matters are as divisive lived their usefulness. In a new paper Olivi- because they would mean reopening the among the eu’s members as fiscal policy. er Blanchard, a former chief economist of eu’s treaties. A more moderate proposal, And the debate will only begin in earnest the imf, and two co-authors say that in a advanced among others by the European next year. For now the eu is focused on im- world in which nominal growth is likely to Fiscal Board, an advisory body to the com- plementing a €750bn ($880bn) recovery exceed interest rates for a long time, debt mission, calls for a simpler framework: a plan it agreed in July. Some hope this fund burdens can be sustainable at levels far debt “anchor” (which some suggest could could prove a stepping stone to the sort of higher than could have been imagined be higher than 60%), and a spending rule permanent European fiscal capacity that when the Maastricht treaty was being writ- that would cut excessive debt but adjust the would render rules for national govern- ten. The authors suggest replacing the tan- pace of belt-tightening when growth is ments less relevant. But that is an argu- gle of rules with looser “standards”, and ap- slow. The commission itself wants to dis- ment for another day. 7 Buttonwood Blitz-coin

Revisiting the investment case for bitcoin very tuesday for most of 1979-80, the the entire system of bitcoin users. The is difficult to make a lot of money buying EBlitz wine bar in Covent Garden was system’s dispersed nature means that an asset that everybody likes. And as with host to an influential club-night. London tampering with the accounts would re- the Blitz, the infamy and outrage is part was then a run-down city. The Blitz was a quire gaining control over a majority of the of the allure. Older visitors might grum- seedy spot. What made it remarkable network’s computers. That is an important ble that the music played there was were the Blitz Kids, the extravagantly source of trust in bitcoin. unremarkable or that the venue was a dressed Tuesday-night regulars. A teen- A big part of its appeal to users is that dump. It didn’t matter. The club acted as age Boy George worked in the cloakroom. no one official entity—no government, a focal point for like-minded people. The door policy was strict. To get in, said bank or tech firm—is in charge. (This is That is an underrated virtue. Thomas Steve Strange, who ran the club-night, also what a lot of people dislike about it.) Schelling, a Nobel prize-winning econo- you had to look “like a walking piece of The system is self-regulating. It is also mist and game theorist, contended that art”. Mick Jagger was once refused entry. self-limiting. Bitcoins are “mined” when a people gravitate towards focal points This all seemed shallow and tran- computer solves a very time-consuming without formally agreeing to do so. His sient. The make-up, the get-ups and the maths problem. It must identify a large insight extends to asset markets. Gold evident disdain for people who were not number encrypted in the system’s code. bars—or bitcoins—have value if enough walking pieces of art were marks of Over time the remaining numbers become people tacitly agree that they do. unseriousness. Yet the Blitz Kids, a mix harder to find. Eventually the mine will be What precisely might that value be? of art students and urchins, would go on exhausted. Bitcoin’s supply protocol is as An honest answer is: “Who knows?” to shape popular culture, according to restrictive as the Blitz’s door policy. Only Bitcoin has no intrinsic worth. As with “Sweet Dreams: The Story of the New 21m bitcoins will ever be produced. gold, there is no stream of future divi- Romantics”, a new book by Dylan Jones. Millennial techies are at home with all dends to build a valuation around. Yet This brings us to another hangout for this. The older technophobic crowd tends people have become comfortable with oddballs, fantasists and drop-outs: bit- to be hostile. So be it. “That most people gold as an asset because it has been coin. To most people it seems at best a still hate bitcoin isn’t a bad thing,” writes around for so long. Bitcoin is a newcom- fad, at worst a con-job. But it refuses to Dylan Grice of Calderwood Capital, an er, but its use is growing. So if you believe disappear. And its price in dollars is up alternative-investment boutique, in a it has a future, you may want to own by around 150% since March. recent letter to clients. This is to say that it some, says Mr Grice. Indeed if you like It is hard to have a sensible conversa- gold as a hedge against a revival in in- tion about bitcoin. To show interest is to flation or some other calamity, you invite contempt from sceptics and an might consider transferring some of inbox stuffed with get-rich-quick pro- your gold allocation to bitcoin. It has posals from boosters. But a nagging advantages over the precious metal: it thought will not go away. What if these can be more easily stored and trans- crypto-kids are on to something just as ferred, for instance. In some places, you the much-derided Blitz Kids were? After can actually use it. all, as well as notoriety, bitcoin has inge- Bitcoin is a pretty tiny club. Beside it, nuity and scarcity on its side. gold looks as capacious as Wembley Start with the ingenuity. Even people Stadium. The market value of all bitcoin who are hostile to bitcoin will concede is just 1-2% of the value of all the gold that its technology is fiendishly clever. It above ground. Scarcity is a trait of many is essentially a way of accounting for things that are perceived to have value. who has spent what. Instead of a central Steve Strange, who sadly died in 2015, exchange to keep score, and to verify understood this fully. “The best move I payments and receipts, it uses an elec- ever made was turning Mick Jagger away tronic ledger that is distributed across at the door,” he said. 74 Finance & economics The Economist October 31st 2020 Free exchange The notorious GDP

What measures of output can and cannot tell us about the post-pandemic economy vid-19 is a kink constricting the torrent. Because of the pandemic, many normal activities—meals out, holidays, trips to the dentist— have gone unrealised. The kink has been more obstructive in some places than in others; Germany’s economy is forecast to shrink by 6% this year, whereas Spain’s may contract by 13%. The question is whether kinks today cause lingering damage to the hose, affecting its long-run capacity—ie, whether there will be what economists call “hysteresis”. The extent of such scarring is not clear-cut. Hysteresis is a serious worry. imf forecasts suggest that many large economies—Brazil, Britain, France and Japan among them— will produce less in 2022 than they did in 2019, in real terms. In Ita- ly the shortfall may persist through 2025. But the depth and persis- tence of these effects is only loosely related to how much output flows through the hose this year. Consider the potential sources of long-run damage. Lost income for firms and households could mean loan defaults and bankruptcies, all of which stand to impair recovery as the threat from covid-19 recedes. Company shutdowns that sever job ties could delay a return to full employment and ex- tend the period during which jobless workers’ skills and networks erode. A shortfall in investment has also checked the flow of gdp this year in ways that might depress long-run growth, by reducing levels of capital per worker and undercutting productivity growth. ity the world’s chartmakers. For years, normal economic fluc- Tumbling private investment accounted for roughly a quarter of Ptuations will be dwarfed by the extraordinary gyrations of 2020, the dramatic decline in America’s gdp in the second quarter. such as the third-quarter gdp figures that are now rolling in. These Yet the risk of scarring can be mitigated. Generous government data are informative—measures of output today are in part a re- stimulus could help break the link between households’ con- flection of governments’ success or failure in controlling the sumption today and their ability to consume tomorrow. Such re- spread of covid-19. Yet they can easily mislead, and should be lief may not have boosted gdp by much so far: recipients may have treated with care. chosen to save their handouts, rather than spending them, or may This year’s gdp figures pose a number of interpretative chal- have been forced to do so, because of lockdowns. Although stimu- lenges. In America and Japan, for instance, statisticians present lus cheques pushed up disposable incomes in the second quarter gdp growth compared with the previous quarter as an annualised in America, for instance, households still saved 26% of their in- rate, indicating how much an economy would shrink or expand if come, up from 7% in the second quarter of 2019. But healthy house- its performance in the relevant quarter were sustained for an en- hold balance-sheets prime the economy for a boom after the pan- tire year. As economies have swung into and out of lockdowns the demic. This is why allowing some relief to lapse over the summer practice has yielded numbers that are astonishing and misleading will be damaging. (The failure to renew stimulus is also a symptom in equal parts. Real gdp in America shrank at a reported annual- of lawmakers’ mistaken emphasis on the short run. More borrow- ised pace of 31% in the second quarter, seeming to suggest that co- ing today is likely to be better for long-run fiscal sustainability vid-19 swallowed nearly a third of America’s economic output. In than a stingy response that depresses incomes for years to come.) fact, production in the second quarter was 9% below that in the first—still staggering, but quite a lot less dramatic. Got a story to tell Simple mathematics adds to confusion. As The Economist went The extent to which investment today affects tomorrow’s capacity to press the Bureau of Economic Analysis was expected to report to grow is also harder to assess than you might suppose. When that American gdp rose at an annual pace of about 35% in the third firms explore ways to make use of new technologies, as many have quarter, compared with the second. The rate in this case is doubly been forced to do this year, they are spending on “intangible capi- misleading. Output probably rose by just 8% from the second quar- tal”, which may improve long-run growth without being recorded ter to the third. Though the third-quarter rise is larger, in absolute in today’s gdp. China’s expansion this year, by contrast, has been terms, than the second-quarter fall, the fact that the third-quarter powered by investment in housing and infrastructure. Capital growth rate took place from a pandemic-diminished base of out- spending accounted for all of its economic growth in the second put means that American gdp will probably still be about 2.5% quarter, compared with the previous year, offsetting a steep drop lower than it was a year ago. in consumption, and for more than half of the rise in gdp in the A similar year-on-year drop is expected for the world economy; third quarter. If these projects were well chosen, then they should the imf expects global output to shrink by 4.4% this year. Excep- contribute to future growth. If they were not, however, then an im- tions—like China, where gdp in the third quarter stood about 5% pressive gdp figure in 2020 may have bought little more than above its level in the third quarter of 2019—look not only to have short-term bragging rights for the Chinese government. managed the crisis better than others but to have stolen a march on No statistical measure is perfect. gdp is a crude proxy for a the rest of the world. Looks, though, can be deceiving. gdp is what country’s economic health at the best of times, the sterling efforts economists call a “flow” variable: an estimate of how much is pro- of government data-gatherers notwithstanding. Tempting as it is duced (or, equivalently, how much is spent or earned) in a period of to compare flows, sound economic management demands a dif- time. If the economy is a hose conveying a stream of water, co- ferent focus in the face of a deadly pandemic. 7 Property 75 designed for clearer thinking Discover our app The best of our journalism, handpicked every day. Plus your weekly edition, morning briefings, podcasts and more

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Lunar exploration its way to Saturn. The hints became stron- ger a decade later when Chandrayaan 1, an Watermarked Indian probe, flew to the Moon. An Ameri- can instrument on board, the Moon Miner- alogy Mapper (m3), employed a spectrome- ter to examine sunlight reflected back from the lunar surface. m3 found that infrared light of a specific wavelength—three mi- There is now cast-iron evidence for water on the Moon. And it may be more crons—was being absorbed by the surface. widespread than previously suspected This is an absorption pattern shown by wa- f human beings should ever wish to The other investigation, led by Casey ter, but also by hydroxyl. Ibuild bases on the Moon, those bases will Honniball of the Goddard Space Flight Cen- In October 2009, a few months after the need water. Residents will require it not tre in Maryland, a branch of nasa, Ameri- results from m3 had been published, nasa only for their own sustenance but also as a ca’s space agency, confirms the presence of crash-landed the spent stage of an Atlas V raw material for rocket fuel to power ad- water molecules (H2O) on the Moon’s sur- rocket into Cabeus, a crater near the Moon’s ventures farther afield—Mars, for example. face. Previous evidence could not distin- south pole. They chose Cabeus because it Given the cost of blasting things off the sur- guish such molecules from hydroxyl radi- was known to have areas in perpetual shad- face of Earth, however, such a base would cals (OH), which are subunits of water that ow. The impact was followed minutes later be best served by finding its water locally. A are normally chemically bonded to other by lcross, the Lunar Crater Observation pair of studies published on October 26th, substances. Intriguingly, these water mol- and Sensing Satellite, its cameras trained in Nature Astronomy, will therefore raise ecules are on sunlit parts of the surface, on the site taking pictures and measure- the hopes of would-be lunar settlers. away from any cold traps. ments of the resulting cloud of debris. One, led by Paul Hayne of the University Previous scans of the Moon’s south pole of Colorado, Boulder, shows that more of Sea of showers in the 1990s, by nasa missions called Cle- the Moon’s surface is in perpetual shadow Despite the Moon being Earth’s closest and mentine and Lunar Prospector, had indicat- than was previously believed. This matters most studied celestial neighbour, the pres- ed large amounts of hydrogen were present because ice—the form in which any lunar ence of water there was confirmed only re- in the region, though it was unclear what water is likely to exist—would be stable and cently, by a gradual accumulation of evi- form this hydrogen took. lcross was de- long-lived in such cold, shaded regions. dence. In 1999 a nasa craft called Cassini signed to find out. The crash excavated 350 Most of the lunar surface is bathed in harsh detected hints of the stuff as it flew past on tonnes of lunar regolith, creating within ionising radiation from the sun, so any wa- Cabeus a crater 20 metres wide and gener- ter molecules present would swiftly be ating a plume that rose 10km from the sur- Also in this section torn apart or disappear into space. But Dr face. Among the ejecta, lcross detected the Hayne’s work calculates that there are 78 How to improve the world’s fisheries characteristic three-micron spectroscopic around 40,000 square kilometres of these signal, but still could not distinguish 79 Rats, palms and Palmyra ice-preserving “cold traps” on the Moon. whether the cause was water or hydroxyl. 1 78 Science & technology The Economist October 31st 2020

2 One way to tell the difference is to look tions that might be small but nevertheless sults, then, give mission planners some- for missing light at six microns, too—for maintain shadows where the temperatures thing to think about—not least those in- only water molecules absorb at this wave- stay low enough to accumulate ice. volved in nasa’s Artemis project to land length. So that was what Dr Honniball set Just because cold traps exist, however, people on the Moon some time this decade. out to do. In 2018 she commandeered the does not mean they have trapped anything. Deciding where to site a base, should one only instrument capable of making the rel- Finding out if they have, and also answer- ever be built, has always been a balance be- evant measurement—the 2.5-metre-wide ing the questions left open by Dr Honni- tween the availability of water for food and Stratospheric Observatory for Infrared As- ball’s work, requires further examination fuel, and of sunlight for power. The idea of tronomy (sofia) telescope, which sits on of the regolith itself. In November 2023 doing so at the south pole, to provide the board a modified Boeing 747 that can fly it nasa hopes to launch a mission called vi- water, would have come at the cost of astro- to an altitude of 13km. This is above 99.9% per (Volatiles Investigating Polar Explora- nauts having to work and live in pitch-dark of the water vapour in Earth’s atmosphere, tion Rover) to the Moon’s south pole. This conditions where temperatures rarely ex- which would otherwise obscure any infra- craft will be armed with instruments de- ceed -160°C. The possibility that better-lit red signal reflected from the Moon. signed to prospect the landing area for and marginally less hostile parts of the lu- sofia normally observes distant celes- minerals and ice. nar surface might have water as well will be tial objects, such as black holes. Instead, Dr Both Dr Honniball’s and Dr Hayne’s re- a welcome prospect. 7 Honniball pointed it towards Clavius, a cra- ter about 75° south of the Moon’s equator, and which, perhaps coincidentally, was the Fishing fictional site of an American Moonbase in “2001: A Space Odyssey”. She found an ab- Have your hake and eat it sorption line at six microns in the reflected sunlight. This confirmed that, here at least, between one and four parts in 10,000 of the material of the lunar surface is water. How useful such water would be for fu- ture missions depends, though, not only Stopping some fishing would increase overall catches on how much of it there is but also on how it is stored in the regolith. One possibility is n 2018, the most recent year for which elsewhere. If the right extensions are that it exists as ice crystals in microscopic Irelevant data are available, people con- picked, their model suggests, designating a voids between regolithic grains. If that is sumed more fish than they did either pork mere 5% more of the world’s oceans as true, lunar settlers could simply heat the or beef or poultry. Humanity’s appetite for mpas—which would triple the area protect- regolith up to liberate its water. Dr Honni- the sea’s bounty has more than doubled ed—could increase the future global catch ball thinks, however, that the water she has since 1990. Fish, whether wild caught or of the 811 species they looked at by more found is more likely to be trapped in tiny farmed, now make up nearly a fifth of the than 20%. That corresponds to an extra glassy beads that form when the lunar sur- animal protein that human beings eat. 10m tonnes of food a year. face is hit by micrometeorites. In this context, running the world’s The idea that restricting fishing would The theory behind this idea is that the fisheries efficiently might seem a sensible permit more fish to be caught may seem solar wind, which is composed largely of idea. In practice, that rarely happens. Even counterintuitive, but the logic is simple. protons, the nuclei of hydrogen atoms, well-governed coastal countries often pan- Fish in mpas can grow larger than those at continuously deposits that element into der to their fishing lobbies by setting quo- constant risk of being pulled from the the regolith. Some of this hydrogen then tas which give little respite to battered pi- ocean. Larger fish produce more eggs. More reacts with oxygen atoms present as part of scine populations. Those with weak or eggs mean more fry. Many of these young-1 lunar minerals. That leads to the creation corrupt governments may not even bother of hydroxyl radicals. When a micrometeor- with this. Deals abound that permit outsid- ite hits the Moon, the impact vaporises the ers legal but often badly monitored access regolith. Everything is lifted into space, to such countries’ waters. And many rogue where the hydroxyls combine to form wa- vessels simply enter other people’s fishing ter molecules. These molecules are then grounds and steal their contents. encapsulated within drops of rapidly cool- The demand side of the equation, then, ing regolith as it falls back to the surface. has many problems. But there may be a way to improve the supply side: increase the Sea of cold area where fishing is forbidden altogether. Extracting water from such beads would This paradoxical approach, which in- not be straightforward. A more promising volves the creation of so-called marine pro- source is the ice thought to exist in cold tected areas (mpas), has already been dem- traps. Dr Hayne’s team used high-resolu- onstrated on several occasions to work tion images from nasa’s Lunar Reconnais- locally. Valuable fish stocks off Apo island sance Orbiter to identify potential cold traps in the Philippines increased significantly all across the Moon’s surface. There are after a no-take reserve was created in 1982, more than had been hoped for, and they and similar results have been forthcoming range in size from several kilometres to a off the coasts of Florida, South Africa and St few centimetres across. Most, as expected, Lucia. Extrapolating from these examples, are found near the poles, where the sun, Reniel Cabral of the University of Califor- when visible, remains near the horizon nia, Santa Barbara and his colleagues have, and shadows are consequently long. But a as they describe in the Proceedings of the small number also exist at lower latitudes, National Academy of Sciences, built a model created by craters or other surface varia- which explores the idea of extending mpas Net benefits The Economist October 31st 2020 Science & technology 79

2 sters then grow up and move out of the safe Ecology world war, however, it was the site of a na- zone, thus becoming available to catch in val airbase—and along with the ships, adjoining areas where fishing is permitted. Rats, palms and planes and personnel that serviced this Dr Cabral and his team based their cal- base came rats. culations on data they compiled for 1,338 Palmyra Island Because of the damage these rodents stocks of fish and marine invertebrates. For cause, the elimination of rats from small each they mapped the geographical range, islands like this one has become some- mobility and population growth of the lo- thing of a cottage industry in recent years. The law of unintended consequences cal species, and assessed the sustainability More than 400 have been thus cleared of manifests itself on a Pacific atoll of present-day fishing levels. That let them their infestations. Palmyra’s turn was create a model of the ocean from which the n the hierarchy of conservationists’ scheduled for 2011, and Ms Miller-ter Kuile impact of changes in fishable area could be Iconcerns, animals often seem to trump saw this as an opportunity to observe how assessed. Working at a fairly coarse resolu- plants. For example, feral rats that live on the local plants would respond. tion—each pixel corresponding to a square islands after having been introduced acci- In 2007 she and her colleagues estab- of ocean 55km across—they discovered dentally by passing ships are excoriated be- lished seven vegetation-monitoring plots that a small, well-aimed increase in the cause of the damage they do to local wild- on the atoll, each 300 square metres in size of mpas brought substantial benefit. life. More than 100 island-based animals area. They observed the plants in these have been exterminated or are imperilled plots until the moment, four years later, Less is more by these rodents—birds being at particular when doom for Palmyra’s rats rained down Though mpas work their magic on all sorts risk through loss of eggs and nestlings. The from the skies in the form of bait stations of fishing grounds, Dr Cabral’s model sug- effects of the interlopers on the local flora loaded with poison. That this bombard- gests they are especially beneficial for the are, however, less well investigated. ment did for the rats successfully was con- worst-managed areas, most of which are Rats’ main source of nutrition being firmed the following year, by the setting up tropical—and in particular for overfished seeds and fruit, this is a surprising omis- of further bait stations. Not a single station species such as Atlantic horse mackerels, sion. But it has been rectified in part by a was touched. The animals were gone. Ms Japanese anchovies and Argentine hake project undertaken by Ana Miller-ter Kuile Miller-ter Kuile and her colleagues waited a (the catch pictured on the previous page). of the University of California, Santa Bar- further three years for things to settle They also have the virtue of simplicity. bara. The object of Ms Miller-ter Kuile’s at- down, and then got back to the task of mon- The setting of quotas is open to pressure to tention was Palmyra, an atoll that is one of itoring their plots. They did so for four overestimate of how many fish can safely the most remote specks of land in the Pacif- more years. be caught. And different species need dif- ic Ocean. And, as she describes in Biotrop- ferent arrangements, making manage- ica, by focusing on the atoll’s plants she No good deed goes unpunished ment harder. The breeding habits of the showed just how extensive an effect rats The difference this second time around fish concerned must be monitored, and can have on an isolated island’s ecology. was palpable. During both periods of ex- good estimates made of their numbers. She also showed, though, that restoring amination, the researchers concentrated This is difficult enough for countries with matters to the status quo ante bellum is not their efforts on juvenile trees. Between well-developed fisheries-research estab- as easy as might be hoped. 2007 and 2011 they found that the mass of lishments. For those without such it is lit- Palmyra, an American territory, is the such trees remained unchanged. Between tle more than guesswork. And the problem northernmost of the Line Islands. At the 2014 and 2017 it rose 14-fold. Ironically, is made yet more complicated by the fact moment it has no permanent human resi- however, the main beneficiary of this ex- that tropical ecosystems are more speciose dents. But it does host a scientific base that pansion was the coconut palm. and thus harder to understand and manage is home, at any given time, to a couple of Though coconut palms do grow wild on than those in temperate climes. dozen researchers. During the second Pacific islands, those on Palmyra are, like Setting the rules for an mpa is, by con- the rats which once inhabited it, aliens. trast, easy. You stick up a metaphorical sign They are the descendants of palms import- that says, “No fishing”. Knowing who is ed to create copra plantations. In the 1850s, breaking the rules is easy, too. If your gear before people started taking an interest in is in the water, you are fishing illegally. the place, Palmyra’s coconut-palm popula- There are, Dr Cabral and his team readi- tion is reckoned to have been about 4,000 ly admit, limitations to their model. Not all adult trees. Copra farming changed this fish stocks are equally well recorded, and, though the last planation was aban- meaning many pertinent species escaped doned many years ago, the consequence the analysis. Including these would more was that in 2005 the coconut-palm popula- than double the underlying tonnage of tion exceeded 53,000. Now that the rats are catch being looked at, and might reason- gone, Ms Miller-ter Kuile’s work suggests ably be presumed to add to the increase in this population will grow yet bigger. yield that the model already predicts. Also, Even without its rats, then, Palmyra’s though good data exist about the move- ecosystem looks unlikely to return to any- ment of fish around the world’s oceans, thing approaching its prelapsarian state where they spawn is less well understood. without further human assistance. In 2019 As spawning grounds are prime sites for the Nature Conservancy, an American mpas, this uncertainty muddies the waters. charity that now owns most of the atoll, be- The researchers’ hope, though, is that— gan a further project: uprooting coconut- perhaps inspired by this study—some gov- palm sprouts to give other species, particu- ernments will now think it worthwhile to larly the delightfully named grand devil’s conduct more detailed investigations of claw, a chance. Whether culling the coco- their own. If a bit more protection results nuts in this way will also have unintended in a lot more fish, everybody wins. 7 Gotcha! consequences remains to be seen. 7 80 Books & arts The Economist October 31st 2020

Also in this section 81 Matisse in lockdown 82 The exorcists 82 A Kenyan novel in verse 83 Johnson: The puzzle of language

Political philosophy was founded. It has been an essential in- gredient of Western democracy ever since. Sylvanian fantasies Throughout its first 200 years, conser- vatism has contained an unresolvable ten- sion. Robert Peel, the Tory prime minister who created London’s Metropolitan Police, thought his party’s governing philosophy ought to be to oppose unneeded social change wherever possible, but to accept it How a resilient ideology has repeatedly lost its way—and found it again where necessary. Writing much later, Sam- came preoccupied with the need to main- uel Huntington, an American academic, Conservatism. By Edmund Fawcett. tain order. He also worried that democracy thought that in this regard all conservatism Princeton University Press; 544 pages; would ruin valuable elitist pursuits, such was “situational”. But how to tell the differ- $35 and £30 as the composition of lengthy poems about ence between unnecessary change and the decrepit sailors. Southey went further. unavoidable sort? n 1794 two British students made a plan Though he became poet laureate, he Ito set up a radical Utopia—in Pennsylva- thought that people who committed libel Bend or break nia. Samuel Taylor Coleridge and Robert ought to be transported to Australia. When Subordinate to that big question are several Southey envisaged creating a society gov- a cavalry regiment fatally charged into a other conservative puzzles. Is democracy erned along the latest Pantisocratic princi- crowd of protesters in Manchester in 1819, good, because it is generally a source of or- ples, with no private property and plenty of Southey blamed the crowd. der, or bad, because it can pose a threat to time for art. They would write sonnets The crossing of boundaries that sepa- established ways of doing things? Is capi- while ploughing the soil, criticise poetry rate it from radicalism is a theme of talism too disruptive a force for conserva- while chasing buffalo and discuss meta- Edmund Fawcett’s epic history of conser- tives to embrace? Are the masses possessed physics while chopping down trees. It vatism. It begins, as is traditional, with the of plain common sense, or should complex came to nothing, for the usual reasons: lack French revolution. Previous revolu- matters of state be left to an enlightened of money and disagreement about who tions—1688 in England, 1776 in America— (conservative) elite? Is modern architec- would ultimately be in charge. Southey, for could be seen as defences of ancient liber- ture mostly harmless, or should it all be example, thought that women should do ties, and so as attempts to restore some- bulldozed and replaced by something with all the domestic work and the child care. thing that had been spoiled by despotism. a nice portico? Coleridge disagreed. But 1789 was different; there was nothing Previously the author of a penetrating As well as writing Romantic verse, both ancient or restorative about the guillotine history of liberalism, Mr Fawcett—who Coleridge and Southey would go on to be and the basket. In arguments against the also wrote for The Economist for 30 years, prominent conservatives. Coleridge be- French revolution, a conservative tradition from London, Paris, Berlin and Washing-1 The Economist October 31st 2020 Books & arts 81

2 ton, until he retired in 2003—traces these Matisse in lockdown tensions through a multistorey pantheon of thinkers in Britain, France, Germany and Windows of America. Almost all are men; each is put briefly into historical context, with sketch- opportunity es of the politics of their time. The result is more guidebook than essay, but to the ex- tent that Mr Fawcett has a unifying thesis it is that liberal democracies flourish when PARIS Alluring visions of a different world conservatives feel safe in them, and are prone to collapse when they do not. Or, to double french window flung open to put the proposition in reverse: compro- Areveal a glimpse of headland and sea. mising conservatism is a vital part of a The distant peach-pink glow over a Paris healthy democracy; the uncompromising bridge, framed by the dark inky-blue walls kind is a threat to liberty. of an apartment’s interior. The quiet con- Practical, compromising conservatism templation of a violinist as he practises be- of the sort pursued in the past by prime fore a closed upper-floor window. One of ministers and presidents has sought to em- the more unexpected sensations prompted brace its contradictions rather than take by the Centre Pompidou’s major new exhi- sides. By doing so it became the dominant bition, “Matisse, like a novel”, is that the force in Western governance. Despite ini- artist inadvertently captures life in lock- tially setting themselves up as an opposi- down: the confined angular indoor spaces, tion force in the countries covered here, the teasing promise of open windows, the conservatives have exercised more power glimpse of a brighter life beyond. than liberals or socialists combined. They In 1908 Henri Matisse wrote of his own also have a decent record in the kind of so- work: “What I dream of is an art of balance, cial reforms that liberals like to think are of purity and serenity, devoid of troubling their turf. The extension of the franchise in or depressing subject matter…a soothing, Britain is a good example of compromising calming influence on the mind.” His asso- conservatism: British Tories spent much of ciation with decorative art, and his defiant the 19th century arguing for restrictions on use of vibrant colour, earned him a reputa- the right to vote, before doubling the size of tion as a painter of bonheur. The chance to the electorate in 1867—and proceeding to see “Interior with aubergines” (1911), for ex- win six of the next ten general elections un- ample, a vast canvas that vibrates with flo- der the new rules. ral motifs and fabrics and disrupts space Uncompromising conservatism has a and dimension, lent for the exhibition by Let there be light darker history. In Mr Fawcett’s telling it the Museum of Grenoble, is indeed a sheer runs from Joseph de Maistre and his coun- delight. As are the original, vivacious “Jazz” in a profusion of red and gold. “Interior ter-revolutionaries in the French-speaking cut-outs (1943-46) or “Red interior, still life with goldfish”, painted from his fourth- world; to the pro-slavery arguments made on a blue table” (1947), one of Matisse’s last floor Paris studio on the Quai Saint-Michel by John C. Calhoun in America’s Senate; works in oil, on loan from Dusseldorf. in 1914, on the eve of war, speaks more of and on to the 20th-century conservatives Looking at his paintings at a time of solitude. A translucent wash of light on the in France and Germany who failed to de- pandemic, though, is a reminder of how Ile de la Cité beckons through the window, fend democracy, a failure which allowed much more there is to him. The Pompidou framed by the sombre greys and Prussian jackbooted fascists to march through Eu- had to postpone the exhibition, which blues of walls and furniture. Two goldfish rope in the 1930s. Chastened by that experi- marks the 150th anniversary of Matisse’s swim in a bowl, confined. ence, and aided by the foreclosing of radi- birth, from May this year because of co- Matisse’s windows are playful, child- cal options that had tempted some of its vid-19 (it finally opened last week). It has like, enticing, deceptive, but also on occa- adherents before the second world war, reduced the number of tickets sold each sion darker, a hint at the unknown that conservatism then enjoyed its greatest per- day to meet health rules, and closes early to may lurk beyond the comfort of home. In iod—from 1945 until very recently. conform with the nightly curfew in Paris. “French window at Collioure” (1914), it is Now conservatism is in trouble again. Over 230 works are on display, although the shutters that Matisse has given colour, Most of its front-rank thinkers in America none from Russia or private American col- while a black wash obscures the view. Auré- feel orphaned by a movement they helped lections. In a nod to the title of Louis Ara- lie Verdier, the exhibition’s curator, stress- create, as conservatism as a political brand gon’s work “Matisse, a novel”, exhibits are es that Matisse “can also be read in the light has been seized by people like Viktor Or- organised around the thoughts of nine of a certain anxiety”. ban, Marine Le Pen and Donald Trump. De- writers on the painter, and the interplay be- Art was his way to work through it. In feat for Mr Trump, though, would offer an- tween his art and the written word. 1916, as the first world war raged on, the other chance for this flexible ideology’s It is the windows, though, that seize the painter said that he had begun “to use black renewal. The way out, so the past couple of lockdown eye. Unlike the English-style as a colour of light and not as a colour of centuries suggest, is to think hard about vertical-sliding sash version, French dou- darkness”. As lockdowns tighten again, what is worth hanging on to and what must ble casement windows seem designed to this ambiguity, and the uplifting moments be abandoned. And then to compromise. 7 be thrown wide open, to blur the interior of insouciance that the Matisse exhibition and exterior worlds. Raised in northern offers, are unusually powerful. 7 ...... France, Matisse was enchanted by the Med- John Prideaux iterranean light, and brought it in to fuse ...... We identify the reviewers of books connected “Matisse, like a novel” will be at Centre Pompidou, to The Economist or its staff. John Prideaux is inside and out. “Red interior, still life on a Paris until February 22nd 2021. Image: “Celestial the paper’s United States editor. blue table” boldly blends both perspectives Jerusalem” © Succession H. Matisse 82 Books & arts The Economist October 31st 2020

Bumps in the night An early presumed victim was Princess Bentresh, the daughter of a potentate in Uninvited guests what today is Turkey. Her resident demon was said, in a later inscription, to have fled at the sight of a statue of Khonsu, the Egyp- tian lunar god. Mr Laycock surmises that Bentresh may actually have been throwing a tantrum because the pharaoh Rameses II had married her sister rather than her. The Penguin Book of Exorcisms. Demons able to take possession of peo- Edited by Joseph Laycock. Penguin Classics; ple feature in virtually all the world’s main 336 pages; $17 religious traditions: bhuts in the Indian ith disarming banality, in April subcontinent, fox spirits in China and Ja- W2012 Father Michael Maginot, a Cath- pan, zar in parts of Africa and the Middle olic priest in Indiana, wrote to his bishop East. A hadith (a text recounting a saying of about a recent event. During his weekly Bi- the Prophet) has Muhammad driving a de- ble class, he had “received a call…to per- mon from the body of a young boy. He form an exorcism on a boy witnessed by “opened the boy’s mouth and blew into it many as walking backwards up a wall.” three times, and he said, ‘In the name of The boy was the son of Latoya Ammons, God—I am the servant of God—Go away, O the haunting of whose house and the ap- enemy of God!’” parently supernatural possession of whose Many Muslims are nevertheless scepti- offspring became the subject of intense cal of demonic possession, and the leaders Kenyan fiction media coverage and, later, a film. The of the more established Christian churches priest’s request for permission to conduct had until recently come to see exorcism as the ritual makes suitably chilling reading something between a superstition and an Magic mountain for Halloween. Among other things, Ms embarrassment. Yet today it is in greater Ammons’s children were said to break into demand in the Christian world than at any a “demonic chant, where one would stop time since the febrile witch-hunting days and the other would pick up where [the of the 17th century. William Friedkin’s cult first] left off”. film of 1973, “The Exorcist” (see picture), In his commentary on this letter, Joseph prompted a huge uptick in America, while The Perfect Nine. By Ngugi wa Thiong’o. Laycock of Texas State University—author the global spread of Pentecostal and evan- New Press; 240 pages; $23.99. of “Speak of the Devil” and “Vampires To- gelical Christianity has propagated a re- Harvill Secker; £12 day”—does not mention that the family’s branded version of exorcism as “deliv- doctor thought the whole thing was a hoax, erance ministry”. mong the most exciting new writing nor that previous and subsequent tenants Some believers will doubtless see this Aof the past few decades has been the of Ms Ammons’s house did not experience as the result of a rise in genuine demonic reimagining of foundation myths by au- paranormal activity. His anthology of writ- activity. Others may side with a character in thors across the globe: Derek Walcott ings about exorcism, including eyewitness one of the “Colloquies” of that dogged old breathing fresh life into Homer in St Lucia; accounts, is short on scepticism (though sceptic, Erasmus, who argued that “many Murray Bail reinventing the princess-in- not wholly lacking in it). But the book Things that have been printed and pub- the-tower fable among Australia’s ever-va- shows in illuminating detail how the belief lished, as true Relations, were only by Arti- ried eucalyptus forests; Gabriela Cabezón in demonic possession stretches back fice and Imposture, Impositions upon Cámara subversively turning a famous more than 2,500 years. credulous Persons.” 7 gaucho narrative from the macho Argenti- na of the 1870s into a gay feminist story, published in English earlier this year as “The Adventures of China Iron”. Now comes Ngugi wa Thiong’o, an 82- year-old Kenyan novelist and playwright, with an experimental epic written in blank verse—originally in his native tongue and translated into English by the author him- self. It tells of the very first Kikuyu and their passionate attachment to Mount Kenya, the home of their god, Ngai. Early in their marriage, fleeing war and starvation, Gikuyu and Mumbi, his “partner in everything”, settle in the moun- tain’s foothills. They bring up a family of famously beautiful, self-reliant girls; the youngest, Warigia, is an ace with the bow and arrow, although disabled from birth and unable to walk. When 99 suitors turn up one day in search of brides, Gikuyu and Mumbi urge their daughters to test the men first and then choose, but above all to Come out, come out wherever you are choose wisely. 1 The Economist October 31st 2020 Books & arts 83

2 “Warigia is my last born,” Mumbi explained. new homes, each named after one of the feared that the rot might pollute the rivers. “She makes up the Perfect Nine. daughters. Then the suitors must bring Polluting air and water is poisoning life. Her eyes can see a long way, and her ears back the cure for Warigia’s disability, We chased the ogre with the sweet smell of hear sounds from afar. which, they are told, is a single hair that can fresh flowers. Her legs are the only organs that remained be found only on the tongue of an ogre. Gifted, ingenious and brave, the older sis- those of a child. The rest of the body is a grown woman, and The sisters take the men up the moun- ters have a generosity of spirit that is well she does things her own way.” tain, trying their courage and devotion. conveyed in the book’s lolloping rhythms. Some get eaten by crocodiles, others sink But it is Warigia’s story—with its chal- Mr wa Thiong’o’s writing is rich with Kiku- in the mud or are bitten by snakes. Many lenges, uncertainties and bittersweet end- yu folklore and observations about this run away. And then on the upper slopes ing—that gives this tale its deep humanity. mountain of tropical forests and icy peaks, they encounter the ogres, among them the Most writers lose their energy and inven- and his verse has a galloping intensity that Ogre of Endless Tears and the Ogre that Shat tiveness as they grow old. Not Mr wa gives the narrative momentum. The men Without Stopping, around whom the air Thiong’o. “The Perfect Nine” is one of the are instructed that they must first build “smelled of pure rot”. The posse: year’s great discoveries. 7 Johnson The riddle of the cucumbers

A tantalising book of puzzles that doubles as an introduction to linguistics ou have a candle, a box of matches together the answer using barely sufficient passage of Old Persian in cuneiform Yand some tacks. How do you affix the evidence, some common sense and some script, starting with impossibly little candle to the wall so the wax won’t drip uncommon reasoning. information. Mr Bellos provides short on a table below? It is a classic problem Uncommon, at least, to non-speakers narratives about such feats, and how first devised in the 1930s. Most people of the languages involved. Languages pay they in turn inspired others—in this struggle with it. The easiest solution: attention to different things: a famous case, the interpretation of cuneiform pour out the matches, and use the tacks formulation of this idea, by Roman Jakob- writings from Babylon and Sumer. and part of the matchbox to make a little son, a Russian-American linguist, is that Along the way, the seemingly exotic shelf, which the candle can sit on. The languages differ not in what they can say, becomes familiar. In a simplified but reason people struggle is “fixedness”: the but what they must. English-speakers take realistic example, readers can recon- association of candles with the matches note of the distinction between “a man” struct proto-Germanic, spoken 2,000 themselves is so strong as to blot out the and “the man”, which many languages years ago but never written down, by container. The idea that the box is more could not care less about; when others figuring out patterns of difference in the important simply doesn’t occur. learn English they have to force them- daughter languages of German, Icelandic Now consider this problem, derived selves to grapple with details that seem to and English. Suddenly Icelandic looks from these Japanese phrases: boru niko them trivial. Mr Bellos’s book is not just a like English’s cousin, which it is. But the (two balls), tsuna nihon (two ropes), uma puzzle collection, but an introduction to familiar also becomes exotic. The Tok nito (two horses), kami nimai (two sheets the science of distilling regularities from Pisin creole of Papua New Guinea may be of paper), ashi gohon (five legs), ringo the weird ways in which languages behave. based on English, but few will guess that goko (five apples), sara gomai (five plates) History buffs will enjoy a chapter that gras bilong dok is “the grass that belongs and kaba goto (five hippos). How do you focuses on decoding ancient tongues. to the dog”, or fur. say “nine cucumbers”? Kyuri kyuhon, Some of the challenges are just simple Many people think academic linguis- kyuri kyuko, kyuri kyuhiki or kyuri kyuto? enough to impart a sense of confidence tics is either something to do with work- If that fires you up, you are probably (such as matching runic inscriptions to ing out “correct” grammar (it isn’t), or not only a language-lover but a puzzle- Norse words and the names of gods). Some with learning to speak a dozen languages solver, with the type of intellect that are so hard as to inspire awe for those who (most linguists do not). It is really about thrills not only to cryptic crosswords but cracked them, like the deciphering of a the kind of problem-solving that can to sudoku or brainteasers like the match- help a field linguist translate an isolated box riddle. And Alex Bellos, who has the unknown language, a historical linguist delightful job of “puzzle columnist” at reconstruct a never-written tongue, or a the Guardian, has a book for you: “The computational linguist code a comput- Language Lover’s Puzzle Book”. It begins erised translation system. Many begin- with the Japanese conundrum above (a ners, after the buzz of Mr Bellos’s puz- hint at the answer is at the end of this zles, may also fall in love with the joys of column), and takes readers through a this misunderstood discipline. host of linguistic games that will stretch About those Japanese cucumbers. their minds in ways most were not aware Unless you know a language that behaves they could be stretched. similarly, like Chinese, you may not have Mr Bellos was inspired by the Linguis- thought to consider the shape of the tics Olympiad, a competition for stu- objects being counted. In Japanese this is dents that gives them problems like the integrated into the numbers themselves. Japanese one. It requires no knowledge Once you’ve found the solution, and of Japanese; questions are intentionally those to many other comparable pro- drawn from languages that the contes- blems, it will become second nature to tants won’t know. The point is to piece think outside the matchbox. 84 Economic & financial indicators The Economist October 31st 2020

Economic data

Gross domestic product Consumer prices Unemployment Current-account Budget Interest rates Currency units % change on year ago % change on year ago rate balance balance 10-yr gov't bonds change on per $ % change latest quarter* 2020† latest 2020† % % of GDP, 2020† % of GDP, 2020† latest,% year ago, bp Oct 28th on year ago United States -9.0 Q2 -31.4 -4.6 1.4 Sep 1.1 7.9 Sep -2.2 -15.3 0.8 -106 - China 4.9 Q3 11.2 1.9 1.7 Sep 2.9 4.2 Q3§ 1.7 -5.6 3.0 §§ nil 6.71 5.2 Japan -9.9 Q2 -28.1 -6.4 0.1 Sep nil 3.0 Aug 2.5 -10.6 nil -8.0 104 4.5 Britain -21.5 Q2 -58.7 -10.6 0.5 Sep 0.6 4.5 Jul†† -1.5 -18.9 0.4 -33.0 0.77 1.3 Canada -13.0 Q2 -38.7 -5.8 0.5 Sep 0.7 9.0 Sep -2.1 -13.0 0.6 -103 1.33 -1.5 Euro area -14.8 Q2 -39.5 -8.4 -0.3 Sep 0.3 8.1 Aug 2.3 -9.2 -0.6 -29.0 0.85 5.9 Austria -14.3 Q2 -38.2 -6.4 1.5 Sep 1.1 5.0 Aug 1.0 -7.4 -0.4 -34.0 0.85 5.9 Belgium -14.4 Q2 -40.2 -8.1 0.9 Sep 0.4 5.1 Aug -1.6 -9.6 -0.4 -33.0 0.85 5.9 France -18.9 Q2 -44.8 -10.1 nil Sep 0.7 7.5 Aug -1.6 -10.4 -0.3 -22.0 0.85 5.9 Germany -11.3 Q2 -33.5 -5.8 -0.2 Sep 0.5 4.4 Aug 5.4 -7.2 -0.6 -29.0 0.85 5.9 Greece -15.3 Q2 -45.4 -8.5 -2.0 Sep -1.0 16.8 Jul -2.9 -7.5 1.2 -4.0 0.85 5.9 Italy -18.0 Q2 -42.8 -10.0 -0.6 Sep -0.1 9.7 Aug 2.5 -11.0 0.8 -34.0 0.85 5.9 Netherlands -9.4 Q2 -30.0 -6.0 1.1 Sep 1.1 3.8 Mar 5.8 -5.4 -0.6 -31.0 0.85 5.9 Spain -21.5 Q2 -54.3 -12.7 -0.4 Sep -0.3 16.2 Aug 0.5 -12.3 0.2 -8.0 0.85 5.9 Czech Republic -10.8 Q2 -30.4 -6.9 3.2 Sep 3.2 2.8 Aug‡ -0.9 -6.7 1.0 -37.0 23.3 -1.3 Denmark -7.6 Q2 -24.6 -4.0 0.6 Sep 0.4 4.9 Aug 10.0 -6.3 -0.5 -19.0 6.34 6.3 Norway -4.7 Q2 -19.0 -3.5 1.6 Sep 1.4 5.3 Aug‡‡ 1.8 -0.9 0.7 -66.0 9.35 -1.5 Poland -8.0 Q2 -31.4 -4.0 3.2 Sep 3.4 6.1 Sep§ 2.8 -11.3 1.2 -86.0 3.93 -2.0 Russia -8.0 Q2 na -4.4 3.7 Sep 3.3 6.3 Sep§ 1.9 -4.1 6.3 -17.0 78.7 -19.1 Sweden -7.7 Q2 -29.3 -3.8 0.4 Sep 0.4 8.3 Sep§ 4.5 -4.1 nil -1.0 8.85 9.7 Switzerland -8.3 Q2 -26.1 -4.1 -0.8 Sep -0.9 3.3 Sep 9.0 -4.6 -0.5 -2.0 0.91 9.9 Turkey -9.9 Q2 na -3.9 11.7 Sep 11.7 13.4 Jul§ -4.1 -5.6 14.1 132 8.28 -30.9 Australia -6.3 Q2 -25.2 -4.5 0.7 Q3 0.3 6.9 Sep 1.3 -7.6 0.8 -32.0 1.42 2.8 Hong Kong -9.0 Q2 -0.5 -4.2 -2.3 Sep 0.9 6.4 Sep‡‡ 4.4 -5.8 0.6 -100 7.75 1.2 India -23.9 Q2 -69.4 -9.8 7.3 Sep 6.3 6.7 Sep 0.9 -7.8 5.9 -81.0 73.9 -4.0 Indonesia -5.3 Q2 na -2.2 1.4 Sep 1.9 5.0 Q1§ -1.1 -7.1 6.6 -44.0 14,625 -4.1 Malaysia -17.1 Q2 na -8.0 -1.4 Sep -1.1 4.7 Aug§ 0.5 -8.0 2.6 -82.0 4.15 1.0 Pakistan 0.5 2020** na -2.8 9.0 Sep 9.0 5.8 2018 -1.3 -8.0 9.7 ††† -163 161 -2.9 Philippines -16.5 Q2 -48.3 -6.1 2.3 Sep 2.4 10.0 Q3§ 0.9 -7.9 3.0 -153 48.4 5.6 Singapore -7.0 Q3 35.4 -6.0 nil Sep -0.4 2.8 Q2 18.5 -13.6 0.8 -88.0 1.36 nil South Korea -1.3 Q3 7.9 -1.5 1.0 Sep 0.5 3.6 Sep§ 3.0 -5.8 1.5 -26.0 1,131 3.5 Taiwan -0.6 Q2 -5.5 -0.2 -0.6 Sep -0.3 3.8 Sep 12.3 -1.5 0.3 -35.0 28.6 6.8 Thailand -12.2 Q2 -33.4 -5.9 -0.7 Sep -0.8 1.9 Aug§ 3.1 -6.4 1.1 -47.0 31.2 -3.2 Argentina -19.1 Q2 -50.7 -11.0 36.6 Sep‡ 41.7 13.1 Q2§ 2.2 -10.0 na -464 78.3 -24.3 Brazil -11.4 Q2 -33.5 -5.2 3.1 Sep 2.8 13.8 Jul§‡‡ -0.7 -15.7 2.0 -245 5.74 -30.7 Chile -14.1 Q2 -43.3 -5.6 3.1 Sep 2.6 12.9 Aug§‡‡ 0.2 -10.0 2.5 -52.0 774 -6.5 Colombia -15.5 Q2 -47.6 -7.3 2.0 Sep 2.6 16.8 Aug§ -4.6 -8.8 5.3 -55.0 3,839 -11.9 Mexico -18.7 Q2 -52.7 -9.1 4.0 Sep 3.4 3.3 Mar 0.4 -4.5 5.8 -103 21.2 -10.0 Peru -30.2 Q2 -72.1 -13.0 1.8 Sep 1.8 15.5 Sep§ -0.8 -9.0 3.3 -82.0 3.61 -7.8 Egypt -1.7 Q2 na 3.8 3.6 Sep 4.9 9.6 Q2§ -3.4 -9.4 na nil 15.7 2.8 Israel -6.7 Q2 -28.8 -5.7 -0.7 Sep -1.0 4.9 Aug 3.4 -10.4 0.8 -14.0 3.41 3.5 Saudi Arabia 0.3 2019 na -5.2 5.7 Sep 3.4 9.0 Q2 -4.7 -10.0 na nil 3.75 nil South Africa -17.1 Q2 -51.0 -7.7 2.9 Sep 3.5 23.3 Q2§ -2.1 -16.0 9.3 113 16.3 -10.9 Source: Haver Analytics. *% change on previous quarter, annual rate. †The Economist Intelligence Unit estimate/forecast. §Not seasonally adjusted. ‡New series. **Year ending June. ††Latest 3 months. ‡‡3-month moving average. §§5-year yield. †††Dollar-denominated bonds.

Markets Commodities % change on: % change on: The Economist commodity-price index Index one Dec 31st index one Dec 31st % change on In local currency Oct 28th week 2019 Oct 28th week 2019 2015=100 Oct 20th Oct 27th* month year United States S&P 500 3,271.0 -4.8 1.2 Pakistan KSE 41,186.9 -0.8 1.1 Dollar Index United States NAScomp 11,004.9 -4.2 22.6 Singapore STI 2,483.5 -1.7 -22.9 All Items 129.2 118.1 -5.2 7.4 China Shanghai Comp 3,269.2 -1.7 7.2 South Korea KOSPI 2,345.3 -1.1 6.7 Food 106.4 107.7 6.5 12.6 China Shenzhen Comp 2,239.1 -0.7 30.0 Taiwan TWI 12,793.8 -0.6 6.6 Industrials Japan Nikkei 225 23,418.5 -0.9 -1.0 Thailand SET 1,207.9 -0.7 -23.5 All 150.4 127.7 -12.8 3.7 Japan Topix 1,612.6 -1.5 -6.3 Argentina MERV 43,532.7 -13.1 4.5 Non-food agriculturals 106.2 107.8 4.3 11.7 Britain FTSE 100 5,582.8 -3.4 -26.0 Brazil BVSP 95,368.8 -5.2 -17.5 Metals 163.6 133.7 -16.1 1.9 Canada S&P TSX 15,586.6 -4.0 -8.7 Mexico IPC 37,393.7 -3.3 -14.1 Sterling Index Euro area EURO STOXX 50 2,963.5 -6.8 -20.9 Egypt EGX 30 10,515.3 -5.3 -24.7 All items 152.1 137.9 -6.8 6.1 France CAC 40 4,571.1 -5.8 -23.5 Israel TA-125 1,353.0 -3.4 -16.3 Germany DAX* 11,560.5 -7.9 -12.7 Saudi Arabia Tadawul 8,123.1 -4.4 -3.2 Euro Index Italy FTSE/MIB 17,897.8 -6.2 -23.9 South Africa JSE AS 52,308.1 -5.5 -8.4 All items 121.1 110.7 -6.0 0.9 Netherlands AEX 534.1 -4.2 -11.7 World, dev'd MSCI 2,306.6 -4.6 -2.2 Gold Spain IBEX 35 6,474.4 -4.9 -32.2 Emerging markets MSCI 1,120.8 -1.5 0.5 $ per oz 1,908.4 1,909.7 1.2 28.1 Poland WIG 45,008.3 -6.1 -22.2 Brent Russia RTS, $ terms 1,078.3 -5.7 -30.4 $ per barrel 43.2 41.3 0.6 -33.3 Switzerland SMI 9,618.7 -3.7 -9.4 US corporate bonds, spread over Treasuries Turkey BIST 1,127.0 -7.0 -1.5 Dec 31st Sources: Bloomberg; CME Group; Cotlook; Refinitiv Datastream; Australia All Ord. 6,261.8 -2.2 -7.9 Basis points latest 2019 Fastmarkets; FT; ICCO; ICO; ISO; Live Rice Index; LME; NZ Wool Services; Thompson Lloyd & Ewart; Urner Barry; WSJ. *Provisional. Hong Kong Hang Seng 24,708.8 -0.2 -12.3 Investment grade 167 141 India BSE 39,922.5 -1.9 -3.2 High-yield 551 449 Indonesia IDX 5,128.2 0.6 -18.6 Sources: Refinitiv Datastream; Standard & Poor’s Global Fixed Income For more countries and additional data, visit Malaysia KLSE 1,495.2 0.2 -5.9 Research. *Total return index. Economist.com/indicators Graphic detail Immunity to covid-19 The Economist October 31st 2020 85

The valleys of the → In some Italian towns, more than 1% of people died in covid-19’s first wave

Excess deaths in first wave*, % of population AUSTRIA Bergamo province shadow of death 0.6% died 0 0.20.10.5 1.0 No data 24% with antibodies†

Italian towns with the deadliest first SWITZERLAND waves of covid-19 are doing better now SLOVENIA ne of the most pressing questions Oabout covid-19 is how achievable “herd Milan immunity” may be. Holding other factors Venice FRANCE constant, the more people have protective Turin CROATIA antibodies, the slower the virus spreads. If enough people become and remain im- mune, further outbreaks are prevented. Lombardy region Some experts have advised letting the ITALY 0.3% died young and healthy get covid-19, in order to 8% with antibodies† approach such herd immunity. European Adriatic Castiglione d’Adda Florence data suggest this goal remains distant: 1.1% died Sea within countries, the regions with the 100 km 23% with antibodies† most cases in the spring also tend to have the biggest outbreaks now. Yet broad aver- ages can obscure local variation. And new Italian data show that the worst-hit places → The parts of Lombardy hardest-hit in the spring now have the fewest cases do now enjoy some degree of immunity. Municipalities in Lombardy‡, 2020, excess deaths Like a tornado, covid-19 has walloped New cases per some towns while sparing others. In Lom- in first wave* v confirmed cases in second wave§ 100,000 people§ bardy, the heart of Italy’s first wave, 83% 1,250 more people died of all causes from March Population, ’000 to June than the historical average, an ex- 1,000 cess representing 0.3% of the population. 500 100 Yet some pockets of the region were hit dis- Milan 10 proportionately. The rate was 0.6% of the 750 population in Bergamo province, and more than 1% in 30 of Bergamo’s 243 municipal- 500 ities. If anywhere has enough antibodies to restrain covid-19, it would be these towns. Bergamo (city) 250 Lombardy’s government does not share Castiglione d’Adda case counts for every area. But Isaia Inver- nizzi, a journalist, has gained access to its 0 internal data, which show that the hardest- 0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 hit towns are doing unusually well today. Excess deaths in first wave*, % of population Since September 1st, municipalities with first-wave excess deaths of at least 0.5% of the population have tallied 216 cases per → Mobility declined all over Lombardy, regardless of outbreak severity 100,000 people—one-third as many as in areas with excess deaths around 0.1%. Italy, 2020, mobility outside of residential areas and parks Social distancing has also slowed the vi- % change from baseline**, seven-day moving average rus. According to Google, Lombards moved around 24% less in July than in January, the 0 steepest drop in Italy. But this decline has been similar in all of Lombardy. That leaves -20 immunity as the best explanation for dif- ferences in case counts within the region. Bergamo These data do not prove the case for Varese -40 seeking herd immunity. Without a vaccine, Lombard Rest of Italy the cost of gaining even mild resistance is provinces -60 grim. No national study has found a share of people with antibodies even one-third ↑ Provinces with fewer covid-19 deaths, as high as the 24% seen in Bergamo in July. -80 such as Varese, have socially distanced And Europe’s highest national excess death just as much as hard-hit ones like Bergamo rate, in Spain, is just a fifth of Bergamo’s. Yet for beleaguered Bergamasques, the -100 data are good news. Serosurveys show that Feb Mar Apr May Jun Jul Aug Sep Oct antibodies there are not only common, but Sources: ISTAT; Isaia Invernizzi; Google; The Economist *March 1st-June 30th 2020 †Serosurveys in May-July 2020 especially so among the old and health- ‡With population greater than 4,000 and positive excess deaths, trendline weighted by population care workers, who need them most. 7 §September 1st-October 25th 2020 **Median mobility by day of week from January 3rd to February 6th 86 Obituary Hawa Abdi The Economist October 31st 2020

lets and shrapnel out of them. When famine struck, especially the dreadful hunger of 2011, people came simply to be fed. At times she could not think how to help so many, but gave them whatever she had: sorghum chapatis every other day, a little donated rice cooked up in oil drums, cool water from the wells, a place to sleep. The residents of her village were mostly women and children. Their men had gone: killed, away fighting, or working in some oth- er land. This gave her a fine chance to empower women, and she set to it. She knew how little they counted in Somali society, where boys were kings. When she was a child her mother had died before her eyes after a miscarriage, the blood pooling out of her robe; she decided then to become a doctor, to save the lives of other mothers. At seven she had been cut and stitched, which made the birth of her first child, at 13 after a forced marriage, wretchedly hard. The sickly little girl died, but happily her husband divorced her, and at 17 she leaped into studying: medical training in Kyiv on a Soviet scholar- ship, then a law degree in her spare time. Devoutly Muslim though she was, she dressed as she liked, and hotly disputed the parts of sharia law that offended her. In her village, equal rights were meant to prevail. Men were not allowed to beat their wives, and were locked in a storeroom if they did. Women were taught to sew and read in a special centre. Girls packed the school, smiling shyly in their uniform yellow hijabs alongside the boys. Her two daugh- ters by her second, free, marriage, Amina and Deqo, set the exam- ple by becoming doctors and working with her. As for her, she could hold her own against anyone. Her body might be weak, but her tongue could defend against a thousand. It takes a village She refused to tolerate the clan identities that made men fight each other, forbidding clan politics in the village and hanging white sheets round the boundaries to show it was a neutral place. That did not stop the Islamist militants, however. They routinely blocked food shipments and barged several times into the village, most violently in 2010 when teenage fighters ransacked the hospi- Hawa Abdi, doctor and rescuer of Somalia’s refugees, died tal, smashed the four incubators that were the only ones in the on August 5th, aged 73 country, drove out the patients and tore up their records. She fter her morning prayer and before she had eaten breakfast, shouldn’t be in charge of anything, one gunman sneered, because Athe sun barely up, Hawa Abdi liked to walk around the village. she was old, and a woman. Well, she shouted back, he was young, First she would go to the communal farm to start the generators and a man; he had two testes; but so did a goat. She was doing and check the crops: sorghum, maize, bananas, beans. Then she something to help her country. What exactly was he doing? She de- would go past the villagers’ dwellings, just stirring. When she had manded a written apology. To her great satisfaction, it came. bought this land, in the Lower Shebelle west of Mogadishu, the As their staff were increasingly attacked and killed, the interna- capital, trees stretched to the horizon. Many remained, but now tional aid agencies left one by one. She had mixed feelings about thousands of people sheltered among them, in a haven that had that. People should work, not get handouts; it was better to train come to be called Hawa Abdi, after her. “Where are you going?” one Somalis, many of them nomadic herders, to fend for themselves by dusty, desperate traveller might ask another in the years of Soma- farming or fishing. She gave the villagers patches of land and a lia’s civil wars, and the frequent answer was: “To Hawa.” small fleet of boats to encourage them. But she also needed big in- Her name was not only on it, but she ran it, sorting out pro- fusions of money and willing hands. In 2010 her three-year part- blems with the village elders in the shade of the mango grove she nership with Médecins Sans Frontières, which had helped run had planted. She guided its growth over three decades from a one- large parts of the hospital, came to an end; in 2013 msf left Somalia. room rural maternity clinic, built in 1983 with some family gold The un World Food Programme suspended aid too, and the Italian she had put by, into a 400-bed hospital with three operating the- company that had subsidised the farm no longer dared send ships atres, a school for 850 children and seven feeding centres. Eventu- to buy its bananas. Trips to America from 2010 brought her wel- ally the village was home to 90,000 people. She was chief doctor come publicity and money from the diaspora, but when the for- and surgeon, farm manager, strategist, fundraiser and spokesman eign ngos ventured back in later years they still avoided the riski- for the place. When the rest of the world forgot about Somalia, or est areas, like hers. She thought about leaving too, but who would turned away, she kept going at a furious pace. “Sitting is empty,” care for her patients then? She sighed and stayed. her grandmother taught her, “but working is plenty.” Sometimes she was so weary that she could hardly walk. She This was a village of the poor and needy. Its houses were shacks felt Somalia was lost. What kept her going was a dream of her vil- of sticks and woven grass, or bubble-tents rainproofed with plastic lage as the country in miniature: the Somalia she remembered sheets. New arrivals often slept in the open, lining up each morn- from childhood as a string of jewels along the Indian Ocean, its ing to see her and ask to stay. Many would be women, heavily preg- fields and tall trees greening miraculously after the rains. This nant, seeking a safe place to give birth where care was free. Some seemed to her to have been a society of diligence, honesty, respect people came to find jobs; she trained a band of sharp-eared boys to and love. Slowly, she had begun to rebuild it. No sound of gunfire be security guards and put men to work at building and farming. In there, just the sing-song of children at their lessons; no one hiding the 1990s, when the hospital overflowed with injured soldiers and in terror from armed gangs, but women working at crafts and men refugees who stumbled out of the bush, she became skilled, well fishing off the shore. And if a traveller should ask these people beyond her expertise in obstetrics and gynaecology, at taking bul- where they came from, they would answer: “From Hawa.” 7 3-day virtual summit November 9th–11th 2020

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