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Contents The Economist December 5th 2020 7

The world this week United States 11 A summary of political 30 The recovery falters and business news 31 Wasting campaign cash 32 In praise of Congress Leaders 33 Lead pipes in cities 15 Energy Make coal history 34 The future of intelligence 35 Lexington Jake Sullivan 16 Belarus The colours of terror The Americas 16 Health care Alive and kicking 36 Artists dissent in Cuba 17 America and Iran 37 Alberta goes green A better nuclear deal 38 Bello Argentina’s president without a plan On the cover 18 “The Crown” Truth and fiction Celebrate the decline of coal in rich Western countries. Asia Letters must be next: leader, page 15. On Afghanistan, Asia The world is finally burning 22 diplomats, Hong Kong, 39 Taiwan’s perky economy less of the stuff. It now faces the Democrats, the colour the challenge of using almost 40 India’s wild inequality black, hipsters none at all: briefing, page 25 41 Coal in Australia 42 Dynasticism in Indonesia • Digital health care’s leap Briefing forward The world’s most 42 Japan’s hungry ungulates 25 Coal’s endgame complex and immovable Crushing it 43 Banyan 50 years after a industry has been reinventing novelist’s seppuku itself: leader, page 16 and analysis, page 61. Artificial China intelligence is solving one of A beefier coastguard biology’s biggest challenges, 44 page 75. The pandemic has 45 Jailings in Hong Kong pushed Britain’s National Health 45 Hong Kong’s grand plan Service to breaking point. It has 46 Chaguan The costs of also brought forth a wave of bullying other countries innovation, page 55 • Taiwan’s perky economy Covid-19 has ravaged economies Middle East & Africa all over the world—but not 47 Biden’s ideas on Iran Taiwan’s, page 39 49 Torturing refugees eu • Torture on the ’s doorstep 50 Victory in Ethiopia? Having stolen an election, 50 Boko Haram kills farmers Belarus’s government is abusing those who object: leader, page 16. An interview with Svetlana Tikhanovskaya, page 51 Charlemagne Why shutting down Europe’s ski resorts proves so tricky, page 54 We are working hard to ensure that there is no disruption 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 8 Contents The Economist December 5th 2020

Europe Finance & economics 51 An interview with 68 Ping An’s ﬁntech might Belarus’s leader in exile 70 Data and the quant boom 52 Istanbul’s next earthquake 70 Biden’s economic team 53 France’s security law 71 Buttonwood The case 53 Dutch populism for Europe 54 Charlemagne To ski or 72 Investing in royalties not to ski? 72 India’s stockmarket rally 73 Free exchange Digital Britain currencies 55 The NHS unleashed 57 Trans rights Science & technology 57 The Brexit endgame 75 How proteins fold 58 Bagehot Boris’s 76 The Starship SN8 organisation man 77 Tracking ﬁsherfolk 78 Covid-19 vaccine safety International 59 The growth of communal living Books & arts 79 Our books of the year 82 Books by our writers

Business 61 Digital medicine 62 Pandemic gastronomy Economic & ﬁnancial indicators 63 Volkswagen’s boss 84 Statistics on 42 economies 64 US Congress v China Inc 64 Chinese hospitality Graphic detail 65 Salesforce gets some Slack 85 A covid-19 vaccine and share prices 65 Swiss stakeholderism Obituary 66 Bartleby Managing by Diego Maradona, a genius fuelled by rage Zoom 86 67 Schumpeter Nestlé gets a pick-me-up

Volume 437 Number 9223 Published since September 1843 Subscription service to take part in “a severe contest between For our full range of subscription offers, including The best way to contact our Customer Service Please intelligence, which presses forward, digital only or print and digital bundled, visit: team is via phone or live chat. You can contact us and an unworthy, timid ignorance Economist.com/offers on the below numbers; please check our website obstructing our progress.” for up to date opening hours. If you are experiencing problems when trying to Editorial offices in London and also: subscribe, please visit our Help pages at: PEFC certiﬁed Amsterdam, Beijing, Berlin, Brussels, Cairo, www.economist.com/help for troubleshooting North America: +1 800 456 6086 This copy of The Economist Chicago, Johannesburg, Madrid, Mexico City, advice. Latin America & Mexico: +1 636 449 5702 is printed on paper sourced Moscow, Mumbai, New Delhi, New York, Paris, from sustainably managed San Francisco, São Paulo, Seoul, Shanghai, forests certiﬁed to PEFC Singapore, Tokyo, Washington DC PEFC/29-31-58 www.pefc.org

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The world this week Politics The Economist December 5th 2020 11

Cuban police arrested 14 mem- Joe Biden filled out the rest of bers of a dissident group called his economic team for his Coronavirus briefs Movimiento San Isidro. They incoming government. Cecilia To 6am GMT December 3rd 2020 had locked themselves into the Rouse will lead the Council of Weekly confirmed cases by area, m movement’s headquarters in Economic Advisers, and Brian Havana, and some went on Deese the National Economic 2.0 Europe hunger and thirst strikes, to Council. Both were advisers in 1.5 US protest against the jailing of the White House during the Latin America 1.0 Denis Solís, a rapper charged global financial crisis in 2009. Other with disrespecting authority. The choice of Neera Tanden to 0.5 After the raid hundreds of head the Office of Management 0 activists gathered at the cul- and Budget is more contro- Britain became the first coun- ture ministry. In a small but versial. Ms Tanden has report- O SAJJMAM ND try to license a fully tested rare concession, the vice- edly deleted 1,000 tweets that Confirmed deaths* vaccine for covid-19. The minister of culture met a dele- disparaged Republican Per 100k Total This week medicines regulator gave its gation representing them. senators she now has to count Belgium 145.9 16,911 834 approval to the Pfizer/BioN- on to confirm her in the job. Peru 109.1 35,966 281 Tech jab following a “rolling Brazil’s space agency reported Spain 97.9 45,784 1,747 review” process, used to assess that 11,000 square km (4,000 A court in Hong Kong sen- Italy 94.3 57,045 5,017 promising vaccines during a square miles) of forest were tenced a prominent pro-de- Britain 87.9 59,699 3,166 Argentina 86.6 39,156 1,442 health emergency. Data from destroyed in the Amazon from mocracy activist, Joshua Wong, Mexico 83.4 107,565 3,968 the vaccination programme August 2019 to July 2020, the to more than 13 months in United States 82.3 272,520 11,482 will continue to be reviewed as most since 2008. prison for his role in a protest Brazil 82.1 174,515 3,746 they become available. Priority last year. Agnes Chow and Ivan Chile 80.8 15,438 300 distribution will start within a Ethiopian forces entered Lam, who were fellow leaders Sources: Johns Hopkins University CSSE; UN; week. America is expected to Mekelle, the capital of the of his now disbanded group, The Economist *Definitions differ by country approve a vaccine soon and the northern region of Tigray, less Demosisto, were also jailed. eu by the end of the month. than a month after the start of a The number of daily deaths in civil war between the federal In Beijing a court began hear- America approached their Boris Johnson faced his biggest government and the regional ings into a case involving a highest levels during the backbench rebellion since one. Tigrayan fighters have woman who says a television pandemic. The number of becoming prime minister over withdrawn from towns in the host sexually harassed her. He people in hospital with the the confusing rules in the new region in order to launch a has denied the charge. The disease surged in November regional tier-system that re- guerrilla war. alleged offence has become a and is now above 100,000. placed lockdown in England. cause célèbre among Parliament approved the plan. Bobi Wine suspended his campaigners in China for Los Angeles County, the most Customers may order booze in presidential campaign in women’s rights. populous in the United States, pubs only if it comes with a Uganda after members of his entered a three-week period substantial meal. A pub re- staff were injured when securi- Hundreds of thousands of of tight restrictions during named one of its beers ty forces fired rubber bullets at farmers besieged Delhi, block- which people are urged to stay “Substantial Meal”. one of his rallies. In November ing highways. They demanded at home and wear face masks at least 54 people were killed, the scrapping of recent agricul- outside. Meeting other house- President Emmanuel Macron most of them by the security tural reforms, which could holds is banned. of France ordered his govern- forces. Mr Wine is running allow the Indian government ment to redraft a proposed law against Yoweri Museveni, who to stop offering guaranteed Vietnam reported its first that would have made it illegal has led Uganda since 1986. prices for crops. locally transmitted case of in some circumstances to covid-19 in nearly three publish photographs of police. The Iranian government Indonesia called off plans for months. He did so after cctv footage of accused an opposition group of an 11-day holiday subsuming three cops beating and racially working with Israel to assassi- Christmas and the new year, Many businesses reopened in abusing a black man went nate Mohsen Fakhrizadeh, for fear that people travelling Ireland after a six-week lock- viral. Such footage might have Iran’s most senior nuclear would spread covid-19. The down. People still cannot been illegal to publish under scientist, using a remote- extra holidays had been in- travel outside their county, the proposed law, civil libertar- controlled machine gun. Iran’s tended to make up for ones however, except for work, ians noted. parliament passed plans to scrapped earlier this year to study or health reasons. ramp up the country’s nuclear help curb the epidemic. Tributes were paid to Valéry programme. But President Hong Kong reduced the limit Giscard d’Estaing, the presi- Hassan Rouhani opposed the The National Assembly in on the number of people who dent of France from 1974 to 1981, move, which would endanger a South Korea approved a can gather in public from four who has died aged 94. Mr potential rapprochement with change allowing k-pop stars to two. Giscard d’Estaing helped America under Joe Biden. who have won government formalise a role for the sum- awards to defer mandatory mits of Europe’s heads of state Israel’s parliament passed a military service until the age of For our latest coverage of the through the European Council. preliminary proposal to dis- 30, instead of 28. This came virus please visit economist.com/ In France he battled the solve itself, moving the coun- days before the 28th birthday coronavirus or download the Catholic church to liberalise try closer to a fourth election in of a member of bts, the world’s Economist app. abortion and divorce laws. under two years. most successful band. 12 The world this week Business The Economist December 5th 2020

Salesforce agreed to buy Slack lian goods this year, as the moved from the Dow Jones ly available. It forecasts the for $27.7bn, combining its countries’ diplomatic relations Industrial Average in August. world economy will grow by range of business software have worsened. around 4% in both 2021and with a chat platform tailored to Turkey’s economy grew by 2022. The recovery will be companies. United they will The government might be 15.6% in the third quarter over uneven, however. China and increase competition for about to change in Washing- the previous three months, other non-oecd countries will Microsoft, which has pulled ton, dc, but a new law that may and by 6.7% compared with the chalk up faster growth rates ahead of many rivals in this in effect ban trading in shares same quarter last year. The than developed ones. year of working from home, of Chinese companies on spurt in growth was fuelled by when firms have relied on American stock exchanges government-backed credit. In Britain, the pandemic cloud services more than ever. over concerns about their However, with exports falling, pushed more long-struggling Microsoft’s Teams platform accounting practices is very a widening current-account retailers to the wall. Arcadia, has also been a formidable close to becoming reality. The deficit could spell more trou- which owns a string of high- challenger to Slack. Shares in House of Representatives ble for the lira. street clothing brands, such as Slack have performed poorly unanimously passed the bill Topshop and Burton, fell into compared with other providers this week. It has already administration. That led the of remote tech. cleared the Senate. Chinese India’s GDP firm behind a potential rescue companies would have three % change on a year earlier of Debenhams to pull out of its years to comply with the law. 10 deal; the department-store What looms for Zoom? 0 chain now faces liquidation. Zoom, one of the chief benefi- The organisation that runs The collapse of both retailers -10 ciaries from the turn to remote Libra, a cryptocurrency that puts 25,000 jobs at risk. working, reported that revenue has been proposed and backed -20

soared by 367% in its latest by Facebook, renamed the -30 quarter, year on year, to $777m. project “Diem”. Following Golden State loses its lustre 2019 2020 But its share price took another criticism from regulators Hewlett Packard Enterprise, Source: Refinitiv Datastream knock, as the news on vaccines around the world the pay- which provides computer and the prospect of a return to ments system has much less India’s economy is still strug- servers and it services, decided office normality raised more scope than its creators had gling, contracting by 7.5% in to move its headquarters from questions about its future. hoped, but according to reports the three months ending Sep- Silicon Valley to Houston. In the first Diem dollar, backed by tember, year on year. Still, that 2015 hpe split from the pc-and- There was more consolidation the American dollar, could be was an improvement on the printer business that was in the data-provision industry, launched next month. previous quarter, when gdp Hewlett Packard, a computing as s&p Global, best known for shrank by 24%. pioneer born in Silicon Valley compiling credit ratings, ExxonMobil wrote down and often synonymous with struck a deal to acquire ihs $20bn-worth of assets in natu- The oecd’s latest outlook the famous tech cluster. hp Markit, an American-British ral gas. The energy company forecast that global gdp will computers is still based there, information provider. At was the world’s biggest by return to pre-pandemic levels though the region’s high living $44bn, it is the largest takeover market capitalisation seven by the end of next year, if out- costs and terrible traffic have in America this year. years ago. It has yet to report a breaks of covid-19 are under made Texas a tempting loca- profit this year and was re- control and vaccines are wide- tion for many tech companies. Airbnb said it would price its forthcoming ipo at between $44 and $50 a share, which would value it at up to $35bn. That is double a private estimate from earlier this year, when the home-rental firm was hit by lockdowns. It has since bounced back, as people seek remote dwellings either to work in or to get away from it all. The pandemic “has accelerated the ability to live anywhere” Airbnb recently said.

China followed through with its threat to impose tariffs of between 107% and 212% on Australian wine imports. China is the biggest market for Aussie wineries. Beijing says the tariffs are an anti-dumping measure to stop Australian imports damaging the domestic wine industry, but it has slapped tariffs on other Austra-

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Celebrate the decline of coal in rich Western countries. Asia must be next round the world the mood is shifting. Xi Jinping has adopt- first step, by imposing new targets and bans. The Philippines has Aed a target to cut China’s net carbon emissions to zero by declared a moratorium on new plants; Japan and Bangladesh are 2060. Under Joe Biden, America will rejoin the Paris agreement, slowing construction, too. China’s new five-year-plan, which which it adopted five years ago. In the financial markets clean- will be published next year, may limit coal use. It should set its energy firms are all the rage. This month Tesla will join the s&p cap at current levels, so that the decline can start immediately. 500 share index—as one its largest members. If targets are to be credible, Asian countries must tackle deep- Remarkably, in a realm where words are cheap, there has been er problems. The strategy that worked in Europe and America action, too. In America and Europe the consumption of coal, the will get them only so far, because the mining firms, power sta- largest source of greenhouse gases, has fallen by 34% since 2009. tions, equipment-makers and the banks that finance them are The International Energy Agency, an intergovernmental body, often state-controlled. Market forces and carbon taxes, which reckons that global use will never surpass its pre-covid peak. use price signals to change incentives, are therefore less effec- Yet coal still accounts for around 27% of the raw energy used tive. And coal politics is treacherous. The coal economy forms a to power everything from cars to electric grids. Unlike natural nexus of employment, debt, tax revenues and exports. China has gas and oil, it is concentrated carbon, and thus it accounts for a used its Belt and Road Initiative to sell both mining machinery staggering 39% of annual emissions of CO2 from fossil fuels (see and power plants. Across the region, local governments depend Briefing). If global emissions are to fall far enough, fast enough, on coal for revenues. Many will defend it ferociously. the task now is to double down on the West’s success and repeat One step in fighting regional lobbies is to redesign power sys- it in Asia. It will not be easy. tems so that renewables can compete fairly and incentives work. Coal came of age in the Industrial Revolution. In the rich Most renewables provide only intermittent power, because the world its use in furnaces and boilers peaked in the 1930s and fad- weather is changeable. National smart grids can mitigate this by ed as cleaner fuels became available. Consumption in the West connecting different regions. Too many of Asia’s electricity sys- has recently collapsed. In Britain the last coal-fired power plants tems muffle market signals because they are locked into legacy could close as soon as 2022. Peabody Energy, a big American coal long-term supply contracts with coal firms, and because they are miner, has warned that it may go bankrupt for riddled with opaque subsidies and price caps. the second time in five years. Removing these so that markets and taxes work Although carbon prices accelerated the shift better will let renewable power undercut coal. in Europe, the Trump administration has fa- The other step is to compensate losers. The voured America’s coal industry with deregula- lesson from destitute mining towns in south tion and political support—and still it has de- Wales and West Virginia is that job losses store clined. One reason is competition from cheap up political tensions. Coal India, the national natural gas produced in America by fracking. mining colossus, has 270,000 workers. From Tax credits and subsidies have prompted renew- Shanxi province in China to Jharkhand in India, ables to scale up, which has in turn helped drive down their local governments will need fiscal transfers to help rebalance costs. Solar farms and onshore wind are now the cheapest source their economies. Banks may need to be recapitalised: China’s of new electricity for at least two-thirds of the world’s popula- state lenders may have up to $1trn at stake. tion, says Bloombergnef, a data group. As coal faces cleaner ri- Europe and America have shown that King Coal can be de- vals and the prospect of more regulation, banks and investors are throned, but they cannot be bystanders as Asia works to com- turning away, raising coal’s cost of capital. plete the revolution. Coal powered the West’s development. In This is a victory, but only a partial one. In the past decade, as 2019 coal consumption per person in India was less than half that Europe has turned against coal, consumption in Asia has grown in America. It is in Asia’s long-term interests to topple coal, but by a quarter. The continent now accounts for 77% of all coal use. the short-term political and economic costs are large enough China alone burns more than two-thirds of that, followed by In- that action may be too slow. If politicians in Europe and America dia. Coal dominates in some medium-sized, fast-growing econ- are serious about fighting global warming, they must work hard- omies, including Indonesia and Vietnam. er to depress coal elsewhere. That includes honouring prior If the aim is to limit global temperature rises to 2°C above pre- promises to help developing countries deal with climate change. industrial levels, it is no good waiting for Asia’s appetite for coal Ultimately, though, the responsibility will lie with Asia itself. to fade. New plants are still being built. Many completed ones are And the good news is that it is overwhelmingly in Asia’s interest not yet fully utilised and still have decades of life in them. Nor is to do so. Its people, infrastructure and agriculture are danger- it enough to expect a solution from “clean coal” technologies, ously exposed to the droughts, flooding, storms and rising sea which aim to capture and store emissions as they are released. levels caused by climate change. A growing middle class yearns They may help deal with pollution from industrial uses, such as for their governments to clean up Asia’s choking metropolises. steelmaking, but they are too expensive for power generation. And renewable energy offers a path to cheaper power, generated Hence Asia needs new policies to kick its coal habit, and soon. at home, as well as a source of industrial employment and inno- The goal should be to stop new coal-fired power plants being vation. Coal’s days are numbered. The sooner it is consigned to built and to retire existing ones. Some countries have taken a museums and history books, the better. 7 16 Leaders The Economist December 5th 2020

Belarus The colours of terror

Having stolen an election, Belarus’s government is torturing those who object reen means humiliation, which may involve sexual abuse response from the eu’s key member states has been limp. Many Gor the threat of rape. It is reserved for young men sporting European leaders, including Angela Merkel, the German chan- dreadlocks, long hair or piercings. Yellow paint, when daubed on cellor, and Emmanuel Macron, the French president, have made those who ask too many questions or argue with riot police, the symbolic gesture of meeting Svetlana Tikhanovskaya, the spells a beating. Those who try to run away or resist arrest are probable true winner of the rigged election in August, who has sprayed with red paint and subjected to torture so severe that it since then been forced into exile (see Europe section). But sanc- could leave them disabled for life. tions against the Belarusian regime have been limited to a travel Colour-coding prisoners is standard practice in Belarus, a ban and an asset freeze for a few named officials, including Mr European country that has been ruled by Alexander Lukashenko Lukashenko. In a slap to the Belarusian people, Israel has sent its for the past 26 years. What is new is that since August, when Mr ambassador to present Mr Lukashenko with his credentials. Lukashenko declared himself president again after another The main reason for European inaction and Mr Lukashenko’s fraudulent election, his goons have used colour codes to system- staying power is Russia, which has forged a kind of political un- atise the brutalisation of thousands of peaceful protesters, ac- ion with Belarus. Vladimir Putin, Russia’s president, has warned cording to Nash Dom, a Belarusian ngo. the West against meddling in what he claims as The colour codes testify to the scale both of his backyard. After his invasion of eastern Uk- state terror and of the national resistance move- raine in 2014, few Western leaders are willing to ment. Over the past four months more than wade in. But there are some simple steps that 30,000 people have been detained, and some they could and should take, preferably together. 4,000 have alleged they have been tortured. To start with, they should stop buying chemi- Some have been stripped naked, shot with rub- cals, petrol and metal from Belarus’s state- ber bullets from close range, sodomised with owned firms and impose sanctions on anyone truncheons or driven through a corridor of who does. More important, they should offer the thugs for more beatings. Victims are paraded and humiliated on prospect of justice to the people of Belarus and punishment to state television. Terrified into submission, some are forced to their torturers. They should do so not just for the sake of Belaru- apologise on air for imaginary crimes. sians but also to honour their own values. Next year, when Joe Bi- Mr Lukashenko has so far stopped short of opening fire on de- den is president of the United States, he should do the same. monstrators. However, several have been killed. The latest, 31- Violence is carried out not by abstract agencies, but by specif- year-old Roman Bondarenko, a military veteran and children’s ic people who serve in them and hide their faces beneath bala- art teacher, was reportedly bludgeoned to death for trying to stop clavas. Those agencies should be designated for what they are— Mr Lukashenko’s thugs from taking down red and white ribbons, organs of terror. Western governments should take a cue from a symbol of national resistance. A doctor who tried to save him, Lithuania and Poland in collecting evidence and setting up in- and who contradicted the official story that Mr Bondarenko was vestigations into crimes against humanity. They should apply drunk, was arrested and forced to recant on camera. the principle of universal jurisdiction in cases of torture. Stand- That such abuse can take place in a country which borders the ing up for human rights in Belarus is not interference. It is the European Union is a blot on the continent’s reputation. Yet the duty of every self-respecting country. 7

Health care Alive and kicking

The world’s most complex and immovable industry has been reinventing itself ast, bureaucratic and amorphous, health care has long using novel mrna technologies. But there have also been count- Vbeen cautious about change. However, the biggest emergen- less smaller miracles as health workers have experimented to cy in decades has caused a revolution. From laboratories to oper- save lives (see Britain section). Obsolete it-procurement rules ating theatres, the industry’s metabolism has soared, as medical have been binned and video-calls and voice-transcription soft- workers have scrambled to help the sick. Hastily and often suc- ware adopted. Machines are being maintained remotely by their cessfully, they have improvised with new technologies. Their makers. With patients stuck at home, doctors have rushed to creativity holds the promise of a new era of innovation that will adopt digital monitoring of those recovering from heart attacks. lower costs, boost access for the poor and improve treatment. Organisational silos have been dismantled. All this has taken But to sustain it, governments must stop powerful lobbies from place alongside a boom in venture-capital-raising for medical blocking the innovation surge when the pandemic abates. innovation: $8bn worldwide in the most recent quarter, double Covid-19 has led to the spectacular development of vaccines the ﬁgure from a year earlier. jd Health, a Chinese digital-medi-1 The Economist December 5th 2020 Leaders 17

2 cine star, has just listed in Hong Kong (see Business section). Many of these trends should improve efficiency directly— More innovation is needed. Global health spending accounts with lower office rents, or the allocation of doctors in real time to for 5% of gdp in poor countries, 9% in rich ones and 17% in Amer- rural areas where surgeries are scarce. But they are also likely to ica. The industry employs over 200m people and generates more unleash a burst of competition and continuous improvement. than $300bn of profits a year. But as well as being risk-averse, it is More data will make it simpler to judge which treatments are insulated from change. Patients may not know which treatments most effective, the holy grail of medicine. Personal-health mon- are effective. The need to pool risk among many people creates itoring will mean that treatment becomes more preventive rath- administrative leviathans, typically national-health schemes in er than reactive. And with more information, patients can make Europe, or insurers in America and some emerging economies. better decisions. Complex rules enable firms to extract high profits. Governments can do their bit to help. Big health-care firms, The result is that productivity growth has been sluggish. High such as insurers, and state-run health schemes, should be eager costs mean that many people in the developing world lack access to recognise new digital services and pay for them. Germany and to health care. Low efficiency may cause a fiscal crisis in some China have passed laws or new rules urging reimbursements of rich countries over the next two decades, as age- online services, for example. The evaluation of ing populations force medical bills up further. Level of digitisation digital services for efficacy should be faster. The pandemic helped show what is possible, Global, 2018, 100=maximum America’s Food and Drug Administration has partly because it got people to put aside their 100 50403020 modernised its approval process for apps. Health care The other priority for governments is to caution. Remote medical consultation and Packaged goods monitoring can lower costs and increase access. Financial services build a system for the flow of health-care data. The share of remote visits at the Mayo Clinic, an Retail Individuals should have control over their re- American health provider, rose from 4% before Travel cords and grant permission to providers to gain the pandemic to 85% at the peak. Sehat Kahani, a access to them. India is creating national health Pakistani firm, has helped female remote doctors treat the poor ids that will aim to combine privacy with mass data. Around the in a socially conservative society. Ping An Good Doctor, a Chinese world hundreds of millions of medical records need to be anony- portal, had 1.1bn visits during the height of the pandemic there. mised and aggregated more efficiently so that researchers can A surge in online pharmacy would increase competition. On scour data sets for patterns. November 17th Amazon announced its entry into the field, A rare chance to improve the quality of health care and lower which promises to disrupt America’s industry dominated by big its costs may vanish by the end of 2021. Exhausted health-care pharma and middlemen. That is just the start. Data-rich diagno- workers may prefer a rest to a revolution. Some of today’s med- sis could help specialists in routine analysis of, say, medical tech startups will flop, prompting a backlash. A few big tech scans such as x-rays. A new generation of continuous glucose firms may try to monopolise pools of data. And the industry’s monitors for diabetics benefits from recent improvements in powerful lobbies will try to lock out competitors. Health care is sensors. In time artificial intelligence will lead to drug innova- not a field where you set out to learn from your mistakes. Yet the tions. This week DeepMind, an ai laboratory, announced a pandemic has revealed that the industry became too used to be- breakthrough in the analysis of proteins (see Science section). ing careful. It has redefined what is possible. 7

America and Iran Towards a better nuclear deal

Joe Biden should drive a hard bargain with the mullahs or the past four years Iran’s enemies in the Middle East have from the world economy—but the administration never serious- Fhad a friend in the White House. President Donald Trump ly pursued a new deal. Iran is now closer to a bomb than it was at blamed Iran for the region’s problems, sold arms to Israel and the start of Mr Trump’s term. Although covert operations may set Arab states, and pulled America out of the deal that saw Iran limit Iran’s nuclear programme back, negotiations hold out the pro- its nuclear programme and agree to inspections in return for the mise of a more lasting solution. Before Mr Biden jumps back into lifting of international sanctions. In November Mr Trump ret- the nuclear deal, however, he should consider how things have weeted news of the assassination of Mohsen Fakhrizadeh, the changed since it was signed in 2015. architect of Iran’s past nuclear-weapons programme. Start in the Gulf. The region has long lived under an American The killing appears to have been the work of Israel, which has security umbrella. Yet when Iran carried out a series of attacks, a history of bumping off Iranian nuclear scientists. With the including missile strikes, Mr Trump barely stirred. That not only clock ticking on the Trump administration, it may have been an raised doubts about American deterrence; it also highlighted a attempt to scorch the earth before Joe Biden takes over. When it flaw in the nuclear deal, which says little about Iran’s missile comes to Iran, Mr Biden prefers statecraft to sanctions and talks programme and regional aggression. Such concerns have to targeted killings. He promises to return to the nuclear deal if brought Israel and the Gulf states together. The United Arab Iran, which began breaching parts of it last year, moves back into Emirates and Bahrain have normalised relations with Israel, compliance (see Middle East & Africa section). which is also working with Saudi Arabia. As the mullahs step up More diplomacy would certainly be welcome. Mr Trump’s their nuclear activity, this anti-Iran axis is growing bolder. Israel policy of “maximum pressure” has hurt Iran by cutting it off may be behind several covert attacks inside Iran this year. 1 18 Leaders The Economist December 5th 2020

2 Things are also different in Iran. Five years ago Barack Were Mr Biden to jump back into the nuclear deal quickly, it Obama’s team dealt with a pragmatic administration there. But would mean lifting the sharpest sanctions and giving up much the pragmatists have been discredited by the failure of the nuc- of this leverage. That would be a mistake. The president-elect lear deal to bring economic benefits. Hardliners won parliamen- says he wants to re-establish trust with America’s allies, but he tary elections this year and one may win the presidential elec- will do that by negotiating competently, not by rolling over. Al- tion in June. Iran’s response to the killing of Mr Fakhrizadeh though he is unlikely to satisfy Israel, Saudi Arabia or Republi- highlights the tug-of-war between the camps. Parliament ap- cans, he should use his leverage to wring more out of Iran. proved plans to stray further from the nuclear deal and kick out Mr Biden’s priority should be to extend the original accord, international inspectors. Hassan Rouhani, the relatively moder- which expires over the next decade. Iran’s leaders appear open to ate president, opposes the bill. the suggestion. They are less keen to discuss missiles, Iran’s All this complicates Mr Biden’s effort to turn back the clock. principal means of deterrence. But Mr Biden should demand that But America’s position has changed, too. The new administra- they forswear long-range rocket launches and the transfer of tion may not like how Mr Trump and his team have handled Iran, missiles to regional proxies. In return he could gradually ease but they have bequeathed it an extensive sanctions regime. Iran’s Iran’s economic pain and throw in sweeteners, such as access to gdp fell by 5.4% in 2018 and 6.5% in 2019, and it is expected to fall dollars and more civilian nuclear co-operation. again this year. The value of the Iranian rial has collapsed. The There are steps Mr Biden can take in the meantime to lower annual rate of inflation is around 30%. Although the ruling elite tensions with Iran, such as lifting Mr Trump’s more symbolic have found ways around sanctions, ordinary people are hurting. sanctions. But he should drive a hard bargain with the mullahs. Their protests are put down by ruthless security men, but Iran’s He is in a position to negotiate a broader, longer-lasting deal clerical rulers are nervous. with Iran. He should take advantage of it. 7

“The Crown” Uneasy lies the head of production

Yet a television series that fictionalises reality is more truthful than the story the royals sold ’m struggling to find any redeeming features in these peo- If the monarchy is so vulnerable that a man pretending to be “Iple at all,” says Margaret Thatcher to her husband Denis in Prince Charles saying mean things to a woman pretending to be the course of a visit to Balmoral Castle, where the Thatchers are his wife damages it gravely, then the institution has probably snubbed, humiliated and forced to play an after-dinner game outlived its usefulness. Famous people are often portrayed in called Ibble Dibble in which players smear their faces with burnt ways they do not like, but that is one of the costs of free speech. If cork while getting drunk. Oliver Dowden, Britain’s culture secre- they feel strongly enough about it, they can sue; but Netflix’s tary, takes a similar view of the portrayal of the Royal Family in lawyers are probably not sitting by the phone. “The Crown”. He believes that the real royals have been traduced The most interesting charge is of untruth. Certainly, “The by Netflix, which makes the drama, and has demanded that the Crown” distorts chronology and invents events. Prince Philip company issue a health warning before future episodes, point- was not estranged from his mother. The queen did not visit Chur- ing out that the programme is fiction. chill on his deathbed. The row between Lord Mountbatten and It seems odd that a government led by a man who is writing a Prince Charles before the prince’s mentor is blown up by the ira book on Shakespeare should insist on historical is, so far as anybody knows, made up. Yet the accuracy in drama. Boris Johnson has not been monarchy, too, is a purveyor of fiction. “Richard heard complaining that “Richard III” libels a III” was propaganda written by a Tudor toady to supposedly non-nepoticidal monarch. All justify the overthrow of the previous regime. drama that involves real people is, to some ex- The Windsors constructed their own happy- tent, fiction: when Charles and Diana stared family story, which turned out to be less true into each other’s eyes and realised it was over, than the fictionalised tale of dysfunction and no one else was in the room where it happened. despair. And, all in all, they do not come badly If those being portrayed are dead, decently be- out of “The Crown”. Its theme is the conflict be- haved and unimportant, nobody cares what lines script writers tween duty and personal fulfilment, which causes pain to cas- make up for them. But if they are alive, adulterous and the heir to cade down from generation to generation. That is no fiction. the throne, things are bound to get sticky. Since a government wedded to free speech is unlikely to haul It is not surprising, then, that the release of the latest epi- Netflix’s chief executive to the Tower of London for ignoring Mr sodes has been accompanied by the sound of remote controls Dowden, the intervention should be read as mere virtue-signal- ricocheting off Home County walls. Conservatives are furious ling to conservative Britons. Still, the government’s concern for because their pin-up, Margaret Thatcher, appears as a rasping veracity is welcome. Perhaps in future Mr Johnson will pay closer termagant determined to spill the blood of Argentines and rub attention to the truth than he did when heading a campaign to the noses of the poor in the dirt. The royals’ friends and flunkeys leave the European Union which claimed that Brexit would save are outraged that the Windsors are portrayed as cold-hearted the country £350m a week, or when he said over a year ago that a bullies who drive Diana to bulimia. The series, they claim, is un- trade deal was “oven-ready”. Those lies could lead to a geopoliti- true, unfair and will harm the monarchy. cal divorce far messier than the Windsors’. 7 MOBILE CARBON CAPTURE PATENT NO. US 9,486,733 B2 Helping job seekers with free digital skills training

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By taking the Applied Digital Skills lessons, Danett e learned essential digital skills ranging from data analysis to research and communication. Now that she’s fi nished the program, Danett e feels ready to compete. 22 Letters The Economist December 5th 2020

Left to stand alone An honourable man You warned of the dire impli- Bagehot was in error in stating cations of America withdraw- that Kim Darroch was “sacked” ing from Afghanistan (“Leaving as Britain’s ambassador to too soon”, November 21st). Washington after a confiden- Certainly, the parallels with the tial memo critical of the Trump Soviet withdrawal in 1989 and administration was leaked the eventual collapse of the (October 24th). In fact, he Najibullah regime are uncom- resigned after the president fortable. However, it was not tweeted that his administra- the withdrawal of Soviet com- tion would no longer deal with bat troops that brought about the envoy, and Boris Johnson the collapse, but the ending of failed to support him. Mr Russia’s subsidies in 1992. Darroch acted with honour and Other pivotal moments in a sense of the national interest. Afghanistan’s history are also paul taylor linked to the withdrawal of Saint-Remy-de-Provence, France subsidies, from the rivalries between Shah Shujah and Dost Mohammad in the early 19th Hong Kong’s legislature century, culminating in the You reported that four legisla- first Anglo-Afghan war, to tors in Hong Kong were arguments over military pay in disqualified from office (“Leav- 1879, which led to the murder ing in despair”, November of the British envoy, and 14th). What you did not say is through to post-1918, when that each of the four had earlier Britain cut its subsidy. There is been barred from running for a pattern here. Intimately re-election by the returning linked to the historic, systemic officers. It was found they had weakness of the Afghan state not genuinely upheld the Basic and its inability to raise taxes, Law and honoured their pledge the government is beholden to of allegiance to the Special those who subsidise it. When Administrative Region, which the money runs out, it fails. is required under Article 104. The key to securing Afghan- As the elections to the istan’s future is to keep the Legislative Council were post- government financially afloat. poned in September for a year nato has promised that funds because of the pandemic, a will be provided until 2024. decision was made by the That is a start, but 2024 too National People’s Congress closely matches the post- Standing Committee, the Soviet trajectory to be comfort- highest organ of state power. able. Instead, our commitment The logic is simple. People not should be as open as our qualified to contest the elec- military one has been. That tion should not be allowed to may give a chance for the continue to serve as legislators post-Taliban generation to take in the current extended Legco. power and for the country’s The Special Administrative economy to flower. Region government is not The Taliban always taunt targeting any member of the us, “You may have the watches Legco. Nor are we suppressing but we have the time.” We political parties or silencing should now respond, “Yes, but dissenting views. There is no we have the money.” question of the Legco becom- simon diggins ing a “rubber stamp” body. Defence attaché, Kabul 2008-10 Our rules relating to the Rickmansworth, Hertfordshire behaviour of public officers follow international norms. In Had the Americans followed Britain, members of Parlia- your line of thought, they ment must take an oath of would still be involved in allegiance to the crown before Vietnam. assuming office. In America alexander casella members of Congress must Former unhcr director for swear to support and defend Asia the constitution. Geneva It is regrettable that 15 1 Letters The Economist December 5th 2020 23

2 lawmakers subsequently chose black steamship dominates the to resign from the Legco. For canvas, extruding heavy dark them to abandon their smoke; its blackened sails a monitoring role in providing sombre reference to the death checks and balances for the of his colleague Sir David government is an irresponsible Wilkie (“I wish I had a colour to act that serves the interests of make them blacker,” Turner no one. said). The painting is on matthew cheung kin- display as part of the Turner’s chung Modern World exhibition at Chief secretary for Tate Britain. administration william rodner Hong Kong Special Adminis- Norfolk, Virginia trative Region Government Pierre Soulages, who will be 101 this month, has devoted the Political diversity second part of his very long life It is correct and reasonable to exclusively to the colour black, suggest that the structure of or rather non-colour, as he America’s electoral college is calls it. It is not so much black disadvantageous to the Demo- that interests him as the crats because of the current emotions elicited by the reflec- geographical distribution of tion of light off black paint and the party’s supporters (“City v the intense sensorial and hills”, November14th). But introspective experience this there are pros and cons in all brings the viewer. democratic systems, and there Unlike Anish Kapoor, who are arguments for the charac- featured in your article, Mr teristics that yield this partic- Soulages does not resort to a ular outcome as well as argu- new material but works on the ments against. You recognise texture of paint and pigment, that Democrats tend to live in matte or gloss, breaking up the more “diverse” cities, but you surface with lines, contours, also note that they tend to crevasses and forms that either “cluster” to a greater extent. absorb or reflect the light, Crucially, it is the latter point thereby leading the viewer into that works against Democrats. another world, beyond Diversity is a word we hear a black: outre-noir. lot of these days, often in sup- He has exhibited extensive- port of laudable policies. But it ly outre-Atlantique, but involves including all parts of perhaps not outre-Manche? our society in the political elizabeth carroll simon conversation. If the Democrats Paris cannot win rural votes, maybe they have a problem with diversity, which the electoral- Trend setters college voting system is merely The spread of a global hipster- helping point out. ism (“Flat white world”, stephen nash November 7th) is simply Chiddingfold, Surrey another case of the rest of the world taking to American popular culture, whether for The dark art good or ill. This has a long J.M.W. Turner was another history. Romans once thought artist drawn to the evocative it was hip to act like Greeks. possibilities of the colour Even Virgil got into the act, and black, especially in his he was no hipster. watercolours and paintings phil holt depicting the utilitarian grime Ann Arbor, Michigan of the Industrial Revolution (“Paint it black”, November 7th). Black is an essential Letters are welcome and should be element in his numerous addressed to the Editor at The Economist, The Adelphi Building, images of steamboats, which 1-11John Adam Street, London WC2N 6HT marked early 19th-century Email: [email protected] technological progress. In More letters are available at: Economist.com/letters “Peace: Burial at Sea”, a hulking 24 Executive focus

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Applicants are invited to send a cover letter illustrating their suitability against the listed qualiﬁ cations and detailed curriculum vitae as well as names and addresses of the referees to [email protected]. The deadline for submission is 31st January 2021. Only short-listed applicants meeting the above requirements will be contacted. We invite you to learn more about Shelter-Afrique and about this role by accessing our web site: http://www.shelterafrique.org. Brieﬁng Coal’s endgame The Economist December 5th 2020 25

some years. But the capacity to burn it continued to increase, suggesting that things might change. Now the world’s capacity to generate electricity from coal, too, has begun to drop (see chart 1on next page). It is a significant milestone in the fight against climate change. For the world to meet the ambitions it set itself at the Paris climate summit five years ago, that milestone needs to quickly vanish in the rear-view mirror: coal’s decline needs to be made both steep and ter- minal. Coal-fired generation typically emits a third of a tonne of carbon dioxide for every megawatt-hour of electricity generated, around twice the emissions from a natural-gas plant. And although coal is used directly in some industrial processes, such as steelmaking, two-thirds of the stuff is burned to generate electricity—a role that many other technologies can fulfil more cleanly and even more cheaply. Eliminating coal-fired electricity generation is thus a big but doable deal. Failing to get that deal done will see the world blaze past the Paris agreement’s goal of keeping global warming since the Industrial Revo- lution “well below” 2°C.

A tale of three continents The global peak in coal-fired capacity masks divergent stories in different countries. In the West, countries whose economic ascent was powered by coal and co- lonialism have been reducing their coal use for years and are shedding capacity with gusto. In South America and Africa— South Africa apart—coal has never been a big part of the energy mix. But Asia’s largest countries depend overwhemingly on coal for the electricity their economies need, and they are still adding capacity. Merely using the capacity they already have in place could easily push the world past the Paris limits. According to Dan Tong, a researcher at uc Irvine, coal plants Crushing it operating and proposed in 2019 would, if operated to the end of their lives, emit 360bn tonnes of carbon dioxide—a total dominated by Asia. The Intergovernmental Panel on Cli- mate Change (ipcc) calculates that if the LONDON AND NEW YORK world is to have a decent chance of keeping The world is finally burning less coal. It now faces the challenge of using warming below 1.5°C—the Paris agree- almost none at all ment’s stretch goal—it has to keep all fu- scalante, a coal-fired power station ty in the first half of the year. In June Spain ture emissions of carbon dioxide and other Enorth of New Mexico’s Zuñi mountains, closed seven coal-fired stations from A Co- greenhouse gases down to the equivalent is designed to produce some 250mw of ruña to Córdoba, halving the country’s coal of 420bn-580bn tonnes of carbon dioxide. electricity. Since August, however, it has capacity. Even in India, where coal gener- Today’s coal plants could use up 60-85% of produced none. Nor will it ever do so again. ates nearly three-quarters of all electricity, that budget on their own. The 2°C budget is The economic slump brought on by the the crown slipped a tiny bit: 300mw of Indi- more generous: 1,170bn-1,500bn tonnes of covid-19 pandemic hit electricity demand an coal-fired power was retired in the first carbon dioxide. But if existing coal plants around the world; non-renewable genera- half of the year, according to Global Energy use up between a quarter to a third of that tors of all sorts reduced their output. But in Monitor, a non-profit, and no new coal allowance, the chances of staying within many places the owners of coal-fired plants were built. the bounds are slim. plants went further. Britain shut a third of Consumption of coal has been on a Coal’s decline in the West has been its remaining coal-fired generating capaci- slightly downward-sloping plateau for made possible by three mutually reinforc-1 26 Briefing Coal’s endgame The Economist December 5th 2020

2 ing developments: government policy, tion”. Holding the possibility of emissions- cheaper alternatives and restricted access Negative capability 1 free coal open but not realising it simply to capital. Coal capacity, gigawatts prolongs the status quo. Easier, cheaper A growing number of governments and more definitive just to generate elec- have adopted policies designed to support China India United States EU28 tricity by other means, such as renewables clean energy and/or to eliminate coal. In Rest of World 120 and nuclear. 2013 Britain imposed a “carbon-price floor” Analysis like this has led Antonio Gut- on emissions by electricity generators 90 teres, the un secretary-general, to call for which made coal a more expensive fuel. In Net coal-fired electricity to be eliminated 2015, in the run-up to Paris, the country change 60 worldwide by 2040; he says the oecd, a mandated that coal-fired power in Eng- 30 club of rich countries, should get to zero by land, Wales and Scotland be phased out 2030. That would require a huge increase in within a decade. Sixteen countries in the 0 effort. Japan currently envisages getting European Union either have a plan to phase 26% of its electricity from coal in 2030. Ger- -30 out coal or are mulling one; even in those ↓ Coal-plant retirements many plans to go on using coal until 2038. that do not, the carbon prices imposed by -60 Though American coal use has fallen, its the eu’s Emissions Trading Scheme have outright abolition will be staunchly op- 2000 05 10 15 20* made burning coal more expensive in re- posed by some. Source: Global Energy Monitor *H1 cent years. Some owners of coal-fired sta- That said, the fall so far has been deeper tions have chosen to shut them rather than and faster than most expected. Portugal, make the investments necessary to comply other listed firm, warned in November that which had planned to be coal free by 2030, with new environmental standards which it might file for bankruptcy for the second now looks like hitting that target in 2021. enter into force next year. time in five years. Perhaps political pressure, industrial mo- They can do so because of the increas- This displacement needs to be speeded mentum and business opportunity can ing availability of other sorts of power. In up and prolonged. The unique circum- speed things up elsewhere, too. America the alternative which started stances of 2020 have seen a 7% drop in coal If Mr Gutteres’s exhortation gives non- coal’s rout was a glut of gas created by the consumption. According to a report pub- oecd countries a decade longer, it reflects country’s fracking boom. But at both feder- lished this week by the un and an interna- the fact that many, especially in Asia, have al and state level America has also sup- tional coalition of climate researchers, hit- a lot more to do. Asia is currently home to ported renewables, as has Europe. And as ting the 2°C Paris target would require coal nearly 80% of coal consumption. Most of those policies have increased the scale at consumption to drop by the same amount that—52% of the global total—takes place which renewables operate, their costs have every year for a decade. To hit the 1.5°C limit in one country: China. India, Asia’s sec- plunged. Bloombergnef, a data group, cal- would require cuts of 11% year on year. ond-biggest market, consumes less than a culates that better technology and cheap quarter as much. capital mean that, if you divide the amount Prevaricate not The growth in China’s coal-fired gener- of energy that can be expected over the life- Those reductions would need to be even ating capacity between 2000 and 2012 time of a new solar farm in Germany by the steeper were it not for the report’s assump- helped reshape the global economy and cost of building and operating that farm, tion that, by 2030, a billion tonnes of car- drive a 200% increase in Chinese gdp per the “levelised cost of electricity” (lcoe) you bon dioxide produced in power stations person. It also nearly tripled the country’s get is lower than the marginal cost of elec- and industrial plants will be captured on carbon-dioxide emissions, making it the tricity from a German coal plant. The same site and sequestered away underground, a largest emitter in the world. Its effects on is true for onshore wind in Britain; Bloom- process known as carbon capture and stor- air quality hastened millions of deaths. bergnef expects new American wind and age, or ccs. At the moment the world’s ccs Though new installations have never solar to pass the threshold next year. capacity is 4% of that. The technology stopped, concerns over pollution and a glut Banks have tightened finance for coal, could definitely be useful in steelworks of generating capacity have seen their rate too, wary of stricter regulation, stranded and the like. Adding it to coal-fired electric- decrease (see chart 2). The State-owned As- assets and continued pressure from green ity plants, though, is a pricey undertaking sets Supervision and Administration Com- investors. In all, more than 100 financial in which companies have very little experi- mission of the State Council, which over- institutions, from Crédit Agricole to Sumi- ence. What is more, ccs has a long history sees several large coal companies, has tomi Mitsui, have set limits on the financ- as what Duncan McClaren of Lancaster drafted plans to reduce coal capacity by ing of coal projects, according to the Insti- University calls a “technology of prevarica- one-quarter to one-third. Meanwhile alter-1 tute for Environmental Economics and Financial Analysis. The effects have been impressive. In The young ones 2 Britain the share of electricity generated by Age structure of electricity-generating coal capacity, 2019, gigawatts coal fell from 40% in 2013 to 2% in the first 300 half of this year; the country now burns China India United States EU28 less coal than it did when the first coal- PROPOSED Japan Russia Australia Rest of World fired power station was built in 1882. In the 200 eu coal-fired power generation nearly halved between 2012 and 2019. In America President Donald Trump’s promise that he 100 would save the nation’s “beautiful” coal industry proved as worthless as it was mis- 0 guided. Coal-fired electricity generation ≥63 59-57 53-51 47-45 41-39 35-33 29-27 23-21 17-15 11-9 7-91-32-0 13-15 was 20% lower in 2019 than in 2016, when Age, years he was elected. Peabody Energy, an Ameri- Source: “Committed emissions from existing energy infrastructure jeopardize 1.5°C climate target”, by D. Tong et al. can company that digs more coal than any

28 Brieﬁng Coal’s endgame The Economist December 5th 2020

2 natives are on the rise. The government’s caps on coal for domestic power genera- spending on nuclear power handily out- High and dry 3 tion are designed to keep coal-fired power strips that of any other country, and it has China, cost of electricity, new renewable facilities* cheap and promote economic growth. This built up a massive renewables sector. The compared with existing coal and gas providers† limits competition from other fuels. Mar- lcoe from new coal plants in China is al- Forecast, $ per megawatt-hour, 2019 $ kets rigged for coal in countries with ex- ready higher than that for solar and on- 80 panding energy needs will not necessarily shore wind farms, according to Bloom- last all that long. But the new coal capacity Offshore wind bergnef. By the middle of the decade, the they bring into being may stick around for 60 firm’s analysts calculate, the lcoe of on- Gas decades. shore wind and solar will be less than the If it can be made politically feasible, re- marginal cost of operating existing coal 40 designing electricity markets—easing rig- plants (see chart 3). Coal id power-purchase agreements in India Add to all this the country’s recently Onshore wind 20 and Indonesia, for instance—can quickly promulgated target of carbon neutrality by Solar (utility-scale PV) boost renewables, and the batteries which 2060 and the future of coal in China might 0 smooth out their contributions. Carbon seem to be one of rapid withering. Yet coal- prices, too, make coal less competitive, and 5045403530252020 plant construction shot up in 2019. And in if designed in such a way that their benefits Source: BloombergNEF *Levelised †Marginal the first five and a half months of 2020 pro- are visible to all—perhaps as dividends— vincial governments, keen to boost em- they may offer a counterbalance to the con- ployment and economic growth, gave If China limits coal at home, those concentrated political power of coal lobbies. companies permission to add a further cerns will work even harder to find growth Perhaps most important, though, is 17gw of new coal capacity. Various state- elsewhere while the country’s miners, too, support for those who will suffer from owned companies such as State Grid, the look for new markets. coal’s demise. “If you’ve got 30 years, one country’s giant utility, China Electricity In Japan a similar dynamic is at play as can plan a phase-down,” says Mr Mathur. Council, the coal industry’s main lobby, the coal industry and its financiers look for “If you’ve got ten years, it is shutdowns and and some provincial governments want to new opportunities. This year the country large financial transfers.” Mine closures see this growth sustained, even though a set new limits on the financing of foreign must include support and retraining for af- lot of current capacity is underutilised. coal plants, but loopholes remain. In No- fected workers. And there is scope for more One argument is that more electricity will vember development banks from around creative assistance from the West—which be needed to supply demand from the elec- the world issued a statement that they, too, has an interest in reducing coal emissions trification of heating and cars. Lauri Mylly- would consider ways of reducing fossil- wherever they come from. The private arm virta, an analyst at the Centre for Research fuel investments. But they resisted pres- of the Inter-American Development Bank on Energy and Clean Air, a research insti- sure from Mr Guterres and others to elimi- recently helped a Chilean developer re- tute, estimates that the China Electricity nate such investments entirely. place coal assets with wind turbines by Council’s statements imply a net increase In India, as in China, significant new means of a low-interest loan. The Sierra in national coal capacity of 150-250gw. coal-fired capacity is planned on top of am- Club, Carbon Tracker and Rocky Mountain Two eagerly awaited documents should bitious government targets for boosting Institute, three green groups, suggest pay- reveal how much influence these pro-coal solar power, the intermittency of which ing for reverse auctions in which develop- lobbies have. One is China’s 14th five-year policymakers worry about. As India con- ing-country coal-plant owners bid for plan, which will be published early in 2021. templates surging future demand for pow- debt-forgiveness to retire their coal sta- The other is the new “nationally deter- er, it has fewer alternatives to coal than tions early in favour of clean power. Only if mined contribution”, or ndc, required of China. The infrastructure for importing alternatives are made attractive to incum- the country under the Paris agreement—a natural gas is underdeveloped and the fuel bents can coal be crushed as speedily and list of its emission-reduction plans. If the itself pricey; nuclear capacity is growing completely as the world requires. 7 five-year plan includes a near-term cap on only slowly. coal capacity and the ndc calls for a peak in Ajay Mathur of the Energy & Resources carbon emissions by 2025 it will signal a Institute, in Delhi, argues that low utilisa- real turning away from coal (though per- tion rates of existing coal plants mean haps not one fast enough for Mr Gutteres). there is little rationale for further construction. But coal remains a political force. In- Other countries’ coal dia’s state-owned banks have financed Chinese interests in new coal plants do not much of its development. Power markets stop at the country’s borders. Chinese-fi- give coal-fired plants fixed payments, nanced coal plants in other countries are which lessen their incentives to work flat on course to add 74gw of coal capacity be- out but also make it harder for solar power tween 2000 and 2033, according to Kevin to break in. In states such as Chhattisgarh Gallagher and his colleagues at Boston Uni- and Jharkhand jobs provided by Coal India versity. Chinese-funded foreign fossil-fuel Limited, the state-owned coal behemoth, plants—the vast majority of which burn are vital to the economy. And the govern- coal—account for 314m tonnes of carbon ment has recently authorised the develop- dioxide every year. That is nearly as much ment of new privately owned mines to re- as the total annual emissions from Poland. duce India’s imports of foreign coal. With The past decade has seen Chinese compa- new miners come new constituencies to nies seek new opportunities for coal-plant advocate for coal’s future. construction in Indonesia, Vietnam, Paki- Similar political obstacles exist else- stan and Bangladesh, though Bangladesh where. Fitch, a ratings agency, pointed out and Vietnam have both started considering earlier this year that for all Indonesia’s pro- cuts in their plans for future coal capacity. fessed desire to limit pollution, its price

30 United States The Economist December 5th 2020

The economy sector and generated by consumers’ and firms’ transactions, to measure the econ- You must believe in spring omy in real time. Wall Street banks now routinely provide clients with updates on everything from weekly electricity consumption to daily hotel bookings. The high-frequency data do not map onto the official kind perfectly. But they are useful for finding turning-points. They pinpoint- The economic recovery no longer looks indestructible. A difficult winter looms ed the start of the downturn in March long n the summer and autumn America’s dards—and whatever it shows, it is old before the official statistics could. Ieconomy roared back. After peaking at news, since the surveys for the report were America is at another turning-point. nearly 15% of the labour force, unemploy- taken some weeks ago. More up-to-date str, a data provider, finds that in the week ment fell like a stone, while in the third figures show that the recovery has lost ending November 21st hotels were running quarter gdp bounced from its lockdown- steam. That is bad news for the millions at 40% occupancy, down from 50% only induced slump. The recovery of the world’s who remain out of work, as well as the rap- weeks ago. The number of diners in restau- largest economy seemed oddly impervious idly growing share of Americans who are rants has sharply declined in recent weeks, to a second and then a third wave of coro- living in poverty. suggest data from OpenTable, a booking navirus infections, even as economic ac- Official statistics tend to be produced platform, with the fall even steeper in the tivity in other parts of the world took a hit. with long lags. So during the pandemic states hardest hit by the virus. A recovery in Yet there are growing concerns that the economists have turned to “high-frequen- air-passenger numbers appears to have run of surprisingly good economic news is cy” data, largely produced by the private ground to a halt as well. over, at least until a vaccine becomes wide- Other real-time measures capture eco- ly available. In congressional testimony on nomic activity more broadly. The share of December 1st Jerome Powell, the chairman Also in this section small firms which have temporarily closed of the Federal Reserve, said the recovery is probably rising. Consumer spending in 31 Wasting money on campaigns was slowing, while the decision on the the week ending November 22nd was down same day by a bipartisan group of senators 32 In praise of Congress by 5% compared with the one before, ac- to release a proposal for a stimulus package cording to Cardify, a data provider. Using 33 Lead pipes in cities reflects the same fears. The jobs report for mobility data from Google, The Economist November, which was to be released short- 34 America’s spies has constructed an economic-activity in- ly after The Economist went to press, will dex measuring visits to workplaces, tran- 35 Lexington: Jake Sullivan probably be a downbeat one by recent stan- sport hubs and places of retail and recrea-1 The Economist December 5th 2020 United States 31

2 tion. After rising steadily during the Campaign financing autumn, the index has fallen back—though The spread of the spread 2 America still looks better than Europe, United States, share of counties with at least Not for sale where the economic-activity index has one death from covid-19 in past week, 2020, % crashed as governments have imposed an- 60 other round of lockdowns. jpMorgan Chase, a bank, produces an estimate of 50 monthly American gdp growth from a WASHINGTON, DC 40 Why a Democratic cash advantage in range of real-time data. In a report pub- the billions did not matter lished on December 2nd, it suggests that 30 n the heady output stopped growing in November. 20 days before the elections on Three factors explain the slowdown. To INovember 3rd, when Democrats dared to some extent it was inevitable. Loosening 10 dream of unified control of Washington lockdowns had allowed millions of people 0 and a coming progressive remake of Amer- to return to work and start spending again. ica, two especially optimistic indicators NOSAJJMAMF But there was no comparable loosening of elicited particular giddiness. First, of Source: Johns Hopkins University CSSE coronavirus restrictions after that. So it course, were the horse-race polls showing was never realistic for America to repeat Joe Biden ahead of President Donald Trump the 7.4% quarter-on-quarter gdp growth drawing on Google data and work by Mark by nine or so percentage points. But there that it saw in July to September. Muro and colleagues at the Brookings In- was also the money race, which Democrats Fiscal policy is the second factor. An- stitution, a think-tank, found that in the were winning handily: Mr Biden’s cam- other reason the economy bounced back so summer and autumn people in pro-Trump paign raised $952m, or nearly 60% more quickly in the summer was the enormous areas were half as likely to avoid public than Mr Trump’s campaign, described by generosity of the stimulus packages agreed places as people living in areas that had reporters as a profligate operation limping by Congress in the spring, worth some voted for Joe Biden (see chart 1). cash-strapped into November. $3trn (or 14% of gdp). Yet Congress has so But now even people in the most pro- The down-ballot races looked even far failed to agree to another one, even Republican areas appear to be getting skit- more favourable. In an election that cost a though the most bullish forecasters still tish, too. In the week before Thanksgiving remarkable $14bn—more than twice the reckon a package worth over $500bn is re- attendance at South Dakotan recreation- price tag in 2016—Democrats were spend- quired to help the economy back to some and-retail was 8% lower than normal. The ing 80% more than Republicans, the most semblance of normality. A programme set continued increase in coronavirus cases lopsided advantage ever according to anal- up by President Donald Trump to raise un- may partially explain this, but a rise in ysis by the Centre for Responsive Politics employment-insurance (ui) payments by death rates may be more significant. Re- (crp), a research outfit. Unfortunately for $300 a week, which had boosted aggregate search by Austan Goolsbee and Chad Syver- them, a few extra billion seemed not to go household incomes by 1.5%, wound down son, both of the University of Chicago, very far in 2020. Democrats lost seats in the in October. States and local governments, finds that local deaths from coronavirus House of Representatives and the party facing a severe budget crunch, cut over 1m have a big impact on a local economy, per- faces an uphill battle to take the Senate, by jobs in the first six months of the pandem- haps because they bring home the serious- the thinnest possible margin, when run- ic, more than they lost even during the fi- ness of the situation. Deaths lag behind off elections are held in Georgia in January. nancial crisis of 2007-09. cases, and the share of American counties Whether campaign spending actually The third and most important reason with at least one death from coronavirus in moves voters is an unsettled debate—one for the slowdown is the virus itself. Until the previous week is soaring (see chart 2). of special academic interest to American recently many Americans, especially in Re- Surveys suggest that a growing share of political scientists and of special pecuni- publican-leaning areas, seemed oddly hap- people worry about catching the virus. ary interest to America’s political-consult- py to go about their business as normal. In The economy will rise again once a vac- ing-industrial complex. The political con- South Dakota in September and October, cine becomes available. Roughly 40% of sultants would probably point to the for instance, visitors to sites of retail and the country should be vaccinated by robust correlation between raising the recreation were 1.5% higher than usual for March, suggests a recent paper by Goldman most money and winning an election: even that time of year, even as coronavirus in- Sachs, a bank, putting America behind only in 2020, 89% of House candidates who fections surged. Analysis by The Economist, Britain in terms of the speed of the rollout. spent most went on to win; the same was And the vaccine-induced boost could be true of 70% of Senate candidates (albeit a bigger than many expect. So far the pan- two-decade low, according to the crp). Relapse 1 demic has left surprisingly few scars on Political scientists would counter that a United States, economic-activity index*, 2020 America’s economy. Business bankrupt- correlation is just that—perhaps one dri- By county, % change relative to pre-pandemic norm† cies and the number of people in long-term ven spuriously by the fact that truly hope- 20 unemployment remain lower than during less candidates generally have a difficult time raising money. Candidates who are Republican-voting the financial crisis of 2007-09. 0 Until then there will be further drags on guaranteed to win also attract a lot of cam- the economy. Two further provisions relat- paign donations from those who want ac- -20 ed to ui, one which expanded eligibility to cess to them. The more nuanced assess- include the self-employed and gig workers, ment is that campaign spending can move -40 and one which provided extra weeks of voters on the margins, going furthest in Democrat-voting benefits for recipients, are due to expire at less prominent and less polarised races -60 the end of the year. A number of emergency (like primaries) where more voters are un- NOSAJJMAMF lending programmes are also likely to end informed and undecided. Sources: Brookings *Visits to workplaces, transit stations, at that time. And the pandemic remains Democrats will want a more thorough Institution; Google; places of retail and recreation out of control. America, and especially its post-mortem than that, though, given not The Economist †Seven-day moving average poorest folk, face a tough winter. 7 just their recent grief but also a cruel irony 1 32 United States The Economist December 5th 2020

2 of history. As the Supreme Court issued rul- glected the years-long organising it takes to Corporate transparency ing after ruling deregulating campaign fi- turn out voters. The first part of her theory nancing, most prominently in its Citizens is suspect, but the second may be correct. Shell collecting United decision ten years ago, Democrats This is aptly demonstrated by what hap- fretted that free-flowing dollars from rich pened in Maine, where Democrats hoped Republican donors would place them at a that Sara Gideon would topple Susan Col- permanent disadvantage, consigning them lins, the longtime Republican senator. Ms to the minority for the foreseeable future. Gideon certainly did not neglect internet WASHINGTON, DC Congress edges closer to cracking But when they managed to secure a serious advertising—spending nearly three times down on anonymous shell companies cash advantage, through considerable in- as much as her opponent on Google adver- vestments in online fundraising and free- tising and four times as much on Facebook ut of the $4.5bn pilfered from 1mdb, a spending by billionaires of their own like ads. But Mainers bristled at the out-of-state OMalaysian state development fund, at Michael Bloomberg, they found it was not canvassers imported by Ms Gideon for her least $1bn is alleged by American prosecu- as decisive as they had hoped. campaign. “Canvassing, phone-banking tors to have been embezzled into the Un- One partial explanation for the misfire and people sending postcards is all a Band- ited States—spent in a Gatsby-esque frenzy is that better online fundraising enables Aid for a lack of social ties in the communi- on, among other things, a Manhattan pent- greater hauls that are distributed ineffi- ty,” says Eitan Hersh, a political scientist at house, a Beverly Hills mansion and financ- ciently. Polls consistently showed that Tufts who has written a withering denun- ing Hollywood films (including, naturally, Amy McGrath had little chance of unseat- ciation of political hobbyism in America. “The Wolf of Wall Street”). America’s po- ing Mitch McConnell, the Republican ma- Democrats opt for quickly constructing rous rules on anonymous shell companies jority leader in the Senate, and yet she man- and then dismantling expensive get-out- make disguising the origins of money fair- aged to raise $88m because there were the-vote operations in each cycle, Mr Hersh ly straightforward. The Tax Justice Net- thousands of Americans not in Kentucky adds, whereas Republicans are able to tap work, a good-government group, ranks willing to set their dollars on fire for the more durable networks built around America as the second-worst performer on warm feeling of spiting Mr McConnell (and churches and gun clubs. its annual financial-secrecy index—ahead probably ignoring their local state legisla- Ultimately, money probably matters of famous tax havens like Switzerland and tive elections where Democrats were shut less than voters suspect. In a provocative Luxembourg, and eclipsed only narrowly out). The top three employers for people (and highly-cited) paper entitled “Why is by the Cayman Islands. As recently as last donating to Ms McGrath were the Universi- there so little money in us politics?”, three year, American prosecutors were trying to ty of California, Alphabet (based in Silicon political scientists pointed out that if cam- wrest control of a 36-storey office building Valley) and Microsoft (based in Seattle). paign financing were really just an auction on Fifth Avenue in Manhattan, probably West-coast cash helped buy a lot of televi- for federal spoils, then there ought to be worth close to $1bn, on the grounds that it sion adverts for Ms McGrath ($18.6m- much more of it given the colossal sums at was secretly owned by the government of worth), with little chance of wooing Re- stake. Instead, they argue persuasively that Iran, which is subject to some of the heavi- publican voters in the first place and di- most campaign spending is driven by po- est sanctions in the world. minishing marginal returns afterwards. litical dilettantes. During the Trump era, Shell games such as these hide not only Alexandria Ocasio-Cortez, the promi- many incensed Democrats were willing to the penthouses of kleptocrats, but the fi- nent Democratic socialist representative, donate record sums to chasing lost causes. nancial networks for traffickers of arms, issued a two-pronged post-mortem of her Campaigns (and their paid consultants) drugs and humans. Congress is on the cusp own soon after the disappointing election: know that viral advertisements are a ticket of making them harder to execute. The moderate Democrats had failed to win be- to huge sums of internet cash. The donors, must-pass annual defence bill is slated to cause they had ignored online advertising on the other hand, have little idea how ef- include legislation requiring companies to on platforms like Facebook, and had ne- fective their dollars will be. 7 disclose to the Treasury Department’s enforcement division their beneficial owners (those who actually enjoy the proceeds rather than those who sign the paperwork). “The biggest vulnerability in our anti-money-laundering regime is the incorporation of anonymous shell companies,” says Clark Gascoigne, a senior policy adviser at the fact Coalition, another anti-corruption outfit that has spent years pushing for the pending legislation. At present, notes Mr Gascoigne, there are more onerous disclosure requirements for obtaining a library card in all 50 states than for starting a new limited-liability company. America’s law-enforcement agencies are keen to get such data. “The strategic use of these entities makes investigations ex- ponentially more difficult and laborious,” a senior fbi official testified to Congress last year. In fact, there is impressively little organised opposition to the new rules, which have strong bipartisan support. The Bank Policy Institute, a lobbying group, is a firm supporter (banks not only spend a non-tri- Amy McGrath wows the masses vial share of operating expenses on anti-1 The Economist December 5th 2020 United States 33

2 money laundering compliance, but would control for other factors by comparing cit- also rather avoid news stories about terro- ies where the ph of the water supply was rism financing). So, too, is the us Chamber below seven, making it acidic, and causing of Commerce, which until June had op- lead to leach into water. The authors found posed such measures. The National Feder- acidic water tallied with more crime. ation of Independent Business, a small- Some cities flush chemicals—ortho- business lobby, is putting up a last stand of phosphates—into pipes, to coat them to resistance, fretting that the new disclosure stop lead getting into the water. Milwaukee requirements would impose onerous pa- spends $400,000 a year to do so. That perwork requirements of 2.5 hours a year. helps, but disturbances—such as when If it passes, the legislation would be the mains pipes are replaced but service lines culmination of a long campaign. Banks to homes are not—can shake out particu- were fairly quick to support the change. lates that remain in water. Karen Dettmer, Realtors (estate agents to Brits) took longer superintendent of water works in Milwau- to come round, as did the secretaries of kee, says events in Flint spurred her city to state in places that make lots of money stop all repairs of lead lines. They also from incorporation fees. (Delaware earns found, in 2017, ten schools fed by lead lines almost as much from charging businesses that were promptly replaced. Nurseries run as it does from its personal income tax.) from private homes remain exposed. The bill would bring America’s rules Milwaukee is trying to replace 1,100 lead closer to Europe’s. Britain has required dis- lines each year—hoping to emulate cities closure of beneficial owners since 2016 (its such as Lansing, Madison and Green Bay register, unlike the one proposed by Con- which have recently replaced all their gress, is public). The European Union re- Bath time stories pipes. Pittsburgh, Newark and other cities quired its member states to set up compa- also plan to do so. But the cost of replacing rable schemes by January of this year. fied for so long, why does it persist? one pipe averages $11,000 in Milwaukee (it America has used the global heft of the dol- The city’s water woes can be blamed in was lower elsewhere). And with service lar to go after international flows of illicit part on the historic clout of industrial lob- lines mostly on private land, the job in- cash, while being permissive towards the byists and a union of plumbers. In the last volves negotiations and cost-sharing with ideal vehicles for money-laundering. That century, even as other cities stopped in- owners. Doing it all “will take about 70 means “the United States is increasingly stalling the pipes or started removing years, that’s not fast”, she says. Much hous- helping to facilitate the very narcotics traf- them, they nudged Chicago’s political ing stock is decades old and pipes inside fickers, human smugglers, terrorist net- bosses to set rules making lead pipes com- homes may also be a source of lead. works and kleptocrats that weaken us na- pulsory. That lasted until a federal ban on With federal help, states and cities tional security,” according to Jodi Vittori of new lead pipes in 1986. More than three de- might move faster. One concern is regula- the Carnegie Endowment for International cades on, Lori Lightfoot recently became tion. The epa last updated its Lead and Cop- Peace. That looks likely to change. 7 the first mayor to set out a plan to fix per Rule, setting out how fast lead pipes things. The catch? It will cost $8.5bn, which should be replaced, in 1991. It requires 7% of the city government does not have. At the them in a given site to be swapped out year- Water current pace of replacing fewer than 800 ly, though this has evidently not been en- pipes a year, notes an alderman, residents forced. An amendment the epa sent to the With the lead won’t all get lead-free water until the White House in July, which is still awaiting mid-26th century. Donald Trump’s signature, would relax that piping Mayors are more alert to the problem to 3% a year. (It would also tighten rules to these days, especially since the water crisis speed replacement in schools.) Mr Olson in 2014 in Flint, Michigan exposed resi- calls the proposed change “appalling”. CHICAGO dents to high levels of lead leaching from Cities want to make changes, but swap- Millions of Americans still get their their pipes. Flint is spending $100m up- ping out 10m service lines could cost drinking water from lead pipes grading its system. Erik Olson of the Natu- $50bn, says Mr Olson (it is cheaper to do it ver a century has passed since the ral Resources Defence Council, who has in bulk). Twice this summer the Democrat- Odangers of consuming lead became campaigned on the issue for 30 years, says run House of Representatives passed bills widely known. Ingesting even small quan- thousands of water systems across the to start paying for it—first a $22.5bn autho- tities damages young brains and may raise country, serving tens of millions of people, risation, then an appropriations bill that the risk of heart problems. Yet residents of still face “serious problems”. The new at- set aside $1bn for this fiscal year. Proposed Chicago—and many other cities—still tention to the problem encourages him. infrastructure bills also include sums for mostly swig from taps fed by lead pipes. A clutch of newish studies on the effects removing lead pipes. But in the Senate such About 400,000 lead service lines connect of lead exposure has helped. The hypothe- plans have, so far, led nowhere. to the mains in the Windy City, linking sis that lead damage to developing brains Joe Biden’s administration could nudge about four in five of all houses there. One causes violence later in life is one of the things on. The epa may set higher stan- study of nearly 3,000 homes, two years ago, great mysteries of social science—widely dards again and might order overdue pub- found two-thirds had elevated levels of believed by those who plot the decline in lic hearings on the topic, perhaps in badly lead in their water. violence against the decline in lead expo- afflicted cities like Flint. A bill co-spon- In Chicago some residents are told to sure and note how the two track each other; sored by a Republican congressman from flush their taps before drinking, to fit fil- widely mistrusted by researchers who New Jersey, Chris Smith, would require all ters or avoid boiled water (doing so can mutter about correlation and causation. lead pipes to be replaced within a decade. concentrate higher levels of lead). Older Newer studies are more nuanced. One, by His timetable may look too ambitious, but houses in poorer districts may be worst af- James Feigenbaum of Boston University waiting for 500 more years to fix the pro- fected. Since this problem has been identi- and Christopher Muller of Berkeley, tried to blem isn’t much of a plan, either. 7 34 United States The Economist December 5th 2020

America’s spies two decades of relentless focus on counter- terrorism, the agencies are shifting re- Shadow business sources and attention to “great-power” rivals, above all China. That requires different skills and capabilities than those wielded in the militarised war against jihadists. As Mr Warner notes, “it’s not just about who has the best rocket or subma- WASHINGTON, DC rine. Who’s going to control the 5g net- The intelligence agencies prepare for life after Trump work? What will be the ethical and legal cri- he whole job of the intelligence as usual during Mr Trump’s tenure. The teria around ai?...We kind of fell asleep at “Tcommunity (ic),” explains Angus non-American intelligence agencies were the wheel, and China flooded the zone with King, a senator from Maine whom Joe Bi- occasionally more careful than usual in engineers in standard-setting areas.” den considered naming Director of Nation- what they told the White House, to avoid If all that were not enough, intelligence al Intelligence, “is to seek the truth and tell triggering a presidential tantrum. Some agencies are also facing something akin to the truth…[and to] provide absolutely un- worried that intelligence coming in the op- the problems media companies ran into varnished information without worrying posite direction may at times have been when news moved from the printed page to what the leader wants to hear.” Most presi- coloured by Mr Trump’s political consider- the internet, and readers no longer needed dents value such independence. Donald ations. But intercepted communications a paper to give them information such as Trump, less so. Over the past four years, he are shared almost automatically. And Mr sports results or the next day’s weather has compared intelligence agencies to Na- Cardillo says that most allies expressed “re- forecast. “Seventy years ago when intelli- zis, rubbished intelligence that displeased lief” when he told them: “I get it, I know gence agencies were being set up, collect- him and replaced professionals with un- what’s in the headlines and what you’re ing and analysing secrets was deemed the qualified sycophants. Doug Wise, a former seeing on Twitter, but we’re still here, we best way to understand the world,” says deputy director of the Defence Intelligence still have this relationship.” Carmen Medina, a former deputy director Agency (dia), calls Mr Trump “the global of intelligence at the cia. Today, she says, “a equivalent of an intelligence cancer”, who Trust funds lot of the information that they stamp se- has damaged morale within agencies and On the other hand, many worry that Mr cret on, I can find anywhere else.” emboldened America’s adversaries. Trump’s denigration of his own spies has Open-source intelligence, from com- The Biden administration will need to emboldened America’s adversaries. His mercial satellite imagery to social media, undo that damage, while also responding carelessness with classified information— cannot substitute for the most hallowed to emerging threats with a set of institu- early in his presidency he offhandedly di- sources—an agent in the Kremlin, say—but tions often deemed too tied to outdated vulged some to Russia’s foreign minister— it offers insight without the encumbrances practices. Mr Biden’s first steps are promis- may make it harder for America to attract of classification. A new generation of offi- ing. He says he wants his national-security would-be sources. The seasoned profes- cials and lawmakers have grown up in a officials to “tell me what I need to know, sionalism of the national-security team world where they expect “answers on de- not what I want to know”. The last two of Mr that Mr Biden has already assembled may mand”, says Zachery Tyson, a former intel- Trump’s four directors of national intelli- calm some nerves, but restoring America’s ligence official at the Pentagon. “They are gence (dni)—a role created in the wake of reputation for stability and care for its in- not going to use an ic where you have to go the September 11th attacks to promote bet- telligence sources will take more than just four floors down into the basement and log ter information-sharing among the 17 enti- words, and longer than just months. on to a secret computer with four different ties comprising America’s intelligence ap- Yet it is challenges unrelated to Mr passwords to access a simple answer that paratus—were a former ambassador and a Trump that are likely to prove trickier. After you can approximate on Google.” 7 three-term congressman, both of whom had negligible intelligence experience. They were there, according to Robert Car- dillo, another former dia deputy director, “as yes-men to ensure the ic didn’t give [Mr Trump] any trouble.” Mr Biden nominated Avril Haines as dni on November 24th. She was Barack Obama’s deputy national security adviser and deputy cia director; John Brennan, her boss at cia, praises her “humility, interper- sonal skills and tremendous capability,” as well as a “work ethic...beyond peer”. She vowed to “speak truth to power” if confirmed. Her priority, according to Mark Warner, the leading Democrat on the Sen- ate intelligence committee, is “restoring morale [and] reaffirming the notion that [analysts] speak the truth, even if it’s not the administration’s position.” Undoing the damage abroad could prove trickier. On the one hand, intelligence sharing among the Five Eyes countries—America, Australia, Britain, Canada and New Zealand—proceeded more or less Needle in a Substack The Economist December 5th 2020 United States 35 Lexington Jake Sullivan to the rescue

What to expect from the Democrats’ golden boy of foreign-policy skewered for the failure of Mr Trump’s foreign policy. Mr Sullivan can expect much stiffer criticism for much smaller setbacks. Barbed comments from Republican hawks such as Tom Cotton and Marco Rubio, for whom any association with the Obama administration is unforgivable, suggest it has already begun. On his core responsibilities—which will include restoring san- ity to the inter-agency process and managing the rivalries it breeds—he will nonetheless start with big advantages. He knows Mr Biden’s mind and has his confidence; the president-elect calls him a “once in a generation intellect”. He has comradely relationships with Tony Blinken and other senior Biden nominees—and a habit of continually questioning his own assumptions which creates an impression of open debate. Often noted by those who have worked with him, this quality is also indicated by Mr Sulli- van’s self-critical recent writing, including that essay on economic policy, another in defence of American exceptionalism (“Despite its flaws, America possesses distinctive attributes…”) and a syn- thesising third essay, in Foreign Policy, on his ambition to bring foreign and domestic policy into alignment. His willingness to adapt suggests the fear that Mr Biden’s security agenda will be too backward-looking may be overblown. When Mr Biden said this week that he would not hurry to scrap the tariffs t the hoary age of 36, Jake Sullivan delivered this life lesson on China, and that he would try to expand as well as to reconstitute Ato graduating students of the University of Minnesota. “Reject the Iran deal, he echoed positions that Mr Sullivan had previously certitude. And don’t be a jerk. Be a good guy.” He cannot be accused laid out. The Biden administration will focus on rehabilitating the of ignoring his advice. The Democratic wunderkind, who eight traditional means of statecraft—including diplomacy and basic years later will become the youngest national security adviser competency—that the Trump administration disdains. But it will since McGeorge Bundy in 1961, has a reputation for high-grade husband whatever useful leverage its predecessor has accrued, amiability that is even rarer in Washington, dc, than his big brain. while pursuing some of the same hawkish objectives. “He’s the smartest guy in the room, but he’s not cocky about it,” Mr Sullivan will find his grander scheme to integrate foreign says Senator Amy Klobuchar, a fellow Minnesotan, who hired Mr and domestic policy tougher going. He makes a strong case—in his Sullivan from the Minneapolis law firm where he had taken a brief Foreign Policy piece and elsewhere—that globalisation has made break from elite institutions (Oxford, Yale Law, a clerkship at the this essential (as the pandemic underlined). Also that the cosy for- Supreme Court). When he left her office to work on Hillary Clin- eign-policy world needs better answers (as Mr Trump’s success ton’s 2008 presidential campaign, he promised to return. He pro- showed) for its populist critics. Mr Biden’s promise of a “foreign ceeded instead to make himself indispensable, in the State Depart- policy for the middle class” speaks to the same concern. And Mr ment, White House and on the trail, to Mrs Clinton, Barack Obama Sullivan can be expected to make at least modest efforts to address and Joe Biden in turn, including as the then vice-president’s nsa. it. As nsa, he might be expected to play an unusually big role in (“He did the trifecta,” quips Ms Klobuchar, a trifle ruefully.) trade and immigration discussions. By the same token, expect do- Even Iran’s mullahs were said to appreciate his lack of conde- mestically orientated agencies—such as Health and Human Ser- scension, after he was charged by Mrs Clinton with a series of top- vices—to play a bigger part in the inter-agency security debate. secret missions to the Gulf that opened a path to the Iran nuclear deal. More remarkably still, the mullahs of the Democratic left like Everything’s Jake him, too. This is on account of his intraparty peacemaking for Mr Yoking together foreign and domestic objectives could also be of- Biden; and also a soul-searching essay on the limits to neoliberal- fered as a political rationale for the more ambiguous relationship ism that he penned in the wake of Mrs Clinton’s loss to Donald with China that Mr Biden wants. Where any engagement with the Trump—for which, as her policy chief, he held himself partly to Party is currently considered a show of weakness, Mr Biden might blame. The bipartisan foreign-policy world has welcomed his lat- argue that closer ties in areas such as public health and climate est elevation with a gusto that goes beyond the usual post-Trump change are urgently required by the needs of ordinary Americans. relief. “He’s a terrific choice,” says Stephen Hadley, former national But these would be marginal developments, far short of the trans- security adviser to George W. Bush. “He’s a good person, very smart formation Mr Sullivan advocates, and for a familiar reason. Presi- and very balanced.” dents pay such heed to foreign policy in part because their pros- Such plaudits may prove hard to live up to. Especially as Mr Sul- pects of passing much on the home front are so limited. Linking livan will be judged by harsher standards than his recent predeces- foreign and domestic objectives will not fix the partisan dysfunc- sors. Mr Trump’s half-dozen national security advisers have been tion underlying that failure, as Mr Sullivan must realise. weighed by the media and Democratic opposition chiefly on their His return to government is therefore liable to be much less reported willingness to restrain the president’s excesses. Thus the ambitious than his writings might suggest. Meeting his admirers’ extraordinary turnabout in John Bolton’s reputation on the left. expectations will be hard. But in picking Mr Sullivan, Mr Biden has Only Michael Flynn, who this week called for a military coup and given himself a better chance of bringing a period of disarray in the imposition of martial law to overturn the election, has been American foreign policymaking to a close. 7 36 The Americas The Economist December 5th 2020

Cuba hunger strike landed him in hospital. The movement began in September The art of dissent 2018 in response to Decree 349, which proposed to restrict cultural activity that is not authorised by the culture ministry. After a protest that month outside Cuba’s legislature, the government suspended enforcement of the decree. That has not stopped it from silencing voices it doesn’t like. A movement founded by artists exemplifies a new sort of challenge to the regime msi is not comparable to Belarus’s mass he front door of Damas 855, a ram- identity and subjugate us again”. A photo of movement to overthrow a dictatorship. Tshackle building in San Isidro, a poor President Donald Trump accompanied the Cuba has no such movement, though pro- neighbourhood of Havana, snapped like a tweet. State media echoed the message. democracy activists were among the 1,800 wishbone when security agents charged Some Cubans take a kinder view of the people who have been arbitrarily arrested through it on the evening of November movement, which includes artists, schol- in the first eight months of 2020, according 26th. The lock and chain tumbled to the ars, journalists, rappers, poets and scien- to Human Rights Watch. msi has more in ground. The agents, dressed in medical tists who advocate freer expression and common with other recent home-grown gowns, arrested 14 people (their pretext more democracy than the communist re- protests that have wrung small conces- was that one of the residents had violated a gime allows. Its leaders are Luis Manuel sions from the regime. covid-19 testing protocol). They had locked Otero, a performance artist, and Maykel “El In August 2017 cuentapropistas (entre- themselves in for eight days to protest Osorbo” Castillo, a musician who sewed preneurs) proposed reforms, such as the against the arrest of Denis Solís, a young his lips shut in prison in August. They gath- right to incorporate, to the labour ministry. rapper who had been accused of disre- er in a part of Old Havana where the mainly Initially they were rebuffed. The govern- specting authority and sentenced to eight black residents live in rickety housing in ment forced the cancellation of events months in prison. A few of the Damas 855 the shadows of luxury hotels. When a bal- meant to help budding entrepreneurs. denizens were on a hunger-and-thirst cony collapsed in January, killing three When in 2018 it threatened to restrict each strike. Police cars took the detainees away. girls, Mr Otero wore a hard hat for nine days entrepreneur to one line of business, Facebook, YouTube and Instagram went to honour them. He has been arrested more cuentapropistas, who run much of the eco- down on most of the island for about an than 20 times over the past two years. His nomically vital tourist industry, said they hour. Connections have been spotty since. would strike. The rules were eased. To defenders of Cuba’s 62-year-old revo- A clash between the gamers who cob- Also in this section lution, the adherents of Movimiento San bled together snet, a private intranet, and Isidro (msi) are reprobates. On Twitter the 37 Alberta goes green the communications ministry played out country’s president, Miguel Díaz-Canel, in a similar way, though the government 38 Bello: Argentina’s muddle called it an “imperial show to destroy our yielded less. On an island with poor and ex-1 The Economist December 5th 2020 The Americas 37

2 pensive connectivity, the network was a Cuban regime). That is probably not a sign lighter oils do. Investment in the prov- way for gamers to play with one another, that the regime is growing tolerant of dis- ince’s oil and gas sector plunged between often games they had created. When the sent. More likely, it was a way to allay anger 2014 and 2019 to C$26bn ($19bn), around government restricted the use of such net- about the San Isidro raid. 6% of gdp (see chart). The covid-19 pan- works and threatened to confiscate the Most Cubans, who queue for hours for demic has made matters worse. The pro- equipment in May 2019, snet users were chicken or eggs, often to return home emp- vincial unemployment rate of 10.7% is now devastated. Several dozen gathered at the ty-handed, have little interest in the doings among the highest in Canada. ministry to protest. Police cars quickly sur- of agitators like those of msi. Their suffer- These reversals are prompting Alberta, rounded them. The government eventually ing has got worse since the pandemic shut a conservative province often at odds with decided that snet and its hardware would down tourism. But a vaccine, and perhaps a the federal government in Ottawa, to re- be permitted, but under the supervision of softening of American sanctions by the in- think its economic future. While Alberta’s the state-run youth computer clubs. coming Biden administration, might even- government expects demand for its oil to Like the cuentapropistas and the snet tually ease shortages. More Cubans might recover and resume its rise, it hopes to re- gamers, msi began in response to a threat then ask why they have so little freedom. 7 duce its dependence on fossil-fuel invest- to its members’ private pursuits. But it has ment for growth. more potential to grow. On the day after the One sign of this is a series of recent ini- Damas 855 raid nearly 300 people, many of Canada tiatives to boost investment in cleaner them supporters of other movements, forms of energy. In October Alberta’s gov- gathered outside the culture ministry, re- Alberta goes green ernment proposed a law to provide a regu- fusing to leave until the vice-minister, Fer- latory framework for investment in geo- nando Rojas, agreed to meet them. Security thermal energy. The province has the right forces and “rapid-response groups”, geology, and expertise in drilling. Energy trained to shout communist slogans at from below the earth’s surface can make sceptics, flooded the area. Agents in plain CALGARY use of abandoned oil and gas wells and the The home of the oil sands looks for clothes snapped photos and took videos. infrastructure that serves the industry. cleaner ways to make a living Mr Rojas met with 30-odd activists for On October 6th Mr Kenney announced nearly five hours on November 27th-28th year ago, when Canada’s government that Alberta would seek to use its natural and promised more dialogue. But the gov- Apromised to end net emissions of gas to produce and export hydrogen, a fuel ernment then launched a media campaign greenhouse gases by 2050, Jason Kenney, that does not emit greenhouse gas. The car- against msi. Police chased Mr Otero after Alberta’s Conservative premier, erupted. bon dioxide that comes from producing his release from hospital. The government’s ideas were a “fantasy hydrogen would need to be captured and Even so, the movement thinks it has plan for a mythical country”, he said. He stored. He has joined the premiers of three made progress. The gathering outside the scoffed at the “California-style pieties” of other provinces to promote the develop- culture ministry is a sign of an emerging the Liberals who govern Canada. They ment of small nuclear reactors. Alberta’s “collective unconformity”, says Carlos Ma- imagine that people in poor countries like government recently set up a council to de- nuel Álvarez, one of the Damas 855 detain- India “are all going to be driving Teslas 15 vise ways of boosting extraction of miner- ees and a co-founder of El Estornudo (“The years from now”, Mr Kenney said. In fact, als such as lithium and vanadium, which Sneeze”), an independent online maga- “they want to stop burning cow dung”. are used to make batteries. zine. He sees that as a direct threat to the The premier’s fusillade was in defence A vociferous opponent of the federal culture of submission demanded by the re- of Alberta’s oil industry, which has made government’s policy of setting a price floor gime. Its agreement to meet participants in the province’s residents Canada’s richest for carbon emissions, Mr Kenney has lately such a large protest “was unprecedented”, citizens. But it has lately suffered setbacks, gone quiet on the issue. Alberta and several says Camila Ramírez Lobón, a visual artist most of which are more damaging than the other provinces are still challenging in who joined the meeting with Mr Rojas. Art- Liberals’ nefarious net-zero plans. Oil court the constitutionality of the broad- ists who are both popular and acceptable to prices have yet to recover from a slump that based carbon price, which is set to rise to the regime, like Fernando Pérez, a film di- began in 2014. Environmental activists C$50 a tonne by 2022. Alberta has a carbon- rector, and Leoni Torres, a musician, have have singled out Alberta’s oil sands as an pricing scheme for large emitters, which publicly backed msi. especially dirty source of crude. The thick supports a fund that promotes emissions The internet, unreliable though it is, is bitumen they contain requires more ener- reductions. In September its government making such movements harder to con- gy, and money, to extract and refine than said it would immediately spend the trol. More than 60% of Cubans have access C$750m in that fund, especially to develop to a connection. That has led to “an explo- carbon capture and storage. sion of civic activism” among groups advo- Oil’s not well The greener tinge to Alberta’s policies is cating such causes as feminism, gay rights Alberta, Canada a big change from the fiery hue of Mr Ken- and animal rights, says José Jasán Nieves, Oil and gas investment Oil production ney’s successful campaign for the premier- editor of El Toque (“The Touch”), an inde- $bn Barrels per day, m ship in 2019. Wearing a wide-brimmed pendent online publication. Some were at 80 4 cowboy hat and touring in a blue pickup the culture-ministry protest. If they joined truck, he blasted the critics of Alberta’s oil forces more often, they might challenge 60 3 sands and vowed a return to the boom

the government more effectively. FORECAST years. He accused the left-wing New Demo- Cuba’s ruling Communist Party, divided 40 Conventional 2 cratic Party (ndp), which then led the pro- between hardliners who remember the vincial government, of hobbling the oil in- revolution and younger officials who are 20 1 dustry with regulation. He excoriated slightly more liberal, is not about to yield. Oil sands Justin Trudeau, Canada’s prime minister, On December 1st the government released 0 0 for failing to back the construction of pipe- Silverio Portal Contreras, a prominent po- * 20181614122010 23 lines to carry Alberta’s oil to foreign mar- litical prisoner (and supporter of Mr Sources: Statistics Canada; kets. The message was popular. In the elec- Trump, who has imposed sanctions on the Alberta finance ministry *Estimate tion Mr Kenney won 55% of the vote. 1 38 The Americas The Economist December 5th 2020

2 His premiership has provided a hum- not fanciful. Its idled workers have skills the economic effects of the pandemic: on bling education. On a road show in New that can be used to produce cleaner forms November 30th it said it would spend an York last year investors told him bluntly of energy. But there are obstacles. The extra C$70bn-100bn, 3-4% of this year’s that they really meant it when they talked province is far away from big energy mar- gdp, over three years. But Mr Kenney’s gov- of using environmental criteria to guide kets, points out Andrew Leach, a specialist ernment is cutting the pay of public ser- their decisions. Insurance companies are in energy economics at the University of vants, including doctors. Reported cases of withdrawing coverage for pipeline con- Alberta. Heat and hydrogen are harder to covid-19 are surging in the province. The struction projects that are opposed by envi- transport than oil. In five or ten years, solar ndp, which gives Mr Trudeau’s minority ronmentalists. Joe Biden, who will become power may replace natural gas as a way of government vital support in Parliament, the United States’ president in January, has producing hydrogen, Mr Leach warns. has pulled ahead of Mr Kenney’s Conserva- said he will cancel the permit for building If Alberta’s energy transformation is to tives in provincial polls. The next election the Keystone xl pipeline, in which Alber- improve Mr Kenney’s political fortunes, it is due to be held in 2023. Alberta’s pro-oil ta’s government has invested C$1.5bn. will have to happen fast. The federal gov- premier may not be the one to lead Alber- Alberta’s plans for a greener future are ernment in Ottawa is splashing out to fight ta’s green revolution. 7 Bello The man without a plan

Argentina’s year of muddle through n death, as in life, Diego Armando will contract by around 12% this year, rationality may be slow. Mr Guzmán has IMaradona represented his country to because of the pandemic. Now the govern- chosen “a low-risk, low-reward equilibri- the full. The funeral of Argentina’s most ment is negotiating, in slow motion, with um”, says Federico Sturzenegger, a for- famous footballer on November 26th was the imf, to which it owes $44bn as a result mer president of the Central Bank. The as passionate and chaotic as his coun- of a loan to its conservative predecessor controls are buying time and may pre- try’s affairs (see Obituary). In defiance of that failed to stabilise the economy. Martín vent an explosion. When the free-market his own government’s health rules, Guzmán, the finance minister, says he peso plunged again in October, Mr Guz- President Alberto Fernández ordered hopes for agreement by March or April. mán announced a reduction in money- that Mr Maradona’s coffin lie in state in The deal with the bondholders did not printing. He has said he will cut the fiscal the Casa Rosada, the presidential palace. restore Argentina’s access to the interna- deficit from 11% of gdp this year to 4.5% Like the president, El Diego was a lifelong tional money markets, or confidence in in 2021. Pensions and public-sector supporter of Peronism, Argentina’s the peso. The free-market exchange rate is wages are rising by less than inflation. populist-nationalist movement. When now almost double the official rate (which The emergency aid will stop this month. the wake was curtailed, with thousands has itself depreciated by around 25% since “They may surprise us positively on the of fans queuing, pandemonium ensued. Mr Fernández took office). Critics com- fiscal side,” says Mr Sturzenegger. Mr Fernández’s craving for popularity plain that the government lacks an eco- So far the Peronist coalition has re- by association is a sign of his weakness. nomic plan. It meanders between prag- mained united. But the Fernándezes’ The funerary disorder extends to the matism—stressing exports and fiscal political marriage is palpably loveless. economy, too. A social democrat, the balance—and populism. It announced the The vice-president has complained of president took office a year ago, at the expropriation of a big oilseed firm, only to government “mistakes” and “function- head of an uneasy Peronist coalition in change its mind. It is pushing through a aries who don’t function”. She and the which much power lies with his vice- swingeing wealth tax, of up to 3.5% on president talked, briefly, for the first time president, Cristina Fernández de Kirch- people with assets above $2.3m (at the in 45 days at Maradona’s wake. Her allies ner (no relation), a leftist who ruled from official exchange rate). are trying to gain control of the judiciary. 2007 to 2015. Within three months, the “Imbalances in Argentina end either She is said to be furious that Mr Fernán- pandemic struck. Mr Fernández was with rationality or an explosion,” notes a dez has failed to halt corruption charges quick to impose a lockdown, which seasoned politician. This time the road to against her. brought a surge in his approval rating, Economic recovery will be slow. The but which delayed rather than prevented exchange controls and the wealth tax are a severe outbreak of covid-19. Argentina discouraging investment. This year is among the top ten countries for re- several multinationals (such as Walmart) corded deaths as a proportion of the have packed up. Much of the software population. Only now is the lockdown industry has departed. Argentina, once being eased. Mr Fernández’s popularity is Latin America’s most developed country, below its starting point. likes to live by its own rules, although In other matters, too, his government that has engendered a long decline. In has little to show for its first year. Its that, too, Maradona represented his main achievement was to renegotiate nation. He had “so much football wealth $65bn of debt with bondholders, though that he thought he could squander it and some economists question whether this it would not end”. That is Argentina, was necessary. It has provided emergen- wrote Martin Caparrós, an Argentine cy aid to much of the population by author, in El País, a Spanish newspaper. printing money. The resulting inflation “He fell, he got up, he fell again. He de- has been tempered, to 37%, by price lighted in his past glories for lack of controls. An already depressed economy future ones: Argentina, perhaps.” Asia The Economist December 5th 2020 39

Also in this section 40 India’s growing inequality 41 Coal and climate in Australia 42 Dynasticism in Indonesia 42 Japan’s hungry ungulates 43 Banyan: A Japanese novelist’s suicide

The Taiwanese economy Both these sources of out-performance will presumably fade when the pandemic Tiger balm ebbs. Taiwan has also, however, been a beneficiary of tensions between China and America. Taiwanese firms that had previously invested in China have shifted some of their operations back home, in order to avoid American tariffs. Those returning in- TAOYUAN clude Giant, a bicycle producer, Long Chen, Covid-19 has ravaged economies all over the world—but not Taiwan’s a paper company, and Compal, a computer hree years ago a prominent scholar Two factors tied to the pandemic help manufacturer. Investments in factories Tdeclared that Taiwan’s economy was account for Taiwan’s relative success this and other fixed assets in Taiwan reached an “on the brink of death”. The wording was year. First, it was the only country to con- all-time high last year of over NT$4trn extreme but the sentiment was widely tain covid-19 without sweeping closures of ($140bn), and are on track for a new record shared. Taiwan faced a litany of seemingly schools, offices and shops. Its government, this year (see chart on next page). intractable problems. Many of its best com- alert to new diseases in China, started The clanging reverberating through panies had moved to China; wages were screening visitors from Wuhan at the end Hwa Ya Technology Park in Taoyuan, a big stagnant; growth was grinding ever lower of 2019, as soon as reports emerged of a city in the north of the island, is evidence of and the population was ageing rapidly. Its mysterious pneumonia outbreak. Thanks the construction boom. Quanta Computer, glory days as an Asian tiger—celebrated for to fine-grained contact-tracing and near- one of the world’s biggest electronics its rapid development—seemed firmly in universal mask-wearing, life has carried on manufacturers, is stepping up domestic the past. more or less as normal. Since July revenues production of sophisticated servers that it Yet in 2020 Taiwan has turned the clock for retailers and restaurants alike have in- once made in China. And workers are tear- back: it is, again, one of the world’s fastest- creased compared with a year earlier. ing down blue plastic scaffolding covering growing economies. Granted, its gdp is Second, Taiwan’s manufacturers have an even larger server factory being built for projected to expand by only about 2% this been well-positioned to cater to global de- NT$15bn ($525m). “It will be ready quickly,” year. But it is in rare company, with fewer mand, such as it is. From tiny semiconduc- a helmeted worker says cheerfully. than a dozen economies expected to grow tors to giant computer servers, electronics Some in Taiwan worry that this mo- at all, thanks to the coronavirus. For the account for a third of Taiwan’s exports. mentum, catalysed by Donald Trump’s first time in decades, Taiwan’s economy With so many people suddenly forced to trade policies, will fizzle out when Joe Bi- may even grow faster than China’s. The work from home, sales of products such as den enters the White House. Although Mr question is whether Taiwan’s surprising tablet computers and headphones have Biden has pledged to take a hard line on strength marks a new departure, or wheth- been strong. So while global trade this year China, he may be willing to roll back tariffs. er it is simply a brief deviation from con- will shrink by about 10%, Taiwan’s exports But Gordon Sun of the Taiwan Institute of tinued descent. are up by nearly 5%. Economic Research thinks Taiwanese 1 40 Asia The Economist December 5th 2020

2 companies will continue to diversify away and thus corner multiple chunks of the from China. “They cannot afford to get Taipei day economy. The tilt in fortunes has rewarded caught in another trade war, even if the Taiwan, gross fixed capital formation* not so much technical innovation or pro- possibility is low,” he says. New Taiwan dollars, trn ductivity growth or the opening of new The return to Taiwan, if sustained, 5 markets as the wielding of political influ- would partly address one of the concerns ence and privileged access to capital to cap- hanging over its future: the relentless mi- 4 ture and protect existing markets. gration of good companies and good jobs to Merely a decade ago, according to data 3 China. Some 400,000 Taiwanese, about 2% compiled by Marcellus, an investment-ad- of the population, now live across the Tai- 2 vice firm, among listed firms in India the wan Strait. Taiwanese businesses speak 20 most profitable generated less than a with trepidation about the emergence of a 1 third of profits. They now account for 70%. “red supply chain” in China that will soon 0 A study by Krishna Kant, a journalist, re- challenge the likes of Foxconn, a Taiwan- veals that between 2014 and 2018 competi- 20151005200095901985 ese contract manufacturer which makes tion within ten different industries, from Years ending June most of Apple’s iPhones. Competition from aviation to tyres, deteriorated markedly. Source: Wind *Constant prices China has also contributed to anaemic Across Indian markets, only the shares wage-growth in Taiwan. Adjusted for infla- of giant firms have gained consistently tion, salaries have been flat since 2000, av- Mr Liang, for one, frets that China is outdo- over the past decade, says Rohit Chandra of eraging just under $20,000 a year. ing Taiwan in its long-term economic plan- iit Delhi, a university. International inves- Yet the surge in investment in Taiwan ning. But stellar performance in this most tors have noticed, and now bet increasingly has clear limits. President Tsai Ing-wen of- challenging year has at least given many in not on promising new firms but on big old ten refers to the country’s “five shortages”, Taiwan a shot of confidence, after years of ones, which they expect to get even bigger. shorthand for its finite supply of land, wa- gloom. Across the road from the Hwa Ya The government boasts that the five ter, power, workers and talent. Only so Technology Park in Taoyuan, Chris Liang months from April to August saw a record much can be done on a small island that is runs a small restaurant. Among his cus- $36bn in foreign investment, suggesting committed to phasing out nuclear power tomers from tech firms, the change in sen- that its wise policies have sustained confi- and that has one of the lowest birth rates in timent has been almost palpable, he says. dence during the covid-19 epidemic. What the world. Taiwan’s population is set to “Our epidemic control has changed peo- it trumpets less loudly is that more than start shrinking this year, and the govern- ple’s attitudes about the economy. People half of that money, including hefty investment forecasts that it will drop from 24m are more optimistic.” 7 ments from Facebook and Google, poured today to 16m in 2070. into Mr Ambani’s hands alone. Added to these chronic woes are the It is easy to understand why. Things hard realities of Taiwan’s reliance on Chi- Inequality in India have a way of turning out as Mr Ambani na. Nearly 40% of Taiwan’s exports go to wishes. Back in 2016, for instance, the ty- China and Hong Kong. “Taiwan can’t just Compounding coon used his massive earnings from get rid of China’s economy and search for petrochemicals to take a $25bn gamble, other growth engines,” says Chen Chien-li- plunging into the maturing mobile-phone ang, an economist who served under the market. His timing was exquisite. Just as he previous administration, which tried to rolled out a free service to lure customers, draw closer to China. DELHI the government withdrew 86% of the The super-rich get richer and everyone The saving grace for Taiwan is that Chi- country’s paper currency, leaving most of else gets poorer na needs Taiwanese products as much as India strapped for cash and eager to find Taiwanese firms need the Chinese market. ome people have almost all the luck. savings. Rival companies also found them- Chinese firms are still far from matching SOver the past year, as India’s economy selves burdened by lawsuits and crushing the wizardry of tsmc, the Taiwanese com- has shrunk by around a tenth and tens of penalties for back taxes. Regulators ig- pany that churns out the world’s most ad- millions of Indians have lost jobs or sunk nored complaints. “If his firm were Chi- vanced semiconductors. China has done into poverty, the fortunes of the country’s nese it would have been charged with little worse to the Taiwanese economy re- two richest people have swollen. Gautam dumping,” says one economist. cently than limit the flow of tourists from Adani, whose conglomerate sprawls from Mr Adani enjoys a similar Midas touch. 1 the mainland (ironically, this may have ports to coal mines to food, has seen his helped insulate Taiwan from covid-19). personal wealth more than double, to some America may in fact do more damage if it $32bn. Mukesh Ambani’s riches, which de- Counter-cyclical investors promulgates new rules that prevent tsmc rive from oil refining, telecoms and retail, India, November 2016=100 from working with Chinese customers among other things, have grown by just 800 such as Huawei, a telecoms giant. 25%, albeit to an intimidating $75bn or so. Gautam Adani For Liang Kuo-yuan of the Yuanta-Po- The share of wealth and income going 700 Net worth laris Research Institute the economic pre- to the top 1% has been rising rapidly in re- 600 scription for Taiwan is simple, if tough to cent years in India, as it has been in many 500 pull off. The island must make itself as in- countries. Last year they hoovered up 400 dispensable in industries such as medical 21.4% of earnings, just ahead of their coun- Mukesh Ambani Net worth devices and batteries, he says, as it has in terparts in Russia, according to the World 300 semiconductors. Such high-value niches Inequality Database. Credit Suisse, a bank, 200 will help protect Taiwan from Chinese puts their share of India’s wealth at 39%, 100 GDP pressure, and will also fit with Taiwan’s well ahead of the richest 1% of Americans 0 limited resources and falling population. or Chinese. Most alarmingly, in India some 2016 17 18 19 20 A single year of impressive growth does of the rich have become super-rich by us- Sources: Bloomberg Billionaires Index; Refinitiv Datastream not move Taiwan closer to that objective. ing their heft to crush smaller competitors The Economist December 5th 2020 Asia 41

2 In early 2019 his group, which controls around a quarter of India’s port capacity, ventured into a new field when the government tendered six 50-year airport-management contracts. Competing against established firms, Mr Adani nevertheless won all six. He has since bought two more, including a 74% share in Mumbai airport, India’s second-busiest. More recently, Mr Adani has counterbalanced big stakes in coal-fired power with lots of renewable energy, winning a $6bn government contract in June for various solar projects. The share price of Adani Green Energy, a subsidiary, has risen tenfold since March. Some of India’s tycoons have prospered because they have learned not just to weather unpredictability, but to game the system. That system, alas, is failing India’s poor. Measures of malnutrition and stunt- ing reveal an alarming backward slide over the past year. The unemployment rate shows some recovery from the worst of the Out in the coal covid shock, but that fails to capture the astonishing bleakness of India’s labour mar- Some miners hope for longer. Either way, cannot prevent Australia’s states and terri- ket. Before covid hit, barely 40% of adults says Mike Kelly of the local chamber of tories from trying to. In fact, every one of were in paid work, according to the Centre commerce, no one denies that the long- them has set a target of reducing net emis- for Monitoring the Indian Economy, a re- term trend is down. sions to zero by 2050, although Mr Morri- search firm. Now only 36% are. The rest, in- The same realisation is dawning across son refuses to do so. The tiny Australian cluding legions of housewives, see no Australia. Its three biggest export markets Capital Territory, host to Mr Morrison’s point in even looking for a job. 7 for fossil fuels—China, Japan and South government in Canberra, already generates Korea—have all recently pledged to achieve all its power from clean sources. In October carbon neutrality by the middle of the cen- South Australia became, for an hour, the Coal and climate in Australia tury or just after. Another buyer of Austra- world’s first big jurisdiction to run only on lian coal, the Philippines, has banned new solar power. Losing seam coal-fired power plants. But it is a state run by the same coalition The federal government, a right-wing as the federal government, New South coalition, appears in denial about this Wales, that has the most ambitious plan to changing outlook. Scott Morrison, the decarbonise, notes Simon Holmes à Court prime minister, insists he is “not con- of Melbourne University. It has pledged to MUSWELLBROOK cerned about our future exports”. When underwrite 12 gigawatts of clean-energy As the federal government harrumphs, anz, a bank, said in October that it would projects and a further two gigawatts of en- the country is moving away from coal stop funding new coal mines, coal-loving ergy storage to back them up over the next f a coal-free future awaits the town of mps griped that it was “virtue-signalling” ten years. That would be enough to power IMuswellbrook, in New South Wales, and called for a boycott. (Australia’s three several smaller states on its own. there is little sign of it. It is surrounded by other big banks had already pledged to The state’s energy minister, Matt Kean, vast canyons of grey and brown rock— steer clear of coal.) A government minister won support from the coal lobby in the co- open-cast coal mines. Nearby, two huge told pension funds, which are also selling alition by promising A$32bn of investment power plants burn their output for electric- sooty investments, that their goal should in regions that will need it as mining de- ity. More is piled onto sooty trains which be to maximise returns and “not to change clines. When the legislation passed the rumble constantly through the town, con- the earth’s temperature”. state parliament in late November, only veying its riches east, to the port of New- The politicians’ misgivings are under- One Nation, a populist party, opposed it. castle, from which the coal is shipped standable. Coal is Australia’s second-big- Mr Kean takes this as a sign that “we have across Asia. gest export, bringing in almost A$70bn wrested back control” from “the coal bar- According to Muswellbrook’s mayor, ($49bn) in 2019. It also provides two-thirds ons that have decided energy policy in this Martin Rush, the surrounding region is the of its electricity. The industry’s hold over country for generations”. source of more than a tenth of the world’s politics is such that three of Mr Morrison’s Miners, though, argue that these grand internationally traded thermal coal (the four most recent predecessors lost power green plans will inevitably lead to higher sort burnt in power plants, as opposed to after trying to curb the country’s emissions power prices and thus crimp economic coking coal, which is used to make steel). of greenhouse gases. growth. Ditch coal, and all Australians “will Fully one third of locals rely on the stuff for Yet even right-wingers in the federal have to downgrade their lifestyle”, says Gus well-paid work. The problem is that, in the parliament harp on less than they used to Mather, who makes equipment for the next five years, three of the area’s mines about the need to open new mines or sub- mines. Muswellbrook is planning multiple will close. So will one of the ancient power sidise coal-fired power stations, notes Greg clean-energy schemes, from pumped-hy- stations, as utilities replace coal with Bourne of the Climate Council, a green dro to biofuels. But Mr Rush, the mayor, cheaper, cleaner energy. Mr Rush reckons pressure group. And while they may have worries that no coal town has ever man- that it will take “between 20 and 30 years” prevented the federal government from aged to stop digging the stuff up and re- for the local industry to die out altogether. taking steps to curb the use of coal, they main prosperous. 7 42 Asia The Economist December 5th 2020

Indonesian politics Subianto, was married for a long time to a Ungulates in Japan daughter of Suharto, Indonesia’s dictator Son set of 31 years. Suharto came to power by over- Hungry for visitors throwing Sukarno, Indonesia’s first president. Sukarno’s daughter, Megawati Sukar- noputri, was president from 2001 to 2004, and remains the head of the pdi-p. The Indonesian public is put off by the TOKYO More relatives of politicians are A crash in tourism means no one is cosiness of its political class, so much so entering the family business feeding the sacred deer of Nara that in 2015 the national parliament passed hen joko widodo was elected presi- a law barring the relatives of incumbents he more than 13m tourists who visit Wdent of Indonesia in 2014, it marked a from running for regent, mayor or gover- TNara, an ancient capital of Japan, each turning-point in the country’s politics. Jo- nor. The law was deemed unconstitutional year tend to follow a well-worn path. On kowi, as he is better known, hails from a by the courts and overturned later that their way into a park at the edge of the city humble background—he grew up in a riv- year, yet the public’s distaste persists: near- they pass the towering wooden pagoda of erside shack—yet managed to vault him- ly 61% of those surveyed in July by Kompas, Kofuku-ji, a temple complex founded in self into the nation’s highest office. It was a local magazine, disapproved of relatives 710. They continue to nearby Todai-ji, gaz- the first time that somebody who did not of politicians running for regional offices. ing in awe at Japan’s largest Buddha, a belong to the political or military elite was Yet politicians keep trying to entrench bronze behemoth weighing 400 tons and in charge of the country. True to his image power within their families—often be- standing 15 metres tall. And finally they as an outsider, he vowed that budding poli- cause the opportunities to make money feed shika senbei, a special kind of rice ticians in his family would not ride on his that come with a political office are too cracker, to the sacred deer, some 1,300 of coat-tails, writing in his autobiography, good to turn down. Political parties do little which live in the park. published in 2018, that “becoming a presi- to discourage nepotism. They are, after all, The deer, though wild, have come to dent does not mean channelling power to animated by personalities, not by policies, love the crackers. With tourism reduced to my children”. points out Ben Bland of the Lowy Institute, a trickle because of the pandemic, they are But since his re-election last year, Jo- a think-tank in Australia. They therefore hungry. Many have begun wandering far kowi seems to have had a change of heart. need politicians with name recognition to from home in search of food. A recent Both his son and son-in-law, neither of propel them to victory: better the relative study by the Nara Deer Preservation Found- them with any experience in politics, are of a somebody than a nobody. ation and Tatsuzawa Shirow of Hokkaido running in regional elections on December Plus, candidates must bear the cost of University shows that 20% fewer are 9th under the banner of Jokowi’s party, the campaigning, which is becoming ever spending their days in the park; incidents pdi-p. His son, Gibran Rakabuming Raka, more exorbitant. Parties therefore need of damage caused by deer in town have is running for mayor of the city of Sura- candidates who either have deep pockets shot up. The less enterprising ones, appar- karta, the job that was his father’s political themselves or know people who do. The ently accustomed to eating only crackers, launchpad. Mr Gibran is so far ahead of his prohibitive cost of running for office have become emaciated. opponent in the polls that December 9th means that “it is virtually impossible” for The deer are not the only ones going will be less an election, more a coronation. those without means or “connections with hungry. So are businesses in places like Jokowi is unusual only in his initial re- established patronage networks to pre- Nara, which have come to rely ever more fusal to smooth the way for his offspring. vail”, says Vedi Hadiz of the University of heavily on tourism in recent years. Fewer Since the advent of democracy in 1998, and Melbourne in Australia. than 7m foreign tourists visited Japan in the devolution of power from central to lo- It is up to the “smart and discerning” In- 2009; last year some 32m did. Revenue cal governments shortly after that, politi- donesian public to decide whether his son from tourism hit a record 4.8trn yen cians have sought to establish dynasties. A is fit for office, Jokowi told the bbc earlier ($46bn). With the Olympics scheduled for 1 growing number are doing so at the local this year. But the high cost of campaigning level. In elections held in 2015, 52 candi- and the associated preponderance of well- dates, or 3% of the total, were related to pol- connected candidates mean that a growing iticians who currently or previously led a share of those running for office come regency (county), city or province, accord- from the same background, winnowing ing to Yoes Kenawas, who studies dynasti- the options available to voters. Many cism in Indonesian politics. In next week’s would-be politicians doubtless balk at pit- local elections, nearly three times as many ting themselves against an opponent candidates—about 10% of the total—have backed by a powerful family. family connections. Take Mr Gibran. He risked running un- Jokowi’s son and son-in-law are not the opposed, which would have underscored only people with ties to the presidential the perception that he was coasting on his palace to have entered the fray. The vice- father’s reputation. Heroically, somebody president’s daughter, who is running for threw his hat into the ring at the last mi- mayor of South Tangerang, a city abutting nute: Bagyo Wahyono, a tailor. He says he Jakarta, the capital, is competing against had no desire to run in the election—“I ac- the niece of the defence minister. In east- tually don’t like politics,” he told a local ern Java the 28-year-old son of Jokowi’s magazine. The chairman of the organisa- cabinet secretary is running for regent. tion funding his campaign denies the alle- This is the first time that so many rela- gation that Mr Bagyo is a “puppet” of the tives of national figures are running in lo- pdi-p, put up to ensure Mr Gibran had cal elections, according to Mr Yoes. Many some competition. If smart and discerning of those national figures are themselves voters have doubts about that, it is not clear dynasts. The defence minister, Prabowo how they can express them. 7 Chewing the crud The Economist December 5th 2020 Asia 43

2 this past summer, Japan had hoped to wel- the programme since it was launched in sor, Abe Shinzo.) Oﬃcials see spending by come 40m foreigners this year. Instead, July. That is a pyrrhic victory: the campaign foreign visitors as a means to compensate after a near-total closure of its borders be- is thought to have contributed to a recent for Japan’s own shrinking population. Tou- cause of the pandemic, arrivals have uptick in covid-19. Daily cases reached a re- rism may also help make Japan more open dropped by 99.4%. cord of 2,680 on November 28th. Suga to foreign migrants in the future, says Saito The government has tried to cushion Yoshihide, Japan’s prime minister, recently Jun of the Japan Centre for Economic Re- the blow by encouraging its own citizens to announced that the subsidies would be search, a think-tank in Tokyo. get out more. The Diet earmarked ¥1.35trn suspended in areas with high caseloads. In Meanwhile, the more resourceful deer ($12.9bn) for “Go To Travel” subsidies, addition, older Japanese have been asked in Nara have reverted to a healthier diet of which provide discounts of up to 35% at do- not to make use of them. plants and nuts, which has been good for mestic hotels and inns; a concurrent pro- Japan is loth to give up on tourism, or to their insides. Their droppings, made pale gramme called “Go To Eat” applies to res- let the infrastructure that supports it with- and runny by the crackers, have become taurants. The ministry of tourism says er. (Mr Suga himself championed tourism ﬁrmer and darker again. If only belt-tight- nearly 40m nights have been booked under as chief cabinet secretary to his predeces- ening were as good for the economy. 7 Banyan Death of a novelist

Half a century after his suicide at the age of 45, Mishima Yukio still has the last word irth is the obvious place to start a novels, more than 70 plays and scores of ichiro, a novelist, says “survivor’s guilt” Blife story, but how can Mishima Yu- lighter tales for a mass market. He was played a big part in his militarism. kio’s not begin with death? That of Ja- Japan’s first media supasuta (superstar). He Fused to it was his obsession with pan’s finest author of the 20th century acted in films and posed as a model. He pleasure, pain and homoeroticism. In was both spectacular and absurd. had sought illumination in India a year one of his greatest novels, “The Temple On November 25th 1970, Mishima led before the Beatles. He had sharp sartorial of the Golden Pavilion”, a monk burns a members of his private army into the sense and twinkling wit. He topped Heibon temple because it is too beautiful. Mi- main military base in the centre of Tokyo Punch magazine’s Mr Dandy awards. shima, in turn, was building his body for and launched a “coup” patently intended Yet Mishima’s commemoration was a final sacrifice. to fail. The commander was taken hos- long the preserve of right-wing fanatics. Yet Mishima’s life-defining death tage. In white headband and a uniform For all his cosmopolitanism, in his later channelled the nihilism of Nietzsche that a biographer, Damian Flanagan, years Mishima embraced the notion that a more than anything essentially Japanese. describes as easily mistaken for a bell Japanese life should only be lived through The act mattered as much as the word. boy’s, Mishima stepped out onto a balco- worship of the emperor. His ideal, he told a Mishima had no time for intellectuals ny and called upon the hundreds of hall of left-wing students at University of who never left their towers, says Roger members of the Self-Defence Forces Tokyo in 1969 was how, before the second Pulvers, an author and translator. The (sdf) below to revolt and tear up Japan’s world war, the word “emperor” had once uncovered footage of Mishima’s debate pacifist constitution. Imposed by Ameri- “prefaced all intentions”. with the students, at the height of huge can occupiers, it had diminished the Mishima was born into a stifling anti-American and anti-establishment standing of the emperor and forbidden a household: his domineering grandmother protests, was recently made into a docu- conventional army (and still does). cocooned him indoors and his father mentary, “Mishima: the Last Debate”. “If “Aren’t you samurai? If you are samurai, destroyed his writings. He came of age just you’d mentioned ‘Emperor’ just once,” why do you defend a constitution that before Japan’s defeat in 1945. His gener- Mishima declares at one point, “I’d have rejects you?” The soldiers responded ation was taught to sacrifice the most joined your cause. Gladly.” with cries of “Fuckwit!” beautiful thing they had—their lives—for Younger Japanese have flocked to see Back in the commandant’s office, the emperor. But when called up, puny the documentary. Mishima’s books are Mishima, a stickler for timekeeping, Mishima failed his medical. Hirano Kei- selling well too. That would have pleased removed his watch and prepared for him. But he would have been appalled at seppuku, or ritual suicide. Kneeling, he the prospect of people “placidly enjoy- pushed his short sword into the left side ing...lockdown thanks to Zoom, Netflix of his intestines and, grunting, moved it and Uber Eats, totally comfortable with across. A first accomplice was to com- the prospect of a future controlled by plete the suicide with a swift beheading artificial intelligence and big data”, as but messed up—Mishima’s over- Peter Tasker, a pundit based in Tokyo, developed neck muscles from years of puts it in Nikkei Asia, alluding to Nietz- physical training did not help. A second sche’s “last man”. delivered the final cut. Then the first Many wonder how things might have disembowelled himself and was behead- been, had Mishima survived. In one ed in turn. The front page of the evening novel, Oe Kenzaburo, a Nobel laureate, edition of Asahi Shimbun showed the two has Mishima released from prison after heads on the carpet next to the scabbard 30 years to become the leader of a 21st- of the long sword. century cult. If that is not as far-fetched Many Japanese remember exactly as his actual death, then Mishima has where they were on hearing the news. made sure, as he knew he would, that he Mishima was the author of 34 limpid would always have the last word. 44 China The Economist December 5th 2020

Also in this section 45 Joshua Wong jailed 45 Carrie Lam’s big plan 46 Chaguan: The downside of bullying

The coastguard It has also benefited from a shipbuild- ing spree. Today China’s coastguard has Great white hulls more than 500 ships. In the region, Japan is a distant second with 373. Others trail far behind. Taiwan has 161, the Philippines 86 and Indonesia a mere 41. China’s ships have got beefier, too. A decade ago China had just ten vessels with a full-load displacement of at least 1,500 tonnes (about the size A new law would unshackle China’s coastguard, far from its coast of a small warship). By 2015 it had 51 such he zhaotou-class cutter may be a low- Over the past decade, the seas around ships. Today it has 87, says the Internation- Tly coastguard ship. But it is no push- China have been roiled by rival activity and al Institute for Strategic Studies, a London- over. At 12,000 tonnes, it is the world’s larg- enmity. In the East China Sea, Chinese ves- based think-tank. est vessel built for such use. It looms over sels have been probing waters around the Many of the coastguard’s ships now most American or Japanese destroyers. Its Japanese-held Senkaku islands—uninhab- dwarf the largest warships in the region’s roomy deck accommodates two helicop- ited outcrops which China also claims (and smallest navies. The most capable, says Olli ters, a 76mm gun and a thicket of other calls the Diaoyu). In the South China Sea Suorsa of the S. Rajaratnam School of Inter- weaponry. China has two of them. One is China has turned disputed reefs into island national Studies (rsis) in Singapore, are deployed on its east coast. The newest, CCG fortresses. America and its allies have in “essentially navy ships painted white”, mi- 3901 (the letters stand for “China Coast turn sent a growing parade of warships to nus the missiles (though that is also true of Guard”), set sail in 2017 on its maiden pa- challenge China’s claims there. China’s Japan’s coastguard). The Type 818 patrol trol of the South China Sea, its designated navy, the world’s largest, has been ever ship, for instance, is a modified version of sphere of operation. Nowhere around Chi- more active, too. But its coastguard, also the Chinese navy’s Type 054A frigate. Such na’s shores are waters more contested. The the world’s largest, has become increasing- large ships are less agile than smaller ones, arrival of the behemoth is intended to ly important in this contest. but they convey suitable menace. make a point: China backs its claims in that In 2013 China merged several civilian That comes in handy, for China uses its area with a panoply of steel. maritime law-enforcement agencies into a coastguard not only for routine maritime Soon CCG 3901 will have extra ammuni- new unified one, called the Chinese Coast- law-enforcement—such as catching smug- tion. In November China published a draft guard Bureau. Five years later this was put glers—but also to project power. When Chi- law that would empower the coastguard to under the command of the People’s Armed na dispatched the hd8, a survey vessel, to demolish other countries’ structures built Police, a paramilitary force that reports to Vietnam’s exclusive economic zone last on Chinese-claimed reefs, and to board the Central Military Commission, the year, it sent a flotilla of coastguard ships, and expel foreign vessels. In some circum- country’s supreme military body. In effect, including the CCG 3901, as back-up. Some stances it could even fire on hostile ships. this turned China’s coastguard into a blocked Vietnamese coastguard ships from The deadline for public comment expired branch of the armed forces—much like its approaching. When the hd8 was sent to as The Economist went to press. counterparts in America and India. Malaysian economic waters in April, the 1 The Economist December 5th 2020 China 45

2 CCG 3901 tagged along again. A report pub- na’s “illegal, unreported and unregulated Housing in Hong Kong lished last year by the Centre for Strategic fishing, and harassment of vessels”. and International Studies in Washington, China has reacted huffily to other coun- Phew, no found that 14 Chinese coastguard vessels tries’ concerns about the draft coastguard patrolling disputed features in the South law. To some extent, it is right to be miffed. democrats China Sea had broadcast their location on Most of the bill’s provisions match those of the Automated Identification System, an laws elsewhere and accord with interna- international ship-tracking network, to tional norms, says Collin Koh of rsis. HONG KONG With opposition silenced, the decks demonstrate a “routine, highly visible Chi- But there is every reason to worry about are clear for a massive building project nese presence”. The Chinese coastguard’s the Chinese law’s proposed scope. It covers near-constant vigil in the South China Sea China’s “jurisdictional waters”, a term that hen hong kong’s legislature was has been helped by the supplies it receives the country applies to most of the South Wstripped last month of an opposition from China’s newly built outposts there. China Sea, says Ryan Martinson of the us after the government expelled four pro-de- In the East China Sea, coastguard ships Naval War College. Most of those waters are mocracy lawmakers and the remaining 15 have spent a record number of days this claimed by other countries or regarded as resigned in sympathy, many in the territo- year near the Senkakus. In October two of part of the global commons. China’s ry feared this would allow the passage of its vessels sailed in the islands’ territorial sweeping assertion of rights there was controversial bills with a minimum of crit- waters (ie, less than 12 nautical miles from largely rejected in 2016 by the Permanent ical scrutiny. In the coming weeks, one pro- shore) and stayed for longer than 39 hours, Court of Arbitration, an international tri- posed law is likely to prove that such wor- the previous record. bunal in The Hague. Article 22 of the draft ries are justified. Sometimes the coastguard is used in bill would allow China’s coastguard to The bill would permit the spending of support of China’s “maritime militia” of create “temporary exclusion zones”, poten- HK$550m ($71m) on a feasibility study for armed fishing vessels, which the country tially cordoning off swathes of open ocean. the biggest infrastructure project ever pro- uses to establish a presence in disputed According to Mr Koh, the Chinese coast- posed in the city. The scheme, Lantau To- waters. In April Vietnam accused China’s guard has been complaining for years that morrow Vision, would involve creating 17 coastguard of ramming and sinking a Viet- it needs such a law to give it more clout in square kilometres of artificial land off Lan- namese fishing vessel near the Paracel is- its dealings with rival forces in the South tau, Hong Kong’s largest island. The gov- lands in the South China Sea, to which both China Sea. The coastguard is “powerful”, ernment says housing built on this, much countries lay claim. It was the second such says Hu Bo, director of the Beijing-based of it subsidised, could accommodate up to incident there in less than a year. South China Sea Strategic Situation Prob- 1.1m people—about one-seventh of the cur- America worries about the Chinese ing Initiative, a think-tank. But, he adds, it rent population. The estimated price tag is coastguard’s growing role as an enhancer has a “heavy task”. In 2016, when Indone- at least HK$624bn. Critics say the project is of Chinese maritime power. Last year an sia’s navy fired on a Chinese fishing boat unnecessary, expensive and threatens rare American admiral hinted that, in the event and detained its crew, the coastguard felt species, including the pink dolphin. of a clash, America’s navy would treat ves- powerless to respond—worried, apparent- In her annual policy address on Novem- sels belonging to China’s coastguard and ly, that using force without explicit legal ber 25th, Hong Kong’s leader, Carrie Lam, maritime militia no differently from those backing might harm China’s image. “It was said the scheme would “bring enormous of its navy. In October America said it a big failure,” says Mr Martinson. “There economic benefits to Hong Kong”. It would would explore the viability of deploying its was likely a lot of soul-searching after also please the authorities in mainland own coastguard vessels to American Sa- that.” The new law will serve notice that the China. They see it as a catalyst for their own moa, in the South Pacific, to counter Chi- white-hulls may shoot back. 7 “Greater Bay Area” idea for building Hong Kong and nearby cities inland into a giant metropolis. Shenzhen, the mainland city closest to Hong Kong, wants a high-speed rail link with the Lantau project. Some developers would like to go further. The Hong Kong Real Property Federa- tion, a lobby group, has suggested that the mainland should lend Guishan, an island 5km south of Lantau, to Hong Kong to allow it to build artificial land there for 800,000 Hong Kongers. But Mrs Lam says the idea would not go down well in Beijing, given President Xi Jinping’s green proclivities. She has not explained why he does not object to the Lantau scheme on such grounds. In September more than 40% of those surveyed by the Hong Kong Public Opinion Research Institute opposed the project. Many would prefer the building of more housing near the mainland border on old industrial sites. But pro-government poli- Where the party wants him ticians in that semi-rural area object. Sadly Joshua Wong, one of the best-known faces of Hong Kong’s pro-democracy movement, for Mrs Lam, they have an outsize voice on was sentenced on December 2nd to more than 13 months in prison for his role in a the 1,200-member committee that picks protest last year. Mr Wong, pictured, has been riling the Chinese Communist Party the winning candidate for her job. Should for over a decade with his activism. Agnes Chow and Ivan Lam, co-leaders of his she decide to seek re-election in 2022 she now-disbanded group, Demosisto, also received jail sentences of several months each. will need all the votes she can get. 7 46 China The Economist December 5th 2020 Chaguan The downside of bullying

China’s habit of humiliating those who defy it could backfire profitable trade flows. That underestimates the calculating nature of Mr Zhao’s tweets and other Chinese attacks, which are not intended to win over Australian hearts and minds. Their aim is partly domestic: to demonstrate the foreign ministry’s fighting spirit to Chinese leaders and online nationalists. The intention is also to demonstrate China’s strength and to provoke such a sense of crisis that Australian political and business leaders are desperate to seek a truce. China’s outlandish attacks are pseudo-populism: a calcu- lated ploy to press elites into cutting a deal. China may yet feel vindicated in its choice of tactics. Australia may cave. If it does not, and China decides to sacrifice relations with Australia for years to come, a ghastly warning will be sent to other trade partners that imagine they can criticise China with im- punity. The world is a rough place on the eve of 2021. China feels in better shape than most. While other large economies remain battered by covid-19, it has already returned to growth. When enunci- ating their core national interests, Chinese leaders are at least predictable. In contrast, America’s allies have spent four years absorbing hard lessons about the impermanence of American interests that once seemed carved in stone—lessons that will outlive the Trump presidency. Yet conversations in recent weeks with more than a dozen am- hina bullies other countries because it works. Once told that bassadors in Beijing reveal a striking change of mood. Westerners Cthey have crossed a “red line” by harming China’s interests or know that they often struggle to understand the incentives that calling out its misdeeds, many governments crumble swiftly. Oth- guide Chinese officials. But envoys in Beijing increasingly suspect ers fold after suffering months of threats, trade boycotts and can- that China’s rulers are misreading the mood in democracies. In celled official meetings. But in China’s long experience, almost particular, Communist Party bosses are too disdainful of Western all—even sometimes America—climb down eventually, sending public opinion, which is swinging against China in ways that will envoys to sue for peace. True, some Western leaders pay public lip- constrain governments, at least somewhat, as they strive to bal- service to their own country’s values as they land in far-off Beijing. ance economic interests and democratic values. Once the press is shooed from the room, however, the foreign visitors get down to dealmaking. They bow to China’s mix of market China prefers to be admired, but will settle for fear power, geopolitical importance and ruthlessness. Western unity is too fragile to enable many formal displays of sol- Lately, bullying others into furtive submission has not been idarity with Australia. And multinational corporations are not enough for Communist Party chiefs. Increasingly, they seem bent about to leave China. For lots of big firms, their only profitable on humiliating countries that show defiance, notably small or business unit this year is Chinese. But China’s assertiveness mid-sized allies of America. Just now, it is Australia’s turn for pun- abroad, and its hardline ideological turn at home, are creating po- ishment. Its transgressions include taking a lead among American litical uncertainties that businesses cannot ignore. The talk is of allies in banning the use of 5g network equipment from Huawei, a hedging now, and of diversifying future investments. There will be Chinese telecommunications giant, and calling for an indepen- no binary moment when the West switches from engagement to dent probe into the origins of covid-19. China has imposed hefty decoupling. However, China is teaching the West to be more de- tariffs on Australian wine and blocked imports of everything from fensive. Over time, more individual, seemingly unconnected deci- coal to lobsters. In November Chinese diplomats made public a list sions will be a no, not a yes: whether to allow this Chinese invest- of 14 ways in which Australia was “poisoning bilateral relations”. ment, buy that sensitive technology from a Chinese firm, or sign The charge-sheet rebuked Australia for allowing news outlets, an exchange deal with a Chinese university. That could have sur- members of parliament and think-tanks to criticise China. Late prising cumulative effects. Western defensiveness will not stop last month China’s foreign ministry pounced on an Australian China from rising, but it could alter China’s trajectory, perhaps government report into unlawful, brutal killings of prisoners and steering it towards dominance of only part of the world: a techno- civilians in Afghanistan by Australian troops. Zhao Lijian, a min- authoritarian sphere in tension with a more liberal bloc. istry spokesman and licensed provocateur on social media, said For decades, countries have tolerated Chinese bullying. For the report exposed the hypocrisy of Western concerns about hu- that, thank pragmatism, naivety and cynicism among politicians man rights. On November 30th Mr Zhao tweeted a crude photo- and business bosses, and broad indifference among publics. Now, montage made to look like an Australian soldier slitting an Afghan however, China seems bent on changing countries that it deems child’s throat. Mr Zhao demanded that troops be held account- hostile, so that governments, news outlets, universities and other able—serenely ignoring the fact that Australia’s inquiry had al- institutions never defy China again. Some trade partners, espe- ready recommended that 19 soldiers face criminal investigation. cially in China’s backyard, will feel bound to submit. Others may At first sight, such Chinese provocations look clumsy, indeed prove more stubborn. China is no longer just a foreign-policy puz- self-defeating. By offending lots of ordinary Australians, they zle. As its confidence swells, and its technological footprint grows, complicate life for those businesspeople and politicians who want it is ready to challenge how Western societies work at home. Im- their government to placate China in hopes of restoring normal, posing that sort of humiliation comes with costs. 7 Middle East & Africa The Economist December 5th 2020 47

America and Iran Under the deal, called the Joint Compre- hensive Plan of Action (jcpoa), Iran agreed Back to the future to curb its nuclear programme and open itself up to rigorous inspections in return for the lifting of international sanctions. Pres- ident Donald Trump called it the “worst deal ever”, pulled America out of it in 2018 BEIRUT AND JERUSALEM and has lashed Iran with sanction upon Joe Biden wants to re-enter the nuclear deal with Iran. Sounds simple, sanction. Iran responded in 2019 by attack- but he faces some big obstacles ing international shipping and striking he assassin was not a human. Mohsen rizadeh’s staff under Project Amad stayed Saudi Arabia with drones and missiles. It TFakhrizadeh, erstwhile maestro of with him in a new organisation. has also gradually violated the deal’s provi- Iran’s nuclear-weapons programme, was That made him a marked man. Several sions. Iran has now accumulated 12 times gunned down on November 27th by a re- of his underlings were killed in suspected more enriched uranium than permitted— mote-controlled machinegun mounted on Israeli hits from 2007 to 2012. When Binya- enough for a pair of bombs, if enriched fur- an exploding pickup truck—if Fars, an Ira- min Netanyahu, Israel’s prime minister, ther. It has also enriched some of that to nian news agency, is to be believed. “No presented the stolen files in 2018, he sin- higher levels of purity than allowed, con- one was present at the scene,” said Ali gled out Mr Fakhrizadeh by name. Israel’s ducted research on advanced centrifuges Shamkhani, the head of Iran’s national se- motive for killing him might have been to and moved some of them to an under- curity council. Other accounts suggest that set back Iran’s nuclear programme by elim- ground facility. But Iran has not substan- gummen—human ones—were on the inating its most experienced manager. But tially interfered with inspectors from the ground, and escaped. The bullets were cer- the likelier aim was to hobble the efforts of International Atomic Energy Agency tainly real. Joe Biden, America’s president-elect, to re- (iaea), the un’s nuclear watchdog. Mr Fakhrizadeh, notionally a physics suscitate the nuclear deal signed between In theory, turning the clock back should professor, was the brains behind Project Iran and six world powers in 2015. be simple. Mr Biden says he will rejoin the Amad, Iran’s clandestine pursuit of nuclear jcpoa if Iran returns to compliance. Javad weapons from the 1980s to 2003. After Zarif, Iran’s foreign minister, has said that Iran’s leaders halted the formal pro- Also in this section if Mr Biden lifts sanctions “we too can im- gramme, Mr Fakhrizadeh continued to mediately return to our full commitments 49 Torturing foreigners in Tanzania dabble in dual-use research, presumably to in the accord.” There will be a narrow win- keep alive the possibility of a bomb. Docu- 50 Victory and confusion in Ethiopia dow between Mr Biden taking office on Jan- ments stolen by the Mossad, Israel’s intelli- uary 20th and Iran’s own presidential elec- 50 Why Boko Haram murders farmers gence agency, suggest that 70% of Mr Fakh- tion on June 18th, notes Ilan Goldenberg of 1 48 Middle East & Africa The Economist December 5th 2020

2 the Centre for a New American Security, a Iran’s economy is “anaemic” and infla- deal. Iran would probably seek access to think-tank in Washington. “The cleanest, tion “persistent”, says Esfandyar Batman- dollars, an easing of energy and manufac- easiest and simplest option is a mutual re- ghelidj of Bourse & Bazaar, a website that turing sanctions and a legally binding turn to the jcpoa,” he says. In practice, analyses Iran’s economy. gdp shrank by agreement that could not be overturned as things could prove more complicated. 5.4% in 2018 and 6.5% in 2019, and will con- easily as Mr Trump sundered the jcpoa, Start with Iran, whose leaders were ini- tract again this year (thanks in part to co- says Ellie Geranmayeh of the European tially delighted by Mr Biden’s victory and vid-19). That has led to protests. But it has Council on Foreign Relations, a think-tank. the prospect of rejuvenated oil sales and not caused regime change, as some in the America’s priority should be to extend trade. In meetings Mr Zarif excitedly re- Trump administration hoped. “We are far the sunset clauses on Iran’s enrichment ac- peated the name of John Kerry, Mr Biden’s from the collapse scenario often discuss- tivity, suggests Gary Samore of Brandeis chosen climate envoy and Mr Zarif’s oppo- ed,” says Mr Batmanghelidj. Firms that University, who served as Mr Obama’s site number during the negotiation of the track tankers even claim that Iranian oil ex- arms-control tsar from 2009 to 2013. Mr jcpoa. Yet Mr Zarif is a member of Iran’s ports rose sharply in September in defiance Yadlin says the sunsets should be extended pragmatist camp, which has been under- of American sanctions. The state’s ruthless to 30 years rather than 15, that iaea inspec- mined by the failure of the jcpoa to deliver security forces keep a lid on discontent. A tions should be “everywhere” with “no lim- economic benefits. year ago they killed hundreds of protesters its” and that Iran should be forced to di- Hardliners won a thumping victory in in two days. “I don’t see any danger to inter- vulge full details of its weapons-related parliamentary elections in February (after nal stability,” says an Iranian academic. work. “If you collect these three, I will sleep many more moderate candidates were Mr Biden anyway rejects the idea of put- better at night,” he says. Mr Goldenberg banned). They fear that a restoration of the ting preconditions on a return to the jcpoa. suggests that because the sunsets are a de- nuclear deal would revive the fortunes of “Look, there’s a lot of talk about precision cade away, America would be better off the pragmatists. Some want reparations for missiles and all range of other things that “building out a regional dialogue” between American sanctions. Mr Fakhrizadeh’s as- are destabilising the region,” he told Thom- Iran and its rivals, using innocuous issues, sassination—met with lukewarm condem- as Friedman of the New York Times. But “the such as co-operation against covid-19, as nation from Europe—has handed them best way to achieve getting some stability stepping stones to more contentious ones. more ammunition. The Islamic Revolu- in the region” is to deal “with the nuclear If Mr Biden simply returns to an unre- tionary Guard Corps (irgc), Iran’s principal programme.” Jake Sullivan, who will be Mr constructed jcpoa, or if subsequent talks military force, quickly rallied its proxies in Biden’s national security adviser, says oth- go nowhere, he can expect stiff opposition parliament. On December 1st lawmakers er issues will be dealt with in later negotia- from America’s regional allies. “If they passed a bill calling on the government to tions. The content and timing of such talks bring to us an additional agreement that’s enrich uranium to near weapons-grade are up in the air, though they will probably the same quality as the jcpoa, we will do and, if certain American sanctions are not involve fresh concessions on both sides— our best to change it,” says an Israeli offi- lifted soon, kick out the iaea’s inspectors. what diplomats call a “more-for-more” cial. “At the end of the day we will not rest Iran’s defence minister said that the budget until we have a better solution.” A confron- of Mr Fakhrizadeh’s old organisation tation between Mr Netanyahu and Mr Bi- would double. Fuelling concern den is “inevitable”, says Raz Zimmt of the The jcpoa is viewed sceptically in Iran and the JCPOA*, selected events Institute for National Security Studies in America, Israel and the Gulf states, too. Tel Aviv, a veteran Iran-watcher in Israeli Critics point to three issues. One is its time- Stockpile of low-enriched uranium intelligence. “It’s in Netanyahu’s political Tonnes line (see chart). An arms embargo on Iran JCPOA signed interests to continue taking as hard a line expired in October. Restrictions on ad- 9 as possible and no one in government or Interim nuclear deal vanced centrifuges and missile imports Deal implementation, the security establishment can currently US/EU oil some sanctions lifted and exports will end, or “sunset”, in three sanctions contradict him publicly.” years. Most other restrictions will do so in a 6 Mr Netanyahu has ample means of in- iaea UN Donald Trump decade (though heightened scrutiny sanctions withdraws from fluencing the American and Iranian calcu- will last for ever). A second grievance is the JCPOA lus. During the Obama administration the 3 Iran’s burgeoning missile programme, the perennial threat of Israeli air strikes on sophistication of which was displayed in Iran’s nuclear programme was a major im- January, when Iran retaliated for America’s petus for both sanctions and diplomacy. It 0 assassination of Qassem Suleimani, head led America to collaborate with Israel on a of the irgc, with precise strikes on Ameri- 2018161412102008 landmark cyber-attack, known as Stuxnet, can troops in Iraq. A third is Iran’s behav- on Iranian centrifuges. Along with the as- iour in the region, in particular its sponsor- Expiration dates of the JCPOA sassination of Mr Fakhrizadeh, Israel is ship of armed groups like Hizbullah, a thought to be responsible for a string of ex- Lebanese militia-cum-political party. 2020 UN arms embargo lifted plosions at nuclear facilities over the sum- America’s Israeli and Arab allies, along 2023 Iran can partially build some advanced mer. And it is putting pressure on Iran be- with many hawks in Washington, would centrifuges; UN and EU lift missile sanctions; yond its borders, too. “Things are happen- Iran ratifies IAEA Additional Protocol like Mr Biden to wring concessions from ing in Syria that did not happen in the 2024 Iran on these issues before rejoining the Iran can build/test some advanced centrifuges past,” says the Israeli official, coyly. “Irani- jcpoa. “I think the balance of power has 2025 UN ends consideration of nuclear programme; an equipment worth billions of dollars has moved to the Americans,” says Amos Yad- EU lifts all remaining sanctions; Iran can build/ been burned.” The latest suspected Israeli test more advanced centrifuges lin, a former head of Israeli military intelli- air strike in Syria was on November 29th, 2030 gence, who points to unrelenting Ameri- Most restrictions on enrichment end; Iran can keep excess heavy water and acquire killing an Iranian commander on the bor- can sanctions and the killing of Suleimani, uranium metals der with Iraq. among other factors. Recent Israeli intelli- 2040 IAEA stops monitoring Iran’s uranium production Iran’s Arab rivals are similarly worried, gence assessments concur that economic though less capable and more cautious. pressure has put Iran’s regime in a position Sources: IAEA; Bloomberg; *Joint Comprehensive Plan of Action They have watched as Iran’s regional influ- Annex 1 of the JCPOA (the Iran nuclear deal) of “unprecedented precariousness”. ence has grown in Syria, Iraq and Yemen in 1 The Economist December 5th 2020 Middle East & Africa 49

2 the years since the jcpoa was signed. Their Others were not able to buy their way doubts about America deepened last year out. Human Rights Watch (hrw), a New after Mr Trump’s feeble response to an Ira- York-based watchdog, interviewed 18 refu- nian drone-and-missile attack on impor- gees who had been arrested in camps by tant Saudi oil facilities. These concerns Tanzanian policemen in the past year. Sev- have gradually driven into the open an eral had been tortured. Eight of them were Arab-Israeli axis. In August the United Arab forcibly returned to Burundi, where they Emirates (uae) established diplomatic ties have been locked up without charge. An- with Israel. Bahrain followed a month later. other rights group, cbdh/vicar, based in Prince Muhammad bin Salman, Saudi Ara- Rwanda, says that about 170 Burundian ref- bia’s de facto ruler, is thought to have met ugees have disappeared from Tanzania Mr Netanyahu in November. since 2015. “There seems to be collusion be- Arab states have little to offer Israel by tween the Tanzanian and Burundian au- way of muscle. They could allow Israeli thorities,” says Mausi Segun of hrw. “Sev- warplanes to fly over their territory en eral of those tortured were told that route to Iran, and might share whatever in- Tanzanian officials had information on telligence the Mossad has not already gath- them from Burundi.” ered. More effective would be joint lobby- About 300,000 Burundians have fled ing in Washington against the jcpoa. That their country since 2015 after violence would make it trickier for Mr Biden to forti- broke out when the then president, Pierre fy it, or any follow-on deal, with a legisla- Nkurunziza, said he would stand for an un- tive stamp of approval. Over time, though, constitutional third term. Hundreds were Arab and Israeli interests may diverge. Isra- killed. Activists, journalists and anyone el’s biggest concern is quelling Iran’s nuc- Burundi and Tanzania who might have been spotted at a protest lear activity. The Gulf states are most wor- rushed to neighbouring countries. Around ried about Iran’s regional influence. No haven half of them went to Tanzania. They are also more vulnerable to escala- A new president, Evariste Ndayishi- tion, should fresh sanctions or Israeli sabo- miye, was elected in June in a rigged poll. tage prompt Iran to lash out again. The uae His government is just as scary. Gervais may have the Arab world’s best army, but an Ndirakobuca, the new security minister, is economy that relies on travel and trade— GOMA nicknamed “Ndakugarika”, meaning “I will Burundian refugees in Tanzania are and imports almost all its necessities—can kill you” in Kirundi, the local language. He tortured and forcibly sent home be easily disrupted. “We’re the first country earned his reputation as a rebel command- across the water from Iran,” says an Emirati ven after Tanzanian policemen had er during the civil war and has worked hard diplomat. “We always need to exercise de- Ehung him from the ceiling and beaten to maintain it since. As police commis- escalation.” The uae was notably quick to him with sticks, Crispin (not his real name) sioner under the former president, who deplore Mr Fakhrizadeh’s assassination would not confess to being a rebel leader has since died, he was responsible for some and urge “maximum restraint”. with plans to overthrow the government of of the bloodiest crackdowns on protesters. In the short term Iran’s leaders must de- neighbouring Burundi. It was only when Because of this the eu and America have cide whether and how to avenge Mr Fakhri- they injected a liquid into his testicles that imposed sanctions on him. zadeh’s killing. Their response to Sulei- he caved in and said he was plotting a coup. With such people in the government, mani’s death was theatrical but did not hurt He was not. Some years ago Crispin was few refugees seem likely to believe its as- America much. They know that striking Is- photographed at an anti-government prot- surance that the country is safe and that rael directly would risk incurring a severe est in Burundi. Thugs from the ruling they should return. Officials in Tanzania response—perhaps even from Mr Trump, party’s youth wing, the Imbonerakure and Burundi drew up a secret agreement who could leave the fallout to his succes- (“those who see far”), painted a red cross on that was leaked last year. It said all refugees sor. An attack on one of Israel’s new friends his door and turned up one night to threat- should “return to their country of origin in the Gulf might send a message without en him. So in 2016 he fled to a refugee camp whether voluntarily or not”. Some 50,000 provoking a war. in western Tanzania. But men from the Im- have gone back in the past two years. Many Yet some Iranian officials still counsel bonerakure also stalk the camps with lists cite insecurity in the camps, in particular restraint in the hope of smoothing the path of dissidents provided by Burundian intel- arbitrary arrests, as their reason for return- back to the jcpoa. After 30 years as supreme ligence. They target them, allegedly with ing. Moreover, camp authorities have leader, Ayatollah Ali Khamenei is fading. help from Tanzanian police. Desperate threatened Burundians, saying that if they The transition preoccupies his court. “For families often pay the Imbonerakure to have do not sign up to go home they will lose continuity when the supreme leader dies, their relatives freed. The spoils are shared their refugee status and risk arrest. Some of they need to get the oil revenues flowing with local cops. Most of those picked up are those returning say that they were threat- again, and for that they need some kind of accused of hoarding weapons or plotting ened or detained when they crossed the accommodation with the us,” says the Ira- against Burundi’s government. border. Many have fled again, but this time nian academic. Iran would not be averse to In December last year men from the Im- into safer Uganda. doubling the duration of the sunset clauses bonerakure turned up at Crispin’s shelter Crispin has no choice but to stay in Tan- as part of a broader set of compromises, flanked by Tanzanian policemen. They zania. He has been warned by the Imbone- says Vali Nasr, a former State Department bundled him into a police car and took him rakure that if he tries to leave for another official. It may even agree to pull back from to a cell where he spent three months. He neighbouring country, he will be stopped some regional conflicts, particularly Ye- was released only because his wife paid 1m at the border and sent back to Burundi. “It men. But it would probably want to see Tanzanian shillings ($430) to the Imbonera- is terrifying to live in a country where you matching gestures from its Arab rivals. kure. “They said if she paid I would not be can be arrested at any time. I am constantly That would entail a level of trust that may killed or returned to Burundi” to face im- frightened,” he said. “But there is nowhere be hard to reach. 7 prisonment, he says. for me to go.” 7 50 Middle East & Africa The Economist December 5th 2020

Ethiopia’s civil war have misjudged its ability to fight on sever- Nigeria al fronts, including one against even the Victory, defeat and small number of Eritreans thought to have Death in a rice field attacked it along the northern frontier. confusion “The tplf totally overestimated at least their conventional force,” reckons René Le- fort, a researcher who has known some of ADDIS ABABA its leaders for decades. Tigray’s ousted rulers flee to the ABUJA The question now is whether it can sus- mountains Why Boko Haram murdered 78 farmers tain a prolonged guerrilla war. Its leaders he battle, in the end, was mercifully certainly have a wealth of experience: in he farmers—43 of them—were found Tshort. The 500,000 inhabitants of Me- 1991 they overthrew a dictatorship in Addis Tin the rice fields where they had gone to kelle, the capital of Ethiopia’s northern re- Ababa after 17 gruelling years in the bush. work. Some had their throats slit. Others gion of Tigray, were spared a large-scale For almost three decades after that they were beheaded. In the days that followed bloodbath. On November 28th Abiy Ah- called the shots in the federal government, locals found evidence of yet more butch- med, Ethiopia’s prime minister, declared which means they know its vulnerabilities. ery, taking the toll to 78. Boko Haram, a ji- victory over Tigray’s ruling party, the Ti- Keeping the army tied up in Tigray may be hadist group that has been fighting since grayan People’s Liberation Front (tplf). A enough to weaken Abiy’s control else- 2009 to carve out a caliphate in north-east military operation that had started a few where. His home region of Oromia, for in- Nigeria, was quick to claim credit for the weeks earlier was complete, he said. Shell- stance, is racked by an armed insurgency. murders. It said they were revenge for the ing of the city began at about ten that morn- But many of the veterans of the tplf’s capture of a militant by locals. ing. By the evening Tigray’s president, De- bush war are now in their 60s and 70s. They The people of north-east Nigeria have bretsion Gebremichael, and other leaders also have few allies left in the region. The grown wearily accustomed to the horrors had vanished into the mountains. Crowds once porous border with Sudan, a lifeline of Boko Haram, whose name is loosely in the national capital, Addis Ababa, broke in the 1970s and 1980s, has largely been translated as “Western education is forbid- into celebration. sealed. On November 29th Sudanese secu- den”. The group has been known to strap But the fighting has not stopped. “Al- rity forces seized a large cache of weapons ticking bombs to children before sending most all the Tigrayan forces are outside the and ammunition en route to Tigray. “What them into markets and mosques. Its abduc- big towns and cities,” says a tplf intelli- happens when they run out of bullets?” tion of more than 200 girls from a school in gence officer, explaining that they had asks a un diplomat. “How do they expect to Chibok in 2014 became emblematic of the withdrawn when Ethiopian forces started bring fuel trucks up long, winding roads many failures of President Goodluck Jona- shelling towns. Only hours after Abiy’s an- without any air cover?” than’s administration. He was defeated in nouncement of victory, rockets were fired Much will depend on whether Abiy can an election the following year by Muham- for the third time from Tigray into Eritrea, a win over ordinary Tigrayans. His govern- madu Buhari, a former general who prom- country to its north that has been helping ment promises to rebuild towns and vil- ised to restore security. Ethiopian forces. There have since been re- lages battered by war. It also says it is wel- Yet the latest killings—and the govern- ports of sporadic clashes and air raids, as coming back refugees. But many of those ment’s ham-fisted response to them—have well as looting in towns, including Me- who fled, the vast majority of whom are Ti- rekindled outrage among Nigerians. Garba kelle. “We have a plan to retake our towns grayan, say they fear reprisals if they come Shehu, Mr Buhari’s spokesman, initially from the invaders,” Debretsion told The back. Most are from western Tigray, which blamed the victims, saying they had not Economist by text message. is now run by police and bureaucrats from been given permission from the army to go The fog of Ethiopia’s month-long civil the neighbouring Amhara region. Amhara to the farm. An army spokesman accused war has thickened since it was declared claims this territory as its own. Its militia- them of collaborating with the insurgents over. Speaking to parliament on November men fought alongside the federal army in and not tipping off the security forces. 30th, Abiy claimed that not a single civilian battles that reportedly saw some of the But one survivor said they had told sol- life had been lost during the march into Ti- war’s worst atrocities. Militias on both diers that jihadists were in the area. After gray. The un and the more than 40,000 ref- sides appear to have targeted civilians, in- the farmers nabbed one and handed him ugees who have fled to Sudan reckon other- cluding at least 600 allegedly massacred by over, many feared Boko Haram would re- wise. Hospitals in the regional capital are a youth group of the tplf. Abiy may have taliate. When it did, the army was nowhere flooded with injured people. Medical sup- won. But he still has a bitterly divided to be seen. plies for the wounded and body bags for the country to heal. 7 The government is unable to provide se- dead are running low. But a communica- curity in large swathes of the countryside. tions blackout imposed on the region since Jihadists are not the only scourge. Bandits the start of the conflict means it is impossi- Red Sea loot villages in northern and central Nige- ERITREA ble to know the true figure. Counter-claims SUDAN ria, and kidnap for ransom. Many farmers that tplf forces downed a jet and recap- Asmara have abandoned their homes and crops. tured the town of Axum are also unverified. Tigray Axum “We will not have food sufficiency because Mekelle Harder to dispute is the federal govern- Gulf people are afraid of going to their farms,” ment’s claim that it has the upper hand in Amhara DJIBOUTI of Aden says the head of a farmers’ association. the conflict. In the weeks before it fired the Mr Buhari won a second term last year, tplf first shots on November 4th, the be- Oromia largely thanks to the votes of rural north- lieved it would easily win a conventional Addis erners. Their support now seems to be war against the Ethiopian army. The retreat Ababa dwindling. That may not matter much to a from Mekelle has put paid to that hubris. term-limited 77-year-old. But it matters to tplf SOUTH ETHIOPIA The does not seem to have counted on SUDAN his party. Allies are pleading with him to the government’s use of drones, for in- fire his army chief. Mr Buhari remains re- SOMALIA stance, which are thought to have been mote and passive, however, even as his 300 km devastatingly effective. And it seems to UGANDA KENYA country burns. 7 Europe The Economist December 5th 2020 51

Belarus “When I got here, I was in despair, ready to give up,” she tells The Economist in an in- A new country struggles to be born terview in Vilnius, the capital of neighbouring Lithuania. “I felt like a traitor and when I saw people emerge from detention half-alive, I felt guilt.” But instead of blame, she got support and compassion from the Belarusians. “When people came out again VILNIUS the next day, after all that happened, I knew But it is still a time of monsters I could not stop,” she says, struggling to vetlana tikhanovskaya, a former treated like cattle, the people of Belarus hold back tears. And so, after three days of Steacher and a mother of two, did not voted for Ms Tikhanovskaya, whose only despair, she recorded a new appeal to the choose to make history. But history has pledge was to release political prisoners nation and called for the protests to go on. chosen her for a starring role. Despite her and hold free and fair elections within six Growing up in Mr Lukashenko’s tightly lack of political experience, she has come months. When Mr Lukashenko declared controlled Belarus, Ms Tikhanovskaya had to personify the struggle to transform Bela- himself the winner, with 80% of the votes, little interest in politics or in the country’s rus from docile former Soviet republic to they thronged into the streets. The dictator history, its symbols or even its language. “I free and truly independent nation. The sent his goons to beat them up, just as he spoke Belarusian in the summer when I leaders of rich democracies greet her as had done in 2006 and in 2010. went to see my grandparents in the coun- president-elect. Her own people derive But this time the violence was so ex- try,” she says: Russian the rest of the time. comfort from her simple, calm words. treme that instead of clearing the streets of She never bothered with elections, and was Alexander Lukashenko, the gun-toting dic- protesters, it detonated a national upris- unaware of a national revivalist movement tator who has ruled Belarus for the past 26 ing. Petrified, Mr Lukashenko had Ms Tik- that simmered under the surface among years, fears her enough to have forced her hanovskaya taken hostage and coerced the country’s artistic and intellectual elite. out of the country after she (probably) won into reading a statement denouncing the She could not have imagined that members a presidential election in August. protests before being driven out of the of that circle, including Franak Viacorka, a That was not meant to happen. All the country. But this tactic, too, has failed. journalist and one of the chief ideologists main challengers, including Ms Tikhanov- of the movement, would become her right- skaya’s husband, were in jail. Opinion polls hand advisers. Also in this section were banned. The media and the security Unlike them, she was not exercised by apparatus were firmly under the strong- 52 Istanbul’s next earthquake the red-and-white flag of the short-lived man’s control. Mr Lukashenko let a tongue- 1918 Belarusian republic, briefly readopted 53 Macron’s screeching U-turn tied housewife with no taste for power reg- as the national banner of post-Soviet Bela- ister her candidacy, some say, just to dem- 53 A Dutch populist explodes rus only to be crumpled by Mr Lukashenko onstrate the futility of opposition. three years later. She lived instead under a 54 Charlemagne: To ski or not to ski? But on August 9th, fed up with being modified green-and-red flag taken from 1 52 Europe The Economist December 5th 2020

2 Soviet-era Belarus that Mr Lukashenko Turkey year alone and 18 tremors measured at 7.0 brought in. The Soviet Union’s victory in or above in the past 120 years. Almost 60m the second world war is the main national Picking up the people, or 70% of the population, live in holiday. “To me Belarus was a geographic seismic zones. Yet disaster response is no territory inside the former Soviet Union,” pieces longer a serious problem in Turkey. Pre- she says. paredness is. Out of a total of about 10m For years Mr Lukashenko, almost un- buildings, 20-25% do not meet current ique among post-Soviet leaders, cultivated IZMIR standards for earthquake protection, says Turkey recovers from one deadly a Soviet rather than a national Belarusian Mustafa Erdik, head of the Turkish Earth- earthquake, and braces for more identity, in the hope that he might claim quake Foundation. Others put the figure the throne of a reconstituted Russian-Bela- ear one of Izmir’s main thorough- even higher. rusian empire. That hope was crushed by Nfares, bulldozers and excavators power The risk is especially acute in Istanbul, the emergence of Vladimir Putin as Rus- through a vast heap of rubble and steel home to over 15m people. Nearly 70% of the sia’s all-powerful leader after 1999. And Mr wire, the ghastly remains of an apartment city’s housing stock dates from before Putin’s annexation of Crimea in 2014 made block levelled by an earthquake that struck 2000. Two decades ago, a 7.6 magnitude Mr Lukashenko nervous; he came instead Turkey’s third-biggest city in late October. earthquake killed at least 17,000 people. to reimagine himself as the guardian of the Movers salvage furniture and kitchen sup- Scientists agree that another big one is a country’s sovereignty against Russia. plies from buildings awaiting demolition matter of time. Some put the probability at But by doing so, he stepped into an un- or on the verge of collapse, their facades up to 40% over the next 30 years. According familiar space, already occupied by nation- covered with deep cracks. A few hundred to a recent study by the local planning alists armed with social media, modern metres away, outside a shelter for those agency, another earthquake of similar technology, history and ideas. Between made homeless by the disaster, Meryem, a magnitude would destroy 48,000 build- them they have built uncontrollable Tele- divorced teacher, and her two children are ings, damage 194,000 and cause 120bn lira gram social media channels that link 3m packing their belongings onto a pickup ($15bn) in damages. Since Istanbul ac- people, half the adult population of Bela- truck. Her house survived, says Meryem, counts for a third of Turkey’s gdp, the long- rus. Mr Lukashenko provided plenty of fuel but suffered so much damage that she re- term economic damage could be severe. for their movement. His ridiculous denials fuses to go back. “I would not wish this on Turkey’s president, Recep Tayyip Erdo- of the coronavirus pandemic mobilised anyone,” she says. gan, and his government have taken steps civil society; his blatant election-rigging At least 116 people died in the magnitude to lessen the impact of future quakes. Over turned a routine election into a struggle for 7.0 quake, including a woman who 500,000 vulnerable buildings have been national emancipation. Ms Tikhanov- drowned in a minor tsunami set off by the demolished and replaced since the launch skaya, an ordinary Belarusian woman, be- tremors. Rescue teams poured in from all of an “urban renewal” programme in 2012. came the face of a mass movement. over the country. Thousands of people vol- Under a scheme partly financed by the The protesters lacked a radical edge. A unteered to give blood. Local businesses World Bank, the government has earth- perfect opportunity arose in late August, distributed food to the survivors. Nearly quake-proofed more than 1,200 schools when thousands of people besieged a de- three days into the search effort, exhausted and hospitals in Istanbul. A slew of recent tention centre where people were being workers pulled a three-year-old girl from infrastructure projects, including a new tortured, raped and beaten so that their the rubble of her home. A day later, they bridge over the Bosporus and an undersea screaming could be heard outside. But at rescued another toddler. tunnel, have been designed to withstand the critical moment, out of nowhere, came Crisscrossed by major fault lines, Tur- big quakes. Over 56% of Turkish home- a few hundred mysterious “volunteers” key has seen four deadly earthquakes this owners have taken out earthquake insur- who formed a human chain and pleaded ance, one of the highest rates in the world, with their “fellow” protesters not to storm and up from 26% a decade ago. the jail. So the storming of the Belarusian But Turkey seems to have taken a step Bastille never happened. back for every step forward. Critics say ur- Since then, Mr Lukashenko has man- ban renewal has enriched companies close aged to regain some control and squeeze to the government, overlooked environ- the protesters from the city centre. They mental concerns and triggered a wave of have retreated into courtyards and residen- evictions. “This was a very good pro- tial areas, where protests are harder to gramme,” says Naci Gorur, a geologist at Is- monitor and control. Mr Lukashenko tanbul Technical University. “But they hopes to wear the protesters out. But a re- handed it to the developers, who priori- cent poll conducted by Warsaw-based soci- tised those neighbourhoods where they ologists shows that 84% of those protest- could make the most profit.” The construc- ing are prepared to go on until Mr tion frenzy that propelled Turkey’s econ- Lukashenko is gone. The Kremlin, which omy under Mr Erdogan has swallowed up has so far backed Mr Lukashenko political- open spaces and parks. Of the 470 assembly ly and economically, is aware of this and is areas designated in Istanbul after the 1999 nudging him to start preparing for a transi- quake, only 77 remain, according to the tion, under a new constitution. mayor, Ekrem Imamoglu. Ahead of an elec- Mr Lukashenko may cling to power a lit- tion two years ago, the government an- tle longer. But the red-and-white flag will nounced an amnesty on unlicensed con- not be put away. “I am proud to be Belaru- struction. The scheme benefitted the sian. We are an independent country in the owners of over 7m properties across Tur- middle of Europe. Our readiness to stand key. One of these was an apartment build- for each other is what makes us a nation,” ing in Istanbul that collapsed on its own says Ms Tikhanovskaya. Her story is surely early last year, killing 21people. Three of its not over. 7 Build back better eight floors had been illegally built. 7 The Economist December 5th 2020 Europe 53

France Dutch populism A screeching On the Chopin block U-turn AMSTERDAM Thierry Baudet, a classical-music-loving populist, blows up the party he built PARIS photo of Thierry Baudet from a Soros. He answered worries about anti- A bill that could shield cops from newspaper profile in 2014 shows him Semitism in the party by saying that scrutiny is being revised A sprawled on his grand piano, gazing “almost everyone I know is anti-Semitic.” t 6.42pm on November 21st, three po- fetchingly to camera. The Chopin-play- (He later repudiated these statements, Alicemen forced their way into a recording Dutch intellectual, then 31, had writ- but did not explain what he had meant.) ing studio in a smart area of Paris and sav- ten a book denouncing the eu. Two years The next day a newspaper published agely beat up Michel Zecler, a black record later he co-founded a party, Forum For chats full of racist and anti-Semitic producer. Pursued for not wearing a face Democracy (fvd), which won the largest vitriol among fvd’s youth wing, run by mask, Mr Zecler initially spent 48 hours in vote-share in provincial elections in Mr Baudet’s ally, Freek Jansen. Rather detention for violence against the police, 2019. In a speech that night Mr Baudet than fire Mr Jansen, Mr Baudet quit as and says that during the beating he was described it as a world-historical turning parliamentary leader. But he stayed on as called a “sale nègre (dirty negro)”. On No- point, invoking Hegel’s “owl of Minerva”, an mp, and said he would return as leader vember 30th, four days after a surveillance a symbol of wisdom that “spreads its if members asked. The fvd’s provincial video of his beating was posted on social wings only [at] dusk”. and city office-holders began deserting media, contradicting the officers’ account, This month the fvd blew itself up in a the party. So did its other mp and most of preliminary charges were brought against series of scandals, and music again its senators, including Paul Cliteur, a the three, for intentional violence and the played a role. At a dinner on November legal philosopher whose department at falsification of police records. All have 20th a newly recruited politician wanted the University of Leiden served as fvd’s been suspended. to play1980s disco. Mr Baudet insisted on intellectual breeding ground. The episode not only shocked France; classical. Soon, says an fvd senator who As recently as March polls gave fvd President Emmanuel Macron said on so- later quit the party, Mr Baudet was rant- about11% of the vote. But as Mr Baudet cial media that it “put us to shame”. It has ing that covid-19 was a plot by George flirted with covid-19 conspiracy nut- also prompted an extraordinary u-turn by jobbery, its support slid to around 3%. the government. For the beating took place Many who once thought Mr Baudet as a controversial “general security” bill de- merely provocative now see him as a signed to reinforce police powers was go- dangerous crank. Henk Otten, a senator ing through parliament. Article 24 of the and one of the party’s co-founders, was draft law, which was passed by the lower pushed out last year after warning that house on November 24th and will next go Mr Baudet was being radicalised. He says to the Senate, would forbid the posting or he has turned into a “fascist psychopath”. broadcasting of any image that identifies fvd’s board says the party’s 40,000- an individual officer during a police opera- odd members will vote on whether or not tion “with the manifest aim of physically or Mr Baudet should return. Mr Otten says psychologically causing them harm”. Had the statutes do not provide for that. But the bill already been on the statute books, it Chris Aalberts, author of a book about the might have made posting the video that ex- party, says its rules do not matter much: posed Mr Zecler’s ordeal illegal. “It is a one-man system.” Mr Baudet may The point of Article 24, according to Gé- stay on as head of a rump fvd and win a rald Darmanin, the hard-line interior min- few seats at the general election in ister who drafted it (presumably with Mr March. Geert Wilders, the head of the Macron’s initial approval), is to protect the Netherlands’ other far-right populist police from attempts to identify and target party, is overjoyed. As fvd has withered, individuals, whether physically or on so- Thierry’s gift to Geert its voters have come over to him. cial media. French policemen regularly get online threats. In 2016 a police officer and a police employee were stabbed to death in drift to the right on security matters. beating, will require a longer-term policy front of their three-year-old son in Mag- At first, the government tried to defend response. France does not collect data on nanville, a town north-west of Paris. Inves- Article 24. Faced with a groundswell of its citizens’ ethnicity, so it is difficult to tigators found a list of names of police offi- hostile opinion, however, Mr Macron on know the scale of racial discrimination. cers, among other figures, on the November 30th told parliamentarians at a But an official study in 2016 found that a perpetrator’s computer. crisis meeting at the Elysée Palace to re- young man “perceived as black or Arab” is The French media and others worried write the article completely. “It’s not a very far more likely to be stopped for an identi- about press freedom, however, cried foul. glorious way of getting out of the situa- ty-card check than anyone else. Mr Darma- An editorial in Le Monde, a newspaper, tion,” says Roland Lescure, an lrem depu- nin, who now finds himself under internal called Article 24 “pernicious”. Ten deputies ty. “But at least it’s clear and quick, and a pressure, has promised to come up with a from Mr Macron’s party, La République en way of saying ‘sorry, we got it wrong, let’s go proper review of training and diversity, as Marche (lrem), voted against the bill, and back to the drawing board.’” well as police oversight and discipline. It 30 more abstained. On November 28th tens Mr Macron’s u-turn over Article 24 may may have taken a particularly nasty case, of thousands of people took to the streets of now defuse the tension over press free- but the problem of racism among the cities across France to protest. Even Macro- dom. But the events that helped to prompt French police is at least beginning to be ac- nistes are concerned about the president’s the reversal, and in particular Mr Zecler’s knowledged. 7 54 Europe The Economist December 5th 2020 Charlemagne To ski or not to ski?

Why shutting down Europe’s resorts proves so tricky ing pulled to the top of a mountain a more pleasant experience than schlepping up on foot. Each nation brings its own approach: proficient Austrians are notorious for taking it seriously; enthusi- astic but terrible Dutch skiers much less so. It speaks to a certain ideal of Europe, in which it is possible to wake up in France and lunch in Italy. All European life is there at any resort—provided they can afford €1,000-plus for a few days of fun. Skiing raises mountains of cash. During winter months it generates 4% of Austrian gdp, according to ing, a bank. For comparison, Germany’s mighty car industry makes up 5% of the country’s economy. This explains why Berlin’s demands that Austria rope off the slopes for Christmas went down so badly. Imagine if the Aus- trian chancellor had asked his German counterpart if she would mind temporarily closing the car industry. (There is a climate crisis, after all, Angela.) For a bloc that prides itself on dissolving borders, skiing is a knotty issue. Mountains are immovable natural frontiers where questions of sovereignty are heightened. Governments in the eu may have pooled sovereignty, but they jealously guard what com- petences they do have, even if it only involves ski lifts. If resorts in some countries lock down for health reasons, another government could scoop up any spare revenue. Normally, eu regulations t took a pandemic to silence Gerhard Schmiderer. For the past are supposed to stop such races to the bottom. When it comes to Iquarter-century, the now 70-year-old “DJ Gerhard” has blasted skiing, the eu has no say. As far as officials in Brussels are con- trashy hits for drunken après-skiers at MooserWirt, a bar in St An- cerned, that is a bullet dodged. In Europe’s delicate ecosystem, ton, an Austrian ski resort. This year, however, the speakers will be mountain communities sit alongside farmers and fishermen as silent rather than blaring out yet another rendition of “The Final near-untouchable endangered species to be protected at all costs. Countdown”, a raucous anthem sung by big-haired Swedes. The Far better to let national politicians take the hit. usual revellers dancing on tables in ski boots will be absent. The After all, there will be a political cost. French resorts can only 500-metre run back to the resort will no longer be strewn with watch as their Swiss peers—outside the eu and apparently free those who have quaffed too much and fallen over in the snow. from any moral obligation not to shaft their neighbours—stay This sad story is repeated across the rest of Europe’s nearly open only a few hundred metres down the valley. Nicolas Rubin, 4,000 ski resorts. Chairlifts have largely ground to a halt because the mayor of Chatel, a resort on the French border, decked his town of the pandemic. Bad memories linger from spring, when an out- hall out in Swiss flags in protest. break in Ischgl, another Austrian resort, led to at least 6,000 cases Those who want to keep on skiing have a point. Sliding down a in more than 40 different countries. Covid-19 loves ski resorts. hill with planks attached to one’s feet is no riskier, in terms of People drive or fly in from all over Europe to crowded mountaintop catching coronavirus, than a cycling trip. (Although bellowing villages. Queues for lifts are packed. Changing rooms are explo- “We’re headin’ for Venus/ And still we stand tall” into the face of a sions of sweat as panting bankers heave themselves into salop- Belgian stranger in a bar at 1,300 metres is another matter.) ettes. Bars are bacchanalian. Yodelling, an efficient way to spread the virus, is not unheard of. As the rich partied in the Alps in Not going downhill March, hospitals overflowed in Lombardy, a few hundred miles Whether families can squeeze in a skiing holiday during a pan- away. No one wants to see that again. demic is a decadent debate—and a familiar one. A similar row Agreeing to write off the first few weeks of the European ski sea- erupted about whether to reopen the continent for tourism over son until the current wave of the pandemic has passed ought to be the summer. If the priority had been to eliminate the virus, the an- uncontroversial. Yet it has triggered a row. France, Germany and It- swer would have been no. But Europeans could not bear the idea of aly all agreed to keep resorts shut until January. Austria was af- being stuck at home in August, so they packed their bags and fronted. “We will not tell France when to reopen the Louvre,” har- zipped across the continent. The consequences were predictable rumphed one Austrian minister. Bavaria’s premier warned that and predicted. Holidaymakers spread the virus. anyone who crossed the border for a few days on the slopes would Every polity has sacred issues that make rationality leap out of face 10 days of quarantine on the way back. Austria eventually ac- the window. In America, it is guns. In Britain, it is health care. In quiesced, effectively banning skiing except for local day-trippers France, it is food. One such issue is a constant across every Euro- until next year. It was, however, a revealing fight. pean country: politicians muck about with holidays at their peril. Europeans ski a lot. In total, they spend roughly 200m days a Whether consciously or not, a choice was made in the summer be- year skiing—about the same as the rest of the world combined. tween health and holidays. Holidays won. This time, at least, a Austria, France and America all rack up a similar number of days more difficult choice has been made. If resorts do fully reopen this on the piste, despite their vastly different populations. Skiing is a season, the Austrian government has decreed that the throbbing quintessentially European invention. Its modern form started in après-ski parties will be banned. MooserWirt may have to wait un- Scandinavia, before it was seized on by 19th-century adventurers. til things are back to normal. When they are, expect to find a 71- It was commercialised across the Alps, after consumers found be- year-old behind the decks. 7 Britain The Economist December 5th 2020 55

The National Health Service the health and social-care systems, covid-19 has accelerated policies that were Unleashed making slow progress. As Jennifer Dixon of the Health Foundation, a think-tank, puts it: “The safety blanket was thrown off.” This presents an opportunity. Matt Hancock, the health secretary, has drawn a ASHFORD comparison to the Great Fire of London in Covid-19 has pushed the nhs to breaking point. It has also brought forth 1666, from which emerged the fire brigade, a wave of innovation the first insurance firms, new water regula- ccording to shelagh o’riordan, a with covid-19. In the first wave of the pan- tions and St Paul’s Cathedral: “Devastating Aconsultant in geriatric medicine, pa- demic it was unable to replicate the care re- shock can force people to find new and bet- tients often experience the National Health ceived in hospitals, with people needing to ter ways of doing things.” Those in charge Service (nhs) as a conveyor belt. “You feel head into an infirmary for oxygen or dexa- of the nhs now face two big questions. The ill, you call this number. This number calls methasone (a cheap but effective steroid). first is which of these innovations make an ambulance. That ambulance tells you Both are now available at home. sense beyond the pandemic, and should that you should go to hospital. You go to The pandemic has put the nhs under become permanent features of the health hospital. And then, if you’re frail, you unbearable strain, but it has also unleashed service. The second is whether this burst of might not come out.” Her job, as she sees it, a wave of innovation. Freed from bureauc- innovation can be sustained. is to help people off the conveyor belt, and racy, and pressed by the need to keep pa- A senior nhs official calls the wide- even on a quiet Sunday morning the tele- tients out of hospital, medics and health spread adoption of remote care a “move phone keeps ringing. Most calls are from officials have rethought how care is provid- away from the dominant mode of medicine nurses, paramedics or care-home workers. ed. In areas from remote care, to the use of for the last 5,000 years”. Before the pan- After a quick chat, each is given a set of in- technology, to breaking down silos across demic, 80% of appointments in primary structions about the care of the patient to care were face-to-face. Now they count for whom they are attending. many fewer (see chart), and those who do Also in this section Dr O’Riordan set up this home-treat- see a general practitioner (gp) mostly have ment service at the start of the pandemic, 57 Trans rights to go through triaging first. “The change spurred by the need to keep patients out of was arguably the most extensive and rapid 57 The Brexit endgame hospital. The service offers acute care at the nhs has ever gone through,” says Trish home: diagnosing, assessing and looking 58 Bagehot: Boris’s organisation man Greenhalgh, a professor of primary care at after frail locals who wish to avoid hospital. the University of Oxford. Yet, despite the Operating from a nondescript office on the fears of many doctors, “nothing very terri- edge of Ashford, a town of 75,000 in Kent, ble happened”. Read more from this week’s Britain section: by the start of November it had treated Economist.com/Britain Remote medicine—which is now more more than 2,000 patients, around a third commonly used for hospital outpatient ap-1 56 Britain The Economist December 5th 2020

2 pointments, too—offers the hope of more vative governments in the early 1990s. This convenient and possibly even cheaper care On call separates purchasers of services (mostly (see Business section). Pre-pandemic eval- England, average daily appointments with GPs gps) from providers (mostly hospitals), uations found it was as effective as in-per- By type, m which compete for contracts. Studies look- son treatment for lots of illnesses. There is, Face-to-face Telephone Other ing at its effectiveness have obtained though, a caveat. Before the pandemic, re- 1.0 mixed results, with none suggesting great mote consultations tended to be done on success. In an age when rising numbers of patients who were considered “very safe 0.8 (often elderly) patients have multiple bets”, warns Dr Greenhalgh, who is leading health problems, and when the nhs is try- 0.6 a study to assess the impact of their wide- ing to focus on prevention rather than spread adoption. 0.4 merely treatment, the bureaucracy and Early in the pandemic, the health ser- fragmentation it imposes is a problem. vice signed contracts to provide Microsoft 0.2 Mr Hancock has said that health care Teams and Attend Anywhere, a video-con- 0 must be “based on the needs of the popula- ferencing platform, to medics. It also of- tion, not the design of the institution”, to 2019 2020 fered reassurance on information-gover- ensure the co-operation of the pandemic Source: NHS Digital nance rules to those who used FaceTime, continues. In recent years the government Skype or WhatsApp. In October 137,000 gp has tried to circumvent the internal mar- appointments took place online. Yet the together. For covid-19, gps referred pa- ket, bringing together purchasers and pro- same month 10m happened by telephone. tients to the remote-monitoring system, viders in local areas to plan services for the “We went to products that were readily working alongside hospital consultants to whole population—an idea imported from available, not the most earth-shattering, decide when to admit patients. This team- America, Germany and Singapore. transformative digital solutions,” says Axel work was part of a broader shift during the Improvements have so far been modest. Heitmueller of Imperial College Health first wave. Across the health service, staff, A recent paper by academics at the univer- Partners, a non-profit consultancy that fo- equipment and ideas were shared. Hospi- sities of Kent and Manchester looked at cuses on innovation. For the most part, ex- tals shuffled responsibilities, acting as part “Vanguard sites”, which trialled the new isting care has been replicated (as far as of wider networks rather than as standa- approach from 2015 to 2018. It found that possible) from a distance. In some places, lone institutions. emergency admissions rose more slowly though, it has been transformed. Bob Klaber, a director at the hospital than elsewhere, but still increased, and trust in north-west London, asks why it that there was no significant difference in A breath of fresh air takes a pandemic for this to happen. In the bed-occupancy rates. The nhs leadership In north-west London, doctors had been popular imagination, the nhs is a mono- thinks the solution is more integration; it installing a remote-monitoring system for lithic organisation, powered by goodwill. hopes to match the financial and legal people with high-risk diabetes. When the In reality it is a tangled network of organi- plumbing of the health service to this new pandemic hit, the focus switched to co- sations, many of which have competing in- reality. Accordingly, it has asked the gov- vid-19. Patients in a serious condition, but centives, leading to behaviour that is, with ernment to introduce legislation to re- short of hospital admission, were given a varying degrees of intensity, territorial. Dr structure the health service, either creating pulse oximeter (to measure blood-oxygen Klaber, who also works as a paediatrician, local health boards or adapting existing bo- levels) and an app into which they entered cites the payment-by-results mechanism dies to serve that purpose. its readings. “We know people sat at home as one obstacle: “If I see a new patient 240 Along with the potential for the first through the first wave feeling fine, but with quid will come into the hospital. If a local major nhs legislation since 2012, next year their oxygen levels going down,” says Sarah gp who I know phones me up and says, ‘I is likely to be dominated by the need to Elkin, a respiratory consultant. “This is a think we could probably clear this up in a shrink waiting lists, which ballooned dur- way of picking up earlier the people who five-minute conversation on the phone’: ing the pandemic. That places very differ- are becoming hypoxic.” no payment for that.” ent pressures on the health service from Remote monitoring of patients is one of The mechanism is part of the “internal during the first wave, when non-urgent the frontiers of digital medicine. The pan- market”, which was introduced by Conser- hospital admissions fell by around 70%. demic injected a new urgency into its in- Spending has tightened and bureaucracy troduction. The approval of the app used in has reappeared. Mr Heitmueller, who for- north-west London took three weeks, in- merly worked in the Cabinet Office, wor- stead of the six months or so that would be ries about where the spark for innovation expected in normal times. Instead of weav- will come from in the post-pandemic ing through a maze of committees, it went health service. straight to those at the top who make the fi- While the pace of change may slow, nal decision. Covid-19 virtual wards have many of the changes will endure. Even over since sprung up in places from Manchester the summer, when the virus waned, the to South Tees, and nhsx, the health ser- proportion of face-to-face appointments vice’s tech unit, has offered support to oth- remained far lower than before the pan- ers who want to follow their lead. In north- demic. Connections have been forged west London, medics now plan to use re- across the health system, and barriers bro- mote monitoring to keep track of people ken. “The nhs surprised itself by how recovering from heart attacks and with quickly it did some major things,” says lung disease. Chris Hopson of nhs Providers, a represen- People focus on the whizzy technology tative group. “One of the things that will required to do this. In fact, says one insider, stick is that sense of the possibility of the bigger challenge in schemes like these much, much more rapid change.” With is changing work patterns and getting dis- lengthy queues and tight public finances, parate parts of the health system to work The doctor is seeing you now ministers must hope he is right. 7 The Economist December 5th 2020 Britain 57

Trans rights pecially after a big backbench Tory revolt on December 1st against his new covid-19 Bellwether? tier system. But Mujtaba Rahman of the Eurasia Group, a consultancy, sees little sign of early readiness to give more ground to the eu. And the mooted inclusion of more unilateral (and illegal) changes to the Northern Ireland provisions of the withdrawal treaty in next week’s finance bill A court ruling upsets trans groups could upset the applecart again. n anglo-saxon countries, trans peo- As repeated Brexit deadlines come and Iple have gained rights in the past few go, the timetable for ratifying a trade treaty years. Those in Canada and some Austra- that runs to some 800 pages (plus annexes) lian states can be legally recognised as be- becomes ever tighter. Getting a deal longing to the gender of their choice, irre- through Westminster should not be hard spective of whether they have had gender even with another revolt by hardline To- reassignment surgery. In America, the ries, because the Labour opposition is un- Equality Act, which Joe Biden has promised likely to vote it down if the alternative is no to sign, would have a similar effect. But in deal. But rushed approval by the eu is a lot Britain there has been a push-back. In Sep- more problematic. tember, the government said it would not Girl, interrupted All national governments must agree. reform the Gender Recognition Act, which Some may jib if there is not enough time for Theresa May, a former prime minister, had rights and women’s rights, are delighted. full legal scrutiny and translation. In a few said she would change to allow gender self- They maintain that mistaken beliefs about countries, such as Finland, parliamentary identification. And now a High Court rul- gender have led to children wrongly being approval is needed before a government ing has upset trans-rights activists. put on the path to gender reassignment, as signs. Some parliaments may also demand On December 1st, three judges ruled that Ms Bell was, and that the court has cut a say if the deal is “mixed”, meaning it in- the youth gender-identity clinic at the Ta- through the ideology and got to the facts. cludes issues such as airline regulation or vistock Hospital in London was not up- Stephanie Davies-Arai of Transgender social security that fall within national not holding the law, which requires that chil- Trend, a campaigning group, points out eu competence. But Georgina Wright of the dren have a mature understanding of the that scientific studies that her group sub- Institute for Government, a think-tank, consequences of hormone treatment be- mitted to the court were accepted as evi- says lawyers in Brussels may still argue fore consenting to it. The ruling was part of dence, while submissions from Stonewall that the deal needs only eu approval. She a judicial review brought by Keira Bell (pic- and Mermaids, a trans support group, were also points to precedents for provisional tured), a 23-year-old woman who identi- denied because the evidence had either al- application of trade deals pending any na- fied as a boy when she was younger, and ready been given or was irrelevant. The tional ratifications later deemed necessary. was given puberty blockers at 16, then tes- judgment is a victory for the trans activists’ That is harder with the European Parlia- tosterone, then a double mastectomy. She opponents; but there are more legal battles ment, since its approval has always preced- later detransitioned. Ms Bell argued that due next year. 7 ed a trade deal taking effect. Next week sees she was too young to understand the impli- its last planned plenary meeting of the cations, and that the protocol for giving the year. Two committees normally scrutinise drugs did not have an adequate scientific The Brexit endgame and report on trade deals before they are basis. The court agreed, calling the treat- voted on. Yet meps are well briefed on the ment “experimental”. How late it was, Brexit trade talks, and are anxious not to be Last year 2,700 people were referred to seen as an obstacle to a deal. They have al- the Tavistock’s youth gender-identity clin- how late ready planned a remote session with a vote ic. Around 40-50% of them were put onto in the week of December 28th just in case. puberty blockers. The clinic argued that the Brexit’s potential cost is becoming drugs are safe and reversible. Ms Bell’s law- clearer. The government tried unsuccess- Talks inch towards a last-minute yers produced a study showing that in 97% fully to head off this week’s backbench re- deal—but it is not done yet of cases they led on to further treatments volt by publishing a hasty economic-im- such as cross-sex hormones and surgery. he government is urging businesses pact assessment of its covid-19 tiers. Yet Mr The court agreed that once on the pathway, Tto step up preparations for the end of Johnson still refuses to offer a similar as- “it is extremely rare for a child to get off it”. Britain’s transition out of the European Un- sessment of any Brexit trade deal (or of no The clinic said it would pause putting ion on December 31st. This week Michael deal). Fortunately the independent Office under-age patients onto puberty blockers. Gove, the cabinet office minister, an- of Budget Responsibility has now done the Most future cases will be referred to the nounced the setting up of a new border op- job. It predicts a 4% long-term loss of out- courts. Trans campaign groups were ag- erations centre, adding that significant put with a deal, and an extra cut in gdp of grieved. The ruling was “shocking”, accord- change was coming with or without a trade 2% next year with no deal. This echoes oth- ing to Nancy Kelley, head of Stonewall. deal. Yet many companies retorted that un- er forecasts and the Bank of England’s con- “Hormone blockers,” she said, “play a vital certainty over the negotiations made clusion that Brexit will cost more than the role in helping to alleviate the distress proper preparation all but impossible. pandemic. And it will come on top of a poor many trans young people experience and This week’s talks in London have made outcome in 2020. The oecd has just down- offer much-needed time…to explore their some progress, yet the old gaps remain graded its forecasts, putting Britain sec- identity. Denying this vital support is not a over fisheries and a level playing-field for ond-to-last among leading members, with neutral act and can be deeply harmful.” competition. Officials suggest Boris John- an expected fall in gdp this year of 11.2%. Some feminist lobby groups, who be- son now needs to intervene to seal a deal. That is an unhappy position in which to in- lieve that there is a conflict between trans The prime minister is under pressure, es- flict further disruption. 7 58 Britain The Economist December 5th 2020 Bagehot Tidying Boris up

Boris Johnson’s new chief of staff is the antithesis of Dominic Cummings he is a neophyte when it comes to the ruling party’s internal mach- inations. But for a man with sensitive political antennae, which Mr Rosenfield clearly has, a certain distance from the warring Conser- vative tribes may be an advantage. Mr Rosenfield has two qualities that his boss conspicuously lacks. As his success at Hakluyt suggests, he is a master of getting things done rather than generating ideas or spinning stories: the company expects its people to complete projects, not just to act as rainmakers. He is also steeped in economics and business. Mr Johnson’s indifference to economics puts him at a disadvantage in arguments with the Treasury, let alone in policymaking. His poor relations with business could also become a problem if Sir Keir Starmer succeeds in mending fences between Labour and the private sector. Mr Rosenfield is business-friendly to a fault. The appointment of a new chief of staff is the centrepiece of a wide-ranging shake-up of Emperor Boris’s Praetorian Guard. The congenitally narcissistic media has fixated on the appointment of Allegra Stratton, one of its own, as head of press relations, but more interesting changes have taken place behind the scenes. Mr Johnson has appointed Neil O’Brien to run the Policy Review Board, the party’s internal think-tank. A northern mp, Brexiteer and former Treasury adviser, Mr O’Brien is a fount of ideas on what he first months of Boris Johnson’s tenure as mayor of Lon- “levelling up” means in practice. Mr Johnson is also working hard Tdon, back in 2008, were, by common consent, a mess. Projects to repair the damage Mr Cummings did to his relations with the fizzled. Senior aides flounced. Chaos reigned. Then “bungling Bo- parliamentary party. There are even rumours of a plan to move the ris”, as the newspapers dubbed him, appointed a talented chief of Whips’ Office from Parliament back to Downing Street (Number 12, staff. The self-effacing but effective Simon Milton brought order to where it used to be, not Number 10). Most important of all, a big chaos and turned dither into decisiveness. Mr Johnson became cabinet reshuffle is in the works. Britain’s most popular Tory and was re-elected by a landslide. Mr Rosenfield’s first day in the job could be difficult if, as looks His first year in Downing Street recalls those early days in the quite possible, Britain leaves the European Union without a deal. mayor’s office. A slow response to the outbreak of covid-19 may Even if there is one, he will be wading into quicksand. The prime have doubled the death rate; clumsy handling of the purchase of minister’s biggest problems are political rather than purely orga- personal protective equipment left front-line workers vulnerable nisational. Brexit was always a bundle of contradictions held to- and led to dodgy deals to get hold of the stuff; faffing about exams gether by a shared hostility to the eu and a vague optimism about generated confusion and anxiety. The angry departure of Dominic freedom. Mr Johnson’s taste for waffle and fudge made him the Cummings, Mr Johnson’s former chief adviser, and his Brexiteer perfect leader of the movement as long as it was about protest. acolytes left Downing Street shell-shocked. Party discipline has With the end of the transition period he will have to focus on what collapsed. On December 1st 53 Tory mps voted against the govern- he likes least: making difficult decisions and tough trade-offs. ment’s tiered-lockdown system and 16 abstained, the biggest re- Party management is also becoming harder, as the dysmorphic volt since Mr Johnson became prime minister. Tory party completes its transition from the natural party of gov- But his premiership may be about to undergo a transformation, ernment into a British version of the Taliban, dominated by a for he may have found himself a new Simon Milton. Dan Rosen- bunch of right-wing revolutionaries and in a permanent state of field is due to take over as his chief of staff on January 1st. In a polit- fury and factitiousness. It was always going to be tricky for a prime ical world in which almost nobody agrees on anything, almost minister who made his career by rebelling against the leadership everybody has a good word for Mr Rosenfield. to impose party discipline. The party’s disintegration into factions The new chief of staff’s most obvious qualification is that he is that reflect warring ideological and regional priorities has made it the antithesis of Mr Cummings. Mr Rosenfield is a peacemaker almost impossible: the One Nation group of liberal Tories, the 109 where Mr Cummings is a warmonger, an organiser where Mr Cum- Group of new mps (oddly named, since there are 66 of them), the mings is an ideas man, a smooth operator where Mr Cummings is Northern Research Group, the Covid Recovery Group and the spiky. Mr Cummings wanted to blow up the British establishment. grandmother of them all, the European Research Group of Euro- Mr Rosenfield personifies it. sceptics. Many of the last lot are battle-hardened, addicted to re- He spent more than ten years in the Treasury, the engine room volt and already convinced that the Downing Street reset is an es- of the British government, eventually serving as principal private tablishment plot to neuter Brexit and return to business as usual. secretary to both Labour’s Alistair Darling and the Conservatives’ For all that, better organisation can improve things. Much of George Osborne. He also has extensive experience in business. He the mess that the government has made of the pandemic has been left the Treasury to work as an investment banker and five years the result of poor management. And despite that, and despite the later moved to Hakluyt, a posh corporate-advisory firm with close infighting, it is still level-pegging with Labour in the opinion polls. links to the secret service, whose chairman, Paul Deighton, is also Imagine how things might look with a new team in Downing chairman of The Economist Group. Some Tories worry that, unlike Street, a ruthless reshuffle and mass vaccinations under way. Don’t two of his recent predecessors, Gavin Barwell and Nick Timothy, bet against another Miltonic resurrection. 7 International The Economist December 5th 2020 59

The modern household vacy. Fights with family or flatmates are the stuff of common lore. But it is single-fam- Nuclear retreat ily households that are the outlier in the broad sweep of human history. From hunt- er-gatherers to workhouses, people lived in big groups, often including non-relatives, pooling resources such as food and sharing tasks such as cooking and child care. It is only after industrialisation, when The pandemic may be encouraging people to live in larger groups work moved outside the home, that people n march, when Britain went into lock- He says after his experience he would con- in the Western world started to live in nuc- Idown for the first time, Andrew David- sider moving in with other people on a per- lear families. son, a 69-year-old retiree who lives alone, manent basis in the future. In much of the world living in bigger was in the middle of renovating his house As lockdowns have limited socialising family groups never stopped. Almost two in the small town of Leamington Spa. The beyond cohabitants or small groups thirds of households are extended family kitchen was a building site so he accepted known as “pods” or “bubbles”, stories ones in Senegal, for example. Extended an offer from his sister to move in with her abound of people moving in with others to families provide a safety net where the and her husband in Birmingham for a cou- lessen isolation or share housework. In state does not, pooling cash to pay medical ple of weeks. Before leaving he asked the fact, the pandemic may merely have accel- bills and letting jobless nephews eat from builder to put in temporary kitchen sur- erated an existing trend. More and more, the communal pot. Even in the West, the faces so he could move back in if they people in the rich world are once again perception that the two-adults-two-kids couldn’t stand living together. Mr David- choosing to live together. family is the norm is outdated. In America son ended up staying away for nine weeks. In Britain households where couples the share of households made up of mar- It was “absolutely brilliant”, he says. share with at least one other adult were the ried couples with children halved between In the mornings he would go for a walk fastest-growing type in the two decades to 1970 and 2019. People are marrying less and with his sister or brother-in-law, or they 2019. In Canada 6% of the population lived later. Marriages are less likely than they would do gardening. In the afternoons they in multigenerational households by 2016, were to last until death. retreated to their own spaces to work on and it was the fastest-growing type of liv- Yet the splitting of the nuclear family their own hobbies: German lessons via ing. By the same year a fifth of Australia’s has taken its time to create an explosion of Zoom, Spanish study, and textile printing. 24.5m people were living with others from new household types. Instead, much of the They ate dinner together, sharing cooking outside their immediate family, a 42% in- West has seen a dramatic rise in single-per- and all-important baking duties. “Living crease on 15 years earlier. son households. From France to Japan, together was a bit of a revelation,” says Mr Such enthusiasm runs counter to West- they make up over a third of the total num- Davidson. “I was quite sorry to move out.” ern notions of individual freedom and pri- ber. In Germany they account for 40% of 1 60 International The Economist December 5th 2020

2 the total, in Finland 41%. Communal liv- cluding a play area and nannies. nalist, moved from New York to live in Pio- ing, at least beyond student halls, retire- The most experimental housing today neer Valley, a community of 32 homes in ment villages or monasteries, is “often involves multiple generations of unrelated rural Massachusetts, with his wife and seen negatively or as a cult”, says Irene Pe- people who did not get a say on whom they their now five-year-old twins. The commu- reyra, a designer who is running a project lived with. Perhaps unsurprisingly it is nity has shared gardens, as well as a large on communal living with ikea, a Swedish found in Scandinavia. Some 60% of the res- communal dining area and an events furniture firm. idents of the 51apartments in Sällbo, a pub- space. He says it is “like having 100 parents Indeed, that is the appeal to some peo- lic-housing project in the Swedish town of for your kids”. There are people around— ple. David and Kim Gotterson, an Austra- Helsingborg, are over 70. The other 40% including his parents, who live on the lian couple in their 60s who lived for many are young people, half of them refugees. same estate—who can play with them, years in communes, said they were rebel- Residents must pass an interview to get baby-sit them and just generally look out ling against the materialistic society of into the community, and sign a contract to for them. His family, he reckons, have a their post-war-generation parents. “We spend two hours per week socialising with much better work-life balance for it. wanted a pure, more natural way to live,” neighbours. This could mean sitting in a The disadvantages of sharing can be says Mr Gotterson. Environmentalists note shared lounge reading a book or doing mitigated by design. Grace Kim, a Seattle- that sharing homes is friendlier on the en- shopping for one of the older members. based architect who lives with eight other vironment than having separate ones. The project is to run for two years. If it is families in a building designed by her and Since the 1970s some feminists have em- judged successful, tenants will be given her husband, says her development bal- phasised the benefits for women of living permanent homes. ances community and privacy—most peo- with other women. Crossing multigenerational boundaries ple’s concern about living communally. has social benefits, says Dragana Curovic, “You can see into some people’s kitchens Communal infiltration the manager. The young, especially the but not their living rooms,” she says. Although some choose to share out of be- newcomers, learn from the older people, Decision-making can be slow. You have lief, recent interest in shared housing has who in turn appreciate the young people’s to work with neighbours even if you do not been sparked in large part by economic help with practical things, she says. Isola- like them. You cannot simply ignore them. pressure. In Britain, where nimbyism tion is unhealthy. One metastudy reported However, as in the workplace, people who makes it extremely difficult to build new that people without strong social connec- have to get things done together often put homes, the average house costs more than tions have a 50% higher chance of dying aside their differences and get on with the eight times the average salary, up from four early—equivalent to smoking 15 cigarettes job. Communal living might, conceivably, times in the mid-1990s. Homes are less af- a day. A Swedish study of people over 75 help bring divided societies together, at fordable for single women, who earn less years old found those with a variety of hap- least a little. than men. The number of older divorcees py connections with friends and family who live alone has gone up. In the absence had a lower risk of dementia. Fallout shelter of new construction, this squeezes the sup- Many other aspects of life can benefit Few governments promote it, though. ply for younger people, who are less from communal housing, too. Parents of Landlords in Britain need a special licence wealthy. “As more people lose their jobs small children find it easier to go out to to let single homes to multiple families. In [because of the pandemic] or have their pay work if they can leave their offspring at New York individually rented apartments or their hours cut, sharing a household home with other friendly adults. Chloe and with shared bathrooms are banned (to dis- with more people is a way to pay the bills,” Alex Wolff, a couple in their 30s, and their courage brothels). During the pandemic says Bella DePaulo of the University of Cali- baby son moved in with Alex’s parents for governments have warned of the dangers fornia, Santa Barbara, the author of “How seven months from March to September. of big households: sociable youngsters We Live Now”. Ms Wolff says she would not have been able may bring the virus home to their grand- Companies have jumped on this oppor- to go back to work six months after giving parents. Multigenerational living may tunity. The Collective, a British outfit, runs birth, had she not been living with her in- partly explain why ethnic minorities have three co-living buildings, one in New York laws. At that point all the nearby nurseries been so hard-hit by covid-19 in Britain. and two in London. Its “members”, whose were shut because of covid-19. Proponents of communal living say it average tenancy is nine months, live in stu- Ben Brock-Johnson, a 40-year-old jour- has made lockdowns more bearable. Ms dio flats but share lounges, gyms and a ros- Kim’s community stopped having 40-per- ter of events from cocktail-mixing to run- son communal meals. Instead, it set up ning clubs. The firm has another 9,000 pods of two to three families who could units in development. dine in well-ventilated shared spaces. In Although urban buildings run by the Sällbo, younger residents have gone out to likes of The Collective are aimed mainly at shop for older ones who are shielding, says young, single professionals, the types of Ms Curovic. Lisa Feardon, a doctor who people seeking to live this way are growing worked long, arduous shifts, says return- more diverse. The Collective houses people ing to her home at The Collective in London aged 18 to 67 years old (the average is 30). A was “a lifesaver”. In a normal rented flat she survey by Build Asset Management, a Brit- would have “just come home and collapsed ish firm that runs serviced accommoda- doing nothing,” she says. “But as every- tion, said that in the year to June 2020 it thing is under one roof here I was able to saw a 136% rise in inquiries about shared still have some sort of work-life balance.” rental accommodation from couples. Kin, Mr Davidson, whose house is now reno- an American company, last year opened vated, says while the pandemic continues two buildings in New York designed for he will be staying at his sister’s a couple of families rather than singles or couples. nights each week (in a support bubble). The Would-be residents can choose an apart- pandemic has forced people apart. But for ment with up to four bedrooms and access an increasing number, communal living to communal facilities and services, in- offers a way to stay connected. 7 Business The Economist December 5th 2020 61

Also in this section 62 Pandemic gastronomy 63 Volkswagen’s boss in the hot seat 64 US Congress v China Inc 64 Chinese hospitality 65 Salesforce gets some Slack 65 Swiss stakeholderism 66 Bartleby: Managing by Zoom 67 Schumpeter: Feathering its own Nestlé

Health care and technology on—will rise from $350bn last year to $600bn in 2024 (see chart 1). Swathes of The dawn of digital medicine America’s $3.6trn health-care market are in for a digital makeover. The same is happen- ing in China, Europe and most other places where doctors ply their trade. The groundwork for what looks poised to be the next trillion-dollar business has NEW YORK been accelerated by the pandemic. Money The pandemic is ushering in the next trillion-dollar industry is pouring in. According to cb Insights, a ast january Stephen Klasko, chief ex- and computer-assisted diagnosis and research firm, a record $8.4bn of equity Lecutive of Jefferson Health, which runs treatment. And enterprising firms, from funding flowed into privately held digital- hospitals in Philadelphia, chatted to a bank health-app startups and hospitals to insur- health darlings in the third quarter of 2020, boss. The financier told him that 20 years ers, pharmacies and tech giants such as more than double the amount a year ago ago health care and banking were the only Amazon, Apple and Google, are scrambling (see chart 2 on next page). The industry’s industries yet to embrace the consumer to provide such services. unlisted “unicorns”, worth $1bn or more and digital revolutions. “Now”, Mr Klasko McKinsey estimates that global digital- apiece, have a combined value of over recalls him adding, “you are alone.” health revenues—from telemedicine, on- $110bn, according to Holoniq, a research The banker had a point. The McKinsey line pharmacies, wearable devices and so firm. In September AmWell, a telemedic in Global Institute, the in-house think-tank of which Google has invested $100m, raised the eponymous consultancy, reckons that $742m in an initial public offering (ipo); its when it comes to digitisation, health care Healthy growth 1 market capitalisation is $6bn. On Decem- has indeed lagged behind not just banking Global digital health, market size, $bn ber 2nd jd Health, a digital pharmacy affili- jd but travel, retail, carmaking and even pack- 600 ated with .com, a Chinese online empo- aged goods. Some 70% of American hospi- Research and rium, raked in $3.5bn in Hong Kong’s tals still fax and post patient records. The development second-biggest ipo this year. ceo Wellness and of a big hospital in Madrid reports vir- 400 No wonder investors are giddy. Demand tually no electronic record-sharing across disease prevention for digital medicine is surging. Doctolib, a Screening and Spain’s regions when the first wave of co- diagnostics French firm, says its video consultations in vid-19 washed over the country this spring. Europe have shot up this year from 1,000 to 200 By exposing such digital deficiencies, 100,000 a day. Ping An Good Doctor, a Chi- Care delivery the pandemic is at last spurring change. nese online health portal viewed by some Confronted with shutdowns and chaos, as the choicest part of its insurer parent Finance operations doctors have embraced digital communi- 0 (see Finance section), is expanding to cation and analytics that have been com- 2019 2024 South-East Asia in a joint venture with estimate forecast mon in other industries for years. Patients Grab, a Singaporean ride-hailing giant. Source: McKinsey are growing more comfortable with remote As with many technology fads, some of 1 62 Business The Economist December 5th 2020

2 this will turn out to be hype. Sober analysts services too seldom genuinely improve at Gartner, a research firm, pour cold water Diagnosis: positive 3 health outcomes. If the new generation of on exaggerated claims made by proponents United States, consumers who have done the digital technologies is to thrive it must of individualised “precision medicine” following in the past six months, May 2020, % “improve health, not increase costs”, and medical artificial intelligence (ai). But Started Prior to covid-19 Since covid-19 thinks Vivian Lee of Verily. Her firm is mov- even they admit there are reasons to think ing away from fee-for-service to risk-based that not all the excitement is overblown. 2520151050 contracts that pay out when outcomes im- Managed prescription Technologies such as sensors, cloud- medicines online prove (eg, if diabetics get blood sugar under computing and data analytics are becom- Checked symptoms control or more people get eye exams). ing medical-grade just as the risk of con- online That points to a hybrid future where Sil- tracting covid-19 in hospitals and clinics Managed medical icon Valley works more closely with tradi- makes their adoption look more enticing appointments online tional health-care firms. Epic is using than ever. Specialist firms like Livongo and Saw a doctor or sought voice-recognition software from Nuance, a Onduo make devices to monitor diabetes medical help virtually startup, to enable doctors to send notes to and other ailments continuously. A study Used a health care outside specialists; it has also teamed up mobile app by Stanford University found that nearly with Lyft, a ride-hailing firm, to ferry pa- Source: Gartner half of American doctors surveyed used tients to hospitals. Siemens Healthineers, such devices. Of that group, 71% regarded a big German health-tech firm, is working the data as medically useful. In June the may already be the world’s largest health with Geisinger, an American hospital Mayo Clinic, a prestigious non-profit hos- data set, thinks Lee Kai-fu of Sinovation chain, to expand remote patient monitor- pital group, teamed up with a startup called Ventures, another vc firm. ing. Patients of India’s Apollo Hospitals can Medically Home to provide “hospital-level Apple, with its reputation for protecting use an app to get drug refills, tele-consulta- care”, from infusions and imaging to reha- users’ privacy, is also championing a com- tions and remote diagnoses—and even se- bilitation, in patients’ bedrooms. Even the mon standard. A combination of such ef- cure a medical loan through Apollo’s part- Apple Watch has been shown to predict a forts and regulatory pressure heralds “a nership with hdfc Bank. medical problem known as atrial fibrilla- new era” for digital medicine, thinks Dr Klasko, keen to prove the banker tion in a clinical trial. Aneesh Chopra, a former White House wrong, is embracing the hybrid approach technology chief. Judy Faulkner, boss of with gusto. “You must have partnerships An Apple a day Epic, a leading maker of software to man- with providers, not just hundreds of un- Patients are keen. A study of some 16m age electronic health records that Mr Cho- connected apps.” He has brought bright American ones just reported in jama Inter- pra has long urged to be more open, de- sparks from General Catalyst, a vc firm that nal Medicine, a journal, found that their use clares she is all for it; 40% of the data made early bets on many digital-health of telemedicine surged 30-fold between managed by her firm are already shared startups including Livongo, to work along- January and June. American consumers with non-customers, she says. Kris Joshi, side his innovation team in Philadelphia. surveyed in May by Gartner were increas- who runs Change, which handles over “Moving fast and breaking things does not ingly using internet and mobile apps for a $1.5trn in American medical-insurance work well in health care,” observes Hemant variety of medical needs (see chart 3). claims a year, sees more interoperability, at Taneja of General Catalyst. But nor does Critically, regulators around the world least between businesses. standing still. 7 are pressing health-care providers to open All this is helping medicine evolve from up their siloed systems—a precondition “a clinical science supported by data to a for digital health to flourish. The eu is pro- data science supported by clinicians”, ar- Pandemic gastronomy moting an electronic standard for medical gues Pamela Spence of ey, a consultancy. records. In August the Indian government Does this make health care big tech’s for the Malls’ last stand unveiled a plan for a digital health identity taking? Amazon wants Alexa, its digital as- with interoperability at its core. Kuantai sistant, to be able (with your permission) to Yeh of Qiming, a vc firm, says that China’s analyse your cough and tell you if it is government, too, is trying to overcome re- croupy or covidy. In November the online sistance to electronic records from hospi- giant, which already sells just about every- NEW YORK The surprising resilience of American tals fearful of losing patients to rivals. Yidu thing else, launched a digital pharmacy to restaurant chains Cloud, a big-data platform for hospitals, take on America’s drug-distribution cote- rie of pharma firms, middlemen and retail- ovid-19 has been brutal for big tenants ers. AliHealth, a division of Alibaba, Chi- Cof American shopping centres, such as Hypertension 2 na’s e-commerce champion, is disrupting clothing stores and cinemas. Not so for the Global digital health equity funding to its home pharmacy market. Its revenues casual eateries that surround these outlets. private firms, $bn leapt by 74% in the six months to Septem- Many of America’s sit-down dining chains 8 ber, year on year, to $1.1bn. Apple has its are on track to emerge stronger after two watch and nearly 50,000 iPhone health quarters of pandemic-driven innovation. apps. Google’s parent company, Alphabet, The final hurdle is the winter. 6 has Verily, a life-sciences division. Independent restaurants were early vic- Tech giants’ earlier forays into health tims of lockdowns. Chewing, chatter and 4 care flopped, argues Shubham Singhal of low air-flow made their busy floors prime McKinsey, because they had gone it alone. candidates for super-spreader events. As 2 Medicine is a regulatory minefield with early as March, state and local regulations powerful incumbents where big tech’s shut down dining halls and began to whit- 0 business models, particularly the ad-sup- tle down the ranks of sit-down eateries. ported sort, are not a natural fit. But the Yelp, a popular review website, reported 2017 18 19 20 pandemic has also highlighted that exist- more than 32,000 restaurant closures be- Source: CB Insights ing providers’ snazzy hardware and pricey tween March and September; 61% of these 1 The Economist December 5th 2020 Business 63

Carmaking hind Audi and Porsche, the stars of the Dark kitchens group). He wants to fill the soon-to-be-va- Seated diners at restaurants open for In the hot seat cant job of chief financial officer with an reservations on the Open Table network*, 2020 ally, perhaps Arno Antlitz, Audi’s finance As % of diners in 2019 chief. He also intends to make his confi- 100 dant the group’s head of procurement. The two roles are central to his drive to boost ef- 80 BERLIN ficiency at vw, which recently approved a Herbert Diess takes on the unions over €150bn ($181bn) investment plan. 60 the Volkswagen system United States Bernd Osterloh, who heads the works 40 ive years ago the Porsche and Piëch council and also sits on the supervisory Britain Ffamilies, who control just over half of board’s executive committee, voted down 20 Volkswagen’s voting rights, poached Her- Mr Antlitz and other candidates for the two Germany bmw 0 bert Diess from , a posh Bavarian car- jobs suggested by Mr Diess. That provoked maker. He was hired to run vw, the biggest Mr Diess to ask the board for support. Ste- May JulJun Aug Sep Oct Nov by far of the the group’s 12 marques, be- fan Weil is the state premier of Lower Saxo- Source: OpenTable *Seven-day moving average cause of his reputation as a cost-cutter and ny, which, as the owner of 20% of vw hard-nosed manager who would not shy shares, is entitled to two seats on the super- 2 were predicted to be permanent. away from taking on the unions. Untainted visory board. The Volkswagen law from Larger chains fared better. With the by vw’s “Dieselgate” emissions scandal, he 1960, which limits the voting rights of any credit lines and corporate infrastructure to made a good start by improving its poor shareholder to 20%, gives Lower Saxony a roll out new delivery methods and safety profit margins. In 2018 he was rewarded veto on any major decision. To protect in- measures, they steadily stemmed losses. with the job of running the entire group. vestment and jobs in the region, represen- Plenty have now recovered or exceeded Only two years later the dynamic Bavar- tatives of the Land invariably back the their pre-pandemic valuations. ian’s job is on the line after a series of clash- board’s ten labour representatives, which New off-premises business has helped. es with organised labour. In June Mr Diess means that organised labour tends to call Texas Roadhouse, a steakhouse chain, in- almost got the boot because of a dust-up the shots on vw’s board. troduced to-go “family packs” and an on- with the supervisory board over a leak of “Osterloh and Weil will try to bring line butcher selling meat to grill at home. confidential information about the group’s down Diess,” predicts Ferdinand Duden- This tided it over as it installed protective software failings. He alleged it might have höffer of the Centre for Automotive Re- equipment and slowly reopened dining come from the board’s union representa- search, a think-tank. Mr Diess, who can be rooms. In October it reported a year-on- tives. After that he was relieved of his job as gruff, clashed with Mr Osterloh soon after year increase in same-store sales. boss of vw (which he had kept). he arrived from bmw—and regularly since Other chains dealt with a fall-off in din- This time the clash is more serious still. then. On November 28th he published a ers by propping up profit margins. Darden On December 1st the executive committee manifesto on how to transform vw into a Restaurants, the parent company of Olive of the group’s 20-member supervisory digital company focused on electric vehi- Garden, slashed promotional spending board, the non-executive conclave that cles. “When I started in Wolfsburg, I was and simplified menus to reduce waste and holds management to account, met to dis- determined to change the Volkswagen sys- costs. Olive Garden’s margins improved cuss his request for an extension of his tem,” he wrote of his early days at vw’s even as a lack of clients in flagship loca- contract. The current one runs to 2023, so headquarters. Mr Diess wanted to “break tions depressed overall sales. The company extending it now would constitute a vote of down antiquated structures, and make the felt sufficiently self-assured after the sec- confidence. No decision has been made company more agile and modern”. He suc- ond quarter to reinstate its dividend. public. The whole board will convene on ceeded in some areas, he said, but not America’s restaurant chains are outper- December 10th. everywhere. forming international rivals, says Dennis Mr Diess demands unequivocal backing “Lower Saxony should give up its voting Geiger of ubs, a bank. American consum- from the board so that he can fulfil his mis- rights,” thinks Mr Dudenhöffer. Otherwise ers have steadily returned to fill seats as of- sion to cut vw’s bloated workforce and vw will remain constrained by its “provin- ficials lift restrictions (see chart). In other boost profitability (which is lagging far be- cial corset”. Mr Dudenhöffer believes that markets stricter regulations and shyer con- Dieselgate would not have happened with- sumers are holding back recovery. Hong out vw’s skewed corporate governance. Kong’s dining sector has yet to turn around With unions refusing to allow lay-offs, he from its spring collapse; receipts fell to an explains, cheating may have seemed the all-time low in the third quarter and even only way to increase its profit margins. fast-food purchases fell by 23% relative to Toyota sells almost the same number of last year. The share price of Vapiano, a big cars worldwide as vw with roughly two- German chain, stands at less than a tenth of fifths of the workforce. its pre-pandemic level. Darden’s is back to Bernstein, a research firm, published an where it was in January. Texas Roadhouse’s open letter to board members in November is up by a third. urging them either to back Mr Diess or to Winter will test the strength of Ameri- sack him. Corporate Germany’s traditional can chains once more, as lockdowns loom model of co-determination has gone too to staunch the flood of new covid cases. At far at vw, the letter says. It is supposed to least chains with a national presence think help bosses and labour to work together that even as northern locations grow rather than fight each other at every turn. frosty, southern states will be opening pati- Even if the board backs Mr Diess this time, os. And data from Yelp show that interest in the infighting will soon resume. It may be outdoor dining is breaking records: it was time to consider repealing the counter- up tenfold in early October, year on year. 7 Sunset for Diess? productive Volkswagen law. 7 64 Business The Economist December 5th 2020

Exchange-traded ﬁends Boiling point

us Congress v China Inc or18 years American regulators Fhave implored Beijing to let them inspect the China-based auditors of Chinese companies listed on America’s stock exchanges. Dream on, China’s Communist regime responded, citing sovereignty and national security. On December 2nd Congress had had enough. The House of Representatives passed a bill that would boot offending firms off American bourses if their auditors fail to comply with regulators’ information requests for three years running. Since it had earlier sailed Chinese hoteliers through the Senate by 100 votes to nil, it can expect a presidential signature. Hospitable climate This would put Chinese businesses worth a combined $2trn at eventual risk of expulsion, including Alibaba, a New York-listed internet titan (see chart). It would make it harder for Americans to get exposure to China BEIJING Two hotel groups thrive amid their industry’s pandemic malaise through American exchanges. Those hungry for juicy Chinese stocks might ovid-19 has, received wisdom has it, to expand much more rapidly. end up buying them abroad instead, Cbeen terrible for hotels. The share The pair indeed look poised to capture a through channels over which Washing- prices of the eight biggest listed Western greater market share at home, reckons Yu- ton exerts no control. groups by room count have slipped by 14%, lin Zhong of 86Research. In America chain on average, this year. The glum consensus hotels accounted for 72% of all hotel rooms is, though, being challenged by two big at the end of 2019. In China the equivalent Red hot Chinese chains. Both are enjoying resur- figure was just 27%. gent demand for domestic travel as China As incomes rise and Chinese travellers Total returns has tamed its epidemic. And strength at become more discerning, the standar- November 27th 2019=100 home is fuelling ambitions abroad. dised, dependable amenities and good ser- 150 Jin Jiang, the world’s second-biggest ho- vice that big chains guarantee begin to look S&P/BNY Mellon China tel firm by capacity, boasted an occupancy more appealing. Domestic providers of Select ADR Index* 125 rate of 74% in the third quarter, in line with such things enjoy a substantial first-mover last year and more than double that of its advantage. The number of hotel rooms in bigger rival, Marriott International. Its China held by Wyndham, the biggest for- 100 market value has soared by three-quarters eign operator, is merely a third that of S&P 500 this year, to $6.4bn, above better-known Huazhu and a fifth that of Jin Jiang. And 75 Asian brands such as Shangri-La and Man- their advantage is growing—the two firms darin Oriental. Huazhu, which like Jin have more than 7,300 hotels under devel- 50 Jiang is based in Shanghai, saw revenue per opment between them, mostly in China, 2019 2020 available room recover by 40% from the equivalent to 47% of their existing stock. second quarter, to 179 yuan ($27). The In a bid to break into the global market, US-listed Chinese companies group is now worth $16bn, behind only two years ago Jin Jiang purchased a major- Market capitalisation, $trn Marriott and Hilton Worldwide among the ity stake in Radisson, the world’s 11th-big- 2.0 world’s listed hoteliers. gest hotel operator by capacity, for $332m. Alibaba † Similarly to their big Western rivals, Jin In January Huazhu paid $868m for Deut- Jiang and Huazhu each owns a portfolio of sche Hospitality, a posh German group. Others 1.5 brands that cater to different customers. Such tie-ups allow the new owners to study Jin Jiang, which is controlled by Shanghai’s the nuances of serving a sophisticated for- 1.0 local government, operates everything eign clientele without spending millions from budget digs (think Marriott’s Fair- on marketing their unfamiliar brands in 0.5 field Inn) to the upper end of the mass mar- the West (or raising the sort of hackles that ket (like Sheraton). Huazhu is a more all- Chinese acquisitions often do in more sen- 0 encompassing group, which also competes sitive industries such as technology or fi- 20191817162015 in the luxury segment. Both companies nance). As American and European hotel- Sources: S&P Global; *American depository receipts of prefer to offload the costs of hotel con- iers continue to reel amid the pandemic’s BNY Mellon; Bloomberg Chinese shares †At Dec 2nd struction to franchisees in exchange for second wave, more last-minute deals may lower franchise fees, which enables them be on offer for the Shanghai duo. 7 The Economist December 5th 2020 Business 65

Business software and MuleSoft, which helps firms connect as Salesforce puts it. Salesforce’s Developer legacy it systems to the cloud. 360 is punier than Microsoft’s Power Plat- Get me some Slack Then came the pandemic. A boom in form but is improving, thanks to MuleSoft tech stocks lifted Salesforce’s market value and Einstein, a set of artificial-intelligence from $144bn to $225bn this year. Slack, services. Slack could be a “Trojan horse” to whose share price has lagged behind those hook customers of Salesforce’s own clients of Zoom and other enablers of remote on more of the company’s applications, work, suddenly looked affordable. Mr Be- says George Gilbert of TechAlpha Partners, The boss of Salesforce has his sights set nioff is paying with a mix of cash and Sales- a consultancy. on tech’s big league force stock. His firm’s valuation is still well Success is not in the bag for Salesforce. arc benioff got the idea for the behind Microsoft’s $1.6trn. But it may at Mr Benioff may fail to turn his vision into M“ohana” corporate culture on a sab- last have a shot at tech’s top table. It already reality. Even if Slack gets its video act to- batical in Hawaii. The term refers to a net- rules in customer-relationship software gether it would be late to videoconferenc- work of families bound together. He likes and thrives in other areas of business soft- ing, which has matured rapidly during the to think of Salesforce, the world’s third- ware, especially since acquiring Tableau. pandemic. Most large corporate clients al- biggest software firm, which he founded Aaron Levie, boss of Box, a cloud firm, de- ready use Zoom, Teams or Cisco’s Webex and runs, as just such a network. On De- scribes Slack as “another dot on the graph” software. And Salesforce might mistakenly cember 1st Mr Benioff welcomed Slack, an that plots Salesforce’s rise to become the end up sacrificing Slack’s growth while try- instant-messaging tool, to his ohana. The world’s number-two business-software ing to bolster its own businesses. $27.7bn deal is one of the biggest ever in the company (behind Microsoft). Perhaps, Mr Moreover, Slack is not in and of itself software industry. Levie muses, “even the largest”. enough to make Salesforce into a genuine Like many family alliances the tie-up is Such sentiments explain why for Micro- rival to Microsoft. Mr Benioff would need partly about power and feuds. Slack’s pro- soft the Slack deal is a red rag. Slack got the to build (or buy) capabilities in document duct has a cultlike following, which Sales- giant’s attention a few years ago when Mr storage, cyber-security and more, reckons force wants to harness to build a tech plat- Butterfield promised to wipe out email, Mark Moerdler of Bernstein, a broker. form that sells digital tools that no firm can which would threaten Outlook, Microsoft’s Wall Street is already wary of Sales- do without. Stewart Butterfield, Slack’s co- popular inbox, and its email server, Ex- force’s big acquisitions; the firm’s share founder, hailed it (hyperbolically) as “the change. “If you are going to come at the price dipped when news of the Slack deal most strategic combination in the history king, you’d better not miss,” quips Charles surfaced. Still, saas holds vast potential, as of software”. The feud is with Microsoft, Fitzgerald, a former executive at Microsoft Microsoft shareholders know well. And, as whose advances Slack spurned four years who is now an angel investor. Back then Mr Mr Butterfield noted on the deal’s an- ago. The deal makes Salesforce a far more Butterfield did miss—and Microsoft shot nouncement, Mr Benioff has already start- formidable challenger to the giant. back with a new product, Teams, combined one revolution. Betting against this Mr Benioff may be best known to the ing messaging with videoconferencing ohana is not for the faint-hearted. 7 public for championing corporate “pur- and other functions. Slack has launched an pose” (and owning Time magazine). But in antitrust complaint against it for offering his own industry he wins kudos for disrup- Teams free of charge in its Office bundle, Stakeholderism tive innovation. In the 2000s the young together with its popular word processor Salesforce basically invented software-as- and Excel spreadsheets. Swiss miss a-service (saas)—accessing programs re- Teams is a big reason why Mr Butterfield motely rather than installing them on of- is in an ohana-ish mood. Like Zoom, it has fice computers—particularly for managing videoconferencing—and far more active customer relationships. Microsoft, Oracle, users than Slack, which explains the lat- sap and others had to follow suit. ter’s lacklustre stockmarket performance. PARIS Multinationals based in Switzerland The explosive growth of saas has pro- Salesforce will invest to reinvigorate it, narrowly avoid new ethics standards pelled Salesforce to ever greater heights. presumably adding more video-meeting And to greater breadth: since 2016 it has capability. Its sales machine will push orporate chieftains can barely keep spent over $25bn snapping up over a dozen Slack beyond early adopters into the cor- Ctabs on what their own staff are up to, firms to boost its computing chops. It porate mainstream. let alone suppliers and subsidiaries in far- bought Tableau, a data-analytics platform, That will intensify Salesforce’s rivalry flung places. A referendum in Switzerland with Microsoft, with which it will compete on November 29th proposed to change in three main areas. With Slack it will di- that, making Swiss multinationals liable in A force to be reckoned with rectly take on Office, now that Teams has domestic courts for lapses in human rights Share prices, June 20th 2019*=100 been folded into it. Slack also offers a gate- or environmental stewardship along their 200 way to 2,400 software tools, mostly created global supply chains. The proposal failed by independent companies, that compete by the narrowest of margins—a watered- Salesforce with other Microsoft products. Salesforce down version will come into force instead. 150 Microsoft and Slack could bundle all this software The changes were championed by the into a convenient alternative to Microsoft. usual foes of big business—ngos, pressure S&P 500 100 Second, Salesforce competes with the giant groups and the like—with their long- in customer-relationship management, standing gripes over cacao that Nestlé uses where it plans to make Slack the user inter- in KitKats or cobalt traded by Glencore. 50 face, and other business functions. This political push to make companies Slack Technologies Then there is the bigger battle over plat- more accountable chimes with boardroom 0 forms. Both Salesforce and Microsoft aim proclamations about purpose-driven busi- to give businesspeople who do not them- ness, shareholders be damned. Corporate 2019 2020 selves write software the tools to build cus- bosses nonetheless fiercely opposed the Source: Refinitiv Datastream *Slack Technologies IPO tomised programs—“with clicks not code”, measures. Vague threats were made about 1 66 Business The Economist December 5th 2020

2 footloose multinationals moving to laxer courts, as they had hoped. thing but enrich lawyers. Some argued that jurisdictions. No Swiss business is—at least public- the risk of litigation may dissuade them That won’t be necessary. Though the Re- ly—in favour of child labour, human-rights from being open about inevitable short- sponsible Business Initiative gained 50.7% abuses or environmental vandalism. But comings they are working to fix. of votes, it failed to carry enough cantons low taxes, pleasant living conditions and a The referendum was seen as a prequel under the arcane Swiss system. (Another historical penchant for business-friendly to wider European efforts to hold business- proposal, to ban the central bank from in- policies like bank secrecy have helped the es accountable beyond their immediate vesting in defence companies, was roundly Alpine confederation attract more than its operations. Germany has mulled a law on defeated.) The Swiss government, which fair share of global firms, some with tricky supply-chain standards; next year the eu opposed the measures, will still bring in supply chains. All proclaim their attach- will push for firms to be held responsible some less stringent norms. Reporting stan- ment to corporate social responsibility, as for human-rights abuses and environmen- dards will be tightened, with fines for er- proven by glossy brochures. But none felt tal harm. If the Swiss experience is any- ring. But campaigners will not be allowed being dragged through Swiss courts for thing to go by, bosses will resist, stakehold- to bring wayward companies to civil misbehaviour elsewhere would do any- er-friendly rhetoric notwithstanding. 7 Bartleby Managing by Zooming around

The pandemic is forcing executives to work harder usinesses are still struggling to with a global workforce and are thus in a senior executives thought they were Bunderstand which of the pandemic’s much weaker bargaining position. engaging employees more in decision- effects will be temporary and which will This point is reinforced by the bcg making since the pandemic, but only turn out to be permanent. Three new report, which finds that the pandemic has 27% of employees agreed. reports attempt to analyse these longer- increased the willingness of companies to The survey also shows that the experi- term trends. One is from Glassdoor, a work with freelancers. Previously, many ence of remote working has not been website that allows workers to rank their managers worried that legal and compli- uniform. Of those working virtually, 69% employers. Another is from the Boston ance issues prevented them from using of women with children want to work at Consulting Group (bcg), a management outside staff. The pandemic forced firms least one day from home when the pan- consultancy. The third is from the Char- to adjust their business models rapidly, demic ends, compared with 56% of men tered Management Institute (cmi), a and simultaneously led to growth in the with kids. These women have had less British professional body. Read together, pool of talented freelancers, as full-time contact with managers during the lock- they imply that firms stand to benefit— employees had to be laid off. bcg says that down than their male peers have had, but that managers’ lives are about to get “by embracing flexibility in whom they suggesting they have been neglected. more difficult. hire, internally or externally, [companies] Strikingly, 48% of British staff from One change that is all but certain to can finally speed up operations and deliver minority ethnic backgrounds thought last is employees spending more of their faster on strategy.” that workplace culture had got better time working at home. The Glassdoor Despite its advantages, a remote work- during the crisis, against 34% of all em- report finds that less commuting has force, or one consisting of more outsiders, ployees. This suggests something was improved employee health and morale. brings challenges for managers, as the wrong with office culture beforehand: Splitting the week between the home and third report demonstrates. The cmi sur- the cmi survey found that black employ- the office is also overwhelmingly pop- veyed 2,300 managers and employees. The ees were more likely than any other ular with workers: 70% of those surveyed results highlight just how important effec- ethnic group to feel their manager did wanted such a combination, 26% wanted tive communication, and concern for not trust them to undertake their role. to stay at home and just 4% desired a workers’ well-being, is to good manage- So managers have a lot more work to full-time return to the office. Perhaps as a ment. They also unearthed an interesting do in responding to the pandemic. Exec- consequence, remote work has not dent- difference of perspective: nearly half of utives need to tailor their behaviour to ed productivity—and indeed improved it individual employees’ needs. Ironically, in some areas. Flexible work schedules though managers may have feared that can be a cheap way to retain employees remote working would allow employees who have child-care and other home to slack, it may be that managers have responsibilities. not been up to the challenge. Bosses may Telecommuting offers other potential have spent too much time videoconfer- cost savings, and not just the reduced encing and not enough speaking directly need for office space. Remote workers do with subordinates. not need to live in big cities where prop- Ask someone what it is like to work at erty is expensive. If they live in cheaper a firm and they may respond by saying towns and suburbs, companies need not what the offices are like—whether they pay them as much. Glassdoor estimates are cramped, in a nice location and so on. that software engineers and developers In a world of remote working, employees who leave San Francisco could eventual- may stress instead how the employer ly face salary cuts of 21-25%; those quit- communicates with them. Not so much ting New York could expect reductions of “management by walking around” as 10-12%. As the report points out, remote management by phoning—or Zooming— employees are, in essence, competing around. Time to get dialling. The Economist December 5th 2020 Business 67 Schumpeter Feathering its own Nestlé

The world’s biggest food company gives a flavour of the future over. During the slash-and-burn era of 3g, sales growth was for wimps. No longer—partly thanks to Mr Schneider. The importance of sales growth is hard to overstate in food. Bernstein, a broker, calls it the “lifeblood” of the industry. In recent years it has been pummelled by changing diets, digitalisation and deflation in parts of the rich world, as well as sluggishness in emerging markets. But Mr Schneider swiftly found remedies. The first was innovation. Thanks to e-commerce, small upstart brands were able to elbow aside the behemoths and sell directly to consumers. He responded by forcing boffins to bring Nestlé’s ideas to market more quickly, often digitally. The three years it sometimes took them was fine for a car, but not for a chocolate bar, he says. New ideas he cherishes include allergy-busting cat foods and vegan burgers. Second, he was quick to strike transformative deals. Within six months of licensing Starbucks coffee in 2018, Nestlé had already launched 24 of the chain’s products. Third, he bought and sold companies, adding to fast-growing nutritional- health businesses and selling down pedestrian ones such as ice cream in America and packaged meat in Europe. Nestlé has sped up growth in other areas, too. It is moving re- lentlessly upmarket. Last year the share of sales from premium products rose to more than a quarter, including items with naked witzerland is known for its timepieces. But it is also home to snob appeal such as “flat white over ice” Nespresso pods. It has Sanother business that for most of its history has operated with joined the craze for plant-based foods and other healthy fare (nev- metronomic regularity. That is Nestlé, the world’s biggest food er mind that this makes its confectionery business look increas- company. Established in the 1860s in Vevey, a small town on the ingly out of place). And it is desperate to improve its reputation for shores of Lake Geneva that remains its home to this day, it has long sustainability. On December 3rd it said it would invest SFr1.2bn been seen as an opaque behemoth with an insular culture and the ($1.3bn) over five years to help its farmers improve their soils as occasional brush with scandal. Yet a billion of its products are con- part of a SFr3.2bn effort to combat climate change. It has also sumed every day. Its sales last year surpassed $93bn. When it talks pledged to make packaging recyclable or resuable by 2025. These coffee, it talks in 100bn cupfulls. Data may be the new oil in Ameri- are attempts to soften its image as a corporate goliath, which puts ca and Asia, but in Europe hot beverages are hotter than either off not just young shoppers but snobby well-off ones, too. crude or computing. With a market value of $320bn, Nestlé is For now, investors are impressed. As Mr Deboo notes, the share worth more than Royal Dutch Shell, the continent’s biggest energy price has already awarded Nestlé ten out of ten for the turnaround, firm, and sap, its software giant. though that may be premature. Sales growth has still not recovered Many global food firms have been models of reliability. Other to the 4-6% a year that the firm once promised. Infant formula re- venerable names, such as Campbell’s, Danone, Kraft Heinz and mains a laggard. So does water, with its cheapest bottled products, Unilever (which sells more non-food items than food), also have consumed in offices, battered by the pandemic. And Nestlé is not roots stretching back over a century. Yet five years ago, amid a immune to industry-wide problems. Growth is slowing in emerg- sharp slowdown in growth, the industry suddenly found itself un- ing markets as people there spend less on ingestible treats and der siege. 3g, a Brazilian private-equity group with a zeal for ruth- more on digital goods. Moreover, low incomes among the young less cost-cutting, merged H.J. Heinz and Kraft Foods. Two years lat- will dampen their appetite for premium products. er American activists targeted Nestlé, demanding the same recipe. The same year Kraft Heinz tried and failed to take over Unilever, Not so sweet and later saw its profits tumble, leaving 3g’s reputation in tatters. Relatively speaking, the virus has been kind to Nestlé. Most of its Europe’s consumer-goods business is still growing at about products are used at home, rather than on-the-go, so extra sales for half the pace it did a decade ago. It badly needs a caffeine shot. No the pantry easily eclipsed what was lost at the sweet shop. Danone, one has shown better how to administer one than Mark Schneider, a European rival that was already struggling to keep up with Nestlé Nestlé’s first chief executive from outside the firm in almost a cen- at the start of the year, has slipped much further behind. tury—and the barista-in-chief of its three-year turnaround. Still, Mr Schneider is no blithe optimist. In a recent Zoom meet- Mr Schneider, a straight-talking German with an American ing held amid stockmarket euphoria about the prospects for a co- passport and a fondness for quips, is the perfect foil for bossy vid-19 vaccine, he was cautious. As a former health-care executive hedge funds. He is not prone to panic. But nor is he complacent. He used to handling cold chains, he expressed doubts about the abili- came from outside the food industry, so sees it with fresh eyes. He ty to distribute vaccines at the required temperatures, especially in carried out what Martin Deboo of Jefferies, a bank, calls “the chief- the developing world. The longer it takes to spread the vaccine, the executive version of Blairism”, steering a middle course between higher public debts will pile up, potentially casting a “long shad- the aggressive profit-margin targets desired by the Americans and ow” over the 2020s. On top of that, he notes, a demographic chal- the meagre restructuring tolerable to the Swiss. Most significant, lenge is looming with rising numbers of elderly requiring medical he revived confidence in organic sales growth, a metric that had care. “I’m quite muted in my outlook,” he admits. But Nestlé, in fallen at Nestlé from an annual 7.5% in 2011to 2.4% the year he took more than 150 years of history, has survived worse. 7 68 Finance & economics The Economist December 5th 2020

Also in this section 70 Data and the quant boom 70 Joe Biden’s economic team 71 Buttonwood: The case for Europe 72 Song royalties—a hit for investors 72 India’s market rally 73 Free exchange: Digital currencies

Ping An tracted investment from hsbc, a bank. To- day it is worth 1.5trn yuan ($236bn; see Metamorphosis chart 1), and has redefined itself as a technology conglomerate built around an insurance business. It is now the largest investor in hsbc. Three things distinguish Ping An’s op- HONG KONG erating model from that of a standard in- The world’s most valuable insurer has transformed itself into a fintech super-app. surer: its vast platform of services; its ap- Could others follow its lead? proach towards its hundreds of millions of job interview at Ping An is a strange and deploy them at such a scale. users and customers; and, underpinning it Aexperience. To become an agent at the The firm, set up by Peter Ma, began life all, its technological prowess. Take its array insurance group, the world’s largest by as a small unit at a state-owned enterprise of subsidiaries first. The firm sells life and market capitalisation, candidates must in Shenzhen, selling bosses insurance health insurance, which in the first three take questions from an intelligent mach- against worker-compensation claims. It quarters of the year accounted for 67% of ine. As they respond, their voice, choice of was eventually spun out in 1988. By the net profit. It provides health care through words and gestures are scrutinised for the mid-2000s it had become one of China’s Good Doctor, its digital-medicine group qualities of the most productive salespeo- largest life and property insurers, and at- (see Business section). Customers can park ple. After accruing data from millions of their cash with Ping An’s bank or invest it such interviews, the firm believes its artifi- through Lufax, its wealth-advisory arm cial-intelligence (ai) system can quickly Premium providers 1 (which listed in New York on October 30th). pluck talent and weed out the duds. Judged Insurance companies*, market capitalisation They can buy a car or sign up for education by the company’s agent-productivity December 1st 2020, $bn services, and then finance the payments scores, it is working. through Ping An’s consumer-credit unit. 250200150100500 Just as the recruitment tool offers a The sheer breadth of services on offer glimpse into the future of hiring, Ping An Ping An allows Ping An to treat customers more as a itself may offer a window on to the future China Life Insurance social-media firm would, rather than an in- of finance. The tool is just one of thousands Company surer—the second distinctive feature of its of applications built by the group’s army of AIA Group business model. Unusually for a financial engineers. They support a sprawling array institution, Ping An considers the majority of services, from insurance and banking to Allianz SE of people buying its products to be users health care and education, which this year instead of customers. They may buy a alone have been used by close to 600m peo- Chubb health service from Good Doctor or a car ple. No other traditional financial-services Zurich Insurance from Autohome, its car-purchasing app, group in the world comes close to rivalling contributing to the company’s data pool, Source: Bloomberg *Excluding Berkshire Hathaway Ping An’s ability to develop technologies yet remaining outside its core customer 1 The Economist December 5th 2020 Finance & economics 69

2 base. “You don’t have to jump through at all, rather than adding to its cost base, hoops. All you need to do is download our Captive audience 2 makes Ping An unusual. app,” says Jessica Tan, one of the group’s Ping An, m Could elements of the model be adopt- three co-chief executives. Only when they 600 ed elsewhere? Many of the individual tech- hold a financial product at one of the core nologies developed by Ping An will soon be units of the company, such as an insurance Internet users 500 applied by western insurers; some are al- policy, do users become customers. Customers* ready talking about how to become “the By allowing hundreds of millions of 400 Ping An of Europe”. But wholesale fintech people to dip their toes in its product offer- 300 adoption will be harder in countries with ing, Ping An has created a pool of users that stricter regulation on big data (and will can be targeted for sales of more sophisti- 200 probably become more difficult in China, cated products. More than 578m people too). Customers in America and Europe used its platform in the first nine months 100 may also be more reluctant than those in of the year (see chart 2). Some 214m were 0 China to buy insurance, health-care and customers who had contractual agree- wealth-management from one company. 2014 15 16 17 18 19 20† ments with the company. The rest were Meanwhile, Ping An’s approach is being Source: Company reports *Financial-product holders †To Sep considered users. In the first half of the put to the test. When covid-19 first struck in year, about 35% of its 18m new customers January the company was a year into re- were sourced from its users. As the com- ance accordingly. More accurate pricing on structuring its life-insurance business. pany has won over more users, that per- both fronts saves the company money. That involves improving its force of over centage has risen steadily in recent years. When large financial firms do develop 1m agents, who are still the main channel Ping An is also becoming better at the systems in-house, they jealously guard for insurance sales in China. The country’s lucrative business of “cross-selling”, or them from competitors. Mr Ma has turned insurers are not only battling among them- selling customers more products from oth- that notion on its head by transforming selves for talent, they are also fighting off er parts of the group, which increases in- Ping An’s technology division into a sales new entrants. “We are competing with the come without incurring the cost of acquir- unit and profit centre. When the company tech companies too,” says Jason Yao, an- ing new clients. The share of retail developed its own cloud-computing tech other co-ceo. Companies with their own fi- customers that have contracts with more for hosting its banking and insurance sys- nancial technologies, such as Ant Group, than one subsidiary rose from around 19% tems, it eventually turned the technology have launched rival insurance offerings. in 2015 to about 37% in June. That puts Ping into products that now serve 630 banks and The ai-powered recruitment and train- An about 20 percentage points above the 100 insurers across China—a “software-as- ing tool has been one of Ping An’s top sol- average cross-selling rate for insurers in a-service” model for banking that is often utions. It appeared to be working in 2019, Asia, according to Bain, a consulting firm. compared to what Amazon Web Services when the value of new business per agent None of this would be possible without has done for website hosting. in the company’s life-insurance division Ping An’s technological prowess—the third Ping An’s lending algorithms facilitated rose by a healthy 16.4% compared with the and by far most important ingredient of its 47.4bn yuan in loans at rival banks in the previous year. The gauge fell by almost as success. ai allows cross-selling pitches to first half of the year. That unit, renamed much in the first half of 2020. Analysts say customers to be made when they are most OneConnect, went public last year. Anoth- that rivals in China have fared even worse. useful, for instance. “The final sale is done er, called Smart City, builds and operates But the risk, says one consultant, is that the by an agent but the system develops the internal systems for hospitals. Local gov- effectiveness of some of Ping An’s tech sol- recommendation,” says Henrik Naujoks of ernments in 118 cities buy Ping An’s admin- utions may have been overestimated be- Bain. “And it’s done at the right time.” istrative technology. cause of rapid growth in the insurance in- Large banks and insurers often sponsor Its technology business, which industry in China at the time. A prolonged “fintech incubators” that develop new cludes the sale of cloud-computing ser- downturn could show that some of its tech technologies, or buy in applications that vices, generated just 4.5% of group net pro- is less effective than first thought. can be patched on to their core operations. fits in the first nine months of 2020. But Another threat comes from leadership hsbc, for instance, hired Identitii, an Aus- making the transition from financial insti- changes. In part, these reflect Ping An’s po- tralian fintech, this year to build a digital- tution to fintech means turning tech into a sition on the tech frontier, which has led ri- payments tool. But for regulatory reasons profit centre, says Leonard Li at Oliver Wy- vals to sniff around its executives. Ericson such experiments tend to be ring-fenced man, a consultancy. That tech turns a profit Chan, chief executive of Ping An Techno- from the financial institution. logy, was poached in September by Zurich, Ping An, by contrast, has fully internal- another insurer. Lee Yuan Siong, Ping An ised these operations, apparently unafraid Health check 3 Insurance’s chief executive, took over as of regulatory blowback. The group has a Ping An, value of new business, yuan bn the boss of aia, a Hong Kong-based insurer, 110,000-strong technology development 80 this year. The loss of the pair has been a team—larger than the commercial-bank- blow to the group. More could follow. ing divisions of all but the biggest banks— Questions also hang around the future including 3,000 scientists. It submitted 60 of Mr Ma, who is 65 this year. He stepped 4,625 technology patents in the first half of down as group chief executive in July, the year alone. The tools developed within 40 prompting industry watchers to expect the group’s technology unit are often used him to retire soon. But he continues to call across the company. These include credit- the shots as chairman, and there is no talk risk models that use vast stores of data to 20 of succession planning yet. Were Mr Ma to make quick lending decisions at Ping An’s depart, some worry that Ping An’s rapid rise consumer-finance division, Puhui. Similar 0 would come to a swift end. “There’s only data crunching can track a customer’s driv- one person driving innovation,” says a con- 20*1918171615142013 ing habits through movements detected on sultant. For all its use of machines, Ping An Source: Company reports *H1 a mobile-phone sensor and price car insur- is still subject to key-man risk. 7 70 Finance & economics The Economist December 5th 2020

Financial-market data run exchanges—were once merely finan- All this makes regulators worry about cial-market plumbers, clearing transac- the growing market power of a shrinking Go figure tions and matching trades. Other niche group of data providers. European watch- players, like ihs Markit, started off by pro- dogs are due to make a decision on lse’s viding pricing for the opaque market in purchase of Refinitiv by mid-January. But credit-default swaps, hoping to tap inves- they may not do much to block the union tors’ growing appetite for derivatives. The between s&p and ihs Markit. Mr Mazari NEW YORK transaction data these firms accumulated says overlaps between the firms’ business- A crowd of data firms are cashing in used to be a by-product. Now they are “the es do not amount to more than 10-12% of on the quant-investing boom lifeblood of finance”, says Audrey Blater of their revenues, so concentration in their raders and their Bloomberg terminals Aite Group, a research firm. Market-data various segments will not rise by much. Tare seldom parted. Some 330,000 peo- revenues have grown by around 5-8% per But whether the deals are pulled off or not, ple fork out around $25,000 annually to ac- year for the past five years and margins are their size shows how the industry is being cess Bloomberg’s suite of services: finan- fat. s&p has an operating margin of 56%, 16 recast. For decades rivals attempted to cial-market data; graphing and pricing percentage points more than five years ago. usurp Bloomberg by offering similar but tools; the ability to chat with other market Now these once entirely disparate firms cheaper platforms. Traders may still clutch participants. These functions are so vital are teaming up. The s&p and ihs Markit at their terminals, but the market for data is for bond traders, hedge-fund managers merger follows a slew of similar deals. In being transformed. 7 and pension-fund investors that, when the 2019 the London Stock Exchange (lse) pandemic closed offices worldwide, many agreed to buy Refinitiv, a financial-data lugged their terminals home in taxi cabs. service once owned by Thomson Reuters, Joe Biden’s advisers As quantitative investing swells and al- for $27bn. In September this year ice gorithms dominate financial markets, bought Ellie Mae, a mortgage-information Top picks though, the demand for data is changing. A provider, for $11bn. human stock-picker might prefer a single Incumbents hope these mega-mergers slick platform through which they can will allow providers to reap economies of build charts and chat to their broker, but scale and create data bundles that appeal to quantitative firms want to be plugged into clients. Like the giants of consumer tech- WASHINGTON, DC A diverse, left-leaning economic team vast data sets that they can sift for signals. nology, financial-data firms are seeking to conveys the president-elect’s priorities One of the quickest-growing slices of the create “ecosystems” that clients never have market-data industry for the past five years to leave, says Ms Blater. Such scale econo- oe biden’s record as president may well has been direct selling to investment man- mies certainly seem to exist for s&p and Jhinge on his response to America’s eco- agers, rather than traders. And a motley, ihs Markit. The companies expect around nomic woes. On December 1st the presi- fragmented bunch of providers are having $480m in annual savings, but Hamzah Ma- dent-elect launched his effort to right the enormous success selling proprietary data zari of Jefferies, an investment bank, economy, when he formally unveiled his directly to quantitative managers. A re- thinks they could end up closer to $600m. choices for top policy jobs. His economic minder of this came on November 30th The transaction should also create rev- team stands out for its diversity, its interest when s&p, a rating agency and financial- enue-generating synergies, which the pair in climate change, and its emphasis on the information firm, said it would buy ihs estimates at an annual $350m. That is be- welfare of working people, sending a clear Markit, a credit-data provider, for $44bn. cause they have complementary business- signal of Mr Biden’s priorities. Its overrid- The tie-up is the second-largest acquisi- es and serve the same pool of clients. s&p ing challenge, though, will be to repair an tion announced this year, behind only a provides equities indices, for instance, economy battered by covid-19. $56bn Chinese oil-pipeline deal in July. whereas ihs Markit looms large in the pric- Many of the names on the slate are fa- The providers that are winning from the ing of bonds. The combined entity could miliar. If confirmed by the Senate, Janet quant boom are doing so almost by histori- sell its array of products through enter- Yellen will become America’s first female cal accident. Some—such as Nasdaq and prise-wide contracts, charging clients a fee treasury secretary. She is assembling one of Intercontinental Exchange (ice), which for all-you-can-consume data. the more impressive public-service careers in the economics profession, having led the Council of Economic Advisers (cea) during the Clinton administration, and the Federal Reserve from 2014 to 2018. Experience aside, Ms Yellen’s broad ac- ceptability across Democratic factions no doubt was a point in her favour. By contrast, Mr Biden’s cea—an advisory body of wonks that aims to ground the president’s policies in sound economics—may be the most progressive in recent memory. It will be led by Cecilia Rouse, an economist at Princeton University, who if confirmed would be the first black woman to chair the council. Ms Rouse is no stranger to Wash- ington, having advised both Bill Clinton and Barack Obama during their terms. She has also done impressive research; her work showing that student debt may deter low-income students from enrolling at A numbers game university, for instance, may be especially 1 The Economist December 5th 2020 Finance & economics 71

Buttonwood The ABC of the euro zone

For the first time in a while, there is a half-compelling case to buy Europe wo men are sitting in adjacent restau- committed to reflation. The hawkish In any event, it is its old-economy Trant booths. One is talking at length— German influence on its apparatus has cyclical stocks that are piquing interest. about train journeys, women, morality, waned. And the pandemic is curing hang- If Europe has been the big loser from the taking chances, living one day at a time. ups around fiscal stimulus. The European pandemic, it ought to be a big beneficiary The other is captivated. “When you die, Union’s recovery fund is a step towards a of reopening, goes one argument. The you’re going to regret the things you shared fiscal policy. It is not huge. But it is forecast for earnings-per-share growth don’t do,” says the speaker. After more of not nothing either. next year is as high as 50% for the Euro this, he sighs, pauses and offers his new The euro zone’s equity market has Stoxx, according to Mislav Matejka of friend a drink. He then takes out a map. suffered from a weakness in its make-up: JPMorgan. A one-off bounce might not “This is a piece of land,” he says. “Listen too few of the digital companies of the impress much. But there is a decent case to what I’m going to tell you now.” future; too many of the industrial compa- that euro-zone equities might sustain This is how Richard Roma, the alpha nies of the past. But time has whittled interest beyond 2021—that the “runway salesman in “Glengarry Glen Ross”, a play away at this, too. After years of under- is longer”, as Mr Secker puts it. The stim- by David Mamet, seduces a stranger into performance, Europe’s banks and energy ulative effect of the eu’s recovery fund buying a tract of undeveloped land. The companies had dwindled to a 10% share of will probably not be felt until 2022. As scene comes to mind when considering market capitalisation by the late summer, global economic recovery takes a stron- the investment case for euro-zone as Graham Secker of Morgan Stanley, a ger hold, investors will start to worry stocks. The phrase “time to buy European bank, noted at the time. Technology had more about higher inflation. That might equities” can elicit the same sort of become the largest single sector in the favour a more longer-lasting tilt towards alarmed response as an invitation to buy Euro Stoxx 50 benchmark index, at 14%. cyclical stocks. Florida swampland. An oblique sales The public-equity market is still a more Why not simply buy emerging-mar- pitch is generally advisable—even cyclical play than that in America. But it is ket stocks instead? You still get exposure though now might be a better time than no longer true to say that Europe is a tech- to companies that benefit from eco- usual to make it. nology desert. Venture capitalists talk nomic recovery; you also get plenty of How would a stockbroking Ricky excitedly about the strength of the pipe- tech stocks; and on top of all this you Roma sell the euro-zone story? The main line of software startups across continen- benefit from a weaker dollar, which is thing would be not to oversell it: Europe tal Europe. generally helpful for financing costs in is hardly transformed. The meat of it is developing economies. Yes, the dollar is that things are not as bad as you probably expected by many to lose further ground. think. The euro-zone’s weaknesses have But what if it doesn’t? And what if Trea- not gone away, but are much less crip- sury yields start to rise quickly? That pling. It is likely to do quite well in the would be a tricky combination for early stages of economic recovery. That emerging markets. Europe would be the might just be enough to close the deal. sounder bet. (A stockbroking Ricky Roma One sure-thing trade that the euro might say that you don’t have to choose. zone has spawned is in books and arti- Buy a bit of both.) cles about how it is a half-finished pro- abc—always be closing—is the man- ject. It is a monetary union, but not a tra of Roma and his fellow salesmen. It is political one. The single market is frag- trickier to seal the deal when the story is mented in services and banking. Tax and not “things are great” but rather “things spending decisions are made at the are a lot better than they were". Still, this national level. But things have changed counts as a more-than-decent pitch as quite a bit. The European Central Bank far as the euro zone goes, even if it is an looks a lot more like its peers than it did odd one to close on. After all, it is mostly in, say, 2010. Like them, it is more or less about reopening.

2 pertinent given a running debate in Wash- Other appointments have been greeted Neera Tanden, the head of the Centre for ington over the wisdom of cancelling stu- less warmly by the left. Brian Deese, who American Progress, a left-leaning think- dent loans. Jared Bernstein, who advised has been chosen to lead the National Eco- tank, and Mr Biden’s choice to run the Of- Mr Biden on economic policy during his nomic Council, the president’s top eco- fice of Management and Budget, is a more vice-presidency and has long been an ad- nomic-policymaking body, worked at divisive figure, known for picking fights vocate of pro-labour policies, will join Ms BlackRock, an asset manager, after serving with far-left supporters of Senator Bernie Rouse. So too will Heather Boushey, who as an adviser to Mr Obama—causing some Sanders. Republican senators have ex- runs the Washington Centre for Equitable to worry about a revolving door between pressed discomfort with her nomination Growth, a left-leaning think-tank. Ms government and business. But Mr Deese’s too; she may face the fiercest confirmation Boushey has argued forcefully that gener- portfolio, which involves directing invest- row of them all. But confirmation will be ous government support for women and ment in climate and sustainability initia- only the first of the team’s many chal- families is a key ingredient of broad-based tives, has muted some of the criticism— lenges. Reforming the economy in the face prosperity. (Neither Mr Bernstein nor Ms and shows the importance that Mr Biden of a slump and Republican opposition will Boushey require Senate confirmation.) places on tackling climate change. be no easy task. 7 72 Finance & economics The Economist December 5th 2020

Music rights of England. The aim is to improve the lot of This picture seems in striking contrast songwriters, who do not have the same op- to that of the economy, which sustained Tuning in portunities as performers to make money the deepest downturn of all large coun- through tours and merchandise. tries. In the second quarter India’s gdp fell Hipgnosis has spent more than £650m by 24% compared with the previous year; ($870m) buying the rights to over 13,000 in the third, according to figures released songs. It now owns a share of eight of the 25 on November 27th, it was still 7.5% lower most-played songs of all time on Spotify, a than a year ago. The Centre for Monitoring The market for song royalties is a hit streaming platform, including tunes co- Indian Economy (cmie), a research firm, for investors written with Ed Sheeran (“Shape of You”) estimates that more than 21m jobs have en stennis is a country-music song- andJustin Bieber(“Love Yourself”). Inaddi- been lost since the pandemic struck. In No- Bwriter from Nashville who has written tion to the hits, Mr Mercuriadis also wants vember the labour-participation rate hits for performers such as Tim McGraw to boost returns from songs that have dropped below 40% for the first time. and Jason Aldean. Earlier this year, as the “been left to languish” by big labels. Meanwhile, inflation has been rising, music industry was stopped in its tracks by Hipgnosis seeks to promote its cata- limiting the Reserve Bank of India’s ability the coronavirus, a company called Royalty logue by trying to place them in films, tv to cut interest rates. In October, consumer Exchange offered him the chance to raise programmes and streaming playlists. prices rose by 7.6%, well above the upper some cash. Since 2016 it has run an online Since it went public in July 2018, the cumu- bound of the central bank’s target range. marketplace that brings together musi- lative return on its net asset value is just Years of deficit spending and a shortfall in cians who want to sell their work and punt- shy of 40%. Music to investors’ ears. 7 tax collection mean there is little latitude ers wanting to invest in royalties. Anthony for fiscal policy, either. In the third quarter, Martini, a partner in Royalty Exchange, government spending fell by 22% com- says it has 25,000 potential investors on its India’s market rally pared with the same three months in 2019. books, from pension funds to “dentists Yet it is not necessarily a contradiction from Ohio”. The rate of investors signing up Dramatic for the stockmarket and the economy to go has doubled this year, compared with 2019. in different directions. They measure dif- Music royalties are a complicated busi- disconnect ferent things: the present value of future ness. When a song is recorded, copyrights profits in the first case, and current busi- are created both for the composition of the ness conditions in the second. Perhaps the song and the recording itself. Each of those stockmarket has been early in understand- Despite a weak economy, the rights is then split into mechanical rights ing India’s resilience, just as it was quick to stockmarket zooms (generated when a song is sold in a physical grasp the severity of the epidemic. Share format or streamed), performance rights he mood on Dalal Street, Mumbai’s prices fell by nearly 40% between mid-Feb- (when it is played on the radio or live at a Tversion of Wall Street, is jubilant. Re- ruary and late March, as supply chains fell concert) and synchronisation rights (when cord highs are being achieved in one ses- apart and activity came to a standstill. Now it appears in a film, television programme sion after another on the Bombay Stock Ex- factories are open, airports are crowded, or a video game). change, most recently on December 2nd. the roads jammed with traffic and the air The idea of investing in royalties is not The Sensex, an index of the country’s big- clogged by pollution. A renewed appetite new. In 1985 Michael Jackson forked out gest 30 firms, is up by around 72% since for global risk, especially after news of ef- $47.5m for the rights to the recordings of March 23rd, the day before India went into fective vaccines broke, has only helped. In around 250 songs by The Beatles; Taylor its strict lockdown; so too is the broader- recent months India has been the recipient Swift is trying to buy the rights to some of based bse 500. That is one of the largest of record portfolio flows from abroad. her master tapes after her previous record rises among the world’s ten biggest econo- Investors may also have become more label was sold. But firms like Royalty Ex- mies. Share prices across all of the 79 sec- optimistic on growth prospects. The crisis change are making rights affordable to a tors tracked by Capitaline, a data provider, has allowed the government to push wider pool of investors; some auctions have risen. Those for makers of cement through rule changes, such as agricultural start with prices in the four figures. (Mr products have gone up by 139%; those of and labour reforms, which could introduce Stennis sold his rights, and paid off his carmakers by 89%; even those of real-es- needed efficiency. Its “Make in India” cam- mortgage with the proceeds.) tate investment trusts, hobbled by shut- paign is tariff-heavy, but also offers incen- There are several reasons why music downs, have risen by 5%. tives to lure in foreign producers. Recent royalties seem attractive at the moment. policy moves, such as the adoption of a Mr Martini believes investors are drawn in goods-and-services tax, may have also by a rate of return that is insulated from Ups and downs toughened the environment for small, less macroeconomic trends. Music rights offer India formal firms, and pushed profits towards a predictable stream of income—people larger, listed ones. tend to tune in no matter what the econ- BSE Sensex 30 index GDP, % change Companies’ profits rose in the third omy is doing. Owning a song is more fun Jan 3rd 2016=100 on a year earlier quarter, even though revenues fell. The than buying a slice of a company. And once 180 10 cost-cutting could signal greater efficien- they have been bought, songs need not re- cy. But it could also be a story that ends un- 160 quire much attention. 0 happily for investors, if it explains low em- Not everyone agrees that buying royal- 140 ployment and why, in the recent gdp ties should be a passive business, though. -10 numbers, household spending remained 120 In 2018 a former manager of Iron Maiden depressed. Growth in power consumption -20 and Guns N’ Roses, Merck Mercuriadis, 100 and freight traffic has begun to slow, sug- founded an investment company called 80 -30 gesting the recovery may be sputtering. Hipgnosis. More than 90% of the firm’s That would seem to bode ill for both the 20182016 20192018 shares are held by institutional investors, economy and the stockmarket. For now, Sources: Bloomberg; Refinitiv Datastream including axa, an insurer, and the Church though, investors are unfazed. 7 The Economist December 5th 2020 Finance & economics 73 Free exchange The disintermediation dilemma

Will central-bank digital currencies break the banking system? people rely on “wallets” to hold their cryptocurrency (though if the public could not hold cbdcs directly, it would not be much of an improvement on existing central-bank digital money). The problem of disrupting the banks may be avoidable with clever engineering. But it would be wise to consider whether it even needs avoiding in the first place. For those willing to enter- tain futuristic ideas, cbdcs may offer an opportunity to rethink the financial system from the ground up. Several research papers, as summarised by Francesca Carapella and Jean Flemming of the Federal Reserve in a recent review, argue that central banks could preserve maturity transformation by re- ordering the chain of funding. Today, households deposit money at banks, which park funds at the central bank. If people prefer cbdcs, however, the central bank could in effect pass their funds on to banks by lending to them at its policy interest rate. “The issu- ance of cbdc would simply render the central bank’s implicit lend- er-of-last-resort guarantee explicit,” wrote Markus Brunnermeier of Princeton University and Dirk Niepelt of Study Centre Gerzen- see in a paper in 2019. Explicit and, perhaps, in constant use. More central-bank lending might sound like an unwarranted expansion of government. But today’s market for deposits is hardly laissez-faire. It is not as if households inspect banks’ loan books magine it is 2035 and a financial crisis is raging. Credit is drying before entrusting them with cash; they rely on the backstop of gov- Iup; banks’ share prices look like ski slopes and every news report ernment-provided deposit insurance. And deposits are increas- features sweaty traders in shirtsleeves tugging at their collars. You ingly concentrated in big banks. (In fact, a recent working paper by log on to your banking app and peer anxiously at your savings. You researchers of the Bank of Canada finds that, by increasing compe- could transfer them to another bank, but none seems safe. Fuel- tition for deposits, a cbdc could increase bank lending and gdp.) ling a traditional bank run by withdrawing physical banknotes, The real problem with central-bank financing of banks is the even if there were any branches left, would be tragically passé. risk of default. To avoid picking winners, policymakers would Luckily, there is a new escape route. At the touch of a button, you probably need to fund any institution that can provide satisfactory can move your funds into a central-bank digital currency (cbdc), a collateral. Determining which loans and other assets qualify is un- government-issued virtual store of value that is completely safe. comfortable work. But central banks already make such evalua- This is one scenario worrying economists working on cbdcs tions in times of crisis. The understanding that they will accept (of whom there are many: a survey at the start of the year found only high-quality assets, plus minimum equity requirements to that more than 80% of central banks were studying the subject). protect creditors, is supposed to prevent moral hazard. There are many potential advantages to publicly backed digital currencies. They might make payments easier. They might “demo- Carpe diem cratise” central-bank money, the part of the central bank’s balance- Another idea is to make banks fund themselves with much more sheet which, unlike physical cash, only banks can access now. And equity, rather than rely on deposits. That would make them look they would reduce the risk that cryptocurrencies replace govern- more like today’s mutual funds or other unleveraged investment ment tender; bitcoin has been on a tear lately, and Facebook’s digi- vehicles. This is precisely what economists such as John Cochrane tal coin—which on December 1st changed its name from “Libra” to of Stanford University and Laurence Kotlikoff of Boston University “Diem”—will reportedly launch in January. But wouldn’t cbdcs have long advocated: that lenders should shed their dependence also make it dangerously easy to flee the banks in times of stress? on flighty sources of financing, and that households’ funds should It is not just in a crisis that cbdcs might compete with banks. instead be parked in completely safe assets. For Mr Cochrane, They would be attractive assets to hold in normal times, too, espe- cbdcs are an opportunity to pursue such “narrow banking”. cially if, like today’s central-bank money, they were a tool of mone- To fear disintermediation at the hands of cbdcs is to believe tary policy and therefore paid interest (assuming that rates are sol- that narrow banking would starve the economy of something it idly positive again by 2035). Thus, commercial banks might be needs, and that today’s “fractional-reserve” system must be pre- drained of the deposits with which they today fund their lending. served. But banks are not necessary for lending and borrowing to Disintermediation of the banking system might make impossible take place—in America a high share of this activity takes place in the financial magic that allows households to pair long-dated capital markets instead. If bank credit must be kept flowing, gov- mortgage borrowing with instantaneously redeemable deposits. ernments could subsidise it directly—making explicit what to- The budding architects of cbdcs are looking for ways round the day’s architecture obscures. Better that than suppressing useful problem. One option, which has been suggested by researchers at technological innovations. the Bank of England and the European Central Bank, is to limit the Making subsidies explicit, however, is not always comfortable amount that can be held in a cbdc. Another idea, pointed out in a for the beneficiaries—or for regulators; obvious support attracts recent paper by Sarah Allen of the Initiative for Cryptocurrencies more public opprobrium. The real risk of cbdcs to the financial and Contracts, a research group, and 12 co-authors, is to rely on system may be that they eventually precipitate a new kind of run: banks to manage the public’s holdings of cbdcs, much as many on the idea that banks need to exist at all. 7 You don’t need to be a helioseismologist to help harness the power of the sun. Help power your portfolio with the innovators of the Nasdaq-100.

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Computational biology ner workings of cells. It could speed up drug development. And it could in particu- The shapes of things to come lar suggest treatments for diseases like Alz- heimer’s, in which misshapen proteins are thought to play a role. But there is yet more to it than that. Un- til now, the machine-learning techniques which DeepMind’s team used to attack the protein-folding problem have been best Artificial intelligence is solving one of biology’s biggest challenges known for powering things like face-recog- o understand life, you must under- Now, things may be about to get much easi- nition cameras and voice assistants, and Tstand proteins. These molecular er. On November 30th researchers from for defeating human beings at tricky games chains, each assembled from a menu of 20 DeepMind, an artificial-intelligence (ai) like Go. But Demis Hassabis, DeepMind’s types of chemical links called amino acids, laboratory owned by Alphabet, Google’s boss, who founded in 2010 what was then do biology’s heavy lifting. In the guise of parent company, presented results sug- an independent firm, did so hoping that enzymes they catalyse the chemistry that gesting that they have made enormous pro- they could also be employed to accelerate keeps bodies running. Actin and myosin, gress on one of biology’s grandest chal- the progress of science. This result demon- the proteins of muscles, permit those bo- lenges—how to use a computer to predict a strates how that might work in practice. dies to move around. Keratin provides protein’s shape from just a list of its amino- The idea of using computers to predict their skin and hair. Haemoglobin carries acid components. proteins’ shapes is half a century old. Pro- their oxygen. Insulin regulates their me- gress has been real, but slow, says Ewan tabolism. And a protein called spike allows Chain gangs Birney, deputy director of the European coronaviruses to invade human cells, To non-biologists, this may sound some- Molecular Biology Laboratory, a multi- thereby shutting down entire economies. where between arcane and prosaic. In fact, national endeavour with headquarters in Listing a protein’s amino acids is easy. it is a big achievement. Replacing months Germany. And it has been marked by a his- Machines to do so have existed for decades. of experiments with a few hours of com- tory of wrong turns and premature declara- But this is only half the battle in the quest puting time could shed new light on the in- tions of victory. to understand how proteins work. What a These days a humbler field, protein- protein does, and how it does it, depends shape prediction now measures its pro- also on how it folds up after its creation, Also in this section gress by how well algorithms perform in into its final, intricate shape. something called Critical Assessment of 76 The Starship SN8 At the moment, molecular biologists Protein Structure Prediction (casp). This is can probe proteins’ shapes experimentally, 77 Tracking small-scale fishing a biennial experiment-cum-competition using techniques like x-ray crystallogra- which started in 1994 and is jokingly 78 Covid vaccine safety phy. But this is fiddly and time-consuming. dubbed the “Olympics of protein-folding”. 1 76 Science & technology The Economist December 5th 2020

2 In it, algorithms are subjected to blind tests and other, surrounding, molecules, partic- who is the author of a recent overview of of their ability to predict the shapes of sev- ularly those of water. These are all matters the field, points out, what AlphaFold 2, its eral proteins of known structure. of considerable complexity which are diffi- rivals and, indeed, techniques like x-ray DeepMind’s first entry to casp, two cult to measure. It is therefore clear that, as crystallography discover are static struc- years ago, was dubbed AlphaFold. It made with playing Go, the only way to perform tures. Action in biology comes, by contrast, waves by performing much better than any the trick of predicting protein-folding is to from how molecules interact with each other then-existing program. The current look for shortcuts. other. “It is”, he puts it, “a bit like someone version, AlphaFold 2, has stretched that The progress that computers have made asking how a car works, so you open the lead still further (see chart). One measure on the problem over the years demon- hood [bonnet] and take a picture and say, of success within casp is the global-dis- strates that these shortcuts do exist. And it ‘There, that’s how it works!’” Useful, in oth- tance test. This assigns algorithms a score also turns out that even inexpert humans er words, but not quite the entire story. between zero and 100 by comparing the can learn such tricks by playing around. Dr Nonetheless—and depending on how predicted locations of atoms in a mole- Hassabis recalls being struck by the ability DeepMind decides to license the technol- cule’s structure with their location in real- of human amateurs to achieve good results ogy—an ability to generate protein struc- ity. AlphaFold 2 had an average score of with FoldIt, a science-oriented video game tures routinely in this way could have a big 92.4—an accuracy that casp’s founder, launched in 2008 that invites its players to impact on the field. Around 180m amino- John Moult, who is a biologist at the Uni- try folding proteins themselves, and which acid sequences are known to science. But versity of Maryland, says is roughly compa- has generated a clutch of papers and dis- only some 170,000 of them have had their rable with what can be obtained by tech- coveries. structures determined. Dr Moult thinks niques like x-ray crystallography. that boosting this number could help Until now, DeepMind was probably best Alpha-helix dogs screen drug candidates to see which are known for its success in teaching comput- Getting players of FoldIt to explain exactly likely to bind well to a particular protein. It ers to play games—particularly Go, a pas- what they have been up to, though, is could be used to reanalyse existing drugs to time of deceptively simple rules but fiend- tricky. This is another parallel with Go. see what else they might do. And it could ish strategy that had been a totem of ai Rather than describing step by step what boost synthetic biology, by speeding up the researchers since the field began. In 2016 a they are thinking, players of both games creation of human-designed proteins in- DeepMind program called AlphaGo defeat- tend to talk in vaguer terms of “intuition” tended to catalyse chemical reactions. ed Lee Sedol, one of the world’s best play- and “what feels right”. This is where the Some promising successes have, in- ers. Superficially, this may seem of little machine learning comes in. By feeding deed, already happened. For example, Al- consequence. But Dr Hassabis says that computers enough examples, they are able phaFold 2 was able to predict the structures more similarities exist between protein- to learn and apply shortcuts and rules-of- of several of the proteins used by the new folding and Go than might, at first, appear. thumb of the sort that human beings also coronavirus, including spike. As for Dr Bir- One is the impracticality of attacking ei- exploit, but struggle to articulate. Some- ney, he says, “We’re definitely going to ther problem with computational brute times, the machines come up with insights want to spend some time kicking the tyres. force. There are thought to be around 10170 that surprise human experts. As Dr Moult But when I first saw these results, I nearly legal arrangements of stones on a Go board. observes, “In general, the detail of the back- fell off my chair.” 7 That is much greater than the number of at- bone [the molecular scaffolding that joins oms in the observable universe, and it is amino acids together] is extraordinary. [Al- therefore far beyond the reach of any com- phaFold 2] has decided that if you don’t get Space flight puter unless computational shortcuts can the details right, you won’t get the big be devised. things right. This is a school of thought Tally ho! Proteins are even more complicated that’s been around for some time, but I than Go. One estimate is that a reasonably thought it wasn’t correct.” complex protein could, in principle, take As an achievement in ai, AlphaFold 2 is any of as many as 10300 different shapes. not quite so far ahead of the field as was The shape which it does eventually settle AlphaGo. Plenty of other research groups into is a result of a balance of various atom- have applied machine learning to the The Starship sn8 is ready for lift off scale forces that act within its amino-acid protein-structure problem, and have seen building blocks, between those building encouraging progress. Exactly what Deep- f all goes well, Elon Musk’s plan to con- blocks, and between the building blocks Mind has done to seize the lead remains Iquer the universe will soon take another unclear, though the firm has promised a step forward, with the flight of Starship technical paper that will delve into the de- sn8, a rocket built by his company, SpaceX. Atom by atom tails. For now, John Jumper, the project’s sn8 is expected to rise from its launch pad Best-performing protein-prediction algorithms leader, points out that machine learning is at Boca Chica, in Texas, sometime between By year a box which contains a variety of tools, and December 4th and 6th. (SpaceX have not Accuracy, % 100 says the team has abandoned the system it confirmed this, but a local flight restriction used to build the original AlphaFold in has been imposed on the area for that per- 2020 80 2018, after it became clear that it had iod.) The idea is that it will fly to an altitude reached the limits of its ability. of 15km, cut its engines, tip slowly forward 2020 (excl. DeepMind) 60 The current version, says Dr Jumper, until it is parallel with Earth’s surface, and 2018 has more room to grow. He thinks space ex- let gravity take its course. Then, shortly be- 40 ists to boost the software’s accuracy still fore it hits the ground, it will fire its thrust- 2016 further. There are also, for now, things that ers again to realign itself vertically and will 2002 20 remain beyond its reach, such as how thus come gently to rest on a landing pad a 1994 0 structures built from several proteins are few hundred metres away from where it joined together. took off. ← Easy Target difficulty Difficult → Moreover, as Ken Dill, a biologist at sn8 is, as its name suggests, the eighth Source: John Moult Stony Brook University in New York state, in the current series of prototypes for 1 The Economist December 5th 2020 Science & technology 77

2 SpaceX’s proposed Starship (sn stands for Sustainable fishing Once attached to a boat, it transmits its po- “serial number”). It is, though, the first to sition either via satellite or, if within range have a nose cone, and thus to assume the The ones that of local services, mobile phone. distinctive atmosphere-penetrating shape Working with local fishery authorities normally sported by space rockets. It also got away and other organisations in Asia and South has more oomph than its predecessors. America, cls hopes to have deployed Previous sns have used just one of SpaceX’s around 1,000 Nemos by the end of 2020. Raptor engines, and have, if launched Costs are still being worked out, but the How to track the activities of (some were used for ground tests), reached price of such a transponder is generally a small-scale fisherfolk a height of no more than 150 metres. sn8 in- few hundred dollars. That compares with cludes three Raptors—half the number ex- ish are being plundered from the several thousand for the sorts of system fit- pected for the finished design. Focean at an alarming rate. According to ted to large commercial boats. Local fishing Strictly, sn8 is a prototype of only the the un Food and Agriculture Organisation groups are also likely to come up with their second stage of the Starship that SpaceX some 90m tonnes of commercial catch are own schemes to supply or lease the units. proposes eventually to build. Its succes- hauled from the sea every year. And that is From cls’s point of view the idea is that, sors are intended to sit on an as-yet-to-be- only for legitimate, commercial fishing by knowing when a vessel has put to sea constructed “Super Heavy” rocket that will vessels. Even setting aside the huge and where it has been fishing, it will be deliver the bulk of the firepower. This first- amount of illegal fishing that goes on, few possible to build up a clearer picture of how stage vehicle is expected to house up to 37 authorities monitor the activities of the small-scale fisheries operate in particular Raptors. These will give it double the thrust 50m or so fisherfolk who operate small places. Also, reported catches can be veri- developed by the first stage of a Saturn V, boats in local waters with the aim of feed- fied against vessels’ actual locations. For the launch vehicle America used for its ing their families, or of selling their catch this to stand any chance of working, how- crewed Moon missions. And the Moon is, harbourside or into local markets. So an at- ever, fisherfolk must be persuaded that indeed, an intended destination, though tempt is now under way to collect some of they, too, have an interest in having a Nemo the craft will earn most of its bread and but- these missing data. attached to their boat. To do this, says Mr ter ferrying goods and people into orbits The combined catch of such small-scale Dejean, means building a good safety and close to Earth—a task for which it has a ca- fishing could be half as much again as the business case. pacity of 100 tonnes. reported global catch, according to Michel As far as safety is concerned, fish- Dejean, director of sustainable fisheries for depleted inshore waters mean that many Here I am, sitting in my tin can cls Group. cls is a subsidiary of France’s people are being forced to sail farther out to Crucially, unlike a Saturn V, every part of space agency that, among other things, sea—often beyond mobile-phone range. which except the capsule containing the helps monitor, via satellite, the transpon- This scuppers their only way of contacting crew was thrown away during the course of ders on large fishing boats operating home if something goes wrong. Nemo’s a mission, a Starship will be fully recycla- around the world. (Those that switch off satellite connection overcomes that, and, ble, with both stages returning to Earth in a their transponders are tracked by radar.) to make doubly sure, the device is fitted manner similar to sn8. Moreover, unlike For small craft, though, cls requires with a single-button distress beacon which Saturn’s partially recyclable successor, the something simpler and cheaper. This is can summon help in a crisis. As to com- Space Shuttle, refurbishing a Starship for where the group’s experience in another mercial incentive, the record of fishing relaunch will not cost $1bn a pop. Instead, area has come in useful—for the organisa- grounds visited will, cls hopes, allow Mr Musk estimates, the turnaround will re- tion also tracks marine birds and sea mam- crews to obtain higher prices from con- quire only a few million dollars. mals, and for this it employs low-powered cerned customers by proving their catches Starships should also be cheap to build. transponders. Engineers at cls have used come from “sustainable” sources. Instead of a fancy carbon-fibre composite that expertise to come up with Nemo, a Whether either of these baits will, in they are made of stainless steel, which is a self-contained transponder powered by a practice, hook enough of the world’s small seventieth as expensive, but is, in many built-in solar panel, since many small fish- fisherfolk remains to be seen. But even if ways, better. Not only is it resistant to the ing boats do not have electrical power on only a few sign up, it may help plug a wor- fracturing to which a composite might be board. Nemo is about the size of a shoe. rying hole in the planet’s fishery data. 7 prone in the low temperatures of outer space, but its melting-point is also high enough to prevent damage in the fiery conditions of re-entry. This is an important part of a Starship’s easy recyclability. When an entire Starship will fly is still anyone’s guess. Mr Musk has a good record of doing what he says, but his timings have a tendency to slip. For a man who famously once said his ambition was to die on Mars, but not on impact, the Starship project is an important step on the road to his intended retirement home. Bases on the Moon or Mars would need frequent resupply from Earth. That would be made easier by high- powered reusable rockets. Mr Musk has, himself, put the odds of sn8’s flight being successful at three to one against. If it does succeed, however, the odds against his wider vision of the future coming true will shorten. 7 Net benefits 78 Science & technology The Economist December 5th 2020

Vaccine safety tion in some groups. Another is that, in rare cases, vaccines trigger autoimmune reac- An injection of urgency tions—something viral infections also do. With covid-19 vaccines being delivered to hundreds of millions, and then billions of people, much surveillance will be needed. There are, as it happens, reasons to think that mrna vaccines might actually be safer than some other kinds. Live vac- Covid-19 vaccines will soon be rushing into people’s arms. Are they safe? cines (that against polio, for example) are n december 2nd Britain became the weakened versions of the virus itself. This Ofirst country to permit the general use brings a risk that the virus will revert to a of a fully tested covid-19 vaccine. The deci- more dangerous form. With an mrna vac- sion to grant this emergency authorisation cine, which is merely a bunch of strands of had been made late the previous evening genetic material—mrna—encapsulated in by the country’s Medicines and Health- tiny spheres of fat, this cannot happen. care-products Regulatory Agency (mhra). This mrna encodes not the instructions The vaccine licensed is code-named for how to make a virus, but rather how to bnt162b2 and was developed by Pfizer, an make just one of its proteins, called spike. American pharmaceutical giant, and BioN- Thus directed, body cells turn out spike in Tech, a smaller German firm. It has an effi- quantity, and that stimulates a response cacy of 95%, a figure that seems consistent which primes the immune system to react across a range of ages and ethnicities. Brit- quickly if it comes across spike again—this ain had already ordered 40m doses of time as part of an invading virus. bnt162b2 and Pfizer, as soon as it was in- Also, mrna is a natural component of formed of the decision, activated the pro- living cells, which make and destroy it con- cedures needed to start importing it from tinuously. Its turnover rate is measured in the site in Puurs, Belgium, where it is being days. So, once the mrna from the vaccine made. The plan is to start vaccinating peo- has done its job it is quickly broken down. ple on December 7th, and Matt Hancock, Hancock’s half-hour Yet misinformation is already being Britain’s chief health minister (pictured), spread. One particularly pernicious false- has said that he expects “a matter of mil- ment officer at Moderna, an American firm hood is that the mrna in the vaccine will lions of doses” of the vaccine to be available that announced encouraging results for its alter a recipient’s dna. This is about as like- in the country by the end of the year. own vaccine, mrna-1273, a week after ly as Isaac Newton’s apple falling upwards. According to Pfizer, other countries are Pfizer and BioNTech, said these were im- rna and dna are different, and mammali- now looking to Britain and wondering if portant, as they allow independent experts an cells have no molecular mechanism for they can similarly speed up their regula- to look at the safety and the analysis, and transcribing the former into the latter. tory processes. And the World Health Orga- also let the public ask questions—some- Maintaining public trust in any autho- nisation, which runs an emergency licens- thing that will build confidence in these rised vaccine is important. That trust may ing procedure for countries without vaccines. “We want people to feel really be more forthcoming in Britain than in medical regulators, said on December 2nd comfortable,” says Dr Ivarsson. many places. Polls say 79% of the country’s that it was in discussions with the mhra Both bnt162b2 and mrna-1273 belong inhabitants intend to get vaccinated about the details of that agency’s assess- to a class known as mrna vaccines. against covid-19, which is above the inter- ment, in order to expedite its own work in Though this is the first time such a vaccine national average. In America, for example, this area. has been authorised for human use, ex- only 64% state such an intention. perts are optimistic about their general Safety first safety because they have been tested in va- But whose safety exactly? The speed with which this anticovid vac- rious cancer-related applications for over a Ultimately all decisions to approve medicine and others are moving through some decade. As to bnt162b2 and mrna-1273 in cines are made on a balance of risks versus of the world’s regulatory systems is a result particular, these have now been in trials in- benefits. For the approval of a vaccine, of rolling reviews of their trials. Instead of volving 73,000 volunteers, half of whom however, the likely benefits must vastly waiting for firms to collate and submit full have been given the vaccine and the other outweigh the possible risks. This is be- data-and-safety packages, regulators have half a placebo of some sort. This consti- cause, unlike drugs, which are generally studied results as they became available. tutes a hefty set of data. And both vaccines prescribed to those who are already sick, For some, though, things are not mov- seem to have been well tolerated, with no vaccines are usually administered to ing quickly enough. On December 1st, the serious adverse events recorded. healthy people. day before Britain’s announcement, Ste- On top of all this, health authorities The mhra, for one, takes advice from an phen Hahn, the head of America’s Food and have already laid safety-related follow-up independent scientific committee in mak- Drug Administration (fda), was sum- plans, says Penny Ward, chairwoman of the ing its choices. But, though its members moned to the White House to answer ques- education and standards committee of the will have taken into account many factors tions about why his agency has not moved Faculty of Pharmaceutical Medicine, a Brit- when deciding to grant emergency autho- faster to approve bnt162b2. As it happens, ish group of doctors. These include sys- risation to bnt162b2, one brutal calcula- both the fda and its counterpart in the tems for examining apparent adverse reaction will surely have been near the fronts of European Union, the European Medicines tions and using anonymised health-care their minds. This is that each day of waiting Agency, have arranged public meetings in records to see how incidence of covid-19 will be measured in lost lives. In Britain coming weeks in which covid-19 vaccines varies between the vaccinated and the un- alone, on the day the government gave per- will be discussed ahead of regulatory deci- vaccinated. One concern with any new vac- mission to use bnt162b2, covid-19 killed sions. Melanie Ivarsson, chief develop- cine is that it may increase the risk of infec- 603 people. 7 Books & arts The Economist December 5th 2020 79

Books of the year scandal over the provision of irreversible treatments, whether surgical or pharma- Cold comforts ceutical, to teenagers. Predictably controversial—yet there is not a drop of ani- mosity in the book. Should Auld Acquaintance Be Forgot. By John Lloyd. Polity; 224 pages; $25 and £20 The best books of the year were about corruption, Asian revolutionaries, Glasgow A timely, forceful rehearsal of the painful in the 1980s, John Maynard Keynes and musical lives consequences that might follow independence for Scotland, and of the virtues of massive concentration of wealth and union with England. The author, a dis- power in the hands of a few is used to Politics and current affairs tinguished journalist, makes a case for quash dissent and project force abroad. enhanced devolution, powerfully enlist- Kleptopia: How Dirty Money is Conquering Eat the Buddha: Life and Death in a Tibetan ing and evoking his own childhood in a the World. By Tom Burgis. Harper; 464 pages; Town. By Barbara Demick. Random House; Scottish fishing village. $28.99. William Collins; £20 352 pages; $28. Granta; £18.99 It is hard to write about international Why the Germans Do It Better. By John This is the grippingly told story of Ngaba, a corruption in an accessible and colourful Kampfner. Atlantic Books; 320 pages; £16.99 county seat near the edge of the Tibetan way, while retaining an urgent sense of This breezy but comprehensive paean plateau, and of the sufferings of its people moral condemnation. This book beautiful- argues that Germany’s culture of consen- under the Chinese Communist Party’s rule. ly captures both the murkiness and turpi- sus and stability has bred a resilience Exploring an area rarely visited by foreign- tude involved. Its ultimate theme—the unusual among crisis-prone democracies. ers, the author paints striking portraits of intersection of politics and personal en- Despite the teasing title—a jab at the au- people living there, with a fine eye for richment—is one of the most important thor’s native Britain—it acknowledges detail and a keen grasp of Tibet’s history. stories of the age. Germany’s problems, from creaking infra- Irreversible Damage. By Abigail Shrier. structure to somnolent foreign policy. Putin’s People. By Catherine Belton. Farrar, Regnery Publishing; 276 pages; $28.99 and £22 Straus and Giroux; 640 pages; $35. William Twilight of Democracy. By Anne Applebaum. A critical look at the enormous rise in Collins; £25 Doubleday; 224 pages; $25. Allen Lane; £16.99 recent years in people identifying as trans, Many books have tried to explain the rise Mixing personal anecdote and analysis, a especially among girls. It covers a brewing and ruthlessness of Vladimir Putin; this well-connected historian of communism one is the closest yet to a definitive ac- chronicles the collapse of the internation- count. It draws on extensive interviews Also in this section al liberal coalition that was forged during and archival sleuthing to tell a vivid story the cold war. A perceptive insight into the 82 Books by our writers of cynicism and violence. On this view, a rise of authoritarian populism. 1 80 Books & arts The Economist December 5th 2020

ships, in the doss houses of port cities and India’s Founding Moment. By Madhav Biography and memoir radical circles in London and Paris. West- Khosla. Harvard University Press; 240 pages; ern ideas raced back to Asia, undermining $45 and £36.95 Black Spartacus. By Sudhir Hazareesingh. colonial rule. The revolutionaries’ big A punchy reminder of the success of In- Farrar, Straus and Giroux; 464 pages; $30. truth, says the author, was that Asia lay “at dia’s birth as a democratic republic. The Allen Lane; £25 the forefront of human futures”. genius of its constitution kept the country The subject of this superbly researched on course for seven decades of peace and Every Drop of Blood. By Edward Achorn. book was born a slave and grew up to be (slow) growth; but it has suffered erosion Atlantic Monthly Press; 336 pages; $28. Black the leading figure in the uprising of1791, in in the era of Narendra Modi. Cat; £19.99 modern Haiti, which reverberated around Abraham Lincoln’s second inaugural the world. Fragmentary records have until address, delivered towards the end of the now meant Toussaint Louverture was a civil war, is etched on the wall of his me- Fiction shadowy historical character; this recon- morial in Washington. Declining to gloat, struction gives his political, military and The Slaughterman’s Daughter. By Yaniv the soon-to-be victorious—and assassi- intellectual accomplishments their due. Iczkovits. Translated by Orr Scharf. MacLehose nated—president instead advocated “mal- Press; 528 pages; £18.99. To be published in A Promised Land. By Barack Obama. Crown ice toward none” and “charity for all”. This America by Schocken in February; $28.95 book richly evokes the intellectual origins Publishing Group; 768 pages; $45. Viking; £35 Echoes of Russian and Yiddish literature There is little score-settling and much and context of a speech that remains a resound in this delightful picaresque, but introspection in this account of the au- model of political magnanimity. you need not hear them to enjoy it. It is the thor’s rise to the White House and his first A House in the Mountains. By Caroline late 19th century, and a Jewish mother in few years in it. Reflective and reasonable Moorehead. Harper; 416 pages; $29.99. Chatto the Pale of Settlement sets out to retrieve almost to a fault, the book is also a remind- & Windus; £20 her wayward brother-in-law from Minsk. er that the 44th president is one of the best After the country capitulated to the Allies Technicolour characters, pathos and hu- writers ever to serve in that office. in 1943, around 80,000 partisans in north- mour are all wonderfully captured in a Stranger in the Shogun’s City. By Amy ern Italy died in a fight for freedom against nimble translation from the Hebrew. Stanley. Scribner; 352 pages; $28. Chatto & fascist loyalists and their Nazi backers. Shuggie Bain. By Douglas Stuart. Grove Windus; £16.99 Weaving deep research into a compelling Press; 448 pages; $17. Picador; £14.99 Set in the first half of the19th century, this narrative, this book tells the story of four This richly told coming-of-age story, set in story of an obscure woman’s everyday women involved in the struggle. the deprived Glasgow of the 1980s, won struggles in what is now Tokyo is a tri- Alaric the Goth. By Douglas Boin. W.W. this year’s Booker prize. Though the title umph of scholarship. Using a trove of Norton; 272 pages; $26.95 and £19.99 character charms with his humorous documents about her downtrodden sub- History may mostly be written by the sideways look at the world, the emotional ject, the author lifts the veil on a half- victors, but the destruction of Rome by the centre of the book is his “disintegrating remembered world of beauty and cruelty. far less literate Goths in 410ad is an excep- mother”, Agnes, whose high hopes are House of Glass. By Hadley Freeman. Simon & tion. This colourful portrait of the city and tragically derailed by alcoholism. Schuster; 352 pages; $26. Fourth Estate; £16.99 empire in the fifth century tells their side My Dark Vanessa. By Kate Elizabeth Russell. Living out her final years in Florida, the of the story. Rich Romans lived in splen- William Morrow; 384 pages; $27.99. Fourth author’s grandmother, Sala, longed for dour while Goths endured slavery. Alaric, Estate; £12.99 Paris. She was actually born in what today their leader, served in the Roman army— The title comes from a novel by Vladimir is Poland, fleeing from the pogroms to before turning on the oppressors. Nabokov, and the story is in part a rework- France. Her family’s intricately recon- ing of “Lolita”, recounting a teenage girl’s structed lives are a moving parable of the grooming and abuse by a middle-aged Jewish 20th century. One of her brothers teacher. In intercut sections she looks back was murdered in Auschwitz. Another leapt on those events from adulthood, through a from a train, joined the resistance and haze of twisted memory. A powerful tale later became friends with Picasso. that will strike a chord with many wom- Kiss Myself Goodbye. By Ferdinand Mount. en—but really ought to be read by men. Bloomsbury; 272 pages; $30 and £20 The Glass Hotel. By Emily St John Mandel. This is the hilarious tale of a bizarre, multi- Knopf; 320 pages; $26.95. Picador; £14.99 bigamist, pathologically inventive aunt in This immersive novel’s main character is a raffish, upper-class Britain either side of bartender who becomes the trophy wife of the second world war. Part detective story, a con-man, then a cook on a container part social history, it moves from the ship. Evoking the atmosphere of the fi- backstreets of Sheffield to Claridges. nancial crash of 2008, its real theme is the difficulty of outrunning the past. “There are so many ways to haunt a person,” the History author writes, “or a life.” Underground Asia. By Tim Harper. Harvard The Ministry for the Future. By Kim Stanley University Press; 864 pages; $39.95. Allen Robinson. Orbit; 576 pages; $28 and £20 Lane; £35 Climate change is a notoriously tough A brilliant study of Asian revolutionary subject for novelists—this is its most movements in the first decades of the 20th important treatment for some time. Led by century, showing how a collective con- an Irish former minister, an intergovern- sciousness emerged in the liminal cracks mental body explores avenues from terror- of empire—in steerage class on steam- ism to geoengineering to central banking 1 The Economist December 5th 2020 Books & arts 81

2 as it bids to avert disaster. At times horri- fying, at others seeming almost to spin out of control, the book is powered by a hope- ful yet illusionless vision of the future. Homeland Elegies. By Ayad Akhtar. Little, Brown; 368 pages; $28. Tinder Press; £18.99 A dazzling, part-autobiographical tale about growing up as a Pakistani-American through the age of 9/11and then Donald Trump. It grapples with ambivalence about Islam, permanent feelings of unbelonging and the hazards of material success. By a Pulitzer-prizewinning playwright. The Perfect Nine. By Ngugi wa Thiong’o. The New Press; 240 pages; $23.99. Harvill Secker; £12 Most writers lose their energy and in- ventiveness as they grow old. Not the 82-year-old Kenyan author of this fresh and magical novel. Written in galloping blank verse, it tells of the very first Kikuyu and their passionate attachment to Mount Kenya, the home of their god, Ngai. lively group portrait of four revolutionary slow to acknowledge the Soviet Union’s Burnt Sugar. By Avni Doshi. The Overlook German-language philosophers in the depredations. “Even if the professors leave Press; 240 pages; $26. Hamish Hamilton; £14.99 1920s. Ludwig Wittgenstein, Walter Benja- politics alone,” he remarked, “politics “I would be lying,” the narrator begins, “if I min and Martin Heidegger all gazed thrill- won’t leave the professors alone.” said my mother’s misery has never given ingly into the post-war cultural abyss; as a The End of Everything (Astrophysically me pleasure.” Antara, now an adult, cannot Nazi stooge, Heidegger jumped in. Only Speaking). By Katie Mack. Scribner; 240 forgive her parent’s failings and cruelties the decent, liberal Ernst Cassirer, “thinker pages; $26. Allen Lane; £20 yet feels compelled to care for her as de- of the possible”, entirely kept his head. The universe had a beginning and, one mentia takes hold. This gripping debut Leo Tolstoy. By Andrei Zorin. Reaktion Books; day, it will end. The author uses the latest novel probes the ties that bind as well as 224 pages; $19 and £11.99 physics to explore the possibilities for the slippery nature of memory. The lineaments of Tolstoy’s astonishing doomsday. Despite her solemn theme, her life are well known: the libertinism, the humour and eclectic references (from remorse, the masterpieces, the infamously Shakespeare to “Battlestar Galactica”) Culture and ideas unhappy marriage and death at the train carry the book along. Even through dis- station in Astapovo. But this elegant, cussions of cutting-edge science, the Magdalena: River of Dreams. By Wade Davis. perceptive biography weaves together his general reader is never bewildered. Knopf; 432 pages; $30. Bodley Head; £25 times, his writing, his faith and his politi- The river of the title is the heart and soul of The Human Cosmos. By Jo Marchant. Dut- cal activism into a single, seamless whole. Colombia. As well as bisecting the country, ton; 400 pages; $28. Canongate; £16.99 the waterway is “the wellspring of Colom- 150 Glimpses of the Beatles. By Craig Brown. From the beginning of human civilisation, bian music, literature, poetry and prayer”, Farrar, Straus and Giroux; 592 pages; $30. religion, art and science have been preoc- says the author, a Canadian anthropologist Published in Britain as “One, Two, Three, cupied by the stars and other celestial and explorer. Travelling the 1,000-mile Four”; Fourth Estate; £20 wonders. This is a thought-provoking look length of the Magdalena, on foot, horse- Books about the Beatles often get bogged at how fascination with the heavens has back, by car or—often—by boat, he has down in minute details of the band’s ca- shaped human culture, and still does. produced an enchanting chronicle blend- reer. This one cuts through the morass Privacy is Power. By Carissa Véliz. Bantam ing culture, ecology and history. with wit and style, in an ingenious history Press; 288 pages; £12.99. To be published in that homes in on150 revealing and enter- Mozart: The Reign of Love. By Jan Swafford. America in June; $24.95 taining anecdotes. Ringo comes out well, Harper; 832 pages; $45. Faber & Faber; £30 The constant and ubiquitous collection of the others not so much. Mozart’s compositions, notes this out- data on private citizens is an abusive standing account of his life and work, system that undermines their rights, display “a kind of effortless perfection so argues an Oxford philosopher. Her sol- easily worn that they seem almost to have Science and technology utions, such as banning the trade in perso- written themselves”. In this telling Mozart nal data, may be extreme, but she galva- A Dominant Character. By Samanth Sub- was a fundamentally happy man, a genius nises an urgent conversation. ramanian. W.W. Norton; 400 pages; $40. with an enduringly childish sense of hu- Atlantic Books; £20 Apollo’s Arrow. By Nicholas Christakis. Little, mour. The author, a composer himself, The subject of this astute book was a giant Brown; 384 pages; $29 and £20 peppers his narrative with penetrating of British science. J.B.S Haldane helped A leading sociologist and scientist consid- insights into the music. flesh out Darwin’s theory of natural selec- ers the history of plagues and how some Time of the Magicians. By Wolfram Eilen- tion by marrying it to genetics and ground- countries blundered in their responses to berger. Translated by Shaun Whiteside. ing it in maths. He served in the trenches covid-19. Pandemics are not just biological Penguin; 432 pages; $30. Allen Lane; £25 during the first world war and wrote prodi- but sociological, he notes: viruses mutate High thinking and low politics meet in this giously. A committed communist, he was but human behaviour changes, too. 1 82 Books & arts The Economist December 5th 2020

Books by Economist writers Business and economics No Filter. By Sarah Frier. Simon & Schuster; Private passions 352 pages; $28. Random House Business; £20 Drawing on the author’s close access to Our correspondents pondered economics, jewellery, revolution and the pandemic insiders at Instagram, this is a lively and revealing view of how the world came to More. By Philip Coggan. Hachette; 496 with its finger on the pulse of geopolitics see itself through the platform’s lens. Her pages; $34. Profile Books; £25 that still manages to move deeply.” The tale includes glimpses of Silicon Valley’s A history of the global economy by our Spectator called it “a searing indictment weirdness, and an account of Instagram’s Bartleby columnist. Covering the devel- of our times”. By our culture editor. sale to Facebook—and its sour aftermath. opment of key sectors such as manufac- Unconventional Wisdom. Edited by Tom turing and energy production, it shows Standage. Economist Books; 272 pages; No Rules Rules. By Reed Hastings and Erin how links between people and countries $11.99. Profile Books; £8.99 Meyer. Penguin Press; 320 pages; $28. Virgin have allowed individuals to grow not just A compendium of our explainer articles Books; £20 more prosperous, but taller and stronger, and daily charts, which spell out how Limitless holiday and no formal expense and to live longer and have more choice much a ghost reduces a house’s value, caps sound like a recipe for corporate in how they run their lives. A “brilliant how pregnancy makes people more chaos. In a rare book by a chief executive survey”, thought the Times; a “fantastic law-abiding and why friends prefer that is both readable and illuminating, the sweep”, reckoned the Financial Times. boss of Netflix—and his co-author—ex- sloppily wrapped Christmas gifts. Com- plain how he arrived at these and other Coveted. By Melanie Grant. Phaidon; 208 piled by one of our deputy editors. radical management rules, and why they pages; $89.95 and £69.95 The Best. By Tim Wigmore and Mark Wil- are not as bonkers as they sound. When, asks the picture and luxury editor liams. Mobius; 256 pages; $24.95. Nicholas of 1843, does jewellery make the leap Brealey; £20 The Price of Peace. By Zachary Carter. from fashion accessory to art? Her richly A contributor on sport and his co-author Random House; 656 pages; $35 and £25 illustrated profiles of leading designers cover topics such as why younger sib- This wonderfully written portrait of John range from Fabergé’s and Cartier’s links lings have more chance of becoming elite Maynard Keynes traces the evolution of his to Art Nouveau and Art Deco, to the sportsmen, why mid-sized towns pro- thinking about political economy. It re- collaboration between Georg Jensen, a duce the most champions and the sci- casts his contributions to 20th-century Scandinavian brand, with the architect ence of performance. They draw on intellectual life in a way both enlightening Zaha Hadid. The New York Times said the interviews with Marcus Rashford, Pete and truer to his thought than most ac- book showed “the complexity, power and Sampras and Steph Curry, among others. counts given in the classroom. artistic impact of great design”. “Excellent,” said the Australian. The Myth of Chinese Capitalism. By Dexter Independence Square. By A.D. Miller. The Classical School. By Callum Williams. Roberts. St Martin’s Press; 288 pages; $28.99 Pegasus Books; 228 pages; $25.95. Harvill Hachette; 288 pages; $16.99. Profile Books; £20 and £22.99 Secker; £14.99 A high-speed history of Western eco- An unvarnished look at the rural migrants A nation’s future, and a man’s fate, hang nomic thought, by our senior economics who have fuelled China’s long boom but in the balance in this novel of revolution writer, told in the form of 20 biographies. remain second-class citizens. The author and betrayal. Set between an icy upheaval Alongside household names such as combines sharp analysis with the story of in Kyiv and a London summer, it stars a Adam Smith and John Stuart Mill, there a family he followed for two decades. sly oligarch, an idealistic young activist are chapters on lesser-known figures and a disgraced British diplomat. “Utter- Fully Grown. By Dietrich Vollrath. University such as Harriet Martineau and Dadabhai ly gripping,” said the Observer, “a novel of Chicago Press; 296 pages; $27.50 and £20 Naoroji. The Times called it a “brisk, A wide-ranging and original study of the absorbing and entertaining history slowdown in economic growth in America lesson” with “an engaging cast of charac- in recent decades. The author attributes it ters” that “leaves you a lot wiser”. to the exhaustion of returns from the spread of education and women entering The Wake-Up Call. By Adrian Wooldridge the workforce, and the switch towards and John Micklethwait. HarperVia; 176 services as people have become richer. pages; $18. Short Books; £9.99 These trends are welcome, he argues: a The pandemic, say our political editor lack of low-hanging fruit means you have and Bloomberg’s editor-in-chief, proves successfully picked it all. that government is not just a diversion for politicians but a matter of life and Open: The Story of Human Progress. By death. The poor performance of Western Johan Norberg. Atlantic Books; 448 pages; democracies, particularly America and $24.95 and £20 Britain, shows how far they have fallen Progress depends on openness, this book behind the Far East, notably China. “A contends, yet that creates a backlash, since shot in the arm,” said the Financial Times. people are hard-wired to fear rapid change. “Full marks for sounding the alarm,” said The author marshals arresting examples the Times Literary Supplement. from every continent and era, ending on an optimistic, timely note. Recent years Award Ann Wroe, our Obituaries editor and the have seen the rise of populist demagogues author of books on Pontius Pilate, Perkin Warbeck, Orpheus, Percy Bysshe Shelley and St who want to pull up drawbridges—but Francis, has been awarded the Biographers’ Club such leaders eventually lose power be- Prize for Exceptional Contribution to Biography. cause they are hopeless at governing. Property 83 84 Economic & financial indicators The Economist December 5th 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 Dec 2nd on year ago United States -2.9 Q3 33.1 -3.8 1.2 Oct 1.2 6.9 Oct -2.3 -14.9 0.9 -88.0 - China 4.9 Q3 11.2 1.8 0.5 Oct 2.9 4.2 Q3§ 1.7 -5.6 3.1 §§ 13.0 6.57 7.2 Japan -5.8 Q3 21.4 -6.4 -0.4 Oct 0.2 3.1 Oct 2.6 -11.3 nil -8.0 105 4.3 Britain -9.6 Q3 78.0 -11.3 0.7 Oct 1.0 4.8 Aug†† -1.5 -19.4 0.4 -38.0 0.75 2.7 Canada -5.2 Q3 40.5 -5.8 0.7 Oct 0.7 8.9 Oct -2.1 -13.4 0.8 -77.0 1.29 3.1 Euro area -4.4 Q3 60.5 -8.0 -0.3 Nov 0.3 8.4 Oct 2.2 -9.1 -0.5 -24.0 0.83 8.4 Austria -4.0 Q3 54.6 -6.7 1.3 Oct 1.1 5.4 Oct 1.4 -8.0 -0.4 -31.0 0.83 8.4 Belgium -4.5 Q3 54.2 -7.9 0.5 Nov 0.4 5.1 Oct -1.1 -9.7 -0.3 -33.0 0.83 8.4 France -3.9 Q3 98.3 -9.5 0.2 Nov 0.5 8.6 Oct -1.9 -10.7 -0.3 -29.0 0.83 8.4 Germany -4.0 Q3 38.5 -5.8 -0.3 Nov 0.5 4.5 Oct 5.5 -7.2 -0.5 -24.0 0.83 8.4 Greece -15.3 Q2 -45.4 -9.0 -1.8 Oct -1.4 16.8 Aug -2.9 -7.9 0.7 -82.0 0.83 8.4 Italy -5.0 Q3 80.4 -9.1 -0.2 Nov -0.2 9.8 Oct 2.6 -11.0 0.6 -86.0 0.83 8.4 Netherlands -2.5 Q3 34.5 -6.0 1.2 Oct 1.1 3.8 Mar 7.0 -6.0 -0.5 -29.0 0.83 8.4 Spain -8.7 Q3 85.5 -12.7 -0.8 Nov -0.3 16.2 Oct 0.5 -12.3 0.1 -31.0 0.83 8.4 Czech Republic -5.2 Q3 30.7 -7.0 2.9 Oct 3.2 2.9 Oct‡ -0.5 -7.7 1.3 -19.0 21.9 5.6 Denmark -4.2 Q3 21.1 -5.0 0.4 Oct 0.4 4.6 Oct 9.0 -4.8 -0.4 -14.0 6.16 9.6 Norway -0.2 Q3 19.7 -1.7 1.7 Oct 1.4 5.2 Sep‡‡ 3.2 -1.3 0.9 -51.0 8.84 3.6 Poland -1.8 Q3 35.5 -3.4 3.0 Nov 3.4 6.1 Oct§ 2.6 -7.9 1.3 -75.0 3.71 4.3 Russia -3.6 Q3 na -4.4 4.0 Oct 3.3 6.3 Oct§ 1.7 -4.3 6.2 -45.0 75.3 -14.7 Sweden -2.7 Q3 21.2 -3.9 0.3 Oct 0.4 7.8 Oct§ 4.3 -4.2 0.1 5.0 8.51 12.1 Switzerland -1.6 Q3 31.9 -3.0 -0.7 Nov -0.9 3.3 Oct 9.2 -3.7 -0.5 4.0 0.90 10.0 Turkey 6.7 Q3 na -3.6 11.9 Oct 12.1 13.2 Aug§ -4.5 -5.1 12.2 13.0 7.86 -27.0 Australia -3.8 Q3 14.0 -4.1 0.7 Q3 0.7 7.0 Oct 0.8 -7.9 1.0 -12.0 1.35 8.9 Hong Kong -3.5 Q3 11.8 -5.6 -0.1 Oct 0.4 6.4 Oct‡‡ 5.6 -6.0 0.7 -87.0 7.75 1.0 India -7.5 Q3 125 -9.8 7.6 Oct 6.5 6.5 Nov 0.7 -7.8 5.9 -56.0 73.8 -2.9 Indonesia -3.5 Q3 na -2.2 1.6 Nov 2.0 7.1 Q3§ -1.4 -7.1 6.2 -92.0 14,125 nil Malaysia -2.7 Q3 na -5.3 -1.5 Oct -1.1 4.6 Sep§ 4.8 -7.2 2.7 -70.0 4.08 2.5 Pakistan 0.5 2020** na -2.8 8.3 Nov 9.8 5.8 2018 -0.4 -8.0 9.9 ††† -145 160 -3.1 Philippines -11.5 Q3 36.0 -6.1 2.5 Oct 2.4 10.0 Q3§ 0.9 -7.8 3.1 -156 48.0 6.3 Singapore -5.8 Q3 42.3 -6.0 -0.2 Oct -0.4 3.6 Q3 18.0 -13.9 0.9 -90.0 1.34 2.2 South Korea -1.1 Q3 8.8 -1.2 0.6 Nov 0.5 3.7 Oct§ 3.8 -5.7 1.7 nil 1,101 7.5 Taiwan 3.9 Q3 16.6 2.1 -0.2 Oct -0.3 3.8 Oct 13.2 -1.5 0.3 -45.0 28.5 7.0 Thailand -6.4 Q3 28.8 -5.9 -0.5 Oct -0.8 2.1 Oct§ 3.1 -6.4 1.3 -18.0 30.3 0.1 Argentina -19.1 Q2 -50.7 -11.3 37.2 Oct‡ 42.0 13.1 Q2§ 2.4 -9.2 na -464 81.5 -26.5 Brazil -11.4 Q2 -33.5 -5.2 3.9 Oct 3.1 14.6 Sep§‡‡ -0.4 -15.9 2.0 -271 5.23 -19.3 Chile -9.1 Q3 22.6 -5.9 2.9 Oct 2.9 11.6 Oct§‡‡ 0.2 -8.9 2.8 -42.0 755 6.5 Colombia -9.5 Q3 39.6 -7.3 1.7 Oct 2.6 14.7 Oct§ -4.6 -8.8 5.0 -127 3,530 -0.7 Mexico -8.6 Q3 58.0 -9.0 4.1 Oct 3.5 3.3 Mar 1.7 -5.3 5.5 -160 20.1 -2.4 Peru -9.4 Q3 187 -13.0 2.1 Nov 1.8 15.7 Oct§ -1.1 -9.2 3.9 -35.0 3.61 -5.8 Egypt -1.7 Q2 na 3.6 4.6 Oct 4.9 7.3 Q3§ -3.3 -8.8 na nil 15.7 2.8 Israel -1.9 Q3 37.9 -4.0 -0.8 Oct -0.6 4.7 Oct 3.8 -11.1 0.8 nil 3.29 5.8 Saudi Arabia 0.3 2019 na -5.2 5.8 Oct 3.4 9.0 Q2 -3.9 -10.9 na nil 3.75 nil South Africa -17.1 Q2 -51.0 -7.7 3.3 Oct 3.3 30.8 Q3§ -2.1 -16.0 9.0 56.0 15.3 -4.8 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 Dec 2nd week 2019 Dec 2nd week 2019 2015=100 Nov 24th Dec 1st* month year United States S&P 500 3,669.0 1.1 13.6 Pakistan KSE 42,027.4 4.1 3.2 Dollar Index United States NAScomp 12,349.4 2.1 37.6 Singapore STI 2,811.0 -2.0 -12.8 All Items 136.9 139.3 8.8 25.2 China Shanghai Comp 3,449.4 2.6 13.1 South Korea KOSPI 2,675.9 2.9 21.8 Food 112.9 111.7 6.1 13.4 China Shenzhen Comp 2,290.2 1.6 32.9 Taiwan TWI 13,989.1 1.8 16.6 Industrials Japan Nikkei 225 26,801.0 1.9 13.3 Thailand SET 1,418.0 0.2 -10.2 All 159.2 165.0 10.6 34.1 Japan Topix 1,774.0 0.4 3.1 Argentina MERV 55,268.9 2.1 32.6 Non-food agriculturals 112.5 116.1 9.0 17.3 Britain FTSE 100 6,463.4 1.1 -14.3 Brazil BVSP 111,878.5 1.6 -3.3 Metals 173.1 179.5 10.9 37.9 Canada Mexico S&P TSX 17,358.2 0.3 1.7 IPC 43,674.8 3.5 0.3 Sterling Index Euro area EURO STOXX 50 3,521.3 0.3 -6.0 Egypt EGX 30 11,023.3 -0.4 -21.0 All items 156.4 159.1 6.4 21.8 France CAC 40 5,583.0 0.2 -6.6 Israel TA-125 1,482.2 -2.5 -8.3 Germany DAX* 13,313.2 0.2 0.5 Saudi Arabia Tadawul 8,694.1 0.1 3.6 Euro Index Italy FTSE/MIB 21,972.2 -1.5 -6.5 South Africa JSE AS 58,282.0 0.9 2.1 All items 127.8 128.3 6.1 15.4 Netherlands AEX 610.9 0.8 1.1 World, dev'd MSCI 2,613.9 0.9 10.8 Gold Spain IBEX 35 8,220.8 0.7 -13.9 Emerging markets MSCI 1,228.7 0.9 10.2 $ per oz 1,805.5 1,810.1 -5.0 22.4 Poland WIG 53,983.7 1.1 -6.7 Brent Russia RTS, $ terms 1,335.4 2.6 -13.8 $ per barrel 47.9 47.5 19.5 -25.7 Switzerland SMI 10,435.4 -0.5 -1.7 US corporate bonds, spread over Treasuries Turkey BIST 1,325.5 nil 15.8 Dec 31st Sources: Bloomberg; CME Group; Cotlook; Reﬁnitiv Datastream; Australia All Ord. 6,811.3 -1.1 0.1 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 26,532.6 -0.5 -5.9 Investment grade 141 141 India BSE 44,618.0 1.8 8.2 High-yield 460 449 Indonesia IDX 5,814.0 2.4 -7.7 Sources: Reﬁnitiv Datastream; Standard & Poor's Global Fixed Income For more countries and additional data, visit Malaysia KLSE 1,598.7 0.1 0.6 Research. *Total return index. Economist.com/indicators Graphic detail Vaccines and stockmarkets The Economist December 5th 2020 85

→ Progress on covid-19 vaccines has narrowed the gap in stock returns between the pandemic’s winners and losers

Predicted date of wide covid-19 100 Return relative to market average for vaccination in the United States 75 every ten-percentage-point increase Probability that 25m doses of an Apr-Sep 2021 in probability of vaccine success† FDA-approved vaccine will first 50 Apr 27th-Dec 1st 2020, percentage points be distributed between, % 25 1.00 Oct 2020-Mar 2021 Leisure: includes hotels, 0 restaurants & airlines Apr May Jun Jul Aug Sep Oct Nov 0.75

Nov 9th Pfizer/BioNTech vaccine trial results announced 0.50 Technology/ Financials E-commerce Global share prices, February 1st 2020 =100 Media & Companies with a market capitalisation of at least $10bn 0.25 entertainment Energy Consumer Real estate durables* Industrials 120 Retail 0 Retail Health care Consumer staples Industrials -0.25 Real estate Media & entertainment Consumer staples 100 Leisure Health care -0.50 Financials Technology/E-commerce Energy -0.75 80

-1.00

60 -1.25 Consumer durables*

Feb Mar Apr May Jun Jul Aug Sep Oct Nov -1.50 *Excluding carmakers †After controlling for country-level variance in returns Sources: Good Judgment; Bloomberg; The Economist

own shares also rose by 7.7% on the news.) date. In contrast, consumer-durables What goes up That leaves the other probable cause of firms—including manufacturers of swim- the markets’ mixed signals: a successful ming-pool supplies, appliances and exer- vaccine may not help companies that have cise bicycles—tended to trail behind the benefited from social changes caused by market when vaccine producers made covid-19. In one study testing this theory, breakthroughs, and beat it when they suf- Goldman Sachs, a bank, analysed how fered setbacks. Health-care stocks (save A covid-19 vaccine will help humanity, shares in each industry had responded to those of vaccine makers themselves), and but not some firms’ share prices shifts in the odds of an early-arriving vac- technology and e-commerce firms buoyed hen pfizer and BioNTech, two phar- cine. It found that technology companies, by lockdowns, also showed this pattern. Wmaceutical companies, revealed in whose products have enjoyed faster adop- However, we also found more surpris- November that their covid-19 vaccine was tion during lockdowns, lagged behind the ing results. Financial firms’ fortunes tend over 90% effective, health experts celebrat- market when vaccine prospects improved. to mirror the broader economy, but the link ed around the world. Stockmarkets, how- Conversely, energy and materials firms ral- between progress on vaccines and finan- ever, responded with a mere golf clap. The lied the most under such conditions. cial stock returns was unusually strong— s&p 500, a technology-heavy index of big To expand on this research, we have ap- nearly as robust as for leisure companies. American firms, rose by just 1.2% that day. plied its “excess return” calculation—per- Banks, which have made big provisions for There are at least two plausible explana- formance relative to market averages—to loan defaults, would enjoy a windfall if tions for this muted reaction. One is that all listed firms worldwide worth at least such losses do not occur. And credit-card investors already expected such success. $10bn, on every day since April 27th. We issuers like American Express will gain Although markets’ views on vaccine pros- then measured the relationship between from the return of international travel. pects cannot be measured directly, Good each company’s excess returns and daily Meanwhile, retailers’ share perfor- Judgment, a consultancy that uses a group changes in the superforecasters’ estimated mance has been curiously uncorrelated to of “superforecasters” to make predictions, probability of mass vaccination by March vaccine news. When Pfizer announced its offers a proxy. In April it began publishing a 2021. Finally, we grouped the results by in- results, shares of discount department daily probability that enough vaccines to dustry, breaking out the sub-sectors most stores like Burlington, Ross and tjx surged. inoculate 25m Americans will be distri- likely to show large effects. However, those of big-box stores such as buted by March 31st 2021. When Pfizer re- This method yielded a more intuitive Best Buy and Target sold off—perhaps be- leased its results, the forecasters raised this list of winners and losers. Hotel, restaurant cause investors expected consumers to value from 53% to 88%, showing that the and airline shares have traded closely in switch to other types of spending once they outcome was indeed a surprise. (Pfizer’s line with the vaccine’s estimated arrival feel safe travelling and mingling again. 7 86 Obituary Diego Maradona The Economist December 5th 2020

A certain urchin cunning also helped. It showed in the way he played, revelling in tricks and touches: nutmegs, like his debut pass in his first game for Argentinos Juniors, straight through a de- fender’s legs; back-heel flicks and sombreros, kicking the ball over an opponent to retrieve it on the other side. Humiliating England, he said, was like stealing a wallet. Though he hated being called a hustler, he had to take every chance. It might look like cheating or deceiving, or it might be skill. The line was narrow sometimes. If it won games, it didn’t matter. His drug problems started in the same way: if ephedrine or cocaine gave him an edge over the opposition, fine. He was sure he could control it as sweetly as a ball, at the beginning. Things got a lot more complicated later. What really fuelled him, though, was anger, bronca, fury tinged with resentment. Life in Villa Fiorito, in a struggling family of ten in a tiny corrugated-iron house on a bone-crusher’s wage, was a giant kick up the backside. He had to get out or go under, and defeat was unbearable. Because he was so small and young in his first teams, he was sometimes left on the bench, and couldn’t stand it. He would weep for hours, knowing he was as good as anyone, better, and could prove it. When César Menotti left him out of Argenti- na’s World Cup squad in 1978, when he was so up for it, he got his own back by leading the youth team to victory in the World Youth Cup the next year. He did not forgive Menotti. Most of the coaches and managers he dealt with, he thought, betrayed him somehow. They held him back, or forced him to train when he preferred to sleep. One even tried to teach him a sliding tackle, down to the ground. He would never go down to the ground, unless pushed. A boy and a ball Sometimes his longing for revenge went as far as war. When Barcelona lost the final of the Copa del Rey, Spain’s fa Cup, in 1984 to Athletic Bilbao, and a Bilbao player gave him two fingers, he started a mighty brawl on the pitch in front of the king himself. In 1986, marching out to take on England, his mind was full of Argen- tina’s defeat in the Malvinas not so long before, and the Argentine Diego Maradona, the best footballer of his generation, died boys who had died there, killed like little birds. on November 25th, aged 60 It was not only his country he wanted to defend but, often, him- ent on an errand, or packed off to school, Diego Maradona self. The media infuriated him, to the point where he once opened Sdidn’t walk. He practised keepie-uppies, instep to thigh to backfire with an air rifle on a posse of reporters who came to his house. heel to head, with anything roughly round he could find. Scrum- They hammered him over women and, especially, drugs. Those pled paper would do, or an orange, or a ball of rags. Tac-tac-tac, on had led to a 15-month ban at Napoli in 1991 and in 1994 to his ejec- and on and on. Then he hopped on his right foot, especially up the tion from the World Cup in the United States mid-tournament, but steps of the railway bridge, while his left foot tried out skills. If no he argued that he was largely innocent. At Barça he had got into the one was wanting him he would head for the waste ground of Villa habit of testing himself, and found himself quite clean. In 1994 he Fiorito, one of the worst shanty-towns in Buenos Aires, but home blamed his personal coach for giving him a power drink full of to him, to have kickabouts with friends until night fell, or later. American chemicals. As for his hobnobbing with the Camorra He wanted nothing from life but football. He could live on it. crime syndicate at Napoli, he considered them protectors and nice Then, perhaps, he might have enough money to buy a second pair people, who gave him gold Rolexes and seemed to want nothing in of trousers to replace the tired old corduroys he always wore, win- return. But then he never had much of a handle on his business after and summer. Little did he think that by 1986, after playing for fairs. He left those to others, while he had fun. Argentinos Juniors and Boca Juniors in the first division, at Barce- In other ways Napoli showed him at his best. He went to a poor, lona and at Napoli, as well as in the national side, he would be able volatile southern city, scorned by the rich north, and won major to have all the fine clothes he wanted, as well as all the flash cars; trophies for it, the first it had ever had. He was revered as a saint for and that he would be on a podium in Mexico City, as Argentina’s restoring its pride by thrashing everybody else. And of course he captain, kissing and shaking the shining gold World Cup, hardly had done that first in Argentina, idolised like God himself for salv- knowing what to do with it, except to keep it in his hands. ing with his brilliance the loss of the Malvinas and the junta years. How had he been propelled so far, so fast? Evidently God, the Yet winning the World Cup, he mused as he came home, had not Beard as he called him, had something to do with it. The Beard had brought down the price of bread. Only politicians who spoke for plans for him, starting with the squat, strong body He gave him, the masses could do that. So he was both a Peronist and a chavista; and the huge thighs, which made it almost impossible to tackle Fidel Castro (whose beret he begged from him) was tattooed on his him at speed. He filled him with love of the beauty and possibility left leg, Che Guevara on his right arm. He told the pope that he of the game, and with talent that saw him transferred for record should sell the Vatican’s gold ceilings to feed the poor. sums of money. There were other good assists, too. In the 1986 As he grew stouter and sicker, he coached the national side and World Cup quarter-final against England, where God’s hand and returned as director of Boca Juniors, the team he had most wanted his own fist shot up to engineer a goal he knew was illegal, the to play for as a boy. His aim stayed just the same, to bring joy to peo- Beard then blinded the officials so they didn’t see it. Four minutes ple with a ball. He was el Diego de la gente, the people’s player. And later the Beard helped out to create the goal of his life, allowing despite the force of the kick that Villa Fiorito had given him, up to him to weave past five England players, trick the goalie with a the stars, he still felt he had those corduroy trousers on, the old pair dummy—tic—and put the ball in, tac. he always wore, winter and summer. 7 SUBSCRIBER ONLY LIVE DIGITAL EVENT

A year in review with the editor-in-chief

Thursday December 10th 4pm / 11am / 8am

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This is a valuable opportunity to hear from our editor-in-chief about her highlights from Edward Carr the past 12 months, and to ask questions. Deputy editor

Our panel will provide insight on the biggest events of the year, from the pandemic to the Sacha Nauta US elections, as well as the less publicised Public policy editor developments that mattered most.

Reserve your space: Economist.com/2020Review

To view our full schedule of upcoming events, go to Economist.com/subsevents