How Abe changed Japan Wall Street’s expansion in China The case for digital ID cards Why Britons walk their dogs so much

SEPTEMBER 5TH–11TH 2020 America’s ugly election How bad could it get?

Contents The Economist September 5th 2020 3

The world this week Britain 5 A summary of political 19 Johnson’s incompetence and business news 20 Dog-walking 21 Avoiding a second wave Leaders 21 Brexit negotiations 7 Politics America’s ugly election 22 Flats out, houses in 22 Rubbish 5G 8 Abe Shinzo’s legacy How he changed Japan 23 Raves are back 10 High finance in China 24 Bagehot Lib Dem revival? The exception 10 Digital ID cards Europe Time for proof 25 France’s new economic plan On the cover 12 Rwanda Nowhere to hide 26 Belarus and Russia What could go wrong with 27 Germany and Poland America’s election? Leader, Letters page 7. A poll carried out 27 Mink in the Netherlands On coming out, during a pandemic in an 14 28 Charlemagne The competition, the atmosphere of deep distrust European Commission Midwest, Turkey, John poses big risks: briefing, Snow, York page 15. Donald Trump tries United States out law-and-order talk on 29 Trump’s suburban strategy suburban voters, page 29. It Briefing 30 Polls after Labour Day looks unlikely to decide this 15 America’s presidential election: Lexington, page 34 election 31 New York’s subway A house divided 31 Debating trans athletes • How Abe changed Japan He not only reshaped the economy 34 Lexington It’s the and foreign relations—he also covid-economy, stupid paved the way for future reforms: leader, page 8 and The Americas analysis, page 41. What can the 35 A rift in Brazil’s cabinet world learn from Abenomics? 36 Friendship on the British Free exchange, page 66. Columbia-Alaska border A biography of Abe Shinzo, page 73 • Wall Street’s expansion in China Even as the trade war rages, China is opening its door Middle East & Africa to foreign capital: leader, page 10 and analysis, page 61 37 Peacekeeping in Congo 38 Elections in Burkina Faso • The case for digital ID cards Covid-19 has accelerated the 38 The hero of “Hotel adoption of online government Rwanda” services, page 49. It has 39 The struggle for Lebanon strengthened the case for digital Chaguan What a lowly, 40 Egypt targets non-voters identity systems: leader, page 10 unpopular law- enforcement agency Asia reveals about China’s 41 The legacy of Abe Shinzo We are working hard to version of dictatorship, 43 Feminism in Pakistan ensure that there is no dis- page 48 ruption to print copies of 43 India’s economy shrinks The Economist as a result of by 24% the coronavirus. But if you 44 America tweaks its have digital access as part of Taiwan policy your subscription, then acti- 45 Banyan Protests in vating it will ensure that you Thailand 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 September 5th 2020

China Finance & economics 46 Making school fun 61 Banking on China 47 Protests over language 63 The Fed’s softer target 48 Chaguan Buying order on 63 Indian finance in the dock the streets 64 Wall Street donations 64 World Bank rankings 65 Buttonwood Private equity’s shortcomings International 66 Free exchange The digitisation of 49 Abenomics government Science & technology 67 Predicting pugnacity 68 Brain-computer interfaces 69 Finding bodies in forests Business 70 Interpreting dreams 51 The purpose of Prosus 52 Wizz Air’s rise 55 Japan Inc’s rebalancing act Books & arts 55 Buffett bets on Japan 71 Violence and drill music 56 Bartleby Anthropology 72 Johnson Lost in dictation of work 73 The lives of ants 57 Indian over-Reliance 73 A portrait of Abe Shinzo 57 TikTok’s limbo dance 74 Home Entertainment 58 Schumpeter Platform French noir fiction constitutions Economic & financial indicators Economics brief 76 Statistics on 42 economies 59 Culture in economics Graphic detail 77 Cities are recovering. So is air pollution

Obituary 78 Chadwick Boseman, avatar of black pride

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details of any charges against A delegation of American and the woman, Cheng Lei, have Israeli officials took the first Coronavirus briefs been released. official flight from Israel to the To 6am GMT September 3rd 2020 United Arab Emirates. The Weekly confirmed cases by area, ’000 Venezuela’s dictator, Nicolás two Middle Eastern countries 600 Maduro, pardoned 110 oppo- agreed to normalise relations Latin America India nents who had been charged last month. The flight crossed 400 with crimes by his regime. Other Saudi Arabian airspace, which US They include associates of Juan had been closed to Israeli air 200 Guaidó, the president of the traffic. The uae also repealed a National Assembly, who is law boycotting Israel. Europe 0 recognised as Venezuela’s Abe Shinzo announced that he interim president by more King Salman of Saudi Arabia SAJJMAM was stepping down as prime than 50 countries. Most oppo- sacked six defence officials Confirmed deaths* minister of Japan because of ill sition leaders intend to boycott over allegations of corruption. Per 100k Total This week health. Mr Abe has held the job the legislative election due in Prince Fahd bin Turki bin Peru 88 29,068 1,067 longer than anyone else. He December. Abdulaziz Al Saud, who com- Belgium 85 9,898 19 will be remembered for “Abe- mands the Saudi-led coalition Spain 62 29,194 223 nomics”, a programme of Protesters in Montreal pulled in Yemen, and his son were Britain 61 41,514 49 monetary easing, spending down a statue of John Macdon- among those removed from Chile 59 11,344 354 Italy 59 35,497 39 and structural reforms. The ald, Canada’s first prime min- their posts. Muhammad bin Brazil 58 123,780 6,115 ruling Liberal Democratic Party ister. They accuse him of per- Salman, the crown prince, has Sweden 58 5,820 17 will choose a successor on petrating “genocide” by used past anti-corruption United States 56 185,249 6,002 September 14th. The leading founding the residential- drives to consolidate power. Mexico 51 65,816 3,740 candidate is Suga Yoshihide, schools system, where tens of Sources: Johns Hopkins University CSSE; UN; Mr Abe’s cabinet secretary. thousands of indigenous Alpha Condé, the president of The Economist *Definitions differ by country children were forcibly en- Guinea, will stand in an elec- Thailand’s King Maha rolled. Many were abused. tion scheduled for October, The World Health Organisation Vajiralongkorn restored after he abolished a two-term recommended the use of Sineenat Wongvajirapakdi to The German government said limit in a contested referen- cheap, everyday steroids for her position as royal “consort”. that Alexei Navalny, a promi- dum earlier this year. Mr Condé the treatment of severely ill Last year the king made her nent Russian opposition leader has run the country since 2010; covid-19 patients, after a meta- Thailand’s first officially taken ill on a plane in Siberia under the new law he may rule analysis of data found they designated consort in almost a and evacuated to Berlin, had until 2032, when he will be 94. reduced deaths by over a third. century, but she was stripped been poisoned by a form of of her privileges a few months Novichok, a nerve agent used The government and rebel The United States passed 6m later for trying to elevate in Britain in 2018 in an assassi- groups in Sudan signed a peace cases in total; the number of herself as an equal to the nation attempt on another deal promising to end a civil new cases continues to fall. queen, the king’s fourth wife. enemy of Vladimir Putin. The war centred largely in the France and Spain recorded confirmation increases the Darfur region that has lasted 17 their most infections in a day Tensions flared anew in a likelihood of more sanctions years. Several earlier ceasefires since March. Argentina regis- disputed border area between on Russia. Mr Navalny remains and peace deals have been tered its biggest jump since the India and China. India in a medically induced coma. signed and then broken. start of the pandemic. accused China of violating an agreement reached during France released details of a Donald Trump visited India reported 2m infections recent peace talks by carrying €100bn ($119bn) stimulus Kenosha, a town in Wisconsin in August, the highest monthly out “provocative military package, aimed at countering that has been embroiled in tally for any country since the movements” in the Himalayas. the recession brought on by violence since a black man was outbreak of the coronavirus. It China said its troops had not covid-19, and also reintroduced shot by police and paralysed. has recorded 3.9m cases in all. violated the status quo. the concept of a national The president reiterated his economic plan. resolute message on law-and- As in many other countries, Ethnic-Mongol parents in the order, which he hopes will help pupils in England started Chinese province of Inner Mustapha Adib, Lebanon’s him win re-election. In returning to school for the first Mongolia kept their children ambassador to Germany, was Portland, another scene of time since March. New York at home in protest against a selected as the country’s next widespread disturbances, a City postponed the reopening government effort to extend prime minister. This came a white man who took part in a of its schools as it resolved a the use of Mandarin in schools. day before a visit by Emmanuel pro-Trump demonstration was dispute with teachers over Some parents fear the new Macron, the president of fatally shot amid clashes with testing (for covid-19, not stu- policy will diminish young France, who pushed Lebanese left-wing protesters. dents’ academic ability). people’s knowledge of the officials to tackle corruption Mongol language. and implement political re- A member of the Kennedy clan form. Lebanon was already lost an election in Massachu- For our latest coverage of the Australia said one of its citi- mired in a financial crisis setts, a first for the state. virus and its consequences zens, a prominent journalist when its capital, Beirut, suf- Joseph Kennedy, a congress- please visit economist.com/ working for Chinese state fered billions of dollars in man, failed to wrest a Senate coronavirus or download the television, had been detained damage from an explosion four seat from Ed Markey in the Economist app. by the Chinese authorities. No weeks ago. Democratic primary. 6 The world this week Business The Economist September 5th 2020

Another raft of data under- reopened at $496. After the children. Up to 240m people 40%. Proceeds of the sale will scored the toll that covid-19 is split Elon Musk, Tesla’s boss, worldwide suffer with food go some way towards shoring taking on economies, as more joined the club of just five men allergies, peanut allergy being up the debt-laden conglomer- countries reported record- in the world who are worth the most common. ate’s balance-sheet. breaking contractions in quar- over $100bn. terly gdp. India’s economy was Lee Jae-yong, the de facto boss Apple removed Epic Games’s around a quarter smaller in Stockmarkets had their best of Samsung, was indicted on access to its app store in a April to June than in the first August since1986. The msci new charges in South Korea, dispute over the fees that Apple three months of the year. World Index of share prices including manipulating share levies. It had already removed Australia’s gdp shrank by 7%, rose by 6.6% over the month. prices. The latest claims focus “Fortnite”, Epic’s most popular Brazil’s by 9.7%, and Turkey’s Fuelled by a rally in tech on the merger in 2015 of two of game. Deleting the firm’s ac- by 11%. Those countries are in shares, and by quarterly earn- the conglomerate’s affiliates. count means its other games recession, in Australia’s case ings from companies that were Mr Lee is already being retried are also unavailable; iPhone for the first time in nearly three more positive than had been in a related bribery case. users who have installed “Fort- decades. expected, the s&p 500 and nite” can continue to play, but nasdaq are at record highs. Zoom’s customer base (firms not with Android or pc gamers. with at least ten employees) People claiming that “Fortnite” Dollars per euro rose by 458% in the three is already on their iPhone are 2020, inverted scale Scrubbing up nicely months ending July compared selling their devices for 1.05 Unilever became the first big with the same quarter last year, thousands of dollars online. 1.10 provider of everyday house- generating soaring profits. 1.15 hold goods to commit to green sourcing for its cleaning and India’s Supreme Court com- Pomp and circumstance 1.20 laundry products. The con- promised and gave the coun- Britain’s public broadcaster, 1.25 glomerate, which sells a wide try’s mobile-phone operators the bbc, did a u-turn and will SAJJMAMFJ range of familiar brands, in- ten years to pay a collective allow the lyrics to “Rule, Bri- Source: Datastream from Refinitiv cluding Persil (in Britain), Surf $13bn in retrospective licence tannia!” and “Land of Hope and and Domestos, said that it fees and penalties that an Glory” to be sung on the last The dollar fell to another would shift to renewable or earlier ruling found were owed night of a popular festival of two-year low against the euro, recycled sources of carbon, and to the government. The court music that it broadcasts. The notching up a fourth consec- by 2030 no longer use chemi- had been insisting on immedi- decision to rearrange the patri- utive month of losses, after cals derived from fossil-fuel ate payment, which threatened otic songs without words was Jerome Powell announced a feedstocks, such as petroleum to wipe out Vodafone’s venture criticised for being soppy and major shift in policy at the and natural gas. in the country. woke. Restoring them is a wise Federal Reserve. The central move by Tim Davie, the bbc’s bank’s chairman said that With food allergies on the rise, In a surprise announcement, new boss, as he negotiates “maximum employment” and Nestlé struck a deal to buy SoftBank said it would sell funding with the government. a “strong labour market” would Aimmune Therapeutics, which $14bn-worth of shares in its It reportedly wants the bbc, guide future decisions, in makes the only approved telecoms business, which it which is funded by a house- effect suggesting the Fed will remedy in America to treat a bought from Vodafone in 2006, hold television-tax, to look for not raise interest rates for years reaction to peanuts among reducing its stake from 62% to alternative sources of revenue. to come. It will now allow inflation to run above 2% sometimes, rather than strictly target that figure as a goal.

A first estimate showed that the annual rate of inflation in the euro zone fell to -0.2% in August, the first time in four years that the currency bloc has slipped into deflation. Cheaper energy was the main factor behind shrinking prices.

Tesla announced that it would sell new shares “from time to time” to raise up to $5bn on capital markets. This came after the electric-car maker completed its stock split, which provided existing in- vestors with more shares but at a lower price. Before the split Tesla’s stock traded above $2,210 a share, up by 500% since the start of the year. It Leaders Leaders 7 America’s ugly election

What could go wrong? abor day marks the beginning of the home straight in a presi- have to witness a postal vote—things which in other mature de- Ldential election. This one threatens to be ugly. The president’s mocracies are in the hands of non-partisan commissions—are supporters are clashing with Black Lives Matter protesters in all taken by people with a d or an r by their name. If the election Portland, Oregon. Donald Trump flew to Kenosha, Wisconsin, is close then all this will be litigated over, and ultimately end up for a photo-op in front of burned-out buildings, a week after po- in courts presided over by judges who have also been appointed lice shot and paralysed an unarmed African-American man and by Republican or Democratic governors and presidents. one of the president’s supporters shot and killed two demonstra- As if that were not worrying enough, covid-19 could add to the tors, possibly in self-defence. Having adopted a strategy built legal slugfest. Already more than 200 covid-related lawsuits around profiting from fears about unrest, the president has an have been filed by the campaigns (see Briefing). The evidence interest in stoking it. Many Americans worry that November from party primaries suggests that though some states, such as could herald not a smooth exercise of democracy but violent dis- Wisconsin, conducted a relatively orderly election despite the cord and a constitutional crisis. virus, others did not. Postal ballots were still being counted Is this all hyperbole? America has had violent, contested elec- weeks after election day in New York’s primary. In November tions in the past. In 1968 one of the candidates, Bobby Kennedy, some swing states, including Michigan, will experiment with was assassinated. In 1912 Teddy Roosevelt was shot in the chest widespread voting by mail for the first time. while making a speech in Wisconsin. (He finished the speech be- If the election is close and there are delays in counting ballots fore heading to hospital, and survived.) Historians are still argu- on election night, it could well appear that Mr Trump is winning ing about who really won the election of 1876. Yet the country has in some key states. He might then claim victory before the re- always managed to gain the consent of the losers in its presiden- sults were in, as he did in Florida’s 2018 mid-terms. As more post- tial elections—even in the midst of the civil war. That long un- al votes are counted, the result could then shift in Mr Biden’s fa- broken streak suggests that doomsayers need to keep things in vour. America would have two candidates claiming victory. proportion. However, there is a real risk that things could go Electoral cases in multiple states might have to be heard in the wrong in November. courts. Protests would surely erupt, some of them armed. The To ensure the peaceful handover of power, president might call out the national guard, as democracies need the losing candidates and he threatened to do this summer, or send federal most of their followers to admit defeat. A clear agents into Democratic cities to police restive result on polling day helps a lot: the losers may crowds, as happened in Portland. At this dis- hate it, but they accept it and start preparing for tance, it is easy to forget quite how wrenching a the next election. When the result is unclear, a disputed presidential election was in 2000. And backup system is needed. Contested election re- that dispute took place at a time of maximum sults are rare in mature Western democracies, American self-confidence, before 9/11, before but they happen. In 2006 Silvio Berlusconi nar- the rise of China, before elections were fought rowly lost an election in Italy and claimed, without evidence, on social media, and when the choice was between two men who that there had been widespread fraud. The country’s Supreme would be considered moderate centrists by current standards. Court ruled in favour of his opponent, and Mr Berlusconi grudg- Now imagine something like the Florida recount taking place ingly surrendered. In 2000 America’s presidential election was in several states, after an epidemic has killed 200,000 Ameri- settled in the Supreme Court after contested recounts in Florida. cans, and at a moment when the incumbent is viewed as both il- In both cases, decrees from judges were just about enough to end legitimate and odious by a very large number of voters, while on the squabbling and let the country move on. the other side millions are convinced, regardless of the evidence, In the case of a landslide win for Mr Trump or Joe Biden, about that their man would have won clearly but for widespread elec- half of America will be miserable. Many Democrats view Mr toral fraud. Trump as a threat to democracy itself. If he wins again millions of Were Mr Trump to lose the popular vote but win in the elector- them will be distraught. Among Republicans, by contrast, Mr al college, as happened in 2016, then almost 40% of Democrats Trump still enjoys an 87% approval rating. If he loses, many will say that the election ought to be re-run. It should not. Were he to grouse that the other side cheated. But that need not stop a lose the presidency, then almost 30% of Republicans think that it smooth transfer of power if the margin of victory is big enough. If would be appropriate for Mr Trump to refuse to leave office if Mr Trump were to lose by eight points, as polls currently suggest there were claims of widespread illegal voting—claims he has al- he will, there will be no way to challenge the result plausibly— ready made in relation to postal voting. It would not. though he may try anyway, possibly fomenting further unrest. There is so much riding on this election—for America and for If the election is much closer, things could get even uglier. the rest of the world—that state officials must do everything they America is unusual in the degree of power it gives to Republican can to make sure it goes as smoothly as possible, remembering and Democratic partisans to administer elections. Decisions that they owe loyalty to the constitution, not their party. Even a over who is removed from lists of eligible voters when they are landslide election win will be fraught. In the event of a narrow updated, the design of ballot papers, where polling stations are one, America might not be able to generate losers’ consent. And situated, whether early voting is allowed and how many people without that, democracies are in big trouble. 7 8 Leaders The Economist September 5th 2020

A prime minister’s legacy How Abe Shinzo changed Japan

He not only reshaped the economy and foreign relations, he also paved the way for future reforms he record was beaten in late August. Then, just four days ened Japan’s appeal to foreign investors. Just this week Warren Tlater, the record-breaker said that he was, too. After serving Buffett piled into Japanese conglomerates (see Business sec- the longest continuous stint of any Japanese prime minister (as tion). The main stockmarket index has more than doubled on Mr well as the longest time in the job overall) Abe Shinzo announced Abe’s watch, having barely budged for the previous decade. his resignation on August 28th. There have been mistakes, too, of course, most notably the Mr Abe blamed the abrupt decision, over a year before the decision to raise the sales tax twice, both times sending the econ- rules of his Liberal Democratic Party (ldp) would have obliged omy into brief recession. But the pundits’ grim warnings—that him to step down, on an old digestive ailment. But many have the scale of government borrowing would prompt unaffordable cast his departure as an admission of defeat. The economy, rises in the interest rate it had to pay or, conversely, that the cen- which he has worked hard to revive after decades of listlessness, tral bank’s adoption of negative interest rates would fatally in- is swooning again because of covid-19. His campaign to revise Ja- jure the big banks—were simply wrong (see Free exchange). pan’s pacifist constitution to give the armed forces a proper legal Mr Abe confounded expectations even more with his vigor- underpinning has gone nowhere. His planned swansong, the To- ous and adroit diplomacy. As the grandson of one of the archi- kyo Olympics that were supposed to have taken place this sum- tects of Japan’s imperial war machine and an avowed nationalist mer, may never happen. His approval rating is dire. himself, he was expected to spark dangerous rows with China It is a gloomy moment. What with the depredations of the while alienating Japan’s allies (see Books & arts). He has, it is coronavirus, the growing pugnacity of China and Japan’s shrink- true, got locked into a pointless historical feud with South Korea. ing and ageing population, Mr Abe’s successor, who will be cho- For the most part, however, he has managed to rally like-minded sen on September 14th by the ldp’s mps, will have his work cut governments in the region to counter China’s military and eco- out (see Asia section). But all these problems have been made nomic might without unduly provoking China’s ire. When more manageable by Mr Abe’s eight years in office. The outgoing America pulled out of the tpp it was Mr Abe who kept the project prime minister has done a far better job than is commonly ac- alive. He also strengthened military co-operation with fellow de- knowledged. Before covid-19 struck, “Abenomics” was succeed- mocracies like Australia and India. He has stayed chummy with ing, albeit slowly, in resuscitating the economy. President Donald Trump, yet he is also, remark- Japan, something of a wallflower in global af- ably, on goodish terms with Xi Jinping, China’s fairs since the second world war, was playing an president, who had been due to visit Japan in unusually prominent and constructive role in April until covid-19 intervened. Asia and around the world. And Mr Abe was The constitution may remain unchanged, pushing through difficult reforms that shorter- but Mr Abe has nonetheless made Japan a more lived and less adept prime ministers had credible force on the world stage. He has in- shirked for decades. He leaves a much more im- creased spending on the armed forces and pressive legacy than his muted exit suggests. pushed through legal changes allowing them to Abenomics was supposed to banish deflation and spur take part in joint-defence pacts and peacekeeping missions. De- growth through lavish spending, radical monetary policy and spite constant Chinese prodding, he has held firm on a territorial structural reforms. Mr Abe never met his own, ambitious target dispute over some tiny islands in the East China Sea. to pump up inflation to 2% a year, but he did at least turn it posi- Mr Abe leaves plenty of pressing problems to his successor. tive. Before he took office, prices had been falling for four years Japan’s shrinking population makes it all the more important to straight; they have risen in all but one of the seven years since. get as many people as possible into the workforce and to raise During his tenure the economy enjoyed a 71-month recovery, just their productivity. Although more women are working, cor- two months shy of a post-war record. And productivity has risen porate culture remains too sexist to make the most of their skills: faster in Japan than in America. most are in dead-end jobs. The rigid divide between salaried and To get the economy moving, Mr Abe adopted policies previ- part-time workers also makes the labour market inefficient. Far ously considered politically or culturally impossible. As part of too little, especially of the work of government, is digital. And Ja- the Trans Pacific Partnership (tpp), a big regional trade deal, he pan has made little progress in greening its energy mix. agreed to slash tariffs and increase import quotas for agricultural Although Mr Abe leaves lots of unfinished business, he also goods, even though coddled farmers are some of the ldp’s most leaves his successor the tools to complete the job. Perhaps his loyal supporters. Japanese women entered the workforce in most important and least recognised achievement is to have droves, helped by free nursery school and other subsidies for made Japan more governable. He managed to quell, at least for child care. They are now more likely to work than their American now, factional jockeying within the ldp, which doomed previ- counterparts. And there are more than twice as many foreign ous prime ministers to short, turbulent stints in office. And he workers in Japan as there were when Mr Abe took office, despite a brought the bureaucracy, which used to run the show as the poli- supposed national phobia about immigration. ticians rotated, more firmly under the control of its elected Corporate governance has also improved dramatically. Al- bosses. Japan’s economy, in particular, still needs a lot of help. most all big listed firms have at least one independent director, But if the next prime minister manages to get anything done, it compared with less than 40% in 2012. That in turn has broad- will be thanks in large part to the groundwork laid by Mr Abe. 7

10 Leaders The Economist September 5th 2020

High finance in China The exception

Even as the trade war rages, Wall Street and China are getting closer n the tech industry the rupture between China and America coming foreign finance. With its current-account surplus set to Icontinues to grow. Will Uncle Sam force a sale of TikTok, a Chi- fall over time, or even fall into deficit, it needs to attract more for- nese-run app popular in the West (see Business section)? Can eign capital. The terms of access have improved. China is at last Huawei survive the embargo? Is Apple shifting its supply chains allowing Western firms to take control of their mainland opera- from China? Yet in one part of the global economy the pattern is tions and has made it easier for fund managers to buy and sell of superpower engagement, not estrangement: high finance. mainland securities. The potential prize is vast: a new source of BlackRock, a giant asset manager, has got the nod to set up a Chi- fees for Wall Street banks, and for fund managers a huge uni- nese fund business. Vanguard, a rival, is shifting its Asian head- verse of potential customers and companies to invest in. quarters to Shanghai. JPMorgan Chase may spend $1bn to buy There are risks. China could bend the rules to protect local control of its Chinese money-management venture (see Finance banks and brokers. Corruption is a hazard: in 2016 JPMorgan section). Foreign fund managers bought nearly $200bn of main- Chase was fined by American regulators for giving jobs to well- land Chinese shares and bonds in the past year. Far from short- connected Chinese “princelings”. Worries over human-rights term greed, Wall Street’s taste for China reflects abuses may intensify. And navigating America’s a long-term bet that finance’s centre of gravity Domestic Chinese assets sanctions regime will be tricky—global banks will shift east. And unlike in tech, both sides Foreign holdings, yuan trn active in Hong Kong, such as hsbc, are already 3 think they can capture the benefits of inter- under pressure to cut off some Chinese officials Bonds action without taking too much risk. 2 there. Yet American financial firms’ exposure to Western, and in particular American, capital 1 China is low enough that they have little to lose. Equities markets still reign supreme on most measures. 0 The tech industry is dangerously dependent on Derivatives are often traded in Chicago; curren- 1716152014 201918 China: Apple assembles many of its devices cies in London. American firms dominate the there. By contrast, the top five Wall Street banks league tables in asset management and investment banking. The have only1.6% of their assets exposed to China and Hong Kong. White House has sought to weaponise America’s pre-eminence, China’s ability to attract Wall Street firms during a bitter trade by pushing Chinese firms to delist their shares from New York, war shows the clout its capital markets have. But to become a fi- for example. But if anything the trade war has shown the growing nancial superpower it would need to create its own global fi- muscle of China in finance. A big wave of ipos is taking place in nance and payments infrastructure and make the yuan more Hong Kong, often done by firms keen for an alternative to New freely convertible. The leading Chinese firms have a tiny pres- York. China’s prowess in fintech will soon be centre-stage with ence abroad (just 5% of revenues for Ant) and most of China’s the listing of Ant Group, which may be the world’s largest ipo trade is invoiced in dollars, making it vulnerable to American ever. And then there is the surprising rush of Wall Street firms sanctions. Building an alternative to America’s global monetary and other foreign investors into mainland China. network is a huge task that will take years and require China’s They have been knocking on the door for 30 years with little control-obsessed officials to loosen their grip further. Still, the success. Now they are betting that China is serious about wel- trade war has given China a big incentive to take the next step. 7

Digital ID cards Time for proof

Covid-19 has strengthened the case for digital identity systems he pandemic has had few silver linings. One is that a huge countries without a system of secure digital identities, the clo- Trange of human activities have moved online far more sure of bricks-and-mortar government offices and the shift of smoothly than almost anyone expected. Businesses have let public services online have caused havoc (see International sec- their white-collar staff work from home for half a year now. Peo- tion). Divorces and adoptions have run into a virtual brick wall. ple are attending yoga classes remotely. Brits are appearing in Italy’s system for doling out emergency payments crashed and court digitally; New Yorkers are tying the knot online. then demanded paperwork that applicants could not obtain be- Yet as they migrate to the virtual world, many people are dis- cause government offices were shut. In America, Washington covering that they do not have the right documents to prove their state paid $650m in unemployment insurance to fraudsters who identity. Businesses use credit cards, in effect, as a rough-and- made applications using stolen identities. ready proof that people are who they say. Governments cannot No such havoc occurred in Estonia, a tiny Baltic state where do that. Rather than simply exchanging goods for money, they every citizen has an electronic identity. More than just an identi- give money away and issue commands, so they need to know ty card, it links every Estonian’s records together. So when the more about their “customers” than, say, a supermarket does. In government created a furlough system for workers affected by 1

12 Leaders The Economist September 5th 2020

2 the pandemic, it already knew where they worked and how to assured by a data-protection law and continually updated anti- pay them. Nobody in Estonia had to join a queue on a pavement hacking safeguards that include two-factor authentication. Sim- to claim benefits, as people in other places did. ilarly, laws can be passed to stop police from demanding to see Other countries, such as Britain and America, have long re- people’s id cards. Autocratic regimes will abuse id systems, of sisted introducing a national identity system. Some fear that it course, but democratic governments can be constrained. Esto- would make it too easy for the government to spy on people, or nia’s system records every time a piece of data is viewed, and it is would be too easy to hack, or would simply be botched by incom- a crime for anyone, including officials, to access private infor- petent bureaucrats. Feelings run high. Boris Johnson, Britain’s mation without good cause. That is a good model. prime minister, once vowed that if he had to carry an id card and Creating a digital id system is hard and expensive. Yet India, a a bossy official demanded to see it, he would “physically eat it”. gigantic and largely poor country, has managed it. Its “Aadhaar” However, the pandemic has strengthened the case for a digi- biometric system has created digital identities for 1.3bn people. tal id. It would not only make it quicker and easier to access gov- It has flaws: many Indians who were unable to register have suf- ernment services remotely. It would also make track-and-trace fered gravely from not being able to access services. But it has systems more effective. If, in an emergency such as the pandem- streamlined government services and massively reduced fraud. ic, health data were linked to work data, governments could If rural Indians can prove who they are online, it is scandalous quickly spot when a cluster of covid patients all happened to that many Brits and Americans cannot. work at the same factory. Digital id systems can be introduced gradually, building on Worries about privacy and security can be allayed, albeit im- pre-existing platforms. They do not have to be compulsory. If perfectly. Estonians, who learned a healthy suspicion of Big they are reasonably safe and reduce the hassle of dealing with the Brother during five decades under the Soviet boot, are broadly re- state, people will willingly sign up for them. 7

Rwanda Nowhere to hide

An authoritarian regime arrests the hero of “Hotel Rwanda” ourists who gawp at gorillas and foreign businessfolk who cials swiftly (and absurdly) accused him of genocide denial, a Tmeet in Kigali’s convention centre sometimes call Rwanda crime in Rwanda. Mr Rusesabagina disappeared after flying to the Switzerland of Africa. It has beautiful mountains, clean Dubai. He reappeared a few days later in manacles in Kigali, streets, a functional bureaucracy and low levels of petty corrup- Rwanda’s capital. His family says he was kidnapped. Rwanda tion and crime. But it differs from Switzerland in ways that casu- says he was arrested “through international co-operation”. al visitors often miss. Rwandans are terrified of their govern- Mr Kagame’s opponents have often met with misfortune far ment. They are constantly watched for hints of dissent, which is from home. His former intelligence chief was strangled in a Jo- ruthlessly suppressed. History is rewritten to suit the present. hannesburg hotel. A former interior minister was shot in Nairo- Heroes can become “unheroes” overnight. bi after starting an opposition party. But the grabbing of Mr Ruse- One such person is Paul Rusesabagina, who as the manager of sabagina marks a new level of brazenness. the Hotel des Mille Collines saved more than 1,200 people from a Rwanda says that he supported armed groups trying to over- genocidal army and machete-waving militias that were hunting throw the government. There is some truth to this: he once down members of Rwanda’s minority Tutsi called for an armed struggle against the regime. group in 1994. Although a member of the major- This is a terrible idea, though the government ity Hutus, Mr Rusesabagina risked his life to has produced no evidence that he ever tried to keep Tutsis and moderate Hutus safe. He bribed turn words into deeds. And dissidents in Rwan- militiamen with booze so they would not attack. da note that they have few options. Elections are When an assault seemed imminent he phoned a sham—Mr Kagame won 99% of the vote in contacts in the regime, begging them to order 2017, and could remain in office until 2034. the killers back. The genocide ended only after Peaceful opponents often end up behind bars, or rebels seized the country under the command of worse. When Diane Rwigara, a businesswoman, Paul Kagame, who is now in his third presidential term. tried to run for the presidency, she was arrested and jailed for Mr Rusesabagina’s courage inspired a film, “Hotel Rwanda”. more than a year on charges of insurrection. A Rwandan court America awarded him the Presidential Medal of Freedom, com- later said the charges were baseless. Her mother was also held mending his “remarkable courage and compassion in the face of and the family’s assets were confiscated. genocidal terror”. Some compared Mr Rusesabagina to Oskar Western governments occasionally tut at Mr Kagame’s Schindler, who risked his life saving Jews during the Holocaust. abuses, but they also sell arms and provide aid to his govern- Yet in Mr Kagame’s Rwanda, Mr Rusesabagina is now portrayed ment. They see Rwanda as an island of stability in a volatile re- as the equivalent of a Nazi fugitive, who must be abducted and gion and him as a leader who gets things done. Yet 26 years after brought home to justice (see Middle East & Africa section). he first shot his way to power, he seems ever less constrained. Although Mr Rusesabagina initially won official plaudits in His authoritarianism, once deemed by many a necessary evil to Rwanda, too, this changed after he criticised Mr Kagame for rig- hold the country together, now risks pushing it back towards ging elections and spoke of entering politics. Government offi- conflict. And that, in Rwanda, is a terrifying thought. 7 Executive focus 13 14 Letters The Economist September 5th 2020

called for equal marriage 24 the size of Luxembourg but Kastellorizo in particular, I want the world to know years ago (“Let them wed”, hasn’t a single four-lane road, would seem to have little claim Your interesting article on the January 6th1996). But please no one complains about traffic. to an eez. It is only a mile off coming-out experiences of gay consider a place for us gay Our rural areas have an the coast of Turkey and nearly people did not mention the folks beyond being tolerated. extraordinarily productive 100 miles east of Rhodes, with widespread institutionalised jon huggett agricultural sector, vibrant only a few hundred residents, discrimination they face in All Out small businesses, inexpensive and virtually no economy. The eastern Europe (“Queer, there San Francisco housing, low crime, and a tragedy though, is that no one and everywhere”, August 8th). sense of community. Nominal can take Turkey seriously In Russia a recent referendum income and gdp per person when it instead thunders about contained a draft amendment Advertising costs may lag behind that of our its “blue homeland” and signs banning same-sex marriage. In Your economics brief on cities, but our quality of life is agreements with Libya that Poland Andrzej Duda, the competition argued that were second to none. pretend Crete and Rhodes are president, declared during his “the market less concentrated” david schober no different from Kastellorizo. re-election campaign in June for digital advertising, the cost Rushford, Minnesota magnus westergren that gays “are not people” but for firms might fall (“From New York are worse than Bolshevism, hospitality to hipsterism”, Why did you refer to those who and that gay marriage is out of August 8th). This ignores one live in country areas as “folk” the question for Poland. of the unique aspects of the while their city counterparts Raise a glass! Just days after his swear- business model of the digital- are “dwellers”? Can you not I was surprised that you did not ing-in ceremony, the police advertising platforms: dwell in the countryside, or is include the contribution of used heavy-handed tactics negative marginal costs. such a word too sophisticated John Snow in your perspective against demonstrators who Machine learning, which for such folk? Why not go on pandemics and economic were protesting against the powers these advertising further and call them expansion (“Cleanliness is detention of a gay activist; 48 systems, is famously data bumpkins? Alternatively, both next to growth”, August 1st). were arrested. The police hungry. The models that serve could be referred to as people. Snow established that cholera claimed the protesters were ads get better with scale. fintan tuohy is a water-borne disease, laying being disruptive and denied These negative marginal Zurich the groundwork for the science them access to lawyers. costs are a big reason why of epidemiology. Like many You wrote about a generally many believe that breaking up public-health professionals, I more tolerant world for gay the platforms will ultimately Confrontation at sea made a pilgrimage to the site of people, but there are still be ineffective. The other Your piece on the eastern the Broad Street Pump in places in Europe where dis- dimension of digital advertis- Mediterranean was very London’s Soho, which Snow crimination and bigotry are ing is that advertisers get value interesting (“Battling over identified as the source of a entrenched and where equality for showing digital ads that are boundaries”, August 22nd). But cholera outbreak, and stopped before the law does not exist. more relevant in these large- you didn’t mention Britain, at the John Snow pub. piotr zientara scale systems. I, for one, enjoy apart from the briefest refer- edward cosgrove Associate professor of seeing ads related to my ence to British support for Needham Board of Health economics interest in The Economist on Kurdish fighters. Britain has Needham, Massachusetts University of Gdansk Google and Facebook. traditionally played a historic matt stone role in eastern Mediterranean “Tolerance” of gay people is San Francisco affairs, and has strategically Yorkminster parliament progress, but it is not a Utopia important Sovereign Base Andrew Adonis rightly of respect, acceptance and Areas in Cyprus. Could one criticised you for mocking the celebration of differences. Yes, A lovely place to live have a more eloquent com- idea of Parliament relocating more of us are coming out, and I enjoyed your special report mentary on Britain’s decline in to York (Letters, August 22nd). earlier, but it is still not easy. I on the Midwest (July 25th), international relevance, pre- In 1963 you argued that don’t want to settle for “gay though you were dismissive of sumably fuelled by Brexit? We “nobody really believes” in rights”. I want equal rights. rural areas. My small home- don’t even rate a mention. Britain’s local democracy Pride events are visible be- town in Minnesota is sur- sir david madden (“Federal Britain’s new cause they are unusual. For the rounded by the hills and hard- Oxford frontiers”, May 18th 1963). That rest of the year we check our wood forests of the unglaciated is as true today as it was then. surroundings before holding Driftless Area. A state-of-the- Turkey’s situation is particu- At the time you called for the hands, even in San Francisco or art school opened in 2017. A larly tragic, as it actually has a creation of a federal Britain to London. Most American states 60-mile paved bike-trail winds good case for getting Greece’s be organised by regions, with still allow the panic defence, through the limestone bluffs of exclusive economic zones its capital, Elizabetha, located which allows someone to the Root river valley. The pro- (eez) reduced. If only it near that northern city. claim temporary insanity if fessional Commonweal The- pursued legal channels in good chris keating they attack a gay person. And atre Company operates year- faith. Virtually all island Liverpool gay sex is still illegal in nearly round in a neighbouring town. disputes that have been 70 countries. Within an hour’s drive are nine brought to international I have been out for decades colleges and universities, the arbitration, from St Pierre and Letters are welcome and should be and have grown used to being Mayo Clinic and Medical Miquelon by Newfoundland, addressed to the Editor at The Economist, The Adelphi Building, told that things are fine for us School, the Minnesota Beetho- to the Kerkennah Islands by 1-11John Adam Street, London WC2N 6HT now, and that I should be grate- ven Festival and the Minnesota Libya, have resulted in smaller Email: [email protected] ful for other people’s tolerance. Marine Art Museum. In Fill- eezs for islands that are far More letters are available at: I was delighted when you more county, which is nearly from a country’s mainland. Economist.com/letters Briefing America’s presidential election The Economist September 5th 2020 15

studies have found the rate to be well below A house divided one in a million votes cast. But this does not mean that Mr Trump’s protestations will be of no account. Ameri- ca is deeply polarised, and in a few places armed partisans have taken to the streets. Both parties have portrayed this year’s con- WASHINGTON, DC test as existentially important to America’s An election carried out during an epidemic and in an atmosphere of deep future, warning that the country will be distrust poses serious risks forever altered for the worse if the other n his final debate with Hillary Clinton followers in August. There can be no real candidate wins. The new round of foreign Iin 2016, Donald Trump refused to commit doubt that, should he indeed lose, he interference, like the lies and fearmonger- himself to accepting the results of the com- would claim that the election was stolen. ing from the president himself, add both to ing election. The following day he made his That, come November 4th, such a theft the stock of disinformation and the perva- position clearer. “I will totally accept the will actually have taken place is remark- sive sense that things are not to be trusted. results of this great and historic presiden- ably unlikely. Admittedly William Evanina, As a result a significant number of Ameri- tial election,” he said in mock solemnity— who directs the National Counterintelli- cans of all political stripes doubt that the before adding, with finger-wagging em- gence and Security Centre, says that China election will be held fairly (see chart on phasis: “If I win.” The stubby finger levelled and Iran have joined Russia in seeking to next page). On top of it all, the election is itself at the crowd, which erupted into influence this election through covert being held during an epidemic that will, by cheers; the not-yet-president grinned. means, presumably emboldened by Russia election day, have killed over 200,000. President Trump went on to win with having paid little price for having done so In June a bipartisan group of campaign 304 Electoral College votes to Mrs Clinton’s last time. This is a shocking development. veterans, elected officials, journalists and 227, and so how he would in fact have react- But even if they were all pushing in the academics convened by the Transition In- ed had things gone the other way remains a same direction—which is unlikely—there tegrity Project, a group founded last year, matter of speculation. This year there ap- is no reason to think that they could deci- set about war-gaming four different possi- pears to be a strong chance that he will not sively tip the result. America’s electoral ble election results: a commanding victory win; The Economist’s election-forecasting system is sufficiently decentralised for at- for Joe Biden, a narrow victory for Mr Bi- model currently puts his chances at one in tempts to rig the vote on a large scale to be den, a narrow victory for Mr Trump seven. Mr Trump, though, denies any pos- incredibly hard. And though voter fraud achieved, as his previous one was, without sibility that he could lose a fair contest: occasionally takes place, both in-person a majority of the popular vote, and a result “The only way we’re going to lose this elec- and by means of absentee ballots, it is in which, because of contested outcomes tion is if the election is rigged,” he told his harshly punished and very rare; various in battleground states, the identity of the 1 16 Briefing America’s presidential election The Economist September 5th 2020

2 victor was unclear. In all four scenarios the nearly 1,700 polling places were closed be- looking for vulnerabilities. Congress’s abil- role playing produced levels of gamesman- tween 2012 and 2018 in states formerly cov- ity to look into what is happening this time, ship and tumult beyond anything seen in ered by the pre-clearance rule. The largest though, may be circumscribed. John Rat- recent American elections. In the narrow- numbers have been in Texas, Arizona and cliffe, a three-term congressman with no Biden-victory scenario the Secret Service Georgia—three battleground states this previous intelligence experience who was escorted Mr Trump from the White House year. Many of the closures are in areas recently installed as the administration’s on inauguration day. It is hard to overesti- where the population is disproportion- Director of National Intelligence, has mate what such a sight would mean to ately black or Hispanic. stopped providing personal briefings to Americans—and to the rest of the world. Polling-place closures can be expected the Democratic-led House Intelligence to lead to queues elsewhere, and queues are Committee. He argues that written brief- More, not merrier already a problem. The Bipartisan Policy ings will somehow reduce the chance of In principle, an election is a fairly simple Centre, a think-tank, found that in 2016 leaks; they will also eliminate committee thing. Identify the people entitled to vote; over 560,000 voters failed to cast a ballot members’ opportunity to question him. provide them with the means to vote; accu- because of polling-place management pro- According to Mr Rubio, Mr Ratcliffe will rately count their votes; after that, just blems, including queues. Predictably, a continue in-person briefings for the Senate abide by the results in the way the constitu- study of the 2018 midterms from the Bren- committee. tion requires. nan Centre for Justice, another think-tank, At the state level, according to Marian As far as the first step goes, America’s found that black and Latino voters were Schneider, president of Verified Voting, a constitution says that only citizens can markedly more likely than white voters to non-partisan group focused on election vote, and that those over the age of 18 can- find themselves waiting more than 30 min- technology, “There have been significant not be barred from doing so on the basis of utes to vote. Such delays can be expected to improvements” since 2016. Many states their race or their sex. The Voting Rights Act discourage voting at the best of times. have got rid of voting machines that do not of 1965 took aim at the legal requirements, And this is not the best of times. Co- produce paper trails for validation, thus in- such as literacy tests and poll taxes, by vid-19 makes standing in a long November viting fraud. But Ms Schneider sees much which Democrats in southern states had queue particularly unappealing. It may more to be done: “America has woefully contrived to maintain race-based disen- also make the queues, and the time taken underfunded election infrastructure for- franchisement. Those changes saw conser- to vote, longer. The epidemic meant that ever.” And new support does not always get vative whites in the south switch their alle- Wisconsin had trouble recruiting enough to where it can do the most good. Accord- giance from Democratic to Republican. poll workers for its primary election in ing to Mac Warner, who as secretary of state In the decades since, conservative April; as a result, the state’s biggest city, is West Virginia’s chief election official, whites have become increasingly central to Milwaukee, had just five polling places, “The most vulnerable piece is the county. Republican fortunes and an increasingly down from 180 in 2016. There has been They may not have [an] information offi- smaller share of the American electorate. more time for planning since then, which cer, and even if they knew the problem, The party has thus developed an interest in will doubtless improve things, but America they might not have the money to fix it.” limiting electoral participation, rather remains grievously short of poll workers. than increasing it. As Mr Trump put it earli- With local governments already cash- Boggling the mind er this year, discussing a proposal greatly to strapped, private enterprise has begun to There is little risk of any hackers, even expand postal ballots, “They had things, step in: the National Basketball Associa- those with the support of nation states, levels of voting that if you’d ever agreed to tion, for instance, says it will convert many changing a meaningful number of votes on it, you’d never have a Republican elected in of its arenas into polling places. the national scale. But hacking into a cru- this country again.” Coronaviruses are not the only invisible cial county in a swing state is a much less Erecting barriers to voting has grown threat such places need to take account of. onerous task, as is taking a state election easier to do since the Supreme Court in 2013 Computer viruses, ransomware and other system down for a few hours on election struck down a provision of the Voting hacks and attacks are also a worry. The Sen- day, thereby increasing voter wait times Rights Act that required jurisdictions with ate Intelligence Committee, which is and sapping public confidence. That Amer- a history of racial discrimination to “pre- chaired by a Republican, Marco Rubio, con- icans are even having such conversations clear” any electoral changes with the Jus- cluded in 2019 that Russian hackers probed is, in a sense, a victory for bad actors. As Ms tice Department. In 2016 a federal court all 50 states’ electoral systems in 2016, Schneider explains, “The destructive nar- struck down a voter-id law in North Caroli- rative that our elections are rigged and na because it “target[ed] African-Ameri- someone is going to hack into them is al- 1 cans with almost surgical precision”. The Unhealthy distrust most as bad as actually doing it.” fact that courts have ruled in this way is “How much confidence do you have that the It is hardly the only such destructive heartening; the fact that they have to is not. 2020 presidential election will be held fairly?” narrative around. Mr Trump is doing his America’s electorate is becoming ever United States, % responding, Aug 23rd-25th 2020 best to undermine trust in one of the key more diverse regardless. This year non- By party identification responses on which states and individuals whites comprise one-third of eligible vot- Democrat Independent Republican are relying in order to ease elections at a ers, an all-time high, with Hispanics out- time of contagion: voting by mail. 403020100 numbering African-Americans for the first In 34 states any voter may now request time. The electorate is also younger than in A great deal an absentee ballot for any reason. Nearly recent times—another factor that favours Quite a bit every swing state falls into this category, Democrats. Most analysts predict a high and fear of covid may see more voters than turnout in November. As much as 70% of Moderate amount ever take up the opportunity. In a number the 240m-strong electorate is expected to Only a little of states the opportunity to vote by mail vote, compared with 60% in the 2016 elec- has been, or is being, widened specifically tion and 50% in the 2018 midterms. None at all to respond to covid (see chart 2). It allows They will not all find it easy. The Leader- Not sure voters to feel more secure and reduces the ship Conference on Civil and Human pressures on polling places. Four states, Source: YouGov/The Economist Rights, an umbrella group, has found that along with Washington, dc, will swell the 1 The Economist September 5th 2020 Briefing America’s presidential election 17

2 ranks of those states which, like Colorado, 2 mail ballots to every registered voter. Less swift completion? Mr Trump has been fulminating against United States, share of votes cast by mail in 2016 presidential election, %, by state these changes since early summer: “MIL- Measures introduced for presidential No data LIONS OF MAIL-IN BALLOTS WILL BE election post-covid-19 020406080100 ME PRINTED BY FOREIGN COUNTRIES AND Vote-by-mail introduced OTHERS. IT WILL BE THE SCANDAL OF Vote-by-mail application or ballot sent to all voters WI VT NH OUR TIMES!”; voting by mail is “a corrupt disaster” that “will lead to the most COR- WA ID MT ND MN IL MI NY MA RUPT ELECTION in our Nation’s History”; and so on. His animus is not restricted to OR NV WY SD IA IN OH PA NJ CT RI Twitter; expansions of mail-in voting are among a huge number of changes to voting CA UT CO NE MO KY WV VA MD DE rules related to the covid-19 epidemic cur- rently being challenged in the courts. As of AZ NM KS AR TN NC SC DC August 31st, according to Justin Levitt, a

professor at Loyola Law School, courts in 43 OK LA MS AL GA states, Puerto Rico and the District of Co- HI AK

lumbia were looking at at least 228 such TX FL cases. When rules change quickly in re- Sources: US Elections Assistance Commission; Washington Post sponse to an emergency, a certain amount of legal scrutiny is a good thing. Still, it is notable that most cases involve Democrats fore punching a ballot, Justice Sotomayor May, Mr DeJoy set about implementing va- pressing for broader ballot access and/or wrote, the Supreme Court “continues a rious operational changes at the United Republicans doing the opposite. trend of condoning disfranchisement”. States Postal Service (usps), an institution Take Pennsylvania, a swing state that Because of the limited time available, where he had never previously worked. Mr Trump barely won in 2016 and where many of these election questions are mak- These included restrictions on overtime polls currently show him trailing Mr Biden. ing their way to the court as emergency ap- and limits on the number of trips mail car- Last year it expanded its provisions for vot- plications; in such cases the justices hand riers can make back to the post office to ing in absentia; Mr Trump’s campaign is down verdicts with little or no explanation pick up more mail. challenging some of that expansion. The after only partial briefing, no live hearing The usps has also removed hundreds of campaign has also sued Nevada over a law and quick deliberation, and reveal their mail-sorting machines from processing fa- that sends an absentee ballot to every regis- votes only if they so choose. Dale Ho, the di- cilities, which makes delivery slower. In tered voter—something which several oth- rector of the voting-rights project at the Michigan—a crucial swing state which, er western states do—increases the num- American Civil Liberties Union, argues like Pennsylvania, Mr Trump narrowly ber of polling places, and allows that the justices “need to explain their rea- won in 2016 and where he is on track to lose non-relatives to deliver the ballots of elder- soning more” in cases about electoral law, this year—postal-union officials say the re- ly or disabled voters. All those things, Mr so as to provide a guide for lower courts and moval of machines has slowed sorting ca- Trump’s legal term argues without evi- the next round of litigants. Rick Pildes, a pacity by 270,000 pieces of mail per hour. dence, raise the risk of fraud. law professor at New York University, says For a ballot to count in Michigan, it must Some cases have already risen as far as the justices should strive for “significant arrive at a county board of elections by the Supreme Court, where the conservative consensus” in issuing decisions on voting election day, no matter when it was post- majority has shown little interest in ex- rules if the election results are to be “broad- marked; delayed mail could easily disen- panding voter participation, to the infuria- ly accepted as legitimate”. franchise voters. tion of the liberal minority. When the ma- Mr DeJoy has said this is all essential jority overturned a decision by a Wisconsin Falls the shadow cost-saving. Others see his changes, imple- court to allow a period of grace for late bal- While the courts deal with questions raised mented so soon before an election heavily lots in the state’s primary elections, Justice by the states’ responses to covid-19, elec- dependent on mailed ballots, as deliberate Ruth Bader Ginsburg wrote that “It boggles tion officials have to make them work on sabotage. At least 20 states have sued the the mind” that the court would risk “mas- the ground. Dealing with new counting usps over his changes or announced plans sive disenfranchisement” by treating vot- systems that comply with social-distanc- to do so. Mr DeJoy reassured Congress in ing during a pandemic as no different from ing requirements while also handling ab- August that the usps could handle the up- “an ordinary election”. sentee and mail-in ballots in unprecedent- coming election. And under public pres- In July Justice Sonia Sotomayor excori- ed quantities will be challenging. In New sure he has vowed no further operational ated the majority for allowing Florida to York’s primary, on June 23rd, the volume of changes. But he has not committed to re- bar around 800,000 released felons from mailed ballots returned in New York City versing the changes already made. the polls. In 2018 Florida’s voters passed a was ten times higher than usual. Thou- These new burdens on changed systems constitutional amendment allowing all sands of people did not receive the ballots make it quite possible that America will felons except murderers and sex offenders they requested; winners in some congres- not see the sort of clean result it has come to vote as soon as they had completed their sional contests were not announced until to expect on election night. This was one of sentence. In response the Republican-con- well over a month later. the main conclusions drawn by the Transi- trolled legislature defined the completion To be counted at all, ballots need to get tion Integrity Project through its war-gam- of a sentence to include the payment of all where they are meant to be going by a cer- ing. A number of swing states forbid elec- fines, fees and penalties. The Supreme tain date, no matter when they were sent or tion officials from even sorting mailed Court was not persuaded by arguments postmarked. This is why the tenure of Lou- ballots before election day, which all but suggesting that this amounted to a poll tax. is DeJoy, a generous Republican donor, as assures several days spent counting. Offi- By ratifying a “pay-to-vote scheme” under postmaster general has been a subject of cials will also need to verify provisional which ex-offenders must pay all fines be- great scrutiny. After being appointed in ballots cast by voters whose eligibility is for1 18 Briefing America’s presidential election The Economist September 5th 2020

2 some reason—such as a forgotten id card, from its levels in 2018. In the swing states of 3 changed address or mistake on the voter Slow reveal Wisconsin and North Carolina, where in rolls—in doubt. Such verification can take United States, predicted electoral-college 2016, 5% and 4%, respectively, of votes a while in person; it may take even longer votes in 2020 presidential election were cast by mail, the odds of a precipitous for mailed ballots. By share of postal votes counted* rise look strong. And if Mr Trump seizes on Jocelyn Benson, a Democrat who is what looks like a mirage in a single battle- 70% 80% 90%+ Michigan’s secretary of state, says that the ground state—if, for example, he sees a Donald 304 231 204 gap between when polls close and when re- Trump small lead in Pennsylvania narrow by the sults are announced “is when we anticipate customary 20,000 votes and then keep on individuals...may drum up uncertainty narrowing—the effect on the narrative of and plant doubts about the sanctity of the the election, if not its underlying process, process...By constantly providing informa- will immediately become national. tion and being transparent we hope to mit- MI igate [those] efforts.” AZ How not to be a loser FL The gap is particularly concerning be- 270 to win PA Nils Gilman of the Berggruen Institute, a cause of the likelihood that the ballots NC think-tank, one of the founders of the Tran- counted early may tell a different story CO sition Integrity Project, says one of the les- from those counted late. After the 2012 sons he took away from June’s war games elections Edward Foley, a professor of law was that “the aggression of the first mover at Ohio State University, noticed a tenden- had a really decisive effect on how the cy for later-counted votes to favour Demo- game played out”. If instead of just tweet- crats. He called this phenomenon the “blue ing that counts should be stopped, as he shift”. In Pennsylvania, for example, late- Joe did when he saw the blue shift in action in counted ballots have added around 20,000 Biden 234 307 334 2018, Mr Trump gave consequential orders more votes to the Democratic tally than the Source: The Economist’s *Assumptions to that end, they might be followed. Nearly election-forecasting model described in text Republican one in the past four presiden- 80 left-leaning groups have joined what tial elections. In 2016 Mr Trump’s lead in they call the Protect the Results coalition, the state whittled down from 67,951 on which is hardly a sure thing but seems rea- which aims to push state election officials election night to just 44,292 in the end. sonable, and that the proportion of Biden to keep counting whatever the president There are various factors at play in the votes in those mail-in ballots is 75%, which says or does. blue shift, and their relative importance is would square with what likely voters for If Mr Trump refuses to concede, Sean El- a matter of some debate. Part of the story is the two candidates are telling YouGov dridge, who founded Protect the Results, the urban/rural split. Rural counts are by about their intentions when it comes to vows “an unprecedented presence on the and large faster; rural areas are by and large voting by mail or in person. At a stage when streets.” This year, when the presence of more Republican. Young and urban voters, only 70% of the strongly pro-Biden mail-in politics on the streets in the form of justi- being more transient as well as more likely votes have been counted, the election will fied peaceful protest has been used a pre- to vote Democratic, may be more likely to look like a clear win for Mr Trump. Only text for rioting and looting, and when a vote with provisional ballots. after 90% are counted will the true out- Trump supporter has been arrested for This year mail-in ballots may exacer- comes for each state become clear. murder after going to Kenosha, Wisconsin bate the shift in places where they are not In reality there will be no such evenly as an armed vigilante, “unprecedented” counted until late in the process, or where spread national mirage. But the conditions has a disturbing ring to it. their sheer number clogs up the system. necessary for late swings will be present in Mr Gilman’s other conclusion from the Mail-in ballots are not normally expected many states. Michigan expects that its war-game was “just how few boundaries to show a pattern of support different from share of absentee votes may nearly triple there are on a sitting president who is un- that seen in the election as a whole. But this bounded by democratic norms and unre- year Mr Biden’s supporters tend to be more strained by his own political party”. It is in worried about covid-19 than Mr Trump’s, the fact that there is a sitting president, and while Mr Trump’s are likely to share his one who meets that description, that one professed views as to the nefariousness of sees the most important difference be- the whole idea. A recent YouGov poll found tween this year’s prospects and the previ- that half of Mr Biden’s supporters planned ous contested election result. In 2000 to vote by mail, compared with just a fifth George W. Bush and Al Gore were challeng- of Mr Trump’s. ers on an equal footing. When the Supreme An enhanced blue shift raises the pos- Court decided, in a five to four decision sibility of a “red mirage”: a situation in along ideological lines, that moves to re- which Mr Trump appears to be leading count Florida’s votes should be ended, giv- around the time when people are used to ing victory to Mr Bush, Mr Gore stepped having the television networks call the re- aside. In the eloquent and graceful conces- sult, but falls behind when the counting sion speech he gave on December 13th, 36 continues. Calculations based on our elec- days after the election, he called on all tion-forecast model provide a sense of how Americans to “unite behind our next presi- that might look (see chart 3). dent”, and asked God to bless Mr Bush’s Though there is obviously a significant stewardship. He also expressed a hope that margin for error, the model currently pre- “the very closeness [of the contest] can dicts that Mr Biden will, when all the votes serve to remind us that we are one people are counted, win 334 Electoral College with a shared history and a shared destiny.” votes. Now imagine that every state sees a Today those words sound like a dispatch doubling of mail-in and other late ballots, from another country. 7 Britain The Economist September 5th 2020 19

Also in this section 20 Dog-walking 21 Avoiding a second wave 21 Brexit negotiations 22 Flats out, houses in 22 Britain’s rotten 5G 23 Rave revival 24 Bagehot: The Lib Dems may fly again

Boris Johnson monplace elsewhere. The government has switched policy on providing free chil- Could do better dren’s meals during the school holidays, whether foreign nhs employees should pay a health-care levy, and when a morato- rium on evictions should be lifted. The test-and-trace system to control the virus BARNARD CASTLE took months to work. “We’ve had more un- Support for the prime minister remains strong, but his government has gained a forced errors this summer than I’ve seen in dangerous reputation for incompetence 30 years,” says an exasperated Tory. thought boris had a bit more author- with his family during the long coronavi- Conservative mps, who returned from “Iity about him,” says Rob Westley, a rus lockdown. their summer breaks on September 1st, teacher. Mr Westley voted Conservative for Poor management of the pandemic fol- blame an over-centralised Downing Street, the first time in the election last December lowed by series of u-turns has damaged the an over-reliance on focus groups and a but now he’s unsure who he would go for. government. It had insisted the algorith- weak cabinet which lacks the confidence or The prime minister, he reckons, was too mically-set exam results were robust and foresight to predict problems. “We’ve got to slow to respond to the coronavirus pan- dependable, but scrapped them after an stop talking about ‘world beating’,” says demic, and the exam-results mess created outcry. It has changed its mind on whether Charles Walker, a Tory mp, who likens Mr misery for his students. “He fluffed it,” he face masks should be worn in shops and Johnson to a star football striker let down says. Leanne Rooney, a waitress, also voted schools, months after they became com- by a poor team. “What we need is ‘effec- Conservative for the first time last year, and tive’—just workmanlike success.” is also having second thoughts. “I did like The Tory unease was fuelled by a poll on Boris’s ideas, but now I question his leader- Grip slipping August 29th which found the Conserva- ship,” she says. “He has been so flippant, Britain, “Is the Conservative/Labour Party tives and Labour on 40% each, the first and you can’t have that in a pandemic.” competent or incompetent?”, % time the Conservatives had not been in Barnard Castle, in northern England, front since July 2019. That was a fall from a does not yet feature much in the great his- Competent Incompetent peak of 55% in April. Yet this figure reflect- tories of the Conservative Party, but it will 75 75 ed a “rally round the flag” effect often be prominent in the chronicles of the John- found in democracies at times of crisis, Labour son administration. It contributed to Mr 50 50 which invariably subsides. Johnson’s greatest victory last December, Conservative A better benchmark is the Tory result of as the constituency of Bishop Auckland 44% secured in the election in 2019. Ex- elected 26-year-old Dehenna Davison as its 25 25 cluding those like Mr Westley who are un- first Conservative mp in a wave that unseat- Conservative decided, polls conducted in August found ed Labour from former mining and mill Labour 0 0 the Tories averaging 42% to Labour’s 37%. towns. It was also the scene of an infamous 2019 2020 2019 2020 “The Tories have been in power for a de- blunder, when his chief aide Dominic Source: YouGov cade, and for the opposition to still be be- Cummings made a day trip to the town hind at that point is extraordinary,” says 1 20 Britain The Economist September 5th 2020

2 Ben Page, chief executive of Ipsos mori, a may erode the goodwill his largesse to date tablished that they are beating the foot- pollster. Voters—including Labour suppor- has garnered. Mr Johnson is determined to paths more than Americans or Australians ters—approve of the package of interven- help the economy recover by getting peo- as well. tions to support workers and businesses ple back into their offices, but in other That continental European pooches are designed by the chancellor of the exche- European countries increased mobility has on the porky side has not gone unnoticed quer, Rishi Sunak. A programme of week- pushed infection rates up. Whether or not on the mainland. “Obesity among dogs is day subsidies for restaurants “was a fantas- Mr Johnson secures a Brexit trade agree- acknowledged as a problem,” says Fleur- tic idea”, says Ms Rooney. ment, leaving the eu’s single market and Marie Missant of France’s Société Centrale Tory mps think their vote is holding up customs union on New Year’s Day will dis- Canine. James Serpell, professor of animal largely because Mr Johnson is aligned with rupt trade. His party is quarrelsome: he ethics and welfare at the University of the values of his base, much as “Teflon” faces a rebellion over plans to build more Pennsylvania, suspects that excessive Tony Blair could brush off scandal as long houses in wealthy constituencies, and the pampering, as well as under-walking, may New Labour was attuned to the public prospect of tax rises to repair the public fi- contribute to the problem. “The French are mood. Folk in Barnard Castle credit Mr nances have alarmed his mps. Mr Johnson’s super-indulgent with their dogs. They tol- Johnson with pushing on with Brexit. marks in his first year have been poor, and erate them in restaurants. I’ve been nudged When in trouble, he has tickled the coun- he has more tough tests to sit. 7 by strange dogs under the table in France.” try’s cultural divisions, claiming that Win- The German government is determined to ston Churchill’s statue and the patriotic get the country’s dogs—and dog-owners— songs sung at the Proms are under threat Dog-walking off their sofas. Last month the agriculture from censorious forces. minister announced plans to require dog- But competence matters, and acts as a Parading the pooch owners to walk their dogs twice a day. leading indicator of support. In “The Poli- The British devotion to dog-walking tics of Competence”, a 2017 study, Jane may have more to do with the walking than Green and Will Jennings show that new the dogs. Britons are big walkers—they governments invariably enjoy a honey- came fifth in the world in a study in 2017, moon, before errors accumulate, dragging the highest in Europe. Dogs provide walk- Why Britons walk their dogs more than a party’s polling lower like a yacht taking on ers with company and a purpose, so it may other nations water. Once gained, a reputation for in- be that walking encourages dog-owner- competence is hard to shift. hen i think of England, I think of ship, rather than vice versa. Reversals are particularly harmful to Mr “Wthe queen taking her dogs for a But Julien Dugnoille, an anthropologist Johnson, who cast himself as the barn- walk in the countryside,” says Carsten Ha- at Exeter University, suspects dog-walking storming antidote to Theresa May’s cau- ferkamp, a dog-owning German architect has a deeper significance. Dogs, he sug- tion and paralysis. Johnsonism promised working in London. There may be some- gests, are a useful aid to a socially awkward to “Get Brexit Done”—and other things, thing in the stereotype. Data from Tractive, nation. “British people…tend to see dog- too, through large cheques, vim and can-do a firm that provides gps tracking for pets, walking as a rare opportunity to socialise spirit. The attention to detail and patience show that Britons walk their dogs more with strangers, to have a chat and exchange that good governance demands are not part than their European neighbours do. a few jokes and comments about the of the narrative. British dogs get 177 minutes of activity a weather without putting themselves in All this works well for Sir Keir Starmer, day, compared with 160 minutes for slack danger (ie, without being too committed in Labour’s leader. Unlike his ideologically German pooches and 170 minutes for the their interaction).” The French, a nation of driven predecessor, Jeremy Corbyn, Sir average French mutt. That could be why flâneurs, have no need of canine props. Keir wants every government policy to be a they are slimmer than their European A tradition among the British aristocra- test of competence. It suits his lawyerly, cousins: the average British labrador cy of owning and training dogs also leads professional image and distracts from the weighs in at 28kg, compared with 29kg and Dr Dugnoille to speculate that dog-walking splits in Labour’s electorate: to ask whether 31kg for its German and French counter- retains some of its ancient kudos. When the Dover customs checks will be ready is parts. And it’s not just Europeans that Brit- people in the park say “Max is very well-be- to sidestep whether leaving the European ish dog-owners outpace. Research by Carri haved,” says Dr Dugnoille, “that is a way to Union is a good idea at all. Westgarth of Liverpool University has es- demonstrate mastery in the art of taming, The strategy is paying off (see chart on an elevation above those dog owners who previous page). Some polls show Sir Keir are ‘not in control of their own dog’, which ahead of Mr Johnson as “best prime minis- is the ultimate faux-pas in public spaces.” ter”. Mr Johnson stirs much more animos- But it’s not just about showing off, in his ity in Labour voters than mild-mannered view. A Belgian who has lived in both Brit- Sir Keir provokes in Tories. (“He has his ain and France, he reckons the British are head screwed on,” says Andrew Alderson, a closer to their dogs than the French. Walk- Tory-voting retired firefighter in Barnard ing with one’s best friend “creates a time Castle, of Sir Keir). Overall, voters disap- and space where dogs and humans meet as prove of the government’s handling of the species and connect as individuals”. pandemic and do not trust its ability to get Still, the British should not congratu- a grip in the future. Most voters, including late themselves too much on their behav- more than quarter of Tories, say Britain is iour towards their canine companions, for “going in the wrong direction”. they are guilty of a universal hypocrisy. Ac- Although the virus is now being effec- cording to Dr Westgarth, “people say that a tively suppressed and gdp will bounce dog needs a walk every day, but they will back strongly after the shutdown, winter find reasons why their dog doesn’t need a will be hard. Mr Sunak is determined to end walk. They’ll say: he’s got company in- the furlough scheme next month. That will doors, he’s nervous or he doesn’t like the drive unemployment sharply upwards and A very British intimacy rain.” Paw show. 7 The Economist September 5th 2020 Britain 21

Covid-19 in England domestic consumption. Progress has been Avoiding a spike nugatory because the sticking points are A summer break Confirmed covid-19 cases per 100,000 people political and cannot be resolved within 2020, seven-day moving average current negotiating mandates. This applies 20 especially to the two hottest issues—fish- eries and rules to stop one side using state United States subsidies to undercut the other. Heads of 15 government have not engaged in the detail; Reopening has not been the disaster France since they want a deal, many analysts ex- many feared Spain 10 Germany pect a last-minute agreement when they t the start of June, when England do. After all, this happened last year when Atook a big step out of lockdown, many 5 Mr Johnson signed the withdrawal treaty. observers were nervous. Dissenting mem- Italy Britain Yet this may be optimistic. Fisheries, gdp bers of the official Scientific Advisory 0 which account for less than 0.1% of , Group for Emergencies (sage) warned the might not scupper a deal, but rules to limit Feb Mar Apr May JulJun Aug Sep government that allowing people to min- state aid go to the heart of the new relation- Source: Johns Hopkins University CSSE gle risked another flare-up. The new test- ship. Mr Johnson is allergic to eu con- and-trace system, intended to squash out- straints on his freedom of action, and his breaks, had only just been established. when restrictions were eased, notes that government has not set out its plans for Polling found that the public believed min- cross-country data imply “the release from state subsidies. For its part, the eu detects isters were being insufficiently cautious. lockdown has resulted in larger changes to an existential threat in opening up to an The government’s decision to ease re- at-risk behaviour [in Europe] than here.” It untrammelled and competitive neighbour. strictions was a gamble, but one that has is unclear why this is. Never mind that Britain has in the past re- paid off. Following a small rise in July, the With children returning to school and sorted to state aid less than most countries, Office for National Statistics’ infection sur- students to university, and people moving or that eu rules against it have been sus- vey, which tests a sample of people in Eng- indoors as the weather cools, keeping cases pended during covid-19. land and Wales each week, finds that the down will soon become trickier. “I think al- As Sam Lowe of the Centre for European number of cases has since remained flat. though we’ve got a lot of testing going on, Reform, a think-tank, notes, the economic Although there has been a gradual rise in we probably don’t have anywhere near as difference between a barebones trade deal the number of positive test results, much much as we will need to manage the next and no deal is not all that large. A deal of this is accounted for by the fact that the month or so,” says Sir John Bell of the Uni- would avoid tariffs in sensitive sectors like number of tests has increased, meaning versity of Oxford. There has been a worry- cars, but in either case disruption from more asymptomatic cases are found and ing jump in cases in Scotland, and it will be customs checks, lorry queues and intru- false positives recorded. Hospital admis- difficult to avoid importing cases from sive non-tariff barriers would be substan- sions remain very low. parts of Europe that are currently seeing tial. The biggest difference might be that, England has so far avoided the spikes spikes, given the volume of summer travel. under no deal, Mr Johnson’s team could try seen recently in France and Spain, mean- Removing restrictions went better than ex- to blame disruption not on the deal it had ing it is now in a similar position to Ger- pected in England. That does not mean done but on the eu’s obstinacy. many (see chart). A recent study found that some will not have to be reimposed over Some argue that Mr Johnson’s growing 6% of people in England have antibodies, the coming months. 7 reputation for incompetence makes him which may offer some protection against more likely to accept any trade agreement the virus. There is huge uncertainty about he can get. If he cannot secure the “oven- the level at which herd immunity kicks in, Brexit negotiations ready” Brexit deal he promised last year, but even London—where the study found what can he do? Yet a weakened prime min- 13% of people had antibodies—appears Deal or no deal? ister who is again seen to be giving in to short of the most optimistic estimates. Brussels bullies would also be vulnerable The state has begun to do a better job at to attacks from his own party hardliners. preventing covid-19’s spread. The test-and- Many now claim to be unhappy with the trace system still has flaws, not least in the withdrawal treaty, especially the customs time it takes to get results from tests. But border it is erecting between Northern Ire- With talks at an impasse, fears grow of there is now a functioning system, which land and Great Britain. a December Brexit without a trade deal helps suppress the growth of cases, as do The parallel with Mr Johnson’s last-mi- local restrictions where necessary. After a n june 15th Boris Johnson promised to nute deal with Leo Varadkar, the Irish taoi- weak start, Britain is now a testing heavy- Oput “a bit of oomph” into trade talks be- seach, on the withdrawal agreement in Oc- weight. Over the last week for which there tween Britain and the European Union so tober 2019 does not really work. The is data, it carried out 2.5 tests per 1,000 peo- as to reach an outline agreement in July. Yet timetable is tighter this time. Rejigging the ple, compared with 1.7 in Spain and Ger- September has come with no sign of a deal. Northern Irish piece of the withdrawal many, and 1.8 in France. Little progress is expected when the talks treaty was simpler and quicker than writ- Public caution has played a part in keep- resume in London next week. Indeed, Mi- ing a new trade agreement. Last year, un- ing cases down, too. According to Google’s chel Barnier, the eu’s chief negotiator, says like today, Mr Johnson was prevented by mobility statistics, Britons are less likely to negotiations are going backwards and a Parliament from going for the alternative have returned to work than those in other deal by year-end (when the standstill tran- of no deal. And as Georgina Wright of the big European countries; something the sition period ends) seems unlikely. The Institute for Government, another think- government, concerned by the economic end-October deadline, to allow time to tank, says, both sides are now better pre- implications, is now trying to change. John draft and ratify a treaty that will run to hun- pared for the consequences. Edmunds, an epidemiologist at the London dreds of pages, is just eight weeks away. Moreover, instead of the friendly Irish School of Hygiene and Tropical Medicine, This does not make no deal inevitable. in 2019 Mr Johnson now faces the implaca- and one of the dissenting sage members Brinkmanship on both sides is often for ble French. They have the most to lose from1 22 Britain The Economist September 5th 2020

2 reduced access to British fishing waters, London residents have been for areas out- and are also the most exercised about state Space race side the capital, compared to 45% a year aid. Bilateral relations have been strained Britain, house prices ago—the biggest fall in interest in any city. by rows over asylum-seekers crossing the % change on a year earlier, August 2020 But the turn away from flats is a problem Channel and covid-19 quarantine rules. elsewhere, too. Flats make up about two- Flat 3210-1-2 Emmanuel Macron faces a tight presiden- fifths of new properties built over the past tial race in early 2022; being seen to help Mr One bedroom decade, and housebuilders worry that the Johnson would hardly boost his cause. This Two bedroom stereotypical block of converted flats in a week his foreign minister, Jean-Yves Le Three bedroom former warehouse in London’s East End, Drian, accused Britain of taking an intran- House Manchester’s Northern Quarter or Newcas- sigent and unrealistic attitude. tle’s Quayside will see a permanent fall in The talks are likely to go to the wire. Two bedroom value. “If you’re a prosperous two-earner Mujtaba Rahman of the Eurasia Group, a Three bedroom couple in your late 20s you might now de- consultancy, says that officials are re- Four bedroom cide to skip the two-bed flat that used to be signed to them drifting into November or Five bedroom the first rung on the ladder and go straight even later, assuming a way can be found to to the three-bed semi in the suburbs,” says Source: Zoopla avert a cliff-edge crash on December 31st. a housing boss. The currency markets seem relaxed. Yet The foreigners aren’t helping. They they may underprice the risk of no deal, buyers are becoming less keen on flats. mostly buy newly built flats and, except in which would be hard to pull back from. The Apartments have fallen out of the top five Hong Kong, where a change in the status of bigger paradox is the sight of a supposedly categories searched for by potential ten- British Overseas National Passport holders radical Tory government driven not by the ants on Rightmove, another property web- is resulting in some interest, international urge for post-Brexit deregulation but by an site, in favour of smaller houses. Access to a demand for flats in Britain is slack, as in- atavistic fondness for1970s-style state sup- garden or a nearby park are much more vestors wait to see where rental yields set- port for industry: a model that looks rather highly prized than a year ago. tle. But the big question is domestic: is more like China than Singapore. 7 Rightmove is advising estate agents homeworking for ever, not just for covid?7 who advertise on its website to emphasise different factors these days. Whereas in the The housing market past proximity to a train or tube station was 5G much in demand, that “isn’t going to be Flatlining such an important selling point for those Moobile networks buyers expecting to work from home more”, according to Miles Shipside of Rightmove. It is now, he explains, “all about showcasing a spare room in the best way”. He advises sellers to buy some cheap People want more space, so houses are 5g rollout has not much improved office furniture and put it in smaller bed- in and flats are out Britain’s rotten mobile performance rooms to demonstrate their potential as hut down between March and May, the home offices. ritons have long complained about Shousing market has roared back to life. The decline in the appeal of flats is a Btheir mobile networks. A report from Nationwide, a lender, reckons prices hit a challenge for London. While flats repre- the National Infrastructure Commission in record high in August. Pent-up demand sent only around a fifth of Britain’s housing 2016 compared Britain’s 4g coverage, unfa- and a temporary cut in stamp duty have stock, they make up just over half of Lon- vourably, to Albania’s. At that time, a much- helped propel interest, but a bigger factor, don’s. According to Rightmove, after the hyped new technology was on the cards: according to estate agents, is that people lockdown, 54% of property searches by 5g, or the fifth generation of networks, are reassessing their housing needs. would offer superfast speeds and lots more Spending weeks trapped indoors gave capacity. The network went live last year, them a chance to think hard about their liv- making Britain one of the first countries to ing quarters, while the rise in working offer it to consumers. from home is already having an impact. A new report from Opensignal, a net- Richard Donnell, the research director of work-analytics firm, compares the experi- Zoopla, a property website, thinks that ence of using 5g in a dozen countries where Britain has undergone a “once in a lifetime it is available. Britons have little reason to re-evaluation of housing requirements”. cheer. British 5g users spend less than 5% People want more space. Price rises are of their time on the new network, com- positively correlated to size (see chart) and pared with nearly 20% for Americans; 5g the value of one-bed flats has slipped since download speeds are in the bottom third; the market reopened. According to Zoopla, overall average download speeds are the the time taken between the listing of a lowest in the set (see chart on next page). home and its receiving an accepted offer One culprit is geography. The countries has fallen across the board but the larger on Opensignal’s list that perform best are the property, the bigger the fall. Five-bed- either small, such as Taiwan, or very big but room houses, which in 2019 took an aver- with most people concentrated in a few ur- age of 48 days to attract an offer, are now ban areas, such as Saudi Arabia and Austra- being snapped up in 32 days, faster than lia. Britain, like Germany, has some dense one-bedroom flats. Three-bedroom areas but also many sparsely populated ru- houses, the category most in demand, are ral areas where building lots of cell-towers going in just 24 days. Renters as well as Peaked? is expensive, and returns slim. The lay of1 The Economist September 5th 2020 Britain 23

2 the land matters too. Hills and trees inter- fere with mobile signals. A second reason is planning. Other European countries have more liberal planning laws, says Ka- ren Egan, a telecoms analyst with Enders Analysis, a research firm. Councils present one obstacle. The farmers on whose land towers need to go present another. The way in which spectrum is allocated also affects the quality of the service. Just as more water flows through a broader pipe, the more spectrum an operator has, the better the service it can provide. Many countries have just three networks. Britain has four. That means more competition and lower prices, but also less spectrum for each. Moreover, only half of the 5g spec- trum has so far been auctioned. When the next chunk is bought up, networks may find themselves with fragmented bits of spectrum. Ms Egan describes the operators’ spectrum as “barcode-like: rather slim sliv- Rave revival ers of it, rather than large bands”. That might be fixable. Ofcom, the tele- coms regulator, is open to facilitating Third summer of love swaps between networks, says Greig Paul, a networks expert at the University of Strath- Why Britons are partying like it’s 1988 clyde. But new problems have arisen, such as the government’s decision to ban equip- t’s groundhog decade in Banwen, a of big venues’ problems, and so have rave ment manufactured by Huawei, a Chinese Ismall village in Wales. When the mak- organisers. “You’ve got block parties, company, from 5g networks. That will slow ers of the film “Pride” needed a location hippies in the woods, and London ones its roll-out and increase its cost. Conspira- for an embattled Welsh mining commu- with middle- class people, thrown in a cy theories linking 5g to covid-19 and other nity in the 1980s, they chose the tiny professional manner,” says James Morsh, ailments do not help either. village on the edge of the Brecon Bea- who runs PillReport, a group that en- This matters—not just for consumers cons. When 3,000 ravers arrived last courages people to rave responsibly. In but also for industrial and agricultural weekend, that dubious decade seemed to May Mr Morsh organised the first social- uses. The real promise of 5g is in vastly in- be making a comeback. ly distanced legal rave, with permission creased capacity. The new network can Headlines about illegal raves recall from Nottingham council. He had over handle up to 1m connections per square ki- the “second summer of love” in 1988, 750 requests to attend, but could only lometre, compared with some 2,000 for 4g. fuelled by the rise of dance music and allow 40 people to take part. He admits That is why much of the hype surrounding party drugs such as ecstasy. The closure that it’s “not really what partying should 5g has been about filling factories full of of clubs has revived that spirit this year, be like”, although the arrival of 12 police sensors or connecting cows to the internet. despite coronavirus restrictions banning officers gave the event an authentic feel. But uncertain rules slow progress and raise gatherings of more than 30 people out- Once the police were satisfied that the costs. As Mr Paul puts it, “you cannot possi- doors. The Metropolitan Police has re- revellers were not breaking any rules, bly charge £10 per cow” per month. Opera- corded more than 1,000 raves (which it they let them carry on. tors will have to find a way to spend on in- defines as unlicensed music events with Tougher punishments were intro- frastructure, control prices and greatly more than 20 people) in London since duced last month to deter people from increase the number of connections all at the end of June. Between 2015 and 2018, partying. Eight organisers of the rave in the same time if they are to milk 5g. 7 the most raves reported to the Met in a Banwen were given fines of up to £10,000 single year was 133. each under the new regulations. But Even before the pandemic, raves were stopping determined ravers is hard, Not picking up making a comeback. A combination of when locations are kept secret until the 5G users, average download speed* expensive rents in big cities and precari- last minute and details shared through May-August 2020, Mbps ous operating licences has changed WhatsApp and Instagram. Mr Morsh 120100806040200 Britain’s nightlife. Big venues have thinks that the new penalties will have Saudi Arabia passed their costs on to clubbers—entry little effect: “The people throwing parties South Korea to Printworks, a factory-turned-club in are going to keep throwing parties.” Taiwan south-east London, can cost £40 ($54)— The consequences for Banwen were and drugs are less tolerated. In 2016 not as grim as some feared. “When that Netherlands authorities revoked the licence of Fabric, many people turn up it’s a bit like ‘Oh Switzerland a famous club in London, after two drug- shit, what have they come to do? Have Australia related deaths. It reopened five months they come to ruin the village?’,” says Hong Kong later, but with stricter rules, including Alun, who lives nearby. But on checking Germany id-scanning and lifetime bans for any- it out, he found a fairly civilised event. Britain one caught asking for drugs. Some attendees were even using hand *Including previous generations Smaller venues have taken advantage sanitiser. Source: Opensignal when 5G not available 24 Britain The Economist September 5th 2020 Bagehot The Lib Dems might just fly again

Although they have few mps, the Liberal Democrats still matter best when Labour has “safe” leaders, such as Tony Blair, because otherwise they are vulnerable to the charge that “a Lib Dem vote lets in Labour”. Paddy Ashdown, a former party leader, maintained there is a Labour-acceptability threshold below which wavering Tories will not vote Lib Dem. In 2019, thus, they would have had a better chance of taking Dominic Raab’s Esher and Walton seat and Sir John Redwood’s Wokingham seat had disillusioned Tories not been terrified of putting Jeremy Corbyn into Downing Street. Sir Ed’s second advantage is the decontamination of the Lib Dem brand. The party managed to do as badly as it did in 2019 by pulling off a remarkable trick: despite not having run the country since 1922, it persuaded voters it was the party of the establishment because it gave its blessing to austerity as part of the coalition gov- ernment in 2010-15 and sided with the “hidden state” in determi- nation to overturn Brexit. Correcting this impression will not be easy given its leader’s knighthood and its legion of lords. But time will dull the memory of the coalition, and failure might revive the party’s image as a scrappy underdog. The Lib Dems’ biggest problem in recent decades has been their lack of what politicos call a “core vote strategy”. Their voters have come from two incompatible groups: on the one hand, cosmopol- itan liberals in suburbs and university towns who support the he mood in Westminster, as mps return from their long break, “double liberalism” of free markets and progressive values; on the Tis one of general frustration. Conservatives are frustrated with other, provincial liberals, particularly in the Celtic fringe, who are Boris Johnson’s inept leadership. Labour mps are frustrated by motivated by local issues and dislike one or both parts of the liber- their failure to translate that ineptitude into a clear lead. And Scot- al formula. Twenty-six of the 57 constituencies which elected Lib tish Nationalists are frustrated that the one thing that they want, Dem mps in 2010 voted leave in 2016. another independence referendum, is in the gift of a man who has A recent shift in voting patterns has solved this problem by ac- no reason to give it. Still, when it comes to frustration nobody can cident: the party has strengthened its support in knowledge-in- compete with the Liberal Democrats. tensive areas (particularly London and the south-east) while los- The Lib Dems went into the last election hoping for a realign- ing its old heartlands. This should make it much easier to produce ment that would boost their numbers and turn them into power- a coherent programme. The current leadership will no doubt bang brokers. They ended up with their seats reduced from 21 to 11 and the drum on green issues (which Sir Ed is keen on) and civil rights their dream of remaining in the eu shattered. The party now has a (which Sir Keir is reluctant to embrace). And it has even more to new leader, Sir Ed Davey, who has tried to rouse them with the bat- gain from the problem of over-centralisation. The Lib Dems’ tradi- tle cry “wake up and smell the coffee”. This is hardly the stuff of tional enthusiasm for local government sits well with the rising Lloyd George, the last Liberal prime minister, whom John Maynard concern that Britain is a dangerously unbalanced country. Keynes called a “goat-footed bard” on account of his eloquence. But Sir Ed is at least right that his party is sleeping rather than dead. Dreaming of Keir One of the Lib Dems’ greatest strengths is that, third-placed in a Who cares? Even the Lib Dems’ strategists don’t expect more than first-past-the-post system, they are masters of disappointment. 30 seats at the next election. Yet the possibility of a Lib Dem revival Humiliation is part of their brand, as is the hope of a revival just matters, for the party is likely to take votes from the Tories. The Lib around the corner. Peter Sloman, of Churchill College, Cambridge, Dems have always been at their happiest when engaged in ground points to a historical parallel with 1970-74. They went into the 1970 wars with the Conservatives. Their new profile pits them even election with high hopes and ended up with just six seats. But then more directly against their old enemy. They have captured several they picked themselves up, winning a succession of by-elections Tory seats in a “yellow halo” around London such as Twickenham, and taking almost 20% of the vote in February 1974, thus helping St Albans and Richmond Park. Tim Bale, of Queen Mary College, eject Edward Heath from office. There are reasons to think that London, calculates that, in 23 of the 29 seats that they are well posi- they can repeat the trick. tioned to win, they are the main challenger to the Conservatives, The party’s new leader inherits some significant institutional with every other party a distant third. strengths. The Lib Dems came second in 91constituencies in 2019, Sir Keir and Sir Ed have a lot in common other than their rather compared with 38 in 2017 and 66 in 2015. They have more members embarrassing knighthoods: both recognise that they have a moun- than they have had for decades—120,000 compared with the Tory tain to climb and both are keen on the politics of competence rath- Party’s 150,000. There are about 90 Lib Dem peers, many of them er than culture wars. They also have much to gain from working to- with long experience in either central or local government or both, gether, at least informally. Labour needs the Lib Dems more than who can act as an ermine-clad think-tank. Sir Ed can also profit ever because, having lost its base in Scotland, it is unlikely to form from a couple of long-term trends. a government on its own. The Lib Dems see their future in detach- The first is the Labour Party’s move to the centre under Sir Keir ing the educated bourgeoisie from the Conservatives. Old-fash- Starmer. A centrist Labour Party sounds like bad news for the Lib ioned liberals have been dreaming of a Lib-Lab rapprochement for Dems, but historically the opposite has been true. The Lib Dems do decades. That vision—or mirage—is taking shape once more. 7 Europe The Economist September 5th 2020 25

France tiste Colbert, Louis XIV’s finance minister. In more recent times, as liberal orthodoxy The man with le Plan prevailed globally, it became the preserve of diehard French dirigistes, often to the disapproval of their German friends. The covid-19 pandemic, however, is now shift- ing the debate well beyond France. Short- ages of masks have called into question the PARIS wisdom of relying on global supply chains. President Emmanuel Macron revives a post-war institution for a post-covid era Overwhelmed hospitals have strengthened n 1946, as France emerged from the hor- relic. Until now. the case for investment in public health. Irors of war, Charles de Gaulle devised le On September 3rd, as The Economist Home-working and a fear of crowds have Plan to rebuild his battered country. Cen- went to press, the French government was reset the discussion about the geography tred on the theme “Modernisation or Deca- set to announce the resurrection of the and greening of the city, just as border clo- dence”, the first five-year plan identified mighty Plan. The first commissioner of the sures have thrown the travel, tourism and six industries—coal, electricity, steel, tran- revived bureaucratic body will be François aerospace industries into disarray. sport, mechanised agriculture and ce- Bayrou. A veteran centrist, he is the leader The point of resurrecting the Plan, says ment—on which France would construct a of MoDem, a party that is crucial to Presi- Mr Macron, is “to rediscover the sense of modern economy. “Modernisation”, de- dent Emmanuel Macron’s governing ma- the long-term” and make sure that govern- clared Jean Monnet, the first commission- jority in parliament. Mr Bayrou will not ment is not only about crisis management. er of the Plan (and later co-architect of join the government, but will report to it. To the relief of many, five-year plans will European integration), is a “state of mind”. State planning and the desire for auton- not make a comeback. But Mr Bayrou will Indeed in the French mind, the Plan was in omy in strategic industries have a long his- set out how France should prepare for large part to thank for the 30 years of pros- tory in France, reaching back to Jean-Bap- 2030: how to move towards a lower-carbon perity—les trente glorieuses—that followed. economy, invest in the right skills for to- The office of the Plan was not formally morrow’s world of work and strengthen lo- Also in this section abolished until 2006, but France has not cal industries across the country. drawn up a five-year plan for nearly 30 26 Belarus and Russia “The French Plan was never a Soviet- years. A successor body, known as France style plan,” says Jean Pisani-Ferry, an econ- 27 Germany’s envoy to Poland Stratégie, scarcely mentioned the word omist and former head of France Stratégie, Plan at all. From the mid-1980s, the forces 27 Mink in the Netherlands who cautions against caricature. In its ear- of liberalisation and globalisation increas- ly guise, the Plan was indeed about public 28 Charlemagne: The semi-political ingly turned the former institution and its investment in roads, railways, electricity European Commission focus on planning into a quaint historical and telecoms. But it also relied heavily on 1 26 Europe The Economist September 5th 2020

2 private-sector firms as well as on public Belarus and Russia enko be overthrown by popular protests. planning. The uncertainties of the post-co- He does not want to set a dangerous prece- vid-19 world, argue the new Plan’s defend- A distorted picture dent. The attempt to kill Russia’s main op- ers, require new thinking. “Planning hasn’t position leader, Alexei Navalny, shows just become part of the new orthodoxy,” says Mr how nervous the Kremlin is feeling. But Mr Pisani-Ferry; “but it’s no longer taboo.” Mr Putin has little desire to incur new Western Bayrou’s role will be one of reflection rath- sanctions by sending soldiers to save Mr er than execution. Bruno Le Maire, the fi- Lukashenko. (Sanctions may be forthcom- nance minister, remains firmly in charge MINSK ing anyway, following Germany’s confir- The information war hots up of public spending. mation on September 2nd that Mr Navalny Which is why it was no coincidence that t was the cables that gave them away. As was poisoned with a nerve agent similar to Jean Castex, the new prime minister, was Iforeign and local journalists in Belarus ones used in other Russian-sponsored as- due to launch the Plan on the same day that scrambled to report on the latest crack- sassinations, to which only state opera- he unveiled his €100bn ($119bn) stimulus down on peaceful protesters, one film crew tives could have access.) Helping Belarus package. This will be spent over two years, was always in prime position. Its members improve its propaganda is more deniable with two-fifths of the sum coming from the were untouched whenever police hounded and less provocative than sending troops. new European Union recovery fund. Part of other journalists, stripping them of their The change in programming wrought the idea is short-term: to keep businesses accreditation and deporting them. The by Russia is glaring. Before the information afloat and people in jobs during a deep re- camera cables that stretched past several takeover, Belarusian state tv offered a cession. The French economy shrank by a unmarked police minibuses led to the largely ineffective diet of Soviet and second massive 13.8% in the second quarter—less source of their protection: a white and world war mythology—more Belarus Yes- than in Spain but more than in Germany— green van belonging to Russia Today. terday than Russia Today. The newly ar- and is forecast to contract by 11% during Russia’s “green men”, unbadged sol- rived propagandists from Moscow have 2020. The government has already said, for diers sent to Ukraine after its revolution in wheeled out an arsenal of aggression and example, that it will extend for two years its 2014, are yet to make an appearance in Bela- divisiveness. Breathless news reports have generous furlough schemes, which have rus. But the Kremlin’s propaganda warriors started to warn of the havoc caused by prot- covered up to 12m people, albeit with a de- have already occupied its airwaves. Their ests in France and Syria. Coverage also creased state contribution. It has promised invasion was solicited by Alexander Lu- seeks to discredit and sneer at the local tax cuts for business. And Mr Castex has kashenko, Belarus’s embattled dictator, protests as creations of the West. Selective made an “absolute commitment” not to who has lost any claims to legitimacy first editing depicts them as feebly supported raise any taxes. by rigging the recent presidential election, yet violent—and doomed to failure. A new Yet the idea is also to turn the crisis into then by unleashing terror against the large legion of experts warns of the dangers of a an opportunity to increase and redirect numbers of his people who protested. split in Belarusian society. public investment. On the one hand, there Shocked by the violence of the security Mr Lukashenko, who has spent the past will be plenty of green measures (insula- services, workers in state-owned factories, two years rallying Belarusians around the tion of buildings, investment in hydrogen who were once Mr Lukashenko’s most solid flag and feeding his army and security ser- and research), as well as the expansion of backers, went on strike. Journalists for vices a yarn about Russia’s threat to the high-speed broadband and local infra- state television, normally obedient ser- country’s sovereignty, has abruptly structure. On the other, there will be a vants of the regime, walked out of their stu- changed his tune. He talks these days about boost for skills, apprenticeships and train- dios in protest. Desperate to look more in one fatherland stretching from Brest, a city ing, particularly for the young. Unlike Ger- control, Mr Lukashenko appealed to Rus- in Belarus’s west, to Vladivostok in Russia’s many, France will focus less on demand- sia’s president, Vladimir Putin, for help. far east. “We now have no other choice but led stimulus than on supporting business- Mr Putin cannot afford to let Mr Lukash- to fasten our boat to the eastern shore,” one es and investment. Thanks in part to senior and somewhat disoriented govern- government help, French consumers built ment official says, landlocked Belarus be- up savings during lockdown and incomes ing conspicuously lacking in shores. were broadly preserved. The hope is that, if But sprucing up state television’s news confidence returns, they will now start to reports in this way may not have the in- spend them. tended effect. The change is so sudden and Does all this add up to a u-turn for Mr so obvious that it risks further alienating Macron, a liberal centrist elected on a pro- citizens who have experienced a national mise to disrupt France? The word planning awakening in the past few weeks. The rush was unuttered during his election cam- of Russian-made propaganda might per- paign. Now, he has put reforms to benefits suade some wavering Belarusians against and pensions on hold and a bureaucrat, Mr taking to the streets, but it seems unlikely Castex, in charge of the government. Mr to change the minds of the hundreds of Macron says he is using the moment to “ac- thousands who are already there. celerate” his transformation of France, not The Belarusians who brave police vio- abandon it. The reforms, he insists, will lence do not watch state television, but rely eventually resume. It may be that the old- instead on social media and messenger fashioned feel of the Plan is deliberate: not groups, such as Nekhta (Someone), a Tele- because it heralds a return to five-year gram channel run by young Belarusians plans, but because it aims to tell the French from neighbouring Poland. It has quickly that, despite the pandemic, the govern- clocked up over a billion page views. Being ment is still in control. “My philosophy,” told by Russia that they are mere extras in a says Mr Macron, with a nod to Monnet, is Western plot will make the protesters all “the transformation, the modernisation of the more determined to prove themselves the country; it cannot stop.” 7 The truth is out there leading actors in an historic drama. 7 The Economist September 5th 2020 Europe 27

Germany’s envoy to Poland perienced diplomats, who had previously have an easy start in Warsaw. He will deal served as a well-liked ambassador to the with Zbigniew Rau, the new foreign minis- Not much of a Czech Republic. The standoff started to at- ter, an ardent supporter of pis who has vir- tract international attention. On the eve- tually no experience in foreign policy. They welcome ning before the 81st anniversary of the Nazi will need to work through complex dis- invasion of Poland on September 1st the putes such as Nord Stream 2, a gas pipeline Polish government at last held out an olive from western Russia to north-eastern Ger- branch. Szymon Szynkowski vel Sek, Po- many backed by the Germans but bitterly BERLIN land’s deputy foreign minister, announced opposed by the Poles. He will also try to re- A low point in German-Polish relations the agrément of the new envoy, but not vive the French-German-Polish “Weimar ven jacek czaputowicz, the outgoing without referring to a special Polish sensi- triangle”, once a constructive forum for po- EPolish foreign minister, called the delay tivity related to “a great unhealed wound in litical and military discussions. And he “strange” in an interview on August 31st the minds of the Polish nation” caused by will clearly have to set aside a lot of time to with Rzeczpospolita, a Polish daily. For the crimes of the second world war. be hectored about the horrors that Ger- three months Arndt Freytag von Loringho- Mr Freytag von Loringhoven will not many once inflicted on Poland. 7 ven was waiting in his apartment in Berlin for his agrément (official diplomatic ap- Animal rights in the Netherlands proval) as German envoy to Warsaw, usual- ly a swift formality. The order to procrasti- nate came reportedly from high up: Not fur sale Jaroslaw Kaczynski, chairman of the ruling Law and Justice (pis) party, and Poland’s de AMSTERDAM Covid-19 brings Dutch mink farming to an end facto leader, opposed Mr Freytag von Lo- ringhoven’s appointment because his fa- nimal-rights activists often com- hands who tended them were diagnosed ther served as a military officer in Hitler’s Aplain that cute beasts get more sym- with covid-19. Genetic tracing showed bunker during the last months of the sec- pathy than equally deserving ugly ones. that at least two workers had probably ond world war. (Bernd Freytag von Loring- If so, one would think a cuddly critter been infected by mink, rather than the hoven was never charged with any war like the mink would be easy to protect. other way around. The contaminated crime.) Yet in the Netherlands, mink are the only animals were destroyed and stricter It is not the first time Mr Kaczynski has animal that can still legally be farmed for hygiene rules imposed, but by summer sought a confrontation with Poland’s their fur. That is about to change. On the virus had spread to a third of the neighbour and biggest trading partner. He August 28th the government brought country’s farms. In June parliament has accused Germany of scheming to re- forward to March a ban on mink-farming voted to shut down the industry as soon cover land it lost to Poland after the war and that had been scheduled to take effect in as possible, and the cabinet agreed. Angela Merkel, the German chancellor, of 2024. The timetable was sped up not That was a win for the Dutch arm of being a pawn of the Stasi, the former East because mink had become more ador- Party for the Animals, which has four German secret police. Radek Sikorski, a for- able, but because they can contract co- seats in the150-member parliament. In mer Polish foreign minister whose tenure vid-19 and spread it to humans. 2013 it helped pass the law that gave mink was marked by improved relations with Dutch farmers normally raise about farmers until 2024 to get out of the busi- Germany, says Mr Kaczynski’s party called 2.5m mink a year, making the Neth- ness. Now the party and its allies object him a “junior German foreign minister” erlands the world’s fourth-largest pro- to the lavish compensation the govern- after he said in a speech in 2011 in Berlin ducer after Denmark, China and Poland. ment has offered for bringing forward that German inaction was scarier than Ger- In April a clutch of mink and the farm the deadline: €150m ($178m), or €1m- mans in action. (The speech was an appeal €1.5m per farmer. Some mps allege that to save the euro.) The pis, which was then the compensation paid for destroying in opposition, also tried to get Mr Sikorski the infected minks was higher than the sacked from his job. market price for their fur. In the past few months Andrzej Duda, Fur farmers say modern standards Poland’s recently re-elected president, allow mink to be raised humanely, and joined in, with tantrums fanning anti-Ger- that they are not a big reason for the man feeling that play well with older voters spread of the virus. But mink are solitary in the less prosperous eastern provinces of predators; animal-rights advocates say Poland, a pivotal pis constituency. Mr Duda they cannot be raised humanely in railed against German interference in the stacked cages. As for covid-19, the worry presidential election campaign in favour of is that mink could serve as a reservoir for his opponent, in particular by Fakt, a tab- it to evade human immunisation pro- loid owned by Ringier Axel Springer, a Ger- grammes. The industry’s turnover is man-Swiss publisher. He singled out Phil- modest (farmers put it at €150m-200m, ipp Fritz, a correspondent for Die Welt, a activists at under €100m), and polls show German daily, who had suggested that Ra- the public overwhelmingly opposes it. fal Trzaskowski, Mr Duda’s rival, would “In a democratic country, that wide- bring calm to German-Polish relations be- spread conviction has to translate into a cause he was unlikely to make astronomi- political decision to ban fur farming,” cal demands for reparations for the ravages says Esther Ouwehand, leader of the of the war. Party for the Animals. The farmers accept The German government did not with- they are shutting down. The remaining draw the appointment of Mr Freytag von Free at last argument is over money. Loringhoven, one of the country’s most ex- 28 Europe The Economist September 5th 2020 Charlemagne Politicians or technocrats?

The contradiction at the heart of the European Commission whether it is a political entity or a technocratic one. It often ends up doing an awkward impression of both. What began as an inde- pendent monitor overseeing the dreary business of coal and steel production now helps to determine its members’ budgets. The politicisation of the commission became more explicit under Jean-Claude Juncker, its previous head. This mindset still prevails internally. Decisions such as whether to punish a country for over- spending are inherently political, runs the argument. Pretending that they can be dealt with by neutral technocrats is absurd. “There has to be political ownership,” says one official. “It can’t be about numbers into a calculator.” At the same time, there are some areas, such as competition policy, that are for the most part left un- touched by politics—a status that must be taken on trust by voters and national governments. Not all are happy with this compromise. During the long nego- tiations over a €750bn ($890bn) recovery fund for the eu this sum- mer, one of the main sticking-points was a lack of trust in the com- mission. Allowing countries such as France, Portugal and Spain leeway in their budgets may have been popular in Europe’s south, but it upset Dutch politicians, for whom the calculator approach is just fine. Politicisation throws up conflicts of interest, critics ar- gue. The commission is the first responder if a member state he economist is fond of handy descriptions. Sometimes, we shows signs of drifting from democratic norms. Yet Viktor Orban, Tadmit, they can be a bit obvious (“Xi Jinping, the president of Hungary’s prime minister, who has enthusiastically dismantled China”; “Goldman Sachs, a bank”). Occasionally, they aim to checks and balances, has been sheltered in part by belonging to the amuse (“Homer Simpson, an American philosopher”, or “Popeye, a European People’s Party (epp), the same European political alli- sailor man”). But coming up with one for the European Commis- ance as Mrs von der Leyen and her two predecessors. sion is distinctly tricky. Though the principle of the commission’s independence is After all, the commission does a bit of everything. It is the clos- constantly proclaimed, party politics is never far from the surface. est thing the eu has to a government, putting forward legislation Mrs von der Leyen owes her job to her membership of the epp. Jobs (which then has to be approved by the European Parliament and in the commission are carefully divided along partisan and na- national ministers). It has the trappings of one, too: Ursula von der tional lines. But if this is acknowledged, complaints follow. In July Leyen, its president, will give a state-of-the-union address in front a two-second appearance by Mrs von der Leyen in a political video of the Parliament later this month. At times the commission is a for Croatia’s centre-right governing party—part of the epp—trig- referee, ensuring both business and governments follow eu rules. gered a row in Brussels. When the commission is involved, Euro- Sometimes it is a broker, forging compromise between sparring pean politics resembles a scene in “Doctor Strangelove”: “Gentle- member states. From the perspective of some national capitals, it men, you can’t fight in here! This is the War Room!” Nationality is a civil service, following the agenda of the European Council, the still matters, too. Commissioners are supposed to leave their pass- club of eu leaders which settles the political direction of the bloc. ports at the door, but the subtle scrap among member states for Mr Bureaucrats in Brussels should be little more than dry technocrats, Hogan’s powerful job (and Irish despair at having potentially lost in this view. Different descriptions lead to different expectations— it) suggests otherwise. and different types of annoyance when they are not met. Boiled down, it is an issue of politics versus technocracy. On a commission These tensions came to a head in the case of Phil Hogan, Ire- Those who dream of a return to technocracy are out of luck. If poli- land’s commissioner and the eu’s trade chief, who resigned last tics follows money, then the commission will become more politi- month. During a trip home, Mr Hogan attended a lockdown-bust- cal. It will oversee the issuance of €750bn in collective debt and ing dinner with lots of golf-loving Irish bigwigs. For a political monitor how the proceeds are spent. That will leave the eu itself body, such as Ireland’s government, the response was obvious: with a bigger stack of debt than any of its member states bar Italy, voters were baying for blood and had to be sated. An Irish minister France and Germany. But politics without democracy is not ideal. who attended the banquet resigned, while guilty senators lost the The experiment of allowing the European Parliament to pick the whip. For a technocracy, it was more complicated. Brussels is sup- commission’s president, in effect, was aborted last year after eu posed to be above national politics: Irish voters may have been up- leaders balked at Manfred Weber, the German mep the system put set about the actions of “Big Phil”, but most Europeans could not forward. Instead, Mrs von der Leyen got the job after much hag- pick the six-foot-five-inch politician out of a line-up. Commis- gling, as was customary when the commission was a more techno- sioners such as Mr Hogan can be sacked only by Mrs von der Leyen. cratic institution. When appointing the head of a civil service, the If she had heeded Irish calls, the commission’s independence lack of a democratic mandate does not matter; when selecting the would have been damaged; if she had ignored them, she would head of a de facto government, it does. Working out which role to have looked contemptuous of voters. Luckily, Mr Hogan jumped, embrace is essential if the commission wants to avoid impossible sparing Mrs von der Leyen a difficult choice. expectations. Until then, it will have to live with an unflattering Such problems are common in a body that cannot decide description: a contradiction. 7 United States The Economist September 5th 2020 29

Swing states quire knife-edge victories in the Midwest. He has consistently trailed Joe Biden, his The suburban strategy Democratic opponent, by five percentage points in Wisconsin since May, notes Charles Franklin, who runs polling at Mar- quette University Law School. The president’s re-election campaign has noticed and alighted on a new strategy CEDARBURG, WISCONSIN, AND WASHINGTON, DC to court the suburbs again. The campaign Donald Trump tries out law-and-order talk on suburban voters has clothed itself in the Nixonian garb of n the most genteel suburbs around Mil- ulation was 94% white at the last census. “law and order”, alleging that the protests Iwaukee, in southern Wisconsin, the The barista says many folk avoid visiting against racism in American cities, which quaintness can be overpowering. Enor- Milwaukee, the large and much less white have recently become violent again, are but mous baskets of flowers hang from metropolis just 30 minutes away, fearful of a preview of “Joe Biden’s America”. For evi- Victorian-style street lamps along the its reputation for crime. dence he pointed to nearby Kenosha where main street of Cedarburg, a riverside town Ozaukee and the other similarly popu- looting, arson and two murders have fol- in Ozaukee County. Tourists, caught in a lous, wealthy and twee counties west of lowed the shooting by police of Jacob Blake, summer downpour, may choose to take Milwaukee are usually comfortable terrain an unarmed black man. A man who may their shelter with a chocolatier, a cake- for Republicans. High turnout and high well have been a supporter of Mr Trump, in maker, two wineries or a French bakery. margins typically counterbalance Demo- turn, was also shot dead in Portland, Ore- Cedarburg is also an avowedly conser- cratic voters in the cities. But the suburbs gon, at the weekend. vative place. In the previous presidential now look rocky for Mr Trump’s re-election The coded, racialised appeal is not diffi- election, the county preferred Donald chances, which, just as last time, may re- cult to decipher. To make it even clearer, Mr Trump by a margin of 19 percentage points. Trump has also taken to arguing that Although a poster for Black Lives Matter Democrats plan to “destroy our suburbs” by Also in this section adorns the front door of one shop—a pur- building public housing and inviting veyor of colourful socks—a worker whis- 30 Polls and nerves crime—an effort he for some reason insists pers that it has provoked several com- will be spearheaded by Cory Booker, a black plaints. One customer called to say he 31 NYC’s MTA senator from New Jersey. On September 1st would never return because of it. Another 31 Inclusivity v fairness Mr Trump visited Kenosha, praising the declared it offensive (even here, cancel cul- police and arguing that Democratic mayors ture reigns). Locals exist in a “Cedarbubble” 34 Lexington: It’s the covid-economy, and governors across the country are soft says a young barista nearby. The city’s pop- stupid on looters. He compared the upheaval 1 30 United States The Economist September 5th 2020

2 there to “domestic terror”. Earlier, when Polls and nerves asked about the white teenager charged with killing two protesters and injuring an- other in Kenosha, who has become a cause Shorting volatility célèbre among some conservative media hosts, the president suggested he had acted WASHINGTON, DC How much do polls move after Labour Day? in self-defence. Promises to restore law and order might here’s a reason that the period from now. Joe Biden therefore has past perfor- seem more persuasive coming from an in- TLabor Day to election day is consid- mance on his side. surgent outsider than from an incumbent ered the home straight in a presidential Mr Trump’s odds have improved in president. When Mr Trump took office in contest. Robert Erikson and Christopher betting markets, suggesting that many 2017, he pledged “I alone can fix it,” and Wlezien, two political scientists at Co- think the combination of the Republican promised an end to “American carnage” in lumbia University and the University of National Convention and the protests in his inaugural address. Now he argues that Texas at Austin, have studied the history Portland, Kenosha and elsewhere are the explosion of urban violence under his of American election-polling since 1952 working in his favour. That in turn sug- administration is proof of Democratic mis- and found that the leader in the polls one gests they expect a lot more volatility in management and the need for him to have week after the second party convention the polls than has ever been seen before. a second term. Some accept the argument. has always won the popular vote. Two Going back to 1948, how wildly polls According to a poll released by YouGov on candidates have trailed in the polls have changed in the first seven months August 28th, 32% of adults believe re-elect- around Labour Day, then won in the of the election cycle helps explain how ing Mr Trump would make the country saf- electoral college: George W. Bush in 2000 much they vary in the last three. The er (though a plurality, 43%, think he would and Donald Trump in 2016. In both cases standard deviation of the average of make it less safe). the polls were much tighter than they are national polls—a measure of how much Can such a strategy work? Some com- they jump around from day to day—over mentators, perhaps scarred by the last con- the first two-thirds of the election cycle test where Hillary Clinton seemed to be the VIX for politics has explained 50% of the variance in the heavy favourite throughout, already spy a United States, average error between Democratic last third (a perfect relationship would be polling bounce for Mr Trump. At least in the vote margin in polls and final election results 100%). Polls in the last third of the cam- national polls, the purported bounce looks Percentage points paign have tended to be about 40% as quite dainty. His vote share has increased 12 volatile as the first two. by one percentage point, from 45% on June Mr Trump’s poll numbers have been 17th to 46% in The Economist’s average of 1948-2016 9 low and stable. Mr Biden’s numbers have presidential-election polls. Some of that moved with a historically low standard- bump came in the week after the party con- 6 deviation of 0.9 percentage points so far. vention—when incumbents usually enjoy Mr Trump is a known quantity. Few a real, if ephemeral, boost in support dur- 3 voters are yet to make up their minds ing the post-coronation bliss. 2000-16 about him and political polarisation has Previous racial unrest has not been es- 0 decreased the share of true swing voters pecially kind to the president. According to 200 150 100 50 0 in the electorate. A bet on volatility in the our maths, Mr Trump experienced the Days until election day polls is therefore highly contrarian. worst three weeks of the campaign after Sources: Will Jennings and Christopher Wlezien; The Economist History is on the side of the herd. George Floyd was killed by police in Minne- sota on May 25th. His deficit in the polls ballooned then from seven points to 11 the president’s handling of covid-19. Many out Matt Mareno, the Democrats’ party points in a relatively short span of time. disapprove of his approach to race rela- chairman in the county. If Mr Biden could It is still too early to determine how tions, although they still trust him on the match her result, then he predicts “it’s large Mr Trump’s national bounce will ulti- economy. For weeks, polls have shown game over” in the state. mately be, or whether it will subside. So far, public support for Black Lives Matter to be So far, Republicans have cheered the the president’s average support over the slipping. In Wisconsin, approval peaked at new suburban strategy. “The more chaos course of the election has been both low 61% in June before falling to 48% in August. and anarchy and vandalism and violence and the most stable on record. And since It may be even lower now. So far, however, reigns, the better it is for the very clear the national election will not be decided by Mr Franklin has seen no evidence of that choice on who’s best on public safety and the popular vote but by the electoral col- shift affecting overall support for either Mr law and order,” said Kellyanne Conway, a lege, if he ekes out a victory again this time, Biden or Mr Trump. close adviser to the president, in a televi- it is likely to come by a similar route. The foot soldiers feel the strain. “We’re sion interview. Mr Dittrich also applauds At the state level, our election model- ground zero, we’re under the gun,” says the new approach. He says he has received ling finds Mr Trump’s position in the Mid- Terry Dittrich, the Republican chairman in a surge of texts, “general feedback” and west has improved relative to his June low. neighbouring Waukesha County—the bell- (unspecified) polling evidence in the past Whereas he was down 11points in Michigan wether county for election-night pundits. week to suggest voters are startled by the two months ago, he is down just six now; in Should Mr Trump fall short here, “the rest urban violence and are flocking back to Mr Wisconsin, an 11-point hole is now a six- of the state has to make up for that”. Mr Dit- Trump. Kathy Broghammer, the Republi- point one; and the president is down just trich admits there has been a wobble of can party chairwoman in Ozaukee County, five points in Pennsylvania, up from nine late. The Republican Party typically expects is even more enthusiastic, pointing to a earlier this year. These are still significant to scoop 65-70% of votes in his county. In surge in interest among Republican volun- deficits, but the trend is certainly looking the midterms, in 2018, the Democrats’ vic- teers because of “the threatening feeling up for Republicans. torious candidate for Senate, Tammy Bald- we see in Kenosha”. “We love our law and Mr Franklin, the Wisconsin pollster, is win—an openly gay war hero—scooped a order,” she says. “People are saying, by golly also cautious. Older voters are dismayed by heady 38% support in Waukesha, points I’m gonna roar.” 7 The Economist September 5th 2020 United States 31

NYC’s MTA bear the brunt of higher fares. The system has long had fiscal pro- Train wreck blems. Little more than a decade after it opened in 1915, it faced a crisis when infla- tion raised operating expenses for the priv- ate companies then running the subway. After the second world war, New Yorkers NEW YORK abandoned the subway for cars. During the When America’s biggest transit system 1960s and 1970s the system was not well is in trouble, so is the city maintained, which caused delays and dis- efore the pandemic, packed subway ruption. Every surface was covered in graf- Bcars were signs of the vitality of New fiti. Crime was rife. Even before the pan- York City. Squeezing into a packed carriage demic the mta was paying nearly 20% of its just as the doors closed was the norm until operating budget on debt service and its in- mid-March. By the time a train reached frastructure was crumbling, with some of Manhattan people would be wedged in, its signal systems dating back to the 1930s. shoving past each other to leave. It is diffi- In the past few months the mta has cult to imagine anyone enduring that been downgraded by various credit agen- crush now. Yet it is also hard to see New cies, which makes borrowing more expen- York truly bouncing back without it. “The sive. The agency is not allowed to file for subway is the barometer of New York,” says bankruptcy and is required by law to bal- Tom Wright, head of the Regional Plan As- ance its books. In the past it has turned to sociation. “If the transit system falls apart, the city and state for help, but they are New York will not recover.” Cleaned out cash-strapped, too. New York’s officials say The system is on the verge of financial Congress should help, since if New York collapse. Pat Foye, chairman of the Metro- the transit authority’s aggressive disinfect- does not recover, the whole country will politan Transportation Authority (mta), ing. Service cuts could deter them from suffer. Senate Republicans have not been the state entity in charge of the subway, commuting regularly. There is anecdotal sympathetic, however. Congress gave the buses and regional commuter lines as well evidence that those who fled from the city beleaguered agency $4bn in May as part of as some bridges and tunnels, painted a are not returning. Many may drive back in, the cares Act, but the mta had spent all bleak picture at a recent board meeting. increasing congestion. A decrease of 10% that by July 24th. The agency is losing $200m a week because in subway passengers means an increase of It may start to make cuts in November. fare revenues, tolls and subsidies are all more than 30% in road traffic, says Nicole If Joe Biden wins, it may get a little more down, while the mta is shouldering new Gelinas of the Manhattan Institute, a New time. But delaying track upgrades and sig- pandemic-related expenses (mostly shut- York think-tank. “If you are not investing nal systems will cause problems fast, ting down the normally 24-hour subway in your capital asset, if you are driving which will further hobble the city’s recov- for nightly cleaning). Passenger numbers away ridership with service cuts, you are ery. “New York without its subway system,” collapsed as covid-19 spread and have risen just accepting much, much lower revenues says Philip Plotch, author of “Last Subway” only modestly as New York City has re- for a long time,” she adds. All that leaves and a political scientist at Saint Peter’s Uni- opened. On August 31st 1.4m straphangers people who depend on the transit system, versity in Jersey City, “is like a skyscraper rode the subway, but that was still 75% be- such as shift workers and shop workers, to without an elevator.” 7 low a typical weekday in 2019. The pan- demic has taken a greater toll even than the Great Depression; passenger numbers de- Inclusivity v fairness clined by only 12% in 1929-33. The mta hopes for $12bn in federal Vitrix ludorum funding to get through this year and next. Without help, Mr Foye will be obliged to take “draconian measures”, which will be felt across the city and the region for de- cades. He spoke of a 40% reduction in sub- way and bus journeys and a probable re- WASHINGTON, DC The battle over transgender athletes and schools sports duction of up to 50% in services to the suburbs. Long-promised capital projects smee silverman feels unusually ner- dents can play sports as the gender with will be delayed or suspended. Fares and Evous about the prospect of trying out for which they identify. Policies on this vary tolls will go up and the agency will lay off her high-school girls’ tennis team this au- from state to state. While more than a doz- 8,400 employees, who have already had a tumn. That is not surprising: last year, she en have introduced guidelines like those in tough time. Thousands of mta workers played for the boys’ team. For the past ten Massachusetts, which also allow trans stu- were infected with covid-19, more than 130 months the 18-year-old has been taking a dents to shower and change with members died and many lost family members to the combination of oestrogen and testoster- of their chosen gender, 11 states have poli- virus. Mr Foye repeatedly drew parallels one blockers as she transitions to becom- cies that prevent this. Some say birth certif- with the 1970s, when New York City sought ing a woman. “It’s a big emotional shift go- icates are the final arbiters of sex; others, a federal bailout to avoid fiscal collapse and ing from one team to another,” she says, that transgender students must first have hundreds of thousands of residents fled. adding that she expects it to be made easier had gender reassignment surgery (which is When, and if, office workers will return by the kindness she has been shown by generally restricted to over-18-year-olds). to Manhattan is uncertain. Many have not girls her age. As an increasing number of teenagers re- swiped their MetroCard for six months. Ms Silverman is fortunate to live in ject the sex they are born with, these clash- Most are afraid to use the subway, despite Massachusetts, where transgender stu- ing approaches are sparking court cases. 1 32 United States The Economist September 5th 2020

2 In Idaho, the American Civil Liberties der boys, meanwhile, often attest that it be- men, biological or otherwise”. Union is battling a statewide law that bans comes easier to compete against males Doriane Coleman, a law professor at transgender women and girls from female once they have had “top surgery” (a mastec- Duke University, observes that it is “ex- sports teams. They are representing Lind- tomy) and taken testosterone. tremely difficult” to get the support of any say Hecox, a transgender woman who was Yet transgender activists argue that the civil-rights group for an agenda that does denied a chance to join the women’s cross- law should regard transgender men and not include trans women in its definition country team at Boise State University. Last women as members of the gender with of women. That is why the female athletes month, a federal judge issued a temporary which they identify. They say it is discrim- in both Connecticut and Idaho are repre- injunction on that law. inatory to exclude transgender women sented by the same conservative Christian In Connecticut, three female high- from women’s sports as well as deeply organisation, the Alliance Defending Free- school athletes are challenging the policy hurtful, especially for those at school. dom (adf). (Ms Coleman points out that of the state’s interscholastic athletic con- “This debate frames these high-schoolers the adf also has first-class lawyers.) In ference, which allows transgender girls to as Olympians,” says A.T. Furuya, the youth Britain, by contrast, the battle to preserve compete against females. They argue that it programmes manager at glsen, which women’s spaces, from lavatories to pri- violates Title IX, a law passed to protect campaigns for the rights of lgbt school sons, is largely being fought by feminists. equal educational opportunities for the students. Furuya, a former high-school The fact that progressives appear to sexes, including in sports. In March the sports coach and one of a handful of people have largely ceded this issue to conserva- civil-rights division of the Department of in America to have obtained “non-binary” tives reflects the way such issues have be- Education said it did violate Title IX. as their legally designated gender, adds come polarised in America. In many coun- These cases highlight the often irrecon- that “These are kids who just want to play.” tries, those who suggest that the law cilable nature of transgender rights and should not regard trans women as women women’s rights. Those opposed to the in- American exceptionalism in all respects are denounced as trans- clusion of transgender women in women’s A similar debate is raging across the rich phobic; in America, such attacks are partic- sports argue that it is unfair to allow people world. World Rugby, which currently fol- ularly aggressive. Though polls suggest who have gone through puberty as men, lows the International Olympic Committee that a majority of Americans believe that and who tend to be bigger, stronger and guidelines that allow transgender athletes trans women should not play in women’s faster, to compete against women. to compete in women’s events if their tes- sports teams, this is a view that is rarely Connecticut offers a vivid example of tosterone levels are below a certain level, is heard publicly. this. Since 2017 two transgender athletes— considering banning trans women from “Our discussion about this topic is in- biological males who identify as women— the women’s game. That is partly because sane—you can’t talk about it at all,” says have between them won 15 state champion- of fears that transgender women players Natasha Chart, a board member of Wom- ships that were once held by nine different could injure their teammates. en’s Liberation Front, which describes it- girls. When they started racing as girls they Strikingly absent from the discussion self as a “radical feminist organisation”. had not begun hormone treatment. But re- in America are women’s groups standing “You face so much social opprobrium for search suggests that even those who have on the women’s side of the issue. Instead, speaking out that people don’t want to gone through testosterone suppression re- many long-established women’s groups touch it.” tain advantages of strength and muscle have aligned themselves with the trans- How will the courts adjudicate? A land- mass. “It is so demoralising, running for gender movement. “Transgender girls are mark ruling on lgbt rights by the Supreme second place,” says 16-year-old Alanna girls and transgender women are women,” Court may offer a clue. In June, America’s Smith, a highly competitive sprinter and reads a statement from several rights highest court ruled in Bostock v Clayton one of the girls challenging the state policy. groups in Connecticut, including the state County that gay, lesbian and transgender “I worry that women are going to become chapter of Planned Parenthood. “They are people were protected under Title VII of the spectators of their own sports.” Transgen- not and should not be referred to as boys or Civil Rights Act, which bars discrimination in employment because of sex. That has raised the question of whether this reason- ing could also be applied to Title IX. Several lower courts have suggested it could. In August the judge who issued a temporary injunction on Idaho’s ban on trans athletes in women’s teams, cited Bos- tock. The same month, a federal appeals court ruled that school policies that forbid transgender students to use the lavatory of their gender identity violate the law. That judge said Bostock had guided his evalua- tion of claims under Title IX, because Con- gress had intended it and Title VII to be in- terpreted similarly. Yet in Bostock, the Supreme Court ex- plicitly said it was ruling only on discrimi- nation in employment; it was not attempt- ing to address “bathrooms, locker rooms, or anything else of the kind”. This qualifi- cation suggested that the justices expect to consider such questions in the future. However the courts in Connecticut and Idaho rule, the issue seems likely to end up Fair enough? at the Supreme Court. 7 EXCLUSIVE LIVE DIGITAL EVENT Thursday September 10th, 12pm edt / 9am pdt / 5pm bst

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Contrary to what some fearful Democrats believe, law-and-order looks unlikely to decide this election treating it as not merely a public-health crisis, but also an inextri- cably connected economic one. “We will never get our economy back on track…until we deal with this virus,” the former vice-presi- dent told the Democratic convention last month. That was shrewd on two counts. First, because it linked the two issues that voters care about most—notwithstanding Mr Trump’s fiery rhetoric, even Republicans are more worried about the pan- demic and the economy than they are about violent crime. Second, because Mr Biden is in effect trying to use Mr Trump’s biggest weakness, his acknowledged failures on the coronavirus, to un- dercut his biggest remaining strength: a diminished, but some- how enduring, reputation for effective economic management. The economy is the only issue on which Mr Trump outpolls Mr Biden. For that matter, it is the only issue on which he has consis- tently out-performed his low approval ratings ever since his in- auguration. Founded upon his years as a tv boardroom titan, as well as his more recent success in spinning the strong economy he inherited as his creation, Mr Trump’s reputation for economic wizardry was the single main reason he had looked highly compet- itive before the coronavirus struck, despite his unpopularity. With the unemployment rate now at 10%, the gap between how Americans rate the president on the economy and overall has hortly after George Floyd was killed by a Minnesotan police- shrunk significantly. According to Gallup, 48% of Americans ap- Sman last May, Joe Biden condemned the riots that his killing prove of him on the economy, while 42% approve of him overall. had sparked. “Protesting such brutality is right and necessary,” he That is the main reason he now looks much less competitive. Yet in said. “Burning down communities and needless destruction is a closer election than the polls currently predict, this residual not. Violence that endangers lives is not.” He repeated his denun- strength could still save him. At the least, it appears to be Mr ciation several times over the next few days. President Donald Trump’s best hope. Trump meanwhile accused him of ignoring the issue. A survey of suburban voters in the swing states of Arizona, So it has continued. Though Mr Biden has more often expressed Michigan, North Carolina, Pennsylvania and Wisconsin—pub- support for the ongoing racial-justice protests against police bru- lished last month by Third Way, a think-tank—underlines that. tality, he has not failed to condemn the violent fringe that, in Ore- Though only 39% approved of Mr Trump, 48% said he was still gon, Illinois and now Wisconsin, continues to haunt them. “There making a decent fist of the economy. That might look like a losing is no justification whatsoever for violence, looting,” he said last hand. But the survey suggested that even a fairly modest uptick in week, after the shooting of Jacob Blake in Kenosha sparked yet the economy could move opinion in Mr Trump’s favour pretty dra- more rioting. The following day—at the Republican conven- matically. The respondents chose Mr Biden over Mr Trump by a tion—Mr Trump for the umpteenth time accused him of failing to nine-point margin. But asked how they would feel if the unem- condemn what Mr Biden had just condemned. ployment rate were to drop to 8%, they split their vote between the The hammering the former vice-president has taken on this is- two candidates. Given how likely that order of economic improve- sue—every evening on Fox News as well as from Mr Trump—has ment is over the next two months, this should worry Biden strat- unnerved some of his supporters. Some suggest a 1968-style silent egists rather more than the spectre of a 1968-re-run. majority, sickened by the violence, is building against the Demo- crats. It sounds plausible. But there is no strong evidence for it yet. From boardroom to bust That means the Democrats anxiously demanding that Mr Biden is- At the same time, the survey suggests Mr Biden’s effort to blunt Mr sue ever more and louder denunciations of the street violence are Trump’s economic edge—by offering a more expansive definition essentially taking their cues from Mr Trump and Tucker Carlson, of the coronavirus crisis—could succeed. A small majority of Third who do not have their interests at heart. Way’s suburbanite voters already attributed the economic crisis in The evidence of the past three months is that Republicans do part to Mr Trump’s poor management of the epidemic. A much not want to set Mr Biden straight on law-and-order. They want to larger majority said the economy could not be fixed until the virus see him hopelessly entangled in the issue—bullied into express- had been brought under control. Both views are anathema to Mr ing ever more forceful denunciations of the riots (as he did again Trump, who has shirked responsibility for the health crisis, even this week, in a speech in Pittsburgh), which they will duly dismiss as he claims to have a recovery from the economic crisis in hand. as “too little too late”. A better course for Mr Biden’s advisers would They appear to represent a clear opening for Mr Biden’s claim that be to consider what the canny Mr Trump does not want his Demo- the president is not only culpable for the crisis but incapable of cratic opponent to talk about. Could it be a public-health catastro- leading America out of it. phe, for which a majority of voters blame the president, which is It is his strongest attack-line and, though it is never wrong to predicted to take a quarter of a million lives by election-day? That denounce violence, he should not be swayed from it. With apolo- is a likelier conjecture. gies to James Carville, this election is about the covid-economy, Especially when you consider the promise of Mr Biden’s recent stupid. (Albeit that, with additional apologies to Bill Clinton’s oft- efforts to recast the politics of the coronavirus catastrophe: by quoted strategist, Mr Biden must not forget law-and-order.) 7 The Americas The Economist September 5th 2020 35

Also in this section 36 Canadian-American friendship — Bello is away

Brazil system, whose lavish benefits would have led to crippling debt. But Mr Guedes is vis- An increasingly prickly partnership ibly uneasy about the spending provoked by the pandemic. In late August two of his top aides quit, prompting a fall in the stockmarket and pushing the real to its lowest level against the dollar since May. Whatever happens to Mr Guedes, Mr RIO DE JANEIRO Bolsonaro’s presidency has entered a new The president’s pandemic spending unnerves the liberal economy minister phase. In its proneness to scandal, its cyni- air bolsonaro, Brazil’s president, ought position in Congress. His tiny Alliance for cal deal with Congress and its generosity to Jto be in trouble. His is one of the coun- Brazil, formed last November, has teamed poor voters, it is coming to resemble past tries worst affected by covid-19. It has had up with the centrão, a big bloc of centre- administrations. Mr Bolsonaro’s govern- nearly 4m confirmed cases, second only to right parties. That will help the govern- ment has “some similarities” to that of the the number in the United States, and ment pass legislation and, perhaps, shield left-wing Workers’ Party (pt), which gov- 123,780 known deaths. That is largely the him from impeachment. The centrão is erned from 2003 to 2016, says Arminio president’s fault. He has downplayed the blocking 49 impeachment motions stem- Fraga, a former head of the central bank. pandemic, railed against lockdowns and ming from the scandals and the mishan- No one would have said that before the promoted unproven cures. dling of the pandemic. pandemic. The government had trimmed A crusader against corruption before he But as Mr Bolsonaro grows stronger, his Bolsa Família, the pt’s flagship welfare pro- became president, Mr Bolsonaro is sur- commitment to keeping his promises be- gramme, which transfers cash to families rounded by scandal. One of his sons is the comes weaker. The alliance with the cen- that promise to send their children to target of a corruption investigation. The trão employs the grubby dealmaking that school and to clinics for check-ups. Last justice minister, Sérgio Moro, quit in April, Mr Bolsonaro once denounced. Friends of year the Bolsonaro government cut the accusing the president of interfering with centrão politicians have got plum govern- number of families enrolled by 1.2m to 13m. the probe. And yet Mr Bolsonaro is gaining ment jobs. Also in doubt is Mr Bolsonaro’s With the pandemic the penny-pinching political strength. The share of Brazilians pledge to reform the economy, which had has stopped. The government has spent who deem his performance “good” or encouraged some bankers and business- 213bn reais ($39bn), about 2% of gdp, on an “great” is 37%, its highest since he took of- men to overlook his authoritarian views. emergency handout of 600 reais a month fice at the beginning of last year, according Mr Bolsonaro, a former army captain, is to Brazilians who earn the minimum wage to Datafolha, a pollster. not an economic reformer by instinct. Eco- of 1,045 reais a month. That benefits 67m This is a side-effect of covid-19. While nomic liberals have put their faith in Paulo people, a third of the population. The Mr Bolsonaro has done little to contain it, Guedes, the economy minister (pictured payout lifted out of extreme poverty 72% of he has spent generously to shield poor Bra- left), who favours small government and families in that condition. Among the ben- zilians from its economic effects. At the free markets. He justified their confidence eficiaries are recipients of Bolsa Família, same time, he has strengthened his weak last year by helping to reform the pension who get a much larger sum than the pro-1 36 The Americas The Economist September 5th 2020

2 gramme’s minimum payment of 89 reais. Canada and the United States In the poor north-east, the pt’s heartland, the share of people who call the govern- ment’s performance “bad” or “terrible” fell Frontier friendship from 52% in June to 35% in August. The government has extended to De- VANCOUVER Two remote towns want the border reopened cember the emergency benefit initially meant to last three months (but will reduce ew american towns are as remote as shift ends at 4.30pm. Cameras and a it by half). Mr Bolsonaro wants to replace FHyder, a settlement of 65 people in the telephone connection to an agent some- Bolsa Família with his own Renda Brasil panhandle that juts south from the rest where else in Canada keep watch after (Brazil Income), a benefit that will unify all of Alaska between Canada and the Pacif- that. If Hyderites break the rules, “an social programmes. Its details are still ic. Its only road connection passes alarm and sirens would be set off and the vague. To give the economy an extra boost through Stewart, British Columbia, 2km rcmp [Royal Canadian Mounted Police] Mr Bolsonaro wants to borrow 5bn reais away. For generations, Stewardites and will be notified, and that’s just not the more this year to build infrastructure. Hyderites paid little attention to the thing we would do,” says Mr Loe. Pro-poor spending makes sense. The border. They celebrate Canada Day on Most Canadians are eager to keep economy shrank by 9.7% in the second July1st in Stewart, then move the party to Americans out. The United States’ co- quarter. It is the same size as it was 11years Hyder, “the friendliest ghost town in vid-19 infection rate is five times Cana- ago. Without the relief programme it Alaska”, for the United States’ Indepen- da’s. Canadians post pictures of suspect- would have shrunk more. The jobless rate dence Day three days later. Activities ed American intruders on social media. climbed to 13.3% in the second quarter include an ugly-vehicle contest and the Some in cars with American plates affix from 12% in the same period last year. “chicken-shit board”, in which bets are signs to their windows saying they’re But the prospect of big deficits worries placed about which square in a grid a Canadians returning home. From March Mr Guedes. The government is set to smash chicken will defecate on. Hyderites buy 21st to August 19th Canada turned away through a ceiling on spending, which is in- petrol and groceries in Stewart. Their 14,000 Americans from its borders. It scribed in the constitution. (A workaround telephone numbers use Canadian area allows Alaskans to travel home across can probably be found.) The primary defi- codes (250 or 778). Canada from the lower 48 states, but they cit, ie, before interest payments, jumped to The back-and-forth between the can enter in only five places and must $94bn in July from $6.5bn the year before. former gold-mining towns stopped in take the most direct route. It is expected to reach $147bn for the full March when the border between the two But Hyderites and Stewardites value year, 11% of gdp. countries closed because of covid-19. togetherness. Mr Loe and Gina McKay, Disagreement between president and Under a special dispensation, Canada Stewart’s mayor, want the towns to be minister flared in late August, when Mr allows Hyderites to go to Stewart once a able to form a bubble that would let their Guedes said the government should pay for week for four hours. That is not enough. citizens mingle freely. Alaska’s governor, Renda Brasil by cutting back other welfare Wes Loe, Hyder’s postmaster and un- Mike Dunleavy, and Taylor Bachrach, the programmes. Mr Bolsonaro rebuffed him. official mayor, would normally drive to Canadian mp who represents Stewart, He would “not take away from the poor to Terrace in British Columbia, 300km have lobbied the Canadian security give to the poorest”, he said. away, to stock up for winter, but the minister to let that happen. So far, they The two men seem to have reached a lockdown rules don’t allow that. Soon, have had no luck. “We’re two countries, truce. Mr Guedes may accept a breach of the the roads will be too dangerous. “Things two communities but for as long as spending cap if Congress acts to control fu- are deteriorating, and I mean emotional- anyone can remember, we’ve essentially ture spending, says Chris Garman of Eur- ly and mentally,” says Mr Loe. operated as one,” says Ms McKay. “We’re asia Group, a political-risk consultancy. The border is lightly policed. There is used to isolation up here but we don’t His other demand is reform of the tax sys- no American post. The Canadian guard’s want to be isolated from each other.” tem, which is among the most complex in the world. A mid-sized Brazilian firm typi- cally spends 1,500 hours a year dealing with tax, compared with 175 for an American firm, according to the World Bank. But reforming tax is as complex as tax- ation itself. One of Mr Guedes’s ideas—re- placing two taxes on company turnover with a 12% vat—would anger farmers, who have a powerful lobby, notes Marcos Cin- tra, the chief of the federal revenue service until September. Consumers would also object. Reform, if it happens, will be “a very noisy process”, says Mr Garman. Mr Guedes has apparently decided he can still do some good. After tax reform could come measures to reduce public-sec- tor employment and benefits. Perhaps. But Mr Bolsonaro has now seen that enlarging the state is more popular than shrinking it. As the presidential election approaches in 2022, the salience of that lesson will grow. Brazil’s experiment with economic liberal- It’s the isolation that has them spooked ism may prove short-lived. 7 Middle East & Africa The Economist September 5th 2020 37

United Nations peacekeeping in Congo 2022, largely because it is too expensive and has sputtered on for so long. President Blue helmet blues Donald Trump’s decision to cut America’s contributions to un peacekeeping has squeezed monusco’s budget to $1bn a year, almost a third less than in 2016. Yet condi- tions for the mission’s total withdrawal will plainly not be met by 2022, when Con- BENI go’s army is supposed to be largely back in The world’s largest peacekeeping mission has struggled to bring peace control. So monusco will probably be n the edge of Beni, a city in north- groups still hide there in the forests. They shrunk but will not leave altogether. Oeastern Congo, a field is strewn with survive by smuggling minerals, looting The peacekeepers are far from fulfilling bricks and broken glass. Three Malawian and extorting cash from the locals. their mandate to disband militias, protect soldiers, working for the un’s peacekeep- This year alone about 1m Congolese civilians and stabilise the state. Armed ing mission, known as monusco, lounge have been displaced by violence. Some of groups are multiplying. Few Congolese ci- under a tree amid the rubble. It is all that is the bloodiest fighting has taken place in vilians think the mission really protects left of monusco’s offices after they were Ituri province, where two rival tribes have them. According to a poll in 2018 by peace- burned down in November by locals furi- been clashing. Rebels have hacked at least a buildingdata.org, an American ngo, only ous that the mission had failed to protect thousand people to death with machetes, 15% of those surveyed said they trusted mo- them from rebels. “We have suffered years attacking 60 schools and raping children. nusco to keep their neighbourhood or vil- of massacres,” says one of those who took Even though the violence still rages (see lage safe. Still, with nobody else to turn to, part in the burning. “We see un soldiers all map), monusco is under pressure from the displaced people do often huddle around over town, but when the rebels are killing un Security Council to pack up and go. A re- monusco bases. us they never come.” port commissioned by the council last year At the best of times, bringing peace to The peacekeeping mission in Congo, says monusco should aim to be out by eastern Congo is a very tall order. The east- with over 16,000 soldiers and police, is the ern provinces are ten times the size of Swit- largest and third most expensive in the zerland. Much of the land is jungle. Murder Also in this section world. un troops have been in Congo since and mayhem can occur quickly at night, so 1999, when they arrived to oversee a cease- 38 Burkina Faso’s blighted elections by the time un soldiers arrive—if they do at fire in a civil war that had left between 1m all—the rebels have invariably melted back 38 Rwanda’s celebrated hotel manager and 5m people dead, thanks to bullets, ma- into the bush. “Whenever I see the blood- chetes and disease. For two decades the 39 Old colonial powers eye Lebanon shed, I always ask, where were we?” says mission has tried to pacify the country’s Leila Zerrougui, monusco’s head. “We can 40 Egypt goes after non-voters embattled east. Yet more than 100 armed never do enough.” 1 38 Middle East & Africa The Economist September 5th 2020

2 In any case, monusco can stay only as Elections in Burkina Faso long as the Congolese government wants it to. It is meant to work alongside the nation- Sacking the voters al army. Whereas Congo’s former presi- dent, Joseph Kabila, routinely threatened to kick it out, his successor, Félix Tshise- kedi, is keener to co-operate with it. Yet working with the army is tricky. Its unruly, Insecurity and a change to the electoral underpaid soldiers often collaborate with law risk disenfranchising millions rebels, selling them guns and tipping them off. Sometimes they kill and loot together. hat makes a national election na- Many former rebel warlords have been giv- Wtional? One answer is that everyone is en senior posts in the army in exchange for able to vote. But politicians in Burkina Faso surrendering their weapons. Their thugs disagree. With little consultation, the main tend to go on pillaging as before—but in political parties have voted to change the army uniforms. electoral code so that presidential and leg- “We cannot trust our soldiers and we do islative elections to be held in November not know who the enemy is,” says a villager will be deemed valid even if people are un- near Beni whose eight neighbours were able to vote in the vast tracts of the country rounded up and shot outside their houses that are plagued by jihadists. last year. He says the killers were uni- One mp, Aziz Diallo, describes the formed Congolese soldiers speaking Linga- change as an “attack on democracy”. An- No home and no vote la, the language of the capital and the army. other, Alexandre Sankara, says it “violates These murders took place barely a mile the constitution”. It is but the latest worry- out earlier this year were followed by mas- from monusco’s offices, sparking the prot- ing sign in a country at the heart of the fight sive anti-government protests and then a ests in which they were burned down. “No- against violent extremists in the Sahel. coup. ecowas, the regional bloc, has told body came to help. We were forgotten.” Only a few years ago Burkina Faso the soldiers running Mali to hand back To make matters worse, un troops in looked on the road to democracy after a power to a civilian administration and Congo have themselves often been accused popular uprising toppled its longtime dic- hold elections within a year. But the men in of violence. Dozens of women say they tator, Blaise Compaoré, leading to free elec- uniform want to stay in power for three have been raped by blue-helmeted soldiers tions in 2015. The first big setback was a years. When democracy falls, it is hard to in eastern Congo. Posters in monusco’s spillover of jihadist violence from neigh- restore. Burkina beware. 7 barracks remind un troops not to have sex bouring Mali that has intensified since with under-age women. 2018. More than 1,700 people were killed in Yet for all monusco’s faults, Congo the first half of this year in fighting that of- Rwanda’s celebrated hotel manager would probably be worse off without it. Its ten involved ethnic militias, up from about soldiers are more trusted than the Congo- 300 in the whole of 2018. Roughly half the We don’t need lese army. “In many places, peacekeepers country (mainly rural areas) has been over- are the only ones who are actually trying to run by armed groups, says Héni Nsaibia of another hero protect people,” says Séverine Autesserre, Menastream, a research consultancy. Over author of “The Trouble with Congo”. mo- 1m people, of a population of 20m or so, nusco’s civilian staff have documented have been forced to flee their homes. Paul Kagame’s regime grows more abuses by rebels and the army that would Many more than that may struggle to brazen in attacking its critics have gone unnoticed. Aid agencies rely on vote. In July 52 of 127 mps said it was not safe monusco’s planes and armed escorts to to campaign in their constituencies. Voters he last time Trésor Rusesabagina help them reach remote, beleaguered in the countryside are the most likely to be Tspoke to his father was on his birthday, places. If monusco leaves in a rush it will left out. In almost a fifth of villages no vot- when the latter called from his home in San leave a gaping hole that is bound to be filled ers have been registered at all. Polling sta- Antonio, Texas, to wish his son well. “He by rebels and predatory soldiers. 7 tions will probably be abandoned in many hadn’t been anywhere for ages because of more villages on election day, when the se- lockdown and I thought he was just hang- curity forces will be stretched thin. Mr San- ing out, watering his plants.” CAR SOUTH SUDAN kara reckons that people may be disenfran- On August 31st Trésor woke up to a wel- chised across five of Burkina’s 13 regions. ter of messages on his phone, asking if he’d In July politicians ruled out delaying heard the news. Paul Rusesabagina had just Ituri the elections because they feared that appeared in handcuffs at a press confer- Beni CONGO- UGANDA would deprive the government of legitima- ence in Kigali, Rwanda’s capital, hosted by BRAZZAVILLE Goma RWANDA cy. But ignoring the rights of millions may the Rwanda Investigation Bureau. The au- Bukavu be no better, particularly since those who thorities accuse him of founding and lead- CONGO BURUNDI will be unable to vote because of insecurity ing “armed extremist terror outfits” fight- Kinshasa TANZANIA are precisely those who have most reason ing the Rwandan state. Mr Rusesabagina to be angry with incumbent politicians. had told his wife he was flying to Dubai for What with widespread accusations of a meeting. How he ended up in Rwanda’s ANGOLA atrocities by the security forces, Burkina capital remains unclear. ZAMBIA Faso’s government could soon face a crisis For the former manager of the Hotel des 500 km of legitimacy much like the one that is tear- Mille Collines, the rendition is a nightmare Violence against civilians ing Mali apart. There, too, jihadists have come true. Since moving his family to Bel- Jan 1st-Aug 1st 2020, fatalities 1 10 30 overrun swathes of the countryside. Dodgy gium in 1996, where he applied for asylum Source: ACLED parliamentary elections with a paltry turn- before relocating to America, he had lived 1 The Economist September 5th 2020 Middle East & Africa 39

2 in anticipation of just such an event. “He’s Ever since a former Rwandan interior Lebanon always been paranoid about them arresting minister, Seth Sendashonga, was shot dead him, shutting him down, because he had a in Nairobi in 1998—an assassination for The sultan et le voice,” said his son, Trésor. “In Rwanda, to which disillusioned members of Mr Ka- have an opinion is a crime.” game’s intelligence apparatus have since président The film “Hotel Rwanda”, which starred admitted responsibility—the government Don Cheadle, made Mr Rusesabagina (pic- has shown the same readiness to ignore tured on the right) a celebrity in the West. It borders. In South Africa at least three at- BEIRUT Old colonial powers are bidding for showed how during the genocide of 1994 tempts have been made on the life of an ex- influence in Lebanon that claimed some 500,000 lives he shel- iled former army chief-of-staff, Kayumba tered 1,268 terrified Tutsis and moderate Nyamwasa, prompting the government to s celebrations go, it was sombre. A Hutus in the Mille Collines. A Hutu on joc- expel Rwandan diplomats suspected of ar- Acentury earlier French officials stood ular terms with the army generals and mili- ranging the attacks. In early 2014 Patrick in Beirut’s imposing Résidence des Pins tia leaders who masterminded the geno- Karegeya, a former external intelligence (the French ambassador’s villa) and carved cide, Mr Rusesabagina used charm, cigars chief, was found strangled in a Johannes- Lebanon out of their mandate in Syria. On and booze to buy time for the hundreds of burg hotel. Mr Kagame, who had known September 1st Emmanuel Macron travelled Tutsis who had taken refuge under his roof. both men since childhood, denies respon- there to mark the event—and to lecture the sibility. But the magistrate at Karegeya’s in- politicians who have helped turn Lebanon Silencing the critics quest ruled that the attackers were “di- into a failed state. Mr Rusesabagina’s pragmatic heroism won rectly linked” to Rwanda’s government. Lebanon has always been a plaything him a Hollywood film deal, international In February Kizito Mihigo, a gospel for foreign powers. America, Iran, Israel, praise and an admiring audience in Ameri- singer, died in Rwandan police custody. Saudi Arabia and Syria have all meddled in ca, which became a donor to the new gov- Friends reject official claims that the young the tiny country’s tortured politics. As Leb- ernment established by Paul Kagame, a for- man hanged himself. Last month a Congo- anon sinks into economic and humanitar- mer rebel leader. But the regime chafed at lese gynaecologist, Denis Mukwege, who ian crisis, two of its old colonial masters, Mr Rusesabagina’s outspoken criticism of won the Nobel peace prize for his work France and Turkey, are making worrying the Tutsi elite now running the country. He with rape victims, said he had had a stream bids for renewed influence. poured scorn on Rwanda’s rigged elections of death threats after calling for those re- This was Mr Macron’s second visit since and mocked what he saw as token attempts sponsible for human-rights abuses in the a massive explosion at Beirut’s port on Au- at ethnic reconciliation. “We have changed east of the Democratic Republic of Congo to gust 4th killed almost 200 people. The the dancers but the music remains the be held accountable. un reports accuse the prime minister, Hassan Diab, resigned same,” he wrote in a memoir. Rwandan army of committing mass atroc- soon afterwards. For weeks the president, On social media Mr Kagame’s backers ities there in the late 1990s. Michel Aoun, declined to consult parlia- are circulating a clip filmed in 2018 which A Rwandan human-rights campaigner, ment about a successor. But he abruptly appears to mark the moment when Mr Ru- Rene Mugenzi, who describes Mr Rusesa- summoned mps to meet on August 31st. sesabagina came out in favour of armed bagina’s arrest as a “kidnapping” since no Wags likened him to a child rushing to fin- struggle. “The time has come for us to use extradition hearing was held, sees the lat- ish his homework before daddy returned. any means possible to bring about change est operation as evidence of extreme intol- Mr Macron speaks for many when he in Rwanda,” he said, calling on Rwandans erance by a regime whose impressive eco- calls for political change in Lebanon, ruled to support the National Liberation Front, nomic development has never been for decades by a coterie of ageing, corrupt the armed wing of a coalition of opposition matched by a respect for human rights: men who deploy fear and exploit sectarian groups which included his own. “All politi- “The risk Rusesabagina represented to Ka- loyalties to stay in power. “The objective of cal means have been tried and failed.” game was reputational, not military. He this visit is clearly to mark the end to a po- His family insist the 66-year-old grand- could reach places in the American estab- litical chapter,” Mr Macron said. Yet the father never actually intended to incite vio- lishment that matter to Kigali. Now they man who will lead this new beginning is lence, which he abhorred. Anyway, the want to destroy his reputation in court.” 7 hardly a break from the past. The unexpect- much-hyped opposition coalition he was ed choice for prime minister was Mustapha part of has largely collapsed since he made Adib, Lebanon’s ambassador to Germany, the statement, suggesting he posed no real who won the support of 90 mps out of 128. security threat to Rwanda. For many, that very support makes Mr This makes Mr Rusesabagina’s rendi- Adib suspect. He is a political unknown, tion all the more surprising, given the in- but hardly an outsider. He advised Najib ternational condemnation it courts. The Mikati, a billionaire businessman who real motive may have been jealousy, says a served two stints as prime minister and is former confidant of Mr Kagame: “There can battling corruption charges. Mr Adib won only be one post-genocide hero in Rwanda the backing of Saad Hariri, another billion- and that’s Kagame. He wasn’t going to share aire ex-prime minister and the country’s the limelight with anyone.” leading Sunni politician. The two main The operation is the most brazen that Shia parties, Hizbullah and Amal, and Mr his government has launched against per- Aoun’s Christian allies are also behind ceived enemies abroad. Quick to remind him. A man handpicked by the establish- the international community that it did ment is unlikely to confront it. nothing to stop the genocide, Rwanda’s Even a genuine reformer would be over- leaders see Israel as a model and inspira- whelmed by Lebanon’s problems. Its econ- tion. This extends to the efforts of the Israe- omy has collapsed. The currency has lost li security services to track down and ab- 80% of its value on the black market since duct or kill those deemed enemies of the October. Annual inflation hit 112% in July; state abroad. A hero and a pretender food prices leapt fourfold. Over half of Leb-1 40 Middle East & Africa The Economist September 5th 2020

2 anese live in poverty. Egyptian politics In years past Lebanon might have turned to the Gulf for a bail-out. Saudi Ara- bia was a longtime patron of Lebanon’s Defendant number 54,000,000 Sunni community. But, frustrated with Lebanon’s politics, in recent years the king- BEIRUT Low turnout for a sham election has made the government bristle dom has stepped back. That has left an opening for Recep Tay- ssembly-line justice is nothing new government bloc. Mr Sisi appoints the yip Erdogan, Turkey’s president, who has Ato Egypt. Since 2013, when Abdel- last third. Little about this stirred the cultivated ties with Sunnis in neglected ar- Fattah al-Sisi led a coup against an elect- souls of Egyptian voters. eas. Turkey’s foreign-aid agency has built ed government, judges have presided Arab autocrats have a touching at- cultural centres and funded other projects. over trials with enough defendants to fill tachment to the trappings of democracy. Thousands of Lebanese have received a jumbo jet. At a hearing in 2014 more Some use elections as shows of power. scholarships to study in Turkey. Thou- than 500 people were sentenced to death Saddam Hussein was re-elected with an sands more have gained citizenship based for killing one policeman. But that exer- impressive 100% turnout and not a sin- on Turkish ancestry. Turkey’s vice-presi- cise is Lilliputian compared with the gle No vote in an up-or-down referen- dent visited Beirut after the explosion and latest labour of Egypt’s judiciary. On dum in 2002. Others use elections as offered to help rebuild the port. August 26th the state referred 54m peo- safety valves. Hosni Mubarak, who ruled Unlike the Saudis, Mr Erdogan has not ple for prosecution over a single case. Egypt for 30 years, kept a firm grip on thrown his support behind a political The defence might rise here to object: parliament but allowed a measure of party. But he and his confidants have made surely that number is in error. But Egypt competition and opposition. powerful friends. Hakan Fidan, the Turk- has indeed opened a case against more Elections serve neither purpose for ish spy chief, has built a relationship with than half its population, and fully 86% of Mr Sisi. The lower house has deteriorated his influential Lebanese counterpart, Ab- the electorate. Their crime—one rarely into a rubber stamp and the Senate will bas Ibrahim. Mr Hariri was a guest at the punished—was failing to vote last month be more feckless still. Paltry turnout wedding of Mr Erdogan’s daughter in 2016. in elections for the upper house of parlia- undermines his claims of popular sup- Turkey’s growing clout worries many. ment. (Compulsory-voting laws are not port. Over half of Egyptians voted in the The dying days of Ottoman rule were not a unique to Egypt: Australia, Belgium and parliamentary election of 2011-12, a genu- pleasant chapter in Lebanon’s history: the others have them too.) inely democratic exercise. In 2015 turn- famine that began in 1915 killed half the A lawyer for the defence would surely out fell to 28%. Mr Sisi’s own election in people in the mountainous heartland. Par- focus on mitigating factors. Sweltering 2014 was scheduled as a two-day affair. ticularly nervous are members of the large August is not a pleasant time to be queu- When turnout looked low, officials Armenian community, many descended ing outdoors, especially for the elderly or abruptly added a third day so they could from refugees who fled the Ottoman-era infirm. Nor should people be gathering drag more bodies to the polls. genocide in eastern Turkey a century ago, amid a pandemic. Though far from their Mr Sisi may hope that the threat of which Lebanon is one of the few Arab states June peak, covid-19 cases are rising; punishment spurs Egyptians to vote in to recognise. officials warn of a second wave. November, when the lower house is up There was a telling incident this sum- Most defendants would just plead for grabs. Many citizens cannot afford to mer, when Nishan Der Haroutounian, a apathy. The upper house, formerly called pay the fine of up to 500 pounds ($32). Lebanese-Armenian tv presenter, called the Shura Council, was abolished after (Prosecuting 54m people could net the Mr Erdogan an “obnoxious Ottoman” on the coup but reinstated in a referendum state 27bn pounds, 1% of its annual bud- air. Mr Der Haroutounian now faces prose- last year. Rebranded as the Senate, it has get.) But threats only work if they are cution. His words sparked protests outside no legislative powers. A third of its 300 credible. Egypt’s judiciary lacks the the studio and insults on social media from members are directly elected. Another resources for such an undertaking. A Lebanese of Turkish origin. One member of third are elected via party lists, of which better way to increase turnout would be that community proclaimed himself there was exactly one on offer: a pro- to hold elections that matter. “proud of the massacre that our Ottoman ancestors carried out”. At the moment, Lebanon is desperate for help, regardless of its source. Mr Mac- ron, who is planning a donors’ conference, gave Mr Adib two months to enact reforms. France is being “demanding, not interfer- ing” and trying to “unblock” Lebanon’s pol- itics rather than impose an alternative, says Mr Macron. But things are rarely so simple in Lebanon. Its politicians are loth to reform, and their foreign patrons often treat the country as a zero-sum struggle. France and Turkey may find themselves at odds as well. The two are already spar- ring in the eastern Mediterranean. A great- er Turkish role in Lebanon could draw in the United Arab Emirates, a small but pow- erful state that views Mr Erdogan’s brand of political Islam as an existential threat. Leb- anon’s next chapter may become a new Someone call the police! struggle between its old rulers. 7 Asia The Economist September 5th 2020 41

Japanese politics next five years Japan cycled through five prime ministers. Mr Abe’s Liberal Demo- A new story at last cratic Party (ldp) fell out of power for only the second time since his grandfather helped found it in 1955. By the time Mr Abe returned to power, he had concluded that he must have a convincing economic agen- da to provide the popular support he need- TOKYO ed to pursue his foreign- and security-poli- Abe Shinzo has left a big mark on the country he has run for eight years cy priorities. hen he was a boy, Abe Shinzo as- China and an unpredictable ally in Ameri- Mr Abe moved first to centralise the ma- Wpired to make films. His family his- ca. Yet Mr Abe will be remembered as trans- chinery of the state. He created a personnel tory—he is the grandson of a prime minis- formative, not least because, after the dol- bureau that gave politicians power to ap- ter and the son of a foreign minister—set drums of the “lost decades”, when the point bureaucrats, and set up a national se- him on a different path (see Books & arts economy stagnated, he fostered hope that curity council. He increased the size of the section). Yet as a politician, he strived to Japan’s problems could be solved. “Abe cabinet secretariat that directly supports change the stories that Japan tells about it- changed the narrative,” says Mireya Solís of the prime minister by more than half. Ja- self. “If the Japanese need one thing now, the Brookings Institution, a think-tank. Al- pan had 16 prime ministers between 1989 that thing is confidence—the ability to turn though his government’s approval rating and 2012, with an average tenure of 538 our faces to the sun, like the sunflower had been dire, in a poll after he resigned days; Mr Abe’s second term stretched for does when it blooms at the height of sum- 74% of Japanese gave it their approval. more than 2,800 days. His ability to bal- mer,” Mr Abe said after becoming prime Mr Abe’s first stint as prime minister, ance factions in his party and command minister for the second time, in 2012. starting in 2006, lasted little more than a the civil service gave him a longevity that His departure did not follow the script. year and was also ended by ill health. In the bred credibility at home and abroad. Mr Abe announced his resignation on Au- The trust Mr Abe earned from foreign gust 28th, citing a bout of ulcerative colitis, leaders enabled Japan to play a bigger role Also in this section a chronic intestinal disease. Instead of in the world, while upholding the post-war leaving in the afterglow of the Olympic 43 Feminism in Pakistan liberal order that has bolstered Japan’s Games, he is departing amid a pandemic. prosperity. He faced down the powerful 43 India’s economy shrinks by 24% His successor will inherit the fight against farm lobby and joined the Trans-Pacific the virus, along with other challenges: an 44 Taiwan’s woolly alliance with America Partnership, a big regional trade pact, pro- economy battered by covid-19, a shrinking moting it even after America pulled out. He 45 Banyan: Thailand’s new protesters population, the growing assertiveness of inked an Economic Partnership Agreement1 42 Asia The Economist September 5th 2020

2 with the European Union and a bilateral tion. His government expanded parental mented that he was unable to amend the deal with America. That, along with lots of leave and child-care services. Female la- constitution or solve a territorial dispute golf and flattery, kept him in Donald bour-force participation grew from 63% to with Russia. Many Japanese feel he put Trump’s good books. “If not for Abe, we’d be 71%, higher than in America. “Abe main- more energy into his ambition to reverse treated like Moon Jae-in or Merkel,” says a streamed the whole concept of gender div- these legacies of the second world war than former adviser. ersity,” shifting the context from human he did into tending to the economy. Mr Abe also dealt deftly with China (see rights to economic growth, says Ms Matsui. His successor will presumably have less Business section). When he took office, the Mr Abe also allowed in more immigrants. interest in fighting these old battles. Man- two countries were close to conflict over The number of foreign workers in Japan aging the effects of covid-19 will come first: disputed islands. Mr Abe had hoped Xi more than doubled during his tenure. the economy shrank by a record 7.8% in the Jinping would visit Japan this year, before Critics see plenty of shortcomings in Mr second quarter of this year. That makes it covid-19 intervened. But he also encour- Abe’s economic policies. Until covid-19, his no bigger than when Mr Abe became prime aged neighbours to stand up to China. Un- time in office was largely free from external minister in 2012. The government has der the banner of a “Free and Open Indo-Pa- shocks. The biggest injuries were self-in- propped up companies and given cash to cific”, Japan has tried to uphold freedom of flicted: two ill-timed increases in the con- consumers; bankruptcies are down this navigation in Asian waters and liberal prin- sumption tax, in the name of fiscal probity, year. But as the slump persists, a painful re- ciples in Asian markets. He built security both of which pushed the economy into re- structuring will have to take place, says ties with Australia, India and countries in cession. As a result, his government mus- Hoshi Takeo of the University of Tokyo. South-East Asia. He created a strategy to tered only meagre economic growth of 1.1% Japan needs a “productivity revolution”, link Japan’s piecemeal aid projects, quietly a year on average during his eight years in says Ms Matsui. The tax code and the la- promoting “quality infrastructure” as an office, less than the 2% he promised. Com- bour market stifle startups and innovation. alternative to China’s Belt and Road Initia- panies saw their profits rise, but many sat The government uses archaic computer tive. “No other [Japanese] politician has on them. Women got more jobs, but not systems. No one in Japan was surprised to such a sixth sense in foreign policy,” says find fax machines being used to tally co- Miyake Kunihiko, a former diplomat. vid-19 test results. “We have to erase all of Mr Abe failed in his efforts to revise the Helping the aged the inefficiencies and redundancies,” says pacifist constitution that America imposed Japan a member of a government economic advi- on Japan after the war. But he strengthened sory council. the armed forces, reinterpreting the con- Female workforce* Number of foreign The next prime minister cannot, how- stitution and passing national-security participation rate, % workers, m ever, ignore foreign affairs. China is ex- and secrecy laws that, in practice, make it 72 2.0 panding its presence at sea. Japan is at odds possible for Japan’s “self-defence forces” to 70 with South Korea; Mr Abe could never mus- 1.5 deploy abroad. Were it to attack Taiwan, 68 ter the patience with Moon Jae-in, its presi- China would have to “assume it would face dent, that he showed with Mr Trump. Ja- 66 1.0 a common us-Japan front”, notes Michael pan’s pro-coal stance and the closure of its 64 Green, a former director for Asia on Ameri- 0.5 nuclear reactors after a disaster in 2011have ca’s National Security Council. 62 made it a climate laggard. Such changes were controversial, but 0 The ldp will choose its next president Abenomics kept voters happy. Mr Abe in- 2008 1915 2008 1915 on September 14th, in a vote of its members stalled a new governor at the Bank of Japan, Sources: Ministry of Health, Labour of the Diet and some regional representa- and Welfare of Japan; World Bank *Aged 15-64 Kuroda Haruhiko, who unleashed a “ba- tives. In the interests of continuity most of zooka” of monetary easing (see Free ex- the main factions have endorsed Suga change). That helped reverse years of defla- enough promotions. Average wages fell Yoshihide, the chief secretary of the cabi- tion, even if a 2% inflation target was never after accounting for inflation. net. If he wins, he would serve out the re- hit. Unemployment fell to its lowest rate in Despite the increases in the consump- mainder of Mr Abe’s term, which was due decades. Reduced corporate taxes and a tion tax, Mr Abe also leaves behind a mas- to end in September next year. Then a weaker yen boosted firms’ profits. The Nik- sive public debt, currently 238% of gdp. party-wide election will be held, which kei stockmarket index has reattained levels Markets seem unworried: the yield on should attract a broader crop of candidates. last seen in the early 1990s. many government bonds is negative. But The son of a farmer from rural Akita Pre- Mr Abe’s government introduced cor- the debt mountain may nonetheless bur- fecture in the north of Japan, Mr Suga has a porate-governance codes that led to more den future generations. “People assume reputation for diligence (in a country outside directors on boards. Nicholas Be- this is free money but it’s not: it will have to known for overwork) and as a master of the nes, who helped draft them, calls the come back in terms of higher taxes or bureaucracy. His instincts appear less changes “unstoppable”. Japan’s state pen- smaller services,” says a former official at nationalist than Mr Abe’s. He has advocat- sion fund, the world’s largest, shifted to- the Bank of Japan. ed more immigration and freer trade. He wards investing in stocks rather than gov- Although Japan has suffered a relatively urged Mr Abe to focus on the economy in- ernment bonds. A new index, the jpx400, small number of deaths from covid-19, es- stead of visiting the Yasukuni Shrine, a focused on good governance and high re- pecially relative to its population, the pub- controversial war memorial, in 2013. turns on equity, helped spur corporate re- lic is unhappy with Mr Abe’s handling of Mr Suga has little experience on the form. “The bluest of blue-chip companies the pandemic. The national government world stage. He is not especially popular were vehemently opposed,” says Kathy Ma- was slow to adopt measures to curb its among either the ldp’s broader member- tsui of Goldman Sachs, an investment spread, leaving local leaders such as the go- ship or among Japanese at large. He will bank. But investors swooned. In a research vernor of Tokyo, Koike Yuriko, to lead. A have many rivals in the party. “A lot of peo- note, Morgan Stanley, another investment string of corruption scandals also dented ple are chomping at the bit,” says Sheila bank, compared Mr Abe’s legacy to those of his standing. Shortly before his resignation Smith of the Council on Foreign Relations. Ronald Reagan and Margaret Thatcher. the approval rating of Mr Abe’s government Ominously, long-serving prime ministers Mr Abe sought to lessen the damage was 34%, the lowest since he returned to have typically been followed by strings of caused by Japan’s swiftly ageing popula- office. In his resignation speech, Mr Abe la- short-lived, unpopular governments. 7 The Economist September 5th 2020 Asia 43

Covid-19 in India Feminism in Pakistan No shrinking violets Double whammy

ISLAMABAD A drama about female vigilantes breaks taboos ot all heroes wear capes,” de- keen. “The most refreshing thing about DELHI The economy shrinks by a quarter as clares the trailer for a new Paki- ‘Churails’ was that it was completely “N the virus gathers pace stani television series. Some wear bur- uncensored,” says Aamna Haider Isani, a kas. The stars of “Churails”—which journalist who covers entertainment for he statistics landed like fists in a one- means “Witches” in Urdu—are a gang of The News, a Pakistani daily. One enthusi- Ttwo punch. First came the news that In- female avengers who wield fists and astic reviewer called it a “feminist mas- dia had counted 78,000 new cases of co- hockey sticks in anger. They dispense terpiece”. Another hailed “a monumental vid-19 on August 30th alone—more than rough justice to abusive and philander- moment for representation”. any other country has tallied in a single day ing men. Asim Abbasi, the show’s creator and since the pandemic began. The next day Sara is a lawyer who gives up her director, who lives in Britain, explains came the bill for the two-month lockdown career for her husband before discov- that he “wanted to tell a story that was that the government imposed in late March ering that the rotter has sent explicit authentic to women I know and to the at only four hours’ notice. The National messages to scores of women. Jugnu society I know”. He is able to do so be- Statistical Office said that India’s output plans weddings for rich couples, and cause “Churails” is airing over a web- between April and June was 23.9% lower happens to be an alcoholic. Batool served streaming service, instead of a television than in the same period the year before. 20 years in prison for murdering her channel. It was created for the Urdu- India had never recorded a quarter of husband, who was a paedophile. Zubaida language unit of Zee5, an Indian video- negative growth since it began issuing has long suffered under a domineering on-demand service. Going digital “allows such data publicly in 1996. No other big and violent father. us to take risks”, says Mr Abbasi. economy has shrunk so much during the Thrown together by chance, the quar- Pakistan has no domestic streaming pandemic. In the same period America’s tet run a secret agency that aims to help services, but Zee5, Netflix and Amazon gdp fell by 9.1%. India’s economy had been wronged women exact revenge. They use are all gaining users. Lockdowns im- stumbling before covid-19. But what had a clothes shop in Karachi as a front for posed to fend off covid-19 have helped to seemed a dismally low rate of growth in their activities. The heroines drink, boost subscriptions. Ms Isani says her 2019 is now the stuff of fond memory. swear and take drugs. There are lesbian children no longer watch conventional In hindsight, India’s government may characters and a trans one. television channels. “They say, ‘Why are have locked down too soon. The country Female characters in Pakistan’s televi- you watching the same woman cry day had detected barely 600 cases of covid-19 sion dramas are often depicted as help- after day?’” That tv-streaming young- by March. The ban on commercial activity less damsels. Their conflicts are usually sters are now watching completely dif- and movement outside of the home was with children, mothers-in-law or rivals ferent things to channel-hopping elders nearly total for two months. Test-and-trace in romance. Lately tv producers have may explain why “Churails” has not programmes worked in some areas, nota- sought to introduce more challenging provoked more of a backlash. Many bly the southern state of Kerala, but nation- themes, such as rape and child abuse, but conservative Pakistanis have yet to wide they have fallen far short of the stan- advertisers and channel bosses are not discover it. dards set by some East Asian countries. Hospitals rushed to get ventilators and free up beds in intensive care, but they were starting from a woefully low level. India had 0.7 hospital beds per 1,000 people; South Korea had more than 16 times as many. Lacking health care, people resorted to makeshift remedies. Around 140m peo- ple were thrown out of work. Millions trudged on foot to ancestral villages. The pain was so great that hardly any- one can stomach the thought of reimpos- ing strict controls, even though infections are rising more swiftly than ever. Public transport is resuming this month. Public gatherings are to be subject to looser rules. Eventually schools will reopen. An edict declares that state and municipal govern- ments may no longer impose stricter rules than the central government. Kerala, once a model for the rest of the country, has been unable to stop travellers from other Indian states bringing the virus with them. It is now counting over 1,000 new cases a day. The number of Indians dying of the vi- rus appears to be lower than might be ex- Shining a spotlight on a different sort of woman pected, given the number of infections. The country’s 3.8m detected cases have led 1 44 Asia The Economist September 5th 2020

fensive character”, and to take seriously any effort to determine the island’s future other than by peaceful means. This vague- ness has been dignified with a clever- sounding euphemism, “strategic ambigu- ity”. Critics of the policy worry that ambi- guity increases the risks of a disastrous strategic miscalculation. Its supporters ar- gue that, for the four decades since Ameri- ca switched diplomatic relations from Tai- wan to China, it has worked. It has provided enough reassurance to Taiwan that America would not let China invade unpunished, but not so much as to em- bolden those who favour a formal declara- tion of independence—something China has always warned would mean war. On August 31st America’s position be- came a touch less ambiguous. It made pub- lic classified cables from 1982 in which its government gave Taiwan six supposedly secret but widely known “assurances”. These included not to repeal the 1979 law, Keeping calm and carrying on and not to set a date for ending arms sales. The declassification went a tiny way to 2 to just 67,000 known deaths. That is a low the virus’s spread. The national media are meeting recent calls from some American rate by global standards, although many once again full of celebrity tittle-tattle. politicians and former officials to clear up covid-related deaths are thought to be go- When Pranab Mukherjee, a former presi- the ambiguity. Ted Yoho, a Republican rep- ing unrecorded around the world, making dent, died on August 31st, the government resentative from Florida, for example, is comparisons unreliable. A paper by Minu declared a seven-day period of mourning. promoting a “Taiwan Invasion Prevention Philip, Debraj Ray and S. Subramanian of That he had been on a ventilator suffering Act”, to authorisemilitary intervention. the National Bureau of Economic Research from covid-19 for the last three weeks of his The issue has seemed more urgent fol- suggests that few Indians are dying be- life was barely mentioned. 7 lowing a recent series of menacing Chinese cause its covid-19 sufferers are younger military drills, including “realistic” exer- than those elsewhere. After taking pa- cises in the Taiwan Strait, at both the north tients’ ages into account, the difference all Taiwan and south ends of the island. No doubt car- but disappears. rying the same message, on August 10th More startling are the results of surveys Unambiguously Chinese fighter jets crossed the median that analyse blood serum. They suggest line in the strait, the unofficial air border. that a fairly high proportion of urbanites dangerous The drills serve as a reminder of just may have already had covid-19. The rele- how seriously China treats its “sacred mis- vant antibodies were detected in 41% of sion” of bringing Taiwan back under its samples collected in Mumbai in July and in sovereignty. They also serve to flaunt Chi- China’s war games raise fears for nearly 57% of samples from its slums. They na’s fast-improving military capability. It is Taiwan’s security were also found in 23% of tests in Delhi in hard not to see this as part of a more asser- June and in more than 28% in August. In hina has never renounced what it says tive approach to the region. That has been Pune, a prosperous city of 7.4m in Mum- Cis its right to “reunify” Taiwan by force evident in the South China Sea, where Chi- bai’s hilly hinterland, the proportion of if peaceful means are thwarted. So armies na has been steadily building up a military those with antibodies was more than half. on both sides have to prepare for war, how- presence in contested waters, although its Many in India are growing stoical about ever remote it may seem. Of late the num- claims have been rejected both by an inter- ber of naval exercises China has conducted national tribunal in 2016 and, just last has caused alarm—all the more so at a time month, by America. To the north, off Chi- Lift off of worsening relations between China and na’s east coast, Japan has accused China in Daily new confirmed covid-19 cases, ’000 America on a number of fronts, including recent months of a “relentless” campaign 2020, seven-day moving average American policy towards Taiwan. The deli- to seize control of the tiny, uninhabited, 80 cate status quo, in which China insists Tai- Japanese-administered Senkaku islands INDIA IN India wan is part of its territory but the island (known in China as Diaoyu). And on Au- LOCKDOWN functions as an independent country, is gust 29th Chinese and Indian soldiers be- 60 fraying. As the Global Times, a tub-thump- came embroiled in the latest of several United States ing official Chinese tabloid, puts it: “The stand-offs in a remote part of their long 40 possibility of peaceful reunification is de- border in the western Himalayas, where In- Brazil creasing sharply.” Mercifully, that does not dia accuses Chinese troops of trying to 20 mean war is imminent. move the de facto border. A big reason for that is America’s sup- Meanwhile, China’s ruthless approach 0 port for Taiwan. Yet it has no formal alli- to Hong Kong has also held a message for ance or clear-cut commitment to defend Taiwan. The imposition at the end of June Apr May JulJun Aug Sep the island. A law passed in 1979 obliges it of a national-security law in effect ended Source: Johns Hopkins University CSSE only to provide Taiwan with “arms of a de- the autonomy promised under the “one 1 The Economist September 5th 2020 Asia 45

2 country, two systems” arrangement that “unofficial”. Those fears have been espe- that if the ambiguity is resolved under Mr was supposed to pertain in Hong Kong un- cially acute under the presidency of Donald Trump, it will be in its favour. In a memoir til 2047. That deal was a modified version of Trump, who raised hackles in Beijing by ac- published this year, John Bolton, one of Mr one on offer to Taiwan. For a time, it cepting a congratulatory call from Tsai Ing- Trump’s discarded national security advis- seemed China hoped Hong Kong might wen, Taiwan’s president, after his election ers, speculates that Taiwan may well be the serve as an advertisement to Taiwan of the in 2016. In recent weeks Alex Azar, Ameri- next American ally to be jettisoned by his benefits of “peaceful reunification”. These ca’s health secretary, visited Taiwan and former boss. As a Global Times commenta- days Hong Kong is less an advertisement met Ms Tsai (apparently provoking the big tor put it this month: “Taiwan for the us is than a grim warning. That is one reason to war-game and the fighter-jet incursion). only a tradable chess piece.” After all, Mr worry that China might conclude that its America has also announced new high-lev- Trump has always put “America first”. Trade patient approach to Taiwan has failed. el economic talks with Taiwan. concessions have always seemed to matter Another reason is China’s concern All of this will annoy China, which will more to him than alliances, or even the ab- about America’s upgrading of its ties with complain loudly. But it is probably relieved stractions Taiwan so proudly embodies, of Taiwan, which China insists can only be that the steps are so modest, and confident freedom and democracy. 7 Banyan Three-finger salute

Young Thais mount a remarkable challenge to their government and their monarch he last time Thailand saw protests dhirak, a political scientist at Chulalong- ments. He usually isn’t even in Thailand Tof the size now roiling the country korn University in Bangkok, saw a change but in Germany, where he has a floor at was nearly seven years ago. Then, pro- on campus last year: “In classes, nobody an upscale hotel near Munich. He shut- establishment types declaring love for was on their phone, nobody was sleeping.” tles to his queen in Switzerland in one of the king, the late Bhumibol Adulyadej, Students poured into the open after the the Boeing 737s at his disposal. Though and for the armed forces that protected ban in February of the Future Forward he once threw a consort, a nurse turned him, came out in Bangkok, the capital. Party, which advocated real democracy and military pilot, into prison, he has recent- They opposed the elected government of won 81seats in last year’s general election. ly rehabilited her, Europe’s tabloid press Yingluck Shinawatra, which seemed to Flash-mob protests spread until the pan- reports, to serve in his harem of “sex threaten their interests. Among the demic brought an end to them. Ms Yanisa soldiers”. No word of sympathy has children parents pulled out of classes to describes the lockdown as a time of social- crossed the king’s lips over his subjects’ attend these “yellow shirt” demonstra- media ferment. In July demonstrations hardship during the pandemic. tions were friends of a prominent protest burst out again. Protesters waved three The next big student protest is leader today, Yanisa Varaksapong, an fingers in the air, mimicking a salute used planned for September 19th, the anniver- 18-year-old undergraduate. by young rebels in “The Hunger Games”, a sary of an earlier coup, against Ms Yin- The turmoil the yellow shirts created dystopian series of novels and films. The gluck’s brother, Thaksin Shinawatra. The enabled an army-led coup in 2014 that demands were clear: a new constitution, establishment has tried to paint the shoved all politics back into a box and the dissolution of parliament and an end students as puppets of the exiled Mr slammed shut the lid. Today, Ms Yanisa to the persecution of government critics. Thaksin and his “red shirts”. Ms Yanisa says, those same friends are protesting By August the demands began to take laughs dismissively: the earlier strife was alongside her—against the very estab- aim at the late king’s successor, Maha “ages ago for us...Right now it’s some- lishment for which they once marched. Vajiralongkorn. Challenging the cult of the thing else.” The dissatisfaction is understand- monarchy breaks a taboo. But the 68-year- A large number of the protesters able. The coup leaders promised a tech- old king is widely (if quietly) reviled as would like to see the king act like the nocratic government to end corruption extravagant, capricious and cruel. He has constitutional monarch he is supposed and spread prosperity, and a swift return seized control of vast royal assets and to be. They benefit from growing support to civilian rule. Instead, the constitution meddled in political and military appoint- from ordinary Thais, from a surreal they wrote, the country’s 20th, en- chasm between royalist propaganda and trenches the political power of the armed the king’s comportment, and from a forces and their allies. The current prime certain vacillation on the part of the minister is the general who led the coup, authorities. On the one hand they arrest Prayuth Chan-ocha. As for the economy, protesters to intimidate the movement: there is neither cleanliness nor compe- this week the head of the Student Union tence. Thailand has managed the pan- of Thailand was charged. On the other, demic well in terms of stemming in- Mr Prayuth seems reluctant to order a fections, but the economy will shrink by bloody crackdown. His government even over 8% this year, according to the cen- claims a willingness to talk. tral bank. In this atmosphere, Mr Thitinan says, The government has immense pow- the parameters for open expression have ers to suppress dissent, including laws been stretched wider than in a long time. against sedition and lèse-majesté. So the The stakes are high, because the param- protests by school pupils and university eters could snap cruelly tight again. For students took many by surprise, espe- the young protesters who, like Ms Yanisa, cially as young Thais rarely pay much see the chance to craft a country in which attention to politics. Thitinan Pongsu- they have a place, there is no going back. 46 China The Economist September 5th 2020

Education reform not shared by reformist educators and some head teachers, who want to down- Testy times play them. They have a radical vision—of reducing study loads, expanding the curri- culum and encouraging students to take up hobbies. Nanjing, a former imperial capi- tal, is the centre of their experiments. In 2016 Nanjing Number One Secondary NANJING School, the city’s oldest and among its Schools are trying to make pupils’ lives easier. Some parents object most competitive, began to let students he largest museum commemorating son whose “fate” he hoped to alter through borrow points from a “marks bank” to Tthe gruelling examination system Chi- their visit. “Xiangshi, huishi, dianshi,” his boost a low grade. These are repaid by de- na used in imperial days to select civil ser- son piped up, naming three levels of the ducting points scored in a later test, or vants opened in 2017 in Nanjing. It would ancient test that inspired the creation of earned from good classwork. The aim is to not seem an obvious destination for a fun civil-service exams in the West. take a bit of pressure off exams. At the family outing in the eastern city. As visitors In terms of the awe it inspires, the keju school, teachers and students are encour- walk into it down a grey ramp—130 metres has a modern rival: the gaokao, a punish- aged to be “on an equal footing”, an appre- long to symbolise the test’s 1,300-year his- ingly hard university-entrance exam ciative former pupil wrote in an online fo- tory—a sign tells them they will “experi- which is taken by over 10m students every rum. Nanjing Number One has a vibrant ence the hardships of the journey to suc- year. For those from poor families, a good student union, a literary society and other cess” for those who sat the keju before its score is often their only chance to escape a clubs. Its university-acceptance rate this abolition in 1905. Bamboo slips affixed to life toiling on farms or in factories. As a re- year was 95%, a record for the school. towering walls represent the “myriad” sult, Chinese education has long involved Yet the scene outside Nanjing Number books that candidates had to read. little more than rote learning, aimed pure- One in late July, soon after the gaokao re- Yet on a recent weekday afternoon, ly at the gaokao. Pupils attend late-night sults were released, was not of jubilation. there were as many youngsters filling the cram sessions and shoulder twice as much Dozens of angry parents brandished plac- museum’s cavernous halls as there were at- homework as the global average. ards demanding that the head teacher step tentive adults. A mother from the city of But the deep reverence for tests ex- down. They blamed their children’s lower- Xi’an, hundreds of kilometres inland, had pressed by the museum and its visitors is than-expected scores on what they saw as brought her four-year-old son in order to his attempts to make light of tests. More inspire him. “He likes the dioramas,” she traditional schools in Nanjing, they noted, Also in this section said brightly, “even though he doesn’t churned out more top-scorers. Nanjing know what an exam is yet.” A coalmine en- 47 Language in Inner Mongolia Number One mollified the protesters by ex- gineer from Ordos, a city in distant Inner tending compulsory revision sessions to 48 Chaguan: Buying social order Mongolia, was there with his nine-year-old 10pm for final-year students. On social me-1 The Economist September 5th 2020 China 47

2 dia theories circulated that officials who universities with tens of thousands of dol- ethnic Mongols as it is of protests by ethnic advocated a less demanding curriculum lars. In 2018 one of them bought two de- Tibetans, or Uighurs in Xinjiang. One rea- really just wanted to make it harder for stu- commissioned army tanks to flank its en- son is that a massive influx of ethnic-Han dents from humbler families to get ahead. trance, apparently to instil a sense of Chinese over the past few decades has re- The tussle highlighted a bitter divide toughness among its students. duced ethnic Mongols to less than a fifth of over how to educate China’s teenagers, Mr Wang says he is glad to see “so much the province’s population of nearly 25m whose summer holidays ended this week. negotiation” under way, with educators people. Their separate identity has long In Nanjing many locals sympathise with pushing forward and policymakers follow- since been eroded. Most (unlike some Ti- the protesters. Xu Wuqing, waiting for his ing cautiously, even if parents are still re- betans and Uighurs) are bilingual. But eth- granddaughter outside the school gates sisting. Observant children at the museum nic Mongols often still cherish their tradi- with homemade pigeon soup, said that in Nanjing will find, in addition to statues tional culture and language. By requiring “less pressure” on students was “simply of prominent men who aced the keju, a more use of Mandarin in schools, the party not okay”. In a complaint last year to Nan- bronze one of a person who failed it repeat- risks fuelling dissent. jing’s education bureau, which was widely edly: Wu Cheng’en, who was educated in The boycott has affected many schools shared online, a mother griped that the Nanjing in the 16th century. Wu went on to across Inner Mongolia. Protesters have city’s children were being turned into write “Journey to the West”, one of China’s submitted thousands of petitions to the “slackers”, too weak to cope with exams. most celebrated novels. 7 government, some using a traditional Many in China once supported what Mongolian format that involves signato- schools such as Nanjing Number One are ries putting their names in a circle to avoid trying to do. In the early 2000s a bestseller Inner Mongolia any one of them being perceived as a ring- about raising a child in the West, “Educa- leader. Videos circulated online show par- tion for Quality in America”, popularised Mongolingualism ents singing Mongolian songs outside the idea of suzhi jiaoyu. The term refers to a schools. In one clip, high-school students well-rounded education that attaches im- shout, “Mongolian is our mother tongue! portance to building character as much as We are Mongolian until death!” knowledge. It guides most of Nanjing’s Fearful of police reprisals, protesters more liberal teaching. The author, Huang have posted messages online warning Efforts to boost the use of Mandarin in Quanyu, became a household name among against the use of violence, and even schools angers ethnic Mongols the middle class, writes Teresa Kuan, an against any action on the streets. “We’ve all American academic, in “Love’s Uncertain- n the first day of the school year in agreed to stay united by keeping our chil- ty: The Politics and Ethics of Child Rearing OInner Mongolia, a northern province of dren at home,” says a herder from Xilingol in Contemporary China”. In 2010 China China, some teachers in schools using the League, a prefecture in Inner Mongolia. published a ten-year plan on education Mongolian language found their class- “But we know that if we take to the streets which admitted that the country’s teaching rooms empty. To show their anger at an of- in protest, we will be thrown into jail.” was “relatively outdated” and that people ficial order that Mandarin be used to teach The changes under way in Inner Mon- had “strong yearnings” for suzhi jiaoyu. history, politics and literature, parents had golia’s schools were rolled out in Xinjiang Some reforms have seemed fanciful. In kept their children at home. In recent years in 2017 and in Tibet the following year. 2018 the central government called for “30 the government has stepped up repression They will eventually affect students in In- burden reductions”, including a limit of 90 in parts of China with large ethnic-minor- ner Mongolia throughout their nine years minutes of homework a day and an end to ity populations, making widespread prot- of compulsory education. This academic the parental habit of comparing their off- ests all but impossible. In Inner Mongolia year they apply only to those in the first spring to others. This year, to prevent cram ethnic tensions have seldom reached lev- year of secondary school and first year of schools from racing too far ahead with the els seen in Tibet or Xinjiang, so the school primary. Parents worry that their children syllabus, it published lists of subjects suit- boycott is especially remarkable. will lose fluency in Mongolian and grow up able for certain age groups. For example, The Communist Party has never been as unable to use the classical Mongolian under-nines are not to study how to add fearful of unrest among Inner Mongolia’s script. They take particular pride in this and subtract with numbers comprising form of writing. Mongolia, an independent four or more digits. country to the north, more commonly uses From next year a tweaked gaokao will the Cyrillic script—a hangover from its give students leeway to pick and choose days as a satellite of the Soviet Union. some subjects, beyond the compulsory The authorities are already cracking ones. But China is reluctant to overhaul a down. The herder says two of her relatives test that remains remarkably meritocratic. who had spoken out against the new lan- “By sticking with the exam, we waste stu- guage policy disappeared on August 31st. dents with other talents. By moving too far Users of Inner Mongolia’s only Mongolian- away from it, we disadvantage poor kids,” language social-media platform, Bainu, says Wang Tao of East China Normal Uni- have found that access to their feeds has versity. It is not that loving parents do not been blocked. Censors have erased posts want their children to have fun. Rather, as about the protests from other social media. one mother in Nanjing puts it, relaxed Local officials have ordered teachers to classrooms are “just no use” if they do not press parents to send their children to get a pupil into a good university. school. Ethnic-Mongol party members, So quasi-military cram schools—“gao- civil servants and teachers have been told kao factories”, as they are known—still that if they join the boycott they may lose thrive. One such is Hengshui Secondary their jobs and party membership. Tibetans School in the northern province of Hebei. It and Uighurs have long been familiar with has 18 branches across China, some of such bullying. Ethnic Mongols will have to which reward students who get into top Towards a less Mongolian future get more used to it. 7 48 China The Economist September 5th 2020 Chaguan Keeping a grip

What a lowly, unpopular law-enforcement agency reveals about China’s version of dictatorship Yet when public-security agencies encounter non-political rule- breakers or even protesters, they can be unexpectedly willing to turn a blind eye or make concessions to offenders. Such haggling is common at the lowest levels of law-enforce- ment, where the chengguan work. As luck would have it, a remark- able documentary about these para-police has just secured a limit- ed release in Chinese cinemas. “City Dream”, directed by Chen Weijun, follows chengguan from the central (and, since then, vi- rus-hit) city of Wuhan, as they match wits with Wang Tiancheng, a 70-year-old street trader with a genius for staging the sorts of noisy protests that win the sympathy of a watching crowd, while humili- ating officers sent to demolish his sprawling, unlawful street stall. Cities created chengguan in the late 1990s to tackle non-crimi- nal forms of disorder, after the dismantling of the planned econ- omy left urbanites less dependent on the state and triggered a wave of rural migration into cities. The documentary begins in 2014, shortly after Wuhan announced a revolution in city management as part of a development drive. At the time chengguan had a grim reputation across China, following a number of deaths caused by officers as well as fatal attacks on them as they were carrying out raids to demolish homes or clear informal markets. High-ups in the city-management bureau loathe “Old Wang”, as or a business that flouts the law in a police state, Mrs Hu’s pan- everyone calls him. “Close the gates! Old Wang is on his way!” they Fcake cart is not hard to find. A tiny, unlicensed kitchen on yelp, as the former farmer heads to the chengguan offices, barrel- wheels, her pushcart appears each night between 11pm and dawn chested, shirtless and demanding to see the boss. Sure that he on a road junction in central Beijing, between a centuries-old tem- makes more money than he lets on, officials send patrolmen to spy ple and a bus station. Neither summer heat nor snow deters Mrs on his fruit sales (an undercover officer returns in tears, after Old Hu. Only rain keeps her at home, because it clears the streets of Wang grabs his notebook). A senior chengguan declares that the customers. On a recent night, diners munching her egg and onion street trader, who moved to Wuhan 14 years earlier from the central pancakes, perched outdoors on low plastic stools, ranged from province of Henan, should be renting a clean, respectable shop. young hipsters to a bus driver still in her uniform. “That’s the real life of a city dweller,” the officer sniffs. In contrast, It is not the romance of the night that inspires Mrs Hu’s hours. street-level chengguan are grudgingly impressed by Old Wang’s Working by day would increase the risks of trouble from the cheng- flair for drama. During several raids on his stall, the trader tells guan—poorly paid, widely disliked city-management officers who gawking onlookers about his disabled son and cancer-stricken enforce local regulations in urban areas. In Beijing the rules are wife. He slaps a chengguan, tears up legal notices, accuses officers ever-less tolerant of street food, deemed unhygienic and unwor- of taking bribes to leave his competitors alone, threatens to com- thy of a capital city. There has been one positive change: less than mit suicide and—in an astonishing moment—appeals to his tor- five years ago chengguan were often violent, grabbing stallholders’ mentors as fellow outcasts at the bottom of society. “Where is your goods and demanding money. Now chengguan shoo vendors away conscience?” Old Wang asks chengguan who have penned him but do not hit them. Mrs Hu ascribes their improved manners to a within a square formed of their riot shields. “A second ago you government campaign for “civilised law-enforcement”. were just like me. A man with no job.” None can meet his gaze. A migrant from central China, she remains an outsider with few rights although she has lived in Beijing for 24 years. She and The power of the powerless her husband once worked legally from a rented market stall. Then At one point Old Wang’s son compares his father to a hen, frantical- two markets in a row were demolished in the name of modernity, ly trying to protect chicks from an eagle. It is a revealing image. In forcing the couple onto night-time streets with separate pancake the end Old Wang loses, for he is thrashing around in the grip of a carts. Worldly wise, the pair stayed calm when the prime minister, much stronger beast. But he gains a concession, too: the city’s help Li Keqiang, suggested this summer that encouraging street traders to stay and work in Wuhan for three more years, until his grand- might boost a covid-battered economy. Food carts may be wel- daughter, a good student, finishes secondary school. The price is comed by smaller cities but not in Beijing, says Mrs Hu. Indeed, the apologising in writing for his earlier defiance. Later a chengguan is capital is currently closing markets and sweeping away vegetable- rebuked by a superior for suggesting that the Wang family are sin- sellers from its streets. So she and her husband survive by keeping cerely grateful. Their emotions are not of interest, snaps the offi- their heads down and working hard. Like many, they live on the cial: “What we want is their obedience to our management.” margins of society, navigating an authoritarian system that wields This brilliant film explains a seeming puzzle: the hard men its powers more selectively than outsiders may suppose. who run China are capable of both brutality and pragmatism. The There is nothing kindly about that security machine, which key is their obsession with social stability. To buy peace, China’s crushes all hints of political, religious or ethnic dissent or open autocrats tolerate and even reward some forms of disobedience, so challenges to the Communist Party. The machine is bent on abol- long as the game ends with displays of deference to their authority. ishing privacy, with surveillance cameras on every corner and cen- Their goal, though, is the maintenance of power. Like an eagle ad- sors and algorithms scouring the online world for forbidden ideas. justing its grip, the party is not guided by mercy. 7 International The Economist September 5th 2020 49

The digitisation of government cial business took place online. Covid-19 has brought many aspects of Paper travails bureaucratic life to a halt. In England at least 73,400 weddings had to be delayed— not just the ceremony, also the legal part— reckons the Office for National Statistics. In France courts closed in March for all but essential services, and did not reopen until Covid-19 has accelerated the adoption of online government services for late May. They are still not operating at full everything from welfare to weddings capacity. Most countries have extended or karina celis and her fiancé James, she says. Some maternity services have visas for foreigners trapped by the pan- Fcovid-19 could not have come at a worse moved online, but mostly health care in demic, but consular services stopped al- time. The couple planned to marry in May Britain, as elsewhere, has stubbornly re- most everywhere, meaning that people liv- and to move from London to Salisbury, a sisted digitisation. The National Health ing abroad could not renew passports or small English city whose cathedral im- Service (nhs) remains among the world’s register births. In America green-card ap- presses Russian tourists. In July they had a biggest purchasers of fax machines. A plan plications were halted in April; they re- baby, their first. The wedding has been to create a unified digital system of pa- started in June. In Britain appointments to postponed indefinitely. Moving house dur- tients’ records was abandoned almost a de- take biometric details of people applying ing lockdown was surprisingly straightfor- cade ago, after £10bn ($12.5bn) was spent on for permanent residency ceased in March ward. But having the child proved a night- it. No further attempts have been made. and resumed only partly in June. mare of bureaucracy. Neither health care nor Britain is un- Some applications cannot be delayed. In Britain pregnant women are often ique in relying heavily on paper. By pre- As Florida was locking down, huge queues given a paper folder containing their medi- venting face-to-face meetings and closing formed outside government offices to get cal records, which they must haul to their the offices where bureaucrats shuffle docu- the paper forms needed to sign up for un- appointments. Ms Celis’s notes were not ments, the pandemic has revealed how big employment insurance. In theory the state transferred properly from her hospital in a problem that is. In many countries, it has has a digital system, but it was so poorly London to a new one in Salisbury. She had been impossible to get a court hearing, a constructed that many could not access it. to start a new folder—and to repeat all her passport or get married while locked down, At the start of the pandemic the website appointments. Absurdly she and her fiancé since they all still require face-to-face crashed for days. Even several months later had to listen again to an hour-long talk interactions. Registering a business has people trying to apply had to join a digital about what to do when expecting a baby. been slower or impossible. Elections are a queue and wait for hours before being able For Ms Celis, a software-engineering worrying prospect. to log in. When government offices in manager, the lack of digitisation was Governments that have long invested in Montgomery, the capital of neighbouring shocking. “At almost every appointment I digitising their systems endured less dis- Alabama, reopened, people camped out- have been to, either in London or here, the ruption. Those that have not are discover- side, hoping to see an official who might staff mentioned their struggles with tech,” ing how useful it would be if a lot more offi- help with their claims. 1 50 International The Economist September 5th 2020

2 Where services did exist online, their to help face-to-face businesses, says Au- ed to make decisions based on evidence de- inadequacies became apparent. Digital un- drey Tang, Taiwan’s digital minister. After livered over sometimes patchy internet employment-insurance systems collapsed paying at a restaurant, for example, citi- connections. But the backlog has forced under a wave of new claimants. At the end zens can use their insurance card at an atm some people to deal with the problems out- of March the website of the inps, the Italian to reclaim cash from the government. side the courtroom. Couples going through social-security office, received 300,000 ap- Covid-19 will probably accelerate a shift contested divorces have not been able to plications for welfare in a single day. It online. During the pandemic the governors get judgments on their financial disputes, crashed. Some of those who could access it of New York and California legalised digital so arbitration has thrived, says Samantha were shown other people’s data. The au- marriages. When New Jersey’s leaders real- Woodham, a British barrister who runs the thorities blamed not just the volume of ap- ised the extent of the shutdown, they in- Divorce Surgery, which provides legal ad- plicants but also hackers trying to put in vested in putting more services online, vice to spouses breaking up. fraudulent claims. Criminals were a pro- says Beth Noveck, the state’s chief innova- The pandemic has not just drawn atten- blem in America, too. In the worst-affected tion officer. Her office created a single gov- tion to more efficient ways of operating; it state, Washington, $550m-650m, or one ernment website through which residents has also required governments to do new dollar in every eight, was paid out to fraud- can find information on the coronavirus things. Track-and-trace systems work only sters who took advantage of an outdated and book tests for it, among other things. if governments know who their citizens system of identity verification (about Other states have followed suit. Her office are and can contact them reliably. Estonia’s $300m was recovered). is also trying to find ways to streamline the officials can do so easily; Britain’s and awkward process of verifying people’s America’s cannot. In China in order to Purposely pointless paperwork identities online in America, which like board public transport or enter their own In America such problems were inevitable, Britain has no national id cards. In France apartment buildings people have to show says Michele Evermore of the National Em- social-security paperwork, which previ- qr codes on their phones to verify that they ployment Law Project, a think-tank, be- ously had to be sent by post, can now be have not been to a virus hotspot recently. cause the country has invested very little in submitted electronically. In Britain and America the lack of id modernising its unemployment-insur- Some think that a bonanza of digital in- cards means that different government re- ance systems. Spending on administration vestment may be coming. “Everyone now cords are isolated in different depart- has fallen since 2001, even before account- can see that the digitisation that will take ments. Health-care records do not identify ing for inflation. Some states, including place will be enormous and billions and where somebody works and vice versa. Lo- Florida, deliberately designed their sys- billions will be spent,” says Daniel Korski, cal administrations do not always have ac- tems to be difficult to use to discourage who runs Public, a venture-capital firm cess to central-government records. With workers from applying. In August Ron De- that invests in the digitisation of public no simple way of connecting names and Santis, Florida’s Republican governor, ad- services. He points to various government addresses, Britain’s government has had to mitted that the state’s system was designed it contracts that are nearing renewal. Brit- rely on data from credit checks to verify with lots of “pointless roadblocks”. ain’s nhs is among the services most likely people’s identities before posting them co- Yet elsewhere the pandemic has re- to change. Harpreet Sood, a practising gp vid-19 tests. When its track-and-trace sys- vealed how effective digitising govern- who is also in charge of technology for the tem was being built, contact tracers were ment services can be. Governments have nhs, says that before the pandemic 7% of not able to connect swiftly clusters of cases for the most part been able to transfer mon- his consultations were done remotely. linked to workplaces because local govern- ey into the accounts of hundreds of mil- During lockdown the figure jumped to ment did not have the data. As a result lions of people without queues at govern- 90%. Not everything can be diagnosed over some local outbreaks were not spotted ment offices or banks. In Britain the the phone, he says, but a lot can. quickly enough to stamp out the spread. previously unloved Universal Credit sys- Not everything works well digitally. At Tony Blair, a former prime minister, is tem, which distributes welfare benefits, the height of the pandemic almost all fam- among those who have called for Britain to proved its worth when almost 1m people ily-court hearings in Britain stopped ex- invest in a citizenship register like the one signed up to it in two weeks without having cept for the most urgent cases, such as the in Estonia. Such projects take time and to go to a job centre. Britain has no national removal of children from abusive parents. money but could prove a worthwhile in- identity card or citizenship register—a pro- Those were put online, with judges expect- vestment. Sharing information can help blem in keeping track of people. But a digi- with more than stopping the virus. Better tal workaround, whereby people were able data-sharing would allow governments to to prove their identity by scanning the elec- improve even mundane services such as tromagnetic chip in their passports with a rubbish collection or managing street mobile phone, seems to have been effec- parking. Better digital identities would not tive. Though people had to wait five weeks just help track patients—they would also for payments—a political decision—they reduce the risk of digital fraud, one of the mostly got them. few industries to have thrived under lock- Governments that have embraced the down. If Americans had digital identities idea of digitising their services—and in- like Estonians, organising November’s vested in them—have performed admira- presidential election would be easier. bly. In Estonia, a country where digital gov- Such changes will not be cheap. And the ernment is so advanced that it is possible to implications for privacy must be taken se- vote online, all citizens have a digital id riously. Implemented badly, new digital linked to their bank account and the tax systems could create new opportunities for system. That meant that working out fraud, instead of making it more difficult. A which Estonians were furloughed and get- state that gathers more and more granular ting benefits to them was fairly straightfor- information ought to be able to make better ward. Taiwan, another digital pioneer, policy—but it will also find it easier to adapted its health-insurance system to im- snoop on citizens. Not all governments can plement an economic stimulus intended be trusted with such powers. 7 Business The Economist September 5th 2020 51

Also in this section 52 Wizz Air’s rise 55 Japan Inc’s rebalancing act 55 Buffett bets on Japan 56 Bartleby: After the fall 57 Indian over-Reliance 57 TikTok’s limbo dance 58 Schumpeter: Tech idealism

Prosus As exciting as that sounds, Mr van Dijk has a more prosaic problem: proving to the Winner’s curse outside world the firm needs to exist. He insists Prosus has found a distinctive ap- proach. Unlike venture capitalists, it does not need to return money to investors. It can back businesses for the very long term and, because it runs some of them, has “an PARIS operator’s dna”. Few of its investments Europe has an internet giant of its own. Does it have a purpose? have been busts. ew firms struggle with too much suc- cent’s continued success—into all manner Investors are sending mixed signals. Its Fcess. One is Naspers, a South African of online ventures, from e-commerce to market capitalisation of $167bn is about a media group founded in 1915. In a prescient food delivery, distance learning and classi- fifth less than the value of its Tencent bid to diversify away from newspapers in fied ads. Though run from the Netherlands, shares. Add the other firms it has stakes in, 2001 it paid $32m for a large stake in a pid- much of its empire lies in emerging mar- some of which are listed, as well as $4.5bn dly Chinese startup. Tencent, the startup in kets, a nod to its African heritage. Deep of net cash on its balance-sheet, and the question, has since morphed into a gaming pockets let it build online businesses or ag- discount rises to 33%—a gap of $80bn or so and messaging behemoth worth over gregate local players into global platforms. (see chart). Its share price has risen of late, 1 $670bn. Dealing with the windfall presents unique management headaches. The unexpected upshot of a South Afri- Tencent’s more can investment in China is a European con- sumer-internet giant. A year ago Naspers Share prices, September 11th 2019=100 Prosus assets, September 2nd 2020 listed Prosus, a vehicle for its online bets, $ terms $bn in Amsterdam. By dint of owning 31% of 250 250 Tencent, worth about $208bn, as well as Delivery Sep 11th Prosus listing Discount 200 other investments made since, Prosus is Hero 200 32.5% the eu’s fourth-most-valuable firm. It is 150 also the closest that Europe has to the glo- Net cash Tencent 150 Other listed bal tech stars that dominate the world’s Mail.ru investments 100 Prosus stockmarkets. Its boss, Bob van Dijk, ac- 100 Unlisted 50 knowledges the firm’s model may be un- Trip.com investments (estimate) usual in the tech world. But, he argues, it 50 0 can still deliver value. 2019 2020 Stake in Other Market Prosus has invested billions—and has Tencent capitalisation ever more billions to invest, thanks to Ten- Sources: Datastream from Refinitiv; Bloomberg; The Economist 52 Business The Economist September 5th 2020

2 but not as fast as those of its holdings. Mar- count. A strong board might rein them in. wise use of Alibaba’s riches is an open kets seem to be valuing the portfolio of But its chairman, the former Naspers chief question; Mr Son has had some big blow- companies which Prosus has spent over executive who pulled off the Tencent deal, ups. Investors have recently nudged him to $12bn building at less than nothing. is no counterweight. When two-thirds of sell some assets to cut back debt. That looks unduly harsh. The manage- ordinary shareholders in 2017 voted Mr van Dijk need not worry about debt ment of what is now Prosus has made bets against the pay deals of Mr van Dijk and or activist investors, who would no doubt which, though less spectacular than Ten- others, their gripes were mostly ignored. campaign to offload the Tencent stake. Yet cent, would not shame most venture capi- Other firms have grappled with the not cashing in has borne handsome re- talists. The classifieds business it built up, curse of success. Yahoo struck gold with wards. By trimming the lucrative stake bit olx, has 300m monthly users in 22 mar- Alibaba, another Chinese tech titan—only by bit—it sold about 2% of the firm in 2018, kets. Payu, a payments arm, has grown rap- to be undone by it when activist share- raising $10bn—Prosus can indulge its idly, notably in India. An Indian e-com- holders pushed the American search pio- bosses’ empire-building instincts while merce investment, Flipkart, generated a neer to spin off other operations in 2017, giving shareholders access to Tencent’s return of $1.6bn when it was sold to Wal- leaving mainly the Alibaba stake, which growth. Listing in Amsterdam was meant mart in 2018. Prosus’s minority stakes in was sold off in 2019. SoftBank, a Japanese to give global investors a chance to buy into Delivery Hero, a food-delivery service ac- group which also made a bundle off Ali- Mr van Dijk’s broader vision, boosting Pro- tive in 40 countries, and Mail.ru, a Russian baba, took a different route. Its boss, Son sus’s value and crushing the conglomerate social-media firm, are worth much more Masayoshi, parlayed his windfall into a discount. So far this has not happened. Un- than what it paid. complex empire of telecoms, property and less shareholders have a real say in what But challenges abound. Many Prosus venture capital. Whether that has been a Prosus is for, it may never do. 7 bets have tricky economics, promising jam tomorrow with fruit and sugar nowhere to be seen today. Adjusted for its stakes, its Wizz Air food operations lost $624m in the year to March, on revenues of $751m. Of the busi- Rising in the east nesses it runs, only the classifieds turn a (small) operating profit. Some of its invest- ments are in industries likely to be profit- able only if mergers create winners that could attract the gaze of trustbusters. Continuing to grow fast will require A go-getting Hungarian airline sees opportunity in the pandemic buying rivals with heady valuations. In the past year Prosus has narrowly lost out on he mood among airline bosses can will not only survive covid-19 but thrive. Just Eat, an $8bn food-delivery business, Tseem uniformly bleak. For good reason: Can the plan fly? “The odds are it will,” and eBay’s classified-ads business, which air travel may not return to pre-pandemic says Keith McMullan of Aviation Strategy, a fetched $9bn. “On the one hand, you do levels until 2024. Not a week goes by with- consultancy. Wizz Air managed to report a want to be disciplined and not overspend out an airline sacking thousands of work- 19% rise in revenues in the 12 months to on acquisitions,” says Ken Rumph of Jeffer- ers. Against this gloom, Jozsef Varadi, who March, to €2.8bn ($3.1bn). Net profits dou- ies, an investment bank. “On the other, if runs Wizz Air, cuts an audacious figure. bled year on year, to €281m. Despite un- you keep on finishing second you don’t get While other airlines cancel and defer or- avoidable losses this year, it has sustained to execute your strategy.” ders for new planes and put expansion less covid-19 damage than rivals. Of 2020’s vagaries, covid-19 should help plans on ice, he wants to increase his fleet Luck played a role. Wizz Air’s customers lure new customers online. But the ongo- from 127 planes to 160 by 2022 and double are on average 32 years old—younger than ing trade skirmishes between America and passenger numbers to 80m by 2025. He be- those of rivals and less fearful of the virus. China pose a risk for owners of Chinese as- lieves the Hungarian low-cost carrier, It caters to many central and eastern Euro- sets. Last month President Donald Trump founded 17 years ago and now Europe’s peans working in the west, who are keen to gave Americans 45 days to stop doing busi- third-biggest behind Ryanair and EasyJet, fly home frequently. Wizz Air’s smaller 1 ness with WeChat, Tencent’s messaging app (as well as with TikTok, a video app— see subsequent article). Tencent shares tumbled, dragging Prosus down with it. Potential investors may also be put off by Prosus’s corporate structure. Naspers still owns 73% of the shares, and the two firms are essentially run as one. Even if the parent sold down its stake, its shares would carry 1,000 times more voting power than anyone else’s. Naspers itself has similar super-voting shareholders, who are seen as close to management. They call the shots. Naspers’s dual voting structure was put in place to protect editorial independence and carried over to Prosus, though it owns no media assets. Tech founders often use dual shares to protect their legacy. But Pro- sus is a subsidiary of a century-old firm. Whatever the rationale, the effect is to shield executives from being held to ac- Helping purple get back in the black Open to new ways of learning

At London Business School, we believe in keeping an open mind. In being open to change, to innovation, to thinking that knows no bounds, to different experiences and diverse perspectives – so you can keep on learning and so can we. Discover where an open mind can take you and your organisation with our Executive Education programmes. www.london.edu/execed

The Economist September 5th 2020 Business 55

Japanese business Now the mood seems once again to be Regaining altitude souring. Covid-19 put paid to Mr Xi’s visit. Share prices, January 1st 2020=100 Rebalancing act His crackdown on democracy in Hong 120 Kong and the economic cold war between Beijing and Washington have led senior Japanese officials to speak of risks rather 100 Wizz Air than opportunities in China. Earlier this TOKYO year Mr Abe’s government imposed new re- Japan Inc is caught in the rift between 80 strictions on foreign investment to protect America and China certain industries, battered by covid-19, Ryanair 60 hen abe shinzo became Japan’s from Chinese bargain-hunters. The pan- Wprime minister for a second time in demic and the spectre of further American 40 2012, relations with China were on the sanctions against Chinese companies such skids. Tensions over disputed islands as Huawei, a telecoms-equipment giant, EasyJet 20 brought the two countries to the brink of are making Japanese companies think conflict. Japanese car dealerships in China about the stability of their supply chains, 0 were set ablaze. Protests at a Panasonic fac- not just efficiency, says Ke Long of the To- tory turned violent. kyo Foundation for Policy Research, a JJMAMFJ AS After that, tempers cooled and relations think-tank. Mr Abe’s sudden resignation Source: Datastream from Refinitiv warmed. Mr Abe had planned to host Xi on August 28th over ill health has added to Jinping for a state visit in Tokyo this spring, the uncertainty (see Asia section). 2 fleet, less than a third the size of Ryanair’s the first by a Chinese leader since 2008. Ja- Closer inspection reveals a more nu- and half of EasyJet’s, meant it could keep a pan Inc, too, has been dining out on the anced picture, however. One source close bigger share of its aircraft in the air. bonhomie. Annual trade between China to the government says its aim is to focus Wizz Air’s resilience is not all down to and Japan, the world’s second- and third- on “several strategic choke-points” in Chi- good fortune. Mr Varadi’s focus on costs biggest economies, amounts to more than na (such as medical supplies), while “keep- helped, too. He claims Wizz Air’s are the $300bn. Japanese firms accumulated over ing many areas open for commercial activi- lowest in the business, thanks mainly to $130bn in assets in China. The flow of Japa- ty”. Not so much a great decoupling, then, the industry’s largest fleet of super-effi- nese foreign direct investment there hit an as a quiet rebalancing. cient Airbus a321s (though he got lucky all-time high of $14.4bn last year. Mr Abe’s ¥244bn ($2.2bn) programme here, too, by not picking Boeing’s rival 737 According to Morgan Stanley, an invest- to induce Japanese firms to diversify their max jets, the grounding of which after two ment bank, listed Japanese firms derived supply chains away from China is a case in fatal crashes has delayed deliveries to big only 4% of revenues from China. But 26% point. In July 57 companies, including Iris buyers like Ryanair). Using the biggest ver- of their profits were tied to China through Ohyama, a big plastics producer, and Sharp, sion of the single-aisle workhorse has suppliers or customers, more than de- a maker of electronics, received a com- helped to spread expenses among more pended on America, calculates Jesper Koll, bined ¥57bn to invest in production at passengers. One estimate put Wizz Air’s a Tokyo-based economist. He reckons this home; others got help to build factories in unit costs at half those of EasyJet, an airline profit share shot up to 63% in the second South-East Asia. But of the 87 winning pro- that increasingly resembles the legacy car- quarter, as the Chinese economy recovered jects, 60 will be producing masks, disinfec- riers it once sought to subvert. And Mr Va- faster than others from covid-19. tants, drugs or other medical supplies. 1 radi has pulled this off without irritating passengers or gaining a Ryanair-like repu- tation for stinginess. Safe as houses Now, thanks to mass lay-offs of pilots, Japan, selected trading companies, $bn cabin crew and other staff, labour costs are tumbling. Empty airports are wooing carri- ers with cheap landing slots and discounts Market capitalisation Financials on other charges. That has allowed Wizz 150 Year ending March 2020 Marubeni Operating Air to set up ten new bases in the past three Company Revenues profit/loss months, including at London’s Gatwick Sumitomo airport, as well as in Germany, Albania and 100 Mitsubishi 132.9 3.0 Mitsui Russia. Plans to serve the Persian Gulf in a Itochu 98.8 3.5 joint venture with Abu Dhabi’s sovereign- 50 wealth fund remain on track. Mitsubishi Mitsui 61.9 1.7 Things could still go wrong. On Septem- Marubeni 61.4 -1.2 Itochu ber 1st, as European countries reimposed 0 travel restrictions, Wizz Air tempered its Sumitomo 47.7 1.4 plans to return to 80% capacity next quar- 20181614122010 ter. It is now aiming for 60%, still better Sources: Datastream from Refinitiv; Bloomberg than 45% or so for most European rivals. Its share price is below its peak in mid-Febru- Berkshire Hathaway’s Japanese bet ary, but back where it was at the start of the Warren Buffett famously likes his businesses simple to understand and transparent. year (see chart). Mr Varadi says Wizz Air’s Why, then, has his conglomerate, Berkshire Hathaway, poured $6bn into 5% stakes in €1.5bn in cash would last 20 months even if Japan’s five biggest trading houses? Mitsubishi, Itochu, Mitsui, Marubeni and Sumitomo all its planes stop flying. He relishes the do not appear to meet either criterion. They run a bewildering array of subsidiaries in chance to “sort winners from losers”. No most sectors of the economy. In that they bear a passing resemblance to Berkshire itself. points for guessing which group he thinks Prehaps more important, though, they satisfied two other Buffett must-haves: their his firm belongs to. 7 shares, dented by covid-19, looked cheap, and they pay reliable dividends. 56 Business The Economist September 5th 2020

2 Having business in China was not a pre- sure to China are in “wait and see” mode, anese companies’ affiliates produce in Chi- condition for the handouts; many compa- says Mr Ke. America may have a new gov- na is sold there. Now a second shift is under nies, especially small and medium-sized ernment soon. The scope and enforcement way, from consumer market to rival in so- ones that made up the bulk of applicants, of American sanctions is vague. Even if phisticated technology. had little or none. An executive at Novel tensions keep rising, Japan Inc is unlikely The latest annual survey of 74 technol- Crystal Technology, a producer of materials to behave as a monolith. Makers of niche ogy products and services by Nikkei, a Japa- for semiconductors, says his firm applied products for export may decamp from Chi- nese business newspaper, found that last for the subsidy to reduce overconcentra- na. Firms with a large Chinese business, year Chinese companies overtook Japan in tion—in the American market. The sums such as carmakers, will be loth to leave. market share for liquid-crystal displays in- on offer are far too small to spur all-out de- In the long run the risk for corporate Ja- stalled in smartphones and insulators for coupling, says Onishi Yasuo, a former offi- pan is less geopolitics than competition. lithium-ion batteries used in electric vehi- cial at the Japan External Trade Organisa- China already transformed once, from a cles. As an adviser to a large Japanese bank tion, an independent government agency. land of cheap labour into a booming con- observes, that is what really makes Japa- Most Japanese firms with lots of expo- sumer market; more than 70% of what Jap- nese firms nervous. 7 Bartleby After the fall

An anthropologist examines the world of work he study of working life tends to be cated societies was inevitable. As Mr Suz- The result of this process, he argues, Tdominated by economists, manage- man notes, humans’ complex brains ex- is an unsatisfactory relationship be- ment consultants and business-school pend a lot of energy processing tween humans and their jobs. “The work professors. So it is nice to get a new per- information. When you are awake you we do also defines who we are; deter- spective. James Suzman, an anthropol- constantly seek out stimulation and en- mines our future prospects, dictates ogist, provides that fresh appraisal in an gagement, and when you are deprived of where and with whom we spend most of ambitious new book called “Work: A information you suffer from boredom. our time; mediates our sense of self- History of How We Spend Our Time”. This analysis helps explain modern worth; moulds many of our values and Mr Suzman’s interpretation has a habits. The efficiency of agriculture and orients our political loyalties,” he writes. quasi-Biblical feel in which hunter- the exploitation of energy sources such as Humans have come to view idleness gatherers, like the Ju/’hoansi tribesmen coal and oil has allowed people in the as a sin and industriousness as a virtue, of southern Africa whom he has studied, developed world to meet their basic needs and teach children that hard work will lived in the garden of Eden. They worked of food and warmth. But human brains pay off. In today’s developed economies, only 15 hours a week and shared their need to be kept active. People created tasks though, there is little correspondence provisions equally. Then came “the fall” for themselves. First there was the Indus- between time worked and monetary and the arrival of agriculture, which trial Revolution, which sent workers into reward. Indeed, Mr Suzman questions brought with it hierarchical societies, factories. Automation subsequently made “why we are content to let our markets inequality, harder work and poorer diets. manufacturing more efficient, at the cost reward those in often pointless or para- Farming’s only, but crucial, advantage of many jobs. sitic roles so much more than those we was that the pastoralists were able to The rise of the service sector, Mr Suz- recognise as essential”. outbreed the hunter-gatherers and even- man suggests, is a way for people to keep This familiar criticism may strike a tually displace them from the land. themselves busy, even though many indi- chord with many readers. However, Mr Farming also brought a change of viduals are dissatisfied with work they feel Suzman’s view of modern society gives mentality. Hunter-gatherers may occa- is meaningless. Another sign of the human little credit to economic growth. Thanks sionally go short of food but they are need for activity is that people now un- to prosperity, fewer mothers die in child- rarely short of time. Agriculture is more dertake what was once considered work birth or infants in their early years. Peo- driven by the calendar: a time to plant (fishing, gardening, baking) as hobbies. ple in general are taller and live longer; and a time to harvest. It also requires they have a higher level of education and regular maintenance: weeding of plants, more choices than before. milking of cows and mending of fences. Economic growth also brings in- Human life became more regimented. novation. Bartleby’s mother was particu- The seasonal nature of agriculture larly grateful for the invention of the also had implications. Grain needed to be washing machine, which saved her a day stored and those who controlled the a week of scrubbing and wringing wet stores became the elite. This led to the clothes through the mangle. development of writing, as the surplus If humankind had stuck to hunting was traded and rations allocated. As well and gathering, there would be a lot fewer as grain silos, some agricultural societies humans. Even if Mr Suzman had been built monumental edifices like the pyr- alive in such a world, he would have been amids. That, too, required new profes- unable to study anthropology or write sions like stonemasons and carpenters. books. Modern work can indeed be bor- In time, humans gathered in towns and ing—and so, as the pandemic has shown, cities, which also created specialist can sitting at home. Not many people occupations like shopkeepers. would want to live their lives back in the Perhaps the development of sophisti- year 1020, or even 102000 bc. The Economist September 5th 2020 Business 57

Indian business ments in Jio, its mobile-network-turned- Microsoft also beefed up its bid by teaming digital-platform. Investors including Face- up with Walmart, a retail colossus. Over-Reliance book, a social-media giant, and kkr, a priv- Then came the Beijing bombshell. Chi- ate-equity one, appear to have concluded na’s commerce ministry added certain that the best way to get a piece of India’s fu- types of artificial intelligence, as well as ture is through a piece of its biggest player. personalised information-push technol- Mr Biyani may have had no choice but to ogy and data analysis, to a list of products find a buyer for his group. In a securities fil- critical to national security. These can no India’s biggest company gets ing in March he said Future Group was in- longer be sold abroad without official per- bigger. Again vestigating “baseless and false” rumours mission. They are also what makes TikTok few years ago Future Group was seen about the finances of subsidiaries that tick. ByteDance quickly said it would obey Aas, well, the future of Indian retail. were undermining their share price. On the new rules. From humble beginnings making trousers August 31st a subsidiary defaulted on some There was always ambiguity as to in the 1980s, Kishore Biyani, its founder, bonds held by mutual funds run by Frank- whether the app’s American suitors would built 2,000 shops in 400 cities across In- lin Templeton, a big American asset man- get its algorithm. They might have bought dia, selling all manner of consumer goods. ager. The debt is supposed to be repaid only the brand, its users, ad-buying plat- That is second only to the 3,700 retail out- from the proceeds of the sale to Reliance, form and less advanced software. But Byte- lets run by Reliance Industries, India’s larg- Franklin Templeton said. Still, being part Dance’s recommendation engine is a big est conglomerate, which peddles every- of Mr Ambani’s empire may not have been part of TikTok’s appeal. It has been honed thing from motor fuel to mobile phones. the sort of future Mr Biyani had in mind. 7 for years with data from millions of users Future’s Big Bazaar supermarkets or Food- around the world and displays an uncanny hall, a posh grocer, are enviably large and ability to divine peoples’ viewing tastes. modern, as is its logistics network. TikTok So Microsoft and Oracle structured their So enviable, in fact, that on August 29th bids to keep access to ByteDance’s code. Ac- Reliance said it would pay $3.4bn for most Limbo dance cording to a shareholder, both are offering of the company. The combined group ByteDance $5bn-10bn upfront, then anoth- would account for one in three formal er $5bn or so a year for a few years depend- shops in India. “This transaction takes into ing on TikTok’s revenues and performance. account the interest of all stakeholders in- In exchange, ByteDance would provide cluding lenders, shareholders, creditors,” technological enhancements and updates Now it is China’s turn to mess with the said Mr Biyani in a statement. every six months or so. hit short-video app Amazon might beg to differ. Last year “ByteDance is over a barrel, so it has to the American e-empire struck a complex nvestors in bytedance have got used to earn the price,” says the shareholder. Try- deal to provide Future, whose expansion Ibeing caught between superpowers. ing to write a brand-new TikTok algorithm had left it deeply indebted, with cash in ex- They were still taken aback on August 28th, in America is out of the question, says an- change for an option to buy it later—law when an update to China’s export-licens- other investor. It would be as difficult as permitting. Despite fiddly visits from In- ing regime blocked the sale of the hot Chi- starting a new company, he says. The dia’s regulators and trustbusters, Amazon’s nese technology firm’s prize asset—the Trump administration appeared to accept hope was that the deal would go ahead. No American arm of TikTok, a short-video that TikTok would keep technology ties such luck. On the contrary, India’s govern- app—to American firms and investors. with ByteDance, so long as data security ment has been making it harder for for- A Chinese riposte to President Donald was ensured by an American owner and the eigners to own Indian warehouses and de- Trump’s campaign against TikTok was in- link did not last for ever. livery fleets. It has tightened restrictions evitable. He contends it could give China’s Now Microsoft and Oracle await Byte- further amid the covid-19 pandemic. Communist Party means to spy on Ameri- Dance’s decision. They may withdraw their As an Indian firm, Reliance faces no cans and conduct disinformation cam- bids or amend them, to take account of the such obstacles. In the past year it has paigns. TikTok’s assurances that it does not fresh uncertainty over what they would be emerged as India Inc’s undisputed champi- censor content unflattering to Beijing or- getting. Once ByteDance signals its inten- on. It now accounts for 18% of the market send personal data to China have fallen on tions and any revised bids are in, it could value of India’s 30 biggest firms (see chart) deaf ears. Last month Mr Trump issued two take 30 days to get China’s go-ahead. Byte- and has secured $20bn in foreign invest- executive orders aimed at TikTok, the most Dance could then request an extension to recent of which will ban it in the United Mr Trump’s November deadline, perhaps States if it is not in American ownership by hoping that he loses to Joe Biden in elec- It all depends November12th. tions on November 3rd. Reliance Industries, market capitalisation Microsoft and Oracle, two software The risk of TikTok being blocked in 2020, % of BSE Sensex index total giants, put in rival bids of around America remains substantial. The Chinese 20 $25bn-30bn for TikTok’s operations in four government may refuse to grant an export markets—America, Canada, New Zealand licence and buyers could walk away. This 18 and Australia. Oracle enlisted some Ameri- would deprive ByteDance of billions. But 16 can venture-capital backers of ByteDance, that may be a price China is willing to pay to 14 including Sequoia Capital and General At- prevent America from setting a bad prece- lantic. It would be more hands-off than Mi- dent by forcing the sale of a Chinese tech- 12 crosoft and could let ByteDance or its foun- nology to American interests. 10 der, Zhang Yiming, reinvest in TikTok later As for Mr Zhang, taking a stand against 8 on. A strategic sale to Microsoft would be Mr Trump would earn him kudos, and pos- more definitive. But Mr Zhang favoured it, sible rewards, at home. State approval is according to people close to ByteDance. He not something the independent-minded Mar Apr May JulJun Aug once worked at Microsoft and is said to ad- entrepreneur has sought. He may yet have Source: Datastream from Refinitiv mire its chief executive, Satya Nadella. little choice but to accept it. 7 58 Business The Economist September 5th 2020 Schumpeter Reconstituted

How to build a better TikTok The new owner is unlikely to do away with advertising in fa- vour of subscriptions; teenagers are notoriously unwilling to pay for online content. But the new TikTok could offer an ad-free ver- sion for those who prefer to pay with cash rather than attention. It could also consider other revenue sources, for example taking a cut from enabling seamless sales of something users see in a clip or charging professional influencers once they have reached a cer- tain prominence (1m followers should be worth at least $100 a month to TikTok stars). As for ads, TikTok could target only broad categories of users instead of individuals, much as firms once bought ads in newspapers. Advertisers, who love microtargeting, need not necessarily object, so long as TikTok remains popular with its coveted young demographic group. Respectful management of data offers another business oppor- tunity. TikTok could give users more control, telling them how much their data are worth and managing information on their be- half, as a data trust of sorts. Other firms could tap your TikTok “data account” if you agree and they pay—a model pioneered by startups like digi.me and CitizenMe, which pocket a share of the proceeds from the data deals. Perhaps most important, the new owner could turn TikTok from a social-media service to a digital commonwealth, governed mainstream giant goes countercultural.” That is how the by a set of rules akin to a constitution with its own checks and bal- “A technology press described the decision in the early 2000s by ances. User councils (a legislature, if you will) could have a say in ibm, then a paragon of corporate it, to back Linux, an obscure op- writing guidelines for content moderation. Management (the ex- erating system written by a ragtag collection of activist coders. In ecutive branch) would be obliged to follow due process. And peo- the event, the unnatural combination wound up being a match ple who felt their posts had been wrongfully taken down could ap- made in computing heaven. It turned Linux into a serious rival to peal to an independent arbiter (the judiciary). Facebook has toyed Microsoft’s Windows, then the dominant operating system, and with platform constitutionalism: it once let users vote on privacy justified the decentralised way that Linux had been developed. changes (mostly as a pr stunt) and now has an “oversight board” to This benefited ibm and fuelled the rise of cloud computing, which hear user appeals (a more serious effort). But the social network in- is mostly powered by Linux and similar “open source” software. troduced these only in response to mounting criticisms. Drafting The tech industry may soon witness a similarly curious pair- rules at the outset might make them more credible. ing. Microsoft and Oracle, a big software firm, are—along with oth- er, less serious suitors—fighting over TikTok, a Chinese-owned Linux lessons short-video app. Its sale is far from assured (see previous article). Why would any company limit itself this way? For one thing, it is But if a deal were struck it too could prove momentous, this time as what some firms say they want. Microsoft in particular claims to a chance to redefine how big online platforms are run. TikTok be a responsible tech giant. In January its chief executive, Satya Na- could become the Linux of social media—and a model for others. della, told fellow plutocrats in Davos about the need for “data dig- The current debate over platform governance centres on two nity”—ie, granting users more control over their data and a bigger options, neither of them appealing. Governments tell firms what share of the value these data create. Brad Smith, Microsoft’s presi- to do (in part already the case in Germany). Or firms can regulate dent, last year wrote a book in which he argued that technology themselves (as happens in most other places, including America). firms “must accept greater responsibility for the future”. In a recent paper Dipayan Ghosh and Josh Simons of Harvard Uni- Governments increasingly concur. In its Digital Services Act, to versity propose a third way, more fitting for what the authors call be unveiled later this year, the European Union is likely to demand “algorithmic infrastructure”—utilities for the digital public transparency and due process from social-media platforms. In square. Governments should set a broad framework and let plat- America, ideas for making them more accountable appear on both forms experiment within it, the authors suggest. sides of the partisan divide. “Citizens who are using these plat- TikTok could become just such an experiment. It is a young ser- forms every day should have a say in what content is acceptable,” vice unburdened by an ingrained business model or governance says Johnnie Moore, an evangelical leader who has the ear of Presi- structure. ByteDance, its Chinese owner, has barely begun build- dent Donald Trump. Andrew Yang, a former Democratic presiden- ing these for the American market. None of TikTok’s wooers, in- tial candidate, has launched a campaign to get online firms to pay cluding Oracle and Microsoft, has much experience running a so- users a “digital dividend”. Getting ahead of such ideas makes more cial-media platform. So each could try something new as TikTok sense than re-engineering platforms later to comply. takes on social media’s incumbents, notably Facebook and Google. Today’s social-media titans will resist change. But they may re- Start with the business model. Social-media firms make almost consider, as Microsoft did with Linux. Mr Nadella’s predecessor, all their money from advertising. This pushes them to collect as Steve Ballmer, once called open-source software “a cancer”. Today, much user data as possible, the better to target ads. Critics call this Microsoft is one of the biggest users of and contributors to such “surveillance capitalism”. It also gives them every reason to make projects. Surreal as it sounds, 20 years from now Facebook and their services as addictive as possible, so users watch more ads. Google may have reconstituted themselves for the better, too. 7 Economics brief Culture The Economist September 5th 2020 59

particular Calvinists, drove the emergence of capitalism due to a strong work ethic. In the middle of the 20th century such cultural explanations began to fall out of favour. The rapid rise of Japan’s economy in the 1950s, and later of the Asian “tigers”, quashed the Marxist-Weberian notion that Western culture alone was conducive to in- dustrialisation. At the same time the in- creasing availability of data with which to do statistical analysis meant that econo- mists’ attention went elsewhere. Why bother with hard-to-measure matters such as morals, when it is possible to plug hard data such as capital accumulation, wages or employment into a regression model? In 1970 Robert Solow, a Nobel prizewinner, quipped that attempts to explain economic growth with reference to culture ended up “in a blaze of amateur sociology”. But an interest in culture remained— and indeed is now making a comeback. Since the 1980s datasets such as the World Values Survey and the General Social Sur- vey have made it easier to quantitatively measure cultural preferences and relate them to economic outcomes. Top eco- nomic journals now regularly include pa- pers on the importance of culture. Even many hardline wonks have come to realise the limits to pure economic reasoning. Perhaps the most influential text in the revival of cultural economics was “Making Democracy Work”, a book from 1993 by Rob- A social turn ert Putnam. Mr Putnam tried to under- stand why for many decades northern Italy Hard work and black swans had been richer than the south, folding the explanation under the catch-all term “so- cial capital”. People in the south were fiercely loyal to their family, but more dis- trustful of outsiders—whereas in the north people were happier to form connections To explain wealth and poverty, the ideas of the earliest economists are being with strangers, Mr Putnam argued. In the revisited and improved north people read more newspapers, were he emergence of the discipline of eco- portantly, that people would be self-inter- more likely to participate in sports and cul- Tnomics in the 18th century was the re- ested, but that they would satisfy their self- tural associations, and voted more fre- sult of people trying to explain something interest by adapting to the needs of others. quently in referendums. This, the theory that had never happened before. At the Karl Marx, a few decades later, worried that went, contributed to better local govern- time a handful of countries were becoming a culture of “oriental despotism” prevented ment and more efficient economic tran- fabulously rich, while others remained the emergence of capitalism in Asia. sactions, which in turn produced greater dirt-poor. In 1500 the world’s richest coun- The speculations of Smith, Marx and wealth—though Mr Putnam was not clear try was twice as well-off as the poorest one; others were often vague. Max Weber’s “The about the precise mechanism by which one by 1750 the ratio was five to one. It is no co- Protestant Ethic and the Spirit of Capital- thing led to the other. incidence that the most famous book in ism”, published in 1905, made them con- A group of researchers, largely domin- economics, published in 1776, inquired crete. Weber argued that Protestants, in ated by Italians who were inspired by Mr into “the Nature and Causes of the Wealth Putnam’s work, has since extended his of Nations”. ideas, seeking cultural explanations of why In order to explain such a divergence In this series some areas are rich and others poor. A pa- between rich and poor countries, the early 1 Competition and concentration per from 2004 by Luigi Guiso, Paola Sa- economists were obsessed with culture, a pienza and Luigi Zingales, also looking at 2 Setting minimum wages catch-all term encompassing a society’s Italy, finds that in high-social-capital ar- beliefs, preferences and values. Adam 3 Explaining inflation's absence eas, households invest less in cash and Smith, the author of “The Wealth of Na- more in stocks, and make less use of infor- 4 The dollar's role in trade tions”, explored the ways in which culture mal credit. In areas where people do not helped or hindered capitalism. He argued 5 The importance of culture really trust those outside their family, it that certain norms were required in order may be hard to form large business organi- 6 Embracing government debt for market economies to thrive—most im- sations which can benefit from economies 1 60 Economics brief The Economist September 5th 2020

2 of scale and which can drive the adoption differences in pre-industrial agriculture anced relationship between state and soci- of new technologies. This suggests that it is and environmental conditions. Plough ety, possibly because the country had more no coincidence that the average business cultivation, common in Egypt, required marginal land and more smallholders. In in Lombardy, a rich northern region in Ita- lots of upper-body strength—so men were Guatemala, by contrast, it led to the emer- ly, has 13 employees, compared with five in at an advantage. Shifting cultivation, more gence of a rapacious government. Calabria, a poor southern one. common in Namibia, used hand-held tools In addition to culture, therefore, a grow- Others look beyond Italy. In “A Culture like the hoe which suited women better. ing band of economists is looking at “insti- of Growth”, published in 2016, Joel Mokyr The effect of these agricultural technol- tutions”, often taken to mean the legal sys- of Northwestern University puts the “prin- ogies echoes in statistics today. tem and regulations. Some cultural ciple of contestability” as the reason why Other economists look to the distant economists argue that the focus on institu- some countries industrialised but others past to explain contemporary disparities in tions proves their point: what are institu- did not. Organisations such as the Royal income and wealth. A paper from last year tions if not the product of norms, values Society, founded in London in 1660, were by Benjamin Enke of Harvard University and preferences? Americans’ and Euro- forums for the exchange of ideas, where finds evidence that pre-industrial ethnici- peans’ differing beliefs about the causes of people put forward their discoveries and ties which were exposed to a high local inequality, for instance, go a long way to- fiercely interrogated the theories of others. prevalence of pathogens exhibited tighter wards explaining why European welfare Crucially, too, over time the goal of western kinship systems—meaning, in effect, that states are more generous than America’s. European science shifted from one con- people were strongly loyal to their extend- But in many cases the emergence of dif- cerned with the “mindless piling up of em- ed family but suspicious of outsiders. In a ferent institutions may have nothing to do pirical facts”, as Mr Mokyr puts it, towards place threatened by disease, tight family with a country’s culture. Sometimes it is discoveries which could be put to use in the ties were beneficial because they reduced just luck. Mr Mokyr shows that Europe, real world. Scientific inquiry laid the the need to travel, and therefore the risk of which was fragmented into lots of states, groundwork for European economic ex- being exposed. Places which had tighter was the perfect setting for innovation: in- ceptionalism. Nothing quite comparable kinship systems hundreds of years ago tellectuals who challenged received wis- happened in other parts of the world. tend to be poorer today, a relationship dom and incurred the wrath of the authori- which first emerged during the industrial ties could move elsewhere (Thomas Culture club revolution. Other research has looked even Hobbes wrote “Leviathan” in Paris). By con- The revival of cultural explanations for further back, suggesting that contempo- trast in China, Mr Mokyr argues, free think- wealth and poverty seems to be a method- rary cultural traits are the result of genetic ers had few escape routes. Europeans did ological step forward. Yet it raises two big variation. But this remains a niche pursuit, not plan such a system. It just happened. questions. The first concerns the origins of and most economists turn queasy when it Other work by Mr Acemoglu and Mr cultural traits: where do they come from? comes to talking about genetics. Robinson, along with Simon Johnson of The second is why people from apparently A separate body of research focuses on mit, has found a further element of ran- similar cultures sometimes have very dif- cases where culture is not a sufficient ex- domness which may explain contempo- ferent economic outcomes. To answer planation for economic outcomes. Take rary patterns of wealth and poverty— these questions, economists have come to the case of Guatemala and Costa Rica. “The namely, which countries are more prone to appreciate the importance of history—and, two countries had similar histories, simi- certain diseases. The mortality rate of set- in particular, historical accident. lar geographies and cultural inheritance, tlers was low in some colonised countries, Take first the question of the origin of and were faced with the same economic such as New Zealand and Australia, in part cultural traits. Some research suggests that opportunities in the 19th century,” write because the kinds of diseases that were they are the product of changes which took Daron Acemoglu and James Robinson in there were less virulent. In others, such as place hundreds of years ago. A 2013 paper “The Narrow Corridor”, a book published Mali and Nigeria, mortality rates were far by the late Alberto Alesina and two of his last year. But today the average Costa Rican higher. Colonisers did not want to settle in colleagues looks at why countries have is more than twice as rich as the average countries with a high risk of disease, even very different rates of female labour-force Guatemalan. The cause of the divergence as they wanted to take those countries’ raw participation. Egypt and Namibia are about initially appeared random, according to Mr materials. So in countries such as Mali and as rich as each other, but the share of Na- Acemoglu and Mr Robinson. Eventually it Nigeria, rather than permanently settling, mibian women in the labour force is more became clear it was down to coffee. In Costa they set up systems which enabled the than twice that of Egyptian women. The pa- Rica the development of coffee plantations maximum of resource extraction with the per puts such differences largely down to for the European market led to a more bal- fewest boots on the ground. That, say Messrs Acemoglu, Johnson and Robinson, produced rapacious political systems The wealth of nations which have endured to this day. GDP per person, $’000, 2011 prices 40 Are economists any closer to answering the foundational question of their science? Far from the simplistic certainty of Weber, 30 it seems likely that some countries are rich France and others poor because of a messy combi- 20 nation of economic incentives, culture, in- stitutions and chance—which is most im- portant remains unclear. In 1817 Thomas Britain China 10 Malthus, one of the early economists, wrote in a letter to David Ricardo, another, India that “the causes of the wealth and poverty 0 of nations [were] the grand object of all en- 1500 50 1600 50 1700 50 1800 50 1900 50 2016 quiries in Political Economy”. The revival Source: Maddison Project Database of cultural economics two centuries on has helped in that quest, but it is not over yet. 7 Finance & economics The Economist September 5th 2020 61

Also in this section 63 The Fed’s softer target 63 Indian finance in the dock 64 Wall Street’s political donors 64 World Bank business rankings 65 Buttonwood: Private equity 66 Free exchange: Abenomics

Financial coupling in China ings. But it is more than that. China has made it much easier for foreigners to enter Present tense, future market its markets, and it offers two things that are rare in the world at the moment: gdp growth and interest rates higher than zero. Despite talk of a new cold war, there are two reasons to think that coupling, not de- coupling, will remain the better descrip- SHANGHAI tion of Sino-American financial ties. The As America tries to cut links, China is opening its door to foreign capital first is China’s own actions. It is pursuing f you want a sure-fire way to get reject- through global markets every day, the main what Yu Yongding, a prominent econo- Ied, try asking Western financial firms for trend looks more like coupling. Consider mist, has described as a “linking strategy”, interviews about how geopolitical ten- these moves by investment and commer- seeking to create more connections with sions have affected their strategies in Chi- cial banks in the past half-year alone. Gold- foreign companies. Since late 2019 the gov- na. “This topic carries some sensitivities,” man Sachs and Morgan Stanley took major- ernment has lifted foreign ownership caps one bank demurs. “We don’t want to end up ity control of their Chinese securities on asset managers, securities firms and life in a Trump tweet,” says another. The Econo- ventures. hsbc acquired full control of its insurers. It has belatedly allowed Master- mist sought interviews with 15 global Chinese life-insurance venture. Citi re- Card and PayPal to enter its payments in- banks, insurers and asset managers. All de- ceived a coveted custody license to serve dustry. And it has let foreign ratings agen- clined to speak—except on background. institutional investors in China. Among cies cover more Chinese firms. Such bashfulness from the swaggering asset managers, BlackRock received ap- Even without the linking strategy, Chi- titans of finance is revealing in itself. They proval to sell its own mutual funds in Chi- na has ample incentive to open its finan- are on unfamiliar ground. For years the na and Vanguard decided to shift its Asian cial system more widely. Its current-ac- American government called on China to headquarters to Shanghai. count surplus has steadily narrowed as a open up to foreign capital, while China Even more astonishing are the money share of gdp over the past decade (though it dragged its feet. Suddenly, these roles have flows. Roughly $200bn has entered China’s will soar this year because of the covid-19 been reversed. President Donald Trump’s capital markets from abroad over the past impact); that puts pressure on it to attract administration wants global financiers to year. Foreign holdings of Chinese stocks more inflows through its capital account. pull back from China. But China is enticing and bonds at the end of June were, respec- At the same time reformist officials want them in, creating opportunities that few tively, 50% and 28% higher than a year ear- greater foreign participation in the finan- had expected to come so quickly, if ever. lier (see chart 1 on next page). Some of this cial system. Zhou Xiaochuan, China’s for- It has made for a disconnect between reflects an inevitable pull as global index mer central-bank governor, has argued that the political and the financial realms. compilers such as msci add Chinese assets just as competition from abroad helped Many observers focus on the decoupling to their benchmarks; fund managers that make Chinese manufacturers world-class, between America and China. Yet for those passively track these benchmarks must al- so it can elevate the finance industry. Regu- managing the trillions of dollars that flow locate cash in line with the new weight- lators also want companies to raise more 1 62 Finance & economics The Economist September 5th 2020

2 funding by issuing bonds and stocks, to building up brokerages or asset-manage- lessen reliance on bank lending. Coldish war, hottish market 1 ment operations in China, the investments China’s regulatory relaxation dovetails Foreign holdings of domestic Chinese assets are small compared with their global foot- with the second factor: the interests of for- Yuan trn prints. The Chinese securities firm con- ubs eign financial firms. The Chinese market is 2.5 trolled by , for instance, held just 5bn simply too big to ignore. The investable yuan ($730m) in assets at the end of 2019— Bonds wealth of retail clients is projected to grow 2.0 bigger than any other foreign-owned secu- from about $24trn in 2018 to $41trn by 2023, rities firm in China but barely 0.2% of ubs’s according to Oliver Wyman, a consultancy. 1.5 global investment-banking assets. And few sophisticated, globally minded as- The one American action that could al- 1.0 set managers operate in China today. Equities most instantaneously derail financial cou- Foreign institutions know better by pling would be to block China from the dol- 0.5 now than to assume that the economy’s lar-payments system. The administration swift scale will directly translate into business 0 could do so by pressuring , a Bel- for them. In the early 2000s China began gium-based messaging system that under- 2019181716152014 opening its commercial-banking industry pins most cross-border transfers, to boot Source: Wind to foreigners, but their share of the market, out Chinese members. Or it could order the always tiny, has shrunk over time, dipping big banks which clear dollar payments in to just about 1% of domestic-banking as- on track to buy out the local partner in its America to stop serving Chinese banks. sets. They are bit players. asset-management venture for $1bn, a 50% Chinese officials, alarmed by these Yet foreigners may fare better in the sec- premium over fair value. That is expensive, once-unthinkable possibilities, have held tors newly open to them. No global bank but it also testifies to the weight that Jamie meetings in recent months to discuss how can compete for deposits against the likes Dimon, the banking colossus’s chief, they might respond. They have talked of Industrial and Commercial Bank of Chi- places on China. “He is looking to build a about promoting the yuan as an alternative na, which boasts some 15,700 branches. real business,” she says. to the dollar and home-grown payment Success in investment banking and asset The political tussle with America looms networks as alternatives to swift. In prac- management, however, is more related to over these corporate decisions. “Global tice, neither would help much. The yuan, experience than to sheer heft. Can an ad- headquarters asked us to develop optimis- constrained by capital controls, remains a viser help structure a cross-border acquisi- tic, realistic and pessimistic scenarios,” weakling in global finance, while China’s tion? Can an asset manager offer the right says the ceo in China of an American bank. would-be swift replacements have failed interest-rate swaps to hedge currency ex- “I laughed because there’s no point think- to gain traction. posure? “These are the areas where foreign ing of things getting better. It’s binary. Ei- The biggest constraint on America is the firms feel they have an advantage,” says ther we can continue in China or we can’t.” damage that it would suffer itself. Cutting Mark Austen, head of the Asia Securities In- So far things have clearly remained on the China off from the dollar would undermine dustry and Financial Markets Association, remain-in-China side of the equation. not just Chinese banks but also China- a group that represents many of the world’s America’s financial measures against Chi- based companies that account for more biggest financial institutions. na have thrown some sand in the gears but than a tenth of the world’s exports. This Not that China is going to make it easy. A have not stopped them from turning. would trigger a collapse in international taste of the potential complications came The Trump administration has blocked trade, massively disrupt supply chains in the approval granted to BlackRock for a a federal-government pension plan from and, quite possibly, deepen the global re- fund-management company. Unlike prior investing in Chinese stocks. It has threat- cession. The fact that American policymak- approvals for Chinese-owned entities, the ened to delist Chinese firms from Ameri- ers must contemplate such consequences regulator added a condition, demanding can stock exchanges. And it has placed is an argument in favour of China’s linking adherence to the Internet Security Law. sanctions on Chinese officials in Hong strategy. “The only option is more open- BlackRock will need to store client data Kong and Xinjiang. All three moves are, in ness,” says Larry Hu, head of China eco- within China and authorities could de- the grand scheme, mild. The government nomics at Macquarie Group in Hong Kong. mand access, likely forcing it to segregate pension plan that now excludes Chinese “You must create a situation where your its Chinese and global systems. stocks represents just 3% of American pen- counterpart has more to lose.” For foreign Foreign firms will also face a ferocious sion assets. China has until 2022 to stave financiers in China, that, oddly enough, is battle with domestic firms on a playing off the threatened delistings, and has al- music to their ears. 7 field that is tilted against them. “They’ll ready proposed a compromise, giving never just completely open and be fine American auditors more access to its com- with us crushing the locals,” says one bank- panies’ books. In the meantime, the value Peace offerings 2 er. State-owned firms will reserve their of Chinese listings on Wall Street has risen US-listed Chinese IPOs* juiciest deals for domestic banks. The gov- this year (see chart 2). As for the sanctions, Number Value, $bn ernment is engineering mergers to create they can be painful for individuals, but 50 10 what it calls an “aircraft-carrier” invest- would have harmed China much more if ment bank to repel foreigners. And global they had named entire banks. 40 8 asset managers will have little choice but to It is only prudent for firms to prepare distribute their products through domestic for America to take a tougher line against 30 6 banks and tech platforms. Chantal Grind- China. But the implications in the financial 20 4 erslev, founder of Majtildig, a Shanghai- sector are different from, say, the industri- based advisory firm, sees a split between al sector. Factories require a large fixed in- 10 2 foreign firms that commit capital to China vestment and carefully configured supply for the long haul and those that are less pa- chains. Investments in bonds or equities 0 0 tient. “If you have to be profitable in three are, by contrast, much easier to adjust—at 20†191817162015 years or less, this is not the market to en- least so long as China lets investors move *Primary listings only Source: Dealogic †To August 31st ter,” she says. JPMorgan Chase, she notes, is cash out of its markets. Even for firms The Economist September 5th 2020 Finance & economics 63

The Federal Reserve Indian finance New job Silent no more description Two aggrieved central bankers spill the beans WASHINGTON, DC entral bankers who leave office The Fed’s move to emphasise full often write memoirs. Few are as employment could start a global trend C damning of the financial system they n 2018, when America’s long recovery once served as Urjit Patel, the governor of Ifrom the 2007-09 financial crisis pushed the Reserve Bank of India (rbi) in 2016-18, the unemployment rate below 4%, the Fed- and Viral Acharya, its deputy governor in eral Reserve had a simple message for 2017-19, who is now an academic at nyu American workers: do not get used to it. Stern School of Business. In separate The central bank’s economic projections books, they tell stories of rampant gov- revealed that its officials believed 4.5% to ernment meddling in the banking sys- be the lowest sustainable jobless rate, to tem. Both stood down before their terms which America would need to return to ended. Their books suggest why. stop inflation surging upwards. If higher Mr Patel does not directly address his interest rates and slower growth were departure. But he appears to have needed to achieve that, so be it. reached breaking point when the govern- On August 27th Jerome Powell, the Fed ment of Narendra Modi tried to dilute chairman, acknowledged what common new bankruptcy rules that it had once sense suggested two years before: that an championed to tackle the problem of intentional increase in unemployment is zombie corporations. an odd thing to pursue after nearly 20 years In a chapter titled “The Empire Strikes of depressed labour-market conditions. Back”, he relates how the government Endangered species Speaking at an annual central-banking lobbied the rbi to extend repayment shindig, Mr Powell unveiled the conclu- times for companies with 2trn rupees long-buried clause in the rbi’s enabling sions of a monetary-policy strategy review ($27bn) in aggregate exposure. “Instead legislation, allowing the government to begun in 2019. The coming changes to Fed of buttressing and future-proofing the give directions to the central bank when policymaking could initiate an important gains thus far”, he writes, the atmosphere it was in “the public interest”. Suggesting global shift in central-bank practice. became one of going “easy on the pedal”. sympathy for Mr Patel, he says the ex- The Fed’s old framework was forged by Mr Patel describes how Indian savers, governor’s battle to defend financial the inflationary tumult of the 1970s. Post- to whom he dedicates his book, see their stability made his job untenable. war economists understood there to be a funds used by government-controlled Mr Acharya grimly concludes that a negative relationship between inflation banks and other financial institutions “silent crisis” has been unfolding in and unemployment—known as the Phil- for “vague (and extraneous) objectives”, India’s banking system, with borrowers lips curve—such that policymakers could such as supporting politically connected prevented from defaulting only because push unemployment as low as they liked, states and companies and, sometimes, the government is presumed to prop provided they were prepared to accept the stockmarket. The distortions un- everything up. That works until the more inflation. But soaring prices persuad- dermine banks’ incentives to apply the government’s “solvency is itself consid- ed many that this relationship did not hold scrutiny needed to properly allocate ered to be on the brink”. With the econ- below some minimum sustainable level of credit. Price signals become confused; omy shrinking by 24% in the April-June unemployment. Attempts to push jobless- interest rates for viable private compa- quarter, compared with the same period ness lower would yield higher inflation, nies must remain high to offset the ones in 2019, and public finances under pres- but at best only a temporary reduction in that don’t pay. sure, the strains are only likely to get unemployment. By the 1990s, most central Mr Acharya documents other forms of worse. But at least with these two brave banks had resolved to target a low level of interference. These include constant books the silence has been broken. inflation, generally around 2%. pressure to provide stimulus, raids on ...... But since the embrace of inflation tar- the central bank’s reserves to cover bud- Urjit Patel, Overdraft, Saving the Indian Saver. Viral geting in the 1990s, the relationship be- get deficits, and even threats to invoke a Acharya, Quest for Restoring Financial Stability tween employment and inflation has weakened. Soaring joblessness during the Great Recession failed to produce the ex- point to technological change and globali- mains a constraint, but a more flexible one pected plunge in prices. Neither have low sation, which expand consumer options than before. It should be hit on average, Mr levels of unemployment since then ended and allow firms to respond to increased de- Powell explained, meaning that periods of an era of historically low inflation. Precise- mand without raising prices. Whatever the below-target inflation can be offset by at ly why the relationship between inflation cause, the flattening Phillips curve biased least some time with inflation above the and joblessness changed is uncertain. monetary policy in an overly hawkish way, target as well. Some economists reckon central banks’ eventually prompting the Fed rethink. But the conceptual change—abandon- credibility in managing inflation anchored The changes to its framework may seem ing the notion of a minimum sustainable the public’s expectations too well. Others modest. Because the maximum sustain- unemployment rate—is significant. And point to a decline in workers’ bargaining able level of employment cannot be mea- the practical effects could be large. Had the power, which has eased the pressure on sured, the Fed will give up worrying about Fed enjoyed more freedom in recent years, firms to raise prices in order to cover the overshooting it and focus only on employ- it could have raised interest rates more cost of expensive pay packets. Still others ment shortfalls. The 2% inflation target re- gradually, or not at all, enabling a faster and1 64 Finance & economics The Economist September 5th 2020

2 more complete labour-market recovery. more than $18m this year, compared with Whether policy will change much in Follow the money around $5m last time, is the only titan who practice is as yet unclear. Markets, for their United States, total donations of selected has increased his share to the president. Mr part, appear not to see a radical change of individuals to political campaigns, $m, log scale Mercer gave more than $15.7m to regime in the offing. Market-based mea- Share given to Trump-affiliated committees in 2016. This Michael sures of inflation expectations are around Republicans, 2016, % Michael 2019-20* time he has given less than $400,000. Bloomberg†Bloomberg 100 1.7%, below the Fed’s 2% target. American 0 It is a similar story with Joe Biden, the Schwarzman George stockmarkets, which seem to soar at the Soros 10 Democratic challenger. His two biggest gentlest of nudges, have rallied, some hit- Jim Simons Paul Singer Wall Street supporters are Mr Soros and Mr ting record highs in the past week. More David Elliot Shaw 1 Shaw, both of whom have given around Robert important is the reaction in foreign-ex- Mercer 0.1 $500,000 each—less than they had given to change markets. The greenback has Cliff Asness Hillary Clinton at this point in her race slipped nearly 1% against a basket of major 0.01 against Mr Trump in 2016. currencies since Mr Powell’s speech, bring- ↘ Lower donations in 2020 0.001 The congressional races are attracting ing its total decline since May to about 8%. 0.001 10.10.01 10010 more attention. The Wall Street group has A weakening dollar could indicate that 2015-16 given over $8m to Senate races and $19m to markets see more room for policy di- Source: Federal *To August †Excludes House races, triple the total contributed to Election Commission donations to own campaign vergence between the Fed and other central congressional races at this point in 2016. banks, most notably the European Central The “Senate Majority pac” (smp) is particu- Bank, whose mandate does not explicitly to 68 people. Of these, 52 have given money larly popular with Democratic donors. Mr require it to minimise joblessness. to political campaigns in at least one of the Shaw has given more to Senate campaigns Under any circumstances, the macro- two most recent general-election cycles than he has to Mr Biden. Mr Simons has economic developments which led the Fed (2015-16 and 2019-20). Together they are given $3.5m to the smp. to revise its strategy would no doubt have worth $310bn and manage firms with as- The Senate race is of keen interest be- influenced other central banks to adjust sets of over $32trn. cause it is considered particularly tight. their own policies. But in weak advanced Estimates of their political contribu- But the lowly sums in the presidential bat- economies with interest rates close to zero, tions are drawn from campaign-finance tle may reflect a dispiriting reality—that currency appreciation against the dollar data in the Federal Election Commisson, a neither Mr Trump nor Mr Biden generates places a drag on spending which cannot regulator. The Economist has attempted to much enthusiasm. At least those worried easily be offset by further easing. The Fed contact larger donors to verify them. Not that Wall Street has Washington in its may thus find that its modest adjustment all have responded. Most of these Wall pocket can console themselves that so far encourages imitators elsewhere in surpris- Street donors hedge their bets; they give to the financiers are not providing the sort of ingly short order. 7 campaigns from both parties. But the big- sums that can help define the race. 7 gest contributors have, in the past, tended to be one-party loyalists (see chart). Eight Campaign finance of the 52—including Cliff Asness of aqr World Bank Capital Management, an investment-man- Wall Street’s agement firm; Robert Mercer, then co-ceo Unease of Doing of Renaissance Technologies, a hedge money fund; and Paul Singer of Elliott Manage- Business ment, an activist-investment firm—gave exclusively to Republican campaigns in NEW YORK the 2016 election cycle. Nine—including Who are America’s financial elite A global red-tape ranking has enough Mr Mercer’s then-colleague Jim Simons, backing in 2020? flaws to make you queasy who founded Renaissance, George Soros, a he ties between Wall Street financiers hedge-fund veteran, and David Elliot Shaw unning a business is hard in many Tand politicians are the subject of a lot of of D.E. Shaw, another hedge fund, gave only Rparts of the world. So the World Bank scrutiny. Not for nothing is Goldman to candidates of the Democratic Party. gives governments an incentive to make it Sachs, a bank, sometimes nicknamed In the intervening years, the pro-Re- easier, and ranks them according to where “Government Sachs”. But how important publicans have appeared to grow less parti- the burden of regulation is lightest. This are the moneybags in New York to political san. Just three of them have remained Re- year, though, its Doing Business (db) index success in Washington, dc? Quantifying publican-only, including Mr Singer and Mr has itself been ensnared in procedural the relationship can be done using the ex- Mercer. Total donations went mostly to Re- problems. On August 27th the Bank said tensive data collected about campaign do- publicans in 2016, but are now evenly split. that publication of the next set of rankings nations. It’s not an uplifting exercise. Political leanings aside, much else has would be delayed. It comes in a year when, The first task is to decide who counts as shifted since the last election. Firstly, the The Economist understands, China was go- Wall Street’s elite. As well as encompassing sums given have fallen. In 2016 the finan- ing to be ranked one of the biggest improv- the bosses of banks like JPMorgan Chase ciers provided $130m to political cam- ers. On that the Bank had no comment. and Morgan Stanley, they also include the paigns, or 1.4% of the total raised. So far Some cheered the postponement be- heads of some hedge funds, private-equity this cycle, their share is just 0.5%. Striking- cause they think the index is counterpro- shops, asset managers and wealth-man- ly, many appear to be sitting 2020 out; ductive, specious, or both. Many critics agement firms in New York, New Jersey around a fifth of those who gave meaning- worry that it encourages pr-attentive tech- and Connecticut. In addition are billion- fully in the last election have given nothing nocrats and politicians to slash regulations aire New Yorkers on the Forbes list, who in 2020. This decrease is largely the result excessively and that it ignores how rules have earned their wealth via some form of of a drop in contributions to the presiden- are applied in practice. A study in 2015 finance, such as Michael Bloomberg of the tial campaign, particularly that of Donald found “almost zero correlation” between eponymous financial-information firm. Trump. Stephen Schwarzman of Black- the db results and what businesses say Totted up this way, the financiers amount stone, a private-equity firm, who has given when directly surveyed by the World Bank. 1 The Economist September 5th 2020 Finance & economics 65

2 Still, the recent suspension happened concerned that China’s db ranking would Some performance improvements defy not because of methodological concerns, fall, which led the bank to double check the logic. An email seen by The Economist sug- but because of questions about data integ- results, an ex-insider says. After fixing a gests that Azerbaijan’s rise to attain the top rity. Nine World Bank whistle-blowers coding error and tweaking a judgment call, score globally for legal rights when obtain- have alerted management to alleged “irreg- its ranking did not drop. ing credit last year was particularly contro- ularities” in the indices published in 2017 A further source of uneasiness comes versial. Its overall score declined. and 2019, including for Azerbaijan, China, from countries paying the World Bank for The World Bank is doing a thorough au- Saudi Arabia and the United Arab Emirates. advice on how to rise up the db rankings. dit of its processes, including those relat- It is not hard to see why countries might China, Saudi Arabia and the United Arab ing to the ras. Whatever the investigation want the figures to be fiddled. Falling down Emirates all pay for such Reimbursable Ad- uncovers, the saga highlights the tension the rankings is politically embarrassing. visory Services (ras), which in the past between the institution’s different roles. The World Bank, meanwhile, may have an were delivered by some db staffers them- The Bank likes to think that its diplomatic incentive to keep relations with important selves. (The use of db officials in this way and research functions are complemen- members sweet. In 2017 its leaders grew was stopped in 2019.) tary. If only things were so simple. 7 Buttonwood Impaired visibility

Private equity’s dodgy data remain a huge headache n “the black island”, Tintin, the by as much as 25%. Between data-crunch- equivalent, say, of the s&p 500 index in Iquiff-sporting boy reporter, uses a ers, discrepancies arise. Pitchbook, one of America’s public stockmarkets. Recently plane to chase a pair of forgers flying over them, says private-equity funds raised investors have developed measures Scotland. As he closes in on them, they $474bn globally last year; Preqin, another, dubbed “public-market equivalents” suddenly disappear into a bank of reckons they collected $595bn. (pmes), which compare the results of clouds. “Just as I feared,” says his pilot. Assessing the returns the industry investing in private markets with public “Running into cloud.” After crashing into generates is the next headache. Investors ones. But pmes often resemble fiddly a dyke, Tintin emerges bruised but im- commit money to private-equity funds. do-it-yourself accounting devices rather pressed by the itchy feel of Scottish They provide it when it is called upon to than something dependable. The in- fashion and his first pint of stout. buy assets. The favourite performance dustry, which attracts some of the Running into cloud is a good descrip- indicator of such funds is the “internal rate world’s shrewdest investors, has yet to tion of the sustained rush into private of return” (irr), which calculates returns come up with a way to measure the risk- equity. Sophisticated investors—pension on the capital deployed to buy the assets, iness of an investment. Public markets funds, insurers and the like—have but ignores the rest of the committed have had the Sharpe ratio, which is used poured money into the asset class in money. For investors, immobilising mon- to gauge the risk-adjusted return of recent years. Soon, in America at least, ey carries an opportunity cost, all the more assets, for over 50 years. they may have more company. On August so in an environment where idle cash, in The industry continues to attract 26th the Securities and Exchange Com- real terms, earns you nothing or worse. newcomers who buy into its claims that mission, America’s markets watchdog, irrs can be easily manipulated by altering it is a profitable form of investment and a broadened the pool of “accredited in- the timing of payments and by using good way to diversify. It insists that vestors” deemed savvy enough to play in leverage. They also assume that when investors who stay in for the long haul private markets. They may include some private-equity firms return capital to have enjoyed buoyant returns. But the retail investors. investors, it can be reinvested at the same flimsiness of the data makes it disturb- But veterans and novices alike face rate that the rest of the fund is earning. ingly hard to verify these claims and the same visibility problem. Working out That is hardly guaranteed. means the critics of the industry and its how much money is channelled into The third shortcoming is the industry’s defenders rarely fight on common private equity, how much it makes and lack of a widely accepted benchmark—the ground. Ludovic Phalippou, an Oxford whether the adventure is worth it is University academic, claimed in July that fiendishly tricky. That is because, even if the numbers were “a myth perpetuated private equity today is not all that priv- by thousands of clever people”, mainly ate—its biggest firms are listed, and they because of misuse of irrs. kkr, a priv- routinely buy and sell companies and ate-equity giant, retorted that his argu- securities in public markets—the data ments were based on “flawed assump- leave a lot to be desired. tions and selective engagement with the Three areas of fuzziness stand out. facts”. Because of the deficiencies in the First is the amount of money allocated to data, it was hard to say whose claims the industry. Some pension funds speci- carried more weight. fy the proportion of their assets that they Mysteriousness has long added to intend to invest in private equity but few private equity’s elite status. But the more reveal their precise disbursements. money the industry raises and prepares Reports by third-party researchers that to deploy and the more it is open to calculate aggregate fundraising are ordinary investors, the more pressure it “directionally suggestive” at best, says will come under from regulators to one. He confesses their estimates often improve transparency. It doesn’t take a prove wrong six months on, sometimes Tintin to work that out. 66 Finance & economics The Economist September 5th 2020 Free exchange Parting shot

What can the world learn from Abenomics? s an exercise in political branding, Abenomics has been an pay put little upward pressure on prices. Aunusual success. When Abe Shinzo returned to power as Ja- Another threat to the power of central banks could recur else- pan’s prime minister in December 2012, he said he would revive where. Japan’s public became so accustomed to unchanging the economy by loosing off three “arrows”. The first, expansive prices, it assumed the future would mirror the past. That assump- monetary policy, would banish deflation. The second, flexible fis- tion, which shaped pay negotiations between unions and employ- cal policy, would restrain public debt without jeopardising the re- ers, then became self-fulfilling. This was a difficult legacy for Abe- covery. The third arrow, structural reform, would revive productiv- nomics to overcome. Proponents of monetary activism were right ity and lift growth. The image stuck, even after the government to criticise the boj for not fighting this mindset earlier. They were tired of it. wrong to think those past mistakes were easily reversible once Mr Abe’s archery excited keen interest elsewhere. Many other Abenomics began. “I was too optimistic and too certain about the mature economies, after all, look a little Japan-ish. They combine ease with which a determined central bank could conquer defla- greying populations, faltering growth, high public debt and stub- tion,” admitted Mr Bernanke in 2017. bornly low inflation, despite miserly interest rates. “Yes, we are probably all Japanese now,” concluded Jacob Funk Kirkegaard of Big is beautiful the Peterson Institute for International Economics, an American As well as showing that monetary policy is less powerful than think-tank, last year, even before the covid-19 pandemic added to hoped, Abenomics has shown that high public debt is less danger- the debt, disinflation and despair. As Mr Abe departs after almost ous than feared. Japan’s gross government debt was almost 230% eight years in charge, what lessons can others draw? of gdp when Mr Abe took charge and is even higher now. But the The first lesson is that central banks are not as powerful as cost of government borrowing has remained negligible. Indeed, hoped. Before Abenomics, many economists felt Japan’s persis- yields for five-year bonds are negative. tent deflationary tendencies stemmed from a reversible mistake Fiscal scolds point out that yields on bonds are low because the by the Bank of Japan (boj). It had combined fatalism with timidity, central bank is buying so many of them: its holdings now amount blaming deflation on forces outside its control, and easing mone- to 99% of gdp, whereas the Fed’s equal about 20% of American tary policy half-heartedly. In 1999 Ben Bernanke, later a Fed chair- gdp. The term “financial repression” gets bandied about, as if Ja- man, called on the boj to show the kind of “Rooseveltian resolve” pan’s central bank is conspiring to let the government spend more that America’s 32nd president showed in fighting the Depression. than it should, at the expense of the private sector. But that gets Sure enough, in April 2013, the boj made a display of new deter- things backwards. The central bank is doing everything it can to re- mination, promising to buy enough assets, including government vive private spending. Until it succeeds, though, the government bonds and equities, to raise inflation to 2% within about two years. has to fill whatever gap in demand remains. The shortfall in priv- In 2016 it introduced negative interest rates, a cap on ten-year bond ate spending is what makes government deficits necessary. It is yields and a promise to let inflation overshoot its target (which the also what makes them so cheap to finance. Federal Reserve emulated last month). These efforts stopped per- What about the third arrow of Abenomics? Before its lost de- sistent deflation, a feat that is often forgotten. But they could not cades, Japan taught the world how to raise productivity in big lift inflation close to the central bank’s target (see left-hand chart). firms, through “lean manufacturing”, just-in-time delivery, and so One reason may be peculiar to Japan: its regular workers are on. Unfortunately, the country also shows how badly productivity economically monogamous, enjoying long-term employment re- can lag in small firms. Many operate in service industries, where lationships with a single firm. They are almost impossible to fire productivity is notoriously low. Yet even in manufacturing, small but also difficult to poach. Thus, although Abenomics lowered un- enterprises are less than 40% as productive as their larger counter- employment to just 2.2% by the end of last year, regular workers parts, according to the Ministry of Finance (see right-hand chart). did not benefit from a bidding war for their talents. Firms instead Just because a firm is small does not mean it is new or particu- spent more on part-time workers. Yet because these recruits col- larly entrepreneurial. In Japan, three-quarters of small firms are lect a relatively small share of the country’s wages, their improved over ten years old and two-thirds of the owners of small and mid- dling enterprises will be 70 or older by 2025, according to the oecd. The government provides plenty of support to small firms. It guar- Hardly a bullseye anteed loans worth 4.4% of gdp in 2016, compared with an average Japan of just 0.1% in the oecd, a group of mostly rich countries. In a re- port last year, the group expressed concern that such guarantees Consumer prices* Output per worker in weaken the incentive for banks to monitor their borrowers and % change on a year earlier manufacturing, ¥m push them to improve. Target† 2 15 For the many countries that have expanded similar guarantees in response to the covid-19 pandemic, Japan thus provides a useful 12 1 lesson. Governments must be careful to ensure that this necessary Large enterprises 9 0 effort to ensure the survival of small firms in the short term does 6 not permit stagnation in the long term. -1 Abenomics will almost certainly outlast the prime minister Consumption- SMEs 3 tax increases who introduced it. None of Mr Abe’s potential successors, includ- -2 0 ing Kishida Fumio, his party’s head of policy, Ishiba Shigeru, a for- 20181614122010 2003 10 1715 mer defence minister, or Suga Yoshihide, the chief cabinet secre- Sources: Bank of Japan; OECD; *Consumption-tax adjusted series tary, are likely to renounce it. They may, however, be tempted to Japanese Ministry of Finance †Introduced in January 2019 rebrand it. Suganomics, for example, has a nice ring to it. 7 Science & technology The Economist September 5th 2020 67

Military strategy tend the idea into the area of morale, by quantifying the psychological variables What motivates the dogs of war? that determine whether troops will flee, or stand and fight. One leader in the field of morale re- search is Artis International, a think-tank in Arizona that is supported by America’s defence department. To understand better what has been going on in Iraq, for exam- How to forecast an army’s will to fight ple, Artis’s researchers have interviewed n june 2014 around 1,500 partisans of Is- the Germans hoped would be a war-win- Iraqi-government soldiers, Sunni militia- Ilamic State (is) attacked Mosul, a city in ning assault. Casualties in that battle ex- men, Peshmerga fighters (pictured) de- northern Iraq. They were outnumbered al- ceeded 300,000 on each side. fending the autonomy of Iraqi Kurdistan, most 15 to one by government troops de- Assessing enemy morale is crucial to and also captured is troops. Participants fending the place. The result was a rout. But warcraft. Bruce Bueno de Mesquita, a polit- were asked about their willingness to fur- not in the direction those numbers might ical scientist at New York University, reck- ther their causes by doing various things. have suggested. In the face of the enemy, ons human will matters enough for four These ranged from protesting in the street the government soldiers ran away. Reflect- wars in ten to be won by what starts off, in and donating money to torturing or killing ing shortly thereafter on America’s failure strict military terms, as the weaker side. opponents, volunteering as a suicide-bom- to foresee what would happen, James Clap- Behavioural scientists are now, however, ber, or even sacrificing one’s family. per, then Director of National Intelligence bringing the power of modern computing (and thus America’s top spy) described a to bear on the question. Defence planners Brothers in arms force’s will to fight, or lack thereof, as an have long used computers to forecast the The researchers charted participants’ re- unpredictable “imponderable”. results of conflicts by crunching data on sponses on a seven-point scale of ascend- Many in the past have felt the same. Mil- things like troop numbers, weapons capa- ing willingness. The responses suggested itary history is, as a consequence, littered bilities, ammunition supplies and body- that, among other things, those who de- with disastrously wrong assumptions and vehicle-armour. The next step is to ex- clared themselves willing to sacrifice the about belligerents’ will to fight. America, most were the ones who also seemed least for instance, famously underestimated the interested in material comfort and eco- determination of Vietnam’s National Lib- Also in this section nomic prospects. The researchers then em- eration Front when it involved itself in that bedded themselves with troops from the 68 Brain-computer interfaces country’s civil war in the 1960s and 1970s. interviewed groups (save the is prisoners), Similarly, in 1916, during the first world 69 Finding bodies in forests in part to seek differences between stated war, Germany underrated France’s will to and actual willingness to fight. The bits of 70 Interpreting dreams defend its fortress at Verdun against what action they witnessed, and post-battle 1 68 Science & technology The Economist September 5th 2020

2 mapping of where (and when) casualties rate will-to-fight calculations into combat the internet, Mr Musk showed off the firm’s were suffered, broadly confirmed the find- simulations. progress. The highlight was the appearance ings from the interviews. Comparing how unblooded cadets play of Gertrude, a pig with a chip implanted Crucially, this fieldwork revealed much the game with the approach taken by com- into her brain. about the casualties various types of units bat veterans will permit werc to compile Reading the brain’s electrical signals, a can take before survivors lose the will to data on how experience, sex, age and other technique called electroencephalography fight. A typical fighting force, it is generally factors affect the speed with which players (eeg), started more than 100 years ago and thought, will collapse sometime before a do things like throwing their virtual selves is now routine. It generally involves plac- third of it has been destroyed. Some Kurd- onto a grenade to save their comrades. How ing electrodes non-invasively on the scalp, ish and is units in Iraq, however, fought on much a willingness to perform such an ac- though it sometimes requires the invasive in a co-ordinated fashion after sustaining tion in a game translates into behaviour on insertion of wires into the scalp or the far more grievous losses. Artis therefore the battlefield remains to be seen. But the brain itself. tried to classify and measure the belief sys- hope, Lieut-Colonel Tossell says, is that Non-invasive eeg provides useful in- tems behind such remarkable bravery. this study will, within two years, help the formation, and can even be employed to do One finding was that a fighter’s identity air force to nudge recruits into combat po- things like playing simple computer games must have fully “fused” with those of his sitions that make the most of their level of via software which interprets the signals brothers in arms. The top priority of such will to fight. The research, he adds, has al- received and turns them into instructions. fighters must, says the think-tank’s boss, ready led to greater emphasis in training on It is, though, a crude approach to monitor- Richard Davis, have shifted from family to the transcendental ideals that underpin ing the activity of an organ that contains another cause, a transcendental ideal that America’s support for its own driving ideo- 85bn nerve cells and trillions of connec- has become so “sacralised” that it would logical creed: liberal democracy. 7 tions between them. Invasive eeg offers not be traded away for anything. Artis’s re- higher resolution readings from those searchers identified fighters who had men- nerve cells, albeit at greater risk because of tally downgraded their families to second Brain-computer interfaces the surgery involved. The device Gertrude or third place. Some were Peshmerga, who carries, known technically as a brain-com- most valued “Kurdeity”—a love for the And pigs may drive puter interface (bci), carries invasiveness homeland steeled with commitment to fel- one stage further still by making the eeg re- low Kurds and Kurdish culture. Many is corder a potentially permanent implant. captives, for their part, had shunted their Signals from implants such as this families into third place behind the caliph- might be employed to control a prosthetic ate and sharia. Units girded with those be- limb, or even a real one that brain or spinal- Elon Musk’s vision of what is to come liefs had fought on effectively even after cord injury has deprived of its normal takes another snuffle forward seven-tenths of their comrades had fallen. nerve connections. They might also be The broad outline of this analysis n idle moments, people sometimes used to control non-medical machinery, if would, of course, be familiar to any student Idream about the future. Of cars that can someone thought it worth the risk of hav- of military history. Fanaticism has long drive themselves. Of travelling to other ing a bci implanted to do this. And it is pos- been recognised as a plus in a soldier, be it planets. Of moving objects by the power of sible to use them to send signals in the op- the Zealots of ancient Israel, the Roman thought. Whichever particular dream you posite direction, too, to give instructions to Catholic conquistadors of the Americas, or have, though, Elon Musk is probably trying the brain rather than receive them. That the Nazis’ 12th ss “Hitler Youth” Panzer Di- to make it real. Self-driving cars and travel might be used to generate signals which vision. What is different about the Artis ap- to Mars are the provinces of two of his suppress an incipient epileptic seizure. proach is its attempt to quantify, or at least firms, Tesla and SpaceX respectively. Mov- Neuralink’s bci, the size of a British tup- to approximate, what is going on. That ing objects by the power of thought is the penny piece, carries 1,000 flexible elec- should help both in assessments of an ene- province of a third, Neuralink. And on Au- trode threads, each of which has a diameter my’s performance on the battlefield, and in gust 28th, at a presentation broadcast over less than a quarter of that of a human hair. designing training and indoctrination pro- This flexibility is important because the grammes for your own side. brain moves around in the skull and the Based on their work in Iraq, Artis’s 45 or electrodes must be able to accommodate so behavioural scientists have now led this movement while continuing to work. studies on willingness to fight and die for The device communicates wirelessly, and customers in 21countries as diverse as Brit- is recharged by induction. This means that, ain, Egypt and Guatemala. The goal is to in- unlike many previous attempts to build corporate such insights into predictive bcis, it requires no skin-penetrating cable software. One organisation working on do- that might admit infections to the body. ing this is the United States Air Force Acad- Along with this improved interface emy’s Warfighter Effectiveness Research Neuralink has built a robot that will im- Centre (werc), in Colorado. werc’s re- plant it. To do so, the robot first takes a searchers are using Artis’s data to quantify high-resolution scan of the recipient’s how different levels of the will to fight alter brain. Using this, it is able to sew the elec- the performance of tasks. For example, ac- trode threads into place with a precision cording to Lieutenant-Colonel Chad Tos- that avoids any blood vessels in the area. sell, werc’s director, aircraft pilots whose That, Mr Musk said, reduces the risk of wills are flagging are unlikely to buckle damage during surgery. The robot can put completely, but their reaction times typi- the interface in place in less than an hour, cally slow down. His team is developing he said, though it cannot yet open the skull equations that reflect this. These are then in order to do so. General anaesthesia is fed into a version of “Far Cry”, a video game not, he said, needed for the procedure. that the air force is modifying to incorpo- The highlight of the show, though, was 1 The Economist September 5th 2020 Science & technology 69

2 not Mr Musk’s presentation but rather the Forensic botany arrival of Gertrude. Her bci is connected to nerve cells in a part of her brain called the Murder will out olfactory bulb. As she snuffled around her pen searching for food, and also sniffed her handler’s hand, a display showed the elec- trical activity which those cells were mani- festing in response to these stimuli. Not everyone is impressed. Andrew Buried corpses may change the colours of surrounding plants Jackson, a professor of neural interfaces at Newcastle University, commented that he body farm, known officially as the there was not anything “revolutionary” in TUniversity of Tennessee Anthropologi- the presentation, saying it was “solid engi- cal Research Facility, is a gruesome place. It neering but mediocre neuroscience”. Mr is a hectare of land near Knoxville, cut off Musk replied, in a tweet, that it was com- from the rest of the world by razor wire, mon for academia to undervalue the bene- that has, for more than three decades, been fits of bringing ideas to fruition. at the forefront of forensic science. It is both a laboratory which examines how Pig headed corpses decay in different circumstances, Admiration will surely increase if and so that matters such as time of death can be when Neuralink performs on people a sim- established more accurately, and a training ilar procedure to that which Gertude has facility for those whose jobs require an un- undergone. The firm received a “break- derstanding of such processes. through device designation” from Ameri- To study a body forensically, though, ca’s Food and Drug Administration (fda) in you first have to find it. For a corpse July. This means the fda thinks the gadget dumped in a city this is hard enough. If the shows promise (in this case for the treat- burial site is a forest it can be nigh impossi- ment of paraplegia), and offers it a faster ble. Searchers must cover huge amounts of pathway for regulatory review. ground, and may therefore not do so as The next challenge the firm wants to thoroughly as might be desirable. Vegeta- tackle is that of sending electrical signals tion broken by people burying bodies is into the brain. Mr Musk says this will re- easy to overlook. And soil perturbed by dig- Doing it the old way quire a range of inputs, as some brain areas ging tends not to remain perturbed for long require delicate stimulation while others once it has been exposed to wind and rain. the body of any large animal. But the re- take a “lot of current”. The point of doing so For homicide detectives, then, wood- mains of wild creatures, left on the surface, will be to establish two-way communica- lands are a problem. At least, they have are usually scavenged quickly. People with tions. This could allow entirely new areas been until now. For Neal Stewart, co-direc- a human body to dispose of generally of treatment to be explored. Besides epilep- tor of the Tennessee Plant Research Centre, prefer to inter it so that it cannot be seen. sy suppression, some think that such brain another part of the university, reckons that A more subtle change in the foliage near stimulation might also work to treat de- a bit of botanical thinking brought to bear a buried body would be brought about by pression and anxiety. More important in on the matter may turn trees from being any cadmium present within its flesh and the long run, it is also essential to Mr cover for the disposal of bodies to sign- bones. Cadmium is rare in nature, but not Musk’s vision of widespread engagement, posts showing just where they are hidden. in some human bodies. Smokers, and also at a neurological level, between people and To pursue this idea, he has organised a those who work in industries involving machines. This, he hopes, will result in a group of researchers from various depart- welding or electroplating, have high con- future in which memories can be down- ments of the university, one of whom is centrations of this metal. Cadmium is easi- loaded and stored elsewhere, and human Dawnie Steadman, the head of the Body ly taken in by plants through their roots beings can form a “symbiosis” with artifi- Farm. And, as they write this week in and, once present in their leaves, affects cial intelligence. Trends in Plant Science, this group has come the structure of a molecular complex called Critics worry that Neuralink is too se- up with three ways in which vegetation photosystem two, which houses chloro- cretive, and that Mr Musk’s vision prom- might flag up illicit burials. phyll. That changes the way this complex ises more than he can deliver. He does, The most obvious is fertilisation—for absorbs and reflects light. This, in turn, af- though, have a record of doing what he says bodies are good fertilisers. Calculations fects the colour of the leaves. he is going to, albeit sometimes not as rap- suggest that a decaying adult human body A third change which might be detect- idly as he says he will. He more-or-less sin- releases about 2.6kg of nitrogenous com- able in foliage is induced by the artificial gle-handedly introduced battery-electric pounds (mostly ammonia) into the sur- polymers found in clothing and shoes. cars to the market and he built a successful rounding soil. That, the researchers found These can be taken up by plants, too—end- space-rocket business out of nothing. when they looked through the relevant lit- ing up in their leaves and sometimes alter- Brains are a lot more complicated than erature, is 50 times the average annual rec- ing those leaves’ colour. cars, and even than rocket science. But do ommended level of nitrogenous fertiliser Crucially, all these effects would be vis- not bet against the coming into being at for trees and shrubs native to temperate ible from above. Drones fitted with spec- some point of the Musk vision of brains North America. troscopes that seek abnormal colours in fo- and computers collaborating directly. 7 Such an overdose would surely have liage are already used by farmers to check consequences for nearby plant life. In par- crops for disease and drought. Dr Stewart, ticular, it would increase chlorophyll pro- Dr Steadman and their colleagues are now Correction In “The aliens among us”, the cover duction, and thus cause a perceptible investigating whether a similar approach leader of the August 22nd edition, we said that 1031 is ten followed by 31 zeros. It is, of course, one greening of plants near a buried body. In can be used to scan woodlands for telltales followed by 31 zeros. Sorry for the mistake. principle, this would be true of the decay of of buried bodies. 7 70 Science & technology The Economist September 5th 2020

Psychology tween 1910 and 2017. And most are from America. In addition to a dream’s contents, Lucid dreams each report includes the age and sex of the dreamer and a brief biography. The predic- tions the three researchers looked at were that the sexes dream differently in perti- nent ways; that people’s dreams change as they age; that life-altering personal experi- ences change patterns of dreaming; and A new approach brings closer an understanding of what dreaming is about that perceived levels of everyday aggres- hat dreams contain hidden meanings sandro Fogli of Roma Tre University, in sion are reflected in dreams. Tis an old idea. The Biblical Book of Gen- Italy, and Luca Maria Aiello and Daniele As to sex differences, men—the more esis, written down about 2,500 years ago, Quercia of Nokia Bell Labs, in Cambridge, violent sex in the waking world—also had describes how Joseph, son of Jacob, inter- Britain, have analysed thousands of re- (as predicted) more violent dreams than preted the Egyptian pharaoh’s dreams of fat ports of dreams experienced by mentally women did. On the question of ageing, Dr and thin cattle as predicting years first of healthy people. Using these, they have test- Fogli, Dr Aiello and Dr Quercia were able to plenty and then of famine. In China, mean- ed several predictions based on the con- show that the dreams of individuals do in- while, the most popular work on dream in- tinuity hypothesis and found support for deed change as they move through adoles- terpretation has long been the “Zhougong all of them. cence and into young adulthood. In partic- Jie Meng”, a dictionary of explanations for ular, they drew on 4,352 dreams recorded weird and wonderful dreams written 500 And not make dreams your master by “Izzy”, an anonymous woman who, be- years earlier still. It is, however, only since The most common way of assessing tween the ages of 12 and 25, systematically the publication of Sigmund Freud’s treatise dreams is the Hall and Van de Castle dream documented her dreams. Their algorithm “The Interpretation of Dreams”, in 1899, scale. This uses written reports of the char- showed that from 14 and 17 Izzy’s dreams that dreams have become a subject of seri- acters appearing in a dream and of those usually involved negative social interac- ous scientific scrutiny. characters’ social interactions, as well as tions and confrontation. From 18 to 25 Things have moved on since Freud’s the dream’s emotional content, to yield a those interactions became friendlier. day. His emphasis on violent urges and sex- set of scores that can be employed to create Though it is dangerous to generalise from a ual repression as the roots of dreaming indices of things like the proportion of single case, this pattern will no doubt be fa- now looks old-fashioned. Instead, the pre- friendly, sexual and aggressive encounters miliar to anyone who has watched a teen- mise is that dreams reflect a dreamer’s quo- in a dream. ager grow up. tidian experience—either because they are Scoring dreams this way is, though, Waking experience, the algorithm an epiphenomenon of the consolidation of both time-consuming and subject to ob- showed, shapes dreams in other ways as memories or because they are a mental server bias—meaning scores assigned by well. A veteran of the Vietnam war, who testing ground for ideas the dreamer may different people may not be properly com- had had intense exposure to violence dur- have to put into practice when awake. This parable. The breakthrough made by Dr Fo- ing that conflict, dreamed more frequently resemblance between dreams and reality is gli, Dr Aiello and Dr Quercia was to auto- of violence and aggression than did those dubbed the continuity hypothesis by psy- mate things using a language-processing with no military background. Conversely, chologists. Data supporting it, however, algorithm called a parsed tree. This deals the dreams of the blind, who often rely on are sparse. Such as exist come from clinical with reports by the thousand, rather than the good offices of others to assist their studies rather than examinations of people the dozen, and does so consistently. everyday lives, were the friendliest and with healthy minds. And the numbers of Their source of supply was the Dream- least violent of all. participants involved tend to be small. Bank, a repository of 24,035 reports of Perhaps the most intriguing result That is not true, though, of the latest in- dreams that is maintained by the Universi- came when the researchers let their algo- vestigation into the matter. As they de- ty of California, Santa Cruz. All the reports rithm loose on the broad sweep of history scribe in Royal Society Open Science, Ales- are in English. They span the period be- by dividing the DreamBank into decades. Lack of data meant they were able to do this meaningfully only from 1960 onwards. But when they did so they found that levels of violence and aggression in dreams were highest during the 1960s, and have subse- quently declined in each decade since. Why that should be is unclear, but they posit that, from an American viewpoint, the 1960s was a particularly violent decade, rife with political assassination, the threat of nuclear annihilation and the Vietnam war—a conflict fought with conscripts, and which therefore had especial resonance. By these tests, then, the continuity hy- pothesis seems to pass muster. None of them, admittedly, seeks to answer the deeper question of what dreams are actual- ly for. Whether a computational approach like this can investigate that matter as well remains to be seen. In the meantime, per- haps remember to stock up the larder if you Do dreams reflect reality? dream of thin cattle. Just in case. 7 Books & arts The Economist September 5th 2020 71

Also in this section 72 Johnson: Transcription 73 The lives of ants 73 A portrait of Abe Shinzo Home Entertainment 74 French noir fiction

Violence and music world gang confrontations. FBG Duck had abused others in song for years, beginning Drilling down with insults of Chief Keef (pictured), an early star of the drill scene. Social media probably helped cause FBG Duck’s death. Chicago’s mayor, Lori Light- foot, suggested his enemies monitored his posts on Facebook as he carelessly bragged A decade after the birth of drill music, an ethnographer unpicks its ties to fans about his shopping sprees. Rivals to gang violence in Chicago routinely “lurk on” others—studying their wo cars, one silver and one black, social-media feeds and hoping, in the Tpulled up in a busy shopping street in Ballad of the Bullet: Gangs, Drill Music words of gangster rappers, to “catch opps the Gold Coast, Chicago’s glitziest neigh- and the Power of Online Infamy. By lacking”. That means getting a chance to bourhood, one afternoon last month. Four Forrest Stuart. Princeton University Press; shoot or humiliate a rival, for example by passengers, weapons drawn, stepped be- 288 pages; $27.95 and £22 forcing him, on camera, to diss his own tween shoppers and fired off a hail of bul- gang or fellow rappers. lets. Their target was a chubby man in a arose in Chicago a decade ago and became For years police in Chicago have said blue tracksuit who stood outside a luxury- popular in London, New York and beyond. this online sparring, often expressed goods boutique. The 26-year-old slumped Performing under the moniker FBG Duck, through music, spurs deadly violence. to the ground as shop windows shattered his tracks were ominous, repetitive and Confirming that is hard. How could anyone behind; his two companions were wound- catchy; his last music video, “Dead prove FBG Duck’s songs directly led to his ed. Passers-by filmed the aftermath of the Bitches”, released in July, has 11m views on death, asks Forrest Stuart, an ethnographer shooting, posting footage online as he lay YouTube. As with many drill videos, the at Stanford University who embedded with dying in the road. star posed in a shadowy room, flanked by drill rappers on Chicago’s South Side for The murder was unusual. Gun deaths gun-toting friends, smoking joints while over 18 months. The musician had ties with have surged of late: by the end of August waving wads of cash. the Tooka gang, an outfit linked to the 500 killings had been counted in Chicago, Some speculate FBG Duck was killed for Gangster Disciples, which has long vied as many this year already as in all of 2019. the music, as that last song was a “diss with the Black Disciples. His elder brother, Overwhelmingly these occur when gang track”. His lyrics crudely celebrated the another drill rapper who worked as FBG members intrude on each other’s turf in murders of several members of an infa- Brick, and a cousin were shot dead on the troubled districts on the South or West mous Chicago gang, the Black Disciples. In- same day in 2017. As a rapper he was a sides. Bullets rarely fly in Gold Coast. For sulting other rappers—and the gangs they tempting target, but he would have been participants in gang conflict, excursions to associate with—is not new, nor unique to one anyway, even without uttering a word. such wealthy, central places had previously drill. It is a means to digital notoriety, Mr Stuart’s recent book, “Ballad of the seemed relatively safe. though it may invite a bloody response. Bullet”, is an often gripping account of Nor was the victim run-of-the-mill. Such musical clashes online are amplified what he learned from his association with Carlton Weekly was a minor celebrity who by bloggers who relish details of these ver- teenage members of an up-and-coming performed drill, a form of rap music that bal conflicts because they mirror real- drill group—he dubs them the Corner 1 72 Books & arts The Economist September 5th 2020

2 Boys—desperate to win fame, status and nearly shot him. He describes learning how ings they have experienced from early money from rapping. He shows how their the Corner Boys lurked on the social-media childhood. Broken families produce ill- musical and lyrical talent is only a minor feed of a rival driller, here called Smoky-P, educated men who go on to choose be- part of what determines success. As impor- fond of posting selfies. They identified a tween menial service jobs or drug dealing. tant are attempts to win a reputation on- shop where he regularly bought alcohol, Youngsters have few role models to follow. line as authentic gangsters, despite their drove by and fired at him several times, ap- In slums, favelas and shantytowns else- sometimes feeble efforts to acquire weap- parently as he prepared to take a photo- where, ambitious people dream of getting ons, cash or other props essential for build- graph of himself. out by playing football. In Chicago drill, de- ing credibility. The author is reluctant to simply blame spite its gang ties, serves that end. For a few Aspiring stars must at least pretend his subjects for such appalling acts. For rappers who earn enough online notoriety, they are heavily involved in conflict. “It is a many characters he uses pseudonyms to such as Chief Keef, record contracts and hyper-violent context,” says Mr Stuart; avoid stirring more conflict, or inviting at- wealth follow. More interesting is the fate even conducting research was risky at tention from police. Most such young men, of larger numbers of smaller fry like the times. A young rapper mishandling a gun he notes, are traumatised by street shoot- Corner Boys. Their relatively modest musi-1 Johnson Lost in dictation

Is it possible to “write” using speech-to-text software? oice technology has come a long when we talk to each other, but it makes for structure only. It has been edited for Vway. Just a few years ago, it would’ve for extraordinarily messy looking writing. length, with all of the original errors kept been unusable, so much so that many To make turning the spoken word into in. Though this paragraph two is being people gave up on it in the early years. coherent writing requires lots of planning. dictated, which means I have no idea But now, those who follow the tech- You’ll need some kind of notes or other how this is turning out, here are guesses nology know that it has gotten consid- organiser to make it work, which only about how this will read. erably better over the last five to ten brings us back to the original problem. The first guess is that the literal accu- years. Truly effective voice technology Those who need to write with their voice racy of the dictation software will be promises many good things. Not only will first need to write a structure to then extremely high. In other words there does it allow you to command devices write from. If you are unable to write, this won’t be many cases where the software like smartphones or use wired home does not solve the problem. has heard one word incorrectly and devices without the use of hands, but Another question turning speech into transcribed another. But the other guess also many other applications. For ex- writing raises is one of style. How would is that the readability of this column will ample, you can identify someone by writing change it more people spoke their be rather bad. their voice if you need to know who they writing rather than typing? Chances are In other words, the blame is not with are over the phone. Your bank will find that at the very least they would come up the technology, which turns out to be this very useful. with many more short sentences and more rather good. Speaking into writing relies What about writing with your voice? concrete language, which is good. But they on a much better human brain than the This could be a great boon for people who would probably also rely on pre-assem- one we currently possess. Writing is lack mobility for one reason or another. bled phrases and clichés a lot more often, hard. There’s a reason it can’t be done at But not only that. Busy people who type which would definitely be a bad thing. the speed of speech, in real time. badly, and find it easier to talk, might Good writing requires slow thought, To elucidate—and this was written find it much easier to dictate their mes- which is not available when you are speak- after the fact, rather than dictated— sages than they would find to sit and type ing at full clip. paragraph breaks were added after tran- them. Everyone remembers the bosses in To test this proposition this column scription. Punctuation had to be spoken old movies who shout things like quo- has been not written but dictated. It was aloud, but after a full stop the first word tation mark Ms Johnson! Take a memo. composed from brief notes written down in the new sentence was capitalised Rotation marked. automatically. Some minor punctuation But writing with your voice raises marks were added to improve clarity. several interesting questions. How easy Only a handful of words out of almost is it actually? Human speech involves a 800 were transcribed incorrectly, among lot more starting and stopping with them “rotation marked” (“quotation errors and the need for repairing man- mark”), “two” (“too”) and “it” (“if”). To gling sentences than you may think. improve accuracy, your author “trained” Writing may be an unnatural act, but the software, Dragon Dictate, for a few once it is learned, the first draft of a piece seconds beforehand, reading a pre- of writing is a lot more usable than the written passage aloud. An external mi- “first draft” of a bit of speech. Anyone crophone of reasonable quality also tempted to doubt this proposition might helped a great deal. try listening to an interview, even one Nonetheless, The Economist’s style with a highly articulate speaker, and mavens have their heads in their hands transcribing every single word that that at the ugly Americanisms and egregious person says. It will quickly become obvi- stylistic infractions. It will be a relief to ous that even gifted speakers make lots them, and to the reader, that Johnson will of mistakes. That’s not usually a problem not be dictating any future columns. The Economist September 5th 2020 Books & arts 73

2 cal success delivers paltry financial re- er’s destinies throughout their shared time Abe Shinzo wards, which mostly go to pay technicians. on Earth, sometimes as competitors, at But the artists earn in other ways: higher other times companionably. For instance, Family man status on the street, the attention of wom- ants have exploited the human talent for en, respect from other would-be rappers long-distance travel to extend their own and adoration from some online fans. reach. On their own, ants are “poor oceanic Who then is responsible for the vio- travellers”, but they hitched rides with lence? Not one actor alone. But one conclu- mariners across the Polynesian archipela- sion is that consumers of drill—mostly go during the age of European exploration, The Iconoclast. By Tobias Harris. Hurst; more affluent folk far from the South and roamed beyond their natural habitats 392 pages; $29.95 and £25 Side—encourage it through the digital aboard modern commercial vessels. Often economy. They reward (by sharing and the arrival of these aliens disturbs the eco- be shinzo was just five years old in clicking) videos of artists who are the most logical balance. When a crop-destroying A1960 when protesters surrounded his authentically antagonistic and boastful fire ant native to Argentina and Uruguay grandfather’s house in Tokyo. Kishi Nobu- about their violent crimes. “I want to impli- arrived in the port of Mobile, Alabama, on suke, then Japan’s prime minister, was in cate all of us,” says Mr Stuart. “Too often we cargo boats, it soon spread devastation the midst of a pitched battle over Japan’s leave ourselves, as consumers, out of the across the American South and beyond. security treaty with America. Kishi would equation.” Rappers respond to consumer In Mr Wilson’s hands even ant-sized an- get his treaty that year, though it led to him demand. If their content “is not egregious- ecdotes carry the seeds of larger ideas. He losing power. For a young Mr Abe, the epi- ly violent, then they are irrelevant”. 7 celebrates ingenuity even when it is mani- sode would be “the touchstone of his polit- fested on the smallest scales. As may be ex- ical identity”, argues Tobias Harris in “The pected from someone who has spent much Iconoclast”, a new biography of Japan’s lon- Myrmecology of his career crawling on hands and knees gest-serving prime minister. among the rotting leaves of a forest floor, or Mr Abe’s status as the grandson of a for- A bug’s life chasing insects across desert sands, the au- mer prime minister and the son of a former thor is not squeamish. He finds beauty in foreign minister, Abe Shintaro, is well- the clever ways a parasitic fungus drives its known. Mr Harris, a longtime observer of host insect to its death, or in the resource- Japanese politics, astutely explains how Mr fulness of the Matabele ants, which attack Abe’s family influenced his thinking, and and destroy termite mounds the size of situates that thinking in the broader con- buses. “Every corpse is an ecosystem,” he text of Japanese history stretching back to Tales from the Ant World. By Edward phlegmatically observes. the Meiji restoration of 1868. This compre- Wilson. Liveright; 240 pages; $26.95 Revolting as all this may seem, Mr Wil- hensive and engaging tome may become and £17.99 son soon brings the reader around. “Each the definitive English-language portrait of nts and people have much in com- fallen bird, landed fish, beached whale, de- Mr Abe, made all the more relevant by his Amon, Edward Wilson explains. Both composing log, plucked flower”, he writes, recent resignation (see Asia section). are social animals, organised into complex “is destined to change from a conglomerate As Mr Harris shows, Mr Abe is the pro- societies with elaborate forms of commu- of giant molecules, the most complex sys- geny of Kishi, but a product of the Ameri- nication. Ant societies, much like the hu- tem in the universe known, into clouds can occupation and the many strange com- man kind, are often highly stratified, with and drifts of much smaller organic mole- promises it engendered. His grandfather’s specialised jobs and a well-defined caste cules.” Zooming out from the microscopic fate is one of the most striking. Kishi made system. Some ants are warriors, some slav- to the panoramic and back again, “Tales his name orchestrating forced labour for ers, and some, more benignly, gardeners. from the Ant World” finds wonder in na- the Japanese war machine as a minister in But Mr Wilson cautions against carry- ture’s endless variety. 7 Japanese-occupied Manchuria in the 1930s. ing the analogy too far. Though ants are He served loyally in Japan’s wartime cabi- creatures of instinct, “human beings are net and was arrested as a war criminal in torn by the competing needs of self, family 1945. As the cold war ramped up, Kishi was and tribe. We use culture to banish instinct one of several ex-leaders the Americans let or at least tame it.” There is nothing in the off in order to help rebuild Japan as a bul- ruthless lives of ants “that we can or should wark against Soviet communism. Kishi emulate for our own moral betterment”. climbed to the pinnacle of power in Japan Mr Wilson has built a distinguished ca- by helping to found the Liberal Democratic reer by deploying insights from the biology Party (ldp) with a bit of help from the cia. and behaviour of ants to present larger les- Re-establishing Japan’s sovereignty and sons about evolution, ecology and the ex- seeking greater equality in the partnership tent to which human psychology can be ex- with America became Kishi’s mission. But plained by natural selection. As its title in the battle of post-war ideas, his vision suggests, “Tales from the Ant World” is a lost out to the “Yoshida Doctrine” (so short, loose-jointed and conversational named after Japan’s first significant post- book. It lacks the ambition of works such as war prime minister, Yoshida Shigeru), Mr Wilson’s “Sociobiology: The New Syn- wherein Japan would rely upon America thesis” (published in 1975) or the panoram- for security while focusing on its own eco- ic sweep of “The Diversity of Life” (1992), nomic development. Mr Abe made it his but it is filled with delightful accounts of a cause to revise that consensus, embodied naturalist in action and enough hard sci- in the American-imposed post-war consti- ence to keep readers on their toes. tution that bars Japan from having armed Ants and humans not only share a so- forces (though it does, with American sup- ciable nature; they have shaped each oth- Anty matter port, maintain mighty armed forces for the 1 74 Books & arts The Economist September 5th 2020

2 purpose of self-defence). home lic. Manchette’s tightly wound plots move Mr Abe may have drawn on his grand- entertainment inexorably towards bloody denouements. father’s ideas but he learned his trade at his Along the way he portrays a society riven by father’s side. Shintaro visited 81 countries a class war that has devolved into a grisly in the 1980s; the younger Mr Abe served as procession of tit-for-tat murders. his secretary. “His father’s globe-trotting Manchette wastes no time on psycholo- personal diplomacy impressed upon his gy. His books are all action, unfolding with son the importance of building trust with a laconic efficiency that would make his foreign leaders,” Mr Harris writes. That has killers proud. One minute Gerfaut is enjoy- been one of Mr Abe’s main achievements ing a dip in the sea, the next a killer in (see Leader). He also inherited his father’s French noir fiction swimming trunks is punching him “mat- unfinished business: Shintaro died of can- ter-of-factly in the solar plexus”. Man- cer while trying to settle a territorial dis- Assassin’s creed chette dispatches his victims with grim pute with the Soviet Union in 1991. specificity: a woman’s chest becomes “a After Mr Abe followed his father into the glob of crushed bone, pulped flesh, frag- Diet, Mr Harris shows how he came to be a ments of bronchial tubes”. His characters’ leader of a “new conservative” movement. interests are narrow but deep—in particu- He argued for a more equal alliance with lar, what bullets do to bodies and the weap- Discover the taut political thrillers of America in which Japan could bear a great- ons that fire them. Jean-Patrick Manchette er burden, and latched on to the cause of Flashes of lyricism illuminate the Japanese citizens abducted by North Korea n the west the economy was not murk. Manchette describes a burning to prove his bona fides as a defender of his “Iworking well, mental illness was rife, house collapsing “just as matter collapses, country. He also engaged in some appalling and social classes were still locked in strug- or so they say, in the hearts of distant stars”. whitewashing of Japan’s wartime gle.” This familiar diagnosis comes from There are touches of black comedy. As Car- atrocities. Mr Abe’s allegiance to the new “Three to Kill”, a French noir novel by Jean- lo and Bastien, a pair of bickering assas- conservative ideas helped doom his first Patrick Manchette, published in 1976. As he sins, trail a target to the south of France, short-lived term as prime minister in wrote, far-left terrorists in Europe were Bastien plans a holiday excursion: “We can 2006-07, which became bogged down in bombing and kidnapping their way to- stop at Le Lude,” he says. “It’s charming, Le ideological battles over the past. wards revolution. He turned this unrest Lude. It has a delightful castle.” When Bas- Belonging to a political dynasty gave Mr into a series of politically engaged pulp fic- tien dies in a shoot-out, Carlo’s eulogy is a Abe a big head start. He rose fast despite tions as smooth as a well-oiled revolver. passage from “Spider-Man”. having been an average student who In his youth Manchette, who died in The blend of action, ideology and hu- whizzed around in a red Alfa Romeo and 1995, had been a left-wing activist. Inspired mour comes together best in “Nada” (1973). played a lot of mahjong. Yet it has also been by this milieu, he created a cast of assas- The most overtly political of Manchette’s a heavy burden. The reader cannot help but sins, anarchists and ideologues. Martin novels, it tells of a ragtag group of left-wing quake alongside Mr Abe when his mother Terrier, the hit-man at the heart of “The terrorists planning to kidnap the American tells him, “The ldp of the present was made Prone Gunman” (published in 1981 and ambassador to France. Manchette skewers by my father Kishi Nobusuke, and you adapted into a film starring Sean Penn in its members—only one is a true believer; must never forget those great footprints.” 2015), is trying to go clean after a decade of the rest are there for the kicks—as well as His mother is an enduring presence: they profitable murder, only to be pursued by the quarrelsome vanity of left-wing fac- live in the same apartment building, and old enemies. Georges Gerfaut, the militant tions. Needless to say, the group’s plan goes even as prime minister, he and his wife, turned middle-manager in “Three to Kill”, awry in a stupendously violent way. Just Abe Akie, ate breakfast with her. stumbles into a bitter vendetta involving when you think all the corpses have That, in part, explains why changing Ja- an old fascist from the Dominican Repub- dropped, another head explodes. 7 pan’s constitution was so important to Mr Abe. He cited his failure to do so as one of his biggest regrets when he announced his resignation on August 28th. Yet history will remember Mr Abe more fondly for his readiness to subsume his ideology in fa- vour of a pragmatic approach to national interests during his second stint in office. (Such as with his conciliatory statement on the 70th anniversary of the end of the sec- ond world war.) Even what Mr Harris dubs an “Abe Doctrine”—building up Japan’s de- fence capabilities and ties with other re- gional powers—is less a break with the Yoshida Doctrine than an offshoot. As Mr Harris notes, Mr Abe was a keen reader of the German sociologist Max We- ber. “With regard to what one should do as a politician, my grandfather consistently acted according to ‘responsibility for con- sequences’,” he wrote in 1996. “That is, Max Weber’s ‘ethic of responsibility’.” Mr Abe was too kind to his grandfather. The de- scription fits him better. 7 Courses 75

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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 Sep 2nd on year ago United States -9.1 Q2 -31.7 -5.3 1.0 Jul 0.7 10.2 Jul -1.9 -15.9 0.7 -84.0 - China 3.2 Q2 54.6 1.7 2.7 Jul 3.6 3.8 Q2§ 1.3 -5.3 3.0 §§ 6.0 6.83 5.0 Japan -9.9 Q2 -27.8 -5.4 0.3 Jul -0.2 2.9 Jul 2.3 -11.4 nil -8.0 106 0.1 Britain -21.7 Q2 -59.8 -9.5 1.0 Jul 0.8 3.9 May†† -1.7 -18.2 0.4 -10.0 0.75 10.7 Canada -13.0 Q2 -38.7 -5.8 0.1 Jul 0.7 10.9 Jul -2.9 -11.0 0.6 -61.0 1.31 1.5 Euro area -15.0 Q2 -40.3 -8.7 -0.2 Aug 0.4 7.9 Jul 2.3 -9.5 -0.5 23.0 0.84 8.3 Austria -12.5 Q2 -34.5 -7.0 1.7 Jul 0.8 5.2 Jul 0.2 -7.5 -0.3 13.0 0.84 8.3 Belgium -14.4 Q2 -40.2 -8.1 0.8 Aug 0.4 5.5 Jul -1.5 -9.5 -0.2 13.0 0.84 8.3 France -18.9 Q2 -44.8 -10.2 0.2 Aug 0.7 6.9 Jul -1.0 -11.3 -0.1 32.0 0.84 8.3 Germany -11.3 Q2 -33.5 -5.9 nil Aug 0.8 4.4 Jul 5.9 -7.2 -0.5 23.0 0.84 8.3 Greece -1.2 Q1 -6.2 -7.5 -1.8 Jul -1.0 17.0 May -2.6 -6.5 1.1 -47.0 0.84 8.3 Italy -17.7 Q2 -42.2 -10.8 -0.5 Aug 0.1 9.7 Jul 2.0 -13.0 1.1 8.0 0.84 8.3 Netherlands -9.3 Q2 -29.9 -6.0 1.7 Jul 1.3 3.8 Mar 4.3 -5.4 -0.4 19.0 0.84 8.3 Spain -22.1 Q2 -55.8 -12.6 -0.6 Aug -0.1 15.8 Jul 1.5 -12.3 0.4 30.0 0.84 8.3 Czech Republic -10.9 Q2 -30.6 -6.7 3.4 Jul 2.8 2.7 Jul‡ -0.9 -6.6 1.1 5.0 22.2 6.2 Denmark -8.1 Q2 -25.0 -4.0 0.5 Jul 0.4 5.2 Jul 9.1 -6.3 -0.3 32.0 6.28 8.3 Norway -4.7 Q2 -19.0 -5.5 1.3 Jul 1.2 5.2 Jun‡‡ 0.9 -0.9 0.8 -37.0 8.82 3.2 Poland -8.0 Q2 -31.1 -4.0 2.9 Aug 3.0 6.1 Jul§ -0.6 -9.4 1.4 -47.0 3.73 6.4 Russia -8.5 Q2 na -5.7 3.4 Jul 3.4 6.3 Jul§ 1.8 -4.3 6.4 -83.0 75.6 -11.8 Sweden -7.7 Q2 -29.3 -4.0 0.5 Jul 0.4 8.9 Jul§ 3.9 -4.0 nil 39.0 8.71 12.7 Switzerland -9.3 Q2 -29.1 -6.0 -0.9 Jul -1.1 3.3 Jul 9.8 -6.3 -0.4 54.0 0.91 8.8 Turkey -9.9 Q2 na -5.2 11.8 Jul 11.6 12.9 May§ -2.5 -5.9 13.1 -281 7.38 -21.3 Australia -6.3 Q2 -25.2 -4.4 -0.3 Q2 1.7 7.5 Jul -1.3 -7.6 0.9 1.0 1.37 8.8 Hong Kong -9.0 Q2 -0.5 -4.2 -2.3 Jul 0.9 6.1 Jul‡‡ 3.1 -5.6 0.6 -56.0 7.75 1.2 India -23.9 Q2 -69.4 -8.5 6.9 Jul 5.1 8.4 Aug 0.9 -7.8 5.9 -64.0 73.0 -2.2 Indonesia -5.3 Q2 na -1.6 1.3 Aug 2.2 5.0 Q1§ -1.1 -7.0 6.9 -38.0 14,745 -3.7 Malaysia -17.1 Q2 na -5.1 -1.3 Jul -1.1 4.9 Jun§ 1.4 -7.7 2.6 -68.0 4.15 1.4 Pakistan 0.5 2020** na -2.8 8.2 Aug 9.0 5.8 2018 -1.3 -8.0 9.4 ††† -385 166 -5.6 Philippines -16.5 Q2 -48.3 -3.7 2.7 Jul 2.2 10.0 Q3§ 1.3 -7.7 2.9 -155 48.5 7.4 Singapore -13.2 Q2 -42.9 -6.0 -0.4 Jul -0.2 2.9 Q2 19.0 -13.5 1.0 -77.0 1.36 2.2 South Korea -2.8 Q2 -12.0 -1.8 0.7 Aug 0.4 4.0 Jul§ 2.4 -5.6 1.5 19.0 1,185 2.1 Taiwan -0.6 Q2 -5.5 -0.3 -0.5 Jul -0.3 3.9 Jul 11.5 -2.7 0.4 -25.0 29.3 6.8 Thailand -12.2 Q2 -33.4 -5.9 -1.0 Jul -0.7 1.0 Mar§ 3.1 -6.3 1.2 -17.0 31.2 -1.9 Argentina -5.4 Q1 -18.0 -11.1 42.4 Jul‡ 42.0 10.4 Q1§ 2.5 -10.0 na -464 74.3 -20.6 Brazil -11.4 Q2 -33.5 -5.5 2.3 Jul 2.8 13.3 Jun§‡‡ -0.8 -15.7 2.0 -357 5.36 -22.4 Chile -14.1 Q2 -43.3 -6.4 2.5 Jul 2.5 13.1 Jul§‡‡ 0.2 -14.0 2.4 -35.0 773 -6.3 Colombia -15.5 Q2 -47.6 -7.7 2.0 Jul 2.3 20.2 Jul§ -4.9 -7.8 4.8 -110 3,643 -5.2 Mexico -18.7 Q2 -52.7 -9.7 3.6 Jul 3.4 3.3 Mar nil -4.5 5.8 -121 21.8 -7.9 Peru -30.2 Q2 -72.1 -13.0 1.7 Aug 1.8 7.6 Mar§ -1.0 -8.5 3.3 -87.0 3.53 -4.0 Egypt 5.0 Q1 na 0.6 4.2 Jul 6.2 9.6 Q2§ -4.1 -10.6 na nil 15.9 4.4 Israel -6.7 Q2 -28.7 -5.4 -0.6 Jul -1.1 4.6 Jul 3.9 -11.8 0.7 -26.0 3.36 5.4 Saudi Arabia 0.3 2019 na -5.2 6.1 Jul 1.2 5.7 Q1 -5.3 -10.3 na nil 3.75 nil South Africa -0.1 Q1 -2.0 -8.0 3.2 Jul 3.3 30.1 Q1§ -2.3 -16.0 9.2 98.0 16.9 -10.0 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 Sep 2nd week 2019 Sep 2nd week 2019 2015=100 Aug 25th Sep 1st* month year United States S&P 500 3,580.8 2.9 10.8 Pakistan KSE 41,834.9 2.4 2.7 Dollar Index United States NAScomp 12,056.4 3.4 34.4 Singapore STI 2,539.9 -0.1 -21.2 All Items 124.9 128.2 6.6 20.0 China Shanghai Comp 3,404.8 2.3 11.6 South Korea KOSPI 2,364.4 -0.2 7.6 Food 96.7 99.6 6.9 11.3 China Shenzhen Comp 2,321.4 3.7 34.7 Taiwan TWI 12,699.5 -1.0 5.9 Industrials Japan Nikkei 225 23,247.2 -0.2 -1.7 Thailand SET 1,315.9 -0.5 -16.7 All 151.3 154.8 6.4 25.9 Japan Topix 1,623.4 -0.1 -5.7 Argentina MERV 44,877.5 -2.1 7.7 Non-food agriculturals 107.0 113.7 13.2 22.2 Britain FTSE 100 5,941.0 -1.7 -21.2 Brazil BVSP 101,911.1 1.3 -11.9 Metals 164.5 167.0 5.1 26.7 Canada S&P TSX 16,698.0 -0.5 -2.1 Mexico IPC 37,053.8 -1.9 -14.9 Sterling Index Euro area EURO STOXX 50 3,337.8 -0.6 -10.9 Egypt EGX 30 11,214.2 -2.1 -19.7 All items 145.4 145.4 3.4 7.9 France CAC 40 5,031.7 -0.3 -15.8 Israel TA-125 1,416.6 -2.6 -12.4 Germany DAX* 13,243.4 0.4 nil Saudi Arabia Tadawul 8,013.4 0.7 -4.5 Euro Index Italy FTSE/MIB 19,858.2 -1.4 -15.5 South Africa JSE AS 55,861.9 -1.3 -2.1 All items 117.2 118.8 4.7 10.0 Netherlands AEX 561.3 -0.9 -7.2 World, dev'd MSCI 2,494.1 2.0 5.8 Gold Spain IBEX 35 6,996.9 -1.8 -26.7 Emerging markets MSCI 1,118.9 nil 0.4 $ per oz 1,920.9 1,976.5 -0.9 27.6 Poland WIG 51,356.2 -2.2 -11.2 Brent Russia RTS, $ terms 1,234.8 -3.0 -20.3 $ per barrel 45.9 45.6 2.6 -21.0 Switzerland SMI 10,384.8 0.7 -2.2 US corporate bonds, spread over Treasuries Turkey BIST 1,083.9 -1.4 -5.3 Dec 31st Sources: Bloomberg; CME Group; Cotlook; Datastream from Refinitiv; Australia All Ord. 6,251.8 -0.7 -8.1 Basis points latest 2019 Fastmarkets; FT; ICCO; ICO; ISO; Live Rice Index; LME; NZ Wool Services; Thompson Lloyd & Ewart; Urner Barry; WSJ. *Provisional. Hong Kong Hang Seng 25,120.1 -1.5 -10.9 Investment grade 178 141 India BSE 39,086.0 nil -5.3 High-yield 567 449 Indonesia IDX 5,312.0 -0.5 -15.7 Sources: Datastream from Refinitiv; Standard & Poor's Global Fixed For more countries and additional data, visit Malaysia KLSE 1,537.5 -0.8 -3.2 Income Research. *Total return index. Economist.com/indicators Graphic detail Air pollution The Economist September 5th 2020 77

→ Air pollution fell precipitously after cities locked down, but has since rebounded

Nitrogen-dioxide pollution* in 12 cities that locked down in March 2020 Nitrogen-dioxide pollution* v traffic congestion Start of lockdown=100, 30-day moving average Start of lockdown=100, weekly readings in 12 cities 150 140 Delhi, the week lockdown began 100 New York City

120 50 Delhi Delhi, a month later 0 0 50 100 150 200 100 Road-traffic congestion London Deaths averted from decline in air pollution* January 1st to August 25th, estimate

80 ↓ Per 100,000 people ↓ Total 0 2,000 4,000

41 Delhi 4,644 Rome 30 Bangalore 1,543 60 69 Paris 1,486 49 Rome 1,259 16 London 1,227

Paris 12 New York City 40 29 Madrid 18 Santiago Santiago 23 Berlin Bangalore 31 Warsaw 20 42 Brussels Jan Feb Mar Apr May Jun Jul Aug 2 Los Angeles

Sources: Centre for Research on Energy and Clean Air; TomTom; The Economist *After adjusting for weather conditions

city imposed its lockdown, from 46μg/m3 died prematurely from diseases related to Blue skies in March to 17μg/m3 in early April. Similar- air pollution, such as respiratory-tract in- 3 ly, NO2 levels in London fell from 36μg/m fections and lung cancer, in 2016 alone, in- turn grey in March to 24μg/m3 two weeks later. cluding 290,000 children. Millions more Air-pollution levels do not depend on suffer from chronic health problems. human activity alone—weather conditions The crea estimates that improved air such as wind speed, rainfall and humidity quality since the covid-19 pandemic began Air pollution is nearing pre-covid matter, too. The Centre for Research on En- has saved about 15,000 lives in 12 big cities. levels, boding ill for respiratory health ergy and Clean Air (crea), a think-tank, has In Delhi, around 4,600 people have es- ovid-19 is not all bad, as any city- produced a model which takes these fac- caped death due to air pollution—roughly Cdweller who stepped outside this year tors into account to gauge the impact co- as many as are known to have died from co- will have seen. The virus has killed hun- vid-19 has had on air-pollution levels in 12 vid-19, although the disease’s true tally is dreds of thousands of people and decimat- big cities around the world. They found probably higher and still rising. ed economies around the world. But as gdp that NO2 levels fell by about 27% ten days As people return from summer holidays has fallen so has air pollution. This spring after governments issued stay-at-home or- in the northern hemisphere and econo- marked the first time in decades that resi- ders, compared with the same period in mies begin to recover, air pollution is near- dents of Jalandhar in northern India were 2017-19. Levels of particulate matter less ing pre-pandemic levels. Although people able to see the snow-capped Himalayan than 2.5 micrometres wide (PM2.5), which are still wary of using public transport, mountains, 160km (100 miles) away. are also harmful to health, declined by an they appear to have fewer reservations One particularly common pollutant is average of about 5% in a group of 12 big cit- about driving cars themselves—data from nitrogen dioxide (NO2). The World Health ies in which data are readily available. TomTom, a location-tech firm, show that Organisation (who) reckons that NO2 lev- The health benefits of cleaner air are congestion in big cities has just about re- els above 40 micrograms in every cubic profound. The who reckons that about turned to pre-covid levels. This increase in metre of air (40μg/m3) are harmful to peo- 90% of the world’s population live in pollution will be deadly, especially to those ple. In Delhi, one of the world’s most pol- places where air quality falls short of its who suffer from severe asthma, who are luted big cities, NO2 fell sharply after the standards. They estimate that 4.2m people also vulnerable to covid-19. 7 78 Obituary Chadwick Boseman The Economist September 5th 2020

music in the 1960s, he bowed to no prejudice but strutted through life, seizing what he wanted. All these were fighters in their way, as effective as Black Panther crouched on a speeding car to spring. Brown had that one-two step, then a punch like a boxer’s at the mi- crophone. Marshall could floor a racist thug with one blow. Robin- son would stand at the plate, ready, about to hit a homer that would shock the crowd into silence. Then cheers. Each character he played left little bits in him, whether Brown’s sexy dance moves or Marshall’s liking for fine outfits. But Robin- son taught him he should confront the world squarely, calmly, and think he was infallible. He had not been too good at doing that, in his past. Growing up in South Carolina, even well after the Civil Rights Act, he had been run off the road by rednecks, called “boy” and passed by trucks that flew Confederate flags. He had faced it, and failed at facing it. Now, in playing his characters, he could re- live those things and respond in a different way. He prepared as thoroughly as possible. For “42” he spent weeks learning to play baseball like a pro. Mick Jagger helped him with “Get on Up”, teaching him how to tease and seduce an audience. He dug deep into the backstories of the characters, filling out their weaker sides and their humanity. It was important to walk in their shoes through the world. Black characters on screen were too often one-dimensional, as if they were second-class. Yet the fictitious role of T’Challa and his kingdom of Wakanda engaged him even more. This was a work of recovery, the celebra- tion of a severed African past that belonged to all black people. Ev- ery part of it had to be properly done. It was he who insisted the cast To be a king spoke Xhosa, with its clicks and smacks. He found it beautiful and rhythmical, like ancient music. He helped devise the salute, which reminded him of tomb effigies of the pharaohs. (In 2016 he had played Thoth in “Gods of Egypt”, the one face of African descent among them, taking the part only because, without him, there would have been none.) For close combat he studied Zulu stick- fighting and Dambe boxing from west Africa. Costumes, sets and Chadwick Boseman, actor, died on August 28th, aged 43 moves fused together different aspects of the continent he loved, a s he slipped into each role, studiously, scene by scene, Chad- mixing and reconnection that went to his own roots: almost the Awick Boseman kept one thought in mind. His character was a moment he got the part, he had his dna tested and found he was strong black man in a world that conflicted with his strength. It Yoruba from Nigeria and Limba from Sierra Leone. Last, he rein- didn’t want him to be great; it tried to keep him down. But there forced the film’s relevance by making T’Challa a peacemaker in the was something in him, some particular talent, or obsession, or Mandela mould while his nemesis Killmonger, his abandoned part of his past, that made him stand tall. That made him say, “No.” cousin, was inspired by Malcolm X. That echoed a conversation he It was fitting, then, that the role he became most famous for had long had with himself: forbearance, or violence. was a tested but triumphant black king, T’Challa, in “Black The film’s huge success was difficult in one way. As an actor he Panther” in 2018. The film was a sensation. It tipped Hollywood on worked at his craft by observing people. He had existed in the shad- its head: a $1.3bn-grossing movie whose cast and makers were, al- ows, watching from a back table as he sipped a vegan smoothie or most to a man and woman, black. Black Panther (T’Challa’s moon- dined on brussels sprouts. He liked to hide. Now people spotted lighting persona) had appeared in film before, but in the “Captain him from the end of the street and chased after him, a star. But in America” and “Avengers” series, among a crowd of white Marvel all other ways success had to be good, well beyond the audience re- superheroes. Now he stood alone. In a white-focused world he action. It showed the Hollywood moguls that a thoroughly black ruled a country, Wakanda, that was more advanced than any other, film was viable and bankable. It opened the way, or ought to, for both technologically and spiritually. Never colonised, never en- substantial roles for more black actors. There were countless sto- slaved. He himself was both an acrobatic righter of wrongs and a ries in their culture that had not yet been told. Or not by them. ruler who was cool, stately, wisecracking and wise. Even before the A storyteller was how he saw himself, part of an ancient tradi- film came out, schools were booking cinemas for pupils to see it. tion in both Africa and the West. When a friend had been shot dead For him, as the lead, success was not just black children, in their in high school, writing a play about it seemed the best way to chan- Panther costumes, crying “Wakanda for ever!” and giving the nel his emotions. Later, forging a path as an actor-director in New crossed-arm salute. He had put in their heads the idea that they York, he wrote a hip-hop play on classic themes, “Deep Azure”, could be great. And he had also sown in little white heads the rare, based on the shooting of a young black man by a black policeman. enlightening thought: “I want to be him.” That victim, he explained, was not just another casualty lost to vio- Less obviously, his major roles before then had also made that lence. He was a would-be leader, a would-be king. point. All were men the world could not keep down. In “42” as He was already a king in the public mind when his cancer took Jackie Robinson, the first black player in modern Major League hold. He went on making films with as much vitality and as full a baseball, he struggled through white disdain, but always knew laugh as before. “Black Panther II” was on: he was in the Marvel how good he was. In “Marshall”, as the lawyer who became the first teaser, regally striding as before. One of his last texts, to his white black Supreme Court justice, he combined sharp clothes with a ra- co-star in “Marshall”, urged him to inhale, exhale and enjoy the zor-sharp mind as he defended his innocent black client. And in rare rain that was falling on Los Angeles. Fate was pushing him “Get on Up” as James Brown, the firebrand singer who electrified down, but he confronted it. For as long as he could, he said “No.” 7 Property 79