The Roaring 20S? Towards a New Era of Innovation

The roaring 20s? Towards a new era of innovation

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Order Now Call/SMS 03336042057 - 0726540141 Contents The Economist January 16th 2021 3

The world this week United States 5 A summary of political 17 The final chapter and business news 18 Social media and speech 19 Murder rates surge Leaders 20 Minor-league baseball 7 Impeachment The reckoning 21 The Texas legislature 22 Lexington The conscience 8 Innovation The roaring 20s? of some conservatives 9 Social media The Americas The sound of silence 23 Biden and Latin America 9 Governing India Reaping what you sow 24 Ford leaves Brazil On the cover 10 Waste in low-Earth orbit New brooms needed The right and the wrong ways to hold Donald Trump to Letters account: leader, page 7. On Brexit, inflation, girls, Congress has impeached the 12 content analysis, the Asia president for his incitement of Dutch royal family, rats, 25 Indonesia’s royal revival the storming of Capitol Hill. Republicans What happens next? Page 17. 26 Child abuse in the The Republican Party launches Philippines an overdue civil war: Briefing 28 Kyrgyzstan’s election Lexington, page 22. Political 14 The economics of 29 India’s farm reforms theorists have been worrying government R&D 29 Gaming in Afghanistan about mob rule for two Molecules, missions thousand years, page 46 and money 30 Banyan Taiwan and America • Innovation Pessimism about technological change is giving China way to hope—much of it justified: leader, page 8. 31 Killing rural democracy Economists are convinced that 32 Defiance in Hong Kong governments can increase 33 Chaguan Covid-19 stigma economic growth by spending more on research and development. Are they right? Briefing, page 14. Companies will emerge from the pandemic Middle East & Africa recession more highly automated, page 48 and Free 34 Gulf jabs, made in China exchange, page 61. Reviving the 35 A Saudi city with no cars Apollo spirit, page 69 36 Uganda’s election 37 Animating Africa

Banyan Have departing American oﬃcials left a booby trap for Taiwan as We are working hard to well as Joe Biden? Page 30 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 4 Contents The Economist January 16th 2021

Europe Finance & economics 38 Race in France 56 The impact of lockdowns 39 A political crisis in Italy 57 Surging commodities 40 Germany’s Christian 58 Buttonwood Options Democrats pick a leader trading 41 Covid-19 in Turkey 59 Emerging-market stocks 41 Greenland’s economy 59 Brazil’s new investors 42 Charlemagne 60 The Big Mac index Cyberpunked 61 Free exchange Robots and jobs Britain 43 The pressure on hospitals Science & technology 44 Rolling out the vaccine 63 Cleaning up space 45 Bagehot Trump and the 64 Satellites made of wood Tories 65 Hitchhiking viruses 66 New drugs for covid-19 66 Thieving monkeys International 46 Democracy and the mob Books & arts 67 Mikhail Gorbachev 69 A novel of the “dirty war” 69 Innovation and the state 70 Johnson The language of incitement

Business 48 A robot revolution Economic & ﬁnancial indicators 49 A chill in China Inc 72 Statistics on 42 economies 50 Pre-emptive antitrust 50 Electronic cars Graphic detail 51 Bartleby Covid-19 routines 73 Eating a bit of meat may have improved Japanese longevity 52 Post-Trump social media Obituary 52 TikTok’s other rival 74 Brian Urquhart, godfather of UN peacekeeping 54 Brand lessons from Rizla 55 Schumpeter Refashioning Zara

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last arrived in China to in- claim, which some saw as an vestigate the origins of the effort to sabotage Mr Biden’s Coronavirus briefs pandemic, after China delayed outreach to Iran. Meanwhile, To 6am GMT January 14th 2021 their entry because of a “mis- Israel bombed Iranian-backed Weekly confirmed deaths by area, ’000 understanding” about visas. militia bases in Syria. 30 The team’s first two weeks will Western be spent in quarantine. Kuwait’s cabinet, less than a Europe Other 20 month old, resigned amid a mp US A South Korean court ruled stand-off with parliament. s 10 that the government of Japan claimed the ministers were Latin should pay compensation to 12 “not reflective” of recent elec- America 0 women forced to work as sex tion results. The feud has 2020 2021 Protected by National Guard slaves for Japanese soldiers hindered efforts to tackle a Vaccinations troops, the House of Repre- during the second world war. fiscal crisis caused by low oil Total This week Per 100 sentatives voted to impeach Japan maintains that several prices and covid-19. It is the ’000 ’000 people Donald Trump for inciting the agreements have already set- first big test for Emir Sheikh Israel 1,991 602 23.00 recent mob attack on Congress, tled all such claims. Nawaf al-Ahmed al-Sabah, who UAE 1,395 367 14.10 the first time that an American took over in September. Bahrain 98 23 5.75 president has been impeached Abu Bakar Basyir, the spiritual Britain 3,068 1,151 4.52 United States 10,278 3,790 3.11 twice. It is uncertain if and leader of Jemaah Islamiyah, a Uganda cut off access to social Denmark 118 65 2.04 when the Senate will hold an jihadist group that carried out media ahead of an election Italy 801 469 1.32 impeachment trial. Mean- deadly bombings in Indone- scheduled for January 14th. Spain 582 339 1.24 while, the fbi has reportedly sia, was released from prison Opposition candidates have Slovenia 24 16 1.18 warned officials of further after serving ten years of a been shot at, arrested and Canada 388 176 1.03 armed protests ahead of Joe 15-year sentence for setting up intimidated by the govern- Sources: Johns Hopkins University CSSE; Biden’s inauguration on Janu- a training camp for terrorists. ment of Yoweri Museveni, who Our World in Data; The Economist ary 20th. Pro-Trump demon- has been president for 35 years. strations are apparently being Sadyr Japarov, a convict freed New variants of the disease planned for all 50 state capitals from prison by supporters in Ethiopian government forces that are more infectious than as well as Washington, dc. October, was elected president claimed to have killed several the original strain were re- of Kyrgyzstan. leading members of the ported in Brazil and Ohio. Mr Biden nominated William Tigrayan People’s Liberation Burns to head the cia. Mr American prosecutors claimed Front, the ousted ruling party Two cabinet ministers in Burns is a career diplomat who that Honduras’s president, of the northern region of Malawi died after contracting has been an ambassador to Juan Orlando Hernández, Tigray. Seyoum Mesfin, a covid-19 as a second wave of Russia and was instrumental directed his armed forces to former foreign minister of the pandemic sweeps across in forging the nuclear deal with protect deliveries of cocaine to Ethiopia, was among the dead. sub-Saharan Africa. Hospitals Iran in 2015, which Mr Trump the United States. They allege in South Africa’s major cities pulled America out of. that Mr Hernández took bribes The trial began of more than have been overwhelmed, from traffickers and wanted to 300 alleged members of Italy’s leading the government to The Trump administration “shove the drugs right up the most powerful Mafia group, close 20 border crossings. announced that it was banning noses of the gringos”. He the ’Ndrangheta. It is the larg- the import of all cotton and denies wrongdoing. est Mafia trial for more than London’s mayor, Sadiq Khan, tomato goods from Xinjiang, three decades, and is expected declared a “major incident”. and products from other coun- The Trump administration put to last for at least two years. The death toll from covid in tries that contain those items, Cuba back onto America’s list the city passed 10,000; 7,600 because they are produced of state sponsors of terrorism. The Italian government was are being treated in hospital. using the forced labour of The measure, which restricts meanwhile plunged into crisis British police toughened the Uyghurs, a predominantly business between America and when Matteo Renzi, a former use of new powers targeting a Muslim group who have been Cuba, will make it more diffi- prime minister who leads a “stubborn number of people” subjected to mass internment cult for Joe Biden to normalise small splinter party, withdrew wilfully flouting the rules. by China. It is the most sweep- relations when he takes over as his support for the ruling ing trade order yet issued president. The administration coalition. Andrew Cuomo, the governor regarding Xinjiang. is also to designate the Houthi of New York, promised to rebel movement of Yemen as a Madrid was paralysed by the increase vaccination rates in The north-eastern Chinese terrorist group, a move aid heaviest snowstorm for 50 his state, but also warned that province of Heilongjiang organisations warn will make years. Temperatures fell to “We simply cannot stay closed declared a state of emergency it harder to help the millions of -16oC in the Spanish capital. until the vaccine hits critical following the discovery of a Yemenis who need assistance. mass…We will have nothing handful of locally transmitted left to open.” cases of covid-19. This followed America’s secretary of state, Correction: Last week, on this page and in “So sweet and clear” in the the imposition of tight curbs Mike Pompeo, claimed that United States section, we were wrong on travel in parts of Hebei after al-Qaeda had established a to say that Raphael Warnock was the For our latest coverage of the a new outbreak in the province, new “home base” in Iran, first black person to be elected to the virus please visit economist.com/ which borders on Beijing. A though he did not provide hard Senate from the South. He is the first coronavirus or download the black Democrat. Tim Scott, a team of experts sent by the evidence. Terrorism experts, as Republican from South Carolina, Economist app. World Health Organisation at well as Iran, disputed the holds a Senate seat. Sorry. 6 The world this week Business The Economist January 16th 2021

Social-media companies, ployees misled regulators earned a reputation as a tough helping to shape Brazil’s mod- including Facebook, Twitter about changes to the 737 max. overseer of Wall Street when he ern layout, which still relies on and YouTube, kicked Donald It is to pay $2.5bn in penalties. led the Commodity Futures road over rail. Henry Ford even Trump off their platforms for Trading Commission in the established Fordlândia, in the inciting the mob that stormed American employers shed aftermath of the financial Amazon, to secure a source of Congress. Twitter’s ban is 140,000 workers in December, crisis, overhauling derivatives rubber, but his company town permanent, a blow for a man the first job losses since April, markets. eventually failed. who last year tweeted 6,280 when millions were being times (over17 a day on average) thrown out of work because of The eu’s competition regulator and retweeted 5,956 items. the pandemic. approved the $27bn takeover of Questions were raised about Refinitiv, a data and trading the implications for free Intel announced that Pat Gels- company, by the London Stock speech. Parler, a social net- inger, who worked at the com- Exchange. It was the last big work favoured by right wingers pany for several decades and is hurdle for the deal, which was who are banned from other presently in charge of VMware, announced in August 2019. forums, was also muzzled. Its would return as its chief exec- app was dropped by Apple and utive, after it abruptly ditched Google, and Amazon stopped Bob Swan. Mr Gelsinger’s task Plugged in hosting it in the cloud. will be to reverse a steady Volkswagen’s worldwide decline. Intel’s chip factories vehicle sales fell by 15% last are no longer cutting-edge, and year, to 9.3m, and by more in Sheldon Adelson died at the Flight test it is losing market share to Europe and South America. age of 87. The casino tycoon The American government amd, a much smaller rival. Sales of electric cars, however, started out selling newspapers issued an edict that all air more than tripled, to 231,600. on Boston’s street corners and passengers travelling to the According to reports, Ameri- That is close to half the number took various other jobs before United States must test nega- cans will still be allowed to that Tesla sold in 2020, evi- making his fortune in Las tive for covid-19 a minimum of invest in Alibaba, Baidu and dence that competition in the Vegas and, eventually, by trans- three days before their depar- Tencent, after the Treasury electric-car market is at last forming Macau into a gam- ture. Airlines will be required intervened to have them re- revving up. Separately, Baidu, bling mecca. In 1989 he bought to deny boarding to anyone moved from a blacklist of China’s leading internet- the famed Sands hotel, only to who cannot produce evidence Chinese tech firms that are search platform, which has a demolish it in 1996 to make of the test. The International alleged to have ties with Chi- big interest in artificial way for the Venetian. Like the Air Transport Association has na’s armed forces. Rumours intelligence, announced that it punters who flocked to his criticised such moves, its that the three companies were was teaming up with Geely, a casinos, Mr Adelson’s riches director-general this week to be put on the list had caused Chinese carmaker, to build could fluctuate at astonishing lamenting that “governments their share prices to swoon. smart electric cars. speed. As one of America’s are not interested in managing wealthiest men, his deep a balanced approach to the Joe Biden was expected to Ford is to close its factories in pockets funded political cam- risks” of the disease, making it choose Gary Gensler to head Brazil. The carmaker opened paigns, backing Binyamin impossible for the travel and the Securities and Exchange its first assembly plant in the Netanyahu in Israel and tourism industries to recover. Commission. Mr Gensler country in 1919, its vehicles Donald Trump in America.

Moderna is working with Uber to disseminate information about the safety of its vaccine through the ride-hailing app. Uber also hopes people will be able to book a car when sched- uling a vaccination appointment. It recently made 10m rides available free or at a discount to get people to vaccination centres, in a project targeted at black communities.

Airbus delivered 566 commercial aircraft to customers last year, a sharp drop from 2019 but in line with its revamped production schedule. Beset by problems with the 737 max, Boeing delivered just 157 passenger planes. Boeing has reached a deferred prosecution agreement with the Depart- ment of Justice, in which it admits that two former em- Leaders Leaders 7 The reckoning

The right and the wrong ways to hold President Donald Trump to account n 230 years the House of Representatives voted for the presi- jority for conviction and the constitution itself. Ident to be impeached just twice. In only 13 months it has dou- The constitutional hurdle comes from conservative jurists bled the total by indicting Donald Trump twice more. Now the who argue that a president cannot be tried once he has left office. Senate should issue another historical rebuke by making him Although hearings against Ulysses Grant’s secretary of war for the first American president in history to be convicted. corruption went ahead after he had resigned, no president has The article of impeachment that passed on January 13th ac- been subject to impeachment after his term ended. Yet the fram- cuses Mr Trump of inciting an insurrection (see United States ers cannot have intended presidents to be unimpeachable dur- section). Stand back, for a moment, and consider the enormity of ing the lame-duck period. If so, the commander-in-chief would his actions. As president, he tried to cling to power by overturn- be beyond the law precisely when the impossibility of being re- ing an election that he had unambiguously lost. First, he spread a elected meant that he or she might be most tempted to flout it. big lie in a months-long campaign to convince his voters that the The conservative-leaning Supreme Court may have to deter- election was a fraud and that the media, the courts and the poli- mine the answer. If it prevents a Senate trial, Congress must fall ticians who clung to the truth were in fact part of a wicked con- back on other, less satisfactory tools such as censure or banning spiracy to seize power. Then, having failed to force state officials Mr Trump from office under the 14th Amendment for having “en- to override the vote, he and his henchmen whipped up a violent gaged in insurrection or rebellion”. If it allows a trial to go ahead, mob and sent them to intimidate Congress into giving him what then the Senate should proceed immediately rather than leave he wanted. And last, as that mob ransacked the Capitol and Mr Trump to fester. Those who worry about impeachment ob- threatened to hang the vice-president, Mike Pence, for his structing Mr Biden’s plans for the first 100 days during a national treachery, Mr Trump looked on, for hours ignoring lawmakers’ emergency are miscalculating. If Republicans do deals on co- desperate pleas for him to come to their aid. vid-19 relief or an infrastructure bill, it will not be because Mr Bi- In a democracy, no crime is higher and no misdemeanour den’s party goes slow on impeachment. If necessary Congress more treasonous. Mr Trump needs to be punished for betraying could divide its day between the trial and the rest of its business. his oath as head of state. He must be prevented from holding of- The political hurdle is not Mr Biden’s agenda but the fact that fice again—or he may well stand in 2024. And, in removing a president requires his party to turn case someone is minded to copy him, he must against him. In the next Senate, at least 17 Re- serve as an example of how vehemently Ameri- publicans will have to abandon Mr Trump. Al- ca rejects a leader who tramples its constitution. though that goal will be hard to meet, impeach- Until this week the only attempt to hold Mr ment is still right. The principled arguments for Trump to account for the storming of the Capitol convicting Mr Trump are unassailable. Many had come from social-media companies, which Republican senators detest the president and had banned him from their platforms to prevent his constitutional vandalism. And many are still further violence before the inauguration of Joe being personally threatened with violence by Biden on January 20th. Although the fbi indeed warns that vio- Mr Trump’s supporters. lence is a real risk, the likes of Twitter and Facebook would have They have more calculating reasons to convict Mr Trump, too. done better by focusing on the president’s individual tweets and Impeachment is inescapably political, and this is their best posts (see leader). chance to loosen the president’s malign grip on their party. Only Outright bans will undermine politics. They appear arbitrary, one in six of his voters now supports the storming of the Capitol, because tech firms imposed them on the spur of the moment, but many of them still think the election was stolen, partly be- having chosen not to block Mr Trump before. And they appear cause, shamefully, Republicans have not dared to tell them the self-interested, because executives are open to the charge that extent of Mr Trump’s lies. Now is the time to start. they saw a chance to ingratiate themselves with the Biden ad- Mr Trump will never forgive those whom, like Mitch McCon- ministration or wished to quell anti-Trump mutinies among nell, the Senate leader, he judges to have failed him by acknowl- their progressive staff. Regardless of whether that criticism is edging Mr Biden’s election victory. Having begun to move fair, the fact that powerful, unelected businesspeople have been against him, they should finish the job. And there is history. They the first defence against Mr Trump sets a bad precedent. It also should think about how Mr Trump’s presidency will ultimately fires up his supporters’ grievances. If you try to exile the mob be judged, and their part in it. In the House ten Republicans vot- from politics rather than assimilate and tame it, you risk driving ed for impeachment. Senators should follow their lead. The it into the arms of demagogues (see International section). more the better, for the Republican Party and for America, too. The proper place to defend the constitution is the venue the And that leads to the last argument for Republicans to remove constitution itself provides: Congress. That is why the House Mr Trump. His supporters argue that impeachment is divisive was right to vote to impeach Mr Trump and why the Senate just when America needs to become united. That is self-serving should move fast to convict him. Due process and the chamber’s and wrong. Nobody has sown discord as recklessly as Mr Trump procedural rules mean that hearings are virtually certain to take and his party. You do not overcome division by pretending that place after Mr Trump leaves office. If so, two potential hurdles nothing is wrong, but by facing it. Were Mr Trump to be convict- will stand in the way: the requirement to secure a two-thirds ma- ed, the healing might genuinely begin. 7 8 Leaders The Economist January 16th 2021

Innovation The roaring 20s?

Pessimism about technological change is giving way to hope—much of it justified or much of the past decade the pace of innovation under- are keen to give more cash to scientists (see Briefing). Having Fwhelmed many people—especially those miserable econo- shrunk for years, public r&d spending across 24 oecd countries mists. Productivity growth was lacklustre and the most popular began to grow again in real terms in 2017. Investors’ enthusiasm new inventions, the smartphone and social media, did not seem for technology now extends to medical diagnostics, logistics, to help much. Their malign side-effects, such as the creation of biotechnology and semiconductors. Such is the market’s opti- powerful monopolies and the pollution of the public square, be- mism about electric vehicles that Tesla’s ceo, Elon Musk, who came painfully apparent. Promising technologies stalled, in- also runs a rocket firm, is the world’s richest man. cluding self-driving cars, making Silicon Valley’s evangelists The third source of cheer is the rapid adoption of new tech- look naive. Security hawks warned that authoritarian China was nologies. It is not just that workers have taken to videocon- racing past the West and some gloomy folk warned that the world ferencing and consumers to e-commerce—significant as those was finally running out of useful ideas. advances are, for example to easing the constraints on jobseek- Today a dawn of technological optimism is breaking. The ing posed by housing shortages. The pandemic has also acceler- speed at which covid-19 vaccines have been produced has made ated the adoptions of digital payments, telemedicine and indus- scientists household names. Prominent breakthroughs, a tech trial automation (see Business section). It has been a reminder investment boom and the adoption of digital technologies dur- that adversity often forces societies to advance. The fight against ing the pandemic are combining to raise hopes of a new era of climate change and the great-power competition between Amer- progress: optimists giddily predict a “roaring Twenties”. Just as ica and China could spur further bold steps. the pessimism of the 2010s was overdone—the decade saw many Alas, innovation will not allow economies to shrug off the advances, such as in cancer treatment—so predictions of tech- structural drags on growth. As societies get richer they spend a nological Utopia are overblown. But there is a realistic pos- greater share of their income on labour-intensive services, such sibility of a new era of innovation that could lift living standards, as restaurant meals, in which productivity growth is meagre be- especially if governments help new technologies to flourish. cause automation is hard. The ageing of populations will contin- In the history of capitalism rapid technological advance has ue to suck workers into low-productivity at-home care. Decarbo- been the norm. The 18th century brought the In- nising economies will not boost long-term dustrial Revolution and mechanised factories; growth unless green energy realises its poten- the 19th century railways and electricity; the tial to become cheaper than fossil fuels. 20th century cars, planes, modern medicine Yet it is reasonable to hope that a fresh wave and domestic liberation thanks to washing ma- of innovation might soon reverse the fall in eco- chines. In the 1970s, though, progress—mea- nomic dynamism which is responsible for per- sured by overall productivity growth—slowed. haps a fifth of the 21st century’s growth slow- The economic impact was masked for a while by down. Over time that would compound into a women piling into the workforce, and a burst of big rise in living standards. Perhaps still more is efficiency gains followed the adoption of personal computers in achievable because many service industries, including health the 1990s. After 2000, though, growth flagged again. care and education, would benefit greatly from more innova- There are three reasons to think this “great stagnation” might tion. Eventually, synthetic biology, artificial intelligence and ro- be ending. First is the flurry of recent discoveries with transfor- botics could up-end how almost everything is done. mative potential. The success of the “messenger rna” technique behind the Pfizer-BioNTech and Moderna vaccines, and of be- It’s not rocket science spoke antibody treatments, shows how science continues to em- Although the private sector will ultimately determine which in- power medicine. Humans are increasingly able to bend biology novations succeed or fail, governments also have an important to their will, whether that is to treat disease, edit genes or to grow role to play. They should shoulder the risks in more “moonshot” meat in a lab. Artificial intelligence is at last displaying impres- projects (see Books & arts). The state can usefully offer more and sive progress in a range of contexts. A program created by Deep- better subsidies for r&d, such as prizes for solving clearly de- Mind, part of Alphabet, has shown a remarkable ability to predict fined problems. The state also has a big influence over how fast the shapes of proteins; last summer Openai unveiled gpt-3, the innovations diffuse through the economy. Governments need to best natural-language algorithm to date; and since October driv- make sure that regulation and lobbying do not slow down dis- erless taxis have ferried the public around Phoenix, Arizona. ruption, in part by providing an adequate safety-net for those Spectacular falls in the price of renewable energy are giving gov- whose livelihoods are upended by it. Innovation is concentrated ernments confidence that their green investments will pay off. among too few firms (see Free exchange). Ensuring that the Even China now promises carbon neutrality by 2060. whole economy harnesses new technologies will require robust The second reason for optimism is booming investment in antitrust enforcement and looser intellectual-property regimes. technology. In the second and third quarters of 2020 America’s If governments rise to the challenge, then faster growth and non-residential private sector spent more on computers, soft- higher living standards will be within their reach, allowing them ware and research and development (r&d) than on buildings and to defy the pessimists. The 2020s began with a cry of pain but, industrial gear for the first time in over a decade. Governments with the right policies, the decade could yet roar. 7 The Economist January 16th 2021 Leaders 9

Social media and democracy The sound of silence

Regulation of free speech should not be outsourced to a few tech tycoons he first reaction of many people was one of relief. On Janu- countable executives are in control. Perhaps their intent really is Tary 6th, with 14 days remaining of his term, the social-media to protect democracy, but they may also have other, less elevated president was suspended from Twitter after years of pumping motives. Some Democrats cheered, but they should evaluate any abuse, lies and nonsense into the public sphere. Soon after, new speech regime based on its broader application. Otherwise many of his cronies and supporters were shut down online by an act that silenced their enemies last week could become a pre- Silicon Valley, too. The end of their cacophony was blissful. But cedent for silencing them in future. The regrets were telling. An- the peace belies a limiting of free speech that is chilling for gela Merkel, Germany’s leader, said that private firms should not America—and all democracies. determine speech rules. Alexei Navalny, a Russian dissident, de- The bans that followed the storming of the Capitol were cha- cried an “unacceptable act of censorship”. Even Jack Dorsey, otic. On January 7th Facebook issued an “indefinite” suspension Twitter’s ceo, called it a “dangerous precedent”. of Donald Trump. Twitter followed with a permanent ban a day There is a better way to deal with speech online. Making the later. Snapchat and YouTube barred him. An array of other ac- industry more competitive would help by diluting the clout of counts were suspended. Google and Apple booted Parler, a small individual firms and by stimulating new business models that social network popular with the far-right, from do not rely on virality. But for as long as the in- their app stores and Amazon kicked Parler off its dustry is an oligopoly, another approach is cloud service, forcing it offline entirely. needed. The first step is to define a test of what Surely this was acceptable in the face of a should be censored. In America that should be mob on the rampage? Legally, private compa- based on the constitutional protection of nies can do as they choose. However, some deci- speech. If companies want to go further by at- sions lacked consistency or proportionality. taching warnings or limiting legal content they Although Twitter cited a “risk of further incite- need to be transparent and predictable. Difficult ment of violence” by Mr Trump, the tweets it judgments should fall to independent non-sta- pointed to did not cross the common legal threshold defining an tuary boards that give people the right of appeal. abuse of the constitutional right to free speech. Meanwhile Aya- Over 80% of Twitter and Facebook users live outside America. tollah Ali Khamenei is still on Twitter and death threats are easy In most countries tech firms should adhere to local laws on to find online. The companies ought to have focused on individ- speech—Germany’s rules on hate speech, say. In autocracies, like ual posts for incitement. Instead they have banned people, in- Belarus, they should default to the standards they observe in cluding the president, pushing fringe voices further from the America. Again, judgments about which standards apply in mainstream. In some cases action was needed, as with Parler’s which country could be guided by media boards. This may harm poorly policed and violent exchanges, but overall there was no American firms in more places: this week Uganda banned Face- clear test for when speech should be banned. The internet’s in- book and Twitter ahead of a contentious election. frastructure, including cloud-computing services, which should America needs to resolve its constitutional crisis through a be neutral, risks being drawn into divisive partisan battles. political process, not censorship. And the world must seek a bet- The other problem is who made the decisions. The tech inter way of dealing with speech online than allowing tech oligop- dustry’s concentration means that a few unelected and unac- olies to take control of fundamental liberties. 7

Governing India Reaping what you sow

The failure of Narendra Modi’s farm reforms is a parable of mismanagement hen most of India’s laws on farming were adopted, in the the burning of stubble. The prime minister, Narendra Modi is W1950s and 1960s, the country was often on the brink of fam- trying to enact reforms. His failure to make them stick illustrates ine. In 1966 mass starvation was averted only by the arrival of 10m much of what is wrong with Indian politics. tonnes of American food aid. Small wonder that a Himalayan The ﬁrst problem is inertia. Reform has been an absurdly long range of regulations rose up, to boost output and stop hoarding. time coming. A judge this week asked the attorney-general Happily, much has changed since then. In 2020 India export- whether farmers had been consulted about the changes. He re- ed 14m tonnes of rice alone. The government has amassed grain plied that consultations had been under way for 11 years. Such stores of around 50m tonnes. Yet even as the food has piled up, dithering is all too common. The overhaul of sales taxes pushed the rules have remained the same. The bill for the subsidies has through in 2017 had been under discussion even longer. risen dramatically. So have the environmental costs, in the form In both cases, the ruling Bharatiya Janata Party (bjp) deserves of sinking water tables, for example, and choking smoke from credit for adopting long-overdue reforms that its predecessor in 1 10 Leaders The Economist January 16th 2021

2 government, Congress, had simply debated ad nauseam. But the tion parties have petitioned the courts to throw out the new laws. bjp takes things to the opposite extreme. It whisked three farm On January 12th the Supreme Court came close, suspending them bills through parliament in September with minimal scrutiny. It indefinitely (see Asia section). There is a genuine debate about refused even to put them to a proper vote in the upper house, in- whether the government might have exceeded its powers by reg- sisting, questionably, that they had been passed by acclaim. This ulating matters that should be left to the states. But the justices is standard procedure for the bjp: no parliamentary committee did not seem very interested in that. Instead, they expressed con- got a chance to debate changes to the laws on citizenship that cern about the health of the women and children among the sparked protests in 2019. The government first made public a protesters, and anxiety that the long stand-off might end in dam- constitutional amendment revoking the autonomy of the state age to property. The solution, they said, was to form a committee of Jammu & Kashmir only a day before parliament approved it. (which no one had asked for) to determine whether the laws It is not just parliament that does not get a look-in. Two of the were in the national interest—a reprieve for dither. bjp’s coalition partners left the government in protest at the farm India is not an easy place to govern. It is so vast, with so many reforms. No one seems to have tried to bring the farmers’ unions competing interests, that securing a consensus about anything around until after the bills were passed. Rather than cultivating is a challenge. The bjp’s proposed farm reforms are sensible broad support for its agenda, the bjp tends to ram it through. enough. But they will never be implemented without a concerted The result has been big and intractable protests from suspi- effort to win farmers over. As for the courts, their job is to uphold cious farmers. That is where a third scourge of Indian democracy the laws, not prevent them from being implemented. The alter- entered the picture: the judiciary. Farmers’ groups and opposi- native, yet more drift, yields meagre harvests. 7

Decluttering low-Earth orbit New brooms needed

It’s time to tidy up space verybody’s business, an old saw has it, is nobody’s busi- was redeemable when they deorbited their property. If they did Eness. And that is a good description of the business of keep- not do so, enterprising salvagers could try to do it for them, and ing outer space clean and tidy. Yet the part of space nearest Earth, claim the deposit if successful. This has the virtue of encourag- known technically as low-Earth orbit, is getting cluttered. Some ing built-in deorbiting capability, though claiming the bounty of the objects up there are working satellites. Some are satellites would require a separate launch. that have stopped working. Some are stages of the rockets which The best idea, though, is to attack the problem at its roots. The put those satellites into orbit. And a lot are debris left over from littering of space is an example of the “tragedy of the commons”, explosions and collisions between larger objects. in which no charge is made for the use of a resource that is owned The risk of such collisions is increasing, for two reasons. collectively. So why not charge the beneficiaries for the right to First, the number of satellites being launched is rising. Second, put something into orbit and keep it there? The longer an object collisions themselves beget collisions. The fragments they stays up, the more the satellite owner pays. The more popular create add to the number of orbiting objects. At the moment, (and hence crowded) the orbit chosen, the more expensive it more than 20,000 such objects are being tracked, but there may would be to add a satellite to it. be as many as 1m bigger than 1cm across. That raises the question of who would do the In the long term, this accumulation of junk charging. The Outer Space Treaty, signed in 1967, may lead to a chain reaction, known as Kessler assigns responsibility and liability for objects in syndrome, that would make some low-Earth or- orbit to the country which launches them, and bits unusable. Even in the short term it puts lots entreats signatories to avoid harmful contami- of expensive hardware at risk. So plans are being nation of space and celestial bodies. As far as laid to send up special craft to “deorbit” redun- low-Earth orbit is concerned, this has not really dant satellites and rocket stages (see Science worked. France requires rocket boosters to be section). Given the current situation, this is a dumped in the sea, but that’s about it. It would good, if expensive, idea. But a better one for the future would be make sense for countries with space-launch capability, and thus to build deorbiting into the life-cycles of satellites and rocket an interest in keeping space clean, to hammer out a new and spe- stages from the beginning. cific agreement. A well-crafted treaty would clean up space, There are several ways of doing this. One is a “launch tax”. But cause it to be used more efficiently, and raise some useful rev- that would load costs onto the satellite industry with no benefit enue from a resource currently exploited for nothing. unless the proceeds were actually spent on orbital clean ups— To deal with non-participants acting as free-riders, partici- and the record of tax-hypothecation of this sort is not good. A pants might agree to make pariahs of firms that tried to take ad- launch tax would also fail to attack the nub of the problem, vantage in this way, while perhaps offering a share of orbital-use which is that rocket stages and satellites need to be able to de- fees to countries without launch capacity of their own. Other orbit themselves unaided, even though building in such capabil- natural commons, notably the oceans and the atmosphere, have ity increases weight, and therefore launch costs. suffered, and still suffer, from a lack of sensible arrangements A second idea is a space-going “bottle deposit” scheme. Satel- for their joint exploitation. It is not too late to stop outer space lite owners would pay an agreed sum into an escrow account that being added to that list. 7

12 Letters The Economist January 16th 2021

protectionism and statism. eu countries, not to mention profiling and comparing Britain has to find its way And that is exactly what a losing the vote. To paraphrase a different text extracts in a I was surprised to see you democratic Britain has done. former British prime minister, variety of categories, such as describe, in your leader on chris rhodes if you believe you are a citizen positive and negative post-Brexit Britain, the cut to Horsham, West Sussex of Europe, you’re a citizen of sentiments and various British foreign aid from 0.7% nowhere. political and social values. to 0.5% of gdp as merely “pain- The fundamental supposition owen brown herbert blumberg ful” (“Britain’s place in the since Britain began its relative Brussels Department of psychology world”, January 2nd). Painful decline has been that the coun- Goldsmiths, University of no doubt for recipients of the try’s interests were served by London aid, already reduced by our punching above its weight. Adding to price rises shrinking economy, which the And yet other countries You continue to view inflation aid figure is linked to, yet achieve similar or higher as a pricing phenomenon of A lemon about an Orange hardly painful for the govern- qualities of life without this products and services (“Will You sent the wrong Orange to ment, many of whose suppor- need to “project”. Switzerland, inflation return?”, December London for the second world ters have been crying out for Norway, the Low Countries, 12th). But this misses where war (“Bruised Oranges”, such a cut for years. but also Germany and Japan, inflation is hiding in plain January 9th). It was not Juliana The consequences for the spring to mind. One of the sight: asset prices, notably in (who spent her war years in Global Britain project will be long-term consequences of the increase in prices of Canada) but her mother, Queen seriously negative. We will Brexit might be that England investment assets such as Wilhelmina, whom Churchill soon see to what extent the (Scotland and Northern Ireland property and speculative equ- quipped to be the only real 0.7% commitment was a key are unlikely to remain long in ity. The way we measure in- man among the governments- element in sustaining Britain’s the United Kingdom) can flation and where we look for it in-exile in London. As a British standing and influence in the become a normal country needs a long-overdue change. publication you might be world, in terms of bilateral again. Let’s try punching below naeem hukkawala aware that when there are two relations and of votes and our weight and focus on the New York generations of royalty in- having an effective say in a well-being of our own citizens. volved, the oldest usually is the whole range of multilateral james hickman monarch, and the younger of organisations. It would be West Raynham, Norfolk Girl power the two is waiting in line. more convincing to think of “Getting girlhood right” peter risseeuw the 0.7% commitment as an Britain is not losing its rele- (December19th) rightly point- Heemstede, Netherlands essential part of any Global vance when it comes to the ed out the many positive Britain policy, quite apart from arts. In fact, I expect that the knock-on effects of giving girls the moral and humanitarian digitisation of media will access to education. One you Rats in the kitchen arguments. cause British culture to be- missed is the impact on Many Western people may david hannay come more saturated through- climate change. According to shudder at the thought of House of Lords out the English-speaking Project Drawdown, giving girls eating rats (“Hamper scamper”, London world. Take “The Great British the tools of education and January 2nd). In 1962 Miguel Bake-Off”. Growing up in the family planning is ranked as Delibes, a Spanish novelist, Your leader ended by sneering American Midwest, I had a the second most meaningful published “Las Ratas”, in which at the “blindness” of Brexi- less-than-nuanced view of solution to limit global heat- he mentions a village where teers. The only blindness is in British cuisine, believing it to ing, only surpassed by reduc- people eat the rodents. The the pages of The Economist, be composed solely of tripe ing food waste, and far ahead of mayor of the village tells the which cannot see why ordinary and fish ’n chips. Now, I have wind energy and solar panels. governor of the province that people defied the intelligentsia spent lockdown trying to beate triantafilidis “They are delicious, sir, with and voted to leave. Why do you perfect sticky toffee pudding. London some vinegar!” respect the wish for self-deter- British television is some of walter schuit mination by the peoples of the most popular content on Overdinkel, Netherlands other countries but refuse to Netflix, The Economist circu- Computing content do the same for British people? lates more outside Britain than Your excellent Christmas robert macmillan in it, and any American who special on the use of data A follow-up Dunmow, Essex says they haven’t read the Daily analysis in the liberal arts In the Letters section of the Mail is a liar. The connected (“The book of numbers”, September 26th issue, Paul The Economist’s take on Brexit world we live in is becoming December 19th) should have Shannon stated that he did not reminds me of those who more British, not less. spared a thought for the late “recall any unlawful behaviour suggest Napoleon won Water- rachel beddor Phil Stone’s General Inquirer. from Republicans” after losing loo. In particular I was taken by Phoenix Developed in the 1960s, this set an election. Well, now he can. the implied pejorative that of procedures continues to be ryan philips supposedly some British peo- The up to 2m British who have applied to machine-readable Oakland, California ple have a “romantic notion of settled in Europe will not have text in all disciplines, and sovereignty” (“How was it for the rights of eu citizenship indeed everyday discourse. It eu?”, January 2nd). Silly billies. preserved (“No longer in added to the computerised Letters are welcome and should be I actually do have a roman- Rome”, January 2nd). We main- content analysis based on rote addressed to the Editor at The Economist, The Adelphi Building, tic view of sovereignty’s sister, tain residence rights in the one counting, distinguished 1-11John Adam Street, London WC2N 6HT democracy. The Economist of country we happened to live in among the different meanings Email: [email protected] my younger days would have on December 31st 2020, and of most words and applied More letters are available at: Economist.com/letters rejected the European Union’s have lost all rights in the other dictionaries for scoring, Executive focus 13 14 Briefing The economics of government R&D The Economist January 16th 2021

found that China published more high-im- Molecules, missions and money pact research papers than America did in 23 out of 30 “hot” research fields. Many in Eu- rope and America think that competing with, or outcompeting, China means following its lead. The incoming Biden administration promises “breakthrough technology r&d programmes” which will Economists are convinced that governments can increase economic growth by “direct investments to key technologies in spending more on research and development. Are they right? support of us competitiveness”. here is nothing new about economists most of the past 40 years shrinking (see And a third factor unites governments Targuing for more government spending chart 1 on next page). In 2018, though, the inside and outside China: they have strate- on research and development (r&d). Theo- most recent year for which data are avail- gic goals they can only meet through the retical work done by Kenneth Arrow in the able, figures from 24 oecd countries development of new technologies and the 1960s convinced his colleagues that the showed government spending on r&d ris- deployment of existing ones. The govern- private sector would not on its own provide ing by a healthy 3% in real terms following ment support for vaccines against sars- the amount of innovation that economies a particularly lean period after the finan- cov-2 is a case in point. The increasing need to maximise their growth. Empirical- cial crisis. In 2020 the French government need for deep decarbonisation is another. ly the coincidence, in the 1950s, of in- promised to increase its research budget by creased government r&d spending and ex- 30% over ten years as part of a new research Rise and fall and rise? cellent rates of productivity and gdp strategy. The Japanese government has also There are voices which would temper this growth strengthened the case further. been increasing funding, and setting up a enthusiasm. In “The Rise and Fall of Ameri- It is true that the hard evidence for a new provision for “moonshots”. In Ameri- can Growth”, a highly influential book pub- positive impact of such r&d spending on ca, having resisted Donald Trump’s at- lished in 2016, Robert Gordon of North- overall growth is both fairly weak and sug- tempts to cut research budgets, Congress western University argued that, although gests that it lags the outlay by quite a while. may well look favourably on President- the century of exceptional American pro- But few doubt that the return is, in practice, elect Joe Biden’s promise to pump them up. ductivity growth from 1870 to 1970 was significant. Rich-world governments cur- This enthusiasm is not simply driven by caused by technological change, such rently spend, on average, a bit over 0.5% of a belief that such spending will increase change will not come again (see chart 2). gdp on r&d; a couple more tenths of a per- growth. It is also about a fear of China. A re- There is no future equivalent to the “great centage point could make a big difference. search backwater when its economy took inventions”—internal-combustion en- The economists have the advantage, off in the 1980s, China has since spent gines, electrification, plumbing and the here, of pushing at a door that others are in heavily on r&d to obvious effect. A study like—which allowed a one-off shift from the process of pulling open. Government published by Elsevier, a scientific publish- an agrarian society to an industrialised r&d spending as a fraction of gdp has spent er, and Nikkei, a news business, in 2019 consumer one over that singular period; 1 The Economist January 16th 2021 Briefing The economics of government R&D 15

2 they catered to the needs of the human that, over time, more inputs—more re- 2 condition in a primary and unrepeatable searcher time, more money—have been Not what it was way. Moving from the internal-combus- needed to get the same improvement in United States, total factor productivity* tion engine to electric motors in order to outputs as before. move vehicles is both impressive and nec- This may explain why, as a fraction of Ten-year average annual % increase essary, but it is not in the same league as gdp, corporate-sector r&d has grown by Total economy moving from the horse to the car. more than enough to offset the reduction 4 Another concern is that emphasising in government research spending. Indeed, Annual data in 3 government r&d oversimplifies innova- some firms are doing staggering amounts inset below ↓ tion. What matters to the economy are not of r&d, though their definitions may be 2 scientific discoveries or the innovations at elastic. Amazon claimed to spend $36bn on 1 technology’s cutting edge, but the technol- “technology and content” last year, more 0 ogy people and firms make widespread use than the science budgets of Britain and 192000806040201900 of—not papers in peer-reviewed journals France combined. Nevertheless Dr Arora or even cool lab creations, but things which argues that corporate science has gone into pervasively improve the everyday and gen- decline, with big firms increasingly choos- % change on a year earlier† erate economic activity in doing so. And ing to license research from universities Private sector, five-year moving average there is no simple production line which, rather than do it themselves. Further re- 3 fed with new scientific understandings, moved from production, the universities 2 produces such technological change. which serve as the primary research focus 1 A recent paper by Ashish Arora of Duke in many countries are not so focused on University and colleagues, which focuses useful invention. If the current innovation 0 on the large corporate lab of post-war system is simply less good at creating -1 America, shows how important that dis- growth-boosting innovations than it was, 191020009080701960 tinction can be. The post-second-world- then spending more on r&d will not raise *The portion of output growth not explained by the amount of war years were not only marked by a incomes as much as it might. It may simply inputs used in production †Utilisation-adjusted growth in government r&d spending, but produce more research papers. Sources: Robert J. Gordon; Federal Reserve Bank of San Francisco also by the scientific excellence of in- A final concern about boosting govern- house laboratories at companies such as ment spending is cui bono. In the clubby, leads to global growth.” At most times and at&t and ibm. In the 1960s researchers at closed world of the 1950s and 1960s it made places, most of the technology which DuPont published more articles in the Jour- sense for governments to invest in r&d be- creates growth is imported from else- nal of the American Chemical Society, the cause one of their domestic firms—and, where, not made at home. In a globalised field’s leading journal, than mit and Cal- through its good offices, the nation’s con- world, investing in domestic r&d will nev- tech combined. The production of scientif- sumers—would reap the benefits. What is er be purely to a country’s own advantage; ic knowledge and the desire to solve real- more, big companies on the cutting edge it will help others too, willy-nilly. world commercial problems were closely were not that worried about technological entwined. Science was being pulled into competition. In 1995 a researcher at Bell Hot-wired progress the economy, not just pushed; this was the Labs, the r&d titan which in its pomp To the extent that these concerns hold wa- environment in which, in the 1960s, the earned at&t Nobel prizes, noted that “xe- ter, the worst they do is suggest that the re- term r&d was invented. rography was invented...in 1937, but it was turns to be expected from increased gov- What is more, the link between scientif- only commercialised by Xerox in 1950”, and ernment r&d expenditure may be lower ic publication—whether publicly or pri- “[w]hen the transistor was invented...at than some claim, and less easily captured vately funded—and economic improve- Bell Labs in 1948, several years elapsed be- by the nations that make them. And their ments is weakening. “Ideas are getting fore other laboratories acquired enough ability to hold water is open to question. Dr harder to find,” according to a paper pub- expertise in the semiconductor area to Gordon’s thesis, like much historical argu- lished in the American Economic Review in make [a] significant contribution.” ment, is limited by a sample size of one. It 2020. Applying econometric tools to tech- All that has changed, thanks to greater is also, in its overall form, familiar; the idea nologies-in-use such as chipmaking and travel, better communications and, per- that the best lies in the past has a long his- crop improvements, Nick Bloom of Stan- haps most straightforwardly, a much great- tory, and it has spent most of that history ford University and his colleagues found er number of researchers and research cen- being wrong. tres. As a recent paper from the imf puts it, What is more, such declinism can be “globalisation has intensified the diffusion used to argue that government r&d spend- 1 The state role reduced of knowledge and technology across boring, far from being futile, is vital. In the OECD, total spending on research and ders”. It has been doing so for some time; 1930s Alvin Hansen, a noted American development, % of GDP the Bell Labs anecdotist pointed out that economist, put a Gordon-like emphasis on 2.5 following the “discovery of high-tempera- the special qualities of certain “great inven- ture superconductivity at the ibm Zurich tions” when he argued that although rail- 2.0 lab in 1987, it took only a few weeks for roads, electricity and the car had propelled groups at University of Houston, Universi- growth in the past, America could not “take 1.5 ty of Alabama, Bell Labs and other places to for granted the rapid emergence of new in- Non-government make important further discoveries.” dustries as rich in investment opportuni- 1.0 David Edgerton of King’s College Lon- ties.” The people who argued for the gov- don, Britain’s foremost historian of tech- ernment’s wartime r&d effort to persist, in 0.5 nology, argues that “Only in techno- a modified form, after 1945 appreciated Government 0 nationalist fantasies…does national inven- Hansen’s argument enough to be doing tion drive national economic growth. In something about it. Rather than taking the 1815100520009590851981 the real world, global innovation leads to formation of new industries for granted, Source: OECD national growth, and national innovation they were creating a way for government to 1 16 Briefing The economics of government R&D The Economist January 16th 2021

han. The vaccines enabled by that se- that funding for papers that build on the Refusing to stay in its lane 3 quence may turn out to be the technology- most recent advances has declined. Con- Research and development spending*, $bn in-use with the greatest economic impact servative funders get conservative re- darpa 600 over a single year ever seen. searchers. Even , an agency of Amer- As for the difficulty of capturing the ica’s Department of Defence famous for r&d United States benefits of national spending in a glo- funding out-there projects, is accused of bal world, making use of cutting-edge tech- taking fewer risks than it used to. 400 nologies developed elsewhere is not possi- New organisations can be more innova- ble without a lot of very highly trained tive. Tyler Cowen of George Mason Univer- China locals, and such cadres are hard to produce sity has explored one possibility: Fast EU28 200 and maintain without r&d spending. Chi- Grants, a project he launched in April with r&d Japan na’s immense investment in (see chart Patrick Collison of Stripe, a payments firm, S. Korea 3) has produced an immense number of dispenses grants for promising covid-19 re- Britain 0 people with skills, know-how and curios- search very quickly, usually within days. ity, as well as institutions with the equip- But the budget is tiny relative to what is re- 1815100520009590851981 ment they need. These researchers and en- quired. Mr Biden promises to create new Source: OECD *Public- and private-sector gineers have developed many innovations organisations for research on health and of their own, but to date their most crucial climate, while the British government says 2 bring them into being, thus making good role has been in exploiting knowledge it plans to “experiment...with new funding any failures of private investment. brought in from elsewhere by fair means or models across long-term time horizons”. Today plenty of people reckon that the foul. It is notable that, now it is in the r&d But the ideas are little more than sketches. government can help unlock further in- front rank, China too is grappling with a Another way to instil urgency is ventions. In their book “Jump-starting slowdown in productivity growth. through a sense of mission. Dr Gordon’s America”, Jonathan Gruber and Simon If Dr Bloom and his colleagues are cor- point that “some inventions are more im- Johnson, two mit economists, single out rect in arguing that ideas are getting harder portant than others” is very pertinent for synthetic biology, hydrogen and deep-sea to find, more money may be required, in governments. Technologies which let mining. Of the three it is synthetic biology, China and elsewhere, just to stand still. But them achieve strategic goals become im- which offers new approaches to everything raising government r&d spending in the portant, and they are willing to spend a lot from petrochemicals and agriculture to g7 nations as far above its 1970 level, rela- on them. This can end badly. But when it medicine and computer memories, that is tive to gdp, as it is currently below that lev- works governments do not so much pick best placed for the “great invention” status el would cost about $400bn a year overall: winners as make them. In the 1950s and that comes from improving the material considering that the g7’s gdp is $36trn, this 1960s, its strategic focus on the cold war, conditions of billions of lives. appears easily doable. Still, it would be the American government made winners worth finding ways to produce new ideas out of aerospace and electronics. In the The shape of things to come more efficiently. In much of the oecd the 1970s France, always nervous about de- The other contender for such laurels is ai. mechanisms and institutions through pending on others for electricity, made a After spending some time being visible which governments support r&d are more winner of its nuclear industry. “everywhere but the productivity statis- or less the same as they were 50 years ago. Strategic programmes of this sort do not tics”, in a famous quip of Robert Solow’s, There is a degree of ossification. always require groundbreaking r&d. computers finally provided a measurable A new paper by Mikko Packalen of the France’s reactors were based on American boost in the mid-1990s. With ever more in- University of Waterloo and Jay Bhatta- designs. They may need hardly any r&d at formation to learn from, information ap- charya of Stanford University shows some all. Germany made a winner of solar panels pliances which can whisper into every ear, evidence of this at America’s National In- simply by providing massive subsidies for robots at its command and applicability to stitutes of Health (nih), where they find them, driving up demand and allowing any number of problems computers that manufacturers in China to make hay. And use ai might yet do more than that. The fact there is no clear evidence that the technol- that an ai program recently showed un- ogies governments decide that they need matched prowess in the prediction of pro- for strategic reasons will be those that most tein structures that synthetic biologists improve economic growth. might like to change underlines that inno- But such projects do typically lead to vation can and will often come about most both a sense of mission among those in- surprisingly where two fields collide. volved and researchers from government There are also arguments against the and academia working alongside those idea that the link between scientific re- from industry. If they do so in multidisci- search and technology-in-use has become plinary environments—which missions weaker. It may well have done so in some often require, whether in the public or ways; but in other ways things have speed- private sectors—then growth-boosting ed up. This is particularly true of the pro- technologies may be more likely to emerge. cess that puts today’s innovation into the It will take time for new ideas to have hands of millions tomorrow. Electric appli- big effects. And in a world of 24-hour me- ances had been around for decades before dia, it will be hard to sweep unavoidable they made a definitive difference to rich- stories of wasted money and failed projects country homes. Information appliances— under the carpet—however inevitable, specifically, smartphones—have spread far even welcome, some sorts of failure may further far faster. The sars-cov-2 genome be. But at a time when the need to boost in- sequence was shared between China and novation has never been greater, politi- the rest of the world before there were any cians may conclude that rebooting the in- confirmed cases of covid-19 outside Wu- novation system is worth the risk. 7 United States The Economist January 16th 2021 17

Donald Trump’s presidency office and his oath to the constitution”. Ke- vin McCarthy, the Republican leader in the The final chapter House, who objected to certification of Joe Biden’s election victory even after the attack on the Capitol, declined to whip opposition to the measure. Several Democrats say that some of their Republican col- WASHINGTON, DC leagues confessed privately that they voted Congress has impeached Donald Trump for his incitement of a mob attack on the no because they were in fear of their lives. Capitol. What happens next? Having pledged to end “American carnage” f all the democratic norms President an article of impeachment accusing the when he was inaugurated, Mr Trump will ODonald Trump has broken during four president of “incitement of insurrection”. depart ignominiously: the only president years in the White House, none is as impor- It passed on January 13th, one week after to have been impeached twice. The indeli- tant as the peaceful transition of power. the attack on the Capitol. Some Republi- ble image of his administration will be that The photos, videos and accounts that have cans, after encouraging or standing by of a mob vandalising Congress in a bid to emerged since the ransacking of the Capi- mute as the president attacked the demo- overturn a fair election. tol on January 6th include footage of rioters cratic process for months, have shaken What happens from here, however, is beating a police officer with a flagpole as a consciences. Ten of them joined all 222 uncertain. Upon impeachment, charges crowd chanted “usa” and crushing another Democrats on the vote. against the president are tried in the Sen- officer repeatedly in a door. Yet the vio- Liz Cheney, the third-ranking Republi- ate, where a two-thirds majority is needed lence, which resulted in five deaths, was can in the House, was one of them, declar- for conviction and removal from office. Yet nearly much worse. Quick-thinking police ing in a statement issued the night before Mr Trump will be leaving office anyway on officers distracted the mob from breaching that “there has never been a greater betray- January 20th, when Mr Biden is inaugurat- the debating chambers long enough to al by a president of the United States of his ed. The Senate is adjourned until January whisk every lawmaker to safety. Some of 19th. An earlier session might have been the rioters, chanting “Hang Mike Pence” called if members had agreed to it unani- and “Where’s Nancy?”, had violent designs Also in this section mously but Mitch McConnell, the Senate on both the Republican vice-president and majority leader, could not bring that about. 18 Social media and speech the speaker of the House—the first and sec- Even if he had, completing the trial while ond in the line of presidential succession. 19 Murder rates jump Mr Trump is in office would require record- In the final days of Mr Trump’s adminis- breaking speed, and not give the president 20 Minor-league baseball tration, Congress will be consumed with much time to defend himself. working out how to penalise the president. 21 The Texas legislature This presents a constitutional edge case The House of Representatives, which is without precedent: can a president be con- 22 Lexington: Conservative consciences controlled by Democrats, quickly drew up victed of impeachable offences after he has 1 18 United States The Economist January 16th 2021

2 left office? Although not legally proscribed, most untested option for ousting Mr single week (and among his supporters in this is also untested. Congress ended the Trump, or from preventing him from run- the recent election from a messianic 93% to Watergate impeachment inquiry soon after ning for president again. Nonetheless, a mere 83%). One in six of his voters now Richard Nixon resigned in 1974, feeling its some Democrats think it could be used say that they supported the violent assault purpose moot. Some lawyers reckon that more widely. Cori Bush, a leftish Democrat- on the Capitol, a worrying minority, but continuing the trial once Mr Trump has left ic representative, has introduced a resolu- much less than the 45% of Republicans office might be unconstitutional. tion, co-sponsored by 47 other Democrats, who thought it justifiable in the immediate There are compelling reasons to pro- citing the same clause, which seeks to cen- hours after news broke. ceed anyway and let the Supreme Court sure and possibly expel the Republican Yet there are concerning remnants of sort that out. The first would be to establish congressmen who voted not to certify Mr the epistemic rot that Mr Trump and his that presidents may not commit impeach- Biden’s victory. abettors have wrought: 81% of his suppor- able offences without consequences dur- As for Mr Trump, his steadfast allies in ters say that they have little to no faith in ing their lame-duck periods. The second Congress are showing clear signs of insub- the fairness of the presidential election— would be to disbar Mr Trump from holding ordination. The Twitter account he used to the Big Lie that instigated the entire fiasco. federal office again, preventing a possible keep Republican dissenters in line has And a remarkable 74% of Trump voters be- comeback presidential bid in 2024. That been muzzled. And the emerging evidence lieve the conspiracy theory that Antifa, a would give Republicans an opportunity to from public-opinion polling suggests that left-wing group, was involved in the Capi- rid the party of Trumpism, hopefully stop his base is souring on him too. Our latest tol assault. Republicans in Congress may, its worrying flirtations with authoritarian- survey, conducted with YouGov, shows in the twilight of Mr Trump’s presidency, ism and allow it to return to being a consti- that Mr Trump’s overall approval rating has embark on an exorcism for their party. Oth- tutional, conservative opposition. “To my dropped from 42% to 39% in the span of a er demons may haunt them for longer. 7 Republican colleagues who have been saying, we need to come together, we need to heal, we need to be reconciled after last Tech and politics Wednesday, I remind them: There’s a spiritual teaching that there’s no reconciliation Said the spider to the fly without repentance,” says Chris Coons, a Democratic senator from Delaware. Mr Trump’s first impeachment trial, held just one year ago over his pressing the Ukrainian president to find dirt on Mr Bi- The banishment of Donald Trump from social-media platforms underlines the den and his son Hunter, ended in acquittal concentration of power online because of near-unanimous opposition from Senate Republicans (Mitt Romney arler, a small but rapidly growing so- Trump, Parler jumped to the top of Apple’s was the lone aisle-crosser). Their desire to Pcial network, is an unlikely candidate app store in America, nearly quadrupling defend the president after the assault on for liberal sympathy. Pronounced “par- downloads in a day. The same day Google the Capitol will not be so dogged. The odds lour”, it gained popularity mainly with removed the app from its store for Android of a full conviction still seem long: with the right-wing Americans fleeing what they phones, citing its weak moderation policy, newly sworn-in Congress, at least 17 Re- saw as the lefty tendencies of Twitter and followed the next day by Apple. So did oth- publicans would need to defect. Yet Mr Facebook. Yet alarm at the company’s fate er providers of important back-end ser- McConnell, the soon-to-be Senate minor- has crossed America’s political divide in a vices, with names like Twilio and ZenDesk, ity leader, has let it be known that he might way that suspending the president from that few outside the tech industry have be open to impeachment. Where he goes Twitter and Facebook has not. heard of. The end came when aws, Ama- many of his caucus may well follow. On January 8th, after the two better- zon’s cloud-computing arm, which pro- Democrats who want more certain and known sites banned President Donald vides the infrastructure used by millions of1 immediate punishment for Mr Trump, and the historic dishonour of being the first sitting president to be removed from office, have suggested two hastier constitutional routes. The first is the invocation of the 25th Amendment, which allows the vice- president and a majority of the cabinet to immediately remove Mr Trump from power. This is doomed. When Democrats passed a resolution urging Mr Pence to try that strategy, he refused, writing that “I will not now yield to efforts in the House of Representatives to play political games at a time so serious in the life of our nation”. The other is the resuscitation of a section of the 14th Amendment to the constitution that permanently bars those who vi- olate their oaths of office by engaging in “insurrection or rebellion” from ever holding federal office again. This clause was designed to prohibit the election of Confeder- ate rebels after the civil war, and has been almost entirely ignored since. This is the The Economist January 16th 2021 United States 19

2 services and websites, also pulled the plug. their detractors uncomfortable. It puts Mr Trump was banned by networks. Face- Inaccessible as an app on either Android or some on the left in the unfamiliar position book itself has long called for more regula- ios devices, Parler and its roughly 12m ac- of celebrating corporate power to deter- tion. That is likely to come in this Congress. counts disappeared from the web too. mine what people can say and much of the Even before the events of the past weeks, The firms have a legal right to cut ties right in the unfamiliar position of lament- both parties agreed on the need to reform with Parler. And Section 230 of the Com- ing it. The fallout will be louder calls to reg- Section 230, which became law 25 years munications Decency Act allows them to ulate internet companies—not just from ago, when the web was in its infancy. A remove any “objectionable” content if it is American politicians but from leaders clearer set of rules, set by legislatures rath- done in good faith. But their actions give around the world. Politicians from Ger- er than Silicon Valley executives, would be the lie to the argument that if users do not many’s Angela Merkel to Russia’s Alexei enthusiastically welcomed—not just in like one social network’s policies, they can Navalny have expressed dismay at the way America but everywhere else, too. 7 just go somewhere else. It is unlikely that the two other big cloud services, run by Mi- crosoft and Google, will want Parler any- where near their servers. Even though in wiping Parler from their infrastructure they may well be removing illegal incite- ments to violence, potentially shielding themselves from liability, these companies are “wielding unchecked power over key arteries of the internet,” says Lina Khan, an antitrust scholar at Columbia Law School. The debate surrounding the awesome power of tech companies to shape what people see online has long focused on consumer-facing platforms such as Facebook and Twitter. Yet, in recent days, many previously obscure firms have found their names included in these discussions. These include Stripe, a payment-processor that said it would stop working with the Trump campaign; Salesforce, which blocked emails sent by the Republican Na- tional Committee; and Shopify, a Canadian firm that provides online shopfronts and removed two stores connected with Mr Trump. That is in addition to bans from Violence in cities Reddit, Instagram, Snapchat, TikTok, Twitch, YouTube, Pinterest and Discord, Where bullets fly social-networking firms which have all taken action against Mr Trump’s accounts or hashtags such as #stopthesteal. Even Pe- loton, which makes pricey internet-connected exercise bikes, issued bans. The role of social networks, payment- CHICAGO America is experiencing the worst recorded increase in its national murder rate processors and infrastructure providers as the police force of the internet is not new. ven for a city used to gun violence, the pen in just 7% of its residential blocks. Gab, a far-right social network, was Eevents on January 9th in Chicago were That should make doing something eas- dropped by GoDaddy, which registers do- terrifying. A lone man, probably psychotic, ier, as officials know where to concentrate main names, after it became clear that an bragged in videos on social media of how resources. Yet their efforts are failing. After anti-Semitic mass-shooter had used the he planned to murder strangers. Then, over some years of fewer killings, last year was service to broadcast hateful content (it had several hours in many places, he shot seven “extraordinarily tough”, he says. Chicago long before been barred from app stores). people—a Chinese doctoral student, a se- saw over 770 murders, 50% more than in Cloudflare, a famously neutral infrastruc- curity guard, a teenage girl, two elderly 2019, and around 3,000 people shot and ture firm that helps protect websites from women and two others—picked seemingly wounded. Carjackings more than doubled. cyber-attacks, last year booted out 8chan, at random. Three of the victims died before Eddie Bocanegra, who works with young an online forum, for its role in other mass police killed him. men most at risk, says killers, many of shootings. In 2017 it pulled the plug on the Such serial attacks are rare. Much more them teenagers, have grown more ruthless. “Daily Stormer”, a neo-Nazi website. “I common, in cities everywhere, are retalia- He describes a victim shot 21 times with an woke up in a bad mood and decided some- tory murder by small gangs. Some compete automatic rifle. He blames increased vio- one shouldn’t be allowed on the internet. for drug markets, but often shootings have lence on more lethal weaponry, including No one should have that power,” Matthew no end beyond a young gunman asserting magazines that hold dozens of rounds. Prince, the company’s boss, wrote at the his status or settling a perceived slight. It is not just Chicago. Rates of gun vio- time. It is difficult to exist on the internet Arne Duncan, a former federal education lence are rising in other cities too, after fall- without the support of these companies. secretary who now works on tackling vio- ing since the early 1990s. Thomas Abt of the Few tears were shed over sites known to lence in his home town, says much of it is Council on Criminal Justice, in Washing- host extreme far-right actors. But the ban- extremely local: between one-third and ton, says data so far for 2020 suggest “the ning of Mr Trump and of Parler make even one-half of all shootings in Chicago hap- largest single-year increase in homicides 1 20 United States The Economist January 16th 2021

2 ever reported in the us.” A study by his group of 21 big cities counted murders up (year-on-year) by 42% last summer, then by 34% in the autumn. Jeff Asher, an ana- lyst based in New Orleans, cites fbi data for cities with fewer than 10,000 residents, where murders leapt by 30%. In all the fbi counted 16,425 murders, five for every 100,000 people, in 2019. Figures for 2020 will eventually show big a rise from that. Violence really picked up in late spring, after the pandemic took hold, the economy slumped and, especially, after the killing by Minneapolis police of George Floyd, an African-American man, in late May. Rich- ard Rosenfeld of the University of Missou- ri, in St Louis, points to a simultaneous “abrupt increase” in killings across cities. National rather than local factors evidently drove the murder rate last year. Harder to trace is exactly why this happened. Did protests against police violence lead to forces pulling back, which in turn led to more murders? Did temporary reduc- Minor-league baseball tions in jail populations in the early weeks of the pandemic allow newly released men to commit crimes? Did school closures Trouble on the farm push up crime, as they do in the summer holidays? Why did property crime slump How baseball represents American society in miniature last year, whereas violence soared? Part of the explanation may be a boom inor-league baseball clubs, the clubs if they blossom into stars. Yet it has in firearm sales, especially of handguns Mmore than a hundred small, in- also caused widespread outcry at the (which are usually bought for security, not dependent teams—some, like the Albu- billionaire owners eviscerating a folksy recreation). Jurgen Brauer of Small Arms querque Isotopes, with wonderful institution solely to cut their costs. Analytics, which tracks industry sales, names–have long had a symbiotic rela- The realignment is likely to disrupt counts 22.7m handguns and long guns sold tionship with their major-league coun- thousands of jobs in the same regions hit last year, a record, and 63% more than in terparts. Since the 1960s most have been by deindustrialisation over the past few 2019. He notes that availability of weapons affiliated with a major-league club in decades. The likely result is that the is associated with higher rates of violence. what is called the farm system. Major- sport’s wealth and power will be increas- Those were legal sales, but criminals may league clubs loan their prized young ingly concentrated in the major league, own legal weapons, or buy or steal them. talents to a minor-league club, pay their which derives much of its revenue from Mr Rosenfeld sees other mechanisms in salaries (a relative pittance, given that media rights and technology. play. The police grew less effective as offi- Congress has exempted minor-leaguers Beyond illustrating the power of cers fell ill with coronavirus, were quaran- from minimum-wage laws because of superstar economics, the relationship tined or were diverted, for example by prot- major league lobbying) and lend their between the majors and minors mirrors ests. Those still patrolling also practise name and prestige to marketing, as the other trends. Although no longer the social distancing. “That reduces the kind of New York Yankees once did for the Tren- country’s most popular sport, baseball face-to-face contact that can be effective,” ton Thunder. In return the small clubs remains a unifying symbol of Ameri- he says. Police are most helpful if they pre- provide a supportive training ground, cana, from the College World Series in vent retaliation, stopping petty disputes allowing young players to develop and Omaha to the sandlot diamonds of the escalating into shooting wars, but that re- refine their skills against competition of South Bronx. Despite their brand as quires a heavy presence on the ground. The a similar age, without the pressure that keepers of the national pastime, major- widespread loss of trust in police after the exists at the major-league level. league clubs are in the cosmopolitan city Mr Floyd’s killing “widens the space for so- This has been changing, as major- centres that have outgrown and outpaced called street justice”, he says. league clubs use their influence to con- the rest of the country in recent decades. Mr Duncan points to micro-measures to trol, centralise and consolidate the mi- This is a pity. If a young fan of the push back against the gloom. His group nor leagues. That process took a step Idaho Falls Chukars (an 80-year-old works with rappers in Chicago, for exam- forward last month when the majors minor-league club facing probable bank- ple, to spread “rules of engagement” be- invited the minnows to join a new mi- ruptcy) loses a connection to the game, tween gangs, telling members “You are not nor-league system. About a quarter of that can only exacerbate regional and a man if you shoot into crowds or at chil- small clubs, mostly in Appalachia and cultural divides. Nearly 40 years ago, the dren.” Borrowing from conflict resolution the rural West, have been cast out of the French-American intellectual and base- experts, he also promotes non-aggression farm system, and are likely to wither. ball fan Jacques Barzun said that “Base- pacts and “peace treaties” between small The stated reason for the realignment ball still reflects our society, it’s just that gangs. Such efforts are welcome, but will is to streamline and modernise training our society has changed.” Were he alive take time. Meanwhile, America’s mayors for young players, who will become today, it seems unlikely that he would must hope that the murder spike is just enormously valuable to the major-league revise that view. that, rather than a return to old ways. 7 The Economist January 16th 2021 United States 21

Texas politics can former speaker of the House, who now supports the change. State Republicans Stars and gripes may feel that the fact they kept their grip on the legislature in November, despite many predicting that the Democrats would take the state House, is proof that they do not need to take dramatic action. DALLAS Finally there are the issues that the leg- The Texas legislature is back in session and must deal with challenges that are as islature will take up that would be best left large and diverse as the state alone. Chief among them is a proposal to hen the Texas legislature convened ity will be the expansion of broadband, ban taxpayer-funded lobbyists, such as Won January 12th, the state House whose patchiness the pandemic has un- those representing mayors’ officers and opened its first session with prayer, the derscored. Texas is one of only six states city councils, which is aimed at Democrat- pledge of allegiance to the American flag, that lacks a statewide broadband plan, ic cities and counties. “The power of state and the pledge of allegiance to the Lone which deprives it of valuable federal fund- government…is being used to strip power Star flag. The 140-day session, which takes ing, according to Tom Luce, the founder of from local government,” says Jason Sabo of place every other year, will be filled with Texas 2036, an economic policy non-profit. Frontera Strategies (a lobbying firm). In plenty more prayers and promises. Texas, Then there are the issues that the legis- past legislative sessions, the Capitol has like other states, is grappling with the hu- lature should address, but won’t. The most also seen epic battles over social issues— man and economic toll of the pandemic, glaring one is an overhaul of health care. from abortion to transgender bathrooms— but also faces challenges of its own. Texas has the highest uninsured rate of and divisive proposals could flare up again The stark economy will rule out new, adults and children in the country—nearly this spring, as Republican politicians try to ambitious proposals. On January 11th the 20%—because it declined to extend Medic- score points before next spring’s primary state comptroller estimated that Texas aid under the Affordable Care Act. “We had run-offs. Yet these would distract from the faces a $1bn shortfall, stemming from fall- a public-health crisis prior to the pandem- many problems ordinary Texans are facing. ing sales-tax revenue and its ailing oil-and- ic,” says Evan Smith of the Texas Tribune. The coronavirus has brought the state gas industry, which has contributed to a “And because coverage is tied to employ- plenty of challenges, but it has also pre- higher unemployment rate in the state ment, the number of people without cover- sented it with an opportunity. “Texas’s rela- than in the nation. However, the $1bn hole age has spiked.” The pandemic has under- tive positioning has improved meaning- is five times smaller than predicted over scored the hardship in rural areas. In the fully as a result of covid,” says Robert the summer. Quick cuts to state agencies past ten years, almost one in five of the na- Kaplan, president of the Federal Reserve and tax collections from online sales have tion’s rural hospital closures took place in Bank of Dallas. Businesses and individuals, helped, but the biggest saviour has proved Texas, complicating treatment for covid-19 including Elon Musk, have moved in from to be Washington, dc. Already Texas and its and vaccine distribution. higher-tax states, including California. Yet local governments have received $13bn Although conservative Oklahoma and future population growth will also require through the cares Act, and more state aid Missouri expanded Medicaid last year, Re- investment in order to become even more is likely with Democrats controlling the publican-controlled Texas has resisted, ar- competitive long-term. Texas Republicans Senate. Texan leaders like Governor Greg guing that the cost is too great (although still seem loath to invest more in areas Abbott, who made a habit of railing against the federal government would pick up 90% such as education and health care. That is a the Obama administration, may find it of it). “The state’s top leadership is not conversation that this legislature is unlike- wise to be less hostile this time round. showing a real openness to an expansion of ly to want to have this session. Put it in the The state’s troubles can be put into three Medicaid,” reckons Joe Straus, the Republi- category of “won’t, but should.” 7 buckets: those that legislators will take up and are essential priorities, those they will not address but should, and those they will address but shouldn’t. The main priority is public education. In 2019 the legislature passed a popular public-education bill, committing $6.5bn to education. It also passed a $5.1bn to lower property taxes, which are often used to pay for schools. The newly-elected speaker of the Texas House, Dade Phelan, insists that public education will not be given short shrift. That is good news. Measures such as more funding for full-day pre-kindergarten, in- centivising teachers to work in poorer schools, and extending the school year, are even more necessary than they were when passed in 2019, says Todd Williams of the Commit Partnership, an education non- profit. A year of learning has already been lost with the pandemic, according to Mi- chael Hinojosa of the Dallas Independent School District. In the autumn of 2019 only 46% of Texas 8th-graders (13-14-year-olds) were proficient in maths, and by last autumn it had dropped to 33%. Another prior- How you Phelan, Dade? 22 United States The Economist January 16th 2021 Lexington Conscience of some conservatives

The Republican Party launches an overdue civil war over Donald Trump leaders—apparently the lynch mob’s first target—almost as much as against Democrats. Below the level of Ms Cheney and Mr McConnell, he has also changed the Republican establishment— such that 147 Republican House and Senate members voted to overturn the election even after the attack on the Capitol. He has promoted its most anti-democratic elements, in particular the Tea Party faction, whose bigotry and demonising of their leftist opponents presaged his own. One of its members, Senator Ron Johnson of Wisconsin, recently told Lexington that what distinguished Trump voters from the left was that while the former “love America with all their hearts” Mr Biden and many Democrats “don’t really care for this country”. After your columnist suggested this was untrue, Mr Johnson, a staunch proponent of Mr Trump’s election-fraud conspiracy theory, insisted, also falsely, that: “Bi- den rallies were protests which turned to riots in the streets.” This was absurd even before the attempted maga coup. More recent additions to the Republican bench can sound positively de- ranged: especially the two qanon admirers, Marjorie Taylor Greene and Lauren Boebert, in the House. With their divided base and divided elite the Republicans are splitting into two coalitions. One is large, Trumpist and incompatible with democracy; the other anti-Trumpist, anxious, and of uncertain size. o paraphrase Samuel Johnson, nothing concentrates the This is a crisis with deep roots. The modern conservative move- Tmind like the prospect of being hanged. And so it has proved ment always contained contradictions: its love of limited govern- inside the Republican leadership. A week after Donald Trump’s ment was belied by its support for supersized defence; the reli- maga mob erected a gallows besides the Capitol reflecting pool gious right was often illiberal. Such tensions were nonetheless then invaded the building, the president’s party is for the first time harmonised by the fuzzier values Ronald Reagan imbued the seriously reviewing its loyalty to him. Liz Cheney—the number movement with: realism, patriotism and prudence. Yet that settle- three Republican in the House—was among ten in her party to vote ment had eroded long before Mr Trump; the right’s policy agenda to impeach Mr Trump. Mitch McConnell, the Republican leader in had become captured by vested interests and its values by pessi- the Senate, has let it be known he might be supportive. In that case mists. Over the past four years it has collapsed. The ideological Mr Trump—the first president to have been impeached twice— contradictions have ballooned, as Mr Trump has slashed taxes, could become the first to be convicted and disbarred from office. splurged on defence and lionised religious crackpots. Meanwhile It is hard to exaggerate how dramatic a turnaround this already he has substituted for Reagan’s harmonising values an ever-in- is. Although inciting the attack itself was worse than anything Mr creasing animosity to the other side, personified by his own be- Trump has done, it revealed nothing fundamentally new about his haviour, and leading to the January 6th eruption. character. And his newly emboldened Republican critics did not This history suggests a necessary condition for renewal on the merely stomach his earlier abuses—of ethics rules, migrant chil- right may be failure. The Reagan revolution was fomented in the dren, and so on—but vociferously defended them. Mr McConnell wilderness. Its ingredients included political space and a slow- has had more power to check Mr Trump than anyone and has bare- witted Democratic opponent, grown complacent with power. ly tried. Ms Cheney dismissed the leaked recording that led to his Therefore the right’s most astute critics, Never Trump Republi- first impeachment—in which he coerced his Ukrainian counter- cans, mostly wanted to see it hammered in November. Yet it seems part to invent a corruption case against Joe Biden—as a “political that path to creative destruction has been blocked. Extreme polar- set-up”. Up until the riot, and perhaps still, most Republican poli- isation limits the potential losses of either party. And the Republi- ticians expected him to be their presidential nominee in 2024. cans are additionally sustained by the advantage their heavy rural This history of supplication makes the nascent effort to purge Mr vote gives them in the Senate and electoral college. This anomaly— Trump and his destructive politics as astonishing as it is welcome. which Daniel Ziblatt, a political scientist, calls “constitutional It also suggests how hard it will be. welfare”—means they have cause to think they are winning even To start with the obvious barrier to Republican reform, most of when they are losing. It also amplifies the party’s most remote, cul- the party’s voters appear to be against it, which is why Mr Trump’s turally aggrieved and therefore maga voices. It is undemocratic, critics enabled him for so long. After the insurrection, almost half the ultimate barrier to reform on the right and presently insoluble. of Trump voters said they stood with the rioters. Even if the president is ousted, his main means of keeping his party in line—the Out, out damn spot threat of a primary challenge—may therefore endure. America has This is cause for realism; but not despair. Expunging Mr Trump a history of rabble-rousers, but none has previously come close to from Reagan’s party is a more basic condition for progress. And achieving Mr Trump’s personal grip on millions of voters. thanks to the belated bravery of ten Republican House members If his grasp does weaken, however, as he becomes less visible or and perhaps Mr McConnell it is imaginable. If they succeed, it will ineligible, there is little to suggest the Republican base could easily be their life’s work; Republicans and Democrats alike should back be turned back to a more constructive conservatism. Mr Trump has them. Mr Biden liked to say the general election was a battle for the defined himself against his party’s conventionally conservative soul of America. It is now being waged in the Republican Party. 7 The Americas The Economist January 16th 2021 23

Biden and Latin America has undermined the region’s self-confidence. The pandemic has killed 541,000 A shift of gears people in Latin America and the Caribbean, second only to the death toll in Europe, and caused the worst economic slump in more than a century. The corrupt are winning the war on corruption. Anger at a broken social MEXICO CITY AND SÃO PAULO contract has led to unrest and the election A post-populist president will encounter a region where of populist presidents. Venezuelans are populism has recently flourished fleeing their country, putting strain on its n 2013, after WikiLeaks revealed that the the region in Barack Obama’s new memoir neighbours. Central America’s exodus, IUnited States’ National Security Agency is his confession to “smiling and nodding” paused by the pandemic, has resumed. had bugged the phone of Dilma Rousseff, through a long dinner in 2011, thinking Democracy is in retreat. The Bertels- then Brazil’s president, Joe Biden called to about the war in Libya while Chile’s presi- mann Foundation, which ranks countries’ apologise. A year later the American vice- dent droned on about wine exports. democratic strength on a ten-point scale, president went to Brazil for a World Cup Still, Mr Biden will probably pay heed. finds that the scores of seven democracies football match bearing a gift: declassified He was Mr Obama’s point man for Latin in Latin America have fallen by 0.8 points documents shedding light on abuses by America, visiting 16 times. Regional emer- or more since 2010. Recently Peru’s Con- Brazil’s military dictatorship of 1964-85. Ms gencies, from mass migration to Venezue- gress unseated the second of two presi- Rousseff had herself been tortured. la’s tightening dictatorship, will require his dents within 30 months. Nayib Bukele, El Ms Rousseff called Mr Biden “a seduc- attention. He does not have Donald Salvador’s president, has laid the ground- tive vice-president”. Other Latin American Trump’s bullying style. He will promote the work for dictatorship. Elections in 2021, in- leaders found him less so. Otto Pérez Moli- rule of law and efforts to fight climate cluding in Ecuador, Peru and Nicaragua, na, a former president of Guatemala, rues change, concerns that Mr Trump largely ig- could bring populists to power or consoli- the day that he bowed to pressure from him nored. This year Mr Biden is due to host a date authoritarians’ rule. to prolong the life of cicig, a un-backed triennial “summit of the Americas”. When Mr Trump took office in 2017, Lat- graft-fighting agency. He expressed this re- Latin America has changed since his in American governments suffered a “fear gret in 2015 from a military prison, where vice-presidency. Weak economic growth of coming to his attention”, says a former he awaited trial on corruption charges. adviser to his administration. But many cicig supplied the evidence. grew to like him, largely because he left Also in this section Once Mr Biden has the top job, it would them alone, unless they allowed migrants not be surprising if his interest in Latin 24 Ford leaves Brazil to stream into the United States. His inter- America waned, given other demands on est in promoting democracy did not extend him. The only memorable vignette about — Bello is away beyond the left-wing “troika of tyranny”—1 24 The Americas The Economist January 16th 2021

2 Cuba, Nicaragua and Venezuela. Jair Bolso- Carmaking in Brazil naro of Brazil and Andrés Manuel López Obrador of Mexico, populists of the right and left respectively, felt a kinship with Driven away him (Mr Bolsonaro is an unabashed fan). Both waited a month to recognise that Mr SÃO PAULO Why Ford Brasil is shutting up shop Biden had defeated him. Bidenworld thinks it wrongheaded to n 1928 henry ford built a factory in the1970s built roads in the Amazon, confine democracy promotion to three Ithe Amazon rainforest. He planned to filling the jungle with settlers to fend off countries. It shares the pre-Trump consen- grow rubber trees, make tyres and teach foreign influence. Luiz Inácio Lula da sus that the neighbourhood’s stability de- Brazilians Utopian ideals at a Midwest- Silva, who as a child left the poor north- pends on the rule of law, a strong civil soci- style company town called Fordlândia. It east in the bed of a pickup and later ety and fairer capitalism. It will seek more lasted 17 years. Pests killed the trees and worked in a car factory in São Paulo and humane ways to control migration than vice doomed the town. But car culture led a trade union, became president in bullying governments to block migrants as thrived in Brazil. Ford stayed, its profits 2003. Tax breaks worth billions of dollars they pass through their countries. fattened by industry-promoting sub- in the 2000s brought more carmakers, Mr Biden wants eventually to resume sidies from the government. which supplied a growing middle class. allowing asylum-seekers to apply in the On January 11th Ford Brasil said that it Its members included autoworkers who United States. Now the Trump administra- will close its factories, laying off 5,000 “put their kids in private school”, says an tion forces those who reach the border to workers. Although the decision is partly ex-director of Mercedes in Brazil. remain in Mexico. Mr Biden is expected to a result of Ford’s global woes, it also But the industrial engine is faulty. unwind Mr Trump’s pacts with the three shows the weakness of Brazilian manu- Bureaucracy is oppressive and workers’ countries of the Northern Triangle—Gua- facturing. “It’s a blow to Brazil’s notion of productivity is relatively low. Brazilians temala, Honduras and El Salvador—where- being a modern nation,” says Joel Wolfe, sum up the burden as “Brazil cost”. It is by the United States can send migrants the author of “Autos and Progress: The one reason why China and Mexico out- back. That will be a slow process. A loftier Brazilian Search for Modernity”. export Brazil. Internal demand crashed goal is to make the Northern Triangle a bet- In the 1950s Juscelino Kubitschek, a in a recession in 2014-16. With a manu- ter place to live in. Juan Gonzalez, who will statist president, built thousands of facturing capacity of 5m cars a year, join the National Security Council, was a miles of motorway. Military dictators in Brazil put plates on 1.9m in 2020, when Peace Corps volunteer in the highlands of both supply and demand were hurt by Guatemala, origin of many migrants. Mr the pandemic. Biden wants to spend $1bn a year to im- Ford would probably have exited prove conditions in Central America. anyway. It has been losing money in He will have to use sticks as well as car- Brazil since 2013. In 2018 it announced a rots. Corruption is worsening in the North- global plan to focus on pickups, which ern Triangle. Guatemalan lawmakers are made for the South American market chased out cicig; legislators shut down in Argentina, and electric cars. “There’s maccih, its counterpart in Honduras. Mr no debate about sustainable mobility” in Trump did not protest. This month Ameri- Brazil, says Cassio Pagliarini, a consult- can prosecutors named Honduras’s presi- ant who spent 25 years at Ford. He pre- dent, Juan Orlando Hernández, as a co- dicts that other carmakers will shutter conspirator in a drug-trafficking case (he plants, too. denies wrongdoing). The case shows the Miguel Torres, the head of a car- limits of spending on security and prosper- workers’ union in São Paulo, lambasted ity while the rule of law is weak, says Eric Ford for “deepening the social tragedy” Olson of the Wilson Centre, a think-tank. caused by the pandemic. He called on Mr Biden will resume the fight for better politicians to press the carmaker to governance. American ambassadors will change its mind. They would do better to press governments to appoint honest reduce Brazil cost. That could truly mo- judges and officials. Mr Biden’s adminis- Brazil is in the rear-view mirror dernise the country. tration may propose the establishment of an anti-graft agency for all of Central Amer- ica, which would support prosecutors and to Mr Obama. Mr Biden will cautiously re- create a $20bn fund to protect it, but Brazil, attorneys-general but be less intrusive new that policy, easing restrictions on re- which interprets such initiatives as threats than cicig and maccih. One lesson of Mr mittances and tourism. The Trump admin- to its sovereignty, has so far rejected the Trump’s successful bullying over migra- istration’s decision this week to restore idea. Relations between Mr Biden and Mr tion is that the United States has great le- Cuba to the list of state sponsors of terror- Bolsonaro, who praises the regime that tor- verage in the region. ism, alongside Iran, Syria and North Korea, tured Ms Rousseff, are likely to be strained. Mr Biden’s approach to the tyrannical raises the political costs of rapprochement. For him and some other leaders in the troika will be less punishing, giving them Mr Obama had removed it in 2015. region, the change of gears in Washington fewer excuses for misrule. Like Mr Trump, Climate change will be a new source of may cause whiplash. Some will say the Un- he regards Venezuela’s Nicolás Maduro as a rancour. Mr López Obrador, who champi- ited States is in no position these days to tyrant. But he is likely to sabre-rattle less, ons Mexico’s state oil monopoly and has lecture other countries. But, says an advis- work with other powers more and seek spurned American renewable-energy pro- er to Mr Biden, the failure of attacks on ways to alleviate the humanitarian crisis. jects, will face green pressure from Wash- American democracy shows the value of Antony Blinken, Mr Biden’s nominee ington. So will Mr Bolsonaro, who has al- strong institutions. If the United States can for secretary of state, helped normalise re- lowed destruction of the Amazon rain- overcome such assaults, it may be able to lations with Cuba when he was an adviser forest to accelerate. Mr Biden wants to help its neighbours do the same. 7 Asia The Economist January 16th 2021 25

Royalty in Indonesia laborating with the Dutch, or fled. Later most had their land seized. By this century Strutting sultans the few aristocrats who held on to their palaces had become glorified caretakers of “run-down tourist attractions”, writes Ger- ry van Klinken of the University of Queens- land in Australia. In 1998 Indonesia’s strongman of more SINGAPORE than 30 years, Suharto, was overthrown. Defunct princely families are making a comeback Like just over half of Indonesians, he was uaib syamsudin sjah recalls how un- would rather a “weekend sultan” than none from the island of Java. To cement his con- Seasy he felt as his extended family began at all. When the kolano visits, “there’s a eu- trol, he had suppressed local identities and to chant on the fateful day. They had gath- phoria that you can feel among the people,” crushed revered institutions elsewhere in ered by a sacred spring on a beach on the is- says Ronal Tuandali, chief of the local the archipelago. After his fall, many com- land of Halmahera to discover who among council of a village in the kingdom. munities began to revive old rituals and them would become kolano (king) of the At least Mr Suaib has peers with whom forms of governance, encapsulated by the Lolodans, a local ethnic group. Mr Suaib to commiserate. For centuries the Indone- word adat, or tradition. Ex-royals, embody- was worried that he would be chosen. As sian archipelago was ruled by myriad Hin- ing a sense of place, fitted perfectly into they recited a holy mantra, the spirit of Mr du rajas and Muslim sultans. By 1914 some this revival, Mr van Klinken notes. Suaib’s great-grandfather, the last king of 340 of these principalities had become pro- Some began dusting off their old regalia Loloda, possessed an elderly relative, who tectorates within the Dutch East Indies. and reclaiming their prerogatives. Others put on the dead king’s robes and picked up During the struggle for independence, had to be begged by their would-be subjects his sceptre. He approached each eligible many petty potentates were killed for col- to move back into the boarded-up palace, descendant in turn, passing over them un- or scarcely remembered their claim. (A lo- til he arrived at Mr Suaib, to whom he did cal historian had to be enlisted to trace the indeed give his ancestor’s blessing. Also in this section descendants of the last king of Loloda, who Mr Suaib has been kolano of Loloda for died in 1915.) Bayu Dardias of Gadjah Mada 26 Child abuse in the Philippines four years now. The crown “is a burden for University suspects there are well over 100 me”, he says. The job comes with many re- 28 Kyrgyzstan’s controversial president village rajahs across the country today. He sponsibilities but few perks. The stipend counts 35 sultanates and kingdoms that are 29 Implacable Indian farmers from the provincial government is not so influential at district level or higher (see generous that he can quit his day job, as a 29 Afghanistan’s bored young map on next page). Most sultans have no policeman. He works in a city six hours by formal role or rights, but many have politi- 30 Banyan: Booby-trapped Taiwan boat from his kingdom. But his subjects cal ambitions. At least four royals hold po-1 26 Asia The Economist January 16th 2021

ing covid-related lockdowns last year. BRUNEI S MALAYSIA Loloda Pressure groups for children have long U MALAYSIA Ternate Kingdom campaigned to raise the age of consent, as a Sultanate M BORNEO Halmahera simple way to combat all this. It would 500 km A WEST mean that sex with young teens was illegal KALIMANTAN NORTH by definition, making rape much easier to T SULAWESI MALUKU R prosecute. It would also spare children the INDONESIA PAPUA trauma of cross-examination in a court- A Jakarta Surakarta room, the prospect of which discourages Sultanate Selected localities J A many victims from coming forward, says with prominent V A Alberto Muyot of Save the Children Philip- royal families Yogyakarta TIMOR- pines, a charity. And since parents or rela- Sultanate LESTE Source: Bayu Dardias tives often play a part in the sexual exploitation of children, it would allow the 2 litical office, including a provincial gover- accountable,” declares Princess Wandan- authorities to charge the perpetrators even nor and two vice-governors. sari, sister of the sultan of nearby Sura- when the victim did not want to. Changes in the structure of government karta. “What if he makes a mistake? But After years of shilly-shallying, politi- after Suharto’s fall created incentives to re- how can a sultan go to prison?” cians are at last taking the idea seriously. In vive sultanates. In 1999 parliament de- The authority sultans have accrued is in December the House of Representatives volved much authority from the centre to part a reflection of popular disillusion- passed a bill raising the age of consent to 16, localities, turning Indonesia into one of ment with elected politicians. Take Loloda. by a vote of 207-3. A similar bill is making the world’s most decentralised countries, Residents complain they have not been its way through the Senate. The president, says Marcus Mietzner of Australian Na- sufficiently compensated for land being Rodrigo Duterte, who will also have to ap- tional University. The regions’ share of mined for gold. Mr Ronal says they have re- prove any reform, is not expected to object. government spending rose rapidly, from peatedly complained to the company con- He claims to have been abused by a priest as 16% in 2000 to 50% in 2017, according to the cerned, and to the provincial government, a child himself. World Bank. Politicians lobbied for prov- to no avail. The experience has shaken Lo- Congress had shrugged off previous at- inces to be split into ever more administra- lodans’ faith in the system, says L.G. Saras- tempts to raise the age of consent on the tive units, each entitled to its own slice of wati Putri of the University of Indonesia. ground that the country already had laws to these riches. Between 1999 and 2013 more They have turned to the kolano for help. He, deal with sexual abuse. But the legislators than 200 new districts were formed. in turn, has declared that the land in ques- leading the current effort, says Bernadette Politicians seeking local office quickly tion belongs to his kingdom. 7 Madrid, who runs the Child Protection realised that the backing of a sultan would Unit at the Philippine General Hospital in lend them prestige and legitimacy. Ethnic Manila, have young children of their own. activists also saw value in having a sultan Child abuse in the Philippines “It speaks to them emotionally, not only in- on side. Struggles between Malays and tellectually,” says Dr Madrid. Dayaks, the two main local ethnicities, Sex with What is more, the internet seems to be over control of newly autonomous dis- exacerbating the problem. In 2014 some tricts in West Kalimantan province 12-year-olds five in every 10,000 Filipino internet ad- prompted Malays to revive three long-ex- dresses were used for child sex abuse, ac- tinguished local sultanates, in the hope cording to International Justice Mission, a that these potentates would serve as sym- Christian charity. By 2017 that proportion A push to raise the age of consent is bols of their identity and cause. had jumped to 69. An analysis of cases of nearing fruition Two lucky royals have even succeeded possible online abuse referred to authori- in reviving their kingdoms in a semi-for- t is perfectly legal in the Philippines— ties abroad by American, British, Canadian mal sense. Hamengkubuwono X, the sul- Ibut almost nowhere else—for an adult to and Nordic law-enforcement agencies be- tan of Yogyakarta, was elected governor of engage in consensual sex with a preteen. tween 2010 and 2017 found that the Philip- the “special administrative region” of the For as long as the country has had an age of pines received nearly nine times as many same name in 1998. In 2012 the national sexual consent, it has been fixed at 12, referrals as the second-ranked country, parliament, at his behest, decreed that he among the lowest in the world (see chart). Mexico, and 47 times as many as the next 1 and the ruler of a neighbouring principal- The Philippines is a deeply religious, ity would be governor and deputy governor largely Catholic country. It remains the respectively for life, and that those posts only place in the world, other than the Vati- Young adults would be passed on to their heirs. can, where divorce is illegal (except for Age of consent, 2020 Sultans often win praise for defending Muslim Filipinos). The low age of consent adat. Fadriah Suaib, an artist from Ternate, is not a sign of sexual liberalism, but the re- 1817161514131211 Philippines an island in North Maluku province, is verse: it is a holdover from the patriarchal willing to overlook the local royals’ occa- mores instilled by Spanish colonialists, Japan sional snobbery and abuse of their stand- who had little compunction about men South Korea ing. “I still believe that having a sultan is marrying young girls. Bangladesh very important,” she argues. “Continuing Campaigners see a link between the age China the tradition, cultures and customs and of consent and the many sexual horrors Thailand norms—it can only be done by the sultan.” suffered by Filipino children. More rapes Australia The royals’ peculiar status raises some are committed against children than adult Indonesia awkward questions. In Yogyakarta, Mr women. Roughly one child in five has expe- India Bayu writes, “The democratically elected rienced sexual abuse of some sort. The Vietnam parliament rarely criticises, let alone chal- abuse of children for dissemination online Source: World Population Review lenges, the sultan.” “The governor must be has grown rapidly recently, especially dur- Introducing ATEM Mini The compact television studio that lets you create presentation videos and live streams!

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2 South-East Asian country, Thailand. cities, meanwhile, provide an incentive for hard-won political freedoms that make The factors that contribute to this state online abuse. Kyrgyzstan stand out in a region of auto- of affairs are normally seen as reasons to be Raising the age of consent is only the crats. The use of force in politics is “very optimistic about the Philippine economy. beginning, campaigners say. Passing the alarming”, says Maksat Janibekov, a 30- English is widely spoken, enabling easy law will be relatively easy; changing peo- year-old resident of Bishkek, the capital, communication with the outside world. ple’s attitudes will be harder. Many parents referring to the mobs that have helped per- Internet access is widespread and inexpen- still see corporal punishment as a good way suade many of Mr Japarov’s rivals to stand sive. And the Philippines’ legions of mi- to discipline children, even though it’s ille- aside. Mr Janibekov was among protesters grant workers mean the country has an ex- gal, points out Isabelle Ereñeta of Child- marching on election day against Mr Japa- tensive network of payment and Fund, another charity. “These things take a rov’s plans to strengthen the presidency. In remittance services. Widespread poverty really long time to change when it’s so a referendum held alongside the election, and a lack of opportunity outside the big deeply ingrained in our culture.” 7 81% of voters approved his proposal to shift various powers back from parliament to the president, undoing changes adopted Kyrgyzstan’s election after the revolution in 2010 to prevent a return to the rule of strongmen. Mr Japarov Steppe one also intends to scrap the clause in the constitution limiting the president to a single term, another safeguard against power- hungry leaders. Mr Japarov shrugs off suggestions that he is a dictator-in-waiting: “I’m a demo- BISHKEK cratic person.” In his victory speech he Sadyr Japarov is elected president in a landslide sounded a conciliatory note, saying he had campaign advert for Sadyr Japarov, cial media and the thuggishness of some of “no malice or hatred in his heart” and urg- Athe newly elected president of Kyrgyz- his devotees have drawn comparisons to ing rivals to unite behind him. More omi- stan, shows him galloping across a snowy Donald Trump, which he rejects with a nously he also declared, “The minority expanse on a white steed, coattails flying in good-natured laugh: “I don’t consider my- should submit to the majority.” the slipstream. The message is clear: Mr Ja- self a populist. I hate populists.” Mr Japarov will need all the consensus parov is a knight in shining armour (or at “He’s good, honest and just. He’s suf- he can muster if he is to make a success of least in traditional Kyrgyz garb, which he fered for the country and the people,” gush- the job. The pandemic has prompted a wore on the campaign trail), racing to save es Elzad Junusov, a supporter. “He really is surge in unemployment. Foreign investors the turbulent Central Asian nation, which a man of the people,” he adds. He whips out were spooked by mob attacks on business- has seen three popular uprisings in 15 his phone to show photos of himself visit- es during the unrest in October. Russia and years, including one this past autumn that ing Mr Japarov in prison. Mr Junusov says China, the region’s dominant powers, are put him on the path to power. he has been a fan since Mr Japarov led a also upset by the tumult. Organised crime “I’m not going to repeat the mistakes of rabble-rousing campaign for the national- and corruption are blights that he insists previous administrations,” Mr Japarov told isation of a Canadian-run gold mine nine he will fight, but he has been accused of The Economist in his campaign headquar- years ago. Although that movement complicity in both—a claim he dismisses ters at midnight on election day, January brought Mr Japarov to national promi- as a political smear. It will take a couple of 10th. Preliminary results showed him nence, he has backtracked on the idea since years to fulfil his promise of better lives for romping home with 79% of the vote, albeit coming to power. his people, Mr Japarov warns. With two of on a turnout of less than 40%. It was venal- To his critics the new president is a dan- his predecessors in exile and another in ity and injustice that had caused past lead- gerous demagogue, likely to roll back the jail, the stakes are high. 7 ers to be overthrown, he said. “Why repeat those mistakes? I’m going to rule fairly.” Yet Mr Japarov participated in one of those discredited governments, toppled in 2010. Moreover, his recent rise involved all manner of legal contortions. He was serving a prison sentence for kidnapping—a conviction he says was politically motivated—when protests first broke out over a tainted election presided over by his predecessor, Sooronbay Jeyenbekov, in October. A mob freed Mr Japarov, and helped propel him first to the prime ministership and then to the job of acting president, when Mr Jeyenbekov resigned. (An ally briefly took over that role while Mr Japarov campaigned, as the constitution requires.) “Ordinary people, especially young people, believe in me. They entrust their fates and the fate of the country to me,” said an exhausted Mr Japarov, sipping tea as eu- phoric campaign staff bustled about. His habit of invoking “the people”, his careful cultivation of a mass following through so- Don’t mention the p-word The Economist January 16th 2021 Asia 29

its members, however, have already made Afghanistan’s bored young statements in defence of the reforms. The farmers welcomed the suspension, A war over but said it was not enough to persuade them to disperse. They have vowed to drive Battlegrounds their tractors into Delhi on January 26th, in a rival cavalcade to the annual Republic Day parade presided over by the prime KABUL A popular video game has sparked a minister. Mr Modi’s Bharatiya Janata Party moral panic (bjp) towers over national politics, having won a second term in government in 2019 n a basement webcafé in Kabul, Kazem with the biggest majority in 35 years. But IRahimi directs a scurrying armed figure whereas rival parties trouble it very little, around his screen. Scouring his sunlit on- protest movements like that of the farmers, line world, he hunts for rivals to shoot, or the people who demonstrated against while chatting to fellow players on a head- discriminatory new rules on citizenship a set. Just a few miles outside the city, genu- year ago, are different. They are harder both ine fighting of a similar sort is an everyday to anticipate and to face down. occurrence, as Taliban guerrillas battle the The cheery but determined faces in the Afghan security forces. In Kabul itself, camps have attracted sympathy from bombs and assassinations are common. across the country, despite the complexity Yet for Mr Rahimi, the game is a form of es- of the policies involved, and the relative capism. He enjoys the teamwork and it im- Agriculture in India wealth of the protesters, most of whom proves his English, he explains. Moreover, come from the states of Punjab and Harya- he is jobless, so has little else to do. Ploughing on na, where farmers’ incomes are more than The game Mr Rahimi is playing, “Player- twice the national average. Agronomists Unknown’s Battlegrounds”, has been a glo- and economists are in nearly uniform bal hit. It is mostly used as a smartphone agreement with the thrust of the new laws, app, not in dim underground gaming dens which do away with restrictions on where but in bedrooms and living rooms. It DELHI and to whom farmers can sell their crops, racked up worldwide sales of around $2bn The Supreme Court suspends farm and seek to make it easier to invest in stor- in the first nine months of 2020. reforms, but farmers keep protesting age and distribution, in particular. These But in Afghanistan the popularity of the he steam and smoke that billow new freedoms should benefit farmers in game, known as pubg (pronounced Tthrough the encampments that circle the long run. Pub-g), has caused a moral panic. Mobile- India’s capital are even thicker than the But the protesters are worried that Mr phone operators estimate that around city’s wintertime smog. Hundreds of thou- Modi’s allies in big business will find a way 100,000 Afghans play it at once at peak sands of angry farmers descended on Delhi to game the new system. They also fear that times. Many also do so in the wee hours, seven weeks ago. Stopped at the borders, the changes presage the shrinking or scrap- when the internet is fastest. The game is they pitched tents, blocked traffic, sharp- ping of especially generous subsidies for thought to take up a huge chunk of national ened slogans—and began to cook. Mobile those growing wheat and rice, the main mobile-data traffic. The closure of schools generators power giant automated cha- crops in Haryana and Punjab, despite the and universities because of covid-19 seems pati-making machines. Vats of steaming government’s assurances to the contrary. to have supercharged its popularity. mustard greens hiss at January’s chilly The government has managed to inflame Critics worry that it is further desensi- dampness. To mark Lohri, a regional festi- matters further by claiming, without any tising a generation already exposed to con- val, the protesters built the usual bonfires, evidence, that many of the protesters are stant violence and is keeping young stu-1 throwing in copies of the three farm-re- really Sikh separatists, working to under- form acts that Narendra Modi, the prime mine the state. bjp functionaries have been minister, rushed through parliament in circulating old pictures of Sikhs waving se- September. Their leaders say they will stay cessionist placards, falsely asserting that put until the three laws are revoked. they are part of the current protests. On January 12th they almost got their The Supreme Court appears to be trying way. The Supreme Court issued an “ex- to help the government out of this impasse, traordinary order of stay of implementa- by providing the farmers with a face-saving tion of the farm laws”. The chief justice, victory that may dampen the protests with- Sharad Arvind Bobde, is presenting the ju- out necessarily undoing the reforms. It is diciary as an impartial mediator, but would not clear how soon its committee will re- clearly like the farmers to go home. “While port, whether it will recommend any we may not stifle a peaceful protest,” he changes and what weight its findings will said, he nonetheless hoped that the court’s carry. The government must hope that the order would be “perceived as an achieve- protests in the meantime will lose momen- ment” by the farmers and that their leaders tum. It was recently saved from surprising- would “convince their members to get back ly big and persistent demonstrations to their livelihood.” against the citizenship law by the advent of The Supreme Court did not say how covid-19. But the farmers, with their gener- long the suspension would last, or what the ators and communal kitchens, look ready legal justification for it was. Instead, it for a long stay. Whatever the Supreme named a committee of four experts to pon- Court’s intention, its ruling has done little der the worthiness of the laws. All four of to clear the air. 7 Coals to Newcastle 30 Asia The Economist January 16th 2021

2 dents from their studies. Freshta Karim, an be. It says it is discussing with telecoms grim enough, the un estimates that four in educationist who runs a mobile library, firms how to put the ban into effect. ten young Afghans are neither working nor says she cut the internet in her home to Mohammad Reza, a regular player sit- studying. A dispiriting number think their stop her nephews playing. “It looked so ting next to Mr Rahimi, is dismissive of the only hope of a better life is to flee to Europe. real, and for us, it looks more real because ban. “Is pubg the real problem with Af- Zakria Ayubi, who runs a gaming den in the war is going on,” she says. ghanistan?” he says, rolling his eyes. The Kabul, says pubg offers a welcome distrac- The Ministry of Haj and Religious Af- country, he and his friends say, has far tion. One of his friends, an unemployed fairs has piled in, declaring the game harm- more serious troubles, and young people in law graduate, plays through the night and ful to mental health and warning that it particular face grave difficulties. Kabul has sleeps all day. “He says, ‘I have looked for could create a violent mindset. On Decem- precious few parks or recreational facili- jobs and there’s nothing. What more can I ber 17th the telecoms regulator said it was ties, and the risk of violence on the streets do?’” The ban infuriates Mr Ayubi. “What banning the game, though it gave little in- makes parents reluctant to let their chil- has the government done for us? They try dication of how it would enforce a ban or dren go out. While the intractability of the to ban pubg, but can you see any services what the penalties for breaching one would 40-year civil war makes the future look- from the government for young people?” 7 Banyan Bonfire of the protocols

Have departing American officials left a booby trap for Taiwan as well as Joe Biden? echnically speaking, the United the evils of China. ten). Yet Asia hands in Washington, both TStates has not had diplomatic rela- Poking China in the eye is part of the Republican and Democratic, say it is a tions with Taiwan since it initiated them mission. Hence the easing of rules that booby trap for President-elect Joe Biden. with the People’s Republic of China, in prevented Taiwanese and American offi- Either he embraces the move, in which 1979. But diplomats or no, America prom- cials visiting one another’s offices. In 2019 case he starts off on the wrong foot with ises to maintain close economic and the ait’s director, Brent Christensen, held China, or he gets flak at home for not cultural ties and provide arms “of a de- a press conference with Taiwan’s foreign standing up for gallant little Taiwan. fensive character”. It also reserves the minister, Joseph Wu, in his ministry. Last Worse, Evan Medeiros, a former head right to come to Taiwan’s aid in the event year Mr Christensen’s counterpart, Hsiao of policy on China and Taiwan for Barack of any coercion against the island nation Bi-khim, made a well-publicised call on an Obama who is now at Georgetown Uni- (presumably by China, which threatens assistant secretary of state, David Stilwell. versity, sees Mr Pompeo’s move as a trap force to reclaim what it insists is part of In August the health secretary, Alex Azar, for Taiwan, too. Over the past few years the motherland). This much is laid out in became the highest-ranking American China has increased its bullying of Tai- the foundational text governing bilateral official to visit Taiwan since 1979. wan with military posturing and dip- ties, the Taiwan Relations Act, passed by Nothing, however, tears at the figleaf as lomatic isolation. Crossing China now Congress the same year. But crucially, much as a brief statement on January 9th might prompt it to conduct even more air these links, close as they are, have all by the outgoing secretary of state, Mike sorties or pick off Taiwan’s remaining supposedly been “unofficial”. Pompeo. In it, he declared all constraints diplomatic allies. If you really care about That word is a figleaf, says Douglas on contacts between American and Tai- Taiwan, argues Mr Medeiros, you should Paal of the Carnegie Endowment for wanese officials to be “null and void”. not expose it to more military pressure. International Peace, who is a former head America had imposed such constraints to That is a risk that many of Taiwan’s of America’s de facto embassy in Taipei. “appease the Communist regime in Bei- leaders seem happy to take. On social The leaf has grown over time and hides jing”, he said. “No more.” media Ms Hsiao and William Lai, the much that goes on so as not to give China Mr Stilwell has argued that the un- vice-president, have cheered Mr Pom- unnecessary grounds for pique. A thicket shackling of constraints is the culmina- peo’s declaration. In the past they flirted of dialogues has sprouted between offi- tion of a considered review of a rag-tag set with the idea of Taiwan’s declaring itself cials of the two countries, and the of protocols (many of which are unwrit- formally independent from China—a boundaries of the unofficial have been move China threatens would lead to war. cautiously stretched. Only a decade ago To advance the cause of independence were the Stars and Stripes first raised there is “no briar patch they wouldn’t outside the American Institute in Taiwan jump into”, one Asia hand observes. (ait), an embassy in all but name. (Tai- By contrast, the president, Tsai Ing- wan even now refrains from flying its wen, is more cautious. She has refrained national flag outside its equivalent office from commenting on Mr Pompeo’s in Washington.) ruling. Not least, says her ally Wang President Donald Trump’s adminis- Ting-yu, co-chairman of parliament’s tration seemed to want to tear the figleaf foreign-affairs and national-defence away. Mr Trump himself cares not a jot committee, Taiwan should give Mr Biden about Taiwan (though as president-elect room to complete the transition, which he made waves by taking a congrat- is also a sensitive time for President Xi ulatory phone call from his Taiwanese Jinping of China. Taiwan does not want counterpart, Tsai Ing-wen). Yet his ad- to be a “troublemaker”, Mr Wang says, ministration housed appointees whose but a reliable partner of America’s. One, fervent support of democratic Taiwan is in other words, that will don a figleaf the flipside of their Manichaean view of when required. China The Economist January 16th 2021 31

Village elections different times. In this cycle the party is pulling out all the stops to get its way. Why bother counting? To the 550m people who live in rural China, the results can matter. Decisions made by village bosses can have an enormous impact on people’s livelihoods. In particular, they wield power over the use of land, which is officially under “collective” The West once dreamed of democracy taking root in rural China. control—none of it is privately owned. In The Communist Party is making doubly sure it does not some villages it is pooled for large-scale like winning better than losing,” ers’ anger would foment unrest. Making farming or industrial purposes. “IAmerica’s then president, Bill Clinton, village leaders more accountable could In 2018 the party began calling for all- told villagers in China in 1998 as they pre- help keep the lid on, officials thought. But, out efforts to implement a system it de- pared to elect their community’s leader. In to the party’s chagrin, its stooges did not al- scribes as yijiantiao, or “carrying across one a gentle prod to his hosts, he added: “But ways win. In the 2000s Chinese leaders re- shoulder”. This refers to the way that farm- whenever there is an election and the peo- emphasised that (appointed) party secre- ers suspend two loads on either end of a ple decide, everyone wins.” taries, not elected committees, still had the pole across their backs. In this case the At that time, Western leaders were ex- final say in villages. In the West, dreams loads are the two parallel structures that cited by China’s new and much-vaunted gradually faded of democracy spreading run China’s villages: the elected village experiment with rural democracy. It upwards through the system. But every committees and the party committees. The would, they hoped, lead to broader politi- three years, as the law decreed, villages still party wants memberships of both commit- cal change. Today it is election season once held elections, and, occasionally, snubbed tees to be the same, and to be led by a single again in the countryside. But the Commu- the party’s preferred candidates. person: the village party secretary. nist Party is making it clear that the days of Late in 2020 rural residents began vot- In some places, local officials—with the dalliance with modest political freedom in ing for their leaders once again. It is a pro- party’s blessing—have long been practising villages are over. The biggest effort in de- cess that will take months to complete, the yijiantiao model. A five-year plan for cades is under way to make sure the party’s with different places conducting polls at “rural revival”, published in 2018, said it candidates win, unopposed. was being implemented in around one- Seeding democracy was not the party’s third of China’s more than 500,000 “ad- Also in this section plan when it introduced elections in the ministrative villages” where the commit- countryside in 1988. Corruption was ram- 32 Dissent in Hong Kong tees reside (there are 2.6m other “natural pant among rural party bosses. Many were villages” that fall under their aegis). That 33 Chaguan: The stigma of covid-19 incompetent. The party feared that farm- year the party issued regulations saying 1 32 China The Economist January 16th 2021

2 that the system should become the norm. Dissent in Hong Kong After the elections now under way the party wants at least half of village leader- ships to be of the yijiantiao variety. Doubt- Masked defiance less eager to impress, some places are aim- ing much higher. Township officials are HONG KONG To show support for the democracy cause, some don yellow masks being told their performance evaluations will depend on how well they do at ensur- n the streets of Hong Kong, few making and selling bright yellow ones. ing targets are met. Red banners have been Otraces remain of the turmoil in 2019 Many of them are discreetly printed put up in streets saying yijiantiao will when tear gas, rubber bullets and stand- with the letters fdnol. This stands for “strengthen the party’s overall leadership”. offs between police and pro-democracy “Five demands, not one less”, which was This requires some sleight of hand. The demonstrators were an ever-present a popular chant during the turmoil. “I election law says that “no organisation or hazard. Especially since June, when wear yellow masks first and foremost to individual may designate, appoint or re- China imposed a draconian security law express my political stance, rather than place any member” of elected committees. on the city, few people have dared to to protect myself from covid-19,” says But localities have introduced rules that all protest openly. Yet defiance is still vis- Ellen, a piano teacher in Hong Kong. but ensure the village party secretary gets ible. On the metro, in wet markets and in The yellow-mask industry is part of the concurrent job of village chief. Com- trendy cafés, some wear yellow masks. what is commonly called the “yellow monly, the village’s party members (usual- Yellow is the colour of the city’s de- economy”. This refers to businesses that ly just a small fraction of the population) mocracy movement: during the upheav- are deemed supportive of the democracy choose a party secretary and other mem- al, protesters commonly wore yellow cause. Some people deliberately choose bers of the party committee—ie, endorse helmets or carried yellow umbrellas. such firms when eating out or shopping. the choice made by higher-ups. Next, a Even before the security law was enacted, “I like to support pharmacies that sell member of this committee organises the the pandemic and tighter policing had yellow masks, so if I walk past one, I’ll go election for the post of village chief. Finally dampened enthusiasm for mass gath- in to buy some medicine, cosmetics or an election is held in which every adult vil- erings. But covid-19 has offered a new masks,” says one 50-year-old woman. lager may vote. The party secretary wins. opportunity for showing discontent. The Some companies have banned their A tighter vetting system typically en- government made mask-wearing in employees from wearing yellow masks at sures that no one stands against him (vil- public compulsory. Businesses began work. On January 11th a judge ordered lage leaders are rarely female). It involves three people wearing them to leave his consulting official organs in the local courtroom. But Hong Kong’s chief jus- township, including the police. These can tice, Andrew Cheung, defended those block the candidacy of a wide range of peo- who sport yellow. “Hong Kong is a free ple. The south-western city of Kunming, society,” he said. “There should be abso- for example, has a list of ineligible types lutely nothing wrong…with wearing called the “seven forbiddens and 15 unsuit- clothes or face masks of any colour.” ables”. Among the forbiddens are “politi- His words are unlikely to reassure cally two-faced” people. A propaganda vid- yellow-mask suppliers. In November eo explains this with an illustration of a Yellow Factory, a big maker of them, man dreaming of a protest for freedom and closed after newspapers backed by the democracy. The unsuitables include those Communist Party accused the business with “strong religious feelings”: a cartoon of violating the security law. Yellow shows people bowing to a Jesus-like figure. Factory’s masks were sold in boxes bear- Local regulations also commonly bar ing the words “Get better soon Hong those who have been involved in “illegal” Kong, resist the pandemic of our times.” petition campaigns for the redress of a lo- This echoed the slogan “Liberate Hong cal injustice; petitioning is routinely Kong, revolution of our times”, a rallying treated as criminal. In Guangxi province cry of protesters that the government there are bans on candidates who have re- now deems illegal. Many say yellow ceived training in grassroots politics from Soon to become a scarce commodity? masks are becoming harder to find. any organisation abroad. A few years ago the government allowed some Western groups to provide such help. views should be solicited when choosing when they rose up against their party boss Also banned are those with links to the party secretary. The law still says that in 2011 and held free elections. The party “black and evil forces”. This is a sweeping the winner of an election for village chief eventually clamped down there, harshly. term used to describe everything from needs at least 50% of the vote, and that 50% The party clearly expects the current criminal gangs to unauthorised religious of registered voters have to cast their bal- elections to produce the results it wants: it sects and clan networks. In 2018 the party lots for an election to be valid. But that is a has changed the rules this time to allow vil- launched a three-year campaign to sever low bar, especially when many do not reg- lage chiefs to serve for five years instead of such forces’ connections with grassroots ister. Since the 1990s, many working-age three. Officials argue that, for one person political structures. It declared victory late villagers have moved to cities. Migrants carrying two loads, a five-year term will last year, claiming it had “severely pun- can return to vote or appoint a proxy, but make it easier to implement plans without ished” 3,700 “village overlords” (as power- why bother when it looks stitched up? The being fettered by frequent polls. Some ful leaders operating without heed to the same turnout is required to force a village state-owned media have aired concerns law are known), and sacked 41,000 offend- chief to step down. But when the chief is that concentrating so much power in the ers from village committees. also the party secretary, a recall requires hands of one person may result in rash de- Democracy is not entirely dead. Some daring. In Guangdong province, residents cisions going unchecked. But that is a pro- local regulations say ordinary villagers’ of Wukan village grabbed world headlines blem for later. The party is out to win. 7 The Economist January 16th 2021 China 33 Chaguan The stigma of covid-19

A year into the pandemic, ordinary Chinese are strikingly accepting of harsh virus controls rus controls are rarely criticised, even in private. Indeed, a common grumble is that rules are not being enforced harshly enough. A lazy explanation for this virus exceptionalism is that people in China do not care about personal freedoms or privacy. That is unfair to citizens of a large country with complicated views towards authority. Instead, a year into this pandemic, a simpler difference stands out. Lots of ordinary Chinese take covid-19 seriously in a way that is not always true in the West. In particular, the idea of catching it inspires real fear, even dread. The reasons include politics and propaganda, economics, culture and history. Intrusive virus controls have their own, self-reinforcing logic. In China, each individual case disrupts many lives. Beijing’s worst outbreak to date started in a wholesale food market last summer, infecting at least 368 people. Its first officially diagnosed patient, on June 11th, was Tang Jingzhi, the owner of a noodle shop. Inter- viewed this week on a stroll through his local park, Mr Tang, an amiable 52-year-old Beijinger, recalls how he reported a low-grade fever to local doctors, only to be called back later that night. “When I arrived the fever clinic was sealed off, all the doors and gates were closed and they greeted me in protective suits.” Weeks of treatment followed. Chinese netizens spread false rumours that he had visited an infected city in the north and had cov- n january 10th an office worker surnamed Zhou was diag- ered his tracks by using an unregistered smartphone. Happily, Onosed with covid-19 in Xicheng, a district of Beijing. For offi- doctors and virus-control officers confirmed that he had fallen ill cials under orders to keep the virus out of China’s capital, this sin- after buying salmon for his ten-year-old son at the market in Bei- gle case was grim, career-threatening news. They responded with jing. Still, his restaurant was closed for two months, leaving him to a vigour that some other countries reserve for wartime invasions. pay staff salaries from savings. His wife and son were quarantined As is the norm when anyone in China tests positive, Ms Zhou’s for three weeks, then avoided friends until school started in Sep- movements for the previous ten days were made public, down to tember, fearing their reactions. State media commended Mr Tang noodle bars where she ate and train lines that she took. Internet for reporting his illness, easing his return to society. He praises users fumed that she had twice visited Shijiazhuang, a drab city of China’s government for its virus control and “cannot fathom” 11m people in the next-door province of Hebei, which has seen Western responses to covid-19. In China, people understand that more than 400 virus cases since the new year. She should have society is safe only when all play their part, he says: “If I am irre- stayed at home, or at least avoided the metro, netizens growled. sponsible and harm other people, it may come full circle and hurt Almost 100 of Ms Zhou’s close contacts and thousands of work- me.” China is an ageing society and not yet rich, he adds. Serious ers near her office were swiftly tested. Authorities tested and quar- illness is feared because it can cause financial ruin. antined her neighbours in Gu’an, a Beijing commuter town just inside Hebei. On January 12th officials took still sterner measures. In China, shame is a powerful tool Roads out of Gu’an were sealed and 500,000 residents told to quar- A prominent psychologist, Lu Lin, reports that a study of 1,000 co- antine for a week. Several cities in Hebei province, including Shi- vid patients found about a third suffering from depression and jiazhuang, its capital, have been locked down to quell outbreaks. anxiety long after recovery. Research continues into the precise Some 22m people have been trapped at home. role played by social stigma and discrimination, says Professor Lu, In Beijing, growing fears of a second wave have led to ever- the president of Peking University Sixth Hospital. But he cites real- tighter rules. These range from the irritating—some pharmacies life cases, such as that of an old woman who was excluded from a stopping over-the-counter painkiller sales, to prevent people hid- dancing club even after she had shaken off the virus. Some social ing fevers—to the heartbreaking. Chinese New Year, which this pressure can be useful. “For young people, you should not think year falls on February 12th, has been, in effect, cancelled for gov- just of yourself, you should think of your community,” he says. ernment workers: they may not travel home to see families around Official media have played up the deadly nature of covid-19, China. Almost every movement in the city must be registered by while striving to erase memories of disastrous early cover-ups in scanning a health code with a smartphone, whether visiting a shop Wuhan, where the virus first emerged. In part, propaganda chiefs or catching a taxi. After commuters spent hours snarled at high- want to demonstrate the superiority of modern Communist Party way checkpoints into the capital, social media described inventive rule. In part, they are drawing on older traditions. An outbreak of workers skating down rivers frozen by the coldest winter in years. bubonic plague during the civil war in 1947 saw party workers in New rules duly banned skating into Beijing. the north-east recruit villagers with a “patriotic hygiene” cam- Such restrictions are burdensome, indeed a bit sinister, but ef- paign involving compulsory vaccinations and fines for failing to fective. At the time of writing, Beijing has detected 44 cases of co- report deaths. Further back, in the last days of the Qing dynasty, re- vid in the past month, after millions of tests. For comparison, Lon- formist officials fighting plague in Manchuria in 1910-11 linked don is finding more than 8,500 new cases a day. Foreign chaos modern medicine with national rejuvenation, stressing the need prompts head-shaking disbelief from Chinese, who ask if it is true to quarantine “irresponsible” migrant workers and make them that some Westerners refuse to wear face masks. China’s strict vi- wear face masks. In China, the urge to control has deep roots. 7 34 Middle East & Africa The Economist January 16th 2021

Vaccination in the Gulf elsewhere has met scepticism. The move has speeded up their push for herd immu- Made in China nity. It will also pay political dividends, deepening ties with China and positioning the uae, a regional power, for an ambitious sort of vaccine diplomacy. Known as bbibp-corv, the vaccine is DUBAI one of two developed by Sinopharm. China Two leaders in covid-19 vaccination are relying on a Chinese-made broke with protocol last summer by offer- jab—hoping for both political and public-health benefits ing its citizens the experimental jab, unlike side from the ubiquitous masks, visi- There are obvious reasons for their early Western vaccine-makers, which waited for Ators to Dubai would be hard-pressed to success. Both are small countries: Bahrain trials to show their products were safe and know there was a pandemic raging. Bars has fewer than 2m residents, the uae fewer effective. Many countries have been reluc- and malls are busy. Hotels that were four- than 10m. Centralised, well-staffed health- tant to approve bbibp-corv because it lacks fifths empty last spring hit 70% occupancy care systems have coped well during the reliable trial data. in December. Tourists have flocked to Du- pandemic. Residents of both countries can Despite an inauspicious beginning, it is bai to escape lockdowns at home. A recent register for a jab by app. Many Western gaining credibility—largely thanks to Gulf spike in daily infections—they have more states have detailed rules that set a pecking countries. The uae began late-stage trials than doubled since November—has not order for vaccinations, which can slow dis- in July with 31,000 volunteers. Bahrain dented the sense of normality. By spring tribution; Bahrain and the uae offer them started its own trial in August. Both autho- that perception may be a reality: Dubai to all-comers. “We have enough available rised it in December after declaring it 86% seems well on its way to widespread co- for everyone,” says Dr Waleed Khalifa al- effective. Yet they have not published data vid-19 immunity. Manea of Bahrain’s health ministry. to support their findings; officials in the The United Arab Emirates (uae), of Perhaps the biggest difference is that Gulf say it is Sinopharm’s decision. “We’re which Dubai is part, ranks second in the Bahrain and the uae rely on a vaccine made part of this study, but we don’t actually world in vaccinations per head. By January by Sinopharm, a state-backed Chinese have the right to disclose this type of infor- 13th it had administered almost 13 doses for firm. Early on they adopted a product that mation,” says Dr al-Manea. every 100 residents, behind only Israel (see It seems unlikely that Sinopharm will chart on next page). Since the vaccines re- submit its vaccine to a stringent national quire two doses, the number of people fully Also in this section regulator. Instead it is being scrutinised by inoculated is lower. Still, the uae aims to the World Health Organisation (who), 35 A Saudi city with no cars—or roads inoculate half the population by April. Bah- which could grant it emergency authorisa- rain, another Gulf country, ranks third, 36 Uganda’s authoritarianism tion by March. Some countries remain with almost six doses per 100 residents. sceptical: in the Philippines, for example, 37 Animating Africa Even that is double the rate in America. there are reports of reluctance to take the 1 The Economist January 16th 2021 Middle East & Africa 35

2 vaccine. Scientists in Brazil announced on with Pfizer to distribute that company’s Sinopharm doses in the uae could lead to January 12th that another Chinese vaccine, vaccine. The uae is also conducting trials its adoption widely across the Middle East manufactured by Sinovac, was only 50% for Russia’s Sputnik V jab, which so far has (in December the government donated effective, far below the 78% initially report- little to recommend it beyond President 100,000 doses to Egypt). ed. The data, the first from late-stage trials, Vladimir Putin’s endorsement. That would please China, a desirable had been delayed for weeks. But the uae’s closest relationship is outcome for the Emiratis. Long a Western There are few reservations in the Gulf with China. Later this year it will move partner, they have sought in recent years to about bbibp-corv. Partly this is due to pub- from administering Sinopharm’s vaccine diversify their relationships, particularly lic trust in governments with a reputation to manufacturing it. That has fuelled talk of with China. State-run telecoms firms in the for being well-run. Scores of Emirati offi- vaccine diplomacy in a region where access Emirates have awarded 5g contracts to cials, among them the health minister and to inoculations will be uneven. Egypt Huawei, which is blacklisted by America. the ruler of Dubai, have posted photos of needs enough jabs for its 100m people, Military ties are growing as well, with the themselves receiving the vaccine. Both twice the population of the entire Gulf. uae fielding Chinese-made attack drones countries have fared well during the pan- Lebanon, which is in effect bankrupt, ex- in Libya. The uae’s embrace of Sinopharm demic. The uae has logged 723 deaths from pects to receive just 60,000 doses of vac- will bring them closer still: in this relation- covid-19, and Bahrain 356, which (as a share cine from Pfizer next month. A surplus of ship there is no social distancing. 7 of population) ranks them well below countries both in the West and in the Arab Saudi Arabia world. Testing is widespread and fast. It helps to be a police state with little tol- erance for dissent. The Emirati govern- The Line in the sand ment has condemned “rumours” about vaccines and warns of punishment for DUBAI Muhammad bin Salman’s emissions-free city faces some big obstacles spreading them. Local newspapers carry stories about happy residents queuing up t is perhaps the mother of all off-plan SYRIA for jabs; there are rather fewer articles ask- sales. The prospectus makes a seduc- ISRAEL I Mediterranean ing questions about vaccine-trial data. tive pitch to weary city-dwellers trapped Sea Jerusalem Amman Bahrain and the uae are also offering in polluted concrete jungles. Why spend the Pfizer-BioNTech vaccine, which has years of your life stuck in traffic or JORDAN 200 km won approval from Western regulators. But crammed into public transport? Urban Cairo they have much less of it. In Dubai it is planners would no doubt make different Gulflf oof available only to the old and to key workers choices if they were free to start from Aqaba (the rest of the population should be eligi- scratch. That, at least, is the thinking EGYPT Neom ble by April). Still, that could assuage any behind The Line. Sharm el-Sheikh concerns from expats. Some residents, The proposed city within Neom, a The Line

though, say they prefer the Sinopharm jab high-tech development planned for Nile SAUDI because it is based on an inactivated strain Saudi Arabia’s north-west coast, would Red Sea ARABIA of the sars-cov-2 virus, a long-established carve a 170km-long (106-mile) ribbon way of making vaccines, rather than the across the desert (see map). There would new mrna technology used by Pfizer and be no fights over congestion charges or by renewable energy with zero carbon other Western manufacturers. parking regulations because there would emissions. Abu Dhabi, the uae’s capital, aims to be be no cars, nor even streets for cars to First announced in 2017, Neom—a a hub for distributing vaccines across the drive on. portmanteau of “neo” and mustaqbal, region. It has opened a big new storage fa- Instead it would be an urbanist’s Arabic for “future”—remains something cility and is in partnership with SkyCell, a dream, with residents able to reach of a blank canvas. There is talk of robot Swiss firm, to produce refrigerated ship- whatever they need within a five-minute workers, flying cars and glow-in-the- ping containers that can keep doses cold in walk. For the average person that is a dark sand on the beach. Foreign consul- transit. Dubai’s Emirates airline is working distance of around 400 metres, shorter tants eagerly lap up contracts to draft than two blocks in Manhattan but appar- fanciful schemes. ently long enough for everything from In the real world, though, little of this Hot Shots schools to clinics and parks. The bro- has advanced beyond PowerPoint slides. Covid-19, vaccination doses administered per chure is silent on the weather: summer There is an airport, and palaces where 100 people, selected countries, at January 13th 2021* temperatures in the region hover around Saudi royals can summer: King Salman c 2520151050 a not-so-walkable 40° . has holidayed in Neom for the past few Israel Perhaps heat is a surmountable obsta- years. The project is still many years UAE cle, since the laws of physics seem to be. away from attracting millions of resi- Bahrain Should any of its 1m potential residents dents and contributing significant sums gdp Britain wish to venture farther afield, longer to the Saudi . Supporters praise the kingdom for US journeys will be a pleasure: “ultra-high- thinking big. Critics call it a white ele- Denmark speed transit” should limit even the longest trip to a mere 20 minutes. If phant, of which the Gulf states already Italy passengers are willing to pull a few g’s have plenty. Some locals who live in the Canada while accelerating, that would require area are excited about development. Germany speeds of up to 510kph, about 25% faster Others have clashed violently with police China than Japan’s fastest bullet train, which is sent to evict them. And, at least for now, Saudi Arabia still being tested. All this would be pow- those police are humans who arrive the World average ered, in the world’s biggest petro-state, old-fashioned way: in cars. Source: Our World in Data *Or latest available 36 Middle East & Africa The Economist January 16th 2021

ous work in providing services, often informal ones, like selling second-hand clothes or riding motorbike taxis (see chart). Mr Museveni, a former Marxist, fought his way to power just as the cold war was ending. He soon embraced the new market orthodoxy, privatising state firms, floating the shilling and opening up to trade and foreign investment. Over his 35 years in office, poverty has fallen, growth has aver- aged 6% and the inflation rate has rarely reached double figures. But the proportion of Ugandans working in industry has shrunk. The economy today creates formal jobs for barely a tenth of the 700,000 young people who reach working age every year. The remainder get by as best they can, in farming, odd jobs or petty trade. Many mi- grate to Arab countries to work as security guards and maids. In the towns and cities, where populations have grown sevenfold under Mr Museveni, the sting of injustice is sharpened. The residents of Kamwokya, a poor quarter of Kampala, need only stroll up the hill to find the city’s most glamorous Sticky authoritarianism shopping mall. It was in those unpaved streets that Mr Wine grew up, styling him- The ghetto strikes back self the “ghetto president” in songs up- braiding the powerful. “We come to express exactly what’s on the poor man’s mind,” he sang. Though this new politics is quintessen- tially urban, it has trickled out to small KAMPALA markets where dealers bring goods—and Uganda’s violent election has exposed divisions of age and class ideas—from the city. Grievances are often n a pool hall in Kampala, the Ugandan ularity brings to the fore generational and local. Faridah Kange, an activist for Mr Icapital, a group of boxers and nightclub class fissures, and the shortcomings of an Wine in the eastern district of Budaka, says bouncers are discussing elections. They economic model that has brought growth people there are furious that the govern- were recently taken to meet an army gen- but few jobs. ment is chasing them out of wetlands, eral, who offered them money to wear t- Those trends are not unique to Uganda. where they started growing rice after cot- shirts of the ruling party, the National Re- In the 1980s, under pressure from interna- ton co-operatives collapsed. Such outspo- sistance Movement (nrm), and fight rowdy tional lenders, many African governments ken dissent unsettles some older Ugan- opposition supporters in the streets. The enacted pro-market reforms. In time, with dans, who remember the instability and sum was not enough, they thought. Then debt cancellation and soaring commodity civil war of the past. “Those who have never disappointment turned to fear when a prices, economies grew. But few countries got education, they cause all this commo- well-known champion boxer who had pub- graduated from farming and mining into tion,” says Aksoferi Karegnet Kulany, the licly backed the nrm was gunned down by more productive activities, like manufac- chairman of the nrm Elders’ League in security agents in the night, amid rumours turing. Many young people found precari- mountainous Kapchorwa. “They want that he had fallen out with his erstwhile pa- shortcuts to getting things.” trons. Politicians view the urban poor with In Mr Wine’s party, the National Unity contempt, says a bouncer. “When they see Still counting chickens Platform (nup), the hustlers’ revolt has them in the ghetto smoking weed, they Uganda found common cause with sections of the think that they are useless,” he complains. middle class, such as recent graduates. But “But they come to realise they are useful Employment GDP, % change it is only in the central Buganda region, in when it is time for elections.” By age group, 2016, % on a year earlier which Kampala lies, that the established Ugandans went to the polls on January opposition has decamped en masse to the Agriculture 8 14th, with results due after The Economist nup. The nrm still saturates politics in the Services Industry 6 had gone to press. Officials will almost cer- 100 villages, where it is hard for other parties to tainly declare victory for Yoweri Museveni, organise. Lauben Bamwesigye, a farmer in who has been president since 1986. But the 75 4 the west, says he hears Mr Wine’s message election has been defined by the rise of only when the young folk visit from town Robert Kyagulanyi, better known as Bobi 50 2 at Christmas. “They came, they preached Wine, a 38-year-old musician and opposi- the gospel, and they went back,” he jokes. 0 tion candidate who has faced arrest, ob- 25 Mr Museveni is backed by the rich, who struction and gunfire on the campaign 0 -2 look to him to protect their interests. Many trail. Like the disgruntled boxers, he spent large firms are owned by foreigners or 25-3415-24 35-64 20*152010 his youth hustling in the ghetto, some- Ugandan Asians, grateful to the man who Sources: World Bank; IMF *Estimate times sparring in the ring himself. His pop- welcomed them back after their expulsion 1 The Economist January 16th 2021 Middle East & Africa 37

2 by the dictator Idi Amin. Critics say the Animating Africa tight nexus between politics, security and business is increasingly controlled by brokers from Mr Museveni’s ethnic group, es- Move over, Superman pecially his own family, who award contracts, control access and grab resources. In JOHANNESBURG New platforms are bringing African comics to a broader audience 2018 an ex-politician from Hong Kong was convicted by an American court for paying or ziki nelson it began with tv ties of African ones often have spiritual $500,000 to Sam Kutesa, the foreign min- Fcartoons: “X-Men” and “Spider-Man”. provenance. “Strike Guard”, by Ayodele ister (and father of Mr Museveni’s daugh- These led to “Archie” and “Asterix” com- Elegba, a Nigerian artist, is the story of a ter-in-law), to secure favours for a Chinese ics, then Japanese anime and manga. But murdered student whose body is thrown company. Ugandan officials denied the as he devoured animated work from into the grave of Ajagbeja, a Yoruba deity, payment was a bribe. elsewhere, something was missing. “We from whom the reincarnated hero gets The state is also a conduit for foreign had this African heritage and no one was his strength. Juni Ba’s comics are rooted aid. Even as covid-19 relief money has telling stories about where we’re from.” in Senegalese myths and legends. flowed into the budget, so spending That is changing. New platforms are Others draw on the hustle of urban marked as “classified expenditure” has bringing African animators to a global life. “Kwezi”, a South African comic, flowed out of it. Much of this money went audience. One is Kugali, co-founded in features a self-absorbed social-media to the army and the president’s office. 2017 by Mr Nelson with a fellow Nigerian, influencer who reluctantly uses his Intensifying repression is straining old Tolu Foyeh, and Hamid Ibrahim, a Ugan- powers for good. In “Razor-Man” a me- relationships. America is assessing op- dan. It sells comics from across the chanic-turned-superhero tries to avenge tions to reduce assistance in the event of continent and creates its own anima- his father’s death amid corruption and more violence, and congressmen have tions. In December Kugali announced a repression in Zimbabwe. called for sanctions on some security landmark deal with Disney to make Comics also confront difficult sub- chiefs. Tibor Nagy, America’s senior dip- “Iwájú” (The Future), a sci-fi series im- jects. “Lake of Tears”, set among the lomat for Africa, expressed concern on Jan- bued with Yoruba culture. treacherous fishing industry on Lake uary 12th after Uganda blocked access to so- Kugali is part of a small but vibrant Volta in Ghana, depicts child trafficking. cial-media platforms just days before the industry. As in many areas of African “Un Voyage Sans Retour” (A Journey Of No vote. But Mr Museveni has presented him- popular culture, Nigerian brands are Return) by Gaspard Njock, a Camer- self as a bastion of stability and sent thou- prominent; others include Comic Repub- oonian artist, charts the dreams and sands of Ugandan troops to a peacekeeping lic and Vortex Corp. But animators are dangers of migration to Europe. “Zana”, mission in Somalia. “Maybe we are a bit thriving elsewhere, too. Afrocomix, an set in a future in which apartheid never overwhelmed by a region which is falling app for reading comics, was made by Leti ended, raises questions about race rela- apart,” muses a Western diplomat in Kam- Arts, a video-game developer based in tions in South Africa today. pala. “What happens if Museveni falls?” Ghana and Kenya. In 2019 “Mama K’s African comic artists have been The choice between stability and justice Team 4”, written by Malenga Mulen- sketching for decades. But digital plat- is a false one, not only in Uganda but in dema, a Zambian artist, and co-produced forms and cheaper software are making many African countries where young pop- by a South African studio, became Net- it easier for them to make a living. The ulations chafe against sclerotic systems. flix’s first African-made animated series. pandemic has nudged comic-buyers Economic discontent has animated move- Etan Comics is the publisher of the first towards digital versions with fatter ments from the hip-hop activists of Y’en a Ethiopian superhero comic books, “Jem- margins. A new generation of readers Marre, in Senegal, to the leftist populism of ber” and “Hawi’’. want characters they can relate to. Mr the Economic Freedom Fighters in South These superheroes do not just look Nelson says that conversations “about Africa. In Sudan and Mali, street protests different. Whereas many American race and identity are inspiring people to have helped topple presidents. The pro- superheroes derive their powers from seek out new stories.” When it comes to blem is not just bad leadership. Changes in galactic or scientific sources, the facul- comic sales, curiosity is a superpower. trade and technology are making it harder to pull off an industrial revolution. In the meantime, frustration festers. As a young man, Mr Museveni helped Uganda out of “a deep ditch”, says Miria Matembe, a former minister, but now he has “a total obsession with power”. To pre- serve it he relies ever more on money and violence. Ugandan security forces shot at least 54 people dead in November, during protests sparked by the brief detention of Mr Wine. The victims were motorbike driv- ers, chapati sellers, carpenters, mechanics and others, almost all hustling in the city’s informal economy. Two days before the vote armoured cars drove through Kampa- la, soldiers peering from gun turrets, while helicopters hovered overhead. Mr Muse- veni has been fighting wars all his life, against brutal despots, messianic rebels, foreign warlords and Islamist extremists. Mama K’s team His final war is on the ghetto. 7 38 Europe The Economist January 16th 2021

France which saw the growth of groups such as sos Racisme, anti-racism movements often Colour vision ended up more concerned about social equality than racial identity. Now a new generation is pressing a different sort of racial awakening. This has pushed President Emmanuel Macron to respond—but also to question the way the problem is discussed. Last month Mr Macron stirred indigna- A new challenge to France’s deep reluctance to talk about race tion in some quarters of the police force hen growing up in La Courneuve, cial or religious origin. Officialdom neither when he acknowledged that people “with Won the unfashionable fringes of Paris, counts nor recognises racial minorities. non-white skin colour” are more likely to Rokhaya Diallo says she “didn’t feel black”. Identity is assumed to be simply French. be stopped by the police in France. He also The daughter of parents from Senegal and Yet the reality of racial discrimination conceded that “being a white man can be the Gambia, she recalls that “being black has for years meant that France fails to an experience of privilege.” Commonplace was just not an issue, because there were so match up to this ideal. Studies that use in America, the use of such terms is highly many of us.” It was only as a young adult in proxy measures for race, such as parents’ unusual in France. Mr Macron has now Paris, when people began to ask where she national origin, show that French people promised to launch a “citizens’ consulta- came from, that Ms Diallo realised “that with links to the Maghreb or sub-Saharan tion” on discrimination. In February he they didn’t mean La Courneuve. It was real- Africa find it harder to rent housing or get will also set up a permanent anti-discrimi- ly a matter of the colour of my skin.” jobs. They are also disproportionately ab- nation platform—online and via telephone Today, Ms Diallo belongs to a generation sent from French television studios, board- and chat—to register and respond to com- of French writers and activists who are as- rooms and government. In the 1980s, plaints. The idea is to raise awareness of serting their identity as black in a way that discrimination, and supply tools to fight it. challenges France’s sense of itself as col- If Mr Macron has decided to do more our-blind. This is prompting a complex Also in this section about racial discrimination, though, this and heated debate about how, and whether, does not mean that he shares the way that 39 A political crisis in Italy to think about race. It is particularly sensi- some activists in France seek to steer the tive in France because its universalist mod- 40 Germany’s Christian Democrats debate. A row currently pits “universalists”, el assumes that all citizens have equal who prefer to combat discrimination by re- 41 Covid-19 and repression in Turkey rights as individuals, not groups. Partly as a inforcing the existing colour-blind model, rejection of identification methods used 41 Greenland’s rare earths against those who argue that deep struc- under the wartime Vichy regime, it is ille- tures of racism can be erased only by “racia- 42 Charlemagne: Cyberpunked gal in France to collect data on ethnic, ra- lising” French society. “France has a theo-1

The Economist January 16th 2021 Europe 39

2 retical universalist philosophy which is a think-tank, is that inflexible defenders of seppe Conte, has far and away the highest. hermetic to the experience of a large num- the French model consider that the mere But Italia Viva’s senators are enough to ber of French people,” says Ms Diallo. “We “recognition of difference is a way of con- make the difference in the upper house. Mr refuse to talk about race, so we don’t have testing that model”. It may be that French Renzi said his followers would not obstruct the words to discuss it. This is denial: a re- universalism is more elastic than its rigid two urgent pending bills. It is clear, how- fusal to put words on things that we don’t guardians believe. “Until the mid-20th ever, that Italy now faces yet another bout want to recognise.” century”, says Pap Ndiaye, a French histori- of political instability—and, this time, in Much of this push comes from students an and author of “La Condition Noire”, “we the midst of a pandemic and just as it is and those familiar with the American cam- spoke very freely about race, even within about to submit to Brussels its plans for pus debate. Often even the vocabulary is the universalist idea.” It was only after the spending its share of the eu’s recovery missing in French. Being black at Sciences second world war and decolonisation that funds. “With 500 dead in the country today Po, a group at a Paris university, for in- talking about race became illegitimate. because of the coronavirus, Renzi can’t stance, calls for classes on “la critical race Mr Macron’s vision of universalism find anything better to do than bring down theory”, as well as “intersectionality” and may be more nuanced than his critics al- the government on a whim,” railed one “decolonial studies”. When you hear talk in low. He has often talked about France’s plu- irate Twitter user. France about “white supremacy” or “sys- ral identities. Recently he said: “We should The withdrawal of Italia Viva leaves Mr temic racism”, says Thomas Chatterton be able to be fully French and to cultivate Conte with the backing of the centre-left Williams, an American writer on race another belonging.” The challenge will be Democratic Party (pd), the ideologically based in Paris, “these are American ways of to get this balance right, while ensuring heterogeneous Five Star Movement (m5s) thinking, which derive from a society built that those who do not feel fully recognised and a small, radical left-wing party. The on slavery and oppression.” in France can genuinely prosper in it. 7 m5s said that pitching into a political crisis Up to a point, Mr Macron is sympathet- at such a time was incomprehensible. An- ic. When campaigning in 2017, he upset drea Orlando, the deputy general secretary conservative French circles by calling colo- Italy of the Democrats, called it “a grave mis- nisation a “crime against humanity”. He take—we shall all for pay for it”. agrees that more should be done to teach Just what they Mr Renzi, a former prime minister who the full picture of French history, and last abandoned the centre-left Democratic year asked Benjamin Stora, a historian, to didn’t need Party (pd) in 2019, was harshly critical of Mr re-examine the archives on France’s colo- Conte at a press conference to announce nial history in Algeria. Mr Macron draws the resignations. But he was careful to the line, however, not only at the idea of ROME leave open several possible solutions to the Matteo Renzi crashes Italy’s sidelining controversial figures in history. crisis, even including a reshuffled govern- government in mid-pandemic He also rejects the “ethnicisation” of ment under the same leadership. French society in ways that could be divi- talians usually greet their periodic po- Since Mr Renzi began his offensive last sive—particularly regarding extreme Ilitical crises with cynical resignation. month, critics have argued that his aim is forms of Islamism—and undermine uni- But when, on January 13th, the ministers to become the kingmaker of Italian poli- versalism. “We’re not a country like the Un- from Italia Viva, a splinter group led by tics. He maintains he is acting for the good ited States that has lived through segrega- Matteo Renzi, pulled out of Italy’s left-pop- of the country. He claims that Mr Conte has tion,” he told Brut, an online platform. ulist government, stripping it of its parlia- kept too much power to himself, citing the The challenge for France is whether it mentary majority, the reaction of many prime minister’s control of the intelligence can accommodate more explicit racial was outrage. services in particular. He has challenged identities within its existing model, in Polls suggest Mr Renzi’s tiny party has Mr Conte’s reluctance to tap the eu’s bail- ways that neither crush genuinely felt dif- the support of only about 3% of the elector- out fund, the European Stability Mecha- ferences nor abandon the colour-blind ide- ate. Its leader’s approval rating is among nism, for cash to boost Italy’s health ser- al. James Baldwin, an American writer, the lowest of any prominent Italian politi- vices. The eu’s pandemic recovery funds once commented that in France “I was cian. By contrast, the prime minister, Giu- are yet another bone of contention: Mr freed of…the crutches of race.” Mr Williams Renzi has objected vigorously to the gov- echoes that thought today. “I’m a mixed- ernment’s plans for spending the money, race black man,” he says, “but in France my estimated at more than €200bn ($240bn). identity is primarily my nationality. I’m Francesco Grillo, whose think-tank, Vi- not the first American to feel liberated by sion, has prepared a study of the recovery stepping out of the black-white binary.” funds, says that in this respect Mr Renzi Some, such as Sibeth Ndiaye, Mr Mac- has a good case. The government’s blue- ron’s former government spokesperson, print contains “no real view of where Italy suggest that France should at least debate wants to be in five or six years’ time, nor a the question of collecting statistics based clear roadmap to show how it intends get- on ethnic background. It is harder to mea- ting there,” he says. It allocates almost a sure diversity, let alone prove discrimina- quarter of the loans and grants it expects tion, when there is no official recognition from the eu to tax breaks. These are intend- of racial groups. The legal case for discrim- ed to encourage investment that will make ination currently rests on a plaintiff be- Italy “greener” and “smarter”. But, argues longing to a “real or supposed” race and on Mr Grillo, those criteria are loosely defined the perception of racism. For universalism and not part of an overall strategy. to prosper, wrote Ms Ndiaye in Le Monde The direst outcome to the mess would last year, “we shouldn’t hesitate to name be an election amid a possible third wave of things, to say that skin colour isn’t neutral.” the pandemic. On current polling, that Part of the difficulty of the debate, says would deliver power to a hard-right co- Hakim El Karoui of the Institut Montaigne, The demolition man does it again alition that would doubtless want to re-1 40 Europe The Economist January 16th 2021

2 write Italy’s recovery-fund proposal. But Rhinelanders and dour Westphalians has net as environment minister. “These are few in parliament are keen on a vote, not been complicated by high immigration emotions you don’t forget quickly,” says least because the next election will be held that has turned nrw into one of Germany’s Florian Braun, a cdu member of the nrw under new rules that will reduce the num- most cosmopolitan states. “nrw is a min- state parliament. ber of seats by around a third. iature Germany,” says Dennis Radtke, a cdu After that loss Mr Laschet, a moderate in A more sanguine view is that an assort- member of the European Parliament from the Merkel vein, slowly revived the demor- ment of independents and renegades from the Ruhr. “If you can run the state, you can alised party and led it to victory five years other parties could be assembled to join run the country.” later, building a national reputation in the forces with the remaining parties in the co- For decades nrw was a stronghold of process. Today he leads a broadly success- alition to support a new government, led the Social Democrats (spd), thanks in part ful coalition in nrw with the Free Demo- either by Mr Conte or some respected es- to the large coal-and-steel workforce in crats, a small liberal party. Soon after the tablishment figure. That, however, risks Ruhr conurbations like Dortmund. But it cdu leadership was vacated last February producing an even more fragile, and per- has mattered at least as much to the cdu. It Mr Laschet recruited to his campaign Jens haps disreputable, majority. Parliamentary was partly in what was to become this Spahn, Germany’s popular health minister, turncoats expect to be pampered and re- multi-denominational state that its found- yet another North Rhine-Westphalian. As warded for their support. They are like ex- ing fathers agreed that post-war Germany for Mr Merz, he is from the Sauerland, a tra-marital lovers, a politician famed for needed a big-tent Christian Volkspartei largely rural part of Westphalia, but has no his party-hopping warned Mr Conte: “You (people’s party) that could overcome the history in state politics. The most conser- have to give them dignity, bring them out class and religious differences that had be- vative of the three candidates, he draws into the open and recognise their value. devilled Weimar-era politics. much of his support from states like Hesse Otherwise, they say good-bye.” 7 Early meetings in Cologne and Bad Go- and Baden-Württemberg. desburg, near Bonn, set the party’s path All this helps explain why Mr Laschet and determined its name. The “Düsseldorf ends the cdu campaign as the narrow fa- Germany’s Christian Democrats guidelines”, laid out in 1949, shaped the vourite, ahead of Mr Merz. After a wobbly principles of West Germany’s “social mar- performance during the covid crisis he Three men in a ket” economy. This blend of market capi- polls poorly with voters, but the delegates talism, social protection and labour rights are a different bunch, often elected offi- Rhineland boat underpinned the Wirtschaftswunder (eco- cials who want a leader they think will help nomic miracle) that followed—largely un- them keep their jobs. His is a pragmatic der the leadership of the cdu’s Konrad Ade- conservatism, shaped by the needs of a COLOGNE AND DÜSSELDORF nauer, a former mayor of Cologne elected complex state, focused on bread-and-but- What Germany’s largest state means in 1949 as the country’s first post-war chan- ter concerns, and with an ear—too acute, for its largest party cellor, and of Ludwig Erhard, his finance say some—for the concerns of industry. n january 16th 1,001 parliamentari- minister and successor as chancellor. Mr Laschet’s backers praise his ability to Oans, party functionaries and small- In the 2000s the spd’s grip loosened and build bridges and meld opposing points of town mayors will open their laptops, log nrw started to swing. State elections took view, while rivals acknowledge his skill in into a virtual congress of Germany’s ruling on an outsized importance. A crushing loss working across party lines. His jocular, centre-right Christian Democratic Union in 2012 shattered the cdu’s morale; a nar- modest Rhenish bearing contrasts with the (cdu) and elect their party’s new leader. row win in 2017 restored it. These results silky erudition of Mr Röttgen or the flinty The winner will instantly become the fa- resonate today among the nrw delegates— arrogance of Mr Merz. If it is hard to spot vourite to succeed Angela Merkel as chan- almost a third of the total—tasked with any fundamental beliefs in Mr Laschet be- cellor once she steps down after an election choosing their party’s new leader. For it yond a staunchly Catholic pro-life attitude, in September. Yet on the face of it the dele- was Mr Röttgen who led the cdu to that that may be no great sin. After all, Mrs Mer- gates do not have much of a choice. The 2012 defeat, an ignominy that poisoned his kel has run Germany successfully for 15 three candidates—Armin Laschet, Norbert reputation among party colleagues in nrw year and no one is quite sure what she Röttgen and Friedrich Merz—are all Catho- and saw Mrs Merkel fire him from her cabi- stands for either. 7 lic trained lawyers aged between 55 and 65. Each has struggled to find a distinct message during an interminable campaign drawn out over almost a year by the pandemic. And all three come from the same state: North Rhine-Westphalia (nrw), the most populous of Germany’s 16 Länder. nrw’s 18m inhabitants—over one-fifth of Germany’s total—would make it the sev- enth-largest country in the European Un- ion. Its 34,000 square km (13,000 square miles) span the urbanised Rhine-Ruhr region, rural Münsterland, the mountainous Eifel and much more. Walloped by deindustrialisation, its rustbelt cities have re- invented themselves as hubs for retail, logistics and other services. Farther east, the small and medium-sized firms of the Mit- telstand in Westphalia rival anything in Ba- varia or Baden-Württemberg for technical specialisation and export prowess. The traditional gulf between carnivalesque Laschet, Röttgen, Merz: spot the difference The Economist January 16th 2021 Europe 41

Covid-19 and repression in Turkey Greenland One man’s Cloud mining terrorist An icy country considers its economic future ISTANBUL ost people sniggered when Donald excavation rights for the past decade. Turkey’s government goes after Trump proposed buying Greenland Greenland’s environment ministry civil-society groups M in 2019, but he had a point. The world’s has given a tentative go-ahead. A major- ebnem korur fincanci, a forensic biggest island has a rich helping of rare- ity of parliamentarians have already Sphysician, and many other doctors had earth minerals, and the superpowers declared themselves in favour of digging. long insisted there was something dodgy want them. In early February the townsfolk of Narsaq about Turkey’s covid-19 figures. Excess These17 elements, ranging from will hear representations from the is- deaths across the country far surpassed of- scandium to lutetium, lurk in the depths land’s government; though a depen- ficially reported deaths from the virus. of the periodic table and turn up in all dency of Denmark, Greenland enjoys Case numbers seemed suspiciously low. things electronic. The renewable-energy self-government in most areas except Vindication came at the end of November, revolution will also rely on them for defence and foreign relations. A consul- when the government revealed it had power storage and transmission. On the tation phase is to last, provisionally, stopped reporting asymptomatic infec- darker side, weapons—including nuclear until mid-March. tions months earlier. Once it resumed do- ones—need them too. Residents of Narsaq welcome the ing so, the case-count rocketed from about A new open-pit mine at the top of opportunity to learn more and to have 7,000 to over 30,000 a day. (The numbers Kuannersuit, a cloud-rimmed mountain their say. Urani Naamik (“No to Ura- later dropped, after new lockdowns were near the settlement of Narsaq in the nium”), a community lobby, has strong imposed.) For her troubles Dr Fincanci, south of the island, may provide a goodly support. Nobody wants (mildly) radio- who turned 61 last year, was labelled a ter- chunk of the rare earths needed to ditch active dust, an inevitable by-product, rorist by none other than Turkey’s presi- fossil fuels. So believes Greenland Min- drifting down to settle on their town and dent, Recep Tayyip Erdogan. The head of erals, actually an Australia-based com- pastures. Many worry about the lake of the Nationalist Movement Party, the presi- pany, which has been angling for the waste—a sludge of chemicals and dis- dent’s coalition partner, called for the carded rock fragments—that mining group she heads, the Turkish Medical Asso- would leave on top of the mountain. ciation, to be disbanded. But Greenland’s politicians are in a Mr Erdogan and his nationalist allies quandary. The country’s two largest now have a convenient weapon against parties both want full independence pesky doctors and other such subversives. from Denmark, which currently provides Under a law passed by parliament on De- half the territory’s annual budget. But cember 27th, the government will have the they would then need to be self-sustain- power to overhaul or shut down civil-soci- ing. Greenland would depend on fish, ety organisations, including local tourism, fresh-water sales and minerals. branches of foreign groups like Human The last is by far the most valuable. Rights Watch or Amnesty International. Christian Schultz-Lorentzen, editor The law allows the interior ministry to re- of Greenland’s Sermitsiaq newspaper, move board members who face terrorism says a bigger long-term issue is who gets charges, freeze their assets, replace them the mine’s spoils. Shenghe, a Chinese with its own appointees and carry out in- conglomerate, is the largest shareholder spections, all in the name of “combating in Greenland Minerals. The Danish terror financing”. In case that is not government, in a frenzy of Atlanticism, enough, the government can ask the courts earlier managed to stop Chinese compa- to ban the organisations altogether. nies from investing in the expansion of Few countries have suffered as many two airports on the island. Will it pre- terrorist attacks as Turkey in the past five There’s gadolinium in them thar hills serve Greenland’s rare earths for nato? years. But few governments have invented as many terrorists as Mr Erdogan’s. Tens of thousands of people, including Kurdish dents at one of the country’s best-regarded “Civil-society groups are supposed to be a politicians, teachers, journalists and se- universities of links to terrorist groups, check on state power,” she says, speaking nior members of Amnesty have been ar- after they had the nerve to protest against after a vigil for the roughly 300 Turkish rested on spurious charges since an abor- the president’s appointment of one of his doctors who have died of covid-19. “Now tive coup in 2016. More than 600,000 have loyalists as their rector. Police have de- the state has become a check on civil soci- been placed under investigation for alleged tained at least 45 of the protesters. Some of ety. The state is no longer accountable.” links to a movement led by Fethullah Gu- them say they were beaten and threatened The doctor seems undeterred, and con- len, an exiled Islamist preacher, that spear- with rape while they were in custody. tinues to be a thorn in Mr Erdogan’s side. headed the coup. Hundreds of academics Dr Fincanci, who has also faced terro- His government, she says, is still covering were sacked from their jobs and charged rism charges over the Kurdish peace peti- up the scale of the pandemic. According to with spreading “terrorist propaganda” for tion (she was sentenced to 30 months in the health ministry, the virus has killed just signing a petition urging the government prison, pending appeal, and has been over 23,000 people in Turkey, including to suspend security operations against forced to retire from academia), says the over 1,319 in the week ending on January Kurdish insurgents in Turkey’s south-east. government needs the new law to continue 10th. She believes the true number may be Most recently, Mr Erdogan has accused stu- ruling by fear and to act with impunity. at least twice as high. 7 42 Europe The Economist January 16th 2021 Charlemagne Cyberpunked

A botched launch of a video game provides a lesson for European business their efforts on bestseller lists for the same reason Swedish pop stars do: they have a knack for knowing what people like. In an industry worth $140bn annually, roughly three times global box office for films, this is a useful skill to have. Yet Europe’s success in the sector has its limits. European companies are dwarfed by American and Chinese rivals. The two biggest American competitors, Electronic Arts and Activision Bliz- zard, are roughly three and six times bigger respectively than their largest European peer. Any company showing signs of growing to a serious size is swiftly gobbled by an American or Chinese rival. Mi- crosoft bought Mojang, the maker of “Minecraft”, for $2.5bn in 2014. Tencent took control of the Finnish mobile-gaming company Supercell in 2016 in a deal valuing the group at $10bn. Capital is always relatively scarce in Europe compared with America, but especially when it comes to video games, points out Matti Littunen at Bernstein, a broker. Often continental investors have no interest in the genre. Just as Europe failed to produce its own Amazon or Facebook, so too has it failed to control the platforms that dominate video games. These are controlled either by hardware sellers, such as Mi- crosoft and Sony, or American distributors such as Valve, which owns the world’s biggest pc-game store, Steam. The companies t is easy to be optimistic about the future of Europe when run- that did succeed in these previous land grabs, such as Microsoft, Ining through a dystopian hellscape, machinegunning police Google and Amazon, can be ambitious in a way that European ri- and decapitating pedestrians with a samurai sword. Such opportu- vals are simply unable to match. It is these giants that are set to nities come thanks to “Cyberpunk 2077”, a Polish video game, dominate new markets, such as the rise of cloud gaming, with launched before Christmas after a decade of development. It sold games streamed—à la Spotify, a rare European tech success—rath- 13m copies at up to $60 each in its first ten days, with buyers tempt- er than bought individually, as they are now. People’s attention is a ed by its mix of hyper-violence, women wearing inexplicably few lucrative, finite resource and one that European companies are ill- clothes and a one-armed terrorist played by Keanu Reeves. Pre- placed to mine, because of previous failings. Europe’s younger launch hype turned its Warsaw-based creator, cd Projekt, into the technology companies will pay for the sins of their fathers. country’s most valuable listed company and a rare example of European business succeeding at the frontier of a 21st-century in- Steady eddies dustry, rather than coasting on a reputation built up in the century Perhaps Europe should be happy for its businesses to be niche before. Even the in-game currency provides something for Euro- players in a world dominated by American and Chinese firms. Be- philes to cheer: in Cyberpunk lore, the main currency, “eddies”, is ing owned by others is not the end of the world. Asset-stripping in based on the euro. Society may have collapsed into a living night- the creative industry is a dumb idea: there is little point buying a mare, but at least the eu’s single currency lived on. creative company, then firing everyone. True, the quality of jobs in What should have been a rare technology victory for European gaming can be overstated. (At its worst, it can be well-paid grunt business soon turned into a farce, however. The game was work, ensuring that a horse’s digital testicles shrivel in the correct launched while still littered with bugs, much like the actual euro. manner on a chilly day.) But video games are a growing industry Performance was so poor on older consoles that Sony, the world’s and, crucially for a bloc with increasingly divergent economic biggest console manufacturer, took the rare step of pulling the prospects, relatively well spread across the continent. As long as game from its stores. One scene gave an unfortunate reviewer an some jobs and investment stay, why should anyone care? epileptic seizure. cd Projekt issued grovelling apologies. Its share Yet this attitude jars with the goals of Europe’s leaders, who are price halved as complaints and refund demands poured in. The pa- desperate to make the union a proper superpower. The eu has per billionaires created among the Polish company’s management proved capable of regulating businesses, but incapable of helping became paper millionaires once more. The peculiar cocktail of to build them. It should start by paying future-proof industries success and embarrassing failure of “Cyberpunk 2077” is an allego- more attention. Instead of being cherished, sectors like video ry for Europe’s video-game industry at large. It also says something games are forgotten: eclipsed by traditional industries, which about Europe’s economic place in the world. have the ear of national politicians; dismissed as too nerdy by the Start with the positives. Had a Polish film studio put out a film luvvies who give the creative sector its clout. If a more dirigiste Eu- that grossed the best part of $1bn in just a few weeks, as “Cyber- rope is inevitable, then the eu should at least focus its efforts on in- punk 2077” managed to do, it would be churlish to complain if dustries with a bright future, rather than helping older ones cling some of the acting was clunky and the plot had holes. cd Projekt is on. Much like the haphazard launch of “Cyberpunk 2077”, Europe’s far from alone. Ubisoft, its French peer, is behind popular series video-game sector is still a success, but it has the potential to be a such as “Assassin’s Creed”, which allows players to vent their lot better. Unfortunately, in the minds of Europe’s lawmakers, bloodlust across the rooftops of historic Europe. A host of other 20th-century industries on which the continent built its wealth— smaller developers are scattered across the bloc, from Bucharest to cars, chemicals, banks—are still king. Unless that changes, come Helsinki via Berlin. Game-designers in Poland and France find 2077, there may be no eddies to go around. 7 Britain The Economist January 16th 2021 43

Also in this section 44 Vaccine roll-out 45 Bagehot: Trump? Don’t think I know him

The economy after Brexit dle takeaway business, gdp should not shrink as fast as it did in April 2020 (see Not with a bang but a whimper chart). But schools have been closed, as they were in the first but not the second lockdown, so many parents are unable to work. Samuel Tombs of Pantheon Macro- economics, a consultancy, reckons that the impact of the third lockdown will be closer to that of the first than the second. The real damage from Brexit will take time to make itself felt But although the resurgence of covid-19 or the four and a half years since the and the Treasury has not ruled out a further has overshadowed Brexit, the latter is caus- Freferendum on European Union mem- continuation. ing problems. The hassle of new vat rules bership, firms have been worrying about With many firms now better adapted to has prompted some businesses to halt the impact of Brexit. But Britain’s transi- home working than they were last year, shipments to Britain entirely. Dutch Bike tion out of the eu, completed on December more retailers offering an online service Bits, an online retailer of bicycle parts, has 31st, did not end with a bang. There were no and more restaurants better set up to han- called the new arrangements “ludicrous” queues of lorries at Dover. Supermarket and halted sales to Britain in December. shoppers were not starved of green vegeta- In the other direction Scottish seafood bles. And business has had other troubles A bumpy ride 1 traders complain that new paperwork is on its mind. Britain, GDP, January 2020=100 delaying exports, leading to valuable lan- England’s third national lockdown be- 100 goustines going to waste. In general traffic gan on January 5th, shutting much of the seems to have run smoothly on the Dover- hospitality and retail sectors. The govern- 95 Calais route, but advance stockpiling, ment has taken steps to soften the blow. trucks turned away in Kent and covid-19 re- Rishi Sunak, the chancellor of the exche- 90 strictions all seem to have eased the transi- quer, announced a further £4.6bn ($6.2bn) 85 tion. The government has warned hauliers package of grants, worth around 0.2% of that delays are likely to increase as vol- pre-crisis gdp, for firms as the lockdown 80 umes rise and eu enforcement of rules began and signalled that more support may FORECAST tightens. be forthcoming at his next budget, due in 75 Rules-of-origin checks have emerged as early March. The job-retention scheme, ** 70 a particular bugbear. Many traders were under which the state will pay up to 80% of pleased that the eu-uk trade deal promised 2020 2021 the wages of furloughed employees, has al- no tariffs or quotas on goods. Yet to qualify, Source: Pantheon *Estimate ready been extended until the end of April companies must be able to certify that 1 44 Britain The Economist January 16th 2021

2 around 50% of any exported product origi- land. To avert a hard border on the island of nates in Britain or the eu. This catches not Ireland, the two sides agreed that there Playing catch-up 2 just Asian t-shirts or dates imported from should be a border in the Irish Sea between Total factor productivity Israel. Even foodstuffs imported from oth- Great Britain and Northern Ireland, which Compared with original EU6 countries eu er countries and repackaged for export remains in the customs union. Freight 1.4 back into the bloc without significant val- businesses worry that importers have not Britain ue-added in Britain can lose certification. grasped how this will work. The complex- 1.3 That is disrupting distribution hubs. ity of the customs procedures has led some 1.2 Denmark The need for rules-of-origin checks to give up trading or to narrow product 1.1 flows directly from the government’s long- ranges. Marks & Spencer, a retailer, has standing red line of quitting the customs dropped several hundred products in its 21 1.0 union and single market, so bigger compa- Northern Irish stores, ranging from Brew- Ireland 0.9 nies should have been prepared even if Dog beer to bin-bags. With Northern Irish 0.8 smaller ones were not. Yet detailed new politicians grumbling about empty rules for each product (including a tempo- shelves, the supermarkets have appealed to 112000908070601950 rary derogation for batteries in electric the government for help in sustaining the Source: Professor Nauro Campos, University College London cars) were not known until a week before province’s grocery market. January 1st. Talks with the eu could pro- Yet the real hit to the economy from duce more derogations or longer grace pe- Brexit is likely to come as more of a whim- time than it would be had it stayed in the riods for the toughest checks. But Sam per than a bang. With a last-minute trade single market and customs union. Lowe of the Centre for European Reform, a deal, Britain and the eu avoided the worst In the three decades after the second think-tank, says Brussels will weaken its short-term chaos, but economists worry world war, Britain’s economy declined rel- rules only to help eu members such as Ire- about the return of the post-war “British ative to its European neighbours. That was land; it has no interest in softening the im- disease”—hence the Bank of England’s pre- not just because they had so much ground pact of Brexit on Britain. diction that the economy will be three or to make up after the war; by the 1960s, they It will care more about Northern Ire- four percentage points smaller in ten years’ were beginning to pull ahead. Britain suffered from confrontational industrial relations, poor management, weak productivi- Rolling out the vaccine ty and low investment. Margaret Thatcher is often credited Quick jabs with changing the country’s trajectory, but many economists argue that the effect of Britain’s entry to the then European Eco- Britain gets off to a quick start; ministers promise acceleration nomic Community (eec—now the eu) in hen it comes to the race to get out be getting done more slowly than in 1973 was at least as important. Nauro Cam- Wthe covid-19 vaccine, there is Israel, other countries that got off to a quick pos and Fabrizio Coricelli of the Centre for which has given out 23 doses for every start. And observers have raised concerns Economic Policy Research, a network of 100 people, and then there is everywhere about the lack of ventilation in mass- economists, point to a similar productivi- else. In second and third place, some way vaccination centres, in which elderly and ty-growth pattern among the three coun- behind, sit the United Arab Emirates and vulnerable people congregate. tries—Britain, Denmark and Ireland—that Bahrain, which are relying on a jab with- These are serious problems. They are joined the eec in 1973 (see chart). They sug- out published data from late-stage trials also ones most of Europe would love to gest that Britain’s entry into the Common (see Middle East and Africa). Next is have—which is not a position Britain has Market created the conditions for Britain, the speediest big country. been in for most of the pandemic. Thatcherism to thrive by offering British British medics were quick off the entrepreneurs access to a larger, deeper mark with early approvals for the Pfizer- Covid-19 vaccination doses and more innovative market than was pre- Biontech and AstraZeneca-Oxford Uni- administered, per 100 people viously available to them. versity vaccines, and the roll-out has At Jan 13th 2021 or latest No Nicholas Crafts, a leading historian of recently sped up. On January 6th, 1.3m 0.5 124 data Britain’s economy, argues that the real doses had been delivered. A week later, cause of the British disease was a lack of 3.1m had, a number equivalent to 4.5 Iceland Source: Our World in Data competition. The economy was cartelised doses per 100 people. Denmark, Britain’s Finland in the interwar years and sheltered from nearest rival in Europe, has done 2. Norway Russia international competition in the post-war Britain Though fast, the pace still needs to Sweden Est. decades. Thatcher, by his reckoning, de- Lat. accelerate further to meet the govern- Denmark serves credit for liberalising markets and ment’s target of offering everyone in a big Lith. deregulating industries, but was helped by Ireland group—which includes people over the the wider exposure of firms to internation- Neth. Poland age of 70 and front-line health- and Germany al competitive pressure from entry into the Bel. Slovakia social-care workers—a jab by the middle Czech Rep. eec and the creation of the European Single Lux. of February. To meet it, around 2.5m Aust. Hung. Market in the mid-1980s. He reckons that doses will have to go out each week. France Romania Britain’s failure to join the eec at its cre- Slovenia Serb. Ministers promise they will. Bulgaria ation in 1957 had a substantial cost in terms The roll-out is not without flaws. The Port. Croatia of lost productivity. government has provided little infor- Spain If the effect of leaving the eu is the op- mation on, for instance, who exactly has Italy Greece posite of joining it, the impact will not be a received jabs, although more is promised swift, painful recession, but growth for- soon. Care-home vaccinations seem to gone. Britain will be like a boiled frog, not noticing the damage until it is done. 7 The Economist January 16th 2021 Britain 45 Bagehot Trump? Don’t think I know him

The British right needs to come clean about its links with Trumpism ican conservative news-entertainment complex that was born out of Rush Limbaugh’s radio show, produced the Fox News jugger- naut and helped create Trumpism. Julia Hartley-Brewer rages at “political correctness gone mad” on TalkRadio. James Delingpole, a co-founder of the British Breitbart, foams at “warmism” (climate change), “muzzles” (masks) and the “Bolshevik Broadcasting Cor- poration” (the bbc). Andrew Neil, the publisher of the Spectator, is launching a tv station aimed at conservatives. The bond between the British and American right was supercharged by Brexit. There were close alliances between leading Brexiteers and Trumpworld. Matthew Elliott, the chief executive of Vote Leave, is married to Sarah Elliott, chairwoman of the British branch of Republicans Overseas. Mr Trump’s election reassured worried Brexiteers that they weren’t alone—indeed, that they had a “warm and generous friend”, as Mr Gove put it, in the most powerful man in the world—and stoked their belief that the “Anglosph- ere” would provide a geopolitical home for Britain outside the eu. Brexit and Trump also represented solutions to a common transatlantic problem. Both the Conservative Party and the Repub- lican Party have seen their membership undergo a social transformation as they have lost highly educated voters (particularly among the young) and recruited working-class voters in their he maga hats are in the bin. The strategy papers on what the place. This transformation creates a dilemma: how do you satisfy TTories can learn from the Republicans have been shredded. Do- your new working-class constituents while remaining committed nald Trump’s state visit to Britain? Mere realpolitik; Emmanuel to lower taxes and smaller government? Macron did much the same. Mr Trump’s description of Boris John- On both sides of the Atlantic, the answer was to divide the son as “Britain Trump”? The ungrammatical ravings of a madman. country and unite conservative voters by using nationalist rheto- Mr Johnson’s spin doctors are busy drawing a bright line be- ric rather than economic issues. Brexiteers dismissed Remainers tween the two men. Mr Johnson is a classics scholar who can recite as “traitors” and warned that attempts to frustrate “the will of the lengthy chunks of Homer. The only Homer Mr Trump knows is the people” would lead to violence in a way that sounded as much a one in “The Simpsons”. Senior Tories are equally busy denouncing threat as a prediction. Mr Johnson speculated that Barack Obama’s the president and scrubbing their cvs of any hint of Trumpery. “part-Kenyan” ancestry made him anti-British and raised the spec- This is hogwash. Mr Johnson basked in his close relations with tre of a “great conspiracy of the deep state” to frustrate Brexit. the 45th president and, for a while at least, cultivated ties with “Imagine Trump doing Brexit,” Mr Johnson told a group of fund- Steve Bannon, the architect of Mr Trump’s 2016 victory. Michael raisers, smacking his chops. “He’d go in bloody hard.” Mr Johnson Gove, the intellectual engine of Brexit Toryism, was photographed tried to go in “bloody hard” himself by proroguing Parliament, a with the president, making a thumbs-up sign and grinning imp- move that was overruled by the Supreme Court, and more recently ishly. Liam Fox, former trade secretary, seldom engaged in a con- by threatening to break international law. versation in which he didn’t mention his links with Trumpworld. If Mr Johnson’s classical education did not teach him the dan- Farther right, the connections are even closer. Nigel Farage, for- ger of playing with populist fire, the events of January 6th in Wash- mer leader of the United Kingdom Independence Party (ukip) and ington should have. America’s democracy and society may have then the Brexit Party, rejoiced in his position as Mr Trump’s leading sustained long-term damage. The Republican Party certainly has. British fanboy, acting as a warm-up act at recent Trump rallies. Mr If the Tories want to avoid similarly imperilling the nation and the Trump repeatedly urged Mr Johnson to replace Sir Kim Darroch, party, they need to change the way they behave, and not just by pre- ambassador to the United States, with Mr Farage. Sir Kim was even- tending they never met Mr Trump. tually sacked for pointing out, in a leaked private cable, that Mr In America, some on the right are trying to work out how it got Trump was unstable. Raheem Kassam, a former adviser to Mr Far- captured by Mr Trump and ensure that it never happens again. age, collaborated with Mr Bannon to create a British edition of “Never Trumpers” have been trying to formulate a new conserva- Breitbart, an incendiary website, and supported Mr Trump’s at- tism ever since their nemesis appeared on the scene. Others have tempt to deny the legitimacy of the election result. been joining them as Mr Trump became progressively unhinged. The links between the British right and Trumpworld are broad Marcio Rubio, a senator for Florida, is trying to flesh out a new sort and deep. Over the past 40 years the American right has produced a of blue-collar conservatism. The Manhattan Institute is studying conservative intelligentsia, watered by think-tanks and founda- ways to revive conservatism in the Democrats’ urban heartlands. tions, devoted to counterbalancing the liberal elite. Brexiteers The Tories need to engage in this debate and to develop some were happy to join up, and clung to it even as it embraced Trump- real policies to solve the real problems on which populism feeds. ism. Daniel Hannan, a Tory peer, is a regular columnist for the Mr Johnson has rightly identified “levelling up”—boosting pros- Washington Examiner. Douglas Carswell, a former mp who left the perity outside the south-east of England—as a focus for his gov- Tories for ukip, recently became president of the Mississippi Cen- ernment, but has neglected to explain how this might be done. In- tre for Public Policy, a free-market think-tank. stead of devoting his considerable talents to divisive rhetoric, he Right-wing Britons are building their own version of the Amer- should focus on boring, serious policies to improve Britain. 7 46 International The Economist January 16th 2021

Democracy kingship and aristocracy to restrain the will of the people; and create a large middle Madison’s nightmare class with a stake in stability. The following centuries saw only a few innovations in thinking about the mob. Machiavelli speculated that clever princes might be able to profit from chaos if they could forge the mob into a battering-ram against a decaying regime. Mostly elites Political theorists have been worrying about mob rule for 2,000 years were content with demonisation. They in- iberals have become lazy when think- itation on the evils of mob rule. Plato re- vented a slew of fearsome names for the Ling about the mob. They have celebrated garded democracy as little more than mob people—the “beast of many heads”, the “people power” when it threatens regimes rule by another name—perhaps without “swinish multitude” and the mobile vulgus, they disapprove of, in the Middle East, say, the violence, at least at first, but with the or changeable crowd, which gave rise to the while turning a blind eye to the excesses of same lack of impulse control. He compared term “mob”. They also invented cynical protesters who they deem to be on the right the citizens of democracies to shoppers ways of diverting its anarchic energies, side of history—in Portland, Oregon, for who see a “coat of many colours” in a mar- most notably Rome’s bread and circuses. example. In August 2020 a mainstream ket and buy it only to discover that it falls But this changed with the French and publisher, Public Affairs, produced “In De- apart when it has been worn a couple of American revolutions, which were based fence of Looting: A Riotous History of Un- times. He noted that democracies are hard- on contrasting approaches to mob rule. civil Action” by Vicky Osterweil. wired to test boundaries. The invasion of America’s Capitol by Plato also argued that democracies in- Two revolutions mobs of President Donald Trump’s suppor- evitably degenerate into anarchy, as the Initially many celebrated the “people pow- ters on January 6th was a reminder of the poor plunder the rich and profligacy pro- er” of the French revolution. In response to danger of playing with fire. It is naive to as- duces bankruptcy. Anarchy leads to the the tumult Wordsworth wrote: “Bliss was it sume that mobs will be confined to the rule of tyrants: a bully can appeal to the in that dawn to be alive/ But to be young “nice” side of the political spectrum; the mob’s worst instincts precisely because he was very Heaven!” But many changed their left-wing kind by their nature generate the is ruled by his own worst instincts. He is, as minds when they discovered that, far from right-wing sort. It is doubly naive to expect it were, the mob in the form of a single per- unleashing man’s natural goodness, the that mobs will set limits; it is in their na- son. For Plato the only viable alternative to revolution had set free his inner demons. ture to run out of control. mob rule was the rule of a caste of guard- Those who stuck with the revolution de- Political philosophers have been mak- ians: philosopher kings trained from in- spite the guillotine and the Terror did so on ing these points for more than 2,000 years. fancy to control their emotions and put two grounds: that the old regime was re- Pre-modern theorists never tired of warn- wisdom before instinct. sponsible for the violence because it ing that, given the chance, the “many- Aristotle, Plato’s great pupil, distin- created so much pent-up hatred; and that headed monster” would trample the estab- guished between three legitimate forms of you cannot improve the world without lished order. Even liberal thinkers worried government: kingship, aristocracy and de- bloodshed. Tom Paine, a British radical, re- that democracy might give rise to “moboc- mocracy. He argued that they each have mained a true believer despite the fact that racy”. They argued that the will of the peo- their dark shadows: tyranny, oligarchy and he was imprisoned for ten months during ple needed to be restrained by a combina- mob rule. He then outlined the ways in the Terror and only escaped with his life be- tion of constitutional intricacy (individual which these virtuous forms of government cause the chalk mark indicating he should rights, and checks and balances) and civic evolve into their opposites: democracy be- be executed was placed on the wrong door. culture. The wiser among them added that comes mob rule when the rich hog the soci- The French Revolution also produced a the decay of such restraints could trans- ety’s wealth. A more practical thinker than robust conservative critique of mob rule— form democracy into mob rule. Plato, Aristotle argued that there were two first in Edmund Burke’s “Reflections on the The first great work of political philoso- ways of preventing democracy from degen- Revolution in France”, published before phy, Plato’s “Republic”, was, in part, a med- erating into mobocracy: mix in elements of the worst of the Terror, then in a flood of1 The Economist January 16th 2021 International 47

2 works. Burke recognised that the mob has a the mob. A vigorous civic culture rooted in warn that democracies might well degen- collective psychology that makes it self-governing communities (he was par- erate into mob rule if they neglected the uniquely dangerous. It is a “monstrous ticularly keen on New England’s town- health of their political institutions and medley of all conditions, tongues, and na- ships) and a self-reliant and educated pop- civic culture. Seymour Martin Lipset, an tions”. It relishes wild abandon—“horrid ulation are also necessary. So too is a American sociologist, echoed Aristotle’s yells”, “shrilling screams” and the “unut- responsible elite that recognises that its view that a healthy democracy requires terable abominations of the furies of hell”. first duty is to “educate democracy”. broad-based prosperity. Harvey Mansfield, It gets so carried away with its own righ- a political philosopher, reiterated Tocque- teous bloodlust that even normally decent The march of democracy ville’s worry that civic decay might corrupt people can be transformed into monsters. The 19th century saw the world’s ruling democracy. Samuel Huntington warned He predicted that the revolution would end elites reconciling themselves to the fact that “democratic overload”, with too many in the massacre of thousands (including that democracy was the wave of the future. interest groups demanding too much from the king, queen and priests) and the rise of How you dealt with this wave depended the state, would lead to democratic disillu- a dictator who could restore law and order. largely on your attitude to the mob. Opti- sionment as the state failed to live up to its The cycle of mass protest followed by vio- mists thought that extending the franchise ever-escalating promises. lence followed by dictatorship set a pattern was not only right but also a way to tame In recent years the pessimists have for subsequent revolutions in Russia (1917), the mob. Benjamin Disraeli thought that grown in number. The experience of coun- Cuba (1958) and elsewhere. voting would help assimilate people: just tries such as Egypt during the Arab spring The American revolution succeeded as owning property makes people more so- confirmed warnings that, without strong where the French revolution and its pro- ber, so exercising democratic rights con- institutions in place, democracy would geny failed because it was based on a con- verts them into responsible citizens. succumb to mob rule. The election of Mr sidered fear of “the confusion and intem- Pessimists held that delay was the best Trump, a reality-tv star, raised profound perance of a multitude”. “Federalist No. 55”, way to avert the mob. Most members of the questions about the health of America’s po- written by either James Madison or Alex- British ruling class favoured introducing litical regime. Can democracy survive if ander Hamilton, is particularly sharp on democracy in measured stages because television channels make billions of dol- the way that ill-designed institutions can they made a sharp distinction between the lars by peddling misinformation and parti- turn even sensible citizens into a baying respectable middle- and upper-working sanship? Or if wealthy people can invest crowd: “Had every Athenian citizen been a classes, who would vote responsibly be- vast sums of money in the political pro- Socrates, every Athenian assembly would cause they owned property, and the unre- cess? Or if society is polarised into a super- still have been a mob”. spectable classes, who, as well as being class and a demoralised proletariat? Recent The Founding Fathers argued that de- propertyless, were, in their opinion, ad- events suggest that the answer is “no”. mocracy could avoid becoming mobocracy dicted to drink and licentiousness. J.S. Mill The age of democratic naivety died on only if it was hedged with a series of re- argued in favour of a “variable franchise”: January 6th. It is time for an age of demo- straints to control the power of the people. “one person at least one vote, and up to cratic sophistication. Democracies may Power was divided between the branches of three or four votes according to education”. well be the best safeguard against mob rule, government to make sure that nobody Walter Bagehot, editor of The Economist as liberal democrats have been preaching wielded too much. Citizens were given ex- from 1861 to 1877, and a man who worried for centuries. But they can be successful tensive constitutional rights. Senators obsessively about the breakdown of social only if countries put the necessary effort were given six-year terms to insulate them order, added a new solution: use the mon- into nurturing democratic institutions: from fads. They were also initially appoint- archy as a theatre that would simulta- guarding against too much inequality, ened by state legislatures rather than directly neously entertain the masses and distract suring that voters have access to objective elected. Supreme Court judges were ap- them from the real wielders of power. information, taming money in politics and pointed for life, ensuring they cannot be re- This sort of pessimism has been out of reinforcing checks and balances. Other- moved by people from other branches. fashion for a long time. The second world wise the rule of the people will indeed be- Alexis de Tocqueville added his own war and the defeat of Nazism led to an era come the rule of the mob, and the stable worries about mob rule in “Democracy in of democratic self-confidence, and the fall democratic order that flourished from the America”. For him the constitution alone is of the Berlin Wall to one of democratic eu- second world war onwards will look like a not strong enough to save democracy from phoria. But a few pessimists continued to brief historical curiosity. 7 48 Business The Economist January 16th 2021

Also in this section 49 A chill in China Inc 50 Pre-emptive antitrust 50 Electronic cars 51 Bartleby: Creatures of habit 52 Post-Trump social media 52 TikTok’s other rival 54 Brand lessons from Rizla 55 Schumpeter: Refashioning Zara

Business and technology from $45bn in 2020 to $73bn in 2025. “We have had a catbird seat during the Bearing fruit pandemic,” says Michael Cicco, the head of the American operations of Fanuc, a Japa- nese robot-maker. With supply chains whacked, manufacturers were forced to find ways to build flexibility, he says. Com- NEW YORK panies reshoring production have sought The pandemic has ushered more robots into factories, warehouses and back to offset the high cost of human labour offices. They are here to stay with the engineered sort. And robots are ary barra, boss of gm, took to the vir- them to put their money where their becoming much more capable. The most Mtual stage on January 12th to launch mouths are. Hernan Saenz of Bain, a con- dexterous can now pick delicate objects BrightDrop. The carmaker’s new logistics sultancy, reckons that between now and such as individual strawberries. division will peddle such unsexy things as 2030 American firms will invest $10trn in Fanuc has seen a surge in demand for delivery vans and autonomous electric pal- automation. Nigel Vaz, chief executive of material-handling equipment and “collab- lets for use in warehouses (see subsequent Publicis Sapient, a big digital consultancy, orative robots”, designed to interact with article). Hardly stuff to set pulses racing. says that the downturn offers bosses the people. These “cobots” are particularly use- Suppress your yawn, for Ms Barra’s an- perfect cover. “The unrelenting pressure ful in e-commerce, which covid-19 has giv- nouncement is the latest sign of a quiet but for short-term financial results from inves- en a huge boost. The pandemic has, on one powerful revolution. “The convergence of tors has temporarily been suspended,” he informed estimate, led consumer-goods software and hardware seen in the carpet- says. “Firms are not just going back pre- firms to increase buffer stocks by around ed parts of enterprises is now seen on fac- pandemic, but completely reimagining 5%. To counter this, firms are snapping up tory floors in every industry we serve,” says how they work,” says Susan Lund, co-au- robots for use in warehouses, made by Blake Moret, chief executive of Rockwell thor of a forthcoming report from the companies like GreyOrange and Kiva Automation, a giant of the industry. His McKinsey Global Institute, a think-tank. A (which Amazon acquired in 2012 to assist firm runs a full-scale manufacturing facili- recent survey by the institute’s sister con- its e-commerce fulfilment). ty at its Milwaukee headquarters, to prove sultancy found that two-thirds of global Right now cobots help with social dis- that automation enables it to make com- firms are doubling down on automation. tancing. But, says Dwight Klappich of petitive products despite America’s high Gartner, a research firm, robots that move labour costs. Its share price has risen by Aye, robot goods to workers will be a boon for post- 28% in the past year, nearly twice as much Robots are the most prominent winner. pandemic productivity, too (as well as for as the s&p 500 index of big American firms. Robo Global, a research firm, predicts that the morale of humans, by sparing their Other purveyors have done even better. by the end of 2021 the worldwide installed weary feet). Luke Jensen of Britain’s Ocado, Bosses have boasted of automating base of factory robots will exceed 3.2m un- an online grocer and robotics pioneer, in- their operations for years without an awful its, double the level in 2015. The global mar- sists that his low-margin industry must lot to show for it. Covid-19 has spurred ket for industrial robotics is forecast to rise find ways of fulfilling the recent surge in 1 The Economist January 16th 2021 Business 49

2 online orders with less labour. His firm al- Corporate China ready serves the bulk of its British custom- Doing Asimov proud ers from just three highly automated sites. A chill descends Kroger, a big American grocer, is now ex- Manufacturing companies*, adoption rate panding its roll-out of Ocado equipment of technologies, 2019, % both in warehouses and at its retail outlets. Current Projected five-year A survey of supply-chain executives published on January 13th by Blue Yonder, 100806040200 HONG KONG Sensors & automatic From Jack Ma to extraterritorial laws, another consultancy, found that the share identification Beijing throws its weight around of firms with fully automated fulfilment Robotics & automation centres may rise by 50% within a year. And, hen america slammed sanctions on Internet of Things as Sudarshan Seshadri of Blue Yonder puts Huawei, barring its firms from sup- Wearable & mobile W it, “Automation is just the table stakes.”The technology plying the Chinese telecoms-gear titan on pandemic’s bigger long-term impact may 3D-printing national-security grounds, China’s state be a fuller embrace by firms of data their Autonomous vehicles media predicted this would spur innova- operations generate, and predictive algo- & drones tion in the local technology industry. In rithms to help guide real-time decisions. Artificial intelligence time, it may well do. For now, much of the Stuart Harris of America’s Emerson, a innovating is taking place within the Chi- big automation firm, says that “pervasive Blockchain nese state, as it toys with a new system of sensing”—which combines ai and clever control over Chinese business. sensors—helped his company’s revenues “Since the start of the covid-19 outbreak, how On January 9th the Ministry of Com- from remote monitoring grow by 25% last has your company’s or business area’s adoption merce struck back against American sanc- year. Emerson’s clients range from a Singa- of the following technology trends changed?” tions. It said it may force Chinese firms to porean chemicals factory to a Latin Ameri- % responding, July 2020 stop complying with “unjustified extra- can mine. Peter Terwiesch of abb, a Significantly decelerated Somewhat decelerated territorial application of foreign legisla- big Swiss-Swedish industrial-technology Neither Somewhat accelerated tion” (in Beijing’s eyes, virtually all of it is). firm, also reports a boom in remote-opera- Significantly accelerated It also let companies sue foreign and do- tions systems, from marine vessels to pa- 100806040200 mestic firms that have complied with some per mills. His firm’s annual sales of such Supply-chain foreign sanctions for compensation. products have doubled to $400m from pre- digitisation This is part of a broader trend, as the pandemic levels. Drishti, an American Digital consumer Communist regime adopts a more muscu- startup, has come up with a way to apply ar- channels lar stance towards the private sector. In No- tificial intelligence (ai) and computer vi- Digital consumer vember it halted the $37bn flotation of Ant interaction & sion to analyse busy video streams of work- collaboration Group, the payments affiliate of Alibaba, ers on assembly lines. Marco Marinucci of Artificial intelligence China’s biggest e-commerce giant, days be- Hella, a big German car-parts supplier, says & automation fore it was due to list in Shanghai and Hong his firm used Drishti’s kit to analyse and fix Sources: Deloitte; *Based on survey of 1,001 Kong. That month the State Administration problems at a high-volume assembly line. McKinsey supply-chain professionals for Market Regulation (samr), set up in This allowed its throughput to rise by 7% 2018 from three regulators, issued rules to last year. Publicis Sapient automated the duct design, parts procurement and rein in e-emporiums. In December it inventory forecasting of a division of a big manufacturing to logistics and after-sales opened an antitrust probe into Alibaba. On European retailer which found itself re- service. This allowed merchants on Ali- January 10th the Communist Party’s body peatedly out of stock amid the change in baba’s e-commerce platforms to fulfil cus- for political and legal affairs vowed to take consumption patterns during the pandem- tomised orders within days while elimi- trust-busting more seriously. ic. The consultancy’s software allowed its nating excess inventory. Time from The antitrust build-up has spooked in- client to prevent shortages of its top 100 production to delivery was reduced from vestors—Alibaba’s share price is down by a items 98% of the time. several months to a fortnight. quarter since October. Beijing’s new stance It isn’t just production floors and ware- Sceptics note that history is littered creates more uncertainty for business in houses that are being automated. So are with examples of supposedly world- two other ways. back offices. By one estimate, America’s changing technologies that beguiled First, who is in charge of one of the health-care system could save $150bn a bosses, only to fail to live up to the promise. world’s biggest companies? Jack Ma, the ty- year thanks to automation of paper-push- (Remember the blockchain?) Once covid-19 coon who co-founded both Alibaba and ing. Allied Market Research, a firm of an- has been defeated, companies’ enthusiasm Ant, has not been seen in public since he alysts, predicts that the global sales of pro- for new technologies may subside. Those likened Chinese state banks to pawn shops cess-automation products will balloon that have missed the opportunity to auto- three months ago. He owns just 4.8% of Ali- from $1.6bn in 2019 to nearly $20bn in 2027. mate—as many have because they were baba and stepped down as chairman in In December ui Path, a trailblazing Roma- busy trying merely to survive the pandemic 2019, but is thought to control strategic de- nian startup in the area, filed for an initial recession—will lose the cover that Mr Vaz cisions. Even if he does resurface soon, as public offering. It may start with a market speaks of. other awol tycoons have in the past, after value of $20bn. On January 12th Workato, Optimists counter that this time really showing contrition and “assisting” investi- an American rival, said it has raised $110m may be different. In the past the biggest re- gators, the episode sends a chilling signal. in fresh funding. turns to automation accrued to giant, well- The blowback could destabilise Ali- Last year Alibaba, China’s biggest e-em- capitalised firms. Today advances in tech- baba. Like many mainland tech firms, it porium, unveiled the results of a more am- nology and business models allow smaller uses an offshore legal structure that lets bitious project, code-named Xunxi (“fast ones to enjoy similar benefits. That should foreigners invest in Chinese assets that rhino”). Alain Wu, who runs Xunxi, ex- increase demand for clever systems—and would otherwise be off limits. Regulators plains that this involved digitising and in- in time reduce their cost further. And so on, have tolerated the arrangement, without tegrating whole value chains—from pro- in a virtuous, fully automated circle. 7 fully endorsing it, for two decades. But last1 50 Business The Economist January 16th 2021

2 month samr fined Alibaba and Tencent, thing they would love to avoid: take sides. Carmakers and big tech another online behemoth, for not seeking The measures are a mixed blessing even approvals for past acquisitions. A sus- for Chinese firms, which they are meant to Steel and silicon tained regulatory onslaught could raise help. Many could, it is true, seek damages doubts about the viability of these complex from partners. But some may be damaged foreign-ownership arrangements. This themselves, such as mainland banks oper- would spook outside investors even more. ating abroad which have heeded Uncle The other immediate source of instabil- Sam’s sanctions over the years to avoid Detroit loses out to virtual Vegas as ity is the battle between the superpowers fines and maintain access to the dollar- cars go electric—and electronic over their extraterritorial legal reach. In clearing system, the backbone of global fi- 2019 the commerce ministry dabbled with nance. Those that have had to shut Hong he annual Consumer Electronics this by creating a list of “unreliable enti- Kong accounts for blacklisted Chinese TShow (ces) in Las Vegas used to be a ties”. It has yet to be filled with prominent companies and individuals could come jamboree for gadgets you can put in your foreign companies. Rumours that it would under fire. Carrie Lam, Hong Kong’s leader, pocket or hang on your wall. This hasn’t include hsbc, a British bank that played a who has overseen a crackdown on pro- been true for a few years. As vehicles role in an American investigation into democracy activists, has said cash is piling morph from a lump of mechanical engi- Huawei, turned out to be wrong. If the min- up in her flat because American sanctions neering to a digital platform for mobility istry acts more decisively this time, its pro- prevent her from putting it in a bank. services, and motor shows wane in impor- posed measures could pose an impossible In the short run, says a trade lawyer in tance, carmakers have sought new venues dilemma for Western multinationals in Washington, the Ministry of Commerce to showcase their wares. At this year’s (vir- China: either face fines in America for rules are “more likely to sow discord than tual) ces, which opened on January 11th, breaking sanctions, or end up in a Chinese actually help Chinese companies”. This is they once again joined makers of smart- court. Wang Jiangyu of the City University not exactly conducive to innovation. Nor is phones, smart toilets and smart dog flaps of Hong Kong imagines that the new rules the long arm of the Chinese state, especial- in showcasing their smartest tech. will force global businesses to do some- ly as it grows ever longer and stronger. 7 ces has risen in significance because vehicles are changing. Bosch, a parts supplier, noted at the show that a typical car Antitrust in America had 10m lines of code in 2010; today it has 100m. This month Ford had to idle a factory Visa-free travel in Kentucky for a week owing to a global shortage of semiconductors that deprived it of the chips its cars run on. Trustbusters force a big incumbent to back off from an upstart rival Electrification of transport will speed n early 2019 an executive at Visa, a nudging 90%. In 2019 Visa earned around up the transformation of vehicles into elec- Igiant payments firm, sketched a pic- $4bn in profits. On January 12th the doj tronic devices. Battery power requires a ture of an island volcano. He scribbled announced that Visa had pulled out of new electronic architecture that will come the current capabilities of Plaid, a Silicon the deal, rather than continue to trial, with better integration of hardware and Valley fintech firm founded in 2012, in which was scheduled for June. software, and improved connectivity. Har- “the tip showing above the water”. The The trustbusters’ intervention bears man, a car-tech firm, envisions a “third liv- startup, which has developed a platform some striking similarities to the anti- ing space” between home and work, using connecting consumer accounts at more trust suits that have been filed against the development to plug a connectivity gap than 11,000 banks to financial apps, was Facebook. Two separate legal challenges, and offer new in-car services, such as inter- offering services like “bank connec- one mounted by a bipartisan coalition of active concerts and gaming. tions”, “account validation” and “asset attorneys-general in 46 states and anoth- In other ways, though, cars remain a 1 confirmation”. But he warned of the er from the Federal Trade Commission “massive opportunity” beneath the (ftc), centre on its acquisitions. They surface. Plaid could expand into fraud alleged that the technology titan main- detection, making credit decisions and, tained its monopoly in personal social- scariest of all, payments infrastructure. networking by systematically buying up This opportunity for Plaid looked like potential competitors—notably In- a threat to Visa. Ten months later, in stagram in 2012 and WhatsApp in 2014. January 2020, Visa announced that it In its defence, Facebook said that the would acquire its putative rival for government “now wants a do-over”, $5.3bn. This sum was more than 50 times which would, as the company has put it, the revenue Plaid earned in 2019 (though send “a chilling warning to American a modest lift for a company with a market business that no sale is ever final”. The capitalisation of over $460bn). Al Kelly, ftc’s complaint fails to mention that the Visa’s boss, described the deal as an antitrust authorities cleared the In- “insurance policy”. stagram and WhatsApp deals at the time. These details—volcano sketch and The move to block the tie-up of Visa all—were included in the complaint and Plaid implies a new trustbusting America’s Department of Justice filed in approach taking shape in America. November, when it sued to block the Henceforth the authorities will probably deal. The acquisition, the doj said, would try to nip Facebook-like arguments in the snuff out a competitor in the debit-card bud pre-emptively by stymieing at- business, in which Visa has a market tempts by powerful incumbents to swal- share of around 70% and profit margins low upstart competitors. Explosive stuff. Coming to an Apple store near you? The Economist January 16th 2021 Business 51

2 metal box. Although electrification has re- livered a keynote speech reiterating the De- mobile hardware. Apple’s flirtation with duced barriers to entry in the car busi- troit stalwart’s electric and electronic electric cars exemplifies the complexities ness—which were formidable for capital- plans. In the autumn gm said it would in- of the relationship. Rumours that it intend- intensive metal-bashing—vehicles are still vest $27bn in electric cars by 2025 and ed to make electric vehicles first surfaced best made by firms that can manufacture at launch 30 new models. Ahead of ces it un- in 2014. Two years later, when the trouble scale and with a trusted brand. veiled a new logo, repainted blue to evoke and expense became clear, it dropped the As a result, car firms are wracking their clean skies and with its “m” made to look a idea. On January 7th a news report of talks brains over how much of the software that bit like a plug. This week the firm made with Hyundai to build an Apple car sent the runs their vehicles’ new electronic func- more announcements about its plans for South Korean carmaker’s share price up by tions they should develop in-house and electrification, including details about its nearly 20%. Hyundai acknowledged it was how much to outsource to tech firms. At BrightDrop electric delivery van and new in early discussions with the iPhone-mak- ces Daimler showed off Hyperscreen, a electric Cadillacs (as well as, inevitably, a er. Apple has yet to comment. Just as car- new touchscreen dashboard for its luxury flying-car concept). makers look to Vegas, it seems, big tech is electric models. Mary Barra, boss of gm, de- Tech firms, for their part, are mulling headed the other way. 7 Bartleby Creatures of habit

The lockdown has caused both good and bad changes of routine abits can be slow to form. But when A survey of personnel chiefs by Hthey do, they can become en- Gartner, a research firm, found that 65% trenched. When workers headed home planned to allow employees flexibility during the first lockdown of March 2020, on their working arrangements, even they probably thought the break would after vaccines have been distributed. last for a month or so. Had that been true, They predicted that around half the old routines would soon have resumed. workforce would want to return to the It is now ten months since many office, for at least part of the time. employees have made a regular com- Permitting this flexibility makes mute into the office. New routines have perfect sense. When lockdowns end, taken root and those will be much harder many workers may relish the chance to to break. Some of these new habits are escape from their homes and see their bad, and they may stem as much from colleagues in the flesh. They will be even managers as from workers. happier if they can arrive at 10am one Asana, a maker of office software, day, and 8.30am the next, if that suits commissioned a survey of more than their domestic requirements. And if they 13,000 knowledge workers (defined as decide to work at home on Fridays, they those who mostly work at a computer) will no longer feel as guilty as they might across eight countries. It found that, on rid of the needless meetings and produc- have done before the pandemic. The average in 2020, employees were work- tivity should improve. Perhaps managers office can be a refuge, not a prison. ing 455 hours a year more than their will make it their new year’s resolution to Employers will also take advantage of contracted requirement, or around two ask the question, “Is this meeting really the new flexibility. Silvina Moschini, hours a day. That overtime had almost necessary?” Bartleby’s Law is that 80% of who runs TransparentBusiness, a work- doubled relative to 2019. And much of the the time of 80% of the attendees at meet- force-management company, says that excess may not have been necessary; ings is wasted. The lockdowns have pro- firms will change the way they scale up workers complained about the amount vided ample evidence to corroborate your their operations, relying far more on of time they spent in meetings and vid- columnist’s hypothesis. freelancers, contractors and vendors eo-calls, or in responding to messages. Research suggests that executives may than on full-time employees. Perhaps this forced communication spend 23 hours a week in meetings. Cut Handling a combination of remote is the result of manager anxiety. Fearful that time in half and think of how much workers and freelancers will require that remote workers will be tempted to more might be achieved. And that will be managers to acquire new habits. Ms slack, they have monitored their teams just as true when people return to the Moschini says the key will be to develop like an anxious parent who has taken a office as it is when they work from their “empathic leadership” that understands toddler to a swimming pool. kitchen table. The pandemic could provide the varied working conditions of team Or managers may have felt the need to a wake-up call on meeting futility. members. This might involve sending look busy, prompting them to call more The best habit developed during the small gifts; at the start of the lockdown, meetings than before. They may have pandemic has been flexibility. The ritual of she sent slippers to her team so they trapped themselves in a cycle of futile the daily commute and the standard work- could feel comfy (mentally as well as activity—corporate hamsters on a wheel. ing day has been abandoned. And with it, physically) working from home. Many managers complain of “Zoom the curse of “presenteeism”—the idea that, Contacting workers should not be a fatigue”, as they drag themselves from unless you are constantly visible, you are matter of a rigid schedule but rather akin one video-call to another, often keeping not working. Self-isolating workers have to the sentiment that prompts children other participants waiting as they try to shown they will happily get on with their to check in with elderly parents every so wrap up the previous meeting. work, even when not under the beady eye often. Friendly, informal contacts are a This bad news has a silver lining. Get of their boss. new habit that managers must still hone. 52 Business The Economist January 16th 2021

Social media in America... movies or sports (or some lesser dust-up) …and in China may not return with the same frequency. Capitol gains But the upside of being more brand-friend- Feuding film stars ly may offset losses from the Trump dump. The share price of Snap, which also suspended the presidential account, jumped on the news. Twitter’s remains well above pre-Trump levels (see chart). BEIJING Banning Donald Trump is unlikely to Kuaishou takes on TikTok and its For Facebook, Instagram and YouTube, hurt social networks’ business Chinese sibling which blocked Mr Trump’s account on Jan- n january 7th , a day after a mob of his uary 12th, the impact is probably going to e aim to be the most customer- Osupporters stormed the Capitol in be negligible. Their monthly users (2.6bn, “Wobsessed company in the world,” Washington, leaving five people dead and 1bn and 2bn, respectively) are more numer- declares the opening line in the 700-page America shaken, Donald Trump had the ous and more global than Twitter’s (300m). prospectus from Kuaishou, a Chinese vid- sixth-most-popular account on Twitter, A bigger concern is whether muting Mr eo app. The firm, launched a decade ago by with nearly 90m followers. A day later he Trump undermines social-media firms’ a former software engineer at Google and had none. The outgoing president was per- claim that they are impartial platforms, another at Hewlett-Packard, boasts more manently booted off his social-media plat- and thus shielded from liability for what than 250m daily active users, up from an form of choice for inciting violence. their users post, rather than publishers, average of just 67m in 2017. Kuaishou is ex- Free-speech advocates—including An- who do not enjoy such protections. That is pected to hit a valuation of around $50bn gela Merkel, Germany’s chancellor and no why they have been careful to couch their when it goes public next month in Hong Trump fan—bristled. So did investors. decision in the language of process and Kong. That would lift it above better- Twitter’s share price has fallen by around consistency with their own rules. known social-media titans like Twitter 10% since @RealDonaldTrump’s expulsion. Even before the latest outrage, the firms (worth $37bn). That of Facebook, which suspended his ac- had been stepping up moderation efforts, Kuaishou’s revenues have soared in recount “indefinitely” on its main social net- without giving up claims to platformdom. cent years, reaching 25bn yuan ($3.6bn) in work and Instagram, its sister photo-shar- They employ tens of thousands of modera- the first six months of 2020, up by nearly ing app, has also dipped. tors between them to wade through toxic half on the previous year. Just over two- This looks like an over-reaction, at least posts and remove those that break their thirds of this came from what the firm calls by the stockmarket. Social-media firms’ terms of service. They have tried to limit “live-stream gifting”. It hosted nearly 1bn ad-sales departments may be glad to be rid the spread of misinformation around elec- live-streaming sessions in that period, tak- of the troll-in-chief. Before being displaced tions and other febrile times. Facebook has ing a cut on “tips” that viewers shower on by “coronavirus” last year, “Trump” was the a semi-independent oversight body to hear their favourite live-streamers. A tip can be most blocked keyword by online advertis- appeals to disputed moderation decisions. as small as 10 fen (1.5 cents) or as generous ers, loth to have their logos appear along- The social-media giants may welcome as 2,000 yuan. Performers film themselves side content that might repel customers. clearer rules, the need for which enjoys bi- singing, dancing, otherwise prancing or Twitter’s algorithms prioritise tweets partisan support in America. These would just sunbathing. (Pornography is strictly that generate greatest engagement. Mr raise barriers to entry for upstart rivals; prohibited.) New stars can expect to fork Trump’s were highly engaging, to put it Parler, a newish social network popular half of their tips over to the platform. mildly, and often ended up at the top of us- among American right-wingers, was boy- Amid this exuberance two threats loom. ers’ feeds. This coveted online real estate is cotted into oblivion when it showed itself The first comes from China’s increasingly sold through automated auctions. If many unable, as well as unwilling, to excise dan- hands-on regulators (see earlier article). In potential bidders block “Trump”, this may gerously inflammatory content (see Un- November they mandated that video apps depress prices. With Mr Trump gone, says ited States section). If muting Mr Trump like Kuaishou impose daily and monthly Mark Shmulik of Bernstein, a broker, this engenders greater regulatory clarity, the limits on the amount that users can tip ad inventory becomes more valuable. thinking goes, so much the better for deep- live-streamers. Moreover, to prevent im- Twitter may experience a decline in en- pocketed incumbents. As an added bonus, pressionable minors from being coaxed gagement in the short term. People who it earned them rare plaudits from Demo- into sponsoring cunning broadcasters, came to the site to gawp at Mr Trump’s lat- crats, who are about to take unified control platforms have been instructed to perform est outrage, and stuck around to read about of the federal government. 7 tougher background checks on users with such tools as facial-recognition technology. Bureaucrats in Beijing have yet to work Presidential terms and conditions out precisely what Kuaishou’s daily and monthly ceilings ought to be. But growth Share prices Annual revenue per registered user will probably slow down once the details March 3rd 2017=100 Worldwide, $ are hashed out. 400 50 Douyin, TikTok’s Chinese sister app and Facebook Kuaishou’s arch-rival, is better insulated Twitter 40 300 from the regulatory crackdown. Like Kuaishou, it operates a live-streaming 30 200 Twitter business. But unlike its competitor, it Alphabet 20 earns most of its revenues from online ads, 100 which the new rules do not affect. For com- Facebook Snap 10 parison, adverts accounted for just 28% of Snap 0 YouTube* 0 Kuaishou’s revenue mix in the first half of 2020. The company may now try to raise 2017 18 19 2120 2017 18 19 20† that share. To do so Kuaishou will have to Sources: Refinitiv; company reports *Owned by Alphabet †January-September, annualised overcome the somewhat outdated percep-1

54 Business The Economist January 16th 2021

2 tion that its users are disproportionately Start with history. Long ago Rizla may bal element” to rolling your own cigarette. folk living in small cities and rural areas have realised that if you lack an illustrious “The kind of blend you will choose, the with less money to buy advertised wares. heritage, you could invent one. “The Origi- kind of paper, the way you roll it, how The second threat is the potential for a nal...since 1796”, as the underside of its much tobacco you put in, there is a kind of price war between Kuaishou and Douyin. packets’ lids still boasts, refers to a time ritual in it that our consumers like...that For both platforms, user growth is largely a when Napoleon Bonaparte supposedly brings people together.” Brits favour green function of the appeal of their video con- granted the Lacroix family of south-west- packets (17.5g/m2). The Dutch, orange tent, which in turn depends on the calibre ern France a licence to supply rolling pa- (20g/m2). The French, Micron (12.5g/m2). of the producers behind it. A race to the bot- pers to French troops, according to Rizla’s Tribes share a lingo, musical tastes, pas- tom, whereby each firm lowers its “take website. This may well be nonsense. A mu- times, memes, clothing and a sense of hu- rate” on tips and ad sales to lure popular seum in Angoulème, the Lacroix ancestral mour. That is a great way to reach them. A broadcasters from the other app, would de- seat, calls this historical “fantasy” and says former executive says that Rizla once used press margins. that until 1860 the family manufactured models dressed as border guards with high At the moment neither company has a paper but not for cigarettes. Its history of heels and handcuffs as part of a “show me particular incentive to shatter the cosy the clan says it was not until 1867 that Léo- your papers” campaign. With that comes duopoly, points out Jeffrey Young of Grand- nide Lacroix created the brand. A spokes- the most effective, and cheapest, form of ly Asset Management, a broker. But the man for Imperial Brands, which owns Ri- marketing—word of mouth. possible arrival of a big competitor—not zla, says the story is widely recognised to inconceivable in China’s effervescent e- have been told through the generations. Going from paper to digital economy—could disrupt this equilibrium, “It’s a heritage we inherited when we ac- For all its guile, Rizla faces challenges Mr Young suggests. quired the Rizla brand in the 1990s,” he ahead, notably the rise of upstarts that use Despite its domestic challenges (or says. The discrepancy notwithstanding, less subtle social-media campaigns to maybe because of them), Kuaishou is pro- Napoleon is now part of Rizla folklore. build a new kind of cult following, espe- ceeding apace with its global ambitions. Or take design. Rizla’s name and its cially among pot-smokers. They include The international version of its app, Kwai, cross logo are cryptic clues, which also date Raw, started by Josh Kesselman, a shaggy- claims “tens of millions” of users in mar- back to the 19th century. Riz is French for haired American entrepreneur who in- kets from Brazil and Colombia to Malaysia rice, as in the paper. La is the first syllable of structs his 1.7m followers on Instagram and Vietnam. It still lacks the name-recog- Lacroix. The second, croix, is French for how to roll the perfect joint (“if you pack it nition of TikTok, though that may prove to cross—and symbolised by a gold one ap- too tight, it can’t run right”). be a blessing in disguise. Kwai has thus far pended to the name. For Rizla fans the logo Vaping presents another problem. avoided the sort of political scrutiny that is iconic. A former marketing executive re- Though smokers are trading down to roll- its better-known rival has attracted in calls emblazoning it on the heel of wellies your-own cigarettes during the pandemic, many foreign markets. 7 that the company distributed at music fes- sales growth in the longer term is expected tivals, so that the imprint would stand out to weaken. Rizla is diversifying. Coinciding in the mud. Rizla does not advertise to its with the European Union’s ban on menthol Brands customers that they can use its papers to cigarettes, it now sells “flavour cards” that smoke marijuana as well as tobacco; that infuse a packet of cigarettes with the taste Rolling in it would break the law in many countries. But of menthol within 60 minutes. it doesn’t have to: pot-heads do it them- The biggest risk, though, may be think- selves, by plumping for its king-size papers ing it must change too much. It has a mar- (which the company insists are only pro- ket position to protect, but also a heritage. duced to emulate ultra-long cigarettes). This may not quite date back to 1796 but is, Consistent quality is another trait, and a these days, real enough. Rizla’s competi- Marketing lessons from a must to ensure that the claim on the pack- tors can, at best, hope to fake it. 7 packet of Rizla et—“Keep Rolling with the World’s No. 1”— t is hard to imagine a simpler product remains true. Being owned by Imperial, a Ithan a cigarette paper: small, rectangu- global tobacco giant valued at £15.5bn lar, with no moving parts. So cheap it is of- ($21bn), helps. Rizla is a sleek industrial ten given away. And replaceable; desperate machine, producing almost all of its papers smokers have been known to tear out Bible at a big factory in Wilrijk, a suburb of Ant- pages as substitutes. It has none of ciga- werp in Belgium. Reels of paper, now made rettes’ glamour (though, these days, some of wood pulp rather than rice, are layered of their stigma). No wonder Rizla, which with gum, cut into strips, packaged and produces 45bn rolling-papers a year and shipped to about 100 countries. It is highly dominates the industry, attracts little at- automated. Ties to Imperial, owner of tention as a marketing phenomenon. Yet it Golden Virginia tobacco used for rolling, is one of a few brands, like Coca-Cola, Goo- offer a structural advantage that rivals lack. gle, Jacuzzi or Tupperware, whose name The trick is to tap its parent’s deep pock- (“Got a Rizla?”) defines the product. ets while promoting values that appeal to That is because a simple packet of Rizlas roll-your-own smokers who like to think of exhibits many of the qualities—history, de- themselves as individualistic iconoclasts. sign, consistent quality and values—that One is attention to detail, which users ob- marketing gurus consider hallmarks of en- sess over. The papers come in six thick- during brands. Flip open the cover and you nesses, from 12.5 grams per square metre find a lesson in how to remain relevant. (in silver packets) to 26.5g/m2 (liquorice). Aptly for a business long associated with The second value, irreverence, is more the counterculture, the tutorial is a wry ephemeral. Brice Barberon, who took over summary of the dark arts of marketing. as Rizla’s boss in March, speaks of the “tri- Smoking hot, since the 1800s The Economist January 16th 2021 Business 55 Schumpeter Refashion model

Can the owner of Zara tailor its business to fit online shoppers? compare prices than on Google. But at the same time an online- only retailer has none of the expenses associated with stores, such as shop assistants’ wages and rental payments. So online sales can end up more profitable overall. The wrinkle for established retailers is that their website often serves customers who would once have rung up the tills in physical stores, leaving them emptier. Un- less at least some shops are closed, says Aneesha Sherman of Bern- stein, a broker, retailers risk having to cough up new variable costs of online fulfilment while continuing to incur the fixed costs of legacy bricks and mortar. Inditex’s signal that it is reducing its store numbers is a wake-up call in the industry. Bosses dislike shutting shops. Atten- dant lay-offs irk politicians; write-downs and forgone sales can annoy investors. But where Inditex goes, others follow. The Span- ish group has grown faster than rivals, such as Sweden’s h&m or America’s Gap. It surged ahead by outsourcing more of its production close to its main European market, which allowed it to respond faster to fashion trends and maintain leaner stock. Fresher inventory led to fewer end-of-season markdowns and fatter profits. Even as rivals have emulated it, Inditex has managed to keep operating margins at a plump 17%. Those of Fast Retailing, the Jap- anese parent of Uniqlo and the only rival to match Inditex’s sales t had been closed, on and off, for much of the past year. Now growth in recent years, are a third lower. Isigns on the blacked-out windows of the Zara shop on the Few doubt Inditex will meet the target, set in June, of raising the Champs-Elysées, the Spanish brand’s early outpost in the French share of online sales from 14% of the total in 2019 to at least 25% by capital, announce it will not re-open even after covid-19 passes. 2022. Having arrived late to the cyber-party, Pablo Isla, the com- Disappointed fashionistas are redirected to the label’s website for pany’s boss since 2005, has the zeal of a convert. His plan envisages all their value-for-money sartorial needs. Alternatively, they can hefty investment: over $3bn will be spent by 2022 to boost online stroll two blocks down the avenue, where another Zara shop capabilities and make sure stores and websites work seamlessly opened a few years ago. There are three more within a half-hour’s together. New technology, such as rfid chips, tracks where items walking distance in central Paris. are, allowing Inditex to fulfil an order from either a shop or a ware- Peppering city centres and malls with more outlets used to be house. It is testing an app to tell shoppers if a particular item in a the obvious strategy for apparel retailers seeking new customers. particular size is available in a given outlet—and even on which of Inditex, Zara’s owner and the world’s biggest purveyor of fast fash- the outlet’s racks to find it. ion, grew from fewer than 750 stores at the turn of the century to These investments ought to be easy to fund from Inditex’s around 7,500. But trends come and go in business as they do on the healthy balance-sheet and profits—certainly easier than for other catwalk. In 2020, for the first time in its two-decade history as a retailers, which have their backs against the wall after a dud year. listed company, Inditex finished the year with fewer shops than it The Zara brand is strong enough to attract shoppers to its own app; had 12 months earlier—and suffered its first quarterly loss. Up to lesser marques rely on intermediaries such as Zalando or Amazon, 1,200 outlets are in the process of being axed, compared with 300 which crimps margins. Inditex has short leases on its stores, giv- planned openings. Inditex, the most admired firm in the sector, ing it more room to haggle over rents, or make rent payments more has not run out of ambition. Instead, Zara is chasing its young cli- flexible by linking them to shops’ sales. entele to where they spend the most time: on their phones, shuf- fling between Instagram and TikTok. The shift to online sales, Prêt-à-cliquer which has been turbocharged by lockdowns, will require some ag- Being an online champion inevitably brings its own headaches. ile refitting of the way fashion brands do business. Amazon is a far more fearsome competitor than h&m. Barriers to Much of what it takes to flog a polka-dot dress for $27—the aver- entry are low. Maybe one in three garments sold online is returned, age selling price for the Inditex family of brands, which also in- a much higher proportion than in shops, where they can be tried cludes thriftier Bershka and posher Massimo Dutti, among oth- on (though nudging buyers to leave unwanted frocks in stores, as ers—is the same in store or online. The product must be desirable, Inditex does, helps cut postage costs and increase the likelihood and available at the right time, right size and right price. For the the item can be sold again while still in fashion). Zara, which bean-counters, though, the transactions are as different as se- spends next to nothing on advertising, might have to start if peo- quins and flannel. Shops are giant bundles of fixed costs, starting ple are not reminded of its existence by walking past its billboard- with rent and staff, which turn profitable only once you shift like outlets. enough product through them—the idea is to stack it high and sell In time, sales per square foot in remaining shops will probably it cheap. Websites and warehouses cost much less to run. But be- continue to fall, threatening their viability. Unlike banks, which cause retailers cough up to deliver each package, the more they sell have been pruning their high-street branches for years, clothes re- the more such variable costs add up. tailers deal with fickle fashionistas, not sticky account-holders. On the surface, shifting sales online looks alluring. Gross mar- The industry’s supermodel will probably sashay online with more gins are a bit leaner than in shops, where it is harder for buyers to grace than rivals. But it had still better watch its step. 7 56 Finance & economics The Economist January 16th 2021

Also in this section 57 Commodities—a new supercycle? 58 Buttonwood: The options mania 59 The rally in emerging markets 59 Brazil’s retail-investing boom 60 The Big Mac index 61 Free exchange: Robots and jobs

The global economy resilience to lockdowns. But in a recent paper Nicolas Woloszko of the oecd, a rich- Relapse and recovery country think-tank, uses Google-search data to construct a weekly estimate of gdp for large economies. In April they were operating at about 80% capacity. Now they are running at over 90% (see chart). Three main factors explain the improvement: less public fear; better calibrated govern- The world has become better at mitigating the economic cost of lockdowns ment policy; and adaptation by businesses. he lockdowns of the spring, which at terred by the renewed lockdown”. Ameri- Take fear first. In March and April the Ttheir peak covered more than half of the ca’s jobs report for December, released on coronavirus was an unknown quantity, world’s population, provoked an almighty the same day, showed that employment fell and many people responded by barricad- downturn. In April global economic output for the first time since April—a depressing ing themselves inside their houses. Analy- was 20% below where it would have been result when millions of people are still out sis of a survey by YouGov suggests that in otherwise. As cases of coronavirus have of work. Yet other high-frequency eco- April more than 60% of respondents in rich soared again, rich countries are imposing nomic indicators, such as those for con- countries were worried about catching the another round of lockdowns. France was in sumer spending, are in better shape than virus. Yet a better understanding of what confinement in November, Italy locked they were in the spring. they can do to avoid falling ill, and perhaps down over Christmas, and England went It will be some time before official gdp lockdown fatigue, mean that people may into a national lockdown on January 6th. figures confirm the rich world’s growing now be willing to go out and about more. 1 Parts of Japan have entered a state of emergency. The situation in America, where state and local authorities, not the federal Lingering infections government, are mainly responsible for Estimates of weekly GDP, % change on a year earlier stay-at-home orders, is more complicated. But one measure of lockdown stringency Germany Britain France United States suggests that restrictions there are about as 10 10 10 10 tight now as they were in the spring. Nationala locckdown The latest round of lockdowns will hit 0 0 0 0 the economy again—but, perhaps, not as hard. Analysts at Goldman Sachs, a bank, -10 -10 -10 -10 have argued that in Britain’s case “the sen- sitivity of economic activity to covid-19 re- -20 -20 -20 -20 strictions has diminished significantly State-level 95% confidence lockdowns since the first lockdown.” In research pub- -30 -30 -30 -30 lished on January 8th hsbc, another bank, 2020 2021 2020 2021 2020 2021 2020 2021 noted that German industrial output “ex- Source: OECD tended its recovery in November, unde- The Economist January 16th 2021 Finance & economics 57

2 The share of people expressing concern end of last year than it was in the summer, forces that pushed up certain commodities about catching covid-19 fell to around 50% when restrictions were far looser, accord- in 2020 will continue in 2021, or indeed be in November. Data from Google suggest ing to official data. That is not the case for supplanted by even more powerful engines that in many countries, people are moving small businesses in America, but a larger of growth. Last year China proved a vora- around in public spaces more than they share remains open than last spring. cious importer as it increased investment were at the start of the pandemic. That has This resilience of the economy in the and filled strategic stockpiles. Beneficia- led some public-health authorities to tear face of the latest wave of lockdowns has ries included iron ore and copper, used in their hair out. The “current lockdown has several implications. When the virus first steel and electricity projects, as well as soft not had nearly as much impact on mobility began to spread, governments were intent commodities such as wheat, soyabeans (and likely contacts) as...in March,” reads a on freezing the economy in place. But over and pork. This coincided with restrained presentation from scientists in Ontario in time it has become clear that activity has supply. Outbreaks of covid-19 prompted December. British and American newspa- adapted to the shock of the pandemic. This the closure of some iron-ore mines in Bra- pers mention the words “illegal rave” five means that governments should have to do zil. Scant rain in South America, caused by times as frequently as in the spring. less by way of fiscal support—which, in- La Niña, a large-scale cooling of Pacific The greater willingness to defy govern- deed, is precisely their plan in 2021. Ocean temperatures, raised grain prices. ment orders probably worsens the spread Moreover, as fewer resources are left This year has already presented signs of of the virus, whatever its economic bene- unused during this latest round of lock- limited supply. On January 11th Argentina fits. But the second factor that explains the downs, it should inflict fewer scars. That lifted a ban on corn exports, but imposed a resilience of economies this time round, could allow production to ramp up more cap. Russia plans to tax wheat exports from the calibration of government policy, pre- quickly once restrictions are lifted. An- mid-February. Low supply and cold weath- sents less of a trade-off. Officials have alysts at Morgan Stanley, a bank, expect er have powered Asian prices of liquefied worked out what lockdown measures American gdp to return to its pre-pandem- natural gas to a record high of well over $20 come at the least economic cost—so there ic trend by the end of this year. Plenty could per million British thermal units. Big is now less appetite for, say, closing still thwart that forecast. Whatever hap- mines still face risks of restrictions. Prot- schools than in the spring, but more appe- pens, though, the economy that went into ests at Las Bambas copper mine in Peru, for tite for mask-wearing directives and the the pandemic will look very different from instance, have stoked fears of disruptions. testing of international arrivals, neither of the one that leaves it behind. 7 Meanwhile oil has continued its tenta- which impose much hassle on anyone. tive recovery, alternately inflated by hopes Many have followed the example of Ger- for vaccines and depressed by news of lock- many, where many construction sites were Surging commodities downs. To boost prices, Saudi Arabia has allowed to stay open during the first wave. said it will limit output by a further 1m bar- France has kept manufacturing going; out- The mountaineers rels a day in February and March. put in the sector barely shrank in Novem- Two important developments may pro- ber and grew in December. vide further support. The roll-out of vac- The third reason for resilience relates to cines across the world’s largest economies adaptation by businesses. The sudden shift will eventually inspire higher levels of tra- to remote working was a shock for many of NEW YORK vel and trade. And a big spending bill by a Commodity prices are climbing. Is a those who usually labour in an office, stuck Democratic American government, togeth- new supercycle beginning? as they were with old computers and not er with continued loose monetary policy much else. Companies have since invested he biggest commodity story of 2020 from the Federal Reserve, would stimulate in making themselves more productive Twas one of decline. As the coronavirus economic activity and therefore commod- even under lockdown (see Business sec- pandemic halted travel, oil prices fell off a ity consumption. That might also weaken tion). From March to October Britain im- cliff, then briefly went subterranean: in the dollar, which would make oil and other ported £4.7bn-worth ($6bn) of laptops, April a futures contract for West Texas In- commodities denominated in dollars 20% more than in the same period in 2019. termediate was worth less than nothing. cheaper for buyers in emerging markets, A recent paper by Nick Bloom of Stanford Oil began clawing its way above $45 a barrel lifting demand and pushing commodity University and colleagues analyses Ameri- in November, supported by optimism prices even higher. can patent filings and finds that the pan- about vaccines. For other commodities, Commodity bulls, led by Jeff Currie of demic has “shifted the direction of innova- however, 2020 was not all bad. Indeed the Goldman Sachs, a bank, argue that longer- tion towards new technologies that year may have marked the start of an ex- term trends will support prices through the1 support video conferencing, telecommut- traordinary ascent. ing [and] remote interactivity”. In August gold passed $2,000 an ounce Consumer-facing businesses have done for the first time ever, as low interest rates Onwards and upwards even more to cope. New York’s best jazz made the precious metal more attractive. Commodity prices, January 2nd 2020=100 clubs now offer live-streams direct to liv- The value of other commodities rose, too, 175 ing rooms. While staying on a farm in east- not just from the depths of virus-induced ern England your correspondent bought a lockdowns in April but from the start of Iron ore 150 meal from Gujarati Rasoi, an Indian food 2020, before the pandemic began (see 125 stall 92 miles away in London, which like chart). Commodity assets under manage- Gold many restaurants has started to offer na- ment reached a record $640bn in Decem- 100 Soyabeans tionwide delivery. In Britain the share of ber, estimates Citigroup, a bank, represent- 75 firms open for business was no lower at the ing an annual gain of nearly a quarter. By Copper January 11th even the oil-heavy s&p gsci 50 Oil commodity index had reached the level of a 25 Job ad: We are looking for a correspondent to cover year ago. The debate now is how quickly oil JDNOSAJJMAMFJ business, economics and finance across Asia. Please prices will recover, and how high other send a covering letter, CV and an unpublished 2020 2021 commodities may soar. 800-word article suitable for publication to Sources: Refinitiv Datastream; Bloomberg asiafi[email protected] by February 1st. That in turn depends on whether the 58 Finance & economics The Economist January 16th 2021

2 coming decade. “The pandemic itself is a electric-charging stations, for instance, dent-elect Joe Biden’s climate plan will be structural catalyst for a commodity super- and wind farms—is commodity-intensive. passed. “There is nothing on the demand cycle,” Mr Currie contends. In addition to a The early years of green spending may even side that is nearly as commodity-intensive weaker dollar and the accompanying boost lift oil demand, by boosting employment as the first decade of the 21st century,” says for commodities, the pandemic may help and economic activity. Goldman estimates Mr Morse. synchronise activity across some of the that a $2trn stimulus over the next two That earlier supercycle was driven by world’s biggest economies. years would raise American oil demand by urbanisation, investment and an ascen- Governments in America, China and about 200,000 barrels a day, or 1%. dant middle class in emerging markets— Europe profess to champion green invest- Sceptics expect more muted growth. In and China, in particular. Governments ment and efforts to narrow gaps in income. the short term, Ed Morse of Citigroup from Berlin to Beijing now declare that Assistance for poor households has an out- points out, investors’ bets on copper are they intend to bring a new type of transfor- size effect on consumption, Mr Currie not supported by trends in supply and con- mation. The price of commodities in the points out, which in turn supports com- sumption. The Democrats’ slim majority in coming decade depends in large part on modity prices. And green investment—in the Senate hardly guarantees that presi- whether they do what they say. 7 Buttonwood Bucket list

Why everyone is now an options trader n the bucket shops of early 20th- varieties of contract already listed. Tesla Icentury America, ordinary punters You bet your bottom dollar calls expiring on Friday January 15th were could bet on the direction of share prices Average daily volume of options traded available this week at $5 intervals. The with a tiny down-payment. The punters on US exchanges, contracts, millions positions are staggering. There were liked this, because it gave them a lot of 40 some 27,000 contracts with a strike price notional exposure for a minuscule out- of $1,000, for instance. (Tesla’s share lay. The bucket shops on the other side of price was around $860 on January 13th.) the wagers loved it, too, because hour-to- 30 This kind of call option—deeply out-of- hour fluctations in the price meant the-money and close to expiry—is fa- punters often got wiped out. No stock 20 voured by the new cohort of retail in- certificates ever changed hands. This was vestors that has rapidly emerged in betting, pure and simple. America and elsewhere (see next page). It 10 This brings us to the rapid growth of has the features of a long-odds sports bet. the present-day options market. On For a small outlay a call option can pay average last year almost 30m equity 0 off handsomely if the stock price sud- options were traded each day on Ameri- 1995 2000 151005 21* denly surges. If not, the option expires, can exchanges, a rise of more than 50% Source: Options Clearing Corp *Average January 1st-12th worthless, like many a bucket-shop bet. from 2019, according to occ, the world’s There are two sides to a market, of largest clearer of such derivatives. In so only when the option is “in the money”: course. The specialist traders and hedge recent weeks, the volume has regularly ie, when the strike price is breached. funds on the other side of these trades risen above 40m a day (see chart). The key influences on premiums are are content to take the premiums from It is customary in polite society to the gap between the asset’s strike price and options buyers and to manage the risks discuss options in the language of insur- its current price, time and expected vola- of occasional big losses should the punt- ance. The price of an option is known as a tility. A small gap is more likely to be ers’ bets pay off. One hedge for a call premium, for instance. And the need for closed than a large one, so options with option is simply to own the stock, which insurance is one rationale for the growth strike prices close to prevailing prices cost is why long-only equity funds are in- in options. But impolite society, the more. Options with a strike price some creasingly being drawn into the market natural habitat of Buttonwood, has a big distance from the actual price are said to to juice up their returns. “A lot depends say, too. Much of the surge in demand for be “out of the money” and are cheaper. on your book,” says a seasoned options options comes from small investors Similarly, options with a more distant trader. If you’ve taken in a lot of put- seeking long-odds bets on single stocks. maturity are more expensive than near- option premiums, you might write some The bucket-shop punter is back. dated options. The key variable, though, is call options to even things out. Or you To understand the connection, start volatility. The more violently the price of could balance the risk from an expen- with the idea that options are rights that the underlying asset fluctuates, the more sive-looking option—with, say, a round- carry no obligation. A financial option is chance there is that an out-of-the-money number strike price of the kind favoured the right to buy or sell an asset—a basket option will move into the money. When by retail investors—using a cheaper- of stocks, say—at a specified price (the you own options, volatility is your friend. looking option with a nearby strike price. strike price) on or before a specified The range of options you can trade on a This new wave of options trading maturity date. Call options are rights to stock is a function of investor demand, seems unlikely to recede. Technology has buy; they are profitable to own if the says Hugh Selby-Smith of Talaria Capital, a made access to financial markets ever price of the underlying asset rises above Melbourne-based asset manager. If you easier for small investors. Equity options the strike price. Put options are rights to want an option on, say, a Mexican retailer, are like bucket-shop bets. Institutional sell; they pay off when the price of the you may have to ask an exchange to list an investors are increasingly being drawn in underlying asset falls. The owner is not option series for you. But a high-profile to act as bookmakers. One way or anoth- obliged to exercise the option; she will do stock, such as Tesla or Apple, will have 57 er, everybody is an options trader now. The Economist January 16th 2021 Finance & economics 59

Two countries (Morocco and Jordan) have Emerging markets (2) dropped out of the index altogether. One country (Greece) dropped into it, having Joining the fray been booted out of the rich-world index in 2013. Others have yo-yoed in and out. Ar- gentina dropped out, then bounced back in (though msci has warned that it may be rel- egated again). Only Israel emerged and SÃO PAULO Brazilians were once wary of the stayed that way. markets. Now they are piling in It is natural to assume that the stagnation in emerging stockmarkets reflects set- y parents never talked about in- backs in their economies. And some econ- “Mvesting,” says Arthur Lira, a univer- omies have indeed disappointed. But the sity student from Olinda, a city in Brazil’s combined gdp of the 25 countries in the in- poor north-east. In March, after hearing on dex in 2007 has nonetheless grown from YouTube that it was a good time to buy $14.4trn to $29.7trn today. (This does not stocks, he set up an account with an online adjust for dollar inflation, but then nor brokerage and bought shares in airline does the index.) The gdp of the brics now companies with 400 reais ($75). Every exceeds $20trn—thanks largely to China— month he puts a sliver of his scholarship fulfilling Goldman’s optimistic prediction. into the Brazilian stockmarket, the b3. His And there perhaps lies the rub. Any eco- shares have gained 30% on average. nomic success that emerging markets have Retail investors are diving into the Emerging markets (1) enjoyed since 2007 was widely and eagerly stockmarket in Brazil, much as they are anticipated. It was, therefore, already from America to South Korea. Since 2017 A peak conquered priced into equity markets. Moreover, the the number of retail investors in the b3 has incumbent companies in an index do not quintupled to more than 3m, thanks to a always fully share in an economy’s success. dramatic fall in interest rates—the central Some growth may be driven by new firms bank’s policy rate has fallen from 14.25% in that enter the index after many of their 2016 to 2%—and the rise of affordable bro- HONG KONG most dynamic years are behind them and kerages, notably xp Investimentos. Fully Shares in the developing world hit a their prospects are already highly priced. 1.5m piled into the markets in 2020 alone. new record Energy and materials firms (such as Rus- Some investors were undoubtedly lured n his book “The Emerging Markets Cen- sia’s Gazprom or Brazil’s Vale) have been by the 28 initial public offerings (ipos) dur- Itury”, published in 2007, Antoine van eclipsed since 2007 by consumer firms, ing the year, more than in 2014-19 com- Agtmael marvelled at the progress of such as China’s Meituan, an e-commerce bined and the most since 2007. Individuals emerging markets since he coined the term site for food deliveries and other services, made up a fifth of the 25bn-real demand for in 1981. Their growth, he wrote, “will consti- which did not even exist until 2010. shares in Petz, a pet-shop chain that listed tute nothing less than an economic land- This churn should not have surprised in September. They have helped fuel a rally slide”. Projections from Goldman Sachs, a readers of Mr van Agtmael’s book, which in the Ibovespa, Brazil’s main index, which bank, suggested that the combined gdp of points out that emerging-market champi- has returned to its pre-pandemic levels. Brazil, Russia, India and China (the brics) ons tend to rise and fall with great rapidity. Brazil used to be “addicted to high inter- would more than triple in dollar terms It also warns against looking in the rear- est rates,” says Bruno Constantino of xp. from 2005 to 2020. In keeping with the view mirror. In the book Mr van Agtmael People parked their savings in fixed-in- mood, the msci’s index of emerging-mar- describes how the investment team he come accounts run by one of five banks ket shares set a record in November 2007. managed at the time did not have Bloom- that sold everything from bonds to dental There have been plenty of landslides berg machines at their desks. Their job was insurance. Decent returns masked high since. Unfortunately emerging markets to identify future opportunities. If they fees. Lingering trauma from hyperinflation have often been caught beneath them. The wanted to distract themselves by looking at in the 1980s made many Brazilians risk- covid-19 pandemic follows crises in Argen- what the market had already done, they averse. “I thought stocks were for the rich,” tina and Turkey in 2018, the devaluation of had to get up and walk to the terminal. 7 says Umberto Dissenha, a 43-year-old com- China’s yuan in 2015 and the oil-price col- puter programmer who worked for the b3 lapse of 2014. These misfortunes have in his 30s but didn’t invest until 2017. De- opened up a large gap between emerging When we were getting high spite recent growth, less than 2% of Brazil- and mature stockmarkets. Whereas shares Share prices, January 1st 2007=100 ian adults directly own stocks, compared in the rich world regained their 2007 peak $ terms with around 15% of Americans in 2019. as long ago as 2014, and have since risen by 200 Domestic investors more broadly are msci about 60%, ’s emerging-market index MSCI world playing a bigger role in the stockmarket. In did not surpass its 2007 peak until last 175 2007 most of the financing for listings week, when it at last set a new record, 150 came from foreigners seduced by “national thanks to a furious rally in recent months 125 champions” pumped with loans from the (see chart). government of Luiz Inácio Lula da Silva. 100 The price of the index may be near its Brazilian investors may have been right to 2007 level, but little else remains the same. MSCI emerging markets 75 be wary: a recession in 2014-16 led to doz- China’s weight in the benchmark has risen 50 ens of listed firms failing. from 16% to about 40%, thanks to both the 25 After Lula’s successor, Dilma Rousseff, growth of its markets and the loosening of was impeached in 2016 for breaking budget 211917151311092007 its capital controls. Brazil’s weight rivalled rules, the market-friendly administration Source: Refinitiv Datastream China’s in 2007, but has since fallen to 5%. of Michel Temer reined in spending. That 1 60 Finance & economics The Economist January 16th 2021

2 lowered interest rates and restored confi- 2020, before the move was unwound. By dence among Brazil’s financial institu- contrast, the Vietnamese dong remained tions, which then invested more in the b3. oddly stable against the dollar in the first Retail participation has jumped to 15% half of last year. of the b3’s total volume, from 10% in 2016. Consistent with this, Mexico has es- Like first-time investors elsewhere, Brazil’s caped penalties from the Treasury and the novices tend to be younger (the average age Commerce Departments; Vietnam has not. is 32), poorer (investments average in the On December 16th the Treasury labelled it a hundreds of reais) and more risk-tolerant currency manipulator, citing its huge (most invest directly, rather than in funds) goods surplus with America and its inter- than other punters. Their reliance on tips vention in foreign-exchange markets. The from social media has led to concerns. xp Commerce Department has whacked ta- has faced criticism for its compensation riffs on imports of tyres from Vietnam, ar- model, which charges fees for each tran- guing that a depressed dong acted as a sub- saction and links brokers’ pay to sales. sidy for producers. The real threat to the retail craze is fiscal On other fronts, though, America’s re- uncertainty, says Paulo Bilyk of Rio Bravo, cent actions are at odds with our index. The an asset manager. A hint of that came in the Treasury also branded Switzerland a ma- second half of 2020. Generous stimulus, nipulator, based partly on its currency in- amounting to about 8.5% of gdp, has fu- tervention of around $100bn (14% of gdp) elled a better-than-expected recovery. But in the year to June. Both versions of our in- when in September Paulo Guedes, the dex, though, suggest that the Swiss franc is economy minister, suggested funding new long run, so that the same basket of trad- overvalued against the dollar. spending by postponing court-ordered able goods costs the same everywhere. The Commerce Department also used payments to citizens—creative accounting Converting prices into dollars at prevailing manipulation to justify tariffs on imported of the kind that got Ms Rousseff into trou- exchange rates lets you judge whether a twist-ties from China, used to seal plastic ble—investors got jittery. The Ibovespa fell currency is too cheap or too dear. To avoid bags. (The country has not been labelled a by 2.4% that day. A handful of firms have the problem that people buy different manipulator since January 2020, but it is since cancelled listings. things in different places, we compare the still on the Treasury’s watch list.) Incoming Long-term interest rates are creeping up price of just one good: the McDonald’s Big officials may want to note that, after ad- and the central bank has signalled that it Mac. The burgers are not exactly the same justing for gdp, our index suggests the may raise its policy rate. For now, though, across countries—India’s Maharaja Mac, yuan is in fact overvalued relative to the an informal survey by The Economist of for instance, does not contain beef—but dollar by 2.5%. Food for thought. 7 more than 60 Brazilians who bought their they are consistent enough. A burger in first stocks in the past two years found that Thailand costs 25% less than in America most plan to keep investing. Mr Dissenha, when its price is converted to dollars at pre- The Big Mac index the programmer, says his earnings helped vailing exchange rates, for example, sug- Local currency under(-)/over(+) valuation him afford a house and spend time with his gesting that the Thai baht is undervalued. against the dollar, % infant daughter. He opened accounts for As wages tend to be lower in poor coun- Selected currencies his wife, her mother and her sister. “I could tries, though, Big Macs there may be cheap- July 2020 January 2021 7 do this as a job,” he says, half-joking. er. So we also calculate an index that ad- GDP-adjusted index, January 2021 justs for gdp per person. On this basis the Thai baht is no longer cheap relative to the -40-60 -20 40200 Canada The Big Mac index dollar. The number of trading partners with undervalued currencies falls to 11. Euro area* Out of joint Is the Big Mac index consistent with re- Britain cent American policy on currency manipu- Brazil lators? The two do not assess quite the same things. Our index records outcomes; Mexico policymakers, by contrast, try to punish Designated currency manipulators by US Treasury WASHINGTON, DC countries that intentionally depress their What burger prices tell you about Switzerland currencies. America’s Commerce Depart- currency wars Vietnam ment says it looks unkindly on currencies espite a recent bout of weakness, the only if they are cheap because of govern- On US Treasury watch list Ddollar still looks strong. Consider the ment action. The Treasury is also con- Singapore Big Mac index, our lighthearted measure of cerned with manipulation, not undervalu- Thailand† currency valuation. Of the currencies of the ation; it looks for evidence of intervention, 20 trading partners studied by America’s as well as persistent trade imbalances. South Korea Treasury, our measure suggests that all Still, given currency gyrations over the Japan have gained relative to the greenback since past year, the Big Mac index could act as a China‡ July, but that all apart from the Swiss franc cross-check on American policy. When co- India†§ are still cheap. That gives the incoming Bi- vid-19 first spread, investors fled to the dol- den administration, which has promised lar, only for the trend to reverse after the Taiwan† to take “aggressive trade-enforcement ac- Federal Reserve flooded markets with li- Malaysia tions” against currency manipulators, lots quidity. Swings in the Mexican peso meant *Weighted average of member countries †Added to watch list to chew on. that, according to our index, it went from in December 2020 ‡Average of five cities §Maharaja Mac Our burger-based index is premised on being 53% undervalued against the dollar Sources: Eurostat; IMF; McDonald’s; Refinitiv Datastream; The Economist the idea that prices should adjust over the to 61% undervalued over the first half of The Economist January 16th 2021 Finance & economics 61 Free exchange It’s a bot time

The machines are coming for jobs—if you look in the right places An ai-induced change in the mix of jobs need not translate into less hiring overall. If new technologies largely assist current workers or boost productivity by enough to spark expansion, then more ai might well go hand-in-hand with more employment. This does not appear to be happening. Instead the authors find that firms with more ai-vulnerable jobs have done much less hiring on net; that was especially the case in 2014-18, when ai-related vacancies in the database surged. But the relationship between greater use of ai and reduced hiring that is present at the firm level does not show up in aggregate data, the authors note. Machines are not yet depressing labour demand across the economy as a whole. As machines become cleverer, however, that could change. Evidence that ai affects labour markets primarily by taking over human tasks is at odds with some earlier studies of how firms use the technology. A paper from 2019 by Timothy Bresnahan of Stanford University argues that the most valuable applications of ai have nothing to do with displacing humans. Rather, they are examples of “capital deepening”, or the accumulation of more and better capital per worker, in very specific contexts, such as the matching algorithms used by Amazon and Google to offer better product recommendations and ads to users. To the extent that ai leads to disruption, it is at a “system level”, says Mr Bresnahan—as he year is 2021, and honestly there ought to be more robots. It Amazon’s sales displace those of other firms, say. Twas a decade ago that two scholars of technology, Erik Bryn- New work by Ajay Agrawal, Joshua Gans and Avi Goldfarb of the jolfsson and Andrew McAfee, published “Race Against the Mach- University of Toronto suggests that this state of affairs may not ine”, an influential book that marked the start of a fierce debate be- persist for long, though. As the quality of ai predictions improves, tween optimists and pessimists about technological change. The they write, it becomes increasingly attractive for ai-using firms to authors argued that exponential progress in computing was on the restructure in more radical ways. At some level of accuracy, for ex- verge of delivering explosive advances in machine capabilities. ample, Amazon’s ability to predict consumers’ desires could en- Headline-grabbing breakthroughs in artificial intelligence (ai) courage the firm to adjust its business model—by pre-emptively seemed to support the idea that the robots would soon upend ev- shipping goods to consumers before they ever go searching at Am- ery workplace. Given that, on the eve of the pandemic, jobs were as azon in the first place—in ways that are likely to change how many plentiful as ever, you might now conclude that the warnings were workers and of what sort the firm requires. In that event, the influ- overdone. But a number of new economics papers caution against ence of ai on the economy could change dramatically. complacency. The robots are indeed coming, they reckon—just a bit more slowly and stealthily than you might have expected. ok computer Economists have, on the whole, been fairly sanguine about the Does more automation mean a surge in productivity is just over impact of robots and ai on workers. History is strewn with incor- the horizon? Not necessarily. Speaking at the (virtual) aea meet- rect predictions of the looming irrelevance of human labour. The ing, Mr Acemoglu mused that automation comes in different economic statistics have yet to signal the arrival of a robot-pow- sorts, with different economic consequences. “Good” automation ered job apocalypse. Outside of slumps, firms remain keen to hire generates large productivity increases, and its transformative na- humans, for example. Growth in productivity—which ought to be ture leads to the creation of many new tasks (and therefore jobs) surging if machines are helping fewer workers produce more out- for humans. Advanced robotics, for example, eliminates produc- put—has been unimpressive. A look beneath the aggregate num- tion jobs while creating work for robot technicians and program- bers, though, reveals that change is indeed afoot. mers. “So-so” automation, by contrast, displaces workers but gen- Take work by Daron Acemoglu and David Autor of the Massa- erates only meagre benefits. Mr Acemoglu cites automated chusetts Institute of Technology, Jonathon Hazell of Princeton check-out kiosks as an example; though they save some time and University and Pascual Restrepo of Boston University, which was money, their deployment is hardly revolutionary. From 1947 to presented at the recent meeting of the American Economic Associ- 1987, the displacement effect of new technologies was generally ation (aea). The authors use rich data provided by Burning Glass offset by a “reinstatement” effect, he reckons, through which new Technologies, a software company that maintains and analyses tasks occupied displaced workers. The rate of reinstatement has fine-grained job information gleaned from 40,000 firms. They since fallen, though, while displacement has not, suggesting an identify tasks and jobs in the dataset that could be done by ai today increase in so-so automation relative to the good kind. (and are therefore vulnerable to displacement). Unsurprisingly, Mr Acemoglu suggests that policy interventions that lean the researchers find that businesses that are well-suited to the against employers’ inclination to deploy so-so automation, such adoption of ai are indeed hiring people with ai expertise. Since as higher taxes on capital, might be desirable. Perhaps. Yet it is also 2010 there has been substantial growth in the number of ai-related possible that continued improvement in machine capabilities will job vacancies advertised by firms with lots of ai-vulnerable jobs. At solve this problem on its own, either by creating vast new catego- the same time, there has been a sharp decline in these firms’ de- ries of work for humans, or by making us so much better off that mand for capabilities that compete with those of existing ai. we do not especially mind our approaching obsolescence. 7 You don’t need to be a bioengineer to help change the shape of humanity. Help power your portfolio with the innovators of the Nasdaq-100.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE There are risks involved with investing in ETFs, including possible loss of money. ETFs are subject to risks similar to those of stocks. Investments focused in a particular sector, such as technology, are subject to greater risk, and are more greatly impacted by market volatility, than more diversifed investments. The Nasdaq-100 Index comprises the 100 largest non-fnancial companies traded on the Nasdaq. An investment cannot be made directly into an index. Before investing, consider the Fund’s investment objectives, risks, charges and expenses. Visit invesco.com/fundprospectus for a prospectus containing this information. Read it carefully before investing. Invesco Distributors, Inc. Science & technology The Economist January 16th 2021 63

Space flight plosions are caused by things like the igni- tion of leftover rocket fuel and the bursting The dustman cometh of old batteries and pressurised tanks. The rest are the result of collisions. The upshot is a chain reaction of im- pacts in orbit. Unlike the fictional version of such a chain-reaction, which inconve- nienced Sandra Bullock’s character in “Gravity”, a film released in 2013, this real Efforts to remove dangerous debris from orbit around Earth are gaining steam one is accelerating only slowly, so there is uman beings are messy. They tend to for comspoc, a firm based in Pennsylvania still time to curtail it. But if action is not Hleave rubbish behind them wherever that develops software which helps satel- taken soon, insurance premiums for satel- they go—and to expect someone else to lite operators sidestep such collisions. In lites will rise, spending on tracking and clear that rubbish up. This is true even in the longer term, however, more radical ac- collision-avoidance systems will have to outer space. The problem of orbiting de- tion will be needed. increase, and certain orbits eventually risk bris, and the concomitant risk of it collid- Part of the problem is the growing num- becoming unusable. ing with and damaging an active and prob- ber of launches taking place. On January ably expensive satellite, has been around 17th, for example, Virgin Orbit, a new en- Drop shots for a while. But it is rapidly getting worse. trant to the market that is part of Richard Stopping this orbital-junk-generating There may now be as many as 1m bits of de- Branson’s Virgin Group, plans to launch chain reaction means casting part of the bris measuring 1cm or more across in orbit. ten satellites into orbit using a rocket re- superfluous tonnage in space down into Of larger objects, more than 20,000 are be- leased from a modified Boeing 747-400. Earth’s atmosphere, where the frictional ing actively tracked from Earth. And, ac- Another part, though, is that, every year, a heat of re-entry will burn it up. A clean cording to Daniel Oltrogge, an expert who dozen or so sizeable chunks of debris orbit- sweep is not necessary. Removing a hand- advises the Space Data Association, an ining Earth break up. Around half of these ex- ful of the larger derelicts every year would dustry body, on such matters, the past be enough. Exactly how many is debated. three years have seen a doubling of the Yamamoto Toru of Japan’s space agency, Also in this section number of times that bits of junk have al- jaxa, estimates somewhere between three most hit operating satellites. 64 Satellites made of wood and seven. Ted Muelhaupt of America’s In the short term, satellite owners can, Aerospace Corporation, a taxpayer-funded 65 Hitchhiking viruses literally, dodge the problem—as long as research centre, reckons a dozen. But even their craft are fitted with appropriate 66 Repurposing drugs for covid-19 that sounds doable. Except that no one thrusters. Mr Oltrogge’s day job is to ar- knows how to do it. 66 Thieving monkeys range for that to happen, for he also works People are, though, planning to prac-1 64 Science & technology The Economist January 16th 2021

2 tice. One such rehearsal, scheduled for lift- that will be launched in two years’ time. To break off parts of the target which will then off in March, is led by Astroscale, a firm measure the motion and features of a rock- contribute yet more objects to the celestial based in Tokyo. Astroscale proposes to et part which might weigh tonnes, adras-j junkyard. launch, from Baikonur Cosmodrome in will approach within mere metres. Once it Another option is to shoot a net. Airbus Kazakhstan, a mission dubbed elsa-d. collects the necessary data, another space- tested this idea in 2018. That test success- This consists of a 175kg mother ship called a craft can be designed to seize the junk on a fully enveloped a small “cubesat” which servicer, and a 17kg pod fitted with a ferrous subsequent mission. had been pushed seven metres away from docking plate that will act as a dummy tar- In this case, magnets will not be used to the net-throwing craft—though this net get. If all goes well, the servicer will eject grapple with the target, for normal space- was not tethered to the mother ship, which and recover the pod three times, in succes- craft have no iron in them. Using a harpoon would therefore have been unable to deor- sively harder trial runs, before thrusters to capture such an object might be feasible, bit its target. Tethers are hard to manage in push the whole kaboodle to fiery doom in though. In a test conducted in 2019, Airbus, the weightlessness of orbit, which is why the atmosphere below. a European aerospace giant, successfully Airbus chose not to use one in this prelimi- In the first test, the servicer will use shot a harpoon from a satellite into a piece nary net-tossing experiment. That leads springs to push the pod out and then, once of panelling 1½ metres away. However, that some to doubt whether such cosmic retiarii it is ten metres away, will approach it again, panelling was attached to a boom extend- are a sensible idea at all. Chris Blackerby, lock onto the docking plate using an arm ing from the satellite, so this was but the Astroscale’s chief operations officer, ex- fitted with a magnetic head, retract the arm most preliminary of experiments. Also, a pects the best approach will be to design ro- and pull it back to the servicer. For the sec- harpoon can miss, ricochet or—worse— botic arms to clench the target vehicle’s 1 ond test, it will push the pod at least 100 metres away before its starts approaching Space-age materials it. A reaction wheel and a set of magnetic torque-generators will then put the pod into a tumble involving all three axes of Hardy, non-perennial motion, at a speed of half a degree a second. This is, as it were, an important twist— Making satellites out of wood for chunks of orbiting debris typically spin in this fashion. A real deorbiting mission complex polymers which are strong in will therefore have to deal with such spin- tension and compression respectively. ning objects. Markings on the pod will help This material is both cheap and abun- the servicer work out its prey’s motion. Us- dant. It is self-assembling and requires ing eight thrusters, it will manoeuvre itself only simple chemical inputs. Manufac- until those markings appear, to its sensors, ture can be entirely automated, requiring to be stationary. This will mean its motion no human oversight. Translated from exactly matches that of the tumbling pod, chemist-speak, they want to make satel- and that the magnetic head can therefore lites out of wood. be extended to do its job. The research team argue that wood For the third capture test, the servicer offers two advantages. Unlike metal, will first use its thrusters to back off several seasoned timber is easily penetrated by kilometres from the pod, putting the pod radio waves. That means communica- beyond sensor range. Then it will search for tion antennas, sensors and the like could it, as would need to be the case if it were be kept inside the body of the satellite. hunting for a real derelict spacecraft. This, they hope, will simplify construc- For all the technological prowess these tion. The second advantage is that, on tests will require, however, real derelicts atmospheric re-entry, the wooden parts pose a greater challenge than dummy ones. of the satellite should burn up entirely, For one thing, unlike Astroscale’s pod, few making disposal cleaner. spacecraft have been designed to expedite he space age was built on clever The researchers hope to launch a their own removal. Also, those objects Tmaterials. The business ends of prototype version of what they have which most need removing are dangerous- rocket engines are composed of Inconel, dubbed a LignoSat by 2023. Space is both ly heavy. A spacecraft that miscalculates a family of heat-and-corrosion-resistant extremely cold and very hot, and can while attempting to capture a massive nickel-chromium alloys developed in switch quickly between the two as a piece of tumbling debris could be smashed the 1940s. The “gold foil” adorning many spacecraft moves from shade into direct to smithereens, thus contributing to the satellites is, in fact, a form of insulation sunlight. Processing wood to cope with problem it was supposed to be solving. made from layers of Kapton and met- such extremes will be crucial to success. allised Mylar, a pair of artificial polymers Sumitomo has said merely that its way of Grasping the matter from the 1950s and 1960s. SpaceX’s Dra- doing this is an “r&d secret”. The Commercial Removal of Debris De- gon spacecraft use a heat shield made of Sending wood into space is not Sumi- monstration, a plan by jaxa to deorbit a phenolic-impregnated carbon to protect tomo’s only ambition for the material. It discarded Japanese rocket stage, highlights astronauts during atmospheric re-entry. hopes that lessons from the satellite these difficulties. Before a spacecraft can But it is not just humans in lab coats project might assist its plan to build the be designed to capture whichever derelict who can come up with whizzy sub- world’s tallest wooden skyscraper, in Japan’s space agency selects as the experi- stances. Sumitomo Forestry, a Japanese Tokyo. This building, dubbed w350, ment’s target, a reconnaissance mission firm, and Kyoto University are pondering would celebrate the firm’s 350th birthday must first be launched to study it up close. the idea of building satellites out of an in 2041, and would, therefore, be 350 jaxa has awarded the contract for this part advanced, high-performance composite metres tall—roughly as high as the Em- of the demonstration to Astroscale, which made from cellulose and lignin, a pair of pire State Building without its spire. plans to do it using a craft, called adras-j, The Economist January 16th 2021 Science & technology 65

2 fairing-connector ring (the shallow cylin- someone else, who would collect the de- ment developed for orbital cleanup could der that links a rocket’s upper stage to the posit instead. That would encourage peo- be used to disable satellites, too. Mr Testé covering of its payload), if this proves still ple to build deorbiting capabilities into sat- says advances in orbital robotics made by to be intact. ellites from the start, so the celestial France’s adversaries, not to mention the If all that works, jaxa’s debris-removal dustmen would eventually no longer be lack of any international “space gendar- demonstration will face a final challenge. needed. A third suggestion, proposed by merie”, are leading his country to plan This is to execute a safe re-entry. Many Akhil Rao of Middlebury College, in Ver- spacecraft to defend its military and intel- pieces of the re-entering complex of captor mont, is to charge rent, known as orbital- ligence satellites. and captive will survive frictional melting use fees, for every commercial satellite in Mr Testé is coy on specifics. But France’s and slam, at speed, into Earth’s surface. orbit. That would have the same effect. armed-forces minister, Florence Parly, has Were re-entry to occur at a random spot, Support for such schemes is growing, revealed more about her country’s plans the probability of a human casualty would though they would require both interna- than have her equivalents in other powers, now exceed the threshold of one in 10,000 tional agreements between countries with America included. She foresees France that nasa, America’s space agency, set as an launch facilities and an enforcement launching special “lookout” and “active de- acceptable level of risk in 1995, and which mechanism to stop outsiders with laxer fence” spacecraft, to protect its assets in was adopted by Japan and other countries rules from undercutting the arrangement. space. The latter are likely to be armed with thereafter. The complex will therefore There is also one other point. As Jean- powerful lasers. As Ms Parly has put it, “we need to be put into a steep descent aimed at Daniel Testé, once head of the French air intend to blind” threatening spacecraft. an uninhabited area—probably part of the force’s joint space command, notes, equip- Preferably without disintegrating them. 7 Pacific Ocean. As to the first clearance of actual orbiting debris, that is likely to be a European af- Bacteriophages fair, for, in 2019, the European Space Agen- cy awarded a contract to ClearSpace, a A hitchhiker’s guide to the microverse Swiss firm, to grab a 100kg piece of rocket debris that has been looping Earth since 2013. This mission is scheduled for 2025. ClearSpace plans to use a capture craft fitted with four robotic arms. Unlike har- poons or net tosses, this strategy permits Viruses hitch lifts on some bacteria, the better to kill others repeated attempts at recovery to be made. Even so, Luc Piguet, ClearSpace’s boss, ex- owadays, pathogenic bacteria are As is often the way with intriguing find- pects his spacecraft will spend at least nine Ngenerally dealt with using antibiotics. ings, Dr Yu and Dr Zhu made this discovery months in trials near the target before it se- But some researchers argue that bacteri- by chance. They were studying microbe cures the derelict and decelerates suffi- cidal viruses called bacteriophages should communities in treatment plants for waste ciently to descend. be added to the armory. One reason they water, and noticed that phages in these have not found favour so far is that they are miniature ecosystems sometimes attached Pay up! hard to deliver to their targets. However, Yu themselves to species of bacteria equipped An era of serious cleanup in space is still Pingfeng at Rice University in Texas and with flagella. These are rotating, helical ap- some way off. Besides the technological Zhu Liang at Zhejiang University in China pendages which act as propellers, so flagel- obstacles, removing junk will be expen- may have found a way around that. As they late bacteria are more mobile than those sive. The controlled re-entry of an object report in Environmental Science and Tech- lacking such equipment. To the two re- requires fuel, big thrusters and close atten- nology, they have discovered that some searchers, the behaviour of the phages tion from a ground controller. These things phages can hitch lifts with certain bacterial looked a lot like hitchhiking, so they con- can tack millions of dollars—perhaps more species that they do not attack, to bring ducted some experiments to find out what than $20m—onto a deorbiting operation’s them to places rich in those that they do. was happening. price tag. ClearSpace’s mission, for exam- They and their colleagues grew “lawns” ple, may cost as much as €100m ($122m), of an antibiotic-resistant strain of Escheri- though Mr Piguet hopes subsequent jobs chia coli, a common gut bacterium that is a will be cheaper. laboratory workhorse. To some of these Cheaper or not, the question remains, lawns they added a suspension of phages; “who will pay”? The littering of space is a to others, a suspension of a flagella-bear- textbook example of the tragedy of the ing bacterium called Bacillus cereus; and to commons, in which it is in everyone’s in- others still, a mixture of the two. They then terest for a problem to be solved, but no observed the consequences. one’s to be the lone individual who takes on Phages alone inflicted little damage to the burden of solving it. the lawns. Neither did B. cereus alone. In The solutions to tragedies of the com- combination, however, they were able to mons usually have to be imposed from out- tear holes in the lawns, and both the virus- side, often by governments. One idea is a es and the bacterial interlopers consequen- special launch tax, with the proceeds hy- tially prospered at the expense of the origi- pothecated to pay for cleanup operations. A nal E. coli. Whether such partnerships more creative proposal is what Mr Muel- between viruses and bacteria might be haupt calls “a bottle-deposit system”. used for medical purposes would require Spacefarers would pay a deposit for each considerable further investigation. But craft they lofted into orbit. If owners then this study does offer a novel lead in the failed to deorbit their equipment after its search for a way to deploy phages effective- mission was over, the job could be done by A swarm of phages looking for a lift ly in the service of human beings. 7 66 Science & technology The Economist January 16th 2021

Repurposing drugs Neither drug is cheap, however, so they the past with various species of monkey may be beyond the means of poorer coun- and ape suggest such primates can indeed A pair of aces tries. In Britain, a course of treatment costs attach a value to something intrinsically £750-1,000 (about $1,000-1,400). But the worthless to them, like a coloured plastic shorter stays in icus which that treatment counter, by learning that tokens of this sort permits more than offset this, for it costs may be exchanged for food, and that differ- the country’s National Health Service ent types of token bring different rewards, (nhs) £2,000 a day to keep a patient in such not all of them equally valued by the ani- Two arthritis medicines prove effective a unit. Also, in general, those who spend mal (a desirable grape versus an undesir- for covid-19 fewer days in intensive care recover faster able piece of cucumber, for example). That, ood news from covid-19 wards is hard afterwards and need less rehabilitation. though, is an artificial protocol in an artifi- Gto come by. A relentless surge in infec- The nhs will start using tocilizumab cial setting. The macaques of Uluwatu are tions is overwhelming hospitals around immediately for covid-19 patients in icus. true wild animals, albeit ones that are fa- the world. But the results from a clinical Hospitals already have stocks and the gov- miliar with, and comfortable in the pres- trial of two drugs, announced on January ernment is working with Roche, the maker, ence of, human beings. 7th, have improved the prognosis for both to increase supplies. For now, Britain has As they describe in the Philosophical patients and hospitals. banned exports of both tocilizumab and sa- Transactions of the Royal Society, Dr Leca The drugs in question, tocilizumab and rilumab. Whether other countries will fol- and his colleagues conducted their experi- sarilumab, are currently used to reduce in- low suit remains to be seen. 7 ment by wandering around the temple flammation in patients with arthritis. with video cameras, recording the activi- Hyper-inflammation, whereby the im- ties of the larcenous monkeys. Every time mune system goes into overdrive and de- they saw a monkey show interest in a par- stroys a patient’s organs, is how covid-19 ticular tourist, they recorded the interac- tends to kill. The search for suitable anti- tion. Not all attempts at robbery were suc- inflammatory drugs to treat it has already cessful. But of those that were, they turned up one, dexamethasone. This is a analysed the details of almost 2,200. cheap steroid that dampens the immune To work out what was going on, they system across the board. Tocilizumab and had first to establish the relative values of sarilumab, by contrast, are more focused. food rewards to monkeys, and of stealable They are both antibodies that block the ef- objects to people. The temple staff keep fect of interleukin-6, a protein that stokes three sorts of reward available for use in the immune response and has been promi- negotiations by, or on behalf of, tourists nent in patients with covid-19. who want to get their property back: raw The trial of tocilizumab and sarilumab eggs, crackers and small bags of fruit. Dif- enrolled 800 patients admitted to hospital ferent monkeys have different preferences, with covid-19 who were ill enough to re- but Dr Leca and his colleagues established quire transfer to intensive-care units these for individual animals by offering (icus). It was conducted in six countries by them choices between pairs of goodies in a remap-cap, an international collaboration preliminary experiment. dedicated to improving treatments for To confirm which stealable objects are pneumonia, with most of the participants most valued by people, they divided them being in Britain. (Britain has an efficient into six classes: empty containers, such as programme of covid-19 drug trials, in Thieving monkeys phone cases, camera bags and plastic bot- which a quarter of patients in hospital with tles; accessories such as hairpins and key the illness are enrolled.) Half of the volun- Name your price rings; hats and headgear; shoes; spectacles teers received one of the two drugs on top and sunglasses; and electronics and wal- of the standard treatment, which includes lets (phones, cameras, tablets, purses and dexamethasone. The other half received so on). They then observed, from their vid- only the standard treatment eo recordings, how often victims bothered Both drugs appear to work equally well, to bargain with the thief for the return of Human beings are not the only species though the results are more certain for to- property belonging to different classes, able to negotiate a deal cilizumab, an older, more widely available and thus classified objects into low value medicine which was, therefore, given to a f you visit Uluwatu temple in Bali, be- (the first two classes on the list), medium majority of participants in the new-treat- Iware. The long-tailed macaques there are value (the second two) and high value (the ment arm of the trial. Nearly 36% of pa- well-known thieves. Since time out of third two). tients in the standard-treatment group mind they have made a living by robbing They found that monkeys do, indeed, died, compared with 27% of those in the visitors of their possessions and then hold- have a sophisticated sense of what they are group that also received either tocilizumab ing those objects hostage until a ransom in doing—at least, adults and sub-adults do. or sarilumab—a reduction in the death rate the form of food is paid. That is quite clev- These animals have a preference for steal- of about a quarter. Moreover, those treated er. But Jean-Baptiste Leca of the University ing high-value items, and will often hold with these drugs recovered faster and were of Lethbridge, in Canada, wondered wheth- out either for more rewards, or for better discharged from hospital seven to ten days er these monkeys are cleverer still. Some- ones, if they are in possession of such earlier than would otherwise have been ex- times, they do not accept the first offer and items. But this is something that they have pected. Reductions in hospital stay of this hold out for more. He therefore asked him- to learn how to do as they grow up. Juve- magnitude would free up lots of icu beds— self whether they are able to assess how niles make no such distinctions, and sub- welcome news in places like Britain and valuable an object is to its owner, and factor adults are less good at doing so than adults. America, where many hospitals are run- that into their negotiations. In monkeys, as in people, guile is not a trick ning out of such beds. Laboratory experiments conducted in that is innate. It has to be acquired. 7 Books & arts The Economist January 16th 2021 67

Also in this section 69 A novel of the “dirty war” 69 Innovation and the state 70 Johnson: The language of incitement

The aftermath of power ing nothing with him, his faith in social- ism still intact,” Mr Mironov says. Inten- Conversations with a weirdo tionally and otherwise, Mr Gorbachev also changed the map of the world—shrinkages and mutations that are captured in a pro- jection on the theatre’s wall. He may be the last general secretary of the Communist Party to appear on stage in MOSCOW Russia. But he is certainly not the first. Dur- A play and a film explore the life and love of the Soviet Union’s last leader ing the Soviet period, productions pegged dressing room, two makeup stations tract her from the insufferable pain, he cra- to the jubilees of Soviet leaders, past and Aand two mirrors. A selection of wigs dled her in his arms as they told each other present, were part of the official hagiogra- and dresses. A pair of actors—a man and a stories from their half-century together. phy. Had Mr Gorbachev made different woman—enter and sit on stools, facing the Over the next three hours Evgeny Miro- choices in the Kremlin, he might conceiv- audience. They speak in their normal nov (pictured) and Chulpan Khamatova, ably be presiding over the Politburo today, voices, without accents or costumes. All two of Russia’s best-loved actors, recount with every theatre in the land glorifying his that will come later. and relive those stories on the stage of the 90th birthday this March. For now, they stick to the facts. “At the fashionable Theatre of Nations in Moscow. end of May 1999, Raisa Maksimovna ac- Step by step, they go deeper inside their The flywheel of history companied her husband to Australia,” the characters. They put on makeup and try out But by the time he came to power in 1985 woman begins. “Gorbachev admitted that voices and gestures: the deep southern (shortly before Mr Mironov enrolled at the the return flight was long and difficult,” the vowels Mikhail acquired in Cossack coun- Moscow Art Theatre School), the idea that man continues, “and he still can’t help the try; Raisa’s prissier diction, ringing with one of Russia’s trendiest, priciest theatres thought that it gave a jolt to a process that the notes of socialist optimism. Trained in would honour a former Soviet leader out of had already started…” the school of Russian psychological real- choice, not obligation, would have seemed The process was leukaemia. That July, ism, they embody the Gorbachevs with em- ridiculous. And these days, too, the most the actors explain, Raisa Gorbachev went pathy and virtuosity. common feeling towards Mr Gorbachev in to Germany for treatment. Mikhail was at The impersonation is both a personal Russia is not gratitude, but contempt. In- her side, holding her, talking to her and tribute—“I like Gorbachev,” confides Mr toxicated by imperial nostalgia and new- watching her die. The ward had to be kept Mironov—and a study of a man who found wealth, the ruling elite—like much sterile and Mr Gorbachev robed in full pro- changed the lives of everyone on stage and of the country—sees him as at best a failure tective gear. To be able to see and hear him, in the audience. “We wanted to understand and at worst a traitor, who triggered the dis- Raisa refused morphine; one night, to dis- where he came from and how he left, tak- integration of a superpower. 1 68 Books & arts The Economist January 16th 2021

2 It is telling, then, that “Gorbachev” orig- ent life, which had more to do with classi- hospital. Perhaps it was the most crucial inated in Latvia, one of the three Baltic re- cal Russian literature than with the Marx- decision of my political life.” publics liberated by his policies. In a con- ism and Leninism that she herself studied Mr Gorbachev may be reviled by many versation recorded for a documentary and later taught. compatriots, but some of Mr Mironov’s and produced in tandem with the play, Alvis They married in September 1953, six Ms Khamatova’s stardom has rubbed off, Hermanis, the show’s Latvian director, told months after Stalin’s death. The bride wore and made “Gorbachev” a hit. Mr Gorbachev Mr Gorbachev: “I just realised that, after my a new dress but had to borrow her shoes; himself gave an approving thumbs-up mother and father, you are the third person the wedding was celebrated with beetroot- from his box when he saw the show, receiv- who defined my life—and the lives of mil- and-potato salad in a university canteen. ing a standing ovation from a sympathetic lions.” Though he has worked extensively Thereafter, whether they were trekking audience. “I am so glad he had a chance to in Russia, Mr Hermanis was barred from across the dusty steppes of Stavropol, or experience this,” says Mr Mironov. the country in 2014 after criticising Vladi- strolling at night down the snowy lanes at It must have been an uncanny experi- mir Putin; it took a personal appeal to the their government dacha—away from the ence, for at the end of the play Mr Mironov president by the director’s leading man for listening devices—she shared his feelings, transforms himself into the present-day him to return and meet Mr Gorbachev. thoughts and doubts. “We can’t carry on 89-year-old with such eerie precision that His text was developed from the Gorb- living like this,” he told her in the small the distinction between them dissolves. He achevs’ memoirs and is divided into short hours after he came to power. sits alone at the dressing table, memories narratives: “Gorbachev and First Love”, of his life with Raisa playing in his head, “Gorbachev and the Corpse of Stalin”, A higher love unable to throw away her things and still “Gorbachev and Honey”. It is not a biopic or The couple’s public companionship distin- sensing the perfume of her dresses. a political drama. Mr Gorbachev’s stint at guished him from previous Russian rulers. This elderly incarnation is the subject the helm of the Soviet state is skipped in A Russian monarch was wedded to his peo- of the accompanying documentary by Vi- one line: “Those six years went like a day.” ple and was not supposed to have a private taly Mansky, a Latvia-based Russian direc- The director and actors are preoccupied by life. The wives of other Soviet leaders had tor (recently arrested in Moscow for prot- different questions: how did this man been kept out of sight. Raisa’s profile, her esting against the poisoning of Alexei climb to the top of a system that was de- taste for elegant dresses, intelligence and Navalny, an opposition politician). The signed to suppress human instinct? (“Our sophistication became a source of jokes film is called “Gorbachev.Rai”—a play on biggest mistake was to overlook Gorbach- and resentment among Soviet people. the diminutive form of Raisa, which also ev,” the head of the kgb later confessed.) But—in the play, and perhaps in reality—it means “heaven”. It includes scenes of the And what possessed him to undertake the was his devotion to her that compelled Mr theatre actors talking to Mr Gorbachev, but reforms that led, in 1991, to the fall of the So- Gorbachev, as Soviet leader, to value hu- it begins with a shot of several Soviet tele- viet Union and his own loss of power? man life above ideology or geopolitics. He phones, silent relics of his former supreme Volumes have been written about the loved her more than he loved power. power. Now he lives alone and moves slow- economic inevitability of the Soviet col- This became clear during the attempted ly. Mr Mansky peppers him with questions lapse, about Mr Gorbachev’s political mis- coup in August 1991 that brought on Raisa’s and dogmatic assertions about politics, calculations and the influence of the West. first stroke. When the couple returned freedom and his role in history. Theatre had a cameo role in the process, from Crimea, where they were kept under Defiantly, Mr Gorbachev breaks out of too. Shortly after he came to office, Mr house arrest, Mr Gorbachev did not join the the director’s frame, just as he once broke Gorbachev went to the Moscow Art Theatre citizens celebrating his release and their free from ideological constraints. Listen- to watch Chekhov’s “Uncle Vanya”. After- victory over the kgb. He stayed with his being to the questions, he studies the rippled wards he called the director to say that he loved. As Mironov-Gorbachev puts it on veins on his arms, surprised by the meta- found Vanya’s part heart-rending. “It is stage: “I was not married to the country— morphosis of his own body. The physical time to get our flywheel [of reform] moving Russia or the Soviet Union. I was married to frailty (see picture) only underscores the again,” he said. my wife and that night I went with her to impression of enormous authority, com- But by focusing on his relationship with plexity and wit. No actor, not even Mr Miro- Raisa, Mr Hermanis points to a motive nov, could compete with his charisma. rarely associated with Soviet bosses: love. “You say that with Raisa’s death, the “I am convinced that perestroika could not meaning of life itself is gone,” says Mr Man- have happened had it not been for Raisa sky. “Gone,” Mr Gorbachev confirms. “But is and his love for her. He has been winning the meaning of life just to love one woman her all his life,” the director says. Osip Man- and have children with her?” Mr Mansky delstam, a poet who died in the gulag, cap- probes incredulously. “Does it not have tured this intimate view of history: “If it some higher meaning?” Mr Gorbachev re- were not for Helen,/What would Troy be to plies: “But what could be higher than to you, O warriors of Achaea?” Mandelstam love a woman and be loved by her?” wrote. “The sea, and Homer, are all moved At the end of the film Mr Gorbachev, in by love.” his baritone voice, recites a Ukrainian song The couple met on a dance floor at Mos- (also heard during the play) about a silvery cow State University, to which Mr Gorbach- river and a heavenly green wood, which he ev had been admitted without an examina- heard from his mother when he was a tion thanks to the record harvest he and his child. A man who redirected 20th-century father produced in his native Stavropol re- history, and liberated hundreds of millions gion. A provincial combine-harvester op- from Soviet rule, strikes a lonely figure erator with a southern accent, he was an from a different era. Yet he is more free outsider in the world of the post-war urban than any occupant of the Kremlin before or intelligentsia that he aspired to join. after him. “Call this film ‘A Conversation Raisa—a dutiful student in the philosophy with a Weirdo’,” he advises Mr Mansky, with faculty—personified his dream of a differ- Living legend a sparkle in his eye. 7 The Economist January 16th 2021 Books & arts 69

A novel of the “dirty war” pealing idea, even if America has rarely looked less capable of purposeful collec- Unquiet ghosts tive action. Ms Mazzucato is an Italian-born economist of a heterodox bent, whose work has long challenged standard economic thinking about the role of markets and government in generating innovation. Her best- known book, “The Entrepreneurial State” Hades, Argentina. By Daniel Loedel. (published in 2013), argued that American Riverhead; 304 pages; $27. Blackfriars; £14.99 technological prowess is owed in large part to the strong influence of the federal gov- his book”, Daniel Loedel writes in ernment, which funded and bore the risk “Tthe acknowledgments for his power- of the initial development of many critical ful debut novel, “was inspired by my half- 20th-century technologies. Conventional sister, Isabel Loedel Maiztegui, a Monton- economic wisdom remains a target in her era who was disappeared on January 17th latest work, too. 1978, at the age of 22.” That was two years Scepticism among dismal scientists into the seven-year “dirty war” waged by about government involvement in markets Argentina’s military dictatorship against is based on faulty assumptions, she insists. its own people. The junta killed, “disap- Common complaints about state med- peared” and tortured thousands of Argen- dling—that governments are less efficient tines, from members of left-wing groups To hell and back than private firms, cannot pick winners, such as the Montoneros to writers and art- and are staffed by self-interested bureau- ists thought to be voices of dissent. In “Ha- suits not only the horror of his subject, but crats concerned only with their own sta- des, Argentina” Mr Loedel travels back with also his novel’s risky premise. A voyage to tus—are belied by an impressive record of his narrator into this haunted past. the underworld could easily become out- government successes: developing the The haunting is literal. Tomás, an Ar- landish, or, conversely, too familiar— foundation of the internet, for instance, or gentine living in New York, returns to Bue- trapped in the worn formulas of myth or extending financial assistance to Tesla. Not nos Aires in the mid-1980s, hoping to put magical-realist tropes. In “Hades, Argenti- every public investment pays off. But, in “stubborn ghosts back in their graves”. In- na”, though, hell is at once metaphor and Ms Mazzucato’s view, neither is the record stead he is reunited with his first love, Isa- setting, literary conceit and emotional re- of privatisation of public assets and out- bel—a Montonera who was murdered by ality. Tomás’s sojourn there is a fittingly sourcing of public tasks an unmitigated the junta years before. After some initial moving tribute to the author’s sister and triumph. In America and Britain they have alarm, Tomás takes this supernatural re- her many fellow victims. 7 produced plenty of wealthy consultants, union in his stride. He has anyway been she says, but not a revolution in public-ser- drifting for years, struggling with the after- vice efficiency or vast savings. math of trauma and often feeling like a Innovation and the state A rethink is thus overdue, the author ghost himself. urges—and the Apollo programme reveals Soon another shade—of his one-time Fly me to the Moon many ways in which a capable state can mentor, a character known as the Colo- create economic value. The sense of pur- nel—invites him to visit a uniquely Argen- pose and urgency that infused the pro- tine underworld, comprising an eternally gramme in the 1960s motivated the govern- looping version of the dirty war. Tomás im- ment agencies involved to innovate, Ms mediately accepts. He knows this time-tra- Mazzucato writes, as well as to improve vel will be agonising, but also that it may be communication and weed out inefficien- his only opportunity to forgive himself for Mission Economy. By Mariana Mazzucato. cies. Retaining important technological the wrenching choices he once made. Harper Business; 256 pages; $29.99. Allen capabilities in-house enabled nasa to en- Tomás is ashamed of having survived; Lane; £20 gage in a more sophisticated fashion with in a compelling nuance, he is also ashamed private contractors and monitor their proof having abetted torture. While in medical n july 1969 America launched three as- gress better. It also helped the government school, he let Isabel persuade him to em- Itronauts into space, landed two of them retain talent, since working for the state bed himself at a military torture centre, on the surface of the Moon and safely re- could involve meaningful engineering where he treated prisoners and spied for turned all three to Earth. A remarkable de- work, not just banal paper-pushing. the Montoneros. Flashback and re-enact- monstration of American might, the And the programme’s technological de- ment blur in an extended account of his achievement still dazzles more than half a mands—like the need for smaller, more spell at the (real, infamous) Automotores century later; no country on Earth could powerful and more reliable computers Orletti, a clandestine prison where the replicate the feat today. The contrast with than were available at its inception—put junta tortured leftists from several coun- America’s bumbling response to covid-19 pressure on contractors to innovate. They tries. Mr Loedel handles these atrocities could scarcely be more glaring. did so, fearlessly, because the state shoul- with tact, describing only what Tomás sees In “Mission Economy” Mariana Mazzu- dered much of the risk associated with in person; not violence, but its aftermath. cato argues that societies ought to abjure moonshot technologies. The government’s On his first day, for instance, he is called to tired ideologies and embrace the policy ap- demand for cutting-edge kit sowed the defibrillate a prisoner. The man “died a few proach that put astronauts on the Moon. By seeds of the computing age to come. The weeks later”, Tomás says; “his heart setting grand missions for themselves, she mit Instrumentation Laboratory, tapped to stopped again, only this time on one of my writes, and deploying the power of the develop guidance and navigation systems days off. I took fewer after that.” state in practical ways, they can become for the mission, swept up 60% of America’s The plain delicacy of Mr Loedel’s prose more prosperous and equitable. It is an ap- output of integrated circuits at the peak of 1 70 Books & arts The Economist January 16th 2021

2 the Apollo effort. For its part, nasa helped so on—has hurt America’s dynamism and been forged during decades of crisis: two shape the industrial ecosystem of Ameri- the welfare of its people. There is no short- world wars, a devastating depression and ca’s tech sector: to avoid becoming too de- age of daunting global problems in need of an existential superpower stand-off pendent on any one contractor, it spread solving; Ms Mazzucato singles out the fight against the Soviet Union. The bipartisan business around, implanting know-how against climate change, campaigns to im- consensus that supported a strong state across many firms. prove public health and efforts to narrow shattered long ago; a new sense of national These points are compelling. State pro- the digital divide. unity and purpose cannot be conjured out jects can certainly go wrong, but there is no Yet in the end it is hard to feel inspired of thin air. mistaking the vital role governments by her book. America launched the Apollo Arresting as Ms Mazzucato’s views on played in facilitating the development of programme at what may well have been the economic development are, her book does rich economies. Conversely, the weaken- zenith of its state capacity. Not only was the not really offer a route back to that purpose ing of state capacity—to provide badly government at its most capable, but state and cohesion. But that is what America needed infrastructure and basic services, initiatives enjoyed maximum public legiti- needs most. Sadly, those goals look as re- educate citizens, root out corruption, and macy and confidence. That proficiency had mote and inaccessible as the Moon. 7 Johnson Fight like hell

When does a fiery speech cross the line into incitement? ohnson’s first column after the Brandenburg v Ohio. It protected the right thing. Paul Grice, like Austin a philoso- Jelection of Donald Trump in 2016 of a Ku Klux Klan leader to call for “re- pher of language, noted that a tacit but looked at “speech acts”, or what J.L. Aus- vengeance” against African-Americans virtually universal “co-operation princi- tin, a philosopher, called “doing things and Jews, finding that such calls were too ple” is observed between speakers and with words”. Part of a president’s awe- abstract to be criminal. Such speech was hearers. It involves a “maxim of quality” some power is that merely by opening bannable only if “directed to inciting or (be truthful) and a “maxim of relation” his mouth he can set the official policy of producing imminent lawless action” and (do not waste an audience’s time). Ex- the United States. Mr Trump, that col- “likely to incite or produce such action”. pecting speakers to observe these con- umn concluded, needed to learn to watch Which of these three tests—the speak- ventions, hearers will try to interpret his words, given that they would soon er’s intent, the imminence of a crime and statements that seem to flout them in constitute official acts. its likelihood—are met in the case of the such a way that they still make sense. He did not. Now he has been im- Capitol riot? Imminence, clearly: the mob What was the crowd thinking when peached for an offence grounded in was in the Capitol building within an hour Mr Trump said, “We must stop the speech: incitement of insurrection. On of Mr Trump’s harangue. What he intend- steal”—and how was it likely to respond? January 6th he delivered a tirade near the ed, though, is less starkly obvious. Congress was hours from certifying Joe White House protesting that November’s The president used the word “fight” 20 Biden’s win. Marching to the Capitol just election had been stolen from him. Soon times. But such words can be employed to shout outside would stop nothing. the Capitol building at the other end of metaphorically—Mr Trump also referred Further guidance might have been found Pennsylvania Avenue, where legislators to members of Congress who took his side in Mr Trump’s assertion that “when you were certifying the vote, was ransacked in rejecting the election results as “war- catch somebody in a fraud, you’re al- by his audience. Five people died. Mr riors”. He never explicitly said “Ransack lowed to go by very different rules.” What Trump’s accusers say he incited the the Capitol”. The mob, in this defence, took rules? “You have to be strong,” he urged. violence, his defenders that he merely matters into its own hands. Indeed, at one “We fight like hell and if you don’t fight gave a typically barnstorming speech, point Mr Trump said the crowd should like hell, you’re not going to have a coun- and was not responsible for the mob. “peacefully…make your voices heard”. try any more.” The crowd—containing, as Impeachment is a political process, Yet a direct command is hardly re- the president ought to have known, not a criminal one, but the law offers quired to persuade someone to do some- numerous avowed extremists—could some pointers for the neutral. To begin assume either that his superabundant with, America’s First Amendment fighting talk was irrelevant, or that his strongly protects speech—including single mention of peaceful protest was. much that would be illegal in other A luminary of classical liberalism, democracies. Incitement of hatred of John Stuart Mill, defended speech that races or religions, for example, is banned was hot-tempered even to a fault: “An in many European countries—even opinion that corn-dealers are starvers of though the thing being incited (hatred) is the poor…ought to be unmolested when not itself a crime. American law does simply circulated through the press,” forbid “solicitation to commit a crime of Mill wrote. But such words “may justly violence”. But what that means in prac- incur punishment when delivered orally tice has been sharply circumscribed by to an excited mob assembled before the the courts. Sometimes even actual calls house of a corn-dealer.” In that case, for violence are protected. angry words are not merely words. Mr The “solicitation” statute requires Trump surely knows how devoted his intent by the speaker that another person followers are. “Our president wants us should commit a crime. In 1969 the Su- here,” one said inside the Capitol. “We preme Court added two further tests in wait and take orders from our president.” Appointments 71

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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 Jan 13th on year ago United States -2.8 Q3 33.4 -3.7 1.4 Dec 1.2 6.7 Dec -2.3 -14.9 1.1 -75.0 - China 4.9 Q3 11.2 1.9 0.2 Dec 2.4 4.2 Q3§ 1.3 -5.2 2.9 §§ 5.0 6.47 6.5 Japan -5.7 Q3 22.9 -5.3 -1.0 Nov 0.1 2.9 Nov 2.6 -11.3 nil -8.0 104 5.8 Britain -8.6 Q3 81.1 -11.3 0.3 Nov 1.0 4.9 Sep†† -1.5 -19.6 0.4 -42.0 0.73 5.5 Canada -5.2 Q3 40.5 -5.5 1.0 Nov 0.8 8.6 Dec -1.8 -13.5 0.8 -80.0 1.27 3.1 Euro area -4.3 Q3 60.0 -7.5 -0.3 Dec 0.3 8.3 Nov 2.5 -9.1 -0.5 -33.0 0.82 9.8 Austria -4.0 Q3 54.6 -6.9 1.3 Nov 1.1 5.2 Nov 2.4 -8.5 -0.4 -41.0 0.82 9.8 Belgium -4.5 Q3 54.2 -7.9 0.4 Dec 0.4 6.1 Nov -1.3 -9.1 -0.3 -38.0 0.82 9.8 France -3.9 Q3 98.3 -9.2 nil Dec 0.5 8.8 Nov -2.3 -11.3 -0.3 -34.0 0.82 9.8 Germany -4.0 Q3 38.5 -5.4 -0.3 Dec 0.4 4.5 Nov 6.8 -7.0 -0.5 -33.0 0.82 9.8 Greece -9.6 Q3 9.5 -9.9 -2.1 Nov -1.4 16.1 Sep -6.6 -9.2 0.7 -77.0 0.82 9.8 Italy -5.0 Q3 80.4 -9.1 -0.1 Dec -0.1 8.9 Nov 2.6 -11.0 0.6 -83.0 0.82 9.8 Netherlands -2.5 Q3 34.8 -4.4 1.0 Dec 1.1 3.8 Mar 7.2 -6.9 -0.5 -39.0 0.82 9.8 Spain -9.0 Q3 83.6 -11.4 -0.5 Dec -0.2 16.4 Nov 0.6 -11.0 0.1 -37.0 0.82 9.8 Czech Republic -5.3 Q3 30.8 -6.6 2.3 Dec 3.2 2.9 Nov‡ 1.2 -7.8 1.3 -40.0 21.5 5.3 Denmark -3.8 Q3 22.6 -4.0 0.5 Dec 0.4 4.5 Nov 8.5 -4.8 -0.5 -27.0 6.12 9.6 Norway -0.2 Q3 19.7 -1.7 1.4 Dec 1.4 5.2 Oct‡‡ 3.2 -1.3 1.1 -36.0 8.48 5.0 Poland -1.8 Q3 35.5 -3.4 2.3 Dec 3.4 6.1 Nov§ 2.6 -7.9 1.2 -114 3.73 1.9 Russia -3.4 Q3 na -3.8 4.9 Dec 3.4 6.1 Nov§ 2.1 -4.3 6.4 20.0 73.5 -16.7 Sweden -2.7 Q3 21.2 -3.2 0.2 Nov 0.4 7.7 Nov§ 4.2 -3.6 0.1 -6.0 8.33 13.7 Switzerland -1.6 Q3 31.9 -3.0 -0.8 Dec -0.9 3.4 Dec 9.2 -3.7 -0.5 2.0 0.89 9.0 Turkey 6.7 Q3 na -3.6 14.6 Dec 12.1 12.7 Oct§ -4.5 -5.1 12.8 188 7.41 -20.8 Australia -3.8 Q3 14.0 -2.9 0.7 Q3 0.8 6.8 Nov 0.9 -7.3 1.1 -14.0 1.29 12.4 Hong Kong -3.5 Q3 11.8 -5.7 -0.2 Nov 0.4 6.3 Nov‡‡ 5.5 -6.7 0.8 -77.0 7.75 0.3 India -7.5 Q3 125 -7.9 4.6 Dec 6.7 9.1 Dec 1.3 -7.2 6.0 -64.0 73.2 -3.1 Indonesia -3.5 Q3 na -2.2 1.7 Dec 2.0 7.1 Q3§ -1.4 -7.2 6.2 -67.0 14,060 -2.8 Malaysia -2.7 Q3 na -5.3 -1.7 Nov -1.1 4.8 Nov§ 4.8 -7.2 2.7 -61.0 4.04 0.5 Pakistan 0.5 2020** na -2.8 8.0 Dec 9.6 5.8 2018 -0.2 -8.0 9.9 ††† -109 160 -3.2 Philippines -11.5 Q3 36.0 -9.3 3.5 Dec 2.6 8.7 Q4§ 0.5 -7.7 3.0 -169 48.1 5.4 Singapore -3.8 Q4 8.7 -6.0 -0.1 Nov -0.3 3.6 Q3 18.0 -13.9 1.0 -78.0 1.33 1.5 South Korea -1.1 Q3 8.8 -1.1 0.5 Dec 0.5 4.1 Dec§ 3.8 -5.7 1.7 -1.0 1,095 5.6 Taiwan 3.9 Q3 16.6 2.4 0.1 Dec -0.3 3.8 Nov 13.7 -1.5 0.3 -33.0 27.9 7.0 Thailand -6.4 Q3 28.8 -6.1 -0.3 Dec -0.8 2.0 Nov§ 3.6 -6.3 1.3 -17.0 30.1 0.6 Argentina -10.2 Q3 61.7 -10.7 35.8 Nov‡ 42.2 11.7 Q3§ 2.0 -8.0 na -464 85.5 -29.9 Brazil -3.9 Q3 34.6 -4.5 4.5 Dec 3.2 14.3 Oct§‡‡ -0.8 -15.8 7.7 82.0 5.29 -21.7 Chile -9.1 Q3 22.6 -6.2 3.0 Dec 3.0 10.8 Nov§‡‡ 2.1 -8.0 2.7 -76.0 740 4.9 Colombia -9.5 Q3 39.6 -7.7 1.6 Dec 2.5 13.3 Nov§ -3.7 -8.8 4.9 -105 3,471 -5.2 Mexico -8.6 Q3 58.0 -8.9 3.2 Dec 3.4 4.6 Nov 2.3 -4.5 5.3 -149 19.8 -4.7 Peru -9.4 Q3 187 -12.0 2.0 Dec 1.8 14.2 Nov§ 1.0 -8.0 3.6 -49.0 3.61 -7.5 Egypt 0.7 Q3 na 3.6 5.4 Dec 5.1 7.3 Q3§ -3.4 -7.9 na nil 15.7 1.7 Israel -1.5 Q3 38.9 -3.7 -0.6 Nov -0.6 4.8 Nov 4.0 -11.3 0.8 7.0 3.13 10.9 Saudi Arabia 0.3 2019 na -4.2 5.8 Nov 3.5 9.0 Q2 -3.7 -10.7 na nil 3.75 nil South Africa -6.0 Q3 66.1 -7.2 3.2 Nov 3.2 30.8 Q3§ -2.1 -16.0 8.8 50.0 15.3 -5.3 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 Jan 13th week 2019 Jan 13th week 2019 2015=100 Jan 5th Jan 12th* month year United States S&P 500 3,809.8 1.6 17.9 Pakistan KSE 46,092.0 2.1 13.2 Dollar Index United States NAScomp 13,129.0 3.0 46.3 Singapore STI 2,977.5 4.0 -7.6 All Items 159.0 161.1 8.8 38.0 China Shanghai Comp 3,598.7 1.3 18.0 South Korea KOSPI 3,148.3 6.1 43.3 Food 123.5 125.9 11.8 23.9 China Shenzhen Comp 2,393.7 -1.1 38.9 Taiwan TWI 15,770.0 5.3 31.4 Industrials Japan Nikkei 225 28,456.6 5.2 20.3 Thailand SET 1,547.3 3.7 -2.1 All 192.1 194.0 7.0 48.2 Japan Topix 1,864.4 3.8 8.3 Argentina MERV 50,961.2 -1.8 22.3 Non-food agriculturals 131.2 129.4 4.7 24.5 Britain FTSE 100 6,745.5 -1.4 -10.6 Brazil BVSP 121,933.1 2.4 5.4 Metals 210.2 213.2 7.5 53.4 Canada Mexico S&P TSX 17,934.7 0.6 5.1 IPC 45,740.2 0.3 5.1 Sterling Index Euro area EURO STOXX 50 3,616.5 0.2 -3.4 Egypt EGX 30 11,388.9 4.0 -18.4 All items 178.5 180.5 7.0 31.8 France CAC 40 5,662.7 0.6 -5.3 Israel TA-125 1,641.8 4.5 1.6 Germany DAX* 13,939.7 0.3 5.2 Saudi Arabia Tadawul 8,914.3 2.8 6.3 Euro Index Italy FTSE/MIB 22,743.7 nil -3.2 South Africa JSE AS 63,474.5 2.6 11.2 All items 143.6 147.0 8.7 26.2 Netherlands AEX 644.4 0.8 6.6 World, dev'd MSCI 2,739.9 1.5 16.2 Gold Spain IBEX 35 8,361.1 0.1 -12.4 Emerging markets MSCI 1,364.1 3.7 22.4 $ per oz 1,946.7 1,845.5 -0.1 19.6 Poland WIG 58,532.8 0.9 1.2 Brent Russia RTS, $ terms 1,486.8 3.5 -4.0 $ per barrel 53.7 56.7 11.5 -12.5 Switzerland SMI 10,846.9 0.9 2.2 US corporate bonds, spread over Treasuries Turkey BIST 1,559.3 3.6 36.3 Dec 31st Sources: Bloomberg; CME Group; Cotlook; Reﬁnitiv Datastream; Australia All Ord. 6,953.9 1.1 2.2 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 28,235.6 2.0 0.2 Investment grade 133 141 India BSE 49,492.3 2.7 20.0 High-yield 407 449 Indonesia IDX 6,435.2 6.1 2.2 Sources: Reﬁnitiv Datastream; Standard & Poor's Global Fixed Income For more countries and additional data, visit Malaysia KLSE 1,636.7 2.8 3.0 Research. *Total return index. Economist.com/indicators Graphic detail Nutrition and health The Economist January 16th 2021 73

→ Japan’s rapid decline in deaths from strokes may be partly explained by consuming more meat and dairy

Deaths per 100,000 people, OECD countries, standardised by age using WHO standard population

All causes Circulatory* Cancer Cerebrovascular 1,500 500 250 250

← In 1970, Japan had Other the OECD's highest 1,200 400 200 stroke mortality 200 United States

900 300 150 150

Germany 600 200 100 100

300 Japan 100 50 50

South Korea 0 0 0 0 1968 80 90 2000 10 18 1968 80 90 2000 10 18 1968 80 90 2000 10 18 1968 80 90 2000 10 18

Consumption, kg per person, average per year over period Age composition of Japan, % of population In 1960 Dairy and eggs Alcohol Meat Sugar Fish 300 20

Japan South Korea Germany United States 2020 15 200 2060† 10 100 5

0 0 1961-70 2000-13 1961-70 2000-13 1961-70 2000-13 1961-70 2000-13 1961-70 2000-13 0-9 20-29 40-49 60-69 80-89 100+ Sources: WHO; FAOSTAT; OECD; UN *Excluding cerebrovascular diseases †Forecast

over time towards Western eating patterns. tant to heart disease, but prone to strokes. The meat spot Japan was not always a longevity cham- In theory, a dearth of animal-based food pion. In 1970 its age-adjusted mortality could have contributed to Japan’s histori- rates were average for the oecd. Although cal cerebrovascular mortality. In 1960-2013, its levels of cancer and heart disease were as the country’s deaths from strokes tum- relatively low, it also had the oecd’s high- bled, its annual meat intake rose from near est frequency of cerebrovascular deaths, zero to 52kg per person (45% of America’s The Japanese may owe some of their caused by blood failing to reach the brain. level). Tsugane Shoichiro of the National unusual longevity to a Goldilocks diet In 1970-90, however, Japan’s cerebro- Cancer Centre in Tokyo says that his com- anaka kane is one of humanity’s great vascular mortality rate fell towards the patriots may need meat and dairy to keep Toutliers. On January 2nd she became oecd average. With world-beating num- their blood vessels robust—though not so the third person ever to turn 118, according bers on heart disease and fewer strokes, Ja- much that those vessels get clogged. to the Gerontology Research Group, a team pan soared up the longevity league table. Some empirical evidence supports this of academics. She is also the ﬁrst citizen of How did Japan overcome its cerebrovas- view. One paper from the 1990s found that Japan to reach 118—but is unlikely to be the cular woes? Some of its gains simply mirror the parts of Japan where diets had changed last. The country has the world’s longest better treatments and reductions in blood most also had the biggest drops in cerebro- life expectancy, and 80,000 centenarians. pressure around the world, notes Thomas vascular mortality. Another study, which Mrs Tanaka is an outlier for another rea- Truelsen of the University of Copenhagen. tracked 80,000 Japanese people in 1995- son, too. She claims to love chocolate and However, another cause may be diets. 2009, showed that strokes were most com- ﬁzzy drinks, setting her apart from most of Japan largely banned meat for 1,200 years, mon among those who ate the least chops her compatriots. Japan has long had one of and still consumes relatively little meat and cream. Although Japan’s decline in ce- the lowest sugar-consumption rates in the and dairy. Too much of these can be damag- rebrovascular deaths could stem entirely oecd, a club of mainly wealthy countries. ing, since they contain saturated fatty ac- from other causes, these data suggest that The unusual longevity enjoyed in Japan ids, which correlate to heart disease. Stud- nutritional shifts may have helped. is often credited to diet. Yet the idea that ies have also tied eating lots of processed The unhappy irony is that Japan’s health the country has extended lifespans by en- red meat to a greater risk of stroke. But too gains, paired with a low birth rate, threaten tirely avoiding the West’s sinful culinary little may be unwise as well, because they its economy. By 2060, 40% of Japanese delights may be too simple. In fact, recent provide cholesterol that may be needed for could be 60 or older. That would yield more studies imply that one key to its success blood-vessel walls. In a study of 48,000 birthday cakes with 118 candles—and fewer may be that its people’s diets have shifted Britons, vegetarians were unusually resis- great-grandchildren to blow them out. 7 74 Obituary Brian Urquart The Economist January 16th 2021

peacekeeping it became no easier. He had been a soldier himself in the war, second lieutenant in the Dorset Regiment and then an intelligence officer with the 1st Airborne Division. Soldiers were trained to fight, and wanted to be armed. As he had found out, after his service pistol went down with the ship when he was blown up by a mine off the Kent coast, to lose one’s weapon was a disgrace. Besides, it was no joke to be sitting-ducks between enraged parties. But his rule was firm: their strength lay in having light arms only, or none at all. He might limp like an ex-soldier (parachute failure during training), and enjoy the logistics of operations; but he was an impartial desk man now, an international civil servant. His view of the un and its role had begun with high romantic enthusiasm in 1945, when he was only the second staffer hired. He had wanted to work for the League of Nations, and here was a stronger chance to build co-operation and prevent future disas- ters. Experience had left him deeply sceptical of leaders and revolt- ed by war’s waste and violence. Two events seared him: the disastrous Market Garden operation in 1944 to seize German-held bridges over the Rhine, where commanders bent on a dashing- stroke ignored the intelligence he gave them; and his consuming rage at stumbling on Bergen-Belsen, where the corpses piled up like logs at the perimeter fence did not smell, because they had been reduced to skin and bone while they were living. Peacekeeping was not mentioned in the un charter. But it seemed fundamental to create safe zones while reason was brought to bear on conflicts. Among the five secretaries-general he worked for, his deepest admiration was for Dag Hammarskjold: a The thin blue line loner, almost a mystic, with an evangelistic passion for his work and for preserving peace. Hammarskjold’s death in a plane crash just before his own posting to Katanga left a void in which, for years afterwards, he still saw his face and heard his directions. Leadership at the un was seldom so good. He judged Trygve Lie, the first, to be out of his depth, and Kurt Waldheim a status-hungry Sir Brian Urquhart, initiator and overseer of the UN’s mediocrity as well as a liar. His work could be trying, too often ar- peacekeeping operations, died on January 2nd, aged 101 guing the toss over deployment or sitting, numb with annoyance, hen he came to, Brian Urquhart found himself lying on the in some conference hall while antagonistic delegates sulked over Wfloor of a truck full of drug-high commandos. His nose was seating plans. In New York, sclerosis and elephantiasis had set in. broken and streaming blood, and he was bruised from a thorough The Security Council (that “Awesome Organ” as he mockingly pummelling with rifle butts. Much of his clothing seemed to be called it) had split at once along cold-war lines, which made ar- missing. Every so often, one of the boots around him would ad- ranging peacekeeping all the harder. Decolonisation brought in minister a kick. He seized the nearest; it happened to belong to the dozens of Third World countries with new agendas and views that squad commander, and they fell to arguing. In the state he was, he tilted against Israel and, therefore, annoyed the United States. All was not as impressive a disputant as he would have wished. through the 1980s America’s neocons, especially fierce Jeane Kirk- He was sorry to be a disputant at all. That was not why he was in patrick, railed at the un as if it was a troublesome sideshow, Katanga, a breakaway province of newly independent Congo, in though one they were happy to use when in a bind. He began to 1961. As the un representative there (a job no one in his right mind wonder whether it would actually survive into the 21st century. would have wanted), he and his force of Moroccans were meant to Something of that original romance still glowed, however. Even be keeping the peace between Moise Tshombe’s Katangans, the as he witnessed, after his retirement in 1986, terrible peacekeeping mutinous Congolese army and the fleeing Belgians. Now that he failures in Rwanda, Somalia and Bosnia, and even as he saw mis- had been kidnapped and beaten up, the un was in the fight too. sions he had set up still stuck after decades in Cyprus and in Leba- Soon enough his force was battling rebels all over Elisabethville. non, he stayed committed to the idea that there had to be one place This was not what peacekeeping was all about. Few knew that and one international civil service dedicated to problem-solving better than he did, for he had been in at the inception, when in 1956 on a global scale. As the perils facing the planet mounted, so did his the first un Emergency Force had been sent to Suez to stand in appeals in the press and at the Ford Foundation for the un, the their freshly blue-sprayed helmets, ex-American gi issue, between world’s best hope, to be streamlined and reformed. the armies of the French, the British and the Egyptians. Together His peacekeeping days made him realise what a reasonable, co- he and Ralph Bunche—his most valued colleague at the un, who operative world community might be like. He was always moved to had won the Nobel peace prize in 1950 for mediating between see soldiers from every corner working as friends in a common en- Egypt and Israel—had devised the peacekeeping rules. The force terprise—as he also was to see, in some disputed zone, memorials was to be a buffer between combatants, to express a world consen- to un soldiers killed “in the service of peace”. He might have been sus that peace was preferable to war. It could advise, but not order; killed in its service himself, that night in Katanga, but at the time help with humanitarian tasks, but not with anything political. And he was fairly sure some un Gurkhas would haul him out. As it hap- it could not favour one side, even secretly, for first and foremost— pened, the only real damage he sustained was his broken nose. whether on the Green Line in Cyprus, or the Line of Control in Non-religious though he was, he liked to recall St Ignatius’s advice Kashmir, or the Golan Heights between Syria and Israel—it was not “not to heed the wounds”. As he was rescued he noticed with satis- there to join in the fight. faction that his nose was bleeding again, all over the luxurious This was difficult, and over his next three decades of organising white upholstery of Moise Tshombe’s car. 7 Subscriber-only live digital event Biden’s time: exploring the next four years

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