The Economist August 18Th 2018 5

TURKEY’S TURMOIL: HOW BAD IS IT?

Swampy tales from American politics

The prince and the carmaker

Airportqueues,apassporttomisery AUGUST 18ModernTH–24TH 2018 love Dating in the digital age Contents The Economist August 18th 2018 5

7 The world this week United States 29 Summer of scandal Leaders Pythons and ostriches 9 Romance in the digital age 30 West Virginia politics Modern love My kingdom for a couch 10 Emerging markets 31 The death penalty Turkey’s turmoil Cornhusker dues 11 Saudi Arabia 31 The White House The prickly prince Oh me, oh my 11 China’s reforms 32 Clerical sex abuse Turkey An increasingly Pilot error Cardinal sins autocratic country is at the 12 Infrastructure 33 Lexington Indiana country centre of an economic storm: The bridges of decay leader, page 10. Currency On the cover turmoil and a row with America Digital dating has changed Letters The Americas threaten to spill out of control, the search for a mate, for page 24. Turkey’s crisis is not 15 On China, John Stuart Mill, 34 Migrants in Mexico better more than for worse: fundamentally contagious, sin taxes, finance Staying south leader, page 9. Internet page 57. The contrarian case 35 The war on drugs dating is adding to the sum for emerging markets: Unlikely allies of human happiness, though Briefing Buttonwood, page 58. Recep not without heartache, 16 Sexual selection Tayyip Erdogan wants Turkish page 16 Putting the data into dating Middle East and Africa artists to be more docile. But 36 Injustice in Kenya artistic freedom is hard to Too big to jail crush, page 66 The Economist Britain online 37 Ethiopia’s prime minister Daily analysis and opinion to 19 Scottish public policy Abiymania The not so brave supplement the print edition, plus 37 Togo’s president audio and video, and a daily chart 20 Sterling’s slide Tough to unseat Economist.com Crunch time 38 Europe and the Arab world E-mail: newsletters and 21 Rough sleeping Repeating past mistakes mobile edition No end in sight Economist.com/email 39 The Gulf crisis 21 Visa delays Competition over Kabul Print edition: available online by Stamp duty 39 Ugly art in Egypt 7pm London time each Thursday 22 Male nurses The oppressors can’t paint Economist.com/printedition Not just a woman’s job Audio edition: available online 23 Bagehot to download each Friday Frank Field’s other Britain Asia American politics The number Economist.com/audioedition 40 Malaysian politics of money scandals in Trumpland Mahathir’s second act is overwhelming, page 29. Europe Another insider account of how 41 Philippine-American the country is run, page 31 24 The fall of the lira relations Turkey tantrum Healing old wounds 25 Russia’s neighbourhood Volume 428 Number 9105 41 Afghanistan’s endless war Big lake, small sea Ninety miles from Kabul Published since September1843 25 Ireland and Brexit 42 Police in India to take part in "a severe contest between Ferry risky intelligence, which presses forward, and Politicians’ pets an unworthy, timid ignorance obstructing 26 Italy’s bridge disaster our progress." 43 Banyan Structural weakness The perils behind Korean Editorial offices in London and also: 27 German UXB Amsterdam, Beijing, Berlin, Brussels, Cairo, detente Chicago, Johannesburg, Madrid, Mexico City, Deadly sleepers Moscow, Mumbai, New Delhi, New York, Paris, San Francisco, São Paulo, Seoul, Shanghai, 27 Travel in Spain Singapore, Tokyo, Washington DC The Guggenheim effect 28 Charlemagne Bridge safety It is not just in Odyssey without end Italy that bridges are failing: leader, page 12. A deadly collapse reveals cracks in both government and infrastructure, page 26. Crumbling infrastructure worries civil engineers, page 63

1 Contents continues overleaf 6 Contents The Economist August 18th 2018

China 60 Innovation in insurance Icing on the cake 44 Reform experiments Feeling the stones 60 Forensic accounting Looking for the Maﬁa 45 Overstressed children The government v parents 61 Tax breaks in Africa Slipping through the net 46 Muslims And hell is just a sauna 62 Free exchange Carbon taxes

International Science and technology 47 The global arms trade Saudi Arabia Muhammad bin Obituary V.S. Naipaul, Masters of war 63 Construction technology Salman’s capriciousness is A bridge too far curmudgeonly genius, died on hurting his kingdom: leader, 48 The United Nations Arms August 11th, aged 85, page 74 Trade Treaty 64 Archaeology page 11. The arms market is A dead parrot story booming, and tilting in the Honoured in the breach buyers’ favour, page 47. Elon 65 The wheat genome Breaking bread Subscription service Musk has pushed his firm to Business For our full range of subscription offers, breaking point—and 65 Ancient plants including digital only or print and digital combined visit reinvigorated the public 49 The future of computing Enduring relationship Quantum spring Economist.com/offers company: Schumpeter, page 53 You can also subscribe by mail or telephone at 50 Glyphosate and cancer the details provided below: Books and arts Bayer beware Telephone: +44 (0) 845 120 0983 51 Passport queues 66 Creativity and censorship Web: Economist.com/offers Border-line ridiculous in Turkey Post: The Economist The art of survival Subscription Centre, 51 Online retailing P.O. Box 471, Suits you 67 Russian history Haywards Heath, Tale of the century RH16 3GY 52 Golf and the media UK Out of the woods 68 America’s warriors No off button Subscription for 1 year (51 issues) 53 Schumpeter Print only UK – £145 The meaning of Musk 68 A novel of immigration Anchors away 69 The ship that changed Principal commercial offices: Philosophy brief the world The Adelphi Building, 1-11John Adam Street, Quantum computing The London WC2N 6HT technology is advancing and 54 John Maynard Keynes There were dragons Tel: +44 (0) 20 7830 7000 Was he a liberal? attracting investment, but Rue de l’Athénée 32 may face a winter before it 1206 Geneva, Switzerland 72 Economic and financial Tel: +4122 566 2470 enters its summer, page 49 Finance and economics indicators 750 3rd Avenue, 5th Floor, New York, NY 10017 57 Emerging markets Statistics on 42 economies, Tel: +1212 5410500 Fear of the lira plus a closer look at 1301Cityplaza Four, agricultural commodities 58 Buttonwood 12 Taikoo Wan Road, Taikoo Shing, Hong Kong Tel: +852 2585 3888 The case for emerging markets Obituary Other commercial offices: Chicago, Dubai, Frankfurt, Los Angeles, 59 Australian pensions 74 V.S. Naipaul Paris, San Francisco and Singapore Not so super No settled place 59 Litigation finance Appealing returns

Passport queues Their length is vexing airlines as well as their passengers, page 51

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idea ofmoving borders for secretary ofAlfredo Stroessner, Politics ethnic reasons since the sec- the country’s dictator from ond world war. A deal could 1954 to 1989. help Serbia accept the independence ofKosovo, which Bolder than before used to be one ofits provinces. The Taliban were pushed out ofGhazni in Afghanistan, five An unwelcome return days after they launched a An outbreakofEbola in the brash assault on the city. The north-east ofthe Democratic attackby the emboldened Republic ofCongo claimed insurgents tookthe govern- more lives, bringing the death ment in Kabul by surprise. toll to at least 41. The director- Also, dozens were killed by a general ofthe World Health Vermont’s Democratic prim- suicide-bomber at an educa- Organisation appealed foran ary forgovernor was won by a tion centre in the capital. Suspi- end to fighting in the region, transgender woman. Christine cion fell on Islamic State. A highway bridge collapsed in which has hindered aid work- Hallquist, a former electricity Genoa, Italy, during a rain- ers. It is the second outbreak of executive, is the first trans- The UN accused China of storm, killing at least 38 people. the disease in the country this gender person from either placing a million ethnic Uighur The reasons forthe collapse year. The first was declared to party to run as a candidate for Muslims in re-education are under investigation. Italy’s be over in July. governor. She faces an uphill camps in the western region of populist government vowed to taskunseating Phil Scott, the Xinjiang, where formerin- spend more on infrastructure— For the first time in weeks Republican incumbent. mates say they were forced to something some ofits mem- Israel allowed commercial eat porkand pledge loyalty to bers had previously dismissed goods to pass through its bor- A rally by white nationalists the Communist Party. AChi- as unnecessary. der crossing with Gaza at in Washington failed to live up nese official denied it, saying Kerem Shalom. Israel had to its hype. Only two dozen that a few criminals had been America continued to demand blocked all but humanitarian marchers turned up. placed in vocational schools. that Turkey release a pastor, deliveries in response to Andrew Brunson, who is being incendiary kite and balloon Fuel in a crisis held on dubious terrorism attacks by Palestinians. A truce President Nicolás Maduro said charges. Donald Trump said was recently announced. that the official price ofpetrol American sanctions would Egypt is trying to broker a in Venezuela, which is close to tighten until Mr Brunson is long-term ceasefire between zero, will rise to international freed. Turkey’s president, Israel and Hamas, the militant levels. He hopes the higher Recep Tayyip Erdogan, retaliat- group that controls Gaza. price will reduce queues. The ed by raising tariffson Ameri- almost-free petrol is almost can goods and vowing to Tunisia’s president, Beji Caid never available to ordinary boycott Apple. Turkish smart- Essebsi, said he would in- Venezuelans, since regime phones will do, he said. troduce a bill to give women cronies tend to grab it and sell and men equal inheritance it on the blackmarket at a Protesters in Moscow de- rights. Religious conservatives colossal mark-up. The govern- nounced the imprisonment of objected. Laws inspired by the ment arrested 14 more people Taiwan’s president, Tsai Ing- a group ofteenagers belonging Koran restrict women to half fortheir alleged role in an wen, made a political speech to a political discussion group ofwhat men get. attempt to assassinate Mr in America, the first time in 15 called “New Greatness”. The Maduro, bringing the total years a Taiwanese leader has teenagers were sentenced to Time for a confession number ofarrests to 26. done so. Ms Tsai’s visit to the up to two years forextremism. Catholic priests in Pennsylva- United States was her first nia abused hundreds ofchil- Costa Rica’s supreme court since Congress passed an act The European Commission dren over several decades, ruled that the country’s ban on enabling high-ranking Taiwan- gave Poland one month to according to a report by a same-sex marriage is unconsti- ese and American officials to change its new laws that give grand jury. The report de- tutional and told the legislative travel to each other’s country. the government more influ- scribed how senior church assembly to change the law China complained. ence over the appointment of officials systematically cov- within 18 months. Ifthe legisla- judges. The commission says ered up the abuse. Almost all ture does not act, the ban will The postmaster in the village they violate EU rules on the the crimes have passed the automatically lapse. In Janu- ofOdhanga in the Indian state independence ofthe judiciary. statute oflimitations fortrials ary the Inter-American Court ofOdisha was suspended after IfPoland fails to act, the com- to be held. ofHuman Rights, which is it was discovered that he had mission may turn to the based in Costa Rica’s capital, failed to deliver thousands of European Court ofJustice. Kris Kobach became the San José, decided that the letters. Although he was selec- Republican candidate for two-dozen countries that fall tive in the mail he junked and Serbia and Kosovo said they governor in Kansas after the within its jurisdiction must admitted the charges, he might negotiate border incumbent, JeffColyer, con- accept gay marriage. expressed little regret. Most of changes to move ethnically ceded defeat in the recent the letters can’t be salvaged. Albanian regions into Kosovo close-run primary. MrKobach, Mario Abdo Benítez, a conser- Neither can the postmaster’s and ethnically Serbian ones an outspoken supporter of vative formersenator, took job, as officials have stamped into Serbia. Most European Donald Trump, is likely to win office as Paraguay’s president. their authority and said he will countries have abhorred the in November. His father was the private probably get the sack. 1 8 The world this week The Economist August 18th 2018

that had been marked for market so buoyant, zero-hours change. Backed by Tencent, a Business closure. Mike Ashley, Sports contracts fell by12%. big technology investment Direct’s boss, said he wanted company, Nio is one ofseveral Stockmarkets wobbled amid to turn the chain into the New Zealand’s Parliament startups in China with ambi- worries about Turkey’s eco- “Harrods ofthe high street”. passed a law banning most tions to compete with Tesla. nomic turmoil. After taking a foreign non-residents from battering in foreign-exchange The euro zone’s economy buying existing homes. The Meanwhile, Tencent reported markets the Turkish lira stabil- grew by 2.2% in the second measure targets mostly Chi- a drop in quarterly net proﬁt, a ised as the government quarter compared with the nese investors who have been rare occurrence among China’s brought in measures to stop same period last year. Al- speculating in property, and tech giants. The company’s short-selling ofthe currency though that allayed fears that a who are blamed fora housing gaming business has struggled and trumpeted a pledge of trade row with America would crunch that has seen prices to grow. That taskhas been investment from Qatar. The damage the region, it was the skyrocket in places like Auck- made harder by Chinese regu- episode spooked investors in euro zone’s slowest rate of land. Australians are exempt- lators objecting to new titles. other emerging markets. The growth in over a year. ed; other foreigners can still This weeksales ofTencent’s Indian rupee hit a new low make limited purchases of newest game, “Monster Hunt- against the dollar. The Russian new developments. er: World”, were halted be- rouble and South African rand Consumer prices cause regulators had received also had a stormy time. Britain, % change on a year earlier Curiouser and curiouser “complaints”.

3 Elon Muskput more flesh on A jury in California awarded his announcement that he A new high for business $289m to a schools ground- 2 intends to take Tesla private. Constellation Brands, an keeper with cancer after find- 1 He explained how he arrived American drinks company + ing that weedkiller he used 0 at the buy-out price of$420 a which counts the Corona beer had not adequately described – share, and that the funding he label among its assets, in- the risks to human health. The 1 had “secured” would come creased its stake in Canopy 2013 14 15 16 17 18 weedkiller contained glypho- from Saudi Arabia’s sovereign- Growth, the world’s largest Source: ONS sate and was made by Mon- wealth fund, which, he said, publicly traded cannabis santo, a chemicals company Britain’s inflation rate in- has talked to him about taking company, to 38%. Canopy, that was recently taken over by creased to 2.5% in the year to Tesla private. Mr Muskis still which is based in Canada, Bayer. The German com- July, the first time it had quick- not offthe hookabout wheth- wants to expand in countries pany’s share price plunged ened since November 2017. The er he followed the proper rules that permit marijuana for after the jury’s decision. biggest jumps in prices were to for disclosing his plans: the medical use, and also in places transport-related costs. Sep- Securities and Exchange where it is allowed forplea- He has the credentials arate employment data Commission has reportedly sure. Canadians will soon be Uber appointed a new chief showed that 300,000 more subpoenaed Tesla’s directors. able to buy the weed forrecre- security officer, nine months people were in workin the ational use following an act of after it admitted that hackers second quarter than a year Nio, a Chinese electric-car- Parliament that made it legal. had obtained the names of earlier. The unemployment maker, filed an IPO to list its 57m passengers and drivers. rate, at 4%, is at its lowest level American depositary shares For other economic data and Matt Olsen is a formergeneral since 1975. With the labour on the New YorkStockEx- news see Indicators section counsel ofAmerica’s National Security Agency. The firm also published its earnings for the second quarter. With gross bookings forits cars up by 41% compared with the same quarter last year, net revenue, after paying its drivers and other costs, surged to $2.8bn. Uber made another net loss, however.

Home Depot published its quarterly earnings. Seen as a bellwether forthe American economy, the home-improvement retailer reported a big rise in net proﬁt, to $3.5bn, and delivered an upbeat forecast.

House ofFraser, a British department-store chain, found a buyer just hours after going into administration. Sports Direct bought all the company’s 59 premises for£90m ($115m), including the stores Leaders The Economist August 18th 2018 9 Modern love

Online dating has changed the search fora mate, forbettermore than forworse HE internet has transformed ners online. This searchable spectrum of sexual diversity is a Tthe way people work and boon: more people can find the intimacy they seek. communicate. It has upended There are problems with the modern way oflove, however. industries, from entertainment Many users complain of stress when confronted with the bru- to retailing. But its most pro- tal realities ofthe digital meat market, and their place within it. found effect may well be on the Negative emotions about body image existed before the inter- biggest decision that most peo- net, but they are amplified when strangers can issue snap judg- ple make—choosing a mate. ments on attractiveness. Digital dating has been linked to de- In the early 1990s the notion of meeting a partner online pression. The same problemsthatafflictotherdigital platforms seemed freakish, and not a little pathetic. Today, in many recurin this realm, from scams to fake accounts: 10% ofall new- places, it is normal. Smartphones have put virtual bars in peo- ly created dating profiles do not belong to real people. ple’s pockets, where singletons can mingle free from the con- Thisnewworld ofromance mayalso have unintended constraints ofsocial or physical geography. Globally, at least 200m sequences for society. The fact that online daters have so much people use digital dating services every month. In America more choice can break down barriers: evidence suggests that more than a third of marriages now start with an online the internet is boosting interracial marriages by bypassing ho- match-up. The internet is the second-most-popular way for mogenous social groups. But daters are also more able to Americansto meetpeople ofthe opposite sex, and isfast catch- choose partners like themselves. Assortative mating, the pro- ing up with real-world “friend ofa friend” introductions. cess whereby people with similar education levels and in- Digital dating is a massive social experiment, conducted on comes pair up, already shoulders some of the blame for in- one ofhumanity’s most intimate and vital processes. Its effects come inequality. Online dating may make the effect more are only just starting to become visible (see Briefing). pronounced: education levels are displayed prominently on dating profiles in a way they would never be offline. It is not When Harry clicked on Sally hard to imagine dating services of the future matching people Meeting a mate over the internet is fundamentally different by preferred traits, as determined by uploaded genomes. Dat- from meeting one offline. In the physical world, partners are ing firms also suffer from an inherent conflict of interest. Per- found in family networks or among circles of friends and col- fect matching would leave them bereft ofpaying customers. leagues. Meeting a friend of a friend is the norm. People who The domination of online dating by a handful of firms and meet online are overwhelmingly likely to be strangers. As a re- theiralgorithmsisanothersource ofworry. Datingapps do not sult, dating digitally offers much greater choice. A bar, choir or benefit from exactly the same sort of network effects as other office might have a few tens of potential partners for any one tech platforms: a person’s friendsdo not need to be on a specif- person. Online there are tens ofthousands. ic datingsite, forexample. Butthe feedbackloop between large This greater choice—plus the fact that digital connections pools of data, generated by ever-growing numbers of users at- are made only with mutual consent—makes the digital dating tracted to an ever-improvingproduct, still exists. The entryinto market farmore efficient than the offline kind. For some, that is the market of Facebook, armed with data from its 2.2bn users, bad news. Because ofthe gulfin pickinessbetween the sexes, a will provide clues as to whether online dating will inexorably few straight men are doomed never to get any matches at all. consolidate into fewer, larger platforms. On Tantan, a Chinese app, men express interest in 60% of women they see, but women are interested in just 6% of men; While you were swiping this dynamic means that 5% of men never receive a match. In But even if the market does not become ever more concentrat- offline dating, with a much smaller pool of men to fish from, ed, the process of coupling (or not) has unquestionably be- straight women are more likely to couple up with men who come more centralised. Romance used to be a distributed ac- would not get a look-in online. tivity which took place in a profusion of bars, clubs, churches For most people, however, digital dating offers better out- and offices; now enormous numbers of people rely on a few comes. Research has found that marriages in America be- companies to meet their mate. That hands a small number of tween people who meet online are likely to last longer; such coders, tweaking the algorithms that determine who sees couples profess to be happier than those who met offline. The whom across the virtual bar, tremendous power to engineer whiff of moral panic surrounding dating apps is vastly over- mating outcomes. In authoritarian societies especially, the blown. Precious little evidence exists to show that opportuni- prospect ofalgorithmically arranged marriages ought to cause ties online are encouraging infidelity. In America, divorce rates some disquiet. Competition offers some protection against climbed until just before the advent of the internet, and have such a possibility; so too might greater transparency over the fallen since. principles used by dating apps to match people up. Online dating is a particular boon for those with very par- Yet such concerns should not obscure the good that comes ticular requirements. Jdate allows daters to filter out matches from the modern way of romance. The right partners can ele- who would not consider converting to Judaism, for instance. A vate and nourish each other. The wrong ones can ruin both vastly bigger market has had dramatic results for same-sex dat- their lives. Digital dating offers millions of people a more effi- ers in particular. In America, 70% ofgay people meet theirpart- cient way to find a good mate. That is something to love. 7 10 Leaders The Economist August 18th 2018

Emerging markets Turkey’s turmoil

An increasingly autocratic country is at the centre ofan economic storm HERE was a time when peo- And the ones with problems that are most similarhave shown Tple thought that a secular, more alacrityin tacklingthem. The factthatArgentina’scentral democratic Turkey would even- bankacted to raise interest rates is a source ofcomfort. tually accede to the European For Turkey itself, there is a fairly standard blueprint to fol- Union and join the club of low when an economy gets into such straits: raise rates to re- wealthy liberal states known as duce pressure on the currency and tackle inflation, and seek the West. There was a time, too, out emergency financing from the IMF, tied to a set ofinvestor- a few years ago, when Turkey friendly policies. Argentina did just that earlier this summer, was a darling ofemerging-market investors. helping to nip its crisis in the bud. Those days are long gone. Politically, the country has been Turkey has so far done little more than fire-fight, offering tilting away from the West foryears: becoming more stridently some help to the banking system, making it harder to specu- Islamist, picking fights with NATO allies and transforming it- late against the lira and drumming up promises of investment self into a virtual autocracy under President Recep Tayyip Er- from allies such as Qatar, which will provide dollars but not dogan. Economic-policy orthodoxy has been junked. High credibility. MrErdogan’s resistance to higher interest rates, and growth rates have depended on foreign borrowing: the the fact that turning to the IMF would require some bowing amount of corporate foreign-currency debt has more than and scraping to America, dent the chances that Turkey will get doubled since 2009. Mr Erdogan, who believes that high inter- ahead of things. That could be the difference between a man- est rates magically cause inflation rather than cure it, has aged adjustment and a chaotic collapse, in which defaults stopped the central bankfrom acting sensibly. spread and banks teeter. Both these trends have now come to a head. Turkey is gripped by a currency crisis, precipitated partly by America’s He blames America imposition of sanctions over Mr Erdogan’s refusal to release a Mr Erdogan may yet see sense. But his autocratic style fosters pastor, Andrew Brunson, who is absurdly accused of terror- bad policies. He has undermined the institutions that ought to ism. President Donald Trump has made matters worse by stand up to him. The central bank, which should be indepen- vowingto slap highertariffson Turkish metals. The lira has lost dent and technocratic, defers to a leader with crackpot views. a fifth ofits value this month, furtherfuellinginflation, increas- The finance ministry is run by the president’s son-in-law. The ing the burden of foreign-currency debts and threatening the media, which should be pointing out Mr Erdogan’s mistakes, health ofTurkey’s bankingsystem. Relations with America are are so cowed that they repeat his conspiracy theories instead. poisonous. Mr Erdogan blames Turkey’s economic problems Deprived of real news, many Turks believe their problems are on a plot by foreign enemies and has imposed retaliatory ta- caused by a Western plot. With no one to curb him, Mr Erdo- riffson American cars, alcohol and even cosmetics. gan is free to indulge his worst instincts. The crisis poses three types ofrisks: forotheremerging mar- In normal times, Turkey’s Western allies might help by tell- kets, nervous that investors will flee as contagion spreads; for ing Mr Erdogan to change course. But European governments Turkey’s economy, which is staring at a deep recession; and for are scared to upsethim, lesthe open the gatesand let Syrian ref- the West, whose fraying bonds to Turkey could finally break. ugees flood into Europe. And Mr Trump is engaged in a ridicu- On each count, how bad could things get? louschest-thumpingcontestwith the Turkish leader, with each man trading threats and stirring up patriotic anger against the When Erdogan sneezes other. Neitheriswillingto backdown, forfearoflooking weak. Start with the least-bad news. The lira’s collapse has caused In the short run Turks will suffer far more from the crisis. wobbles in other emerging markets that may share one or Many are already feeling poorer as prices soar. In the long run, more of Turkey’s traits, including an inadequate savings rate, a however, America will suffer, too. Turkey is an important ally big current-account deficit, lots of foreign-currency debt and in a crucial place, straddling the crossroads between Europe, high inflation. The South African rand swooned; the Indian ru- the Middle East and Asia. Ifit fallsout too badly with the West, pee hit a record low this week; Argentina, which has already it may drift even closer to Russia or China. Mr Trump isright to had its own currency crisis this year, raised interest rates again. press for the release of Mr Brunson, but wrong to use tariffs to Sharesin bankswith exposure to Turkish borrowersfell (see Fi- thatend. The rules-based tradingsystem dependson countries nance section). not usingsuch blunt weapons indiscriminately. And the NATO The environment for emerging markets has become less alliance is undermined when America’s president needlessly forgiving as the tightening of monetary policy in America has inflames disputes with tetchy member states. boosted the dollar and as concerns grow about China’s econ- Mr Trump and Mr Erdogan need to find a face-saving way omy. Buta cascade ofcurrencycrisesstill seemsunlikely, main- foreach to declare victory and dial down the aggression, as Mr ly because Turkey’s frailties are so acute. Of the big emerging- Erdogan has previously done with Russia and Mr Trump with market economies, only Argentina and Egypt (both now North Korea. That would create room for the West, including wards of the IMF) also have a double-digit inflation rate; none the IMF, to help Turkey step backfrom the abyss. It will be hard has a current-account deficit as big, although Pakistan’s comes to save a country whose leader does not understand why it is close. Other markets have more room for policy manoeuvre. in trouble. But Turkey is too important to be abandoned. 7 The Economist August 18th 2018 Leaders 11

Saudi Arabia The prickly prince

Muhammad bin Salman’s capriciousness is hurting his kingdom LON MUSK, a mercurial en- region. Months later, as part of an anti-corruption drive, hun- Etrepreneur, wants to take Tes- dreds ofSaudi princes and tycoons were locked up in a luxury la, his electric-car firm, private. hotel in Riyadh until they surrendered a big chunk of their as- That will cost billions. Where sets. No doubt some of them were guilty of something, but will he find the money? On Au- there was no due process. To outsiders, it looked as if property gust 13th Mr Musk gave an an- rights in Saudi Arabia depend on the prince’s whim. swer: from Saudi Arabia, prob- In many ways, Prince Muhammad is trying to change the ably (see Schumpeter). It is a kingdom forthe better. He hasloosened religiousand social re- common refrain. When visionarieswantsomeone rich to back strictions: Saudi women can now drive, and everyone can go something bold, they turn to Muhammad bin Salman, the to the cinema. He has pursued economic reforms aimed at crown prince who runs the oil-rich kingdom. He has commit- eventually weaning the Saudi economy off oil, and encour- ted $45bn to a Japanese tech fund and plans to build an ultra- ages Saudi women to go out to work. All this has made him modern city on the Red Sea costing $500bn. If Prince Muham- popular, especially among the young and among women. mad wants to invest in electric cars too, why not take his cash? One reason for caution is that what the prince gives, he can A reformer, but reckless suddenly take away. This month, after Canada’s foreign minis- Yet by doing things that are wrong and foolish, he needlessly ter tweeted that Saudi Arabia should not lock up peaceful dis- alienates potential supporters at home. Even as he lifted the sidents—hardly an unusual statement for a Canadian politi- ban on women drivers, for example, he was locking up wom- cian—Prince Muhammad was furious. Instead of ignoring the en who had campaigned for it. He needlessly alienates for- tweet, he retaliated wildly. Saudi Arabia expelled the Canadi- eigners, too. Last year the Saudi authorities detained Leba- an ambassador, cut off bilateral trade, ordered Saudi students non’s prime minister for two weeks—an extraordinary breach out of Canadian universities and told sick Saudis to shun Ca- of diplomatic norms. In Yemen, where Prince Muhammad is nadian clinics. State media lambasted Canada’s human-rights fighting a proxy war against Iran, Saudi bombs hit a school bus record; social media portrayed Canada asa drug-addled dysto- on August 9th, killing dozens of children. The war, now in its pia. Mr Musk, who is half-Canadian, has been warned. fourth year, has devastated Yemen and shamed allies such as Prince Muhammad’s fury will not hurt Canada much. Just America and Britain, which supply Saudi Arabia with arms. 0.2% of its exports went to Saudi Arabia last year. The immedi- Few Saudis are brave enough to tell Prince Muhammad ate pain will be felt by Saudi students who must suddenly find when he is making mistakes. His allies ought to speak up, but another college and Saudi patients who must take their ail- they are silent too. This is a grave mistake. Saudi Arabia is the ments elsewhere. In the longerrun, the main damage is to Sau- largest Arab economy and home to Islam’s holiest sites. Suc- di Arabia’s reputation—and that has real consequences. cessful reform there would help stabilise the whole Middle Investors like predictability. Prince Muhammad offers the East. Foreign leaders should advise Prince Muhammad to opposite. Last year, without warning, Saudi Arabia led an eco- calm down and stop damaging his country and his reputation. nomic blockade of Qatar that continues to disrupt trade in the Ifhe does not, they should stop selling him weapons. 7

China’s reforms Pilot error

China is conducting fewerlocal policyexperiments underXi Jinping. That is a shame OME December, it will be allowed peasants to farm their own plots and sell their crops. Chinese policy pilots C 40 years since the Commu- When outputsoared, he made thisoﬃcial policy. In 1980, to the Provincial-level nist Party endorsed Deng Xiao- horror of Maoists, he set up “special economic zones” along 600 ping’s proposal for reform. the coast to carry out free-market trials. These too proved a suc- 400 What followed was an eco- cess, and were eventually replicated nationwide. 200 nomic transformation on a scale Deng’spragmatism helped rescue China from the dogmatic 0 and at a pace that had never be- ditch into which Mao had forced it. His successors, though 2010 11 12 13 14 15 16 fore been witnessed in human spooked by the collapse ofthe Soviet Union, kept experiment- history. One of the secrets of Deng’s success was his encour- ing even in the political realm in the 1990s and early 2000s. agement of experimentation (see China section). He did not People in some places were even given a bit more leeway to dismantle Mao’s disastrous “people’s communes” in one go. choose local leaders in grassroots elections. He did so overseveral years, allowingdiﬀerentplaces to trydif- The freedom to tinker has never been unlimited, and va- ferent methods. He turned a blind eye when local authorities rious autocratic habits have undermined some experiments. 1 12 Leaders The Economist August 18th 2018

2 One is secrecy. State media are often ordered to keep quiet gest experiments because anyone adversely affected by them about pilot projects in case they go wrong. Results can often be might retaliate by accusing the reformers of graft. The other published only in classified journals; leakers face years in jail. reason is to do with Mr Xi himself. The man who would be If China’s experiments with a less draconian family-planning president-for-life has shown little interest in letting his subor- policy had been debated more openly after their launch in the dinates do their own thing. When China-watchers call him 1980s, more heed might have been paid to their findings: that it “chairman ofeverything”, they are only half-joking. was pointless (as well as cruel) to punish parents for having Rather than stifling experimentation, Mr Xi should unleash more than one child. Most wanted small familiesanyway. it. Several areas are crying out for fresh thinking. Many state- owned firms are woefully inefficient. Why not privatise some Fear oftrying and see what happens? Chinese farmers lackclear title to their Nonetheless, asin anycountry, letalone one asvast and varied land. Perhaps some places could try giving them property as China, a suck-it-and-see approach yields better results than rights? Rural migrants are treated as second-class citizens in big deciding everything centrally. Alas, under President Xi Jinping, cities, deprived of public services. If their grievances are not experimentation ofany kind has become harder. In 2010—two dealt with, they could destabilise China. Why not ask some of years before Mr Xi took over—around 500 policy-related pilot these cities to try scrapping the pernicious household-registra- projects were being carried out at the provincial level, reckons tion system that is the root cause ofthe migrants’ woes? Sebastian Heilmann of the University of Trierin Germany. By The worry is not just that fresh experiments with local de- 2016 the number had dropped to about 70. mocracy are all but unthinkable under Mr Xi. It is that count- One reason is fear. Since he came to power, Mr Xi has been less good ideas ofall kinds will neverbe tried, will neverprove waginga fierce campaign againstcorruption—sometimes justi- their worth and will never spread. Wise leaders recognise that fied, but brutal. Bureaucrats have become less willing to sug- they do not have all the answers. Does Mr Xi? 7

Infrastructure The bridges of decay

It is not just in Italythat bridges are failing ONCRETE can last a very The riskofdeterioration inherentin reinforced concrete can C long time. The roof of the be accelerated by many factors. Shoddy workmanship in the Pantheon in Rome is the world’s first place does not help. In the case of bridges designed in the largest unreinforced concrete 1960s, the loads placed on them have become far higher be- dome; it was completed in cause traffic volumes are greater, cars are bigger and lorries around 125AD by Hadrian, an much heavier. Extreme weather can also play a part, not least emperor. But concrete structures because concrete expands when it gets hot and contracts in the can also fail, with tragic conse- cold. Floods are able to undermine foundations. In the normal quences. Although it is too early to know the cause of its col- course of things, most bridges built using reinforced concrete lapse, something clearly went very wrong with the Morandi may survive individual events. But if they have been weak- bridge in Genoa, which was completed in 1967 and crashed to ened and that vulnerability has not been detected by regular the ground on August14th with the loss ofat least 38 lives. inspections and repaired, for whatever reason, a vital margin In Italy itself fingers are already being pointed: at the oper- ofsafety has been removed. ator of the bridge, at the bridge’s designer, at politicians at home and abroad (see Europe section). But the Genoa disaster Concreting the world also carries a warningthat stretches well beyond the country’s So it is not just in Italy that questions should be asked about borders. Concrete, on which the Morandi bridge relied, has be- monitoring and maintenance regimes. Bridges throughout Eu- come the world’smostwidelyused buildingmaterial. The sort rope, America and Asia are all showing signs of deterioration. reinforced with steel is found in all manner of construction. As longago as1999, one study showed that 30% ofroad bridges And unlike the stuff in the dome of the Pantheon, reinforced surveyed in Europe had some sort of defect, often involving concrete comes with a problem. corrosion of their reinforcement. And a report this year found The reinforcing is done by encasing steel bars—or the ties that more than 54,000 out of the 613,000 bridges in America that support bridges, as in the design of the Genoa structure— are rated “structurally deficient”. These dodgy bridges are within the concrete. The difficulty with using metal is that it in- crossed 174m times a day. troduces a potential weakness. Tiny cracks can develop in con- In many cases, structures that might have been expected to crete from battering by the weather, vibrations from traffic, last a century or so will now probably have to be replaced in movements in the foundations and other causes. These cracks half the time because of various forms of structural deterio- allow water to creep inside the structure, and once in contact ration. New technologies will help with much closer monitor- with the metal contained therein, cause it to corrode. That pro- ing; new materials will allow stronger replacements (see Sci- cess can dramatically weaken the structure. Bridges are ofpar- ence section), which might turn out to be a cheaper option ticular concern because they can be subjected to unusually than restoration. With the world covered in reinforced con- large stresses and strains, and many span long distances with crete, this is a problem that spans countries. The failure of the nothing below them forsupport. Morandi bridge shows that it must not be ignored. 7 Executive Focus 13

The Economist August 18th 2018 14 Executive Focus

The World Health Organization (WHO) seeks a Director of the Global Preparedness Monitoring Board Secretariat (Vacancy reference: 1802909) The Board is a new structure co-convened by the World Health Organization (WHO) and the World Bank Group (WBG), as the successor entity to the UN Secretary General’s Global Health Crises Task Force. It is aimed at monitoring and holding the global community accountable for work related to emergency preparedness including capacity building, financing, research and development and other key components. The Board Secretariat leads in preparing and convening Board meetings, producing and commissioning reports and research at the request of the Board, proactively maintaining communication channels with and on behalf of the Board and providing day-to-day monitoring and follow-up on Board priorities and recommendations. More specifically, the Director will: • Lead: The Board Secretariat in pursuing the overall goals of the Global Preparedness Monitoring Board, directing technical decision-making processes, carrying overall responsibility for the Board activities, and ensuring broad-based decision making for its day-to-day activities. • Partner: Represent the Board at the Executive Heads of Agency/Heads of State or Government level and at the Working Group level, proactively maintaining communication channels with the Board members, relevant parts of co-conveners WHO and the World Bank and other relevant partners and collaborators. • Manage: Ensure the effective and efficient management of the Board Secretariat. Salary: This position is classified at the “D2” level in the United Nations common system. WHO offers an attractive expatriate package including health insurance, financial support for schooling of children and a relocation package. For more information and to apply online please go to: https://goo.gl/e6JkWn Deadline for applications: 28 August 2018. http://www.who.int/careers/en/

“Promote health, keep the world safe, serve the vulnerable” Dr Tedros Adhanom Ghebreyesus, Director General

The Economist August 18th 2018 Letters The Economist August 18th 2018 15

China expands to grow at its present rate. The Perhaps some ofthe blame utor ofadded sugar to the diet long-standing Sino-Indian lies closer to home. it is right that soda taxes are As well as Eurasia and Africa, border dispute, which China FERGUS GREEN part ofanti-obesity strategies China’s Belt and Road Initia- deliberately keeps alive with London that reach the whole tive has also reached the frequent provocation, also population at minimal cost. shores ofthe Caribbean limits India’s options. The “arc Paying forour sins PATRICIO MARQUEZ (“Gateway to the globe”, July ofmaritime democracies” Lead public health specialist 28th). Often thought ofas need to get their act together if Yourarticle questioning the PAUL ISENMAN America’s backyard, this the rules-based international efficiency ofsin taxes, on Former principal economist region is increasingly becom- order is to survive. products such as tobacco and ALAN FUCHS ing America’s soft underbelly. COMMODORE ANIL JAI SINGH (RETD) sugary drinks, deviated from Senior poverty economist Years ofstrategic neglect by Vice-president your previous strong support SHEILA DUTTA Washington have provided Indian Maritime Foundation forthe policy (“The taxes of Senior health specialist Beijing with opportunities to Noida, India sin”, July 28th). It is almost All at the World Bank Group build relations with many of unbelievable that The Econo- Washington, DC its nations. China has built a What would Mill say? mist aired the idea ofsaving ROBERT MARTEN host ofnew embassies across money by letting smokers die London School of Hygiene and the region, one ofthe biggest ten years early. Youfailed to Tropical Medicine ofwhich is in tiny Dominica, a consider the evidence about country with just 74,000 the effect oftobacco taxes on Youreported that after Mexico inhabitants. Caribbean gov- society at large, and the poor in imposed a tax on sugary ernments have relatively few particular. The health benefits drinks, sales fell by 5.5% in the natural resources to offer, but oftobacco taxes farexceed the first year and 9.7% in the sec- they are happy recipients of increase in tax liability and ond. Mexico’s manufacturing- roads, stadiums, schools, they accrue disproportionately industry survey shows that hospitals and yes, presidential to lower-income households. sales per head fell by just 3.8%, palaces and parliaments. As shown by country- and as a one-offeffect that did China’s economic forays in specific research from the not strengthen over time. the South Pacific have been World BankGroup, the poor Mexico’s biennial household shadowed by a creeping It is a pleasure to read your tend to smoke more and are expenditure survey indicated a militarisation ofthat region. A series on liberal thought more price responsive on slight rebound in sales in the similar development could (“Against the tyranny ofthe average than richer individ- second post-tax survey. happen in the Caribbean in majority”, August 4th). But if uals, so they get a far greater Much recent evidence on the years to come. For now, it is John Stuart Mill would have share ofhealth benefits from these taxes comes from public- too early to say whether China viewed Donald Trump’spresi- higher tobacco taxes than they health researchers who ignore is strengthening its presence in dency as the inevitable out- pay. When they quit their modelling issues that worry the Caribbean as a tit-for-tat for come ofthe clueless majority’s familiesbenefit from the economists, such as the stor- America’s naval patrols in the choice, he would have been reduction in passive smoking ability ofdrinks and quality South China Sea. But should wrong. Hillary Clinton, not Mr and the lower likelihood that downgrading as prices rise, Beijing wish to up the ante at Trump, won the popular vote they will fall into extreme which makes quantity some point, Washington by a majority of3m. The elec- poverty from catastrophic responses smaller. Small sin should wonder why it slept toral college elected President medical expenses and lost taxes do not have the big ef- while China developed a Trump. Ifanything, Mr earnings because oftobacco- fects claimed by some studies. critical strategic foothold right Trump’spresidency demon- related premature ill health, JOHN GIBSON under its nose. strates the frustration, not the disability or death. Countries Professor of economics WILLEM OOSTERVELD tyranny, ofthe majority. can increase the progressivity University of Waikato Strategic analyst SHARONA MUIR oftobacco taxes by spending Hamilton, New Zealand The Hague Centre for Strategic Perrysburg, Ohio them on programmes to re- Studies duce poverty, as in fact most of A Russian proverb In attributing blame forthe them generally do. In the China has established its firm wave ofanti-liberal sentiment Philippines, forexample, the The piece offinancial acumen ownership ofthe South China that followed the 2008 additional tax revenue gener- quoted by Buttonwood (July Sea and is unlikely to cede any financial crisis (“The brains ated by the sin tax reform in 14th), “bears sound clever, space. It will eventually get trust”, August 4th) you pointed 2012 has helped expand health bulls make money”, reminds ASEAN to do its bidding and to the concentration ofpower insurance coverage for15m me ofan old Russian saying: the disjointed approach to among a ruling liberal elite, low-income families. “Ifyou are so smart, why are prevent that is not working. which bred intellectual arro- You also underestimated you so poor?” ASEAN’s faultlines have been gance: “the liberals in charge the health and economic DANIEL GUPTA cruelly exposed. It is the Indian before the financial crisis were effects ofthe obesity epidemic, Moscow 7 Ocean where China needs to convinced that they had all the particularly the ominous be checked as it expands its answers. In protecting what global trends in child obesity footprint through naval bases they had, they stopped think- caused by a poor-quality food Letters are welcome and should be as part ofits overall strategy of ing.” Around that time, The environment ofinexpensive addressed to the Editor at The Economist, The Adelphi Building, global maritime dominance. Economist ran an advertising sugary drinks, junkfood and 1-11John Adam Street, The Indian navy can contain campaign featuring a quote other highly processed foods London WC2N 6HT the present Chinese naval from Larry Ellison: “I used to replacing traditional diets. E-mail: [email protected] presence but would be hard think. Now, I just read The Since sugary drinks are in most More letters are available at: pressed to do so ifit continues Economist.” cases the single largest contrib- Economist.com/letters 16 Briefing Sexual selection The Economist August 18th 2018

which young people have grown up. In Putting the data into dating 2013 Tinder, a startup, introduced the mas- terfully simple idea of showing people potential partners and having them simply swipe right for “yes” and left for “no”; when two people swiped right on each BEIJING, MALMO AND TINDER other’s pictures they were put into contact Internet dating is adding to the sum ofhuman happiness, though not without with each other. It proved a huge hit. heartache. It could get better Such phone-based services are more N JULY 19th 1695 an intriguing adver- primary meeting space for same-sex pair- immediate, more personal and more pub- Otisement appeared in the Collection ings, whether casual or more than casual: lic than their keyboard-based predeces- for the Improvement of Husbandry and 70% of same-sex relationships start online. sors. More immediate because instead of Trade, a London periodical. The husband- “This is a very big shift in how people find being used to plan future encounters, or to ry involved was, potentially, that of “Agen- their partners,” observes Reuben Thomas, chat at a distance, they can be used on the tleman about 30 Years of Age, that says He a sociologist at the University ofNew Mex- fly to find someone right here, right now. has a Very Good Estate”; the trade was an ico. “It’s unprecedented.” More personal because the phone is inti- offer to “Willingly match himself to some For most of human history, the choice mate in a way the keyboard is not, camera- Good Young Gentlewoman, that has a for- of life partner was limited by class, loca- ready and always with you. More public tune of£3,000 or thereabouts.” tion and parental diktat. In the 19th and forthe same reason. Manypeople nowfeel The personal ad went on to become a 20th centuries those constraints were quite happy swiping left or right on public staple of the newspaper business, and re- weakened, at least in the West. The bicycle transport, gossiping to their friends about mained so forcenturies. Now, like so much increased young people’s choices immea- potential matches. Screenshots of possible of the rest of that business, announce- surably; so did city life. But freed from their partners fly backand forth over WhatsApp ments of matrimonial and other availabil- villages, people faced new difficulties: and iMessage. Once confined to particular ity have moved to the internet. The lonely how to work out who was interested, who times and places, dating can extend every- hearts of the world have done very well was not and who might be, if only they where and anywhere. out of the shift. Personal ads never ac- knew you were. counted for more than 1% of marriages in In 1995, less than a year after Netscape It’s just the powerto charm America. Today dating sites and apps ac- launched the first widely used browser, a Not all countries and classes are adopting count forabout a sixth ofthe first meetings site called match.com was offering to help online dating at the same rate or in the that lead to marriage there; roughly the people answer those questions. As befits a same way. Americans are charging ahead; same number result from online encoun- technologydeveloped in the San Francisco Germans, comparatively, lagging behind. ters in venues not devoted to such matters. Bay area, online datingfirst tookoff among India, which has long had a complex off- As early as 2010 the internet had over- gay men and geeks, but it soon spread, line market for arranged marriages within taken churches, neighbourhoods, class- proving particularly helpful for people religious and caste boundaries, has seen it rooms and offices as a setting in which needing a way back into the world of dat- move online. Last year saw a rare Indian Americans might meet a partner of the op- ing after the break-up of a long-term rela- tech-sector IPO when matrimony.com posite sex. Bars and restaurants have fallen tionship. Couples who had met online be- raised 500 crore rupees ($70m) to help it since (see chart on next page). For those came commonplace. target the marriage market. seeking same-sex partners the swing is The 2010s have seen these services In countries where marriage is still very even more striking. The internet is the move from the laptop to the phones with much in the hands ofparents, today’s apps1 The Economist August 18th 2018 Briefing Sexual selection 17

2 offer an option which used hardly to exist: more than one partner at a time. There are others who are like them in various ways— casual dating. YuWang, the chiefexecutive sites for women who want a man to father who know the same people and work in of Tantan, founded in 2015 and now one of achild with them butnotbecome a roman- the same places. Online they can meet China’s largest dating apps, says the coun- tic partner. There are services for Jews, people notlike them in those ways, but like try’s offline dating culture is practically Christians, Muslims, Trump supporters, them in other ways that may matter more. non-existent. “If you approach someone people who self-select as intelligent and You can meet people who aren’t like you you don’t know and start flirting, you’re a vegans. There’s BikerKiss (“Two wheels, and select those who are, says Jess Car- scoundrel,” he says. But on Tantan “you two hearts, one road”), FarmersOnly (“Sin- bino, the in-house sociologist at Bumble. don’t expose yourself, there’s no danger of gle in the country”) and Ugly Bug Ball One aspect of their lives where people getting rejected, you cannot lose face.” As (“Dating forthe aesthetically average”). like to be in sync with those they meet on- of February, Tantan had 20m users and How much happiness these particular line is in religious beliefs. Education levels had created some 10m couples, Mr Wang possibilities for granularity have brought and age also play a strong role—but an says, adding: “That’s a significant effect about is not known. But there are some fig- asymmetric one. Research by Elizabeth on society.” ures forthe field as a whole. In a 2013 study Bruch and Mark Newman of the Universi- Unfortunately, the level of significance researchers from Harvard University and ty of Michigan, published in Science Ad- is hard to analyse or quantify. A great deal the University of Chicago showed that vances on August 8th, used messaging data of the relevant data are treated as propri- marriages that started online were less from one of the large dating apps (they etary by the companies gathering them. likelyto end in break-up and were associat- were notallowed to saywhich) to rank dat- The business is worth $4.6bn globally, ed with higher levels of satisfaction than ers according to other users’ tendency to growing fast and highly competitive. marriages of the same vintage between message them. The analysis shows that fe- Match Group, which operates Tinder, the similar couples who had met offline: the male desirability starts high at 18, then original match.com and some 40 similar difference was not huge, but it was statisti- drops sharply with age. Male desirability businesses, had revenues of $1.3bn in cally significant. Couples who met online starts low, rises until about 50, then tails off 2017—a similar figure to the revenues of also reported being slightly more satisfied gently (see chart on next page). A postgrad- American condom sellers. Tinder has 3.8m with their marriage than those who met uate education makesmen more desirable, paying subscribers; a number of its foun- offline, by an average ofone fifth of a point while reducing desirability for women. ders and early employees are suing Match more on a seven-point scale. Scaled up to These generalities are predictable and on the basis that it had intentionally the third or more of marriages in America somewhat depressing. That said, they are undervalued the company to avoid mak- that start online, that would mean that trends, and specific results are what matter ing big payouts. close to a million people have found hap- to users. The idea is not to appeal Although Tinder has a clear lead, there pier marriages than they would have oth- to the most people, but to be found by the are competitors in America, such as Bum- erwise thanks to the internet—as have mil- right person. ble, set up by one ofTinder’s founders after lions more around the world. One effect where internet dating seems leaving the company, and around the These findings chime with those from to be mixing things up a bit is race. Josue world, all seeking to sell themselves on Mr Thomas and Michael Rosenfeld of Ortega, a sociologistatthe University ofEs- some refinement or other. Facebook is get- Stanford University, who work with data sex, argues that by opening up a racially ting into the market, too. Users of many from the How Couples Meet and Stay To- mixed pool of partners in places where so- dating apps already link to their Facebook gether survey, conducted every few years cial groups tend to be more homogenous, accounts to show who they are; a dating by GfK, a research firm. Again, married the internet will increase the number of app that knew all that Facebook knows people who met their partner online re- mixed-race couples. Using a computer would have a powerful edge if it could use ported slightly higher relationship quality model based on real-world data about ra- it well—and if users did not balk at the idea than those who met offline, and were less cial preferences, he has shown that in a in a post-Cambridge Analytica world. likelyto have broken up aftera year ofmar- world where people are highly connected None of the companies are interested in riage. Mr Rosenfeld has also shown that with others of their own race, but only making it clear what secret data sauce—if heterosexual relationships which start on- poorly so with people from other races, any—they add to their wares. line and progress to marriage do so faster even random links to perfect strangers will Where data are available, mostly than those which reach that honourable quickly increase the percentage of interra- through national surveys, sociologists like estate from an offline beginning. cial marriages. Mr Thomas’s work has led Mr Thomas have found that online dating This makes sense. Offline, people meet him to a similar conclusion. “People are 1 by and large leads to better matches—presumably because of the far greater choice ofpartners it offers. Meet market 70 The benefits are clearest for people United States, how couples meet, % Online whose preferences mean that discovering 60 possible partners is particularly hard, ei- Heterosexual couples Same-sex couples ther because of social isolation or physical 50 50 isolation. Same-sex dating, which both op- Through friends erates in a smaller pool than heterosexual 40 Primary/ 40 secondary dating and is illegal or socially unaccept- Through school friends able in many places, is a particular benefi- 30 30 ciary. Matching with same-sex partners Bar/restaurant over the internet is often farsaferand more 20 Co-workers 20 convenient than trying to do so in person. College The internet thus helps those with simi- 10 Church 10 Church lar, and sometimes quite specialised, College Online views on what makes for good sex, or in- 0 0 deed on more or less anything else. There 1940 50 60 70 80 90 2000 10 80 90 2000 10 Year couple met are dating sites for various esoteric prefer- Source: “Searching for a Mate: The Rise of the Internet as a Social Intermediary”, by Michael J. Rosenfeld and Reuben J. Thomas ences, and sites on which one can find 18 Briefing Sexual selection The Economist August 18th 2018

tractive men, says Mr Wang; all can find Not so progressive someone reasonably attractive. Men at the Desirability ranking*, average across four American cities, 2014, 1=most desirable bottom of the ladder end up completely matchless. This fits with the work by Ms By age By race Bruch and Mr Newman. In general, both 0.6 0.6 Men White Asian men and women concentrate on people men Hispanic women women that the common opinion of the site rates 0.5 Black 0.5 as 25% more attractive than they are. Even men White women for women not seen as desirable, that can Hispanic work. For the least desirable men, nothing 0.4 0.4 men Asian works. “I don’t expect that final 5% to be Women men Black that easy to help,” says Mr Wang. women 0.3 0.3 But he is going to try. Tantan is using the data it has on its users—their photos, the 20 2530 35 40 45 50 55 60 65 text of their profiles and their biographical Source: “Aspirational pursuit of mates in online dating markets”, *Based on the number of initial messages details—as well as their every swipe, like by Elizabeth E. Bruch and M. E. J. Newman a user receives on an online dating service and text message to train an algorithm which will act as a more active matchmak- 2 suddenly meeting in this new bar, the in- Nevertheless, new services do seem to er, one that connects not just people who ternet, where anyone can get in...and be lookingat ways to make theirusers hap- fancy each other, but people it thinks will there’s a lot more diversity in it.” pier. Hinge, a popular app bought by have good conversations. That said, not everyone in the bar is Match in June, asks users to answer three There is a scene in “ABeautiful Mind”, a treated as equal. Internet dating makes va- short questions as part of setting up a pro- film about John Nash, in which he advises rious ways in which race and gender inter- file, providing fodder to get conversation a group of fellow mathematicians on how act quite clear. The research by Ms Bruch going—Tinder, but with full sentences. theycan all leave the barwith a girl: the key and Mr Newman shows that users of all Luna is attempting to build a reputation is for each to go for one or other of the less races find Asian women more desirable market. Good dating etiquette—sending pretty girls in the group they are eyeing up, than Asian men, sometimes much more messages to people when warranted, re- ratherthan all horningin on the prettiest; if so; black men were responded to more spondingto them, behavingnicely ifa date theyall go forher, then theirattentions will than blackwomen. ensues—will be rewarded with an in-app cancel each other out, and her friends, currency called Stars. These can then be piqued at being second choices, will reject I never wave bye bye spentto send messagesto popularusers, or them too. This scene greatly irritates peo- Many users, while welcoming the broad- exchanged forcash, ordonated to a charity. ple who know what a “Nash equilibrium” ening of choice that the online world of- The founders hope this focus on experi- is in game theory, because its scenario isn’t fers, are also becoming aware of its down- ence will keep their business goals and one. Nevertheless, it inspired Mr Wang. He sides. Forthose who find popularity on the their users’ personal goals well aligned. aims to use data from the whole market to apps, endless choice can become some- There are other problems, too. The one suggest good partners foreach person. thing ofa burden. Blessing Mark, a 24-year- that worries Tantan’s boss, Mr Wang, is If this works, Tantan will reap the re- old massage therapist from Lagos, Nigeria, that 5% of his customers will never get a wards. Although network effects give an uses Tinder fortwo purposes. She finds cli- match, no matter how much they swipe. advantage to a dating app with more us- ents (rather as your correspondent found Men on Tantan, he says, tend to like ers—something which makes current apps people through Tinder in researching this about 60% of all the female profiles they worried about Facebook’s intentions—it is piece) and she seeksoutromanticpartners. see, but women like just 6% of the male not an overwhelming one. Many people For marketing her business, she says, Tin- ones. The least attractive women receive use more than one app. If they look at the der is essential, but her love life on the app similar levels of attention to the most at- same group of people through different has turned sour. “I feel like I’m no longer apps and find that one consistently pro- the person I used to be,” she says. “I go for vides matches they like more, they may dinner and I fuckand that’s it.” stop subscribing to the ones that work less Others talk of the exhaustion of traw- well, and they may tell their friends. Better lingthrough endless matches, goingon dis- products can thus hope to be rewarded. appointing dates with some of them, then Reducing romance to number crunch- having to drag themselves back onto the ing may sound crass. It will doubtless have net when it goes nowhere. There is a loneli- its limits. But many phenomena that ap- ness, too. The internet uncouples dating pear complex from a human perspective from other social activities which might often turn out to be simple seen through comfort a shy or spurned heart in the off- disinterested data. The trick is finding the line world; love’s vicissitudes can be hard- data that do it best, which is perhaps the er when taken away from the context of a most interesting area for dating apps to club or church hall. compete in: is it heartbeat on first meeting, It is tempting to hope that people made measured through a smartwatch? Time unhappy by online dating will stop. But spent on first dates? Netflix queues? Sub- people do things that make them unhappy way stops missed on the way home? all the time, and businesses often profit Whatever the telltale data turn out to from theirsadness. Datingapps want exist- be, the experience of love will continue to ing users to keep using them, maybe even be ineffable, and its pursuit strewn with to start paying for new features. Despera- hardships. Butmakingthe path thatbit eas- tion is not necessarily their enemy; the ier to navigate seems likely to make many achievement of domestic bliss is certainly lives better, and many people happier. not their friend. That is no mean thing. 7 Britain The Economist August 18th 2018 19

Also in this section 20 Sterling’s slide 21 Rough sleeping 21 Visa delays 22 Male nurses 23 Bagehot: The other Britain

For daily analysis and debate on Britain, visit Economist.com/britain

Scottish public policy There has been no big change of direction since Ms Sturgeon became first minis- The not so brave ter, says Jim Gallagher of Oxford Universi- ty. Despite gaining new powers last year, the government has made only minor tweaks to the tax system. More radical supporters of indepen- EDINBURGH dence chastise the SNP for its cautious UnderNicola Sturgeon, the Scottish National Partywas meant to be a reforming “managerialism”. Its leadership has be- force. Things have not exactlygone to plan come more sensible, abandoning some of N HER opening policy meeting as Scot- Sturgeon’s most eye-catching ideas point its previous wilder promises about what Iland’s first minister in 2014, Nicola Stur- in this direction. Her government is run- independence would mean for Scotland’s geon left no doubt of her priority: educa- ning a (small) universal basic-income trial economy. Yetsensible thinkingdoesnot in- tion. Falling standards, clear from and plans a national investment bank to spire activists, especially given new com- international surveys and the govern- support industry. Since last year it has cop- petition south ofthe border. As Gerry Has- ment’s own tests, would no longerbe toler- ied Finland in giving the parents of every san, an academic, has written, “the politics ated. In the run-up to the 2016 Scottish par- new baby a free box containing clothes, an of imagining a different kind of state—and liamentary election, she asked voters to ear thermometer and books, among other indeed a different kind of society and fu- judge her on whether she had improved treats. It is also guiding through a few re- ture—have been (however imperfectly) schools and closed the gap between rich forms introduced at the end of Mr Salm- captured by the advent of the Corbyn La- and poor pupils. “Ifyou’re not, as first min- ond’s time, including an expansion of free bour Party.” ister, prepared to put your neck on the line child care. Since losingitsmajorityin the 2016 elec- over the education of our children, then tion, the SNP has passed few significant what are you prepared [to do]?” she asked. Beyond the weans pieces of legislation. After a long delay the It was a change of tone for the Scottish Elsewhere the government has combined government announced in June that it National Party (SNP). Under Alex Salm- this approach with a degree of technocrat- would shelve its flagship education bill, ond, who was first minister in 2007-14 and ic competence often lacking in Westmin- which had been due to transfer power is now a host on RT, a Russian TV channel, ster. It has, for instance, softened the intro- from local councilsto head teachers, and to the party showed scant interest in public- duction of universal credit, which replaces change the working ofthe teachers’ profes- service reform. But after losing the inde- sixexistingbenefits, byallowingmore flex- sional body. The SNP insists that powers pendence referendum in 2014, the SNP re- ibility in its delivery. The government also can still be transferred without legislation alised there was little appetite for a second plans to lock up fewer criminals by remov- under an informal agreement with local vote. It needed more to show for almost a ing the presumption of prison for sen- councils. Others are more doubtful. It is decade in power. As health secretary un- tences ofless than a year. “unimaginable” that Labour and Tory lo- derMrSalmond, MsSturgeon had gained a But the party’s spending priorities do cal authorities will ever do the govern- reputation among policy wonks as an ex- not speak of a transformational government’s bidding, even with the threat of fu- cellent manager. She seemed just the per- ment. Since the SNP came to power in ture legislation, says Lindsay Paterson, an son to show that the SNP could govern, 2007, Scotland has continued to spend a education specialist at the University of and in doing so make clear what an inde- quarter more per person on devolved pub- Edinburgh. pendent Scotland might be like. lic services than England. Over the past de- In this case, the problem was not parlia- Pro-independence types have long in- cade, relative to England, spending on uni- mentary arithmetic. Liz Smith, the Tory sisted that Scotland would have more in versities (in the form of free tuition) and shadow education secretary in Holyrood, common with Scandinavia if it were not the police has grown, while spending on says she would have been open to work- joined with England. Indeed, some of Ms health care and schools has fallen. ing with the SNP to deliver the bill with 1 20 Britain The Economist August 18th 2018

2 some modifications. Instead, opposition tion has been above the Bank of England’s came from the trade unions and local au- 2% target since early 2017. In real terms the thorities. The historic power ofprofession- average pay packet has not grown at all in al bodies in Scotland helps explain the rar- the past two years. The purchasing power ity of structural reforms, says Mr Paterson. of most working-age benefits, which are Despite falling standards, there is little pa- frozen in cash terms until 2020, is falling. rental clamour for big change. This hints at Why is sterling sliding again? It has be- a degree of conservatism in Scottish politi- come obvious that the economy is stuck in cal culture that exists alongside its progres- the slow lane. The IMF thinks GDP will sive instincts. grow by just 1.4% in 2018, below growth There is also strong opposition to the rates in both America and the euro zone. further centralisation of power under the The Bank of England raised interest rates SNP. The government has struggled to in- on August 2nd, from 0.5% to 0.75%, increas- troduce a “named person scheme”, which ing returns for those holding British assets; would give every child a representative but another rise looks unlikely for a while. (such as a teacher or midwife) to whom Traders also fret about Britain’s large cur- they or their parents could turn for sup- rent-account deficit, a measure of how port. Opposition parties characterise it as much the country is borrowing from an example of SNP overreach, this time abroad. Lately Britain has become increas- into family life. The party also had to re- ingly reliant on short-term foreign borrow- treat from plans to merge four economic- ing, rather than long-term foreign invest- development bodies to create a new “su- ment, to cover the deficit. If investors sour per board”, which one Liberal Democrat on the British economy they could quickly MSP labelled a powergrab bya central gov- Sterling’s slide pull out their money, prompting the ernment with “an unhealthy appetite for pound’s value to fall further. controlling every aspect ofwhat goes on in Crunch time The most important factor, however, is this country”. the worry that Britain may crash out of the Other limitations abound. The Scottish EU with no deal at all. That could tip the government is a small organisation, with economy into recession. Samuel Tombs of limited policymaking ability, and there are Pantheon Macroeconomics, a consultancy, few think-tanks to help. Holyrood is set up reckons that, in the event of a no-deal As Brexit day nears, sterling may be in to encourage parties to work together. And Brexit, sterling would drop to $1.15, its low- for a rocky ride Scotland has little choice but to wait and est level in three decades. Reaching a sensi- see what emerges from the Westminster N THE weeks following the Brexit refer- ble agreement with the EU would, of government’s Brexit negotiations, on Iendum in June 2016 the pound gyrated course, give sterling a boost. But most in- which Ms Sturgeon complains loudly wildly, losing 10% of its value. After a per- vestors appear pessimistic. For the first about not being consulted. iod ofcalm, sterling is looking shaky again. time in a year, data from futures markets The SNP’s difficulties should not be On a trade-weighted basis it has lost 5% of suggest that a majority believe that sterling overstated. Many in Edinburgh speak in its value since April. On August 10th it fell is likely to decline. More hard pounding hushed tones of the party’s invulnerabil- below $1.28 for the first time in a year. Fur- could be on the way. 7 ity, and it remains well ahead in the polls. ther depreciation looks likely, given uncer- But the slow pace of change could eventu- tainty over the government’s Brexit plans. ally become a hindrance. Despite Ms Stur- The prospect of leaving the European Brexit means Brexit geon’s promises, there is little sign of any Union has depressed sterling’s value be- Currencies against sterling, % change since improvement in educational outcomes. At cause it will damage the economy. Slower EU referendum, June 23rd 2016 - August 13th 2018 the general election in 2017 the SNP had to growth will call for looser monetary poli- 100 7550 25– 0+ 25 50 defend itself against attacks for its lack of cy. As returns on sterling-denominated as- Moldovan leu domestic reform. The longer the party re- sets fall, fewer traders will want to hold Thai baht mains in power the more difficult it is to re- them. Of 140-odd currencies tracked by but such arguments. Dreams of a tartan Bloomberg, a data provider, sterlinghas de- Denmarkhave yet to come to fruition. 7 preciated against more than 120 since the Euro referendum (see chart). The Venezuelan US dollar bolívar and the Turkish lira are among a mere handful of currencies not to have gained in value against the pound. South African rand Brexiteers argue that sterling’s tumble delivers great benefits. A cheaper pound makes Britain’s wares more competitive in foreign markets. Since the referendum ex- Canadian dollar ports have risen by 7% in real terms. Yet this owes more to a general pick-up in global Chinese yuan trade than to greater currency competitive- ness. Over the same period, the average G7 country has seen stronger export growth Swedish krona than Britain has. Against these uncertain benefits, the Venezuelan drawbacks are clear. A weak pound has bolívar Turkish lira pushed up the cost of imports. Half of Brit- Source: Bloomberg ain’s food is bought from overseas. Infla- The Economist August 18th 2018 Britain 21

Visa delays Stamp duty

EDINBURGH Overly zealous bureaucrats throw cold wateron a bright summerfestival HERE is nowhere quite like Edin- application is progressing. E-mail in- Tburgh in August. Thousands ofartists, quiries are charged to the applicant’s actors, writers, jugglers and musicians credit card. Visas are rejected on the descend on the city forits festivals. The flimsiest grounds, and appeals are diffi- streets are alive with the sound of fun. cult. The political climate does not help. This year, though, ten writers, mostly Staffat all levels ofthe Foreign Office are from Africa and the Middle East, nearly being diverted to workon Brexit, and missed the party—thanks to the heavy- immigration officers at British airports handed bureaucracy ofBritish visas. are scrutinising passports and visas more Every summer more than 900 writers aggressively than usual, claim writers at from 55 countries are invited to the Edin- the bookfestival. burgh International BookFestival. Their “Britain seems to be saying that it is travel and accommodation are paid for not open to cultural dialogue,” Mr Barley and they are offered an honorarium. Yet says. “Ifwe want to be open for business consular officials have forced authors to after Brexit, which we do, we need to make repeated applications forentry have dialogue. You cannot have business Rough sleeping visas and to provide ever more personal without trust. Youdon’t trust without details to prove that they will not become dialogue. Youdon’t trade without trust.” No end in sight a burden on the state. Thanks to noisy interventions by dip- A leading African novelist was asked lomats, the British Council and the Scot- to supply a letter from two cardiologists tish government, all but one ofthe au- stating that he was fit to travel. Another thors was eventually able to travel to writer had to produce his daughter’s Edinburgh to take part in the festival. But MANCHESTER birth certificate, his marriage certificate it was a close-run thing. Not Britain’s The government’s plan on rough and three years ofbankstatements as finest hour. sleeping overlooks a proven solution proofthat he would return home. A LISHIA, a 30-year-old formerly home- Middle Eastern university professor was Eless woman in Manchester, says flatly told that £12,000 ($15,000) ofsavings in that “ifI were out there I’d be dead.” This is his current account was “suspiciously a reasonable guess. The average age of large”; another that she had too little death for those who sleep rough is 43. But money. On August14th the Scottish first what worries the government is the swell- minister, Nicola Sturgeon, described the ing numbers of rough sleepers. On any mess as “embarrassing”. As NickBarley, night in 2017 about 4,700 people in Eng- director ofthe bookfestival, says, “the land slept rough, up from 1,800 in 2010 (see message going out to authors abroad is chart, next page). These are official esti- that they are not wanted here.” mates for a single autumn night; some re- The snarl-up seems to reflect a mix of searchers put the total at 8,000. In March zealotry and paperwork. Few British Theresa May boldly promised to end embassies process visas locally any rough sleeping in England by 2027. Yet her more. Instead they are handled by priv- government’s strategy, published on Au- ate firms, such as TLScontact, and appli- gust13th, isa dampener, notleastbecause it cations are sent to “large-scale decision- offers no new money. Of the £100m making centres” in Istanbul, Manila and ($127m) backing the plan for the next two Sheffield to be approved. It is almost years, halfwasalreadyallocated for home- impossible to askin person how a visa Unwelcome on royal mile lessness and the rest is money “repriori- tised” from other programmes, admitted James Brokenshire, the housing secretary. Charities want a roll-out of this model their needs were “too high”; 67% had re- The plan’s ingredients are good but in England. Instead, the government’s plan fused beds to those they considered a risk “minimal” for the problem at hand, says is to try it in three pilot areas—even though to clients or staff. Jon Sparkes of Crisis, a charity for the there have been more than a dozen pilots Elishia has now moved into a one-bed- homeless. For comparison, he and many already, showing that it is good at ending room flat in what she calls a “decent area”. others point to Finland, which is close to rough sleepingamongpeople who cycle in This would have been impossible without ending rough sleeping. The backbone of and out of the homelessness support sys- help from Shelter, a charity that runs a the Finnish system is a model known as tem, like Elishia. She lists her health pro- housing-first project. Currently, homeless “housing first”, whereby chronically blems: anxiety, psychosis, bipolar disorder people must give up drink and drugs and homeless people are put straight into per- and a history ofdrug use. Staying at hostels go through several levels of temporary ac- manent housing—rather than halfway forthe homeless was tough. Lots of people commodation until they are deemed houses like shelters or hostels—and offered were drunkoron drugs, she says, which af- ready to hold on to permanent social hous- tailored help from social workers. The fected her mental health. In a 2016 survey ing. But those with what the government model has been widely copied in America, of hostels in England, 73% reported that calls “multiple and complex needs”, such Canada, Denmarkand France. they had turned away people because as mental-health issues, addictions and 1 22 Britain The Economist August 18th 2018

Male nurses 2016. And the shadow of Brexit makes it Dossers up tougher for the NHS to fill its 40,000-odd England, rough sleepers* Not just a nurse vacancies from abroad. Doubts about whetherthey will be able to stay dis- 5,000 woman’s job suade nurses from EU countries. 4,000 Last month the NHS launched its biggest-ever nurse recruitment campaign. TV 3,000 advertisements show them in action in Ashortage ofnurses calls forrecruiting hospital wards and ambulances, and on more men. But that is a trickytask 2,000 home visits. Some are male—an improve- 1,000 NE reason I can do stand-up com- ment from previous campaigns, but not “Oedy is because of all the material I enough to draw men in, reckons MrFerran. 0 have from being a male nurse,” says Adri- Paul Vaughan from NHS England, who 2010 11 12 13 14 15 16 17 an Matei. False stereotypes about nursing leads an initiative to change perceptions Source: Ministry of Housing, *On a single night make forgood jokes. But they may also put of nursing and midwifery, thinks recruit- Communities & Local Government in Autumn men off the job. Just under 11% of nurses ment should avoid playing to gender ste- registered in Britain are male, a share that reotypes. He takes a dim view of slogans 2 past stints in prison, rarely go all the way. has been steady foroverfourdecades after like “Are you man enough to be a nurse?”, Roughly half are ejected from or leave hos- climbing from 1% in the 1950s. used in an American campaign. tels before they find a home. At a conference in May ofthe Royal Col- Views of nursing as a “woman’s job” By contrast, about 80% of them stay lege of Nursing (RCN), the profession’s un- have deep roots. Florence Nightingale, housed for a year or longer when they are ion, David Ferran, a nurse in Belfast, pro- who established the principles of modern put straight into their own homes. Support posed a campaign to promote nursing to nursing in the 1860s, insisted that men’s is crucial. It is an “everything job”, says Su- men. His motion did not pass, as the view rough hands were “not fitted to touch, sanne Jones, one of Shelter’s support was that nursing should be pitched to any- bathe and dresswounded limbs”. The RCN workers. She takes her charges to doctors’ one with the right skills, regardless of gen- did not even admit men as members until appointments, shopping, probation der. Undeterred, Mr Ferran started a group, 1960. Outdated titles such as “sister” and checks and Narcotics Anonymous meet- Northern Ireland Men in Nursing, which “matron” (used for men as well) do not ups—and helps them sort out bills and ap- visits schools to promote nursing as a ca- help. Mr Ferran says some patients are sur- ply forbenefits. reer for men. Similar groups are being set prised when he shows up, because they Finding homes is a challenge, even for up elsewhere. Several universities have thought only women could be nurses. small projects like Shelter’s in Manchester, launched social-media blitzes to draw Boys do not see nursing as a career be- which serves 21 people. Last year England men into nursing programmes. Coventry cause they lack role models. In films, fe- had a waiting list of 1.15m households for University is offering male nursing stu- male nurses are cast as helpers of heroic about300,000 social-housingunits. A gov- dents a new £3,000 ($3,800) stipend. male doctors. (In reality, nurses are the first ernment green paper on social housing, Britain is not an exception in having rel- responders when a patient is in crisis.) “If I also published this week, has no targets for atively few male nurses. But with a grow- had a pound for every time I’ve been buildingmore social homes. In manycities ing shortage of nurses across the National called doctor,” says Richard Dowell, a housing benefit is less than market rentals. Health Service (NHS), attracting men is be- third-year nursing student. When he does And private owners may not let to tenants coming more urgent. In 2017, for the first ward rounds with his nurse mentor and without references from employers or pre- time in a decade, more nurses left the pro- she asks questions, patients often turn to vious landlords, or to benefit claimants. fession than joined. Applications to nurs- him to respond, says Mr Dowell. Recruitingsocial workerswith the skills ing programmes are down by a third since Unsurprisingly, just two-fifths of Brit- to provide care needed by housing-first cli- ish parents say they would be proud if ents can be hard. For Mike Wright, who theirson became a nurse. Men who go into oversees the homelessness strategy of the nursing usually follow in the footsteps ofa Greater Manchester area—where one of parent or realise that it could be a career the newhousing-first pilots will accommo- after seeing a male nurse care fora relative. date 500 people for three years—a big wor- Mr Vaughan’s team at the NHS is trying to ry is that there may not be enough mental- boost the prestige of nursing by highlight- health and other support staff. ing that it is a professional job in which ca- When done well, a switch to the hous- reers can be made, that it includes special- ing-first model can be a boon for the public isms such as cardiology or intensive care, purse. One estimate for Shelter’s project and that it has a use forskills in technology, finds that for every £1 spent in its first five innovation and leadership. Most young years there will be £2.65 in savings thanks people also do not realise that the job can to fewer evictions and nights spent in pri- take them round the world. sons, hospitals and hostels. Experience For men, there is another bonus. Ac- shows that not everybody gives up drink cording to a study of more than 20,000 ad- or drugs when housed. But many people vanced nurse practitionersbyAlison Leary cut down on substance abuse and anti-so- of London South Bank University, men cial behaviour. One homeless man in reach the seventh band (a mid-careerlevel) Manchester was arrested 54 times and im- four years sooner than women—partly be- prisoned 24 times in two years. Since he cause women are twice as likely as men to was put up in a flat two years ago he has work part-time and are more likely to ac- had no involvement with the police. cept a lower band to secure a job they real- Unless England moves to the Finnish ly want. When Mr Dowell started his nurs- model, Mrs May’s promise to end rough ing studies, he was promised: “You’ll go sleeping by 2027 is unlikely to be met. 7 Nurse Who? furtherbecause you are a man.” 7 The Economist August 18th 2018 Britain 23 Bagehot The other Britain

A depressing numberofBritons are struggling to keep theirheads above water are impressive not just because they make a little go a long way (eg, getting supermarkets to hand over surplus food that would otherwise go to waste), but also because they help to preserve people’s dignity. Neo Community, a community centre near the old docks, does everything it can to feed people’s sense of self- worth as well as their bodies. The food bank is arranged like a shop and allows people to pay what they can. The café offers a three-course lunch for£1, but also acts as the area’s social centre. Emma Wilkes, who founded the centre five years ago, throws in a bit of gentle pedagogy. The art class encourages children to draw fearsome-looking sharks to teach them the dangers of loan sharks, who specialise in getting children to nag parents into buying things they cannot afford. This correspondent found himself gripped by a disconcerting mix of optimism and pessimism. Op- timism, because local heroes like Ms Wilkes are doing wonderful work; pessimism, because they face such daunting problems. Britain has done too little to refashion its welfare state for a post-collectivist age of flexible labour—and what it has done is sloppily thought out and poorly executed. It has also done too little to deal with the problems of a working class devastated by deindustrialisation. The result is that millions of people live on HE first thingTheresa May did on becomingprime minister in the edge of poverty, and the political system is vulnerable to an TJuly 2016 was deliver a speech promising to help the just- eruption from the farright or the farleft. about-managing. Since then she has done almost nothing to Mr Field tries to tip the balance towards optimism, in his own make good on that promise. Brexit has consumed her attention. idiosyncratic way. He says the biggest change in his political life- Bold initiatives have mouldered on her desk. Life for the JAMsis time is that “people are hungry”. He thinks the government’s more ofa struggle than ever. new universal credit makes life worse for people at the bottom, A good place to see this is Birkenhead, next door to Liverpool, partly because it reduces the amount of benefits available and not least because of its thoughtful local Labour MP, Frank Field. partly because of practical problems, including long delays in Birkenhead looks like a stronghold of the respectable working payments. But then he throws in hope. The working class is no class—all neat houses and well-tended gardens. But you do not longer willing to be taken for granted. This was made clear in the have to lookhard to see that society is fraying. Supermarkets such Brexit referendum, when most working-class voters preferred as Marks & Spencer are upping sticks. Pound stores, gaming em- Leave, and also in last year’s general election, when the Tories poriums, pawn shops (“We loan cash”) and cheap pubs (“Three made advances in Labour heartlands despite running one of the pints for £5”) are on the march. Zero-hour contracts are depress- most inept campaigns in memory. ingly common. The JAMs can be tipped over the edge by the smallest things. Working-class blues Your van breaks down and you must come up with a few hun- Yet the working class is confronted by powerful economic head- dred pounds to fix it. You need a sudden visit to the dentist. In the winds such as globalisation, which means it is cheaper to make summer holidays child care is beyond your reach, but you don’t ships in China, and automation, which reduces the demand for want the kids roaming free. And then there is the dreaded school- labour. The local shipbuilder, Cammell Laird, does more busi- uniform problem. Local schools, particularly academies, have ness than it did a generation ago but with a small fraction of the taken to asking parents to shell out hundreds of pounds on fancy jobs. There are also powerful political headwinds that marginal- uniforms and PE kits. ise the traditional working class. Thus MrField is threatened with Mr Field has devoted his career to thinking about poverty— deselection by his local constituency, harangued by a bizarre alli- particularly the border between the just-about- and the not-man- ance ofhard leftists(who have always hated him) and Remainers aging. His first job before becoming an MP in 1979 was with the (who are furious with him for voting with the government on Child Poverty Action Group, a charity. At 76 he remains one of Brexit). They are on a hiding to nothing. Mr Field will run as an in- Westminster’s workhorses. He chairs both the Work and Pen- dependent if he is deselected. To judge by the way constituents sions Committee and the all-party group on hunger and food come up and thankhim forhis workas he walks down the street, poverty. He applieshisknowledge to hisconstituents’ mostpress- he will have no difficulty winning. ing problems. The Feeding Birkenhead programme, which he set He is nevertheless a lonely figure in his sustained commit- up with the help ofa grant from the Department forEducation, is ment to the JAMs. The British political class seems able to spare a a boon to parents struggling in the holidays. thought for them only just before or just after general elections. Builders are just finishing work on one of Mr Field’s latest cre- The Conservative Partyisrooted in the world ofgarden fêtesrath- ations, a combination of food bank, advice centre and café er than food banks. The Labour Party has become a coalition of dubbed a “citizen’s supermarket”. Members will be able to buy the university-educated and racial minorities. The established food at a steep discount. Members and non-members can use the pressismuch more interested in BorisJohnson’sthoughtson bur- café and consult advisers. The supermarket is one ofseveral orga- kas than it is about the fact that about half a million people visit nisations in Birkenhead helping people to make ends meet. They food banks every week. 7 24 Europe The Economist August 18th 2018

Also in this section 25 Is the Caspian a sea? 25 Ireland and Brexit 26 Italy’s bridge disaster 27 German UXB 27 Art tourism in Spain 28 Charlemagne: Greece’s odyssey without end

For daily analysis and debate on Europe, visit Economist.com/europe

The fall of the lira eign-currency debt that is weighing down the corporate sector. Turkey tantrum Having racked up dollar loans they can no longer service because of the collapse of the lira, many Turkish companies face bankruptcy, especially ones in property, construction and energy, says Refet Gur- kaynak, an economist. “The government ISTANBUL needs to come up with ways to bail out the Currencyturmoil and a row with America threaten to spill out ofcontrol healthier ones, and let the ones that are be- NDREWBRUNSON may be the world’s America risked “trading a NATO partner yond saving die,” he says. Unless the gov- Amost expensive prisoner. It has been fora priest”. ernment restores confidence, portfolio in- just two weeks since America first applied Mr Trump has already signed a bill to vestors, on whom Turkey relies to finance sanctions against the Turkish officials re- delay the delivery of American F-35 jets to its current-account deficit, may head for sponsible for the pastor’s detention. Since Turkey in response to its purchase of a mis- the door, says Timothy Ash of BlueBay As- then, Turkey’s refusal to release him has sile-defence system from Russia. A White set Management. That would make it im- helped to wipe about $40bn off its stock- House official said on August14th that new possible for Turkish banks to roll over bil- market, slash the value of its currency by sanctions were in the pipeline. The next lions ofdollars in debt. about a fifth and bring the country to the day a Turkish court ruled that Mr Brunson brink of a major debt crisis. The govern- should be kept under house arrest. Payback’s the glitch ment of President Recep Tayyip Erdogan is What Turkey needs to do to save the lira Mr Erdogan’s government has belatedly widely believed to have kept Mr Brunson and repair the economy seems clear taken some steps to stem the lira’s plunge, behind bars on terror charges since 2016 in enough. Mr Erdogan must workout his dif- ruling out capital controls and limiting the hope of extracting concessions from ferences with America, allow the central swap transactions to protect the currency Washington. But it is Turkey which has bank to raise interest rates sharply and against short-selling. The central bank has ended up paying the price. make a number of painful reforms, foreign taken steps to tighten the money supply. Mr Erdogan appears to have no inten- investors and analysts say. Down the line, The currency has recovered some of its tion of undoing the damage. Turkey’s com- it will need to deal with the $220bn in for- losses, but remains down by nearly 40% 1 bustible leader has not only refused to repair relations with America, he has raised the stakes. On August15th, lessthan a week Decline and fall after America’s equally impulsive presi- Turkish lira per $, to August 13th 2018, inverted scale Donald Trump doubles tariffs dent, Donald Trump, doubled tariffs on on Turkish steel & aluminium 0 Turkish steel and aluminium products, Mr Gezi Park Recep Tayyip Coup attempt Erdogan appoints Berat Erdogan called for a boycott of electronic protests begin Erdogan elected Albayrak finance minister 1 president goods from America. The following day he Presidential & 2 imposed tariff increases of up to 140% on parliamentary elections American products including cars, tobac- 3 4 co, cosmetics and alcohol. General election General elections Referendum Predictably, Mr Erdogan blames outside on executive presidency 5 forces forthe lira’s collapse. “These are bul- 6 lets, cannonballs and missiles of an economic war waged against our country,” he 7 said in one speech, referring to dollars, eu- 2011 12 13 14 15 16 17 18 ros and gold. In another, he warned that Source: Thomson Reuters The Economist August 18th 2018 Europe 25

2 against the dollarsince the start of the year. has grown increasingly authoritarian, re- finding new sponsors. His ministers have It received a major boost on August 15th pressinganti-government protests, extend- talked up possible Chinese investments. when Qatar, a regional ally, announced it ing his power over all branches of govern- But Turkey’s biggest trading partner re- would invest $15bn in Turkey. ment and responding to a failed coup in mains the European Union. Curiously, re- Economic turmoil was on the cards 2016 with purges and mass arrests. Using lations with Europe have been improving. long before the row with America. For intimidation and buy-outs by pro-govern- Angela Merkel has struck a soothing tone, years Mr Erdogan has forced banks to keep ment tycoons, he has gained almost total insisting on Europe’s desire for a prosper- interest rates low. Companies gorged on control of the press. Few Turks see any ac- ous Turkey. Turkish-German tensions have credit, the lira fell (see chart on previous count of the lira’s fall other than the gov- eased thisyear, asthe Turkshave quietly re- page) and inflation topped 15%. Money ernment line. Mr Trump may have done leased all but a few of the German citizens poured into construction contracts for cro- Mr Erdogan a favour by making it easier for they detained after the failed coup. nies and vanity projects like a bridge over him to pin the blame on the West. That example holds a little hope for Mr the Bosphorus, a vast airport in Istanbul The Turkish president has threatened to Brunson. Mr Erdogan has backed out of and MrErdogan’s1,100-room, $615m palace retaliate by seeking “new alliances”. De- conflicts before, notably in 2016, after Tur- in Ankara. As spending boomed, the cur- spite its grumbling, Turkey is embedded in key’s downing of a Russian jet brought the rent-account deficit swelled. “Had it not NATO, whose member states furnish most two countries to the brink of war. Mr been for severe mismanagement of the ofits arms. But it could buy more from Rus- Trump, too, has picked fights with antago- economy, the problem with the US would sia, and offer it more help (and the Ameri- nists like North Korea’s Kim Jong Un, only not have led to this,” says Mr Gurkaynak. cans more headaches) in Syria. Sergei Lav- to embrace them after minor concessions. “This is a home-made crisis.” rov, Russia’s foreign minister, was in Unfortunately, the interests of 80m Turks Yet many Turks believe foreigners are to Istanbul this week. The commitment from are currentlyheld hostage to an ego contest blame. Over the past decade, Mr Erdogan Qatar shows Mr Erdogan is serious about between two blustering populists. 7

Russia’s neighbourhood Ireland and Brexit Big lake, small sea Ferry risky

MOSCOW What is the Caspian, anyway? AMES can be misleading. Take the 250 km DUBLIN NCaspian Sea. It is actually the world’s Oil fields Gas fields Brexit could mean chaos forIrish trade KAZAKHSTAN largest body ofinland water—or what Source: Energy Information some would call a rather salty lake. The Administration ISITORS to Ireland can raise eyebrows confusion has fuelled disputes over its by referring to Britain as “the main- UZBEK- V legal status for nearly 30 years, as lakes RUSSIA Aqtau ISTAN land”. Yet the ferries that connect the two and seas fall under different international islands are the Republic’s main surface life- legal regimes. GEORGIA Caspian line. Not only does Britain account for 12% The Caspian sits at a strategic spot Sea ofIreland’s external trade in goods, but the between Europe and Asia, and contains Baku “land bridge” via the Channel Tunnel is the ARMENIA AZER- lucrative stores ofoil, gas and fish, in- BAIJAN TURKMENISTAN quickest route for lorries between Ireland cluding the caviar-producing sturgeon. AZ. and the rest of the European Union. The The Soviet Union and Iran had a clearly continental EU, representing 38% of trade defined maritime border but, afterthe in goods, is Ireland’s biggest market. Soviet collapse, the appearance ofin- IRAN Lorries can drive onto a ferryfrom Dub- dependent Azerbaijan, Kazakhstan and lin or Rosslare to Britain at 9am and be in IRAQ Turkmenistan muddied the waters. Tehran Paris by midnight, says Verona Murphy, On August12th the five littoral coun- president ofthe Irish Road Haulage Associ- tries at last signed an agreement. The while, will be divided separately be- ation. Direct ferries to the continent, from Caspian, says a Russian official, is to be tween the signatories. Russia, Kazakhstan Rosslare to Roscoff or Cherbourg in France, treated as neither sea nor lake, but in- and Azerbaijan already have agreements take at least 17 hours for the crossing alone. stead subject to a “special legal status”. that split up the northern Caspian. Carv- They also cost more: about €1,000, com- While leaving some ofthe thorniest ing up the rest ofthe seabed will require pared with €540 for the Irish Sea and issues unresolved, the pact clarifies the furthernegotiations. The agreement also Channel Tunnel crossing. maritime borders, enabling new oil, gas allows pipelines to be constructed with But if Britain leaves the EU next year and pipeline projects to go ahead. the consent only ofthe countries whose without an agreement on trade, customs, All five countries are to have 15 mile- sectors they pass through. That might immigration and food safety, it would wide territorial waters extending from unblocka much-discussed Trans-Caspi- mean reintroducing physical controls on their shores and another ten miles of an Pipeline from Turkmenistan to Azer- trade from Ireland. That would make the exclusive fishing rights. The rest of the baijan which Russia has long opposed. British route much slower and more ex- surface water will be common territory, The convention is the fruit ofmany pensive, and could rule it out for Irish “just- but non-signatory states may not deploy years ofnegotiations. One factor that in-time” trade. armed forces there. For Russia, this helps may have pushed it over the edge is Ms Murphy’s own firm is a perfect ex- preserve its military dominance by re- Moscow’s co-operation with Tehran in ample. It operates four refrigerated trucks taining freedom ofmovement forits Syria. Another is America’s resumption that bring Irish meat to Italy and return warships. (Russia has used the Caspian to ofsanctions on Iran, which pushes that with fresh herbs. “From the time the herbs launch missiles into Syria.) country to seekco-operation elsewhere. come out ofthe ground to the supermarket The seabed and its resources, mean- Call it serendipity. shelfin Ireland it takes about five days, and you are then leftwith a shelf-life of three to 1 26 Europe The Economist August 18th 2018

2 five days,” she says. Making the trip longer reduces the shelf life. Beyond a certain point, it could render the whole enterprise unprofitable. The Irish government is already wres- tling with Brexit’s implications for its border with Northern Ireland. It recently commissioned an urgent study of EU trade via the British route, in case Brexitdisrupts that too. The figures are inexact because such traffic is not closely monitored, but the Irish Road Haulage Association thinks more than 80% of road freight to and from the continent passes through Britain. All of this would be subject to the miles-long queues at Channel ports which British civil servants have warned Brexit could cause. For some, post-Brexit disruption would bring opportunities. CLdN, a Luxembourg- based shipping company, recently introduced the world’s two largest roll-on roll- offferrieson a new 36-hour route between Dublin, Zeebrugge and Rotterdam, bypass- Italy’s bridge disaster ing both Britain and France. The port of Corkhas launched a ferryservice between Structural weakness Ireland and Spain, and Irish Ferries plans to introduce direct routes between Dublin and Cherbourg. On August 1st the European Commis- sion agreed to reroute a proposed tran- ROME sport corridor from the continent to Ire- Adeadlycollapse reveals cracks in both infrastructure and government land away from British ports. Instead it will involve direct ferriesfrom Belgium and the T WAS the stuff of motorists’ nightmares: Netherlands. This would mean less busi- Ion August 14th, a pillar supporting a Construction ahead nessnotjustforBritish butforFrench ports, bridge over the Polcevera river in Genoa Spending on roads*, % of GDP, 2015 puttingthem outofthe runningforbillions collapsed. Three heavy vehicles and up to 1.5 of euros in EU grants for infrastructure up- 35 cars plunged 45 metres from the A10 mo- Slovakia Turkey grades. French ports, predictably, oppose torway into the river bed and onto nearby 1.2 the plan. warehouses. As The Economist went to Norway 0.9 Estonia Martina Lawless, an economist with press, 38 people were known to have died; Latvia Ireland’s state-sponsored Economic and the search forsurvivors was suspended for Finland 0.6 Investment Czech Republic Social Research Institute, says business fear offurthercollapse. France and government will be unwilling to in- Why did it happen? Like many bridges 0.3 Britain Italy vest in new warehousing or port expan- in Europe and America, this one was old: it Austria sion unlessthere isa clearneed. But ifa “no dated from 1967. It had been stressed by 0 deal” Brexit still seems possible after the ever-heavier vehicle loads. That day, it was 0 0.3 0.6 0.9 1.2 1.5 Maintenance next EU summit in October, it could trigger battered by a storm and struck by light- Source: OECD *Public and private a sudden wave of emergency planning. ning. But none of that explains its collapse. The Irish government, unlike the British, is One theory, advanced by Antonio Bren- not yet talking about stockpiling food for cich, a lecturer at the University of Genoa, ing it (see chart). Then Mr Salvini accused its citizens. But with Irish supply chains so is that the bridge was innately flawed. It the franchise holders of the motorway, closely linked to Britain, the possibility of was of unusual construction: its designer, Autostrade per l’Italia, of failing to main- chaos is just as high. 7 Riccardo Morandi, encased the stays hold- tain the bridge. Sweeping aside the firm’s ing up the deckin concrete. Only two other denials, the infrastructure minister, Danilo Belfast bridges—in Libya and Venezuela—were Toninelli ofthe Five Star Movement (M5S), built in that way, both by Mr Morandi. The announced he would revoke the com- Dublin one in Venezuela collapsed, after being hit pany’s franchises and fine it up to €150m. IRELAND by a ship. The Libyan one was closed after That helped deflect attention from a Rosslare inspectors found cracks last year. deep crack in the coalition: the M5S, which Cork BRITAIN Italy’s populist government found oth- has a history of NIMBY-ism, has vehe- NL. Rotterdam ers to blame. Three other bridges have col- mently opposed infrastructure projects the London Zeebrugge lapsed in Italy with less publicity in the League supports. Indeed, it opposed a by- Dover past three years, and the interior minister, pass that would have relieved traffic on the Calais BEL. Ferry Matteo Salvini of the Northern League, verybridge thatcollapsed. Ata rally in 2014 routes Cherbourg claimed the European Union’s budget-def- the M5S’s founder, Beppe Grillo, de- Roscoff icit limits had restricted Italy’s spending on nounced the project as a waste of money; Paris infrastructure. Butfiguressuggestit mayac- on its website, opponents of the scheme FRANCE tually spend too much on patching up its ridiculed fears that the bridge would col- To Spain 200 km infrastructure, and not enough on renew- lapse as a “fairytale”. 7 The Economist August 18th 2018 Europe 27

German problems Spain Deadly sleepers The Guggenheim eﬀect

BILBAO Can Bilbao’s cultural-tourism success be replicated? BERLIN OT long after it opened in1997, the include outposts ofthe Russian state German soil is littered with explosives Guggenheim museum in Bilbao museum and Paris’s Pompidou Centre as from the second world war N became a case study in urbanism, credit- well as a museum devoted to Picasso, N APRIL 18th building workers in Ber- ed with transforming a declining indus- who was born there. Hotel stays in Mala- Olin found a 500kg American bomb trial city into a sleektourist destination. ga were up 9% last year. caked in earth. It had been dropped during Few people know more about the “Gug- Valenciasplurged more than €1.3bn the second world war into what was then genheim effect” than Miguel Zugaza, ($1.5bn) on the City ofArts and Sciences, an industrial area, but lodged in the sandy both then and now the director ofthe a complex offantasy buildings compris- soil rather than exploding. The police or- nearby Bilbao Fine Arts museum. Previ- ing an opera house, an aquarium and dered some 10,000 people within an 800- ously obscure, despite its splendid col- several museums. Tourism to the city is metre radiusto leave theirhomes—an evac- lection ofSpanish masters, his museum growing fast. In Santander, along the uation unprecedented in Berlin’s recent now gets twice the150,000 visitors a year coast from Bilbao, the Centro Botín, a history. The city’s main station was emp- it received in 2002, when he went offfor contemporary arts centre, opened last tied, flightpathsoverhead changed and the a long and successful stint managing the year in a dramatic building designed by nearby canal closed. Specialists then used Prado in Madrid. Renzo Piano and suspended over the sea. high-pressure jets ofwaterand sand to sep- Many other cities around the world Two more museums are under devel- arate the fuse from the bomb. Germany’s have strived to replicate the Guggenheim opment in the city.This is helping to capital breathed a sigh ofrelief. effect, rarely with success. Spanish generate “a cultural map” in northern Such dramas—though typically on a towns, in particular, are littered with Spain, says Mr Zugaza. smaller scale—are a common feature of the expensive white elephants, designed by It is also contributing to healthy eco- German news. Some 1.5m tonnes of explo- starchitects during the pre-crisis construc- nomic diversification. After booming in sive material were dropped on the country tion boom. They include the recently recent years, Spain’s beach tourism ap- during the war, about half of the total that opened Iberian museum in Jaén and the pears to be levelling off.The proportion fell on Europe during that period. Some- City ofCulture in Santiago de Composte- offoreign tourists who are mostly there where between 7% and 20% of this materi- la, which resembles a ski-jump designed forthe culture is still only15%,but the al did not go off. Today individual bombs by a drunk. number is rising fast—from 8m to12.9m in and other explosives are often found by Yet amid the dross, there is gold. Sever- 2012-17, according to official statistics. gardeners hoeing the earth, farmers al cities are following Bilbao’s path. “WeSpaniards are very critical of ploughing their fields or construction Madrid, not long ago a sleepy town of what we’ve done,” says Mr Zugaza. “But workers laying foundations. bureaucrats, is now one ofEurope’s there’s a new dynamism in our cities. We The hotsummerhasled to spate of new cultural capitals. Perhaps the most strik- have an extraordinary cultural patrimo- finds, as dried-up rivers and lakes expose ing example is Malaga. Once skirted by ny.”Not every city can be a hub for the once-submerged explosives, and forest tourists on their way to the Costa del Sol, arts, but the effortto become one is bring- fires set off underground bullets and gre- it now has a cluster ofart museums. They ing a buzz to many. nades. The current building boom in Ger- man cities is also a factor: developers are increasingly redeveloping land and finding unexploded bombs. The building industry is becoming more savvy, says Mar- tin Kötter, a spokesman for the sector. “Developers used to tell their workers: ‘Go and make a hole there.’ Now they tell themselves: ‘If I send my people there and something happens, then I as a business leader am liable.’” This heightened awareness is complemented by new technologies. Wolfgang Spyra of Cottbus University is using Allied aerial photos taken after raids to identify zones where the risk of unexploded Valencia’s fully operational opera station bombs is especially high. Oranienburg, a town north of Berlin heavily targeted because it housed the Nazi nuclear-weapons gust 9th a young father in Mönchenglad- sary. (Many say “I don’t mind, I’ll stay at programme, has thus become the first mu- bach horrified the fire brigade by turning home,” says Jörg Majowski of the Berlin nicipality in Germany to search actively up with a bomb, found in his garden, in a police.) for unexploded ordnance—scanning risky cardboard box.) Experts determine wheth- Even with such precautions, dangers patches of earth for magnetic resonances er the fuse can be removed safely, or arise. Mr Kötter recalls how three experts and cutting the speed limits of the buses whether the bomb is on a timer that could were killed in Göttingen in 2010 when a travelling through them to reduce the risk be restarted by movement. That sort is of- timer-based bomb went off before they ofdetonations. ten blown up, as disarming it is too risky. could disarm it. But most buried devices When an explosive is found, authori- All cases can involve evacuations; police are harmless unless unearthed, he says: ties urge the finder not to touch it. (On Au- officers remove residents by force if neces- “They just slumber on in the ground.” 7 28 Europe The Economist August 18th 2018 Charlemagne Odyssey without end

Ourdeparting Europe columnist offers some reflections from a Greekoutpost mous, apolitical bureaucrats. Where countries once fought over resourcesorterritory, theirmembership ofa club with a common rulebook channels disputes into lengthy negotiations that result in communiquésnobodyreads. Deathlydull, and perhapsa trifle undemocratic. But better than what came before. Yetthere issomethingself-servingaboutthisnarrative. Greece created its own problems, but was largely a bystander while “solutions” were imposed by others. The rules of its bail-outs reflect- ed the installation-by-stealth of austerity as official euro-zone dogma. And it was the victim ofbad policy as well as power politics. Other governments regularly promised Greece jam tomor- row in exchange for hardship today. But projections for its recovery consistently proved wildly optimistic, as the austerity visited on the country, wholly predictably, deepened its recession and made its debts evermore unpayable. It was the most ruinous way imaginable to make a point. Now Greece, left with threadbare public services, eye-watering tax rates, weak institutions and ap- palling demographics, is supposed to run large primary surplus- es (ie, before interest payments) for the next fourdecades. This is magical thinking masquerading as policy. Too often in today’s Europe, acute problems are not dissolved by silvery dip- ASTELLORIZO is “the end of Europe—or perhaps its begin- lomats but rather transformed into chronic ailments that remain Kning”. So says Yannis Doulgaroglou, co-owner of the Hotel bearable, until they are not. True, banking reforms and institu- Kastellorizo, a sunny inn on Greece’s easternmost inhabited is- tional changes have made the euro zone more resilient. That was land. Atiny rocky outpost just offthe Anatolian coast, on maps of why Syriza, an amateurish bloc of ex-communists and elbow- Greece Kastellorizo is often relegated to an inset. Yet it was from patched professors elevated to power by desperate voters in 2015, the island’s picturesque harbour, on April 23rd 2010, that George saw its own brand of anti-austerity magical thinking quickly Papandreou, the prime minister, stared blanklyinto a camera and squashed. (The collateral damage was capital controls that have acknowledged that his troubled country had lost access to capital not yet, as Kastellorizo’s hoteliers and builders grumble, been markets and needed a financial rescue package from its euro- fully lifted.) Greece turned out to have a simple choice: a devastat- zone peers. The day is etched in the memory of most Greeks. ing Grexit, or capitulation to the punishing terms its creditors re- Chuckling, Mr Doulgaroglou recalls the journalists who scar- quired to keep it inside the euro. pered from his hotel once they realised the prime minister was But the euro zone’s failure to collapse bred complacency. In saying something momentous, leaving behind their unpaid bills. the past six months, amid unusually benign political and eco- Eight years and three bail-outs later, as Greece prepares to nomic conditions, governments have failed to muster the will to leave its final programme on August 20th, Mr Papandreou’s rebuild up the euro zone’s defences against the next shock. Nor marks seem laden with pathos. He directed his ire at the “specu- have they used the space afforded by smaller numbers of Medi- lators” who had sent Greekbond yields soaring, more than at the terranean crossings to produce a long-term asylum strategy, in- successive governmentsthathad overspent, under-reformed and dulging instead in pointless squabbles over quotas. The sticking- fiddled the national accounts. Yet, he vowed, with a “common ef- plaster solutions in Turkey and Libya cannot last for ever. fort” Greece would “reach the port safely, more confident, more These issues bubble away for years, corroding trust within, righteous and more proud.” He called this the “new Odyssey”. and between, countries. Odd as it may seem, governments are Odysseus faced great hardships, but his travails culminated in taking the easy way out. It is simpler to squabble and delay than a happy homecoming. After so many years ofservitude, it would to breaktaboos, like writing down Greekdebt or forging a unified be nice to think that Greece’s journey will reach a similar conclu- asylum policy. One lesson, then, of Greece’s crisis is that the sin- sion. There are indeed signs of recovery, led by strong tourist gle currency is harderto fracture than critics predicted. Anotheris numbers on islands like Kastellorizo. Growth has returned, albeit that the EU will go to considerable lengths, including the impov- in nugatory form. But the scars are everywhere. It is now not un- erishment ofits own members, to avoid taking hard decisions. usual to see a dozen men shooting up in broad daylight in the middle of a central Athens street. As Greeks know only too well, Wobbly but still upright after the emigration of hundreds of thousands and a near-25% The EU’s ability to defer hard decisions—the legendary fudge— drop in GDP since 2008—almost half as much again as war-torn once testified to its resilience, or at least its ability to manage dis- Ukraine—no one can mistake their country fora success story. Mr agreements. But in a more unpredictable world, where Europe is Papandreou’s predictions were precisely wrong. That is the les- battling instability from outside its borders and populism within, son ofGreece’s eight years ofpain, and one that offers this colum- it risks becoming a liability. Alternative models, from Chinese nist, shedding Charlemagne’s robes for a new posting after four state capitalism to Russia’s resentful nationalism, are available, years, a chance forsome parting thoughts. and gaining adherents where voters are losing faith in the Euro- Agood case to be made forthe tedious procedures ofthe Euro- pean model. You feel this especially strongly on Kastellorizo, just pean Union is that they transmute inflammatory political argu- 20 minutes from Recep Tayyip Erdogan’s authoritarian Turkey. ments into technical matters to be smoothed away by anony- But the warning should resonate across the continent. 7 United States The Economist August 18th 2018 29

Also in this section 30 West Virginia politics 31 Capital punishment 31 The chronicle of Omarosa 32 Clerical sex abuse 33 Lexington: Conservative Democrats

For daily analysis and debate on America, visit Economist.com/unitedstates Economist.com/blogs/democracyinamerica

Summer of scandal The Office ofGovernment Ethics, an independent agency, has already accused Mr Pythons and ostriches Ross of contravening his ethics agreement by taking short positions on holdings he promised to divest, and of “omissions and inaccurate statements”. John Thune, a Re- publican senator from South Dakota, joined Democrats in urging an investiga- WASHINGTON, DC tion of Mr Ross’s finances. In July Mr Ross The numberofmoney scandals in Trumpland is overwhelming. Will voters care? admitted to “inadvertenterrorsin complet- S A candidate, Donald Trump promised dish, but it is no outlier in Trumpland. The ing the divestitures required by my ethics Ato “drain the swamp” and make gov- president’s former fixer, Michael Cohen, is agreement”, and promised to sell his equi- ernment work for ordinary Americans. As under investigation for fraud. Neither man ties and put the proceeds into Treasury a president, he presides over a staggeringly served in the White House, but plenty of bonds. Mr Ross has previously faced alle- fetid administration. His former campaign other people followed around by money gations of concealing an investment in a chairman, Paul Manafort, even wears scandals have. Two cabinet officials—Scott Russian shippingfirm with ties to Vladimir clothes made from swamp creatures. Pruitt and Tom Price—have been forced out Putin’s son-in-law. Forbes, which is to bil- Among the luxury goods on display dur- amid ethics scandals (Mr Price spent over lionaires as Sports Illustrated is to swim- ing his trial on 32 counts of financial fraud $1m oftaxpayermoney on private and mil- suits, has accused Mr Ross of inflating his and money-laundering was a python coat itary flights; Mr Pruitt’s alleged violations wealth and reports that “many of those for which he paid $18,500, nearly twice were too numerous to list). Other adminis- who worked directly with him claim that what he paid for an ostrich waistcoat, but a tration officials have similar concerns nip- Ross wrongly siphoned or outright stole a mere fraction of what he spent on clothes, ping at their heels. Democrats hope to few million here and a few million there”, rugs, and garden landscaping—all funded convince voters that congressional Repub- an accusation Mr Ross also denies. by lobbying forforeign governments. licans bear some responsibility—and Five days before the CLC filed its com- The prosecution alleged that Mr Mana- should pay the price in November—for the plaint against Mr Ross, Chris Collins, a con- fort lowballed his income by $16.5m so as administration’s ethics deficit. That may gressman from upstate New York and the to pay less tax, and fraudulently obtained prove harder than they would like. first sitting member ofCongress to back Mr $20m worth ofbankloans(none ofMrMa- Trump in 2016, was arrested. Federal prose- nafort’s 31 foreign bank accounts were ap- Called to ordure cutors allege that he tipped off his son that parently willing or able to supply the nec- If so, it will not be for a lack of targets. On a biotech firm, on whose board he served essarily credit). The government’s lawyers August 13th, the Campaign Legal Centre and in which he was one of the largest also provided evidence that Mr Manafort (CLC), a non-partisan ethical watchdog, shareholders, had a disappointing drug dangled a job in the White House in front filed an extensive complaint against Wil- trial. His son, who was also charged, alleg- of a banker from whom he hoped to bor- bur Ross, the commerce secretary, urging edly sold his shares and then tipped off row. In response, Mr Manafort’s lawyers the Commerce Department’s inspector fourother people. Both Mr Collinses plead sought to remind jurors that he was a Re- general to investigate him. The complaint not guilty to the charges. Mr Collins has publican, perhaps hoping that tribal loyal- alleges that Mr Ross helped make policy suspended his re-election campaign and is ty would sway some ofthem to agree with decisions that could have affected stock trying to remove his name from the ballot. the president that government prosecutors and other interests that he did not fully dis- Manysmallerscandalsthatwould ordi- were engaged in a “total witch hunt”. close that he owned. Mr Ross, via his per- narily draw more attention have become Mr Manafort’s case is the most outlan- sonal lawyer, denied wrongdoing. so much background noise. Earlier this 1 30 United States The Economist August 18th 2018

2 year Brenda Fitzgerald resigned from run- dit, says that voters are more worried tenth of Mr Loughry’s overall spending on ning the Centres for Disease Control, about tariffs. North Dakota’s Senate race, office renovations, and far less than the America’s federal public-health agency, he argues, “turns on the price ofsoyabeans $500,000—including two rugs costing after she was discovered trading tobacco …If it’s $6, [Heidi] Heitkamp [the Demo- $28,194—that his fellow justice Robin Davis stocks. Ben Carson, the secretary of hous- cratic incumbent] wins.” Laura Belin, au- spent redoing her office. Unfortunately, ing and urban development, spent $31,000 thor of “Bleeding Heartland”, a blog about they may never get to use their new digs. of taxpayers’ money on a dining-room set Iowa politics, says she doesn’t think “the On August13th the lower chamber of West for his office. He accepted responsibility, public at large is really tuned into” the ad- Virginia’s statehouse impeached all four but also explained: “I left it to my wife, you ministration’s ethics scandals. Those are sitting Supreme Court justices, charging know, help choose something...I dismissed mainly fodderfor “the activist class”. them with overspending on office renova- myselffrom this issue.” Mr Trump’s administration may be so tions and failing to implement policies to Ryan Zinke, the interior secretary, has scandal-ridden thateach ethical peccadillo govern the personal use of state property charged taxpayers for his private-jet travel, just seems like more of the same. Stephen (in a delightful turn, Mr Loughry has been and failed to disclose that he owned shares Bannon, his ousted adviser, famously said accused of using state vehicles four times in a gun firm in Montana and then met ex- that the way to win is to “flood the zone to drive himself to events where he ecutives and lobbyists from that firm. A with shit”, thereby overwhelming any- hawked his book, subtitled “The Sordid spokesman said that the value of shares one’s ability to focus on one thing for more and Continuing History of Political Cor- was below the threshold required for dis- than a single news cycle. “Maybe we’re just ruption in West Virginia”). closure, and that anyway the meeting was like the rest of the country,”says Mr Fuglie. Three justices were also accused of a social call. The desire to avoid other pas- “We’re shaking our heads, and saying, ‘Oh, overpayingsenior-statusjudges. Afifth jus- sengers while flying has been a recurring jeez—there he goes again’.” 7 tice, MenisKetchum, resigned in July, short- theme: last year Steve Mnuchin, the trea- ly before pleadingguilty to a charge ofwire sury secretary, took eight trips by military fraud relating to his use of a state vehicle aircraft, costing taxpayers almost $1m. West Virginia politics and fuel card for golf outings. And in addi- And then there are all the Trump family tion to impeachment, Mr Loughry also hangers-on who have found jobs in the My kingdom for a faces 23 federal counts of fraud, witness federal bureaucracy. Eric Trump’s former tampering and lying to investigators. wedding planner runs the New York couch Their spending on renovations was not branch ofthe federal Department ofHous- illegal: West Virginia’s Supreme Court has ing and Urban Development. On August complete authority over its own budget, 7th ProPublica, an investigative-journal- though a constitutional amendment giv- The Mountain State impeaches its ism non-profit, reported that three mem- ing the legislature partial oversight is on entire Supreme Court bers of Mar-a-Lago, the president’s swish the ballot this fall. But, especially in one of country club in Palm Beach, exercise un- EVER underestimate a successful the poorest states in the union, it was un- due influence within the Department of Nman’s propensity to waste money on seemly, and impeachment is a political Veterans Affairs—despite the fact that none hideouspersonal items. Justin Bieber, a Ca- process rather than a legal remedy. ofthem has everserved in the government nadian troubadour, reportedly spent Some see an unduly political process, or the armed forces. $15,000 on jewelled tooth covers. Allen less a blow for justice and frugality than a All this is before taking into consider- Loughry, WestVirginia’s chiefjustice, spent power grab by Jim Justice, the state’s Re- ation any conflicts ofinterest on the part of $32,000—slightly less than the average in- publican governor. Voting for the articles MrTrump himself. Democrats have dusted come per person in his state—on a blue sec- broke along mostly party lines, with Re- off the phrase “culture of corruption”, tional sofa (pictured below) that looks like publicans for and Democrats against. Mr which they used to great effect in the 2006 something one might find, stained with Justice shares some of the president’s char- mid-terms. Then, George W. Bush’sadmin- beer and other fluids, in a fraternity house. acteristics: he owns a famous golf course, istration was tottering after it turned out The sofa accounted for less than one- the Greenbrier, and switched his affiliation1 that the federal government’s response to Hurricane Katrina wasbeingled byan Ara- bian-horse enthusiast appointed by Mr Bush. The 2006 election also coincided with a money scandal involvingJackAbra- moff, a Republican lobbyist, which has many echoes of Mr Manafort’s escapades. Democrats hope to connect the current administration’s ethical woes to a broader tale of Republicans blithely backstroking around the swamp that Mr Trump was supposed to drain. Yet it is unlikely that voters in, say, Ar- kansas will care enough about the ethical failings of a congressman from upstate New Yorkwhom they have never heard of, or of the cabinet secretary of a department with obscure responsibilities, to vote against a Republican candidate whom otherwise they would have supported. Asked whether the Trump administration’s scandals have come up in North Dakota’s hotly contested Senate race, Jim Fuglie, a former state DemocraticPartyofficial-turned-pun- Sofa, not so good The Economist August 18th 2018 United States 31

2 from Democrat to Republican. He is also the state’s richest man thanks to a fortune The White House built on coal mining, a line ofbusiness that could be affected by future court rulings. Oh me, oh my State law allows Mr Justice to appoint a replacement for any justice with at least Anotherinsideraccount ofhow the country is run two years left in their 12-year term that leaves the court within 84 days ofa general NE by-product ofthe Trumpadmin- hand gestures have been remarked on election, which happened to be August Oistration’s extraordinarily high before, but here the author attempts to 14th. Ms Davis resigned on August 13th, so turnover is likely to be a large number of classify them (the cobra pointed finger; voters will choose her replacement. Evan tell-all books from formerstaffers. The the starfish finger flail). Jenkins, currently a Republican congress- 45th president has only been in office for How much ofthis is actually true? man, announced his candidacy on August a year and a halfand yet there are already White House sources have denied the 14th. So did William Thompson, a circuit three such books—by Sean Spicer, James most salacious bits, but then they would judge from Boone County, in the troubled Comey and, now,by Omarosa Manigault deny that the sun rises in the east. “The southern part of the state, who wants to Newman. The author, who was offered a directive came down from Reince [Prie- “create family drug courts, which will pro- White House job largely on the strength bus, then chiefofstaff] that our default tect children in West Virginia who are ne- ofher performance in Season1of“The position was to backup whatever the glected and abused because their parents Apprentice”, is an authentically Trum- president said or tweeted, regardless of sufferfrom drug addiction.” pian creature who has known the presi- its accuracy,”she writes. And Ms Mani- Now the matter proceeds to the state dent for15years. This lends her a peculiar gault Newman may have more tapes. Senate. Removing the justices requires a kind ofexpertise. She also taped her Amid the craziness, there are mo- two-thirds vote in the chamber; Republi- firing—by the chief-of-staff, John Kelly,in ments ofinsight. “Trump’sgreatest char- cans currently hold 22 of 34 seats. If the the White House Situation Room—which acter flaw”, she writes ofa man whom three are removed, Mr Justice can reshape was bold. she considered a mentor and friend for a the court as he sees fit, at least for the next As befits someone who came to the third ofher lifetime, “is his total lackof two years. Voters will not get to weigh in job through reality TV, in Ms Manigault empathy,which is itselfa function ofhis until the next election, in 2020. 7 Newman’s corner ofthe White House extreme narcissism.” “Ifyou leave or there is no policy,only presentation. The betray the Trumpcult,” she notes, “you author spends much ofher time trying to are labelled crazy and pathetic.” That part The death penalty arrange snaps ofpeople who really do is certainly true. Since publication, the not wish to be photographed with the president has provided his own blurb for Cornhusker dues president. She seems baffled that Trump- the second edition. “When you give a world (her term) does so many things she crazed, crying lowlife a break, and give disapproves of, then pushes backagainst her a job at the White House, I guess it her colleagues with another photo-op. just didn’t workout. Good workby Gen- Much ofthe bookinvolves settling eral Kelly forquickly firing that dog!” scores with Kellyanne Conway,an advis- CHICAGO er to Mr Trump. Ifyou wish to know Nebraska’s first execution for20 years whom Ms Manigault Newman sat next to HE first of the four drugs was adminis- at lunch or on the plane then this is the Ttered on August 14th at 10.24am at the workfor you. The modesty usually ex- state penitentiary in Lincoln. Fifteen min- pected in an autobiography often proves utes later a curtain was lowered, and by elusive. “Ifnews got out that I thought the 10.47 Carey Dean Moore, aged 60, who had president was delusional or mentally been incarcerated for 38 years for murder- impaired, the impact on national and ing two taxi drivers, was pronounced global stability could be cataclysmic,” she dead. It was the first time in 21 years that writes. As The Economist went to press, Nebraska had executed a prisoner. And it the cataclysm had yet to arrive. was the first time ever that fentanyl, a pow- Fortunately there are some funny bits erful synthetic opioid, had been used for to leaven the prose. Ms Manigault New- an execution. man asserts that the president has two Afterdecliningforyears, public support beds in his bedroom, one fortanning and for the death penalty is on the rise; 54% of one forsleeping. She says that he eats those surveyed are in favour, compared sensitive documents and estimates that with 49% two years ago, according to a re- he has drunk43,800 cans ofDiet Coke in cent poll by the Pew Research Centre. the time she has known him. Mr Trump’s Eight Cokes and a frown Death sentences are also a little more frequent than in the recent past, says Robert Dunham ofthe Death PenaltyInformation of his cousins). Yet the state has been un- pealed to the governor, a practising Catho- Centre. That may be related to the political sure about the sentence for years. In 2015 a lic. They asked him to consider the rhetoric in Washington. President Donald bipartisan group of lawmakers overrode doctrinal change announced byPope Fran- Trump has proposed executing drug deal- the governor’s veto of their vote to abolish cis in early August, whereby the Catholic ers to curb the opioid epidemic. the death penalty. The next year Mr Rick- church now holds that capital punishment Nebraska is a deeply conservative state etts used his family fortune to bankroll a is always wrong. and its Republican governor, Pete Ricketts, referendum on its reintroduction; voters The bishops’ appeals fell on deaf ears. is a fervent supporter of capital punish- endorsed the measure overwhelmingly. Mr Ricketts considers the death penalty to ment (not least, some say, because he was But in the weeks before Mr Moore’s execu- be an important tool for public safety and so shocked bythe gruesome murderofone tion, Nebraska’sCatholicbishopsagain ap- the only appropriate punishment for the 1 32 United States The Economist August 18th 2018

Clerical sex abuse Cardinal sins

Ahorrific past that refuses to go away ATHOLIC America was already in ofpower. Not since the 1920s has a cardinal C shock, and then another hammer- been stripped ofhis rank. blow fell. Two weeks after one ofthe coun- The Pennsylvania report struckan emo- try’s best-known prelates handed in his tional note fora legal document. The jurors cardinal’s hat, amid allegations of molest- began with the words: “We…need you to ing young men, a report has documented hear this…There have been other reports in sickening detail the sexual crimes that about child sex abuse within the Catholic were perpetrated by over 300 priests in church. But never on this scale…Now we Pennsylvania over 70 years. know the truth: it happened everywhere.” More than 1,000 children, and probably The jurors gave many grisly examples. several times that number, were victims of One priest in the diocese of Erie, in north- clerical abuse that was systematically west Pennsylvania, had confessed to the swept underthe carpet, accordingto a judi- rape of at least 15 boys, some as young as Fentanyl furniture cial document of nearly 900 pages which seven, only to be hailed by his bishop as a was published on August14th, as Catholics “person ofcandourand sincerity” who de- 2 most heinous crimes. Yet there is scant evi- prepared for one of their cherished annual served praise “for the progress he had dence to suggest that deterrence works. feasts, the Assumption ofthe Virgin. made” in controlling his “addiction”. The murder rate in New York, New Mexico The report was written by a grand jury The jurors agree that much has changed and Connecticut continued to go down that took around two years to investigate in the past 15 years, and that the church after those states abolished the death pen- six of the eight dioceses in the state. They seems farquicker to report abuse to the po- alty. Southern states execute more people heard from dozens of witnesses and used lice. They hailed as “forthright and heart- than any other region of the country, yet their power to gain access to 500,000 felt” the testimony they had received, in the murder rate in the South is the highest. pages of church documents. person, from the current bishop ofErie. The death penalty is also much more ex- The American Catholic church has Still, they found it regrettable that pensive than imprisonment for life, be- struggled to cope with historical sex-abuse thanksto cynical cover-ups and a statute of cause of costly trials and lengthy appeals. allegations since they exploded in the limitations, it had been left too late to pros- Ernest Goss of Creighton University esti- archdiocese of Boston two decades ago, ecute in the vast majority of cases. They matesthateach death-penaltyprosecution and it has paid billions of dollars to vic- urged Pennsylvania’s lawmakers to re- costs Nebraska’s taxpayers about $1.5m tims. But the grand jury’s investigation, fo- move time limits for criminal cases of this more than life without parole. Ten people cusing on a state long seen as a heartland sort. A recent change has made it possible remain on the state’s death row. of blue-collar Catholicism, was the broad- for victims to come forward up to the age Since the death penalty returned to est fact-finding exercise to date. of50, but that still seems too restrictive. America in 1976, 162 death sentences have The jurors’ grim findings follow a deci- In their response to the report, bishops been reversed and 1,480 people have been sion by Pope Francis to accept the resigna- mixed deep regret for past wrongs with an executed, so roughly one in ten was found tion from the status of cardinal, pending a insistence that things had improved, espe- innocent. Mr Dunham believes that, of church trial, of Theodore McCarrick, an cially since 2002 when new guidelines for those who were executed, at least a dozen American cleric who is now 88. As Wash- dealing with sex offenders were adopted. were innocent. He cites the case of Carlos ington DC’s archbishop, he is remembered Cardinal McCarrick helped shape that DeLuna, who was executed for murder in as a familiar, affable figure in the corridors new approach, but fell foul ofit himself. 7 Texas in 1989 and who is now generally believed to have been convicted in error. Nonetheless, it may get technically harder for Nebraska to carry out execu- tions. After giving Mr Moore Valium to se- date him and fentanyl to render him un- conscious, the executioner administered cisatracurium besylate to paralyse his musclesand potassium chloride to stop his heart. If the first two drugs did not work well, says Eric Berger of the Nebraska Col- lege of Law, then Mr Moore would have been in excruciating pain, much like being burned alive from inside. According to eye witnesses, he turned red and purple before the curtain was lowered. If an autopsy reveals that he suffered extreme pain, Ne- braska will find it even harder to buy drugs from pharmaceutical firms fearful of the public outcry over their use. 7 Unholy shroud The Economist August 18th 2018 United States 33 Lexington Indiana country

Moderate Democrats like Joe Donnelly are a throwbackto a politics ofpleasing voters in the Midwest. It has backed the Republican presidential candidate in every election since 1964 barone, when it voted forBarack Obama in 2008. As a big steel producer, it also has a lot of people who like Mr Trump’s tariffs. Its logistics and manufacturing industries, situated at the crossroads of America, are booming. Mr Donnelly’s Republican challenger, Mike Braun, the boss of a car- parts firm and a former member of the statehouse, naturally claims that the senator is an enemy of this progress. He cites his opposition to last year’s plutocratic tax cut. Yet Mr Donnelly, who votes with Mr Trump more often than not, is no out-of-touch liberal. He is rated one of the most socially conservative Democratic senators, rarely speaks to the national media, and focuses on issues, such as veterans’ affairs, that Trump voters like. “The natural Trump coalition—farmers, fire- men, policemen, veterans, small businessmen—has always been my coalition,” he says. “They voted for me before and I’m very hopeful they’ll do it again.” Polls say the race is too close to call. That Mr Donnelly is even competitive is remarkable. It also il- lustrates why the ideological purity demanded by some progressive Democrats is insane. Democrats cannot win legislative power without winning in some conservative states. And to do so OE DONNELLYis almost indistinguishable from the voters he is they need, more than populist or ingenious economic policies, Jminglingwith in DougBurnworth’sbarn. Aburlyfigure, in den- candidates that conservatives voters can trust. Mr Donnelly, a im jeans and a yellow shirt bearing the legend “Indiana Pork”, rare anti-abortion Democrat, gets a hearing from Hoosiers be- the Democratic senator from Indiana looks like a prosperous cause he is on their cultural wavelength. The fact that Joe Biden, farmer. He also knows his onions—or rather, his corn and soya- another hardscrabble moderate, is the only member of Mr Don- beans, the main crops in Noble County, northern Indiana. nelly’s party that he has allowed to campaign with him suggests For the crowd of farmers gathered to hear him, Mr Donnelly how few Democrats cross that bar. “I’ve always kind of ridden has news on the provisions for water management and crop in- around in my own truck,” the senator says delicately. surance in the forthcoming Senate agriculture bill, which he Yet moderates like Mr Donnelly are more than an awkward helped write. He commiserates over the effects of President Do- necessity to their party. Having to overcome their constituents’ nald Trump’sbudding trade war, including a 20% hit to soyabean partisan bias means they understand and represent them to a prices. But he does not blame Mr Trump, for whom most of the rare degree. That is a lesson for complacent partisans of all farmers—and over 70% of folk in Noble County—voted. His atti- stripes. It is no coincidence contempt forpoliticians and the prev- tude towards the president is one of amiable concern, which he alence ofuncompetitive congressional races are risingin tandem. expresses while recounting their slightest interaction in minute The ideological diversity conservative Democrats bring to detail. (“He said, ‘Hey Joe, can you come over?” “I said, sure!”) Not their party is also good in itself. Mitigating groupthink helps pro- once do the words “Democrats” or “Republicans” pass his lips. duce better policy. On financial regulation, health-care policy It is a performance redolent ofa formertime in American poli- and the like, moderates have consistently offered pragmatism tics, when partisan divisions were subservient to local leaders and a checkon the righteousness oftheir progressive colleagues. and issues. It is wholly at odds with talk of a progressive wave Ideological conformity, and the damage it does, is even more and a national verdict on Mr Trump in the mid-terms, which Mr apparent among Republicans, whose moderate wing is even Donnelly is campaigningfor. Yet ifthe Democrats take either con- more diminished. For all their strengths, Mr Donnelly and his gressional chamber, especiallythe Senate, it will be thanks to grit- counterpart in Missouri, Claire McCaskill, probably owe their ty heartland moderates like him, battling for re-election in states jobs to it. Her Republican rival in 2012 imploded by arguing, to ex- such as Missouri, Montana, North Dakota and West Virginia, as plain his opposition to abortion, that women who had suffered a well as Indiana. These are places where MrTrump won big and is “legitimate rape” rarely conceived. Mr Donnelly’s opponent ar- still popular; and where voters are liable to consider social de- gued that conceptions following rape were “something that God mocracy as something America defeated in the cold war. intended to happen”. That means Democrats like Mr Donnelly need to steer clear of the divisive national issues—including Mr Trump himself—their Reaping what you sow left-wing colleagues obsess over. A mastery of retail politics and In the current contest, Mr Trump’s tariffs could be another act of local issues is their principal means. Paradoxically, this ensures Republican self-sabotage. Even the mostTrump-lovingfarmers in their races are at once the most nationally significant and the Mr Burnworth’s barn seemed mildly shocked by them. Others, most grounded in local politics. “Anyone need a passport or noting the excellence of this year’s soyabean crop, were openly something, let us know,” says Mr Donnelly, before engaging a livid. The $12bn in compensation Mr Trump has promised was group offarmers’ wives on the quandary offreezing v canning. additionallyenraging, some said. Itwasdisrespectful. “Thisguyis Alongside Heidi Heitkamp of North Dakota, he is probably trying to treat American agriculture like Stormy Daniels,” said the most endangered Democrat up for re-election. Indiana, Mel Egolf, who farms1,900 acres and has voted Republican all his which Mr Trump won by19 points, is the most conservative state life. “He’s saying take my money and keep quiet.” 7 34 The Americas The Economist August 18th 2018

Also in this section 35 Bolivia, Peru and cocaine Bello is away

Migrants in Mexico border, Mexico may struggle to cope with the flows across its southern one. The first frontier The United States has long pressed Mexico to strengthen that frontier. The “Southern Border Programme”, funded partly with American money, does not so much put up barriers as round up people TAPACHULA who have got through. Migrants in Tapach- AfterDonald Trump split up migrants’ families, Central Americans are ula say that crossing the border from Gua- reconsidering theirplans temala is easy. But from 2013 to 2015 the LBERTO opens his wallet to show how dreds of children from their parents at the number of Central Americans deported Alittle is in it. It contains no money and border (though not that it suspended the from Mexico doubled to 180,000 a year. no bank card, only the identity card issued policy after a public outcry). In June Jeff Checkpoints line the roads from Tapach- by the government of El Salvador, from Sessions, the United States’ attorney-gen- ula. The “Beast”, a railway on which stow- which he has just fled. He left his job as a eral, said migrants could no longer claim aways risk rape, robbery and murder as car repairman in San Salvador, the capital, asylum on the grounds of gang violence or they head north, has become harder to which paid $100 a month, because mem- domestic abuse. That is likely to reduce board. Its speed has been increased and bers ofthe MS-13 gang had demanded from sharply approvals of asylum claims by fences have been put up in railway yards. him more money than he could afford. Central Americans. News of that decision At the same time, Mexico is letting more “They killed my brother. And my son,” he will eventuallyreach the refugeeson Mexi- migrants stay. The number of asylum says. Alberto and his wife, Gabriela, who co’s southern border. claims in Mexico has jumped from 1,300 in is four months pregnant, have found ref- Data on apprehensions of migrants by 2013 to 14,600 last year. Most applicants are uge, at least for now, in Tapachula, in the the United States suggest that Mr Trump’s Central Americans. The United States gets Mexican border state ofChiapas. harsh rhetoric on immigration during his many more claimants: 108,000 Central Central Americans sneak past Mexico’s first year in office has so far been a bigger Americans applied last year. But whereas immigration controls an estimated half- deterrentthan the brutal policiesof hissec- the United States turns down three-quar- million times a year, many in search of se- ond year (see chart on next page). Mr ters of claims from the countries of the curity or better wages. A few years ago Al- Trump has lamented that Central Ameri- “northern triangle” (El Salvador, Guatema- berto and Gabriela might have headed to cans were flowing “like water” into Mexi- la and Honduras), Mexico last year ap- the United States, but they hope to stay in co, which was doing “very little, if not proved two-thirds of them. Awareness is Mexico as refugees. Applying for asylum is nothing” to stop them. But the mood spreading among migrants that asylum in not easy. A decision can take up to 100 among the migrants in Tapachula suggests Mexico is an option. working days. During that time, the family that at least some are reconsidering plans That does not mean they are welcome. must visit a government office in Tapachu- to enter the United States, if not to leave New arrivals in Tapachula can get three la once a week. Although the couple are their home countries. nights’ accommodation in church-run entitled to workin theory, in practice many shelters, but then must move on to make migrants stay jobless while they await an Less beastly room forothers, perhaps to a patch of floor answer. Alberto and Gabriela plan eventu- This is happening just as Andrés Manuel withouta blanket. Thatcosts100-250 pesos ally to head north, to a Mexican state with López Obrador, Mexico’s left-wing presi- ($5-13) a night. The poorest sleep rough. better job prospects than Chiapas. dent-elect, prepares to take office in De- Relations with Mexicans in the area are Why not move on to the United States? cember. He hopes to co-operate with Mr rocky. Tapachula has the second-highest Because of President Donald Trump, Al- Trump on migration, but the American crime rate in Chiapas, even though there is berto says. He and his wife know that the president looks like a reluctant partner. If hardlyanyorganised crime in the city. Resi- American government has separated hun- the United States succeeds in hardening its dents blame the migrants. Classrooms1 The Economist August 18th 2018 The Americas 35

2 overflow with migrant children. Few lo- tion under which the two governments caine seized in Bolivia comes from Peru. cals feel kinship with the Central Ameri- would spend three times as much on eco- Neither country is winning the battle cans, despite ties ofhistory and geography. nomic development in Central America as against it. In Peru, smugglers restore air- In 1823 Chiapas voted in a referendum to they do on border security. That would strips as soon as police dynamite them, join newly independent Mexico rather build on the United States’ pre-Trumppoli- says Héctor Loayza, the general in charge than the United Provinces of Central cy ofspending money to reduce crime and of Dirandro, the anti-narcotics agency. Bo- America, a short-lived federation ofGuate- hardship in the northern triangle in the livia has more aircraft and airstrips, in part mala and fourother countries. hope ofpersuading people to stay there. because “air taxis” are used as transport in Most migrants are eager to move on, but But such policies demand patience, and forested areas, such as the Beni depart- are unsure where their journey will end. A Mr Trumpis not a patient man. Conflict be- ment. Dirandro and FELCN, Bolivia’s anti- programme run by the UN High Commis- tween the presidents seems likelier than drug police, identified hundreds of flights sioner for Refugees (UNHCR) provides a co-operation. Mr López Obrador will prob- in the first half of this year but seized only humane model. Itmovesmigrantsfrom Ta- ably reject Mr Trump’s request for Mexico six planeloads of drugs, partly because of pachula, where jobs are scarce, to Saltillo, a to classify itself as a “safe third country”, the time it takes to scramble helicopters. town in Coahuila near the American bor- which would make it nearly impossible for Sometimes the narcs’ perseverance der, which has a labour shortage. Working Central Americans to seek asylum in the beats the smugglers’ ingenuity. Last Octo- with factory owners, UNHCR gives the ref- United States. Mr Trump has cut aid to ber Mr Loayza’s agents found 1.3 tonnes of ugees a two-week integration course, then Central America by20% andwantstoslash cocaine that had been shaped into irriga- leaves them to their own devices. Five- it further. He still wants a wall between the tion pipes. But such successes are excep- sixths ofthem remain in Saltillo. The agen- United States and Mexico. IfMrTrumpgets tions. FELCN and Dirandro each interdict- cy is setting up another unit in Guadalaja- his way,Mr López Obrador will have to fig- ed only around ten tonnes of coca-based ra, and hopes to relocate up to 5,000 refu- ure out on his own how to care forAlberto, products in the first halfof2018. gees next year. But the programme would Gabriela and others like them. 7 Marco Ibáñez, FELCN’schief, complains have to be much bigger to resettle the bulk that his force of 1,400 agents is about “one ofrefugees. agent per airstrip”. Policing Bolivia’s Mr López Obrador has given little sign The war on drugs 1,000km (620-mile) border with Peru, as of how he means to handle the influx. His well as its 3,300km border with Brazil, is a election manifesto called for a stronger Unlikely allies “struggle”. Both agency chiefs plead for border, but also for protection of migrants’ more manpower. Even more important, rights. The current government says it they say, would be authorisation to shoot wants asylum-seekers to be able to work down suspected drug flights. “All we need while it processes their claims, a measure is the green light, and the next day” smug- LA PAZ AND LIMA that the president-elect favours. Alejandro glers will abandon the air bridge, says Mr Peru and Bolivia have different Solalinde, who advises him on migration, Loayza. He points out that, in 2016, traffick- attitudes, but similarstrategies told El País, a Spanish newspaper, that ers mistakenly thought that two aircraft Mexico should convert its 50-odd deten- N THE early 1980s Peru’s government had been shot down. The drug flights “dis- tion centres, from which migrants are de- Ifounded Ciudad Constitución to be the appeared fortwo months”, he says. ported, into welcoming shelters. capital ofthe country’s Amazon region. To- If the governments had their way, their Nor is it clear what will come of Mr Ló- day, it serves as the capital ofPeru’s war on agents would get that tool. Bolivia ap- pez Obrador’s discussions with Mr Trump. drugs. Clandestine airstripsetched into the proved a law in 2014 that allows air inter- During the election campaign, Mr López jungle make the area a hub for smugglers. diction. The defence minister, Javier Zaba- Obrador said he would not do the United They form part of an “air bridge”, with leta, said in July this year that it would be States’ “dirty work” on Mexico’s southern small planes flying in from Bolivia to pick implemented as soon as a new radar sys- border, implying that he would just let mi- up cocaine paste or refined cocaine, stop- tem was operational. Peru passed a similar grants head to the United States. Since his ping in Bolivia to refuel and then heading law in 2015. election in July, the two nationalist leaders to Brazil, from which the drugisdispatched In fact, neither country is likely to shoot have been gettingalongwell. Theyhave ex- to Europe. A single plane can carry 300kg down drug flights. The United States has changed letters. The American president is (660lb) ofcocaine, worth some $350,000. been opposed to the tactic since 2001, said to have nicknamed his soon-to-be Peru and Bolivia, which co-operate to when Peru mistakenly downed a plane Mexican counterpart “Juan Trump”. disrupt the air bridge, are an odd anti-drug carryingAmerican missionaries. The Euro- In his letter to Mr Trump, Mr López duo. Peru is a partner of the United States, pean Union will dissuade Bolivia, to Obrador proposed a plan to stem migra- from which it gets $120m a year to fight the which it gives €35m ($40m) a year in anti- narcotics trade. Bolivia’s president, Evo drug aid. Shoot-down laws violate inter- Morales, once led a coca growers’ union national law, wrote Alonso Gurmendi The Trump effect and in 2008 expelled the United States’ Dunkelberg, a legal scholar, last year. Be- Migrants apprehended by the United States Drug Enforcement Administration. Both sides, the practice would encourage armed on its border with Mexico, ’000 countries allow some coca cultivation (for groups to chaperone drug shipments over- traditional uses like chewing). Bolivia land, spreading criminality. 70 2016 nearly doubled the area on which farmers A better idea, until drugs are legalised, 60 can grow coca to 22,000 hectares in 2017. would be to strengthen co-operation be- 50 The United States has “decertified” Bo- tween Peru and Bolivia. Peru, for example, 40 livia’s anti-drug programme every year does not share intelligence. The United 2018 2017 30 since 2008 and contends that Bolivia, like States could encourage teamwork, by treat- Venezuela, has “failed demonstrably” to ing Bolivia not as an enemy, but as an ally 20 carry out international and American in the drug war. 7 10 drug-control policies. Yet Peru is the bigger 0 producer. It grows enough coca to make Correction: In an article about cannabis in Canada (“The high street”, August 4th) we described Nova Scotia as a JFMAMJJASOND 410 tonnes of cocaine a year, while Boliv- Source: US Department of Homeland Security north-eastern province. In fact, as many readers ia’s potential is 275 tonnes. Most of the co- pointed out, it’s in the east, but not northern. Sorry. 36 Middle East and Africa The Economist August 18th 2018

Also in this section 37 Abiymania in Ethiopia 37 Togo’s president clings to power 38 Europe’s mistakes in the Arab world 39 The Gulf crisis spills into Afghanistan 39 Ugly art in Egypt

For daily analysis and debate on the Middle East and Africa, visit Economist.com/world/middle-east-africa

Injustice in Kenya ofa drugoverdose, even theorisingin court that bruises to his groin were caused by Who will police the police? vigorous oral sex. Such convolutions point to deep-seated problems within many of Kenya’s new watchdogs. The state bodies they oversee are too powerful and have little incentive to co-operate. Policemen who kill or injure NAIROBI suspects are meant to report themselves to Efforts to tackle official corruption and police brutalityare failing in Kenya IPOA, but because there is no punishment INDING evidence of police brutality in Activists blame internal divisions and ifthey do not, few bother. Evidence is often FKenya should not be too tricky. Ama- poor investigative skills for some of its destroyed, while officers refuse to testify teur footage of officers shooting suspected shortcomings. After police raided a house against those being investigated, an IPOA crooks in the back of the head is shared on during last year’s election violence and al- official complains. social media. Vigilante police groups post legedly beat to death a six-month-old in- Self-preservation hampers progress photographs of suspects they have killed, fant, IPOA failed to identify the culprits. In- too. Kenya’s president, Uhuru Kenyatta, or intend to kill, on Facebook. “Let them stead it recommended a judicial inquest, largely selected the panel that chose have their time in hell,” one officer wrote which often takes years to complete. IPOA’s board. The body’s budget, like beneath an image ofa bloody corpse. those of other oversight bodies, is set by Yet since starting work six years ago, See something, say nothing parliament, which the ruling party domi- Kenya’s police watchdog has managed to IPOA has a poor record on witness protec- nates. Going after the powerful and politi- secure convictions against just three offi- tion, too. In 2015 three officers visited the cally connected is risky. cers, despite receiving nearly 10,000 com- home of Josephat Mwendwa, a motorcy- So IPOA has restricted itself mainly to plaints ofabuse. The Independent Policing clist who complained to the authority that investigating low-ranking policemen, just Oversight Authority (IPOA) was among a he had been shot and wounded by the po- as Kenya’s anti-corruption commission raft of state institutions established under lice. “We will kill you and your body will has generally gone after fairly small fry. It Kenya’s constitution of 2010. The new dis- never be found,” the officers allegedly told has a higher conviction rate than IPOA, but pensation was meant to make the country him. Six months later the mutilated of the 26 officials convicted in the year to fairer and less corrupt after 1,400 people corpses of Mwendwa, his lawyer and the June 2017, nearly half had stolen less than were killed, hundreds by the police, in a taxi driver who had driven them to court $100. The commission’s former chairman disputed election three years earlier. were found in sacks by a river. They had reckons that $6bn is stolen from the gov- Little has changed. Corruption scan- last been seen in a police cell. Such inci- ernment’s budget every year. The recent dals abound and inequality persists, even dents inevitably deter complaints. detention of prominent officials has excit- as Kenya grows richer. When the country IPOA’s relationship with the police it- ed Kenyans. But no politician of note has returned to the polls last year, 92 people self is troublingly fraternal. In June an in- been charged and cases are often dropped died, according to a government-appoint- quest ruled that Alexander Monson, a when the media’s attention wanes. ed commission. Most were killed by the young Briton, had been beaten to death by Politicians have little interest in ending police, who were also accused of mass the policemen who detained him on suspi- a system from which they benefit. So it is rape and torture. cion of possessing cannabis in 2012. The hardly surprising that Kenya’s constitution IPOA was a bold creation. When it was Monson case was IPOA’s first investiga- is not robust enough to stem corruption. formed, there was only one police watch- tion, and the body hailed the ruling as a tri- “These laws and institutions were not dog in sub-Saharan Africa. Yet its paltry umph. Yet it had previously backed ten- created to actually address the underlying conviction rate has disappointed many. dentious police claims that the Briton died problems,” says Patrick Gathara, a com-1 The Economist August 18th 2018 Middle East and Africa 37

Ethiopia Abiymania

ADDIS ABABA Ethiopians are going wild fortheirnew prime minister EMAHEGN GESHAYEhas peddled More than 90% ofthose surveyed by Sbooks near the national theatre in WAAS International, a local research Addis Ababa foreight years. But business firm, have a favourable view ofMr Abiy, has rarely been this brisk. “Anything who has released thousands ofpolitical that’s about Abiy Ahmed is popular,” he prisoners and apologised forpolice says. A flurry oftitles about Ethiopia’s brutality. Buta visitor to the capital could new prime minister has hit the shelves be forgiven forthinking the number is since he tookoffice in April. One best- even higher. Songs with titles like “He seller, called “Moses”, compares Mr Abiy Awakens Us” ring out on the airwaves. to the prophet. Another professes to be Street boys hawkstickers, posters and an insider account ofhis meteoric rise. T-shirts featuring Mr Abiy. Addis Ge- The two most popular were written bremichael, who runs a corner shop near under a pseudonym by the prime min- the central square, says he sold 1,500 such ister himself. The last copies of“The shirts in a single day when a big rally was Stirrup and the Throne”, his meditation staged forMr Abiy in June. on leadership, sold out in the capital Abiymania is also infecting Eritrea, weeks ago. “We badly need that book,” with which Mr Abiy has just made peace. grumbles a bookshop owner. “People are Eritrean women promise to name their Togo’s president always bothering us forit.” first-born sons after him. A clothes shop in Asmara, the capital, has dedicated a Tough to unseat fashion line to him. Some Christians believe he was sent by God. His name alludes to the Easter fasting season, they note, and he rose to power during Lent. Ethiopia’s state media behave slavish- LOMÉ A yearafterprotesters nearly toppled ly towards the prime minister, obsessive- him, Faure Gnassingbé clings to power ly covering his appearances and seldom airing critical views. Mr Abiy himself WO weeks ago sword-wielding sol- never gives interviews and has yet to Tdiers flanked the red carpet as the lead- hold a press conference. Non-state outlets ers of the Economic Community of West complain that they are no longer invited African States (ECOWAS) filed into a fancy to official press briefings. hotel in Lomé, the capital of Togo, for a But there are signs that Mr Abiy’s two-day summit. Gendarmes closed off a honeymoon is ending. At the rally in June chunk of the city. Traders in the market an attempt was made on his life. This griped about a slowdown in business. The month federal troops clashed with local streets fell silent. security forces in Ethiopia’s Somali re- Last Septemberthose same streets were gion, triggering tit-for-tat killings and packed with thousands of protesters call- displacing thousands. Graffiti reading ing for the president, Faure Gnassingbé, to “FuckAbiy” were later seen in the region- step down after 13 years in power. (His fa- al capital. Ethnic violence has recently ther, Gnassingbé Eyadéma, led Togo for 38 escalated in his own region ofOromia. years before that.) The country was in tur- The government’s response has been moil. Ultimately, the government offered Mr Abiy, parting the waters feeble. Mr Abiy may be human after all. concessions, including a promise to hold a referendum on presidential term limits. Mr Gnassingbé’s departure seemed possible. 2 mentator. “They’re there forshow.” slashed and judges have been intimidated. Yet little has changed. Mr Gnassingbé There has been one exception. Kenya’s Kenya’s government is gaining the up- (pictured) is still unpopular, but he clings to judiciary was once known for its pliancy per hand over those who might hold it to power thanks to a crackdown on activists, and crookedness. But in recent years it has account. But there has been little pushback who have been killed, tortured and impris- shown its mettle. Last year the Supreme from the public. The killing of protesters— oned. Many others have fled. Court overturned Mr Kenyatta’s election hardly covered by Kenya’s once indepen- The opposition was relieved this and ordered a rerun. The ruling embold- dent media—is welcomed by many in the month when the government, under the ened other judges, who have struck down middle class, who fear instability will un- threat of more protests, abandoned plans bad laws. dermine the economy. The murderofcrim- to hold a legislative election. It almost cer- A purge of corrupt judges 15 years ago, inal suspects is similarly applauded. tainly would have been rigged. With a less presidential involvement in appoint- Judges who challenge the government are push from ECOWAS, the poll has been re- ments to senior courts and doggedly inde- dismissed as partisan and frequently vili- scheduled for December, after reforms are pendent chief justices are some of the rea- fied. “Our rulers are getting away with made to the electoral system. But the oppo- sons for this improvement. But, having what they want because we are letting sition fears there is too little time—and mo- made enemies in government, the courts them,” says a lawyer. “We are getting the tivation—to make big changes. The elector- face pressure too. Their budgets have been government we deserve.” 7 al commission and constitutional court, 1 38 Middle East and Africa The Economist August 18th 2018

2 which must verify the results, are full of for regime change has grown in the north, ButMrMacron thinksitwill help keep Afri- government cronies. No one is in a rush to once a government stronghold, thanks to can migrants offFrench soil. update the voter register. the efforts of Tikpi Atchadam, a charismat- The EU set a precedent in 2016 when it Left unanswered is the question of ic northern politician who has since fled to asked Turkey’s authoritarian president, Re- what to do about Mr Gnassingbé. Last year Ghana. The opposition promises to hold cep Tayyip Erdogan, to limit the number of he reneged on the promise ofa referendum more protests soon. migrants crossing the Mediterranean. He which, if successful, would have intro- Last year ECOWAS placed troops on the got €6bn in aid and visa-free travel to the duced a two-term limit for the presidency. borders of Gambia and threatened to in- EU for some of his citizens. “Arab states Mr Gnassingbé said the rule would not ap- vade when its former dictator, Yahya Jam- saw there was a kind of hysteria, and they ply retroactively anyway,leavinghim eligi- meh, tried to hold onto power after losing knew they could play that card too,” says ble for two more terms (he is already in his an election. Togo is more stable. Paul Melly an official at the European External Action third). The opposition is adamant that he of Chatham House, a British think-tank, Service, the EU’s diplomatic corps. should not be on the ballot for the next says other African leaders regard Mr In June the Speaker of Egypt’s parlia- presidential election, in 2020. Gnassingbé as “rational and statesman- ment, Ali Abdel Aal, led a delegation to Despite the repression, Jean-Pierre Fa- like”. But ifhe does not implement reforms Brussels. His government holds thousands bre, the leader of the opposition, says his or decides to run for more terms, they may of political prisoners and is the world’s movement is stronger than ever. Support change their opinion. 7 number-three jailer of journalists. Ques- tioned about this, Mr Abdel Aal offered a laughable defence. Locking up bloggers Europe and the Arab world and activists, he argued, would mean fewer negative stories about Egypt, and thus Anything to stop the migrants more tourists. Pressed further, he turned to a familiar argument. Egypt is a country of 97m people just 220 miles from the EU. The threat was obvious: ifyou thought the Syri- an refugee crisis was bad, imagine what would happen ifEgypt collapsed. BRUSSELS AND CAIRO Such scaremongering is effective. The European countries are repeating past mistakes in the Arab world EU has offered only tepid criticism of UCH of Syria lies in ruins, but Bashar Brussels. Politicians from Germany and Egypt’s army-backed government. Until Mal-Assad’s bureaucracy of repression Denmarkhave visited regime-held Syria to this summer, none of it was aired publicly. hums along. Earlier this year a pro-opposi- assess if it is “safe”; the anti-immigrant Al- Britain and France have welcomed the tion website published a list of Syrians ternative forGermany party says it is. president, Abdel-Fattah al-Sisi, for official wanted by the regime. The database is In Libya, where EU members helped visits. Even Italy is pursuing closer ties—de- both staggering in scope—1.5m people, or overthrow Muammar Qaddafi in 2011, spite the death in 2016 of an Italian gradu- 7% of the pre-war population—and incom- they now work with warlords to round up ate student in Cairo, who was probably plete. Jamil Hassan, the head of the air- migrants. Italy has paid off local militias, killed by the police. “The EU is acting like force intelligence service, is said to have which hold migrants in abysmal condi- the juniorpartner,” complains an Egyptian told senior officers in July that he wants to tions. Torture and rape are common. activist. “Even Trump is tougher on Egypt.” arrest twice that number. On August 9th France’s president, Emmanuel Macron, The conditions that sent millions of Ar- another regime official announced that wants Libya’s feuding factions to hold elec- abs across the Mediterranean still exist. 100,000 Syrians have died of “unknown tions in December. He claims it will stabil- Egypt’s population is young, poor and rest- causes” since 2017. Many were tortured to ise the country. It is more likely to shatter a less. Militias in Libya today can be just as death in Mr Assad’s dungeons. Yet Euro- fragile UN-backed transition and boost brutal asMrQaddafi’sregime was. And Mr pean politicians are debating whether to Khalifa Haftar, the strongman who rules Assad, needless to say, is not a stabilising send refugeesbackto thisbloodyoubliette. the east. The EU’s own election observers force. The EU might succeed in sending Seven years ago, when Arabs revolted say the vote will be too unsafe to monitor. some refugees home. More will come. 7 against their autocratic rulers, European leaders engaged in a collective mea culpa. Decades ofworking with dictators had not created a stable, prosperous Arab world. From now on, democracy and human rights would be the cornerstones of the European Union’s Middle East policy, they vowed. But the high-mindedness was short-lived. Driven by a fear of migrants, European governments have once again embraced strongmen. Without a political transition in Syria, the EU refuses to help the regime rebuild the battle-scorched country. But some member states, eager to see refugees go home, want to do it anyway. Russian diplomats have offered to help repatriate migrants in exchange for construction materials and money, and the proposal is getting some attention in European capitals. “It’s going to be very difficult to keep the con- sensus on this issue,” admits a diplomat in Quick, put a strongman in their way The Economist August 18th 2018 Middle East and Africa 39

The Gulf crisis Art in Egypt Competition over Busted

Kabul CAIRO As the police lockup artists, the state commits crimes against good taste CAIRO HEDIVE ISMAIL looms large in Egyp- prizewinning author, and Umm Gulfstates are vying fora role in tian history. During his16-year rule Kulthum, a celebrated singer. After the America’s longest war K the 19th-century Ottoman pasha mo- revolution of2011a new crop ofartists EXT month the American war in Af- dernised the country, laying down rail- tooktheir workto the masses. Theatre Nghanistan will pass a surreal mile- ways and irrigation canals that remain in troupes performed in publicsquares and stone. The army will begin recruiting sol- use today. Astatue ofhim towers over a colourful murals went up across Cairo. diers who were not yet alive during the square in Ismailia, the city that bears his But the army-backed government that attacks of September11th that led to the in- name. When the current governor or- seized power in 2013 views art, like all vasion. For most Americans, the conflict is dered workers to spruce up Ismailia, they free expression, as a threat. Since Febru- all but forgotten. Not so for America’s clos- naturally repainted the sculpture. But ary police have jailed at least a dozen est allies in the Middle East, who have sud- they did so with gaudy coats ofblack and artists, according to Human Rights Watch, denly taken a fresh interest in it. The Gulf silver. Even his eyes got an eerie metallic a pressure group. A poet was sentenced monarchies are sending more troops and glow. The great pasha now looks like a to three years in prison fora book that vying for a role in peace talks. But their in- character from a low-budget cartoon. has not even been published. A director volvement probably says more about their Egyptians are proud oftheir rich and playwright received suspended own internal squabbles than about Af- culture. Statues and reliefscarved in sentences foran “unauthorised” perfor- ghanistan’s future. antiquity draw millions oftourists. In the mance. Though ostensibly secular, the Before this summer’s NATO summit in 20th century Egypt produced cultural government also enforces stifling moral- Brussels, both Qatar and the United Arab icons like Naguib Mahfouz, a Nobel- ity laws. A belly-dancer was detained in Emirates (UAE) offered to send troops to February for exposing too much flesh. train the Afghan army. The UAE, which al- That leaves Egypt’s bumbling bu- ready had 200 men in Afghanistan, will in- reaucrats to play culture commissars, crease that by nearly a third. (Qatar’s con- with predictable results. In 2015 the lead- tribution is unclear.) The numbers are ers ofSamalut, 200km south ofCairo, trivial. The extra Emiratis will increase the wanted to install a statue at the city gates. total NATO-led training mission by about They commissioned a replica ofone of 0.4%. Still, even a symbolic contribution Egypt’s best-known works: the striking might carry weight with America’s tran- bust ofNefertiti carved in 1345BC, her sactional and temperamental president. slender features topped by an imposing The Gulfstates have been vying for Do- blue crown. The replica was grotesque. nald Trump’s attention since last June, Instead ofa healthy reddish glow, the when three of them—Saudi Arabia, Bah- queen’s skin was a sickly yellow, her eyes rain and the UAE—imposed an embargo on closed and her face blemished. Qataroveritscontrarian stances. At firstMr Mockery is not (yet) illegal. Egyptians Trump supported the blockade. Then a se- compared the Nefertiti statue to Franken- ries of Saudi missteps, such as detaining stein’s monster. When a statue ofUmm Lebanon’s prime minister, made the Kulthum (pictured) was painted in 2016, Americans nervous. The administration is many said she looked like Princess Fiona, now more neutral. All four Gulf states are a cartoon ogre from the movie “Shrek”. trying to curry favour, signing big arms The Nefertiti statue came down and deals with America and spending millions Umm Kulthum has been restored. But on Washington lobbyists. Afghanistan is more ugly art, commissioned by the the latest arena for this contest. She sings so high that birds explode government, remains on display. After years of negotiations, the Taliban opened a diplomatic office in Doha in 2013. It got off to a shambolic start. The group ition last month when America’s top en- groups within the Taliban, which has be- had promised not to fly its white flag or call voy for South Asia met Taliban members come more divided since the death in 2013 itself the “Islamic Emirate of Afghanistan”, in Doha, the first such meeting in years. ofits longtime leader, Mullah Omar. the name it used when it ruled the country. The Saudis have their own history with Qatar, unsurprisingly, calls the Saudi ef- It did both and within days the office was the Taliban. They helped to arm the Af- fort a distraction. The Doha office “is still temporarily closed. Qatar’s rivals cited the ghan mujahideen in the 1980s, and their the onlyplatform fortalks”, saysan official. Taliban’s presence in Doha to justify the government was one of the few to recog- The Afghan government is more enthusi- blockade. Yousef al-Otaiba, the UAE’s am- nise Taliban rule. In recent months they astic. It is nervous about America talking bassador in Washington, said the office have tried both to delegitimise the group directly with its foe and hopes Saudi-led was an example of how Qatar “funds, sup- and to win its trust. The imam of Mecca’s negotiations will give it a seat at the table. ports and enables extremists”. grand mosque called the Afghan conflict a In March the Afghan national-security ad- Years earlier, though, the Emiratis vied fitna, a religious term forpointless strife be- viser, Hanif Atmar, said the kingdom was to host that same office. And despite the tween Muslims. Weeks later the Saudi- “best placed” to host a peace process. troubled start, ithasbecome a vital conduit based Organisation of Islamic Co-opera- American diplomats dismiss all this as for negotiations. Last year a pair of retired tion held a peace conference with clerics slightly absurd: if the Gulf states cannot American officials began shuttlingto Doha from dozensofcountries. Atthe same time, even resolve their own dispute, how will for informal talks. Their effort came to fru- Saudi officials have reached out to splinter they help end a 17-year war? 7 40 Asia The Economist August 18th 2018

Also in this section 41 US-Philippines relations: an old sore 41 Afghanistan: the battle for Ghazni 42 India’s misunderstood police 43 Banyan: Deceptive calm in Korea

For daily analysis and debate on Asia, visit Economist.com/asia

Malaysian politics man rights than UMNO did. (Mr Najib’s henchmen often bullied journalists, activ- Mahathir’s second act ists and others.) However, the prime minister rules in the way he knows. He favours the advice of cronies, as well as of an un- elected council ofbigwigs selected by himself. His autocratic style can make people jump. Last month all the board members KUALA LUMPUR ofKhazanah Nasional, the country’ssover- The new administration bows to a political veteran’s old ways eign-wealth fund, resigned after he criti- T IS about 100 days since the leadership abolition of an unpopular goods-and-ser- cised their investment strategy (he said Iof Malaysia changed hands after 61 years vices tax (GST); and the reintroduction of they were not doing enough to help firms of rule by one party. The electoral victory certain fuel subsidies. PH had promised an owned by ethnic Malays). in May of Pakatan Harapan (PH), a co- investigation into whether megaprojects Despite hisself-deprecatingjokes about alition of parties, startled many people in involving foreign countries were worth his dictatorial style, Dr Mahathir is clearly Malaysia and beyond. The upset also sur- the money. The result: infrastructure deals, reluctantto share powerwith others. Butat prised PH itself. Mostmembers of the cabi- including pipelines built with Chinese least superficially, he has reduced the re- net are still struggling to get the hang of help and a high-speed rail project planned sponsibilities that previously accompa- what being in power entails. Malaysia’s with Singapore, have either been can- nied his job. Before he took over, the prime nonagenarian new prime minister, Ma- celled or cut back. minister was also the minister of finance hathir Mohamad (pictured), is an excep- But there are headwinds. Scrapping the and supervisor of the election and anti- tion. He already has plenty ofform as a na- GST will mean a fall in revenue: it brought corruption commissions. Now Lim Guan tional leader. in 45bn ringgit ($10.5bn) last year. This Eng, a Chinese-Malaysian who once ran Dr Mahathir had previously run the could be partly remedied by a new sales the state of Penang, is finance minister and country for more than two decades as a tax which the government plans to intro- the two commissions have been placed leaderofthe United MalaysNational Orga- duce in the comingweeks, and which is ex- under the oversight ofparliament. nisation (UMNO), the party which until pected to be less onerous on consumers Mr Lim’s appointment is an unusual the election had dominated Malaysian than the GST. High oil prices might also move for Dr Mahathir, widely regarded as politicssince independence from Britain in help meet the budget shortfall, since the a champion of Malays and other indige- 1957. He had even mentored his ousted pre- government sucks up royalties from the nous groups (who make up 69% ofthe pop- decessor, Najib Razak, who now stands state oil firm, Petronas. But there will still ulation) and the privileges accorded to charged with graft, abuse of power and be fiscal pain, reckons Yeah Kim Leng of them in Malaysia’sconstitution. In a nod to money-laundering. Back when its success Sunway University in Kuala Lumpur. the multiracial policies of PH’s dominant atthe pollsseemed mostunlikely, PH made parties, the country now also has an eth- bold pledges about what it would achieve The old man’s old style nic-Indian attorney-general, the first non- in office. Butthe disparityofexperience be- Because of the inexperience of his cabinet, Muslim to hold the post. tween the fledgling ministers and their Dr Mahathir has, in effect, become chief of However, the new government is un- grizzled leader is hindering its efforts. everything. This creates a bureaucratic likely to attempt radical reforms to racial The new administration has made at bottleneck as he ponders investigations policies that favour indigenous people, for least some progress in most of the areas in into 1MDB, diplomacy (he has already tak- example in admission to public universi- which it had promised early results. These en two trips to Japan and is due to visit Chi- ties and recruitment for government jobs. include action against Mr Najib and others na on August 17th) and ways of boosting The ruling coalition hangs together in part over the scandal at 1MDB, a state invest- economic growth (expected to be about 5% because all ofits parties have agreed to up- ment fund from which $4.5bn disappeared this year, down from nearly 6% in 2017). hold this system. Politicians ofevery stripe during the previous administration; the PH vows to show greater respect for hu- fear a backlash from ethnic-Malay voters 1 The Economist August 18th 2018 Asia 41

2 should their privileges be curtailed. the minimum wage and introduce a already wondering about its next leader. But civil-society activists are disap- health-care scheme for the poor. Bureau- Dr Mahathir has promised to give the job pointed that the government has failed to cratic resistance may be partly to blame. within two years to Anwar Ibrahim, a for- remedy what they regard as relatively sim- Last month the head of the civil service or- mer UMNO colleague who was locked up ple problems relating to human rights. For dered senior officials to identify saboteurs both by Dr Mahathir and by Mr Najib on example, it has yet to fulfil a pledge to re- loyal to the old regime in their depart- spurious sodomy charges. Mr Anwar was peal oppressive laws, such as one passed ments. Dr Mahathir is trying to replace freed from prison shortly after the election by the previous government to combat 17,000 political appointees who served un- and leads the most prominent party in the “fake news”. The Sedition Act, used to der Mr Najib. But Isham Ishak, the most se- coalition, Parti Keadilan Rakyat. More re- prosecute government critics, also remains niorcivil servant atthe MinistryofInterna- cently, Dr Mahathir has said that letting Mr in place. The government has made little tional Trade and Industry, worries that a Anwar take over after two years was only progress towards meeting another pro- “trust deficit” will remain between new “a suggestion”. But if he does step down in mise, outlawing child marriage. leaders and their minions. the proposed time frame, Dr Mahathir Neither has it made much headway Overall approval ratingsforthe new ad- does not have long to enact the policies he with other commitments, such as to raise ministration remain high. But Malaysia is cares about. 7

Philippine-American relations Afghanistan’s endless war A peal for friendship Rude awakening

MANILA Church bells mayheal old warwounds HE last time any ofthe bells ofthe Now America is planning to return TChurch ofSt Lawrence the Martyr the bells to Balangiga. James Mattis, rang out in the central Philippine town of America’s defence secretary, is expected The Taliban flaunt theirstrength Balangiga was in 1901. Spain had ceded to sign an order to that effect. There may the Philippines to America three years be opposition to the move in Congress, OME time after midnight on August earlier. Filipino independence fighters but there are more powerful forces at S10th, residents of Ghazni, a large town regarded American soldiers first as libe- workthan historical memories. Al- straddling one of Afghanistan’s busiest rators to be welcomed, but later as invad- though America and the Philippines road arteries, awoke to the rattle of intense ers to be resisted. In Balangiga, about 500 have taken different approaches to Chi- gunfire. By morning it was clear that an in- men ofthe town, some disguised as nese expansion in the South China Sea— vading force of Taliban fighters had women, attacked the occupying soldiers the formerconfrontational, the latter reached the city centre. Only after four as one ofthe bells tolled. The attackers conciliatory—both countries have an days of fighting, the dispatch of 1,000 Af- killed 48 Americans and wounded 22, interest in strengthening their alliance in ghan army reinforcements and some three letting only fourescape unharmed. It was the face ofthis challenge. dozen air strikes by American warplanes the bloodiest defeat forAmerican forces The Church ofSt Lawrence the Martyr did the Taliban withdraw. since Custer’s last stand, and Philippine has a modern belfry standing empty, Residents of the city of 250,000 have forces’ biggest single victory in their war ready to receive the bells ofBalangiga. been burying the dead and sweeping up. to prevent America from replacing Spain After117 years, modern geopolitics may The UN estimates civilian casualties at 110- as their colonial master. soon allow them to ring out over the 150. The American-led coalition that props In retribution, the American com- town once again, this time in peace. up the Afghan government said its air raids mander in the area ordered his men to alone had killed over 200 Taliban fighters. turn that part ofthe country into a “howl- Losses among government forces may ing wilderness” and kill every male have been as high as 100. Several govern- Filipino over the age of10. American ment offices were destroyed or damaged. soldiers seized the church bells and The deeper damage was not to lives or burned down the town. Nobody quite property but to the dwindling prestige of knows how many Filipinos were killed, the Afghan government. The Taliban’s but the number was probably in the brief capture of Ghazni repeated its feats thousands. The church bells ofBalangiga earlier this year in the western town of Fa- thus became symbols that stir powerful rah, and last year in the northern city of emotions among Americans and Filipi- Kunduz. The difference is that Ghazni lies nos alike, even today. The two countries just 150km (90 miles) from the capital, Ka- are allies, but the question ofpossession bul, along the main road linking it to the ofthe bells ofBalangiga still festers. south. The guerrillas sauntered in from “Those bells are reminders ofthe several sides of the city, despite plenty of gallantry and heroism ofour forebears forewarnings about a possible move. This who resisted the American colonisers suggested arrangements for its defence and sacrificed their lives in the process,” were, to say the least, lacklustre. Philippine President Rodrigo Duterte said Reuters quoted a Taliban source as say- last year. “They are part ofour national ing the attack was “to convey a message to heritage. Return them to us. It pains us.” the Americans, their allies and the puppet The bells are also painful reminders to government in Afghanistan that if we Americans, especially ex-service person- want, we can target them any time and nel, who have resisted previous efforts to anywhere.” And if the strike on Ghazni restore them to the Philippines. In an air-force base in Wyoming, for now was meant to show the fragility of the government in Kabul, other recent events un-1 42 Asia The Economist August 18th 2018

2 derlined it further. At the same time, gov- recent incidents ofmob lynching that have them. Contrary to impressions of laziness, ernment forces lost another 70 lives to shocked India, perpetrators have repeat- Indian police tend to be overworked. A na- separate Taliban attacksacrossthe country. edly explained that they had to take the tional surveyin 2014 found that90% ofoffi- On August16th a suicide-bombing, widely law into their own murderous hands be- cers worked longer than eight hours a day, blamed on Islamic State rather than the Ta- cause the police were absent or unreliable. and 73% got no more than one day off per liban, struck a training centre in a Shia dis- Callous and incompetent? When a seven- week. Researchers say the recent introduc- trict ofKabul, killing around 50 students. year-old boy was murdered in the bath- tion ofeight-hour shifts in the state ofKera- Despite the grim toll, however, more room of a private school last year, police in la and for city police in Mumbai has radi- hopeful signs are emerging. The Taliban a Delhi suburb forced the lower-caste con- cally improved morale. have hinted at a temporary ceasefire to ductor of a school bus to confess and Police also spend much energy doing mark Eid al Adha, the Muslim feast cele- closed the case. Weeks later a court-or- things other than fighting crime. Akshay brating the end of the Mecca pilgrimage, dered reinvestigation used previously ig- Mangla of Oxford University reckons that beginning on August 21st. A similar pause nored CCTV footage to reveal that the killer in the state of Madhya Pradesh, election over the previous Eid, in May, produced had been an older student. duties alone take up between a sixth and rare scenes of fraternisation between Tali- Are police in the pockets of powerful an eighth of all police time. This does not ban and government forces. There is also politicians? Consider that Delhi police an- just mean providing security to campaign talkofplans fora second, more substantive swer not to the city government but to the rallies, orprotectingballotboxesin endless round of negotiations between American home ministry, run by the rival Bharatiya rounds of polls. Rules intended to prevent and Taliban envoys, following initial con- Janata Party of the prime minister, Naren- corruption or political bias require that as tacts in Qatar earlier this year. 7 dra Modi. The city’s ruling party is Aam many as half the higher-ranking officers in Aadmi. Since winning Delhi’s election in the state must be transferred to a new dis- 2015 it has complained ofcontinuous petty trict before every major election. Police in India harassment. Among other things, police The administrative structure of the raided one official’s home and then force has changed little since the British Politicians’ pets charged him forpossessing a bit more alco- Raj. Some two-thirds of police are lowly hol than is permitted by the arcane Delhi constables, typically with little training, Excise Act. Courts have thrown out 19 out limited equipmentand no powersto arrest of 22 cases filed by Delhi police against or investigate. At the pinnacle stand the Aam Aadmi’s senior members. 5,000 members of the Indian Police Ser- DELHI But while lurid press coverage makes it vice, a national corps that before 1920 was The shortcomings ofIndia’s police are easy to spot police shortcomings, it does staffed only by British officers. Selected via not entirelytheirfault less to explain them. Talk to policemen competitive exams, these elite officers rare- VERY summer across north India, mil- themselves and the reasons for poor per- ly stay in a post more than two years, but Elions of Hindu youths honour Lord Shi- formance become clear. There are, to start enjoy housing, transport and other perks. va by travelling to the sacred Ganges to col- with, too few of them. Excluding paramili- Between them and the lowest-ranking po- lect holy water for anointing the Shiva tary forces and riot squads—and including licemen are officers in various state police lingamsin theirlocal temples. The pilgrims only those in active service rather than the forces who hold full responsibility for travel on foot and use a wooden yoke or number that governments, for budget pur- everyone junior but enjoy no influence kanvar to balance two small buckets. But poses, claim are working—India’s ratio of over their pampered superiors. “Basically though the sight of orange-clad kanvarias ordinary policemen per 1,000 people is they have not invested in middle manage- on country roads is picturesque, the scene just 1.2, about half the level recommended ment,” says Mr Mangla. Indians may remember best from this by the UN. By the government’s own reck- One frustrating result is that police sta- year’s Kanvar Yatra took place in the oning, the country has 600,000 too few of tions are often reluctant to issue First Infor- crowded heart ofDelhi, India’s capital. mation Reports (FIRs), the necessary be- Mobile-phone footage captured a gang ginning to most legal action in India. Mr of kanvarias smashing a small passenger Mangla explains that since the perfor- car to pieces and then tipping it over. Yet it mance metricthatgetsreported upwards is was not this sudden fury—provoked, ap- the proportion of FIRs that a station inves- parently, by the driver causing one man to tigates and closes, “there is every incentive spill some water—that shocked Indians. to keep this denominator low.” What rankled most was seeing two armed, Complaints about India’s police are crisply uniformed police officers wander nothing new. Successive national commis- into the melee and watch, makingno effort sions since the 1970s have urged a range of to stop the methodical demolition ofsome reforms, which have largely been ignored. poor citizen’s property on a busy street. A report in 2018 by the Commonwealth India’s 1.9m policemen do not, by and Human Rights Initiative, an NGO, mea- large, enjoy a good reputation. It is easy to sured compliance by Indian states with six understand why. Asimple glance at recent separate directives on police reform issued news clips substantiates a range of com- by India’s Supreme Court in 2006. Not a plaints. Are police corrupt? Consider that single state had fullycomplied. Small won- public rage over extortion by traffic police dermanyIndianshave concluded thatpol- has prompted the state of Uttarakhand to iticians are unwilling to reform the police, forbid its finest to carry more than 200 ru- because the force serves the interests of pees ($2.85) in cash. Brutal? A high court politicians perfectly well. The police agree. has just ordered an independent investiga- One state’s police chief recently asked offi- tion into the killing by police gunfire, in- cers to rank their top three problems. In as- cluding from sniper rifles, of 13 people at a cending order, they were poor communi- peaceful protest against the pollution cations inside the force, lack of manpower caused by a copper smelter. Ineffective? In At least their uniforms are spotless or resources—and meddling politicians. 7 The Economist August 18th 2018 Asia 43 Banyan Peril in smooth waters

Tensions have subsided on the Korean peninsula. Dangers still abound pore: an agreement to work towards a stable and lasting “peace regime” on the Korean peninsula? In their declaration, that came above the commitment to abandon nuclear weapons. In North Korean-speak, peace regime means the replacement of the armi- stice that suspended the Korean war with a full peace treaty. For American negotiators, who know their president had the wool pulled over his eyes in Singapore, things look different. They know that the “denuclearisation” agreed to in Singapore means, in North Korean eyes, the removal of all American forces from the Korean peninsula, alongwith the American nuclear um- brella under which South Korea is currently sheltered. A “peace regime” implies the same thing. Yet in the absence of a timetable forabandoning the North’s nukes, along with clear steps for veri- fication, “denuclearisation” is meaningless—and a peace treaty an unwarranted, even risky, giftto the North. Early this month the American ambassador to South Korea, Harry Harris, a former chief of American forces in the Pacific, said that any discussions aboutan official end to the Korean warshould begin with a North Korean declaration ofwhere its nuclear facilities are. Yet since the Singapore summit, North Korean negotiators have refused to declare the extent of their nuclear weapons, let FTER a summer lull, the whirlwind of North Korea-centred alone discuss dismantling them. Indeed, satellite evidence sug- Adiplomacy that marked the first halfofthe year is about to re- gests the North is continuing to develop them. Vox, an American sume. This week officials from North and South Korea met at the news website, reports that in the latest discussions in Pyongyang truce village of Panmunjom in the demilitarised zone on the bor- Mr Pompeo proposed that North Korea hand over 60-70% of its der and declared that their leaders would meet, forthe third time, warheads(thoughtto numberup to 60 in total) within sixor eight in Pyongyang, the North Korean capital, next month. Kim Jong months. Whatever Mr Pompeo asked for, he returned empty- Un, the North’s dictator, and Moon Jae-in, the South’s president, handed. North Korea called his demands “gangster-like”. first met only in April. It all represents an extraordinarily rapid The Americans are in a fix. The sanctions designed to punish change following previously frozen relations—and North Korean Mr Kim for his missiles and that helped bring him to the table risk nuclear belligerence. unravelling. China was a key enforcer. For a year or more until Mr Kim’s nuclear and missile tests, which he suspended late early this summer, China backed a ratcheting-up of sanctions. last year, infuriated China, the North’s historical protector, as Now it is in a full-blown trade war with America, it feels less in- much as they unsettled the South. Yet President Xi Jinping has in- clined to support America over North Korea. Mr Xi’s appearance vited him to China on three occasions this year, and he may hon- in Pyongyang would suggest that economic ties are on the mend. ourMrKim with a visitto Pyongyangaround the time of the 70th- Already, sanctions-busting business across the border with Chi- anniversary celebrations of the communist state’s founding on na is growing. Russia is not helping either. Since last September, September 9th. Nothing has been announced by the secretive over 10,000 North Koreans have been registered to work in Rus- states. Yet the sudden cancellation of Chinese tourist visits to sia—in contravention ofa UN ban. North Korea, the announcement of a “renovation” of all of Meanwhile, what its backers in South Korea call the North- Pyongyang’s hotels, plus a crackdown on smuggling along the South “peace train” looks to others like a runaway one. Mr Moon two countries’ border, suggest preparations fora high-level visit. is a strong backer of the North’s calls for a peace treaty. His pro- South Korea and China represent two of Mr Kim’s opponents mise on August 15th of road and railway links with North Korea in a four-way chess match. His most important challenger is the speaks to his hopes of shared prosperity. But it generated unease United States. He isdoingwell there too. PresidentDonald Trump in Washington. Mr Moon has long pushed the idea oftwo Koreas still luxuriates in the memory of the two men’s made-for-televi- co-existing peacefully. At times he seems to envisage a confeder- sion pageant in Singapore in earlyJune. MrTrump declared ita tri- ation, with the Kim dynasty still in charge of the North, and the umph forpeace on Earth, and tookthe credit. Yet Mr Kim tookthe labour camps presumably still full ofpolitical prisoners. limelight, holding Mr Trump in his hand. His next stage may be at the UN General Assembly in New York in late September. An in- Until the next tantrum vitation to the White House still stands. For now, thanks to Mr Moon, South Korea has skilfully averted Yet for Mr Trump’speople, all is not well. So far, the post-sum- open disagreement with the United States over North Korean mit diplomacy led by the secretary ofstate, Mike Pompeo, has lit- matters. Yet South Korean and American interests are undoubt- tle to show. The North claims that quite apart from its morato- edly diverging. Before long, Mr Trump might interpret that as a rium on nuclear and missile testing, it has dismantled an under- personal betrayal by Mr Moon—with unpredictable conse- ground nuclear site and returned the supposed remains of 55 quences. He might, one day, even have to acknowledge that his American soldiers missing in action during the Korean war of new friend Mr Kim has strung him along—and react with fury. 1950-53. Such goodwill now deserves an easing of American-led With sanctions a less effective tool, a military option—the so- UN sanctions, it feels. Above all, why no American good faith in called “bloody nose”—could appeal again. For all the sunny di- discussingan important aspect ofthe Kim-Trump accord in Singa- plomacy, danger still runs deep on the Korean peninsula. 7 44 China The Economist August 18th 2018

Also in this section 45 A war against homework 46 Re-education camps for Muslims

For daily analysis and debate on China, visit Economist.com/china

Reform experiments terparts in other communist-ruled countries by flexibly adjusting policy in order to Feeling the stones satisfypublic demands forgreaterprosper- ity. The pilot system has been an important means of achieving this. There are signs, however, that it is losing steam. In the past, the central government was sometimes ready to devolve considerable LINYING power in order to promote experiments UnderXi Jinping, China is losing its creativitywith reform experiments with reform. Take the “special economic TANDING at the edge of a field where State media say that farmers have put al- zones” (SEZs), which the party set up along Shis soyabean crop will be harvested in a most 17,000 hectares, or half of the coun- the southern coast in the 1980s. In these, lo- month’s time, Liu Xijiang gives a tepid re- ty’s farmland, into the land bank. Much of cal officials were given extraordinary lee- view to a local experiment with rural land this has now been consolidated into large way to approve foreign investments, grant reform which the central government is farms, which are proving more profitable tax breaks and waive price controls. Their promoting as a great success. “It’s a good than smallholdings. experiments succeeded in producing rapid idea and it’s working well enough, but in Though it brooks no dissent and has a economic growth. They were, in effect, the reality it doesn’t make all that much differ- taste for strongman politics and central- pilot projects for the market-oriented poli- ence to most of us,” he says. The experi- ised leadership, the Communist Party has cies that helped China become the eco- ment in Linying, a county in the central shown an admirable willingness to let nomic giant it is today. province of Henan, relates to one of Chi- small areas of the country try out reforms Araftofotherexperimental reforms fol- na’s biggest policy conundrums: how to let before they are introduced nationwide. lowed elsewhere, including the introduc- farmers squeeze more value from the tiny These local experiments with reform have tion of stock exchanges and greater toler- parcels ofland allocated to them than they been cited by some Western scholars as ex- ance of private enterprise. Xu Chenggang can earn by farming it themselves. amples of China’s “adaptive authoritar- of the Cheung Kong Graduate School of Officials resist the obvious solution— ianism”. This is a way of describing the Business in Beijing says that in the first letting them sell it, build on it or rent it out party’s ability to avoid the fate of its coun- three decades ofthe reform era, which was for other purposes. That, they fear, might launched by Deng Xiaoping at a meeting lead to an unacceptable loss ofarable land. of the party’s Central Committee in De- But in 2014 the central government began Trepidation cember1978, nearly all the main economic allowing localities to test ways of helping China, number of provincial-level policy pilots changes began as local pilot schemes. farmers to sell the right to use their land for “Crossing the river by feeling the stones” 600 agricultural purposes. (Many places had Xi Jinping was how reformists described the process becomes leader been quietly allowing this anyway.) Own- 500 (contrary to common belief, there is no re- ership would remain, in effect, in the cord ofDeng having said this). 400 hands ofthe state, which allows farmers to This year, with relentless fanfare, China use land on renewable contracts. 300 has been trumpeting the 40th anniversary Linying county, in China’s agricultural 200 of Deng’s reforms. But in what the party heartland, responded by establishing calls the “new era” under Xi Jinping, the what officials called a “land bank”—a gov- 100 current leader, officials show less enthusi- ernment-run intermediary between farm- 0 asm forcreative experiments. ing households and investors who want to 2010 11 12 13 14 15 16 The land bank in Linying is one undertake over farmers’ contracts and work the Source: “Leninism upgraded: Xi Jinping’s authoritarian whelming example. For each mu of land land on a bigger and more efficient scale. innovations”, by S. Heilmann, China Economic Quarterly (about one-fifteenth of a hectare) that he 1 The Economist August 18th 2018 China 45

2 rents out through the land bank, Mr Liu, ists are often consigned to classified publi- her son’s tutoring, about one-fifth of her the soyabean farmer, receives 900 yuan cations (a widely read one among the elite household’s monthly income. ($130) yearly. That’s roughly what he could iscalled ReformInternal Reference—the fort- Many Chinese schoolchildren do well earn from farming. But the money from the nightly magazine is marked “secret”, academically. In the latest Programme for land bank is guaranteed, even in years of which means that showing it to unautho- International Student Assessment (PISA) poor harvest. He gets it without any la- rised eyes could result in years in jail). Even test, held in 2015, Chinese 15-year-olds in bour, which gives him time to work in when state media are given permission to some cities did better in science and maths town. That provides about 3,000 yuan a discuss pilot schemes, they often gloss than their counterparts in most members month, his main income. “But the truth is, over any flaws. Public opinion is routinely of the OECD, a club mostly of rich coun- we’ve always been able to find people to ignored. “This should involve more civil- tries. Yet Chinese officials worry that pu- rent to on our own. Less paperwork, no society participation,” says Cui Zhiyuan of pils’ achievements may exact too heavy a one interfered and the result was the Tsinghua University in Beijing. But Mr Xi mental and physical price. In July the Min- same,” he says. Early in Mr Xi’s rule, which has been even tougher on civil society istry of Education released its first “com- began in 2012, there was speculation that than his predecessors. He has tried to prehensive quality assessment” of the more profound change in the rural land strengthen the party’s control over NGOs country’s primary- and junior-high school system might be in the offing, possibly al- and suppress those that argue with the education. The unusually critical tone of lowing farmers to sell at least some of their government. Experimentation in this area the 26-page report has been causing a stir land. Not much has happened. is something he will not accept. 7 among China’s online commentators. Even before Mr Xi tookover, the pace of One concern the document raises is experimentation had been slowing. Sebas- that pupils get too much homework. The tian Heilmann of the University of Trier in Education ministry reckons that nearly one in ten pu- Germany reckons that the number of pro- pils in the penultimate year of primary vincial-level policy pilots declined from Taming the tigers school spend more than two hours on Chi- around 500 in 2010 to about 70 in 2016 (see nese-language homework alone, every chart on previous page). Over the same school day. Even before the report was period, the share of national regulations published, some education authorities with experimental status dropped from had been trying to lighten workloads. In nearly 20% to about 5%. March, forexample, primary-school pupils The government sounds the alarm over But the decline is partly the result of Mr in the eastern city of Hangzhou were told stressed-out schoolchildren Xi’s hardline rule. This has been a surprise by their teachers to stop doing homework to many observers, given the reformist cre- IN MING, a ten-year-old who has two at 9pm if they were unable to complete it dentials ofhis late father, Xi Zhongxun. (As Lyears left at his primary school in Bei- by that time. Junior-high school pupils party boss of Guangdong province, the el- jing, does not remember the last time he re- were given until 10pm. der Mr Xi oversaw the founding of the turned home before 6pm on a weekday Another, related, problem is that Chi- most important SEZ, Shenzhen.) The youn- during term. As soon as school is out, his nese pupils are out of shape. Nearly a fifth ger Mr Xi’s ruthless crackdown on corrup- mother, Yang Mei, shuttles him around the of nine-year-old boys and 13-year-old girls tion and demands for unswerving loyalty city, dropping him off at tutoring agencies are overweight or obese, says the report. to himself as the leadership’s “core” have where he studies advanced maths and That is partly because many schools, often spread fear among bureaucrats. Few want English grammar. Ms Yang accepts that she under pressure from tiger parents, teach to risk the unwanted attention that might is “maybe putting a bit too much stress” on more sessions of core subjects like maths result from reforms going badly. Mr Heil- her son. But she has no choice. “Around and Chinese than is required by the educa- mann says the central government has 90% of my son’s classmates attend after- tion ministry, bumping physical-educa- also become less open to input from be- school lessons. It’s a competition I can’t tion classes. From now on, however, low. “Experiences and initiatives put for- lose.” When the newacademicyearbegins schools will be evaluated not only on how ward by various regions tend to be ig- next month, Ms Yang estimates that she well pupils do in academic tests but also nored” under Mr Xi’s more centralised and will spend 3,000 yuan ($435) a month on on their athletic ability, based on their per-1 personality-based leadership, he says. Local trials are still being carried out. The decision by China’s legislature earlier this year to establish a national anti-corruption agency, for example, followed the successful piloting of such bodies in the provinces. In 2016 experiments were launched with innovative public-private ownership structures at some of the country’s largest state-run enterprises. Last year five pilot “green finance zones” were established in various parts of the country. These are intended to try out markets for the trading of water- and energy-use rights and, it is hoped, help banks to lend in an environmentally friendly way. But the growing indifference of the central leadership to feedback from the grassroots is hampering experiments. So too is a problem that long predates Mr Xi’s rule: a culture of secrecy that often shrouds pilot projects, especially in their early days. In- vestigations of them by Chinese journal- Such, such were the joys 46 China The Economist August 18th 2018

2 formance in challenges such as 50-metre sprints and standing long-jumps. Muslims Yet the ministry’s harshest criticism is reserved for schools and tutoring agencies And hell is just a sauna that overburden pupils by “teaching BEIJING ahead”—imparting knowledge that is too China suggests its re-education camps forUighurs are just vocational schools advanced for a given age group. Zhang Ling, the head of Ben Jen kindergarten in URING the past year campaigners, that it simply “had not heard” ofthe Beijing, suspects that most nursery schools Dacademics and journalists have situation they described. in the city use materials that are designed been shedding light on the detention for As it becomes harder to keep the mass for the first or second years of primary “re-education” ofvast numbers ofethnic- detentions under wraps, Chinese offi- school. That will no longer be allowed. Uighur Muslims in China’s far-western cials will probably grow both franker and In July the ministry ordered kindergar- province ofXinjiang. On August13th the pricklier about their behaviour. In an tens nationwide to focus on “fun and topic was raised at the UN, when experts editorial published on August13th, Glo- games” in the classroom. Fun inspectors undertaking an audit ofChina’s policies bal Times, a tabloid with close links to the will be dispatched later this year to enforce towards ethnic minorities said they had party, accused the West oftrouble-stir- this. Ms Zhang, who says her kindergarten heard that as many as1m Uighurs are ring. It insisted that the party’s strategies was already in compliance, welcomes the being locked away. HuLianhe, a Commu- had successfully prevented Xinjiang from greater scrutiny. She says she can now nist Party official flown in forthe hearing, turning into “China’s Syria”. It declared wave an official document at parents who said allegations that the party was send- that “all measures” were acceptable in insist that their children be exposed to too- ing Uighurs to indoctrination camps the name ofensuring peace and stability, advanced academic fare. were “completely untrue”. He explained which it called “the greatest human To ensure that tutoring outfits do not ofthat some petty criminals in Xinjiang right”. This month Radio Free Asia, an fer “unsuitably” stretching courses, the were being assigned to “vocational edu- American-backed broadcaster, published government instructed them in February cation” facilitiesfor “rehabilitation and the transcript ofan audio recording, to provide education authorities with de- reintegration”, but did not say how many. which it said that Xinjiang’s branch ofthe tails of syllabuses and lists of their pupils The party appears to thinkthat oblig- Communist Youth League had produced along with which year they are in at which atory periods offorced instruction, some- in order to help explain the detentions to school. They must also agree to spot in- times lasting weeks or months, are a good the province’s residents. The recording spections. The ministry is cracking down way to tackle the Islamic extremism and asserts that people who are selected for on rogue pedagogues who refuse to teach secessionist thinking that it says threaten re-education are “infected by an ideologi- academic material in school, and instead Xinjiang’s stability. People who have cal illness” that could “manifest itselfat steamroller pupils into attending evening worked or been detained in the centres any moment”. It says that inpatient treat- classes at tutoring centres where the teach- say that inmates have had to sing Com- ment at a “hospital” is necessary to “reers moonlight. This summer 31 teachers in munist Party songs. According to the store their normal mind”. the northeastern city of Harbin received Washington Post, a few have been made In addition to its indoctrination ef- unspecified punishment fordoing that. to consume porkand alcohol. In some forts, the party has deployed a vast sur- Ms Yang, the parent, says the new rules cases they have been subjected to physi- veillance apparatus in Uighur areas of are well-intentioned, but may end up hurt- cal abuse. But Mr Hu’s rebuttal nonethe- Xinjiang, making many aspects ofdaily ing middle-class folk like her. That is be- less provided slightly more detail than life more complex (police are pictured cause those with deeper pockets can al- has previously been volunteered by outside a mosque in Kashgar, a southern wayshire home tutors, who are difficult for officials. In May China’s foreign ministry Xinjiang city). In early August police in the government to monitor, to teach their told reporters who had visited Xinjiang Henan, a province more than 2,500km little ones the advanced stuff. A customer from Xinjiang, said they had imprisoned service agent forXue Er Si, a national tutor- and fined a man who rented rooms to ing chain, says the new restrictions mean three Uighur bakers (his crime, it appears, that classroom-based tutors will have to be was not asking police permission first). more cautious about what they teach. But The Uighurs themselves were tran- she nonetheless reassures parents that the sported to Xinjiang, according to the course content will still be harder than that notice. A citizen who had alerted police found in school textbooks. to their presence was reportedly given a The clampdown on over-eager teachers 2,000 yuan ($290) reward. and out-of-school instructors fails to tackle Muslims elsewhere in China are also the root cause of pupils’ stress, notes Zeng growing nervous. As part ofa broader Xiaodong of 21st Century Education Re- project to “sinicise” religions such as search Institute, a Beijing-based think-tank. Christianity and Islam, authorities in the As long as admission to senior-high province ofNingxia—home to many Hui schools is based on results from the gruel- people, a well-integrated Muslim minor- ling zhongkao exam, parents are likely to ity—have been dismantling mosques’ exploit every loophole to give their chil- domes and minarets and stifling their dren an edge. Typically only the top 60% of calls to prayer. This month officials in the zhongkao-takers secure a spot at an aca- town ofWeizhou abandoned plans to demic school. The rest are shunted to voca- demolish a big mosque they said had tional ones. A better way to reduce stress been built illegally, after a large crowd of for young children, argues Ms Zeng, is to angry Huis mounted a vigil outside. It is scrap entrance exams to senior-high difficult to see how such stand-offs help schools. The education ministry has cor- promote the peace and stability China’s rectly identified a problem. It needs to Any faith you like, as long as it’s patriotic leaders claim to crave. study harder how to solve it. 7 International The Economist August 18th 2018 47

The global arms trade Also in this section Masters of war 48 The United Nations Arms Trade Treaty

The arms market is booming, and tilting in the buyers’ favour NLY a few months ago, Canadians some countries will go on buying Russian comes out on top of all of them. SIPRI has Owere earnestly debating whether or weapons for a while, in the hope they will studied the volume of cross-border weap- not the country’s Liberal administration gradually kickthe habit. on transfers over the five years to Decem- was right to go ahead with executing a Both these developments reflect the vo- ber and compared them with the previous $12bn contract to deliver armoured vehi- latile (and from a Western viewpoint, bare- five years (see chart on next page). cles to Saudi Arabia. The government said ly controllable) state of the global arms The size ofthe world marketrose by10% it would, but acknowledged its critics’ con- market. Total demand is growing, the num- between the two periods. In the more re- cerns by agreeing to adopt a version of an ber of sellers is rising and the Western cent one, America’s slice of this expanding international treaty that limits arms sales countries that have dominated the busi- pie was 34%, up from 30% in the previous to rogues (see box on next page). ness are less confident of shaping the play- five years. America and its five nearest ri- However, things took a different turn. It ing field. Above all, buyers are becoming vals (in descending order Russia, France, was the Saudis who plunged the deal into more insistent on their right to shop Germany, China and Britain), account for uncertainty. After Canada’s foreign minis- around. Forthe likesofIndia, Saudi Arabia, nearly 80% oftotal transfers. ter urged the release of some political pris- Egypt and the United Arab Emirates, “this Britain, meanwhile, claims that last onerson Twitter, the Saudi government de- is a buyer’s market,” says Lucie Béraud-Su- year it jumped to third place among global clared that all new business with Canada dreau ofthe International Institute for Stra- arms exporters, as measured by the value was suspended. This left Canadians un- tegic Studies, a London-based think-tank. oftheirsales. Accordingto the Defence and sure if the kingdom still wants the arms Security Organisation, a government deal. And ifthe Saudis do walkaway, plen- Speak softly and sell a big stick body, America bagged 53% of the global ty of other countries will be happy to sup- The numbers show that the global com- business, its “highest-ever market share”. ply armoured cars. “They could get their merce in conventional weapons is still This left 16% for Russia and 12% for Britain, combat vehicles from Turkey, South Korea dominated by the United States. But Amer- double the share taken by France. or Brazil,” says Pieter Wezeman, a research- ica feelsstrangelynervousaboutmaintain- In part, the jumpiness in Washington, er at SIPRI, a Stockholm-based think-tank. ing that role, and this year it has adopted a DC, stems from the entry to the market of In the United States, meanwhile, Con- more aggressive sales posture. Under a new competitors, especially China. In part gress has been pressing the administration policy proclaimed in April and mapped it reflects new products and technologies to implement the letter ofa law that would out in more detail last month, American where America will struggle to keep its force countries to make a hard, instant diplomats have been told to promote lead. Both these challenges were highlight- choice between buying American or Rus- weapons sales more actively and speed up ed by the appearance at last year’s Paris Air sian weapons. But the Pentagon is hinting procedures forapproving them. Show of a Chinese military drone that that America’s huge diplomatic power At first sight, American apprehensions looked very like the American unmanned does not quite stretch that far. Defence offi- seem puzzling. There are several ways to aircraft that have been used for assassina- cials argue it would be better to accept that measure the arms market, but America tions, for example in Pakistan. Hitherto, 1 48 International The Economist August 18th 2018

it, ifit can get foreign customers. that could ward off potential threats from American-sized portions Such desperation adds to the frenzy of China or Pakistan. Other countries intent Arms* exports by country, % of total market competition. So does the utter in- on continuingto buy Russian include Indo- difference Russia and China display to- nesia and Vietnam. 100 wards their customers’ human-rights poli- Jim Mattis, America’s defence secretary, Others cies. So too does the growth in the number has implored Congress not to be too harsh 80 Britain of countries that have graduated from be- with Russia’s customers, so long as they China France ing mainly buyers of weapons and know- pledge gradually to reduce their reliance. Germany 60 how to sellers—Turkey, the Emirates and In a letter leaked in July to Breaking De- South Korea, forexample. fense, a specialist news service, he told a Russia 40 Japan, which boasts a huge defence in- congressman: “We are faced with a once- dustry, is entirely new to the market. It in-a-lifetime opportunity to decrease Rus- 20 plunged in when the government lifted re- sia’s dominance in key regions.” But that United States strictions on arms exports in 2014. It com- could only happen if America were free to 0 petes, albeit from a fairly weak position, sell its own weapons. For customers, that 2007 10 1517 with China for Asia-Pacific customers. means that for the foreseeable future they Source: SIPRI *Major conventional weapons As for Russia, SIPRI calculates that its can keep both American and Russian share of the global market has slipped (to weapons in their arsenals. 2 America has been willing to share these about 22% in 2013-17). But it offers a blend of It is telling that India has recently been powerful drones only with close European tried-and-tested hardware and, to a few admitted to the Missile Technology Con- allies. A new policy will broaden the range customers, superb know-how, especially trol Regime, a group of countries which of customers and thus lessen the risk that in air defence. promises not to help pariah states obtain China will dominate a market that could That creates a dilemma for America, ballistic missiles. That will make it easier soon be worth $50bn a year. which hopes soon to sell weapons worth for both America and Russia to sell long- China has long been better known as a $6bn to India, but is dismayed by that range rockets to India. The two arms-sales buyer of arms, mainly from Russia, than as country’s determination to acquire S-400 giants, who do not agree on much else, a seller. A big share of its arms deliveries air-defence systems from Russia: missiles have welcomed India into the club. 7 have gone to close allies such as Pakistan. But it has enormously increased its capacity to make and sell its own weapons, in- The United Nations Arms Trade Treaty cluding ships and submarines. Meanwhile, American arms-export Honoured in the breach policy has been a delicate balance between, on the one hand, seizing economic The means exist to regulate the global arms trade and geopolitical opportunity and, on the other, being careful not to share technol- F ALL—or even most—countries abided have pledged to fight on, and were recent- ogies which could destabilise war zones or Iby the letter and spirit ofthe UN Arms ly given the right to appeal. be used against the United States. Trade Treaty (ATT), the world might be The court ruling focused on a narrow But such caution can be counter-pro- rather less grim. Governments that sign question: whether at the time he gave his ductive. At a panel discussion in Washing- up are supposed to halt exports ofweap- approval, the trade minister had reason ton this month, a defence-industry advo- ons ifthey have good reason to think to thinkthat British-made weapons cate lamented that, because of America’s they will be used to flout international would be used to perpetrate atrocities. technology-transfercurbs, France had won humanitarian law. That could cover both Much ofthe hearing was conducted in from it a contract to sell airborne radar to internal repression and waging wars by secret. But in their open arguments, law- India. “I like the French, butI like American inhumane methods. yers forthe government stressed the industry even more,” he grumbled. Every country in the European Union close relations between British and Saudi In another Franco-American contest has ratified the treaty; when it was being militaries, which enabled Britain to have over technology, France is finding it hard to crafted, Britain was a keen advocate. But some say in the selection oftargets. sell more Rafale combat aircraft to its prize Russia and China have stayed out. The Whether that improves Britain’s moral arms customer, Egypt, because the accom- American administration (under Barack standing or makes it seem even worse is, panying Scalp cruise missile incorporates Obama) inked the accord, but it has yet to ofcourse, a matter ofopinion. American know-how, the transfer of be ratified by the Senate and this looks Canada was an unlikely absentee which to third parties is barred. France has unlikely to happen. The treaty, which from the accord. But in a careful pro- promised to develop its own technology, covers everything from tanks to small nouncement last February, itsforeign but Egypt may not have the patience to arms, was opposed by America’s gun minister, Chrystia Freeland, promised wait. Egypt’s government has also been a lobby. Conservative critics in Washing- legislation that would pave the way for keen purchaser of Russian equipment, in- ton, DC, now call it a piece ofliberal her country to join. Critics said there was cluding aircraft and attackhelicopters. Utopianism which would hobble Ameri- a loophole. Canadian-made weapons or For defence-equipment manufacturers ca without reining in its main rivals. parts could still be shipped to America such as Britain and France, export sales The fear ofhobbling may be exagger- and thence who knows where. The bill is matter ever more as a way to maintain ated. A year ago, the High Court in Lon- still being picked over by parliamentari- their own industries. Britain’s edge in mil- don disappointed anti-war campaigners. ans in Ottawa. itary aviation may depend on its sales to It ruled that Britain’s deliveries ofweap- No Western country wants its weap- Saudi Arabia. And the Royal Navy’s ambi- onry to Saudi Arabia were not in vio- ons used to harm Yemeni civilians, and tious building programme got a boost lation ofthe treaty, despite the terrible most democracies crave the respectabil- when Australia said it would buy British civilian casualties in Yemen, where a ity that goes with signing up to the ATT. for a new range of frigates. France wants to Saudi-led coalition is fighting an Iranian- But many balkat breaking ties with the develop a new air-to-air missile, but only, backed one. NGOs that brought the case lucrative arms markets ofthe Gulf. as Florence Parly, the defence minister, put Business The Economist August 18th 2018 49

Also in this section 50 Monsanto’s legal shock 51 Passport queues 51 Japan’s new body suit 52 The Tiger eﬀect 53 Schumpeter: The meaning of Musk

For daily coverage of business, visit Economist.com/business-ﬁnance

The future of computing tered the art of setting up qubits, getting them to operate flawlessly is still an un- Quantum spring solved problem. Since any outside influence, such as vibration or heat, can make these delicate beasts lose their one-and- zero-ness, or “decohere”, they have to be kept in complete isolation (hence the ultra- low temperatures, which slow atoms’ The technology is advancing and attracting investment, but may face a winter movement ). before it enters its summer Errors also need to be detected and cor- OMPUTINGwasprobablyalwaysdes- ginnings of a battle between tech giants rected with the help of many other qubits. C tined to be electronic. Yet even as late such as Google, IBM and Microsoft, which Since large numbers of qubits appear un- as the 1930s, this was not entirely clear. Ear- are vying with each other to attract devel- achievable for at least a decade, the ques- lyin thatdecade VannevarBush, an Ameri- opers onto their respective quantum plat- tion of how quantum computers could be can engineer, built a mechanical computer forms. Some insiders have already started put to practical use had not been on re- with gears, pulleys and shafts rotated by to warn thatthe sectorisgettingahead ofit- searchers’ mindsuntil recently. Thisstarted electric motors. His “Differential Ana- self, predicting a “quantum winter” to change a couple of years ago, when lyser”, which took up a small room, could brought on by unfulfilled promise. hardware-makers managed to build ma- solve equations with up to 18 variables. It would be easy to dismiss excitement chines with more than a couple ofqubits. Quantum computing, which holds the about quantum computing as the start of promise of outclassing even the world’s anotherhype cycle. Butthe technology has Jumping the Q fastest supercomputers, at least for certain huge potential, so it needs to be taken seri- IBM led the wayin 2016 with a 5-qubitcom- types ofproblems, is now at a similar stage ously. Classical computers think in “bits”, puter and then a 20-qubit one in 2017 (pic- in its development. Prototypes are func- which can have a value ofeither 0 or1. Qu- tured above). Its latest “quantum process- tioning but it is not clear what shape the bits are capable of “superposition”, mean- ingunit” (QPU), which wasannounced last machines will eventually take. One big ing they can be in both “states” at the same November, has 50, one qubit more than In- question, for example, is whether “qubits”, time. Anotherkey quantum concept is “en- tel’s. Both were overtaken in March by which are the quantum equivalent oftran- tanglement”. Qubits can be connected, so Google’s Bristlecone, with 72 qubits. Ri- sistors, will live in tiny loops of supercon- that operating on one has an impact on the getti, a startup, recently said that it is build- ducting wire cooled to ultra-low tempera- entangled ones, allowing their processing ing a 128-qubit system (although more tures, be ions trapped in magnetic fields or power to be harnessed in parallel. doesn’t necessarily mean better: some qu- rely on some other technology. The first feature makes for computers bits are more error-prone than others and Even as quantum computers inch for- that have a huge memory. Superposition there are no commonly agreed bench- ward, a lively ecosystem of software start- means that the capacity to store data dou- marks to measure their quality). Mean- ups has sprung up. Big corporations, ven- bles with each qubit. A 64-qubit computer while, classical computers have been get- ture capitalists and national governments has enough memory for 18 quintillion ting better at simulating quantum ones (of are investing, providing the money for a numbers. Entanglement then allows oper- up to around 50 qubits), making it easier to growingnumberofnew firms. “The Quan- ations at lightning speed. Qubits are set up test algorithms and applications. tum Computing Report”, a website, recent- according to an algorithm suitable for a This pace ofdevelopment recently won ly listed more than 70 of them, many of chosen problem; the system applies the the blessing of a luminary of the quantum which aim to write software for the new rules of quantum mechanics until it field, John Preskill of the California Insti- machines (more than a third of them have reaches a state that represents the answer. tute of Technology. “Quantum computers names starting with Q). Reaching this point will be fiendishly with 50-100 qubits may be able to perform This fledgling industry is seeing the be- difficult. Although researchers have mas- tasks which surpass the capabilities of to-1 50 Business The Economist August 18th 2018

2 day’s classical digital computers,” he wrote phasises the heavy usage of Q Experience: hopes that his firm will be established in a paper, calling such devices “noisy in- it now has more than 90,000 users, who enough to be able to “hibernate”. Otherob- termediate-scale quantum” (or NISQ, with have run 5m experiments and published servers of the quantum-computing scene “noisy” meaning that the qubits will re- 110 papers. Hartmut Neven, who heads warn that much ofthe software written to- main error-prone forsome time to come). quantum efforts at Google, says its toolkit day may become obsolete should quan- Big firms are trying to work out what is targeted at “professional programmers”. tum technology take an unexpected turn. quantum computingmightmean forthem, He insists that his team will soon achieve But even if quantum’s spring turns to says Michael Brett of QxBranch, a startup. “quantum supremacy”, meaning it will winter, the chances are high that there will Chemicals giants such as BASF and Dow- show that its quantum computer is able to eventually be a summer. That has hap- DuPont want to understand whether the solve a problem faster than a classical one pened often enough in the past. To use a technology could help them “compute” (a feat critics already call a stunt, because concept developed by Carlota Perez, an the structures of useful new materials, the problem is unlikely to be one of practi- economic historian, revolutionary tech- such as catalysts to reduce the energy used cal relevance). Microsoft, for its part, has nologies always go through a “gilded age”, to make fertilisers. Banks, including Bar- tightly integrated its quantum tools with often accompanied by an investment bub- clays and JPMorgan Chase, hope to use other programming software to make it ble that pops, before entering a “golden them for tasks such as adjusting portfolio easier for classical developers to use them. age” of widespread deployment. There is risk. Games-makers are also interested in Whatever the outcome, none of the little reason to believe that quantum com- using quantum computing to get video- hardware will end up in other firms’ data puting will deviate from that path. 7 games to behave more like the real world. centres, let alone on people’s desktops, in Since quantum talent is in very short the near future. Instead, quantum comput- supply, companies often enrol the help of ers will find a home in computing clouds startups, which play the role of consultan- operated by Google, IBM and Microsoft cies. This brings in money for the new (and also by Amazon and China’s Alibaba, firms and also allows them to acquire the which have smaller quantum pro- intellectual property to develop real soft- grammes). Since the machines will be ware later. Zapata Computing is typical: good only at very specific tasks for many spun out of MIT, its PhD-equipped em- years to come, the firms intend to use them ployees develop programs on paper, mostly as “accelerators”, which will take which “lookmuch like sheet music”, in the over when specifically needed, much like words of Christopher Savoie, its boss. computers with superfast artificial-intelligence (AI) chips today. Quantum harvest Other than these firms, only govern- The field has been well-funded by venture ment agencies are likely to have their own capitalists, with capital inflows reaching quantum computers within the next few nearly $250m last year. Tech firms, too, are decades. National armed forces and intelli- putting in resources. IBM has been work- gence services, notably those of America ingin the area longest. Arvind Krishna, glo- and China, have long funded the field and bal director of its research arm, compares are likely to continue doing so. They worry its efforts to how IBM created a market for that quantum-computing machines might mainframe computers in the 1960s. It start- one day be able to crack the world’s best ed quantum research in the 1970s; in 2016 it encryption, which could give the country Glyphosate and cancer put its 5-qubit quantum computer online that gets there first the capability to decode so others could use it and start writing pro- secret communications or to hackbanks. Bayer beware grams (something it calls Q Experience). It As in AI, China intends to lead the has since designed tools for programmers, world in quantum technology. The coun- helped MIT to develop online quantum try has announced plans to spend more classes and created a network of firms as than $10bn to build a national laboratory well as other universities to explore practi- for quantum science, to open in 2020. This Acourt verdict against Monsanto could cal applications. has triggered efforts in Washington, DC, to have big consequences The competition is not far behind. Last create a “National Quantum Initiative”, month Google released Cirq, a kit of soft- which some observers have compared to T WAS a battle between David and Goli- ware tools. Rigetti has put a machine with America’s nuclear programme of the Iath. On one side was Dewayne Johnson a 16-qubit QPU online. IonQ, another hard- 1940s. The European Union launched a (pictured, above), a former school caretak- ware startup, hasbuilta trapped-ion mach- quantum-research initiative in 2016 and er who is terminally ill with non-Hodgkin ine, which is easier to program. And then backed it with more than $1bn. lymphoma, a blood-cell cancer. On the there is Microsoft. Like IBM, it wants to The flow of government money is al- other was Monsanto, a chemicals giant rebuild an “end-to-end system”, in the words ready such that some venture capitalists cently purchased for$63bn by Bayer, a Ger- of Todd Holmdahl, head of its quantum are complaining about being crowded out. man rival. In the first case of its type, Mr arm. Again like IBM, it offers a “quantum But rising excitement about all things Johnson’s lawyers argued that Roundup, a development kit” and even a special pro- quantum has also fuelled fears that the weedkiller made by Monsanto, had gramming language called Q#. But any field is getting overhyped and that—much caused his cancer. To the industry’s shock, code written in it will have to run on simu- like AI in the 1970sand 1980s, afteritdid not on August 10th the court decided in Mr lation software foryears. Microsoft’squan- live up to its promises—it is headed for a Johnson’s favour, ordering Bayer to pay tum computer is still a work in progress, “winter”; a long period of reduced financ- him $289m in damages. since the firm is betting on an untested but ing and interest. Bayer’s shares abruptly fell by 11% to much less error-prone “topological” qubit. Some startupsare certain thatthere will their lowest level in five years, wiping IBM, Google and Microsoft are spend- be a retreat in a few years and are hedging $11bn offthe firm’svalue asinvestorstotted ing heavily to lure developers and applica- their bets. Michael Marthaler, co-founder up the potential bill from other litigants. tions to theirrespective platforms. IBM em- of Heisenberg Quantum Simulations, Other weedkiller-makers were hit harder 1 The Economist August 18th 2018 Business 51

2 still. Shares in Nufarm, an Australian The aviation business chief executive of Heathrow Airport chemicals firm that makes products simi- (whose chairman, Paul Deighton, is also lar to Roundup, slid by17%. Border-line chairman ofThe Economist Group), has ar- The case centred on whether glypho- gued that more international passengers sate, an ingredient in Roundup, causes can- ridiculous should be allowed to use automated pas- cer. Bayer denies that, and has the backing senger kiosks to speed up processing. But of many. Although the World Health Orga- hisadvisersdoubtifeithersolution ispolit- nisation declared in 2015 that glyphosate ically feasible. Taxpayers are more interest- Growing passport queues are vexing was “probably carcinogenic”, America’s ed in smoothing entry forthemselves than airlines as well as theirpassengers Environmental Protection Agency and the forforeigners. Earlierthis month, for exam- European Union consider it safe to use. HEN weary travellers step off a long ple, Britain’s government was trumpeting Most reputable scientific studies find that Wflight, they want to get off the plane plans for special lanes for British citizens glyphosate poses no risk to humans. Yet and on to their destinations as quickly as after Brexit, which would doubtless wors- there is a correlation between farming possible. But gettingout ofthe airport is been queues foreveryone else. work and incidence of non-Hodgkin lym- coming much more taxing for visitors to Airports are not helpless. In 2014 Dal- phoma. More research is needed to find America and Europe because of lengthen- las-Forth Worth airportin Texaspaid forex- whetherthere is a causal linkto glyphosate ing queues for passport control. Not only tra automatic passport gates to slash queue exposure, or whether it becomes toxic are passengers getting fed up; airlines and sizes. That helped it to win an award from when mixed with other chemicals, says many airports are, too. Airport Council International, a trade Robin Mesnage, a toxicologist at King’s On August13th Virgin Atlanticgrumpily body that represents the world’s airports, College London. published data showing that Heathrow hit for the greatest customer satisfaction of The award to Mr Johnson is so substan- its target for processing more than 95% of any large airport in North America. And tial because his lawyers persuaded the non-EEA passengers within 45 minutes on airlinesaround the world often paya small jurythatMonsanto had known oflinks be- only one day in July, with some waiting up sum per passenger to speed business-class tween glyphosate and cancer since 1983 to 156 minutes. It is not just a blip. Queues customers through special passport-con- and had covered this up. Bayer also denies at Heathrow, Europe’s biggest airport, have trol lanes. Many governments would glad- this. It hopes the ruling will be overturned been growing since 2015 (see chart). In Eu- ly shift the cost of passport checks. Too by an appeal court, where decisions are rope’s Schengen passport area, they have gladly, reckon some airports, who fear the made by judges rather than a jury influ- grown since more thorough checks were entire bill for passport control may eventu- enced by what a company spokesman re- introduced last year owing to the migrant ally be dumped on them. 7 portedly called “junk science” and “emo- crisis. Queues have also increased in tional arguments”. America, where travellers in Boston, New But investors are anxious because even York and Miami often find themselves Start Today if Mr Johnson’s damages are reduced or waiting in line forover three hours. overturned, another 5,000 cases targeting Airlines and airports are starting to Suits you Monsanto are going through America’s le- worry that the queues could discourage gal system. The total cost could hit $5bn, flying for business. Austerity is a primary said Alistair Campbell of Berenberg Bank, cause of the waits, according to Andrew similarin scale to the $4.2bn Bayerpaid out Charlton of Aviation Advocacy, a research TOKYO in the 2000s when its Baycol cholesterol firm based in Geneva. Since the 2007-09 fi- AJapanese firm is shaking up the drug was linked to patient deaths. And a nancial crisis, air traffic has increased and business ofselling clothes online regulatory crackdown on glyphosate budgets for passport controllers have been would not only hit sales of pesticides and slashed. The number of passengers going NE problem plagues the business of weedkillers, but also the seeds that firms through Britain’s airports has risen by a Oselling clothes online—predicting have developed to be used with them. quarter since 2012, for example, but its bor- how a garment will fit without trying it on. Bad as this all sounds for Bayer, there is der force’s budget has fallen by a tenth. Behemothssuch asASOS, a British internet a silver lining. The case, and others like it, America’s international passenger num- platform that sells its own and others’ ap- could hand big chemicals companies an bers have risen three times faster than its parel, try to overcome this by allowing advantage, says Jason McLinn of Bain & border-patrol budget in the same period. people to buy several sizes to try on at Company, a consultancy. Extra testing of The plea from airlines and airports is home and return items free of charge—at chemicals to avoid legal cases, even when for governments to spend more on man- huge cost to them. Enter the body-mea- regulators have approved a substance, will ning passport kiosks. John Holland-Kaye, surement suit from Start Today, a Japanese push up the cost of developing new ones; firm that runs the “Zozotown” platform in that cost will be harder for smaller firms to Japan on which clothing companies from bear. Worries about indiscriminate pesti- Business, no pleasure around the world sell their wares, as well cide use could also encourage greater Heathrow Airport, non-EEA* passengers as its own private label, Zozo. take-up of precision techniques, which big through passport control in under 45 minutes In the pastthree monthsStartToday has firms have invested in. Average, % distributed to just over 1m Japanese cus- European farmers, meanwhile, fret that 100 tomers, free ofcharge, its “Zozosuit”, a skin- the judgment will embolden France, 95 tight, full-body suit covered in around 350 Target which wants to ban glyphosates in the EU. 90 fiducial markers, small objects that can be On August 11th its environment minister used as a point of reference for measure- declared the “beginning of a war” against 85 ments. Shoppers slip on the suit and slow- the chemical. Farmers do not have a wide 80 ly rotate as their smartphone takes photos. choice of pesticides that are both cheap 75 The firm uses the images to create a 3D and effective. They and their workers are scan of their body, which it can use to offer most exposed to glyphosate’s possible 2012 13 14 15 16 17 18 a range of customised services. Among dangers; but they will also face a financial Sources: Heathrow Airport; *European these are made-to-measure business suits hit should it be outlawed. 7 Border Force Economic Area formen from itsZozo brand, which are sell-1 52 Business The Economist August 18th 2018

Sport and the media Out of the woods

NEW YORK TigerWoods’s resurgence is a boon to golf, sponsors and broadcasters ROAR like this had not been heard on Mr Woods to use its clubs. Nike, which Aa golfcourse foralmost a decade. It stood by Mr Woods in the bad times, has was the sound offans cheering on Tiger a valuable clothing deal with him. Woods as he made crucial putts, pumped All these firms will be winners from his fist and almost won a big tournament, his resurgence, even as sponsors of his the USPGA Championship, on August competitors will be deprived ofscreen 12th. Although Mr Woods finished sec- time, says JeffGreenfield ofC3 Metrics, ond there were cheers and fist-pumps an advertising-data firm: “The cameras off-camera, too, from networkexecutives are all on Tiger because the networks are and his sponsors. They know that Tiger is not dumb.” back, and they know, too, that that is very There will be other winners. Discov- good for business. ery has announced a streaming service to No individual athlete has as outsized show American golftournaments out- an impact on the popularity ofhis sport side America, beginning next year. A as Mr Woods when he is in contention at rejuvenated Mr Woods will help sell that a tournament. Nearly 8.5m Americans product. Broadcast networks will be able tuned in to watch the USPGA’s final to earn more foradvertisements. “We’re round, according to Nielsen, a research going to see rates surge like crazy,” Mr outfit which measures viewership. That Greenfield says (by at least 35%, he reck- was 73% more viewers than forthe same ons). They should enjoy the Tiger effect day a year ago, when Mr Woods did not while it lasts. He is 42 years old. When he Doubles as clubwear take part. It was the biggest audience for fades again, so will the fans’ cheers. the tournament since 2009, the last time 2 ing strongly, and jeans and T-shirts that fit Mr Woods had a chance to win it (anoth- most snugly from tens ofthousands of pre- er second-place finish). cut patterns, also from Zozo. At the most That was just before his epic fallfrom basic level, when customers choose an grace—from front-page hero, a winner of item from one ofthe 6,400 brands listed on 14 major golfchampionships, to lurid Zozotown—the core of Start Today’s busi- tabloid fodder over reports ofserial ness—the platform uses the Zozosuit data infidelities, the break-up ofhis marriage to recommend the right size. and estrangement from some ofhis A first, more high-tech version of the oldest friends in professional golf.He lost suit proved too expensive (it had capaci- most ofhis endorsement deals, with tors holding an electric charge that mea- firms such as AT&T and Procter & Gam- sured body shape by how much the suit ble. When he tried to return, injuries set stretched). But its latest version costs the him back. He had fouroperations on his company only ¥1,000 ($9) a piece. Masa- back. Many doubted he would ever win hiro Ito, a board member who oversees en- again, including Mr Woods himself. gineering at the firm, says the fashion in- Fans are not the only ones drawn to dustry has not yet adapted to meet the his comebackstory (even ifsome rel- needs of a generation accustomed to buy- ished the downfallthat preceded it). ing everything online, to their specifica- Sponsors have begun to bet again on Mr tions and at their convenience. “We offer Woods. In 2016 Bridgestone Golfsigned a exactly that,” he says. Othercompanies are multi-year deal with the golfer. The chief watching closely. Fast Retailing, a giant executive ofBridgestone at the time which owns the UNIQLO brand, is one compared Mr Woods to Muhammad Ali firm looking at ways to measure the body and Michael Jordan in global appeal. Last using smartphones. year TaylorMade sealed a contract with Burning bright again How the suit fares is crucial for Start To- day’s future. The Zozotown platform is the undisputed giant ofonline fashion retail in thing in the past 12 months). Its share price suitto help them buyclothesfrom the Zozo Japan. It created and dominates the market dipped sharply in July aftergrowth slowed label. An attempt a few years ago to take for online clothing sales; the second big- slightly. Bespoke services could attract the Zozotown platform into China, Hong gest platform, Marui Web Channel, makes more customers, especially men, who Kong and South Korea (before it came up only a tenth of its sales. It takes lucrative make up only around 30% of active users, with the body-measurement suit) failed. cuts of up to around 35% from brands it reckons Osamu Yamada, an independent Mr Ito notes that Zozotown could not com- hosts; its founder and boss, Yusaku Mae- retail analyst. pete then with existingcompanies offering zawa, is now Japan’s18th-richest person. Observers are more circumspect about more or less the same products; for now at But analysts reckon it may be reaching whetherthe suit can help Start Today on its least, the suit is a unique service. But the saturation point. The company counts 6% other path to growth: expanding abroad. company will still have to work harder of the country’s population as active users Since July customers in 72 countries have than it does at home to persuade people to (meaning those who have bought some- been able to request a body-measurement squeeze into it. 7 The Economist August 18th 2018 Business 53 Schumpeter Life on Mars

Elon Muskhas pushed his firm to breaking point—and reinvigorated the public company rivals, despite trying to automate production. The firm is trying to compete in an industry that has abysmal returns on capital, as the late Mr Marchionne loved to point out. Cloaked in the glitter of Silicon Valley but facing a grimy fight with Detroit, Tesla’s position is stretched on every dimension. Its valuation of $70bn, including net debt, implies that sales will be six times bigger in a decade and is acutely sensitive to changes in assumptions. To justify it, Tesla says it can lift production fast. In the long run it would need to have about a 3% share of the global car industry by revenues to support its value. Today it is at 0.6%. Losses mean the firm has $11bn of debt, $3bn of which matures before 2020, leaving it vulnerable to dips in confidence. This high-wire act has led over 20 executives to leave in the past 24 months. Meanwhile, the tech boom has made life difficult for Wall Street’s short-sellers, leading them to escalate their attacks on Tesla, an easy target. And the price signal sent by Tesla’s valuation has stimulated a response. Conventional car firms are piling into EVs—by 2020 there will be dozens ofnew models. Somehow, MrMusk must keep the plates spinning. There has been nutty conduct, from a wild interview with Rolling Stone to his slandering of a diver in the Thai cave rescue. But more reveal- HENElon Muskstarted Tesla in 2003 the world wasa differ- ingishishyperactive rummagingfora plan thatreinvents Tesla or Went place. The carnage ofthe dotcom crash was still visible— changeshowitisperceived. In 2016 itboughtSolarCity, an energy although Mr Musk had made $200m after PayPal, which he co- firm. In July it said it would build a huge factory in China. Mr founded, was bought by eBay in 2002. The car industry was Musk is giving detailed short-term guidance (he expects a profit belching out fumes and complacency. General Motors had dou- next quarter). On August 7th he tweeted that he might take Tesla ble the number of staff it does now. Chrysler was being run into private at $420 per share (the price was $342 the day before) and the ground by Daimler, its then owner. Sergio Marchionne, who that funding was secured. Later, he clarified that he expected half later saved Fiat and Chrysler, was a nobody toiling at a Swiss in- of outside shareholders to stay invested, and that Saudi Arabia’s dustrial-testing company. In 2010 Tesla floated its shares. Going sovereign-wealth fund might help him out. That may have been public was the obvious thing to do. No one had heard of “uni- insufficiently solid to back up the tweet; the Securities & Ex- corns”—multi-billion-dollar tech firms that are financed privately. change Commission has reportedly sent subpoenas to Tesla. A stifling orthodoxy then held sway in corporate America. In- Going private sounds rather like a sabbatical from reality. It is spired by Warren Buffett and Jack Welch, a former boss of Gen- far from clear what it would solve. The circus around Tesla is eral Electric, this doctrine held that the only attractive businesses mainly due to Mr Musk, not to how public securities are regulat- were well-established ones, with a high marketshare, a “moat” to ed. For loyal shareholders a deal might mean part-financing a protect them against competition and lavish cashflows. Even the buy-out of a minority of investors at a premium, and after that, new tech darling of those years, Google, which floated in 2004, less liquidity and transparency. Any new investor would be pay- conformed to this conservative ideal. It made a profit in its first ing 50% more than they would have spent buying shares in May, quarter as a listed firm, invested peanuts and, by 2010, controlled which should make even the indisciplined Saudis think twice. If the search market. Meanwhile, passive investing was taking off. the private plan flops, Tesla’s likely destiny is a soggy share price Its premise was that it was pointless to back individual compa- and a long struggle to ramp up production. At a lower valuation a nies—better just to own the entire market and go to sleep. big car firm might eventually buy it or take a stake. At first, MrMusk’s approach to runninga public company was exhilaratingly different. He persuaded institutional investors Look at those cavemen go such as Fidelity and Baillie Gifford to make huge bets on his loss- Entrepreneurs often have it tough—Charles Goodyear went to a making firm. Its mission was outlined in a 2006 “Masterplan”: to debtor’s prison before patenting a process to vulcanise rubber in make the internal-combustion engine extinct by mass-producing 1844. But Mr Musk may not have the stomach for more years of electric vehicles (EVs). When sales of Tesla’s Model-S sedan took slog. In a 2006 memo he named SpaceX, hisprivate rocketfirm, as off in 2013, its shares soared. Tesla’s public listing complemented his day job. What he might view as a disappointment would be a its brand-building efforts. Fanatical customers lined up to give success by any other standard. Even if Tesla’s shares halve, it will Tesla deposits in order to reserve cars that it had not yet built. have created $20bn ofshareholder wealth, including $4bn forMr But somewhere along the line this liberated spirit has Musk. Its soaring ambition has kindled investment across the car morphed into a crusade or a tragedy or a farce, depending on industry, in a process of disruption first described by Joseph your view. Mr Musk, who thrives by stoking expectations to ex- Schumpeter, after whom this column is named. Thanks in part to cess, is partly to blame. So is the tech boom, which Tesla has got Mr Musk’s example, it is fashionable again for an elite of public caughtup in, promptingcomparisonswith Apple orAmazon. But firms to invest heavily, including Netflix, and Amazon in recent Tesla has little in common with these firms. It is capital-intensive, years. Most boardrooms now are less obsessed with defensive enjoys no network effects and has no breakthrough technology hoarding. Mr Musk has tested the limits of the public firm, but he (Panasonicsupplies its batteries). It also has higherunit costs than has reminded America ofits possibilities, too. 7 54 Philosophy brief Liberal thinkers The Economist August 18th 2018

was no longer useful in practice. What the state should leave to individual initiative, and what it should shoulder itself, had to be decided on the merits ofeach case. In makingthose decisions, he and other liberals had to contend with the threats of socialism and nationalism, revolution and reaction. In response to the Labour Party’s growing political clout, a reform-minded Liberal government had introduced compulsory national insurance in 1911, which provided sickness pay, maternity benefits and limited unemployment assistance to the hard-working poor. Liberals of this kind saw unemployed workers as national assets who should not be “pauperised” through no fault oftheir own. This cadre of liberals believed in helping those who could not help themselves and accomplishingcollectivelywhatcould not be achieved individually. Keynes’s thinking belongs within this ambit. He dwelled on entrepreneurs who could not profitably expand operations unless others did the same, and on savers who could not improve their financial standing unless others were willing to borrow. Neither group could succeed through their own efforts alone. And their failure to achieve John Maynard Keynes their purposes hurt everyone else, too. How so? Economies produce, Keynes Was he a liberal? said, in response to spending. If spending is weak, production, employment and income will be correspondingly feeble. One vital source of spending is investment: the purchase of new equipment, factories, buildings and the like. But Keynes worried People should be free to choose. It was theirfreedom not to choose that troubled that private entrepreneurs, left to their John Maynard Keynes own devices, would undertake too little N 1944 Friedrich Hayek received a letter spending ofthis kind. He once argued, pro- Ifrom a guest of the Claridge Hotel in At- In this series vocatively, that America could spend its lantic City, New Jersey. It congratulated the way to prosperity. Certainly, countries Austrian-born economist on his “grand” 1 John Stuart Mill could underspend their way out ofit. book, “The Road to Serfdom”, which ar- Earlier economists were more san- 2 Alexis de Tocqueville gued that economic planning posed an in- guine. They believed that, if the willing- sidious threat to freedom. “Morally and 3 John Maynard Keynes ness to invest was weak and the desire to philosophically, I find myself”, the letter save was strong, the interest rate would fall 4 Schumpeter, Popper and Hayek said, “in a deeply moved agreement.” to bring the two into alignment. Keynes Hayek’s correspondent was John May- 5 Berlin, Rawls and Nozick thought the interest rate had another role. nard Keynes, on his way to the Bretton Itstaskwasto persuade people to part with 6 Rousseau, Marx and Nietzsche Woods conference in New Hampshire, money and hold less-liquid assets instead. where he would help plan the post-war Money’s appeal, Keynes understood, economic order. The letter’s warmth will he stated that “there is social and psycho- was that it allowed people to preserve surprise those who know Hayek as the in- logical justification for significant inequal- their purchasing power while deferring tellectual godfather of free-market ities ofincomes and wealth” (although not any decision about what to do with it. It Thatcherism and Keynes as the patron forsuch large gaps as existed in his day). gave them the freedom not to choose. If saint ofa heavily guided capitalism. Why then did Keynes advocate Keyne- people’s demand for this kind of freedom But Keynes, unlike many of his follow- sianism? The obvious answer is the Great was particularly fierce, they would part ers, was not a man of the left. “The Class Depression, which reached Britain in the with money only if other assets seemed ir- war will find me on the side of the educat- 1930s, shatteringmany people’s faith in un- resistibly cheap by comparison. Unfortu- ed bourgeoisie,” he said in his 1925 essay, managed capitalism. But several of nately, asset prices that were so very low “Am I a Liberal?”. He later described trade Keynes’s ideas dated backfurther. would also depress capital spending—re- unionists as “tyrants, whose selfish and He belonged to a new breed of liberals sulting in diminished production, employ- sectional pretensions need to be bravely who were not in thrall to laissez-faire, the ment and earnings. Falling incomes would opposed.” He accused the leaders of Brit- idea that “unfettered private enterprise reduce the community’s ability to save, ain’s Labour Party of acting like “sectaries would promote the greatest good of the squeezing it until it matched the nation’s of an outworn creed”, “mumbling moss- whole”. That doctrine, Keynes believed, meagre willingness to invest. And there grown demi-semi-Fabian Marxism”. And was nevernecessarily true in principle and the economy would languish. 1 The Economist August 18th 2018 Philosophy brief 55

2 The resulting unemployment was not sation of investment. Later liberals placed als would anyway be easier to find. merely unjust, it was also thuddingly inef- more faith in monetary policy. Ifthe inter- In promoting investment, he was hap- ficient. Labour, Keynes pointed out, does est rate would not naturally reconcile sav- py to entertain “all manner of compro- not keep. Although workers themselves do ing and investment at high levels of in- mises” between public authority and priv- not disappear through disuse, the time come and employment, modern central ate initiative. The government could, say, they could have spent contributing to the banks could lower it until it did. This alter- underwrite the worst risks of some invest- economy is squandered forever. native sat more comfortably with liberals ments, rather than undertakingthem itself. Such wastefulness still haunts the than Keynesian fiscal activism. Most of By the 1920s Britain had progressive tax- world. Since the beginning of 2008, the them (although notall) acceptthatthe state ation and compulsory national insurance, American workforce has put in 100bn few- has a responsibility for a nation’s money. which collected contributions from wage- er hours than it could have if fully em- Since the government will need a mone- earners and firms during periods of em- ployed, according to the Congressional tary policy of one kind or another, it might ployment, then shelled out unemploy- Budget Office. Keynes was often accused as well choose one that helps the economy ment benefits during spells of joblessness. by bean-counting officials of a cavalier dis- realise its full potential. Although not intended as such, these ar- regard for fiscal rectitude. But his penny- These three arguments have rebuttals. rangements served as “automatic stabilis- foolishness was nothing compared with If an economy has spent badly, surely the ers”, removing purchasing power during the extraordinary waste of resources from solution is to redirect expenditures, not to booms and restoring it during busts. mass unemployment. reduce them. Ifliberal governments do not This can be taken further. In 1942 fight downturns, voters will turn to illiber- Keynes endorsed a proposal to lower na- Somewhat pink al governments that do, jeopardising the tional-insurance contributions during bad The remedy most often associated with very freedoms the government’s pious in- times and raise them in good. Compared Keynes was simple: if private entrepre- action was meant to respect. with varying public investment, this ap- neurs would not invest heavily enough to Last, Keyneshimselfthoughteasy mon- proach has advantages: payroll taxes, un- maintain high employment, the govern- eywashelpful. He justdoubted itwas suffi- like infrastructure projects, can be adjusted ment should do so instead. He favoured with the stroke of a pen. It also blurs ideo- ambitious programmes of public works, logical lines. The state is its most Keynesian including rebuilding South London from (judged by stimulus) when it is also at its County Hall to Greenwich so that it ri- smallest (measured by its tax take). valled St James’s. In his letter to Hayek, he Keynesian theory is ultimately agnostic admitted that his moral and philosophical about the size ofgovernment. Keynes him- agreement with “The Road to Serfdom” selfthought that a tax take of25% ofnet na- did not extend to its economics. Britain al- tional income (roughly 23% of GDP) is most certainly needed more planning, not “about the limit of what is easily borne”. less. In the “General Theory” he prescribed He worried more about the volume of “a somewhat comprehensive socialisation spending than its composition. He was ofinvestment”. broadly happy to let market forces decide Hisworstcriticshave seized on the illib- what was purchased, provided enough eral, even totalitarian, implications of that was. Done right, his policies only distorted phrase. It is true that Keynesianism is com- spending that would otherwise not have patible with authoritarianism, as modern existed at all. China shows. The interesting question is Keynesianism can certainly be carried this: if Keynesianism can work well with- to excess. If it works too well in reviving out liberalism, can liberalism prosper spending, it can strain the economy’s re- without Keynesianism? sources, yielding chronic inflation (a pos- Liberal critics of Keynes make a variety sibility that also worried Keynes). Planners of arguments. Some reject his diagnosis. can miscalculate or overreach. Their pow- Recessions, they argue, are not the result of cient. However generously supplied, extra er to mobilise resources can invite vocifer- a curable shortfall of spending. They are liquidity may not revive spending, espe- ous lobbying, which can turn militant, re- themselves the painful cure for misdirect- cially if people do not expect the generos- quiring a forcible government response. ed spending. Slumps thus pose no conflict ity to persist. Similar doubts about mone- The totalitarian states Keynes worked so between liberty and economic stability. tary policy have revived since the financial hard to defeatshowed thatthe “central mo- The remedy is not less liberalism but more: crisis of 2008. The response of central bilisation of resources” and “the regimen- a freer labour market that would let wages banks to that disaster was less effective tation ofthe individual” could destroy per- fall quickly when spending flags; and an than hoped. It was also more meddlesome sonal liberty, as he himselfonce noted. end to activist central banks, because artifi- than purists would like. Central-bank pur- But Keynes felt that the risk in Britain cially low interest rates invite the misdi- chases ofassets, including some private se- was remote. The planning he proposed rected investment that ends in a bust. curities, inevitably favoured some groups was more modest. And some ofthe people Others say that the cure is worse than over others. They thus compromised the carrying it out were as worried about the disease. Recessions are not reason impartiality in economic affairs that befits creeping socialism as anyone. Moderate enough to infringe on liberty. This stoicism a strictly liberal state. planning will be safe, Keynes argued in his was implicit in Victorian institutions like In severe downturns Keynesian fiscal letter to Hayek, if those implementing it the gold standard, free trade and balanced policy may be more effective than mone- share Hayek’s moral position. The ideal budgets, which tied governments’ hands, tary measures. And it need not be as planners are reluctant ones. Keynesianism for better or worse. But by 1925, society heavy-handed as its critics fear. Even a works best in the hands ofHayekians. 7 could no longer tolerate such pain, partly small and unassumingstate must carry out because it no longer believed it had to. some public investment—in infrastructure, A third line of argument mostly accepts forexample. Keynes thought these projects Keynes’s diagnosis but quarrels with his should be timed to offset downturns in Read more on classical liberal values and most famous prescription: public mobili- private spending, when men and materi- thinkers at Economist.com/openfuture Some trends need more than a hashtag.

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Emerging markets key is not otherwise a big part ofthe global fruit bowl, buying 1.3% of the world’s Fear of the lira traded goods. The more worrying form of transmission is the second: via an intermediary. In Turkey’s case, the intermediaries of concern are its foreign lenders, which are also important sources of credit to many other markets. Turkey’s crisis is not fundamentallycontagious Most foreign lending to the country N1546 Girolamo Fracastoro, a doctor and Turkey must now cut back. The coun- flows through the local subsidiaries of Ipoet, published an elegant theory of con- try’s new finance minister, Berat Albayrak, European banks. On August 10th, reports tagion. Infections spread in three ways, he who also happens to be the president’s suggested that the European Central Bank argued: by direct contact, via an intermedi- son-in-law, says the government will was worried about the exposure of some ary, or at a distance, through the air. In strengthen fiscal discipline and narrow of the euro zone’s financial institutions. medicine, his theory is now considered Turkey’s current-account deficit. Turkey’s That prompted a noticeable fall in the Euro quaint. In economics, however, it still central bank has also tightened monetary STOXX bank stock-price index. As The works pretty well. policy indirectly, suspending some of its Economist went to press, shares of the two On August 10th President Donald regular auctions of cash, thereby forcing most exposed lenders were over 9% lower. Trump sent a pathogenic tweet, announc- banks to borrow overnight at an interest Euro-area banks have lent about $150bn ing a doubling of tariffs on Turkish steel rate higher than its declared policy rate. to Turkey, amounting to about 10% of their and aluminium. It followed earlier sanc- The slowdown in import spending will combined equity. The majority of those tions on two Turkish ministers involved in pass some of Turkey’s sickness on to its loans ($80bn) belong to Spanish banks, es- detaining Andrew Brunson, an American trading partners. This is a direct form of pecially to BBVA, which owns half of Ga- pastor, on dubious charges. The lira, which transmission, akin to one rotten grape ranti, Turkey’s second-largest private bank. had already lost 38% of its value since the touching and tainting another, in Fracas- Other exposures are mainly scattered start of the year, shed another eight per- toro’s analogy. The countries that export amongthe subsidiaries ofItaly’s UniCredit centage points in the tweet’s aftermath. the most to Turkey, relative to their GDP, in- and France’s BNP Paribas. Early medical scholars believed glut- clude Bulgaria, Iran and Georgia. But Tur- For this handful of banks, the immedi- tons were more susceptible to disease than ate risk is that Turkish borrowers struggle cleaner-living folk. Similarly, Turkey has to repay foreign-currency debts that are become vulnerable to financial disorder Patient zero? now worth much more in lira terms. Thus through macroeconomic intemperance. Currencies against the dollar far, the country has relatively few non-per- Businesses have borrowed heavily in for- August 10th (peak)-13th (trough), 2018, % change forming loans (around 3%). But defaults are eign currencies. The government, which 30 25 20 15 10 5– 0 expected to rise sharply. has manageable debt of its own, has guar- The infection should, however, remain anteed large amounts ofprivate credit. Turkish lira minor. In a worst-case scenario, European Inflation is now over 15%, far above the South African rand parent banks would walk away from their central bank’s target. But the monetary au- Argentine peso local affiliates and write off the equity thority’s freedom to respond has been losses. That would cost them between 1% Brazilian real hampered by President Recep Tayyip Erdo- and 12% ofgroup equity, according to Deut- gan’s distaste for higher interest rates. The Indonesian rupiah sche Bank. Such costs would certainly hurt current-account deficit exceeds 5% of GDP. Indian rupee the banks’ shareholders and perhaps ob- To fill thatgrowinggap, Turkeyrelies on for- lige them to strengthen their capital buff- Chinese yuan eign capital inflows. But risinginterest rates ers. But it would not threaten their solven- in America make capital harder to attract. Source: Bloomberg cy or require outside intervention, says 1 58 Finance and economics The Economist August 18th 2018

2 Alexandre Tavazzi from Pictet Wealth Man- ened to a record low (70 to the dollar) de- lira. The government also said that Qatar agement. He thinks “the market is selling spite the country’s modest inflation and will make $15bn of direct investments in before looking at the numbers.” light foreign-currency debt. Argentina’s the country, though the details were hazy. That tendency to sell before looking central bank hiked interest rates from 40% The effect on Turkey’s currency was sur- represents the third, and perhaps most to 45% to demonstrate its commitment to prisingly powerful. Having traded at over worrying, mode of transmission in emerg- stabilising prices and the peso. And South seven to the dollar at the start of this week, ing-market epidemiology. Fracastoro wor- Africa suffered horrible palpitations in its the lira was hovering closer to six by Au- ried about “noxious air” transmitting dis- currency. The rand fell by almost 10% after gust 15th. Global investors moved on to ease across distances. Economists, Mr Trump’stweet before settling down. other worries, such as the disappointing mustering equal precision, worry that the But that day’s mania did not persist. earnings of Tencent, a Chinese tech firm dampened “spirits” of investors can trans- Turkish regulators eased reserve require- that weighs far more heavily in most mit a crisis across countries, undeterred by ments, giving banks greater access to the emerging-market investors’ portfolios the fundamental economic distinctions dollars on their balance-sheets, and cur- than all of Turkey’s shares combined. Tur- between them. tailed currency-swap deals, making it key’s crises, sadly, are more communicable On August 13th, India’s rupee weak- harder for foreign speculators to target the than its rallies. 7 Buttonwood Value judgment

The contrarian case foremerging markets WENTY years ago, on August 17th keep the real exchange rate steady and ex- T1998, the Russian government deval- Relativity and gravity ports competitive. That is not a big risk. Of ued the rouble, defaulted on its domestic Price-to-earnings ratio, United States relative the 25 emergingmarkets listed on the indi- debts and suspended all payments to for- to emerging markets, September 1st 2007=100 cator pages of The Economist, only three eign creditors. It was one of the most dra- (Turkey, Argentina and Egypt) have infla- 220 matic days of a year-long emerging-mar- tion rates above 6%. Most are below 3%. ket crisis that began with the devaluation 200 It is unsurprising, then, that emerging of the Thai baht. South Korea and Malay- 180 markets are favoured by “value” inves- sia would suffer brutal recessions. Presi- 160 tors. This austere band prefers stocks with dent Suharto of Indonesia was forced to 140 alowPE ora low price relative to the book GMO resign after 32 years that May. But it was 120 value of assets. , a fund-manage- Russia’s defaultthat shookthe world. ment group with an almost fanatical de- Talk of rich-world recession was soon 100 votion to value, has a heavy weighting of in the air. The Federal Reserve would cut 80 emerging-market shares in its discretion- interest rates three times before the year 1996 2000 05 10 15 18 ary portfolio (and no American equities). was out. The MSCI index of emerging- Source: Thomson Reuters For many tastes, the value approach is market stocks, which had lost 40% of its a bit too virtuous, a little too much like a dollar value in the year leading up to Au- start of 1996, both had PE ratios of around diet of steamed vegetables. There is no gust1998, dropped by more than a quarter 18. Whenever the S&P 500’s valuation has lawthatsayscheap stockscannotbecome in that month alone. since risen relative to that of emerging- cheaper. Turkey may be an outlier in Emerging-market assets are not as market stocks, it has eventually fallen back terms of its erratic policymaking and the scorned now as they were then. The pan- again (see chart). America’s stockmarket scale of its foreign debts, but its agonies ic resulting from Turkey’s crisis is not any- currently has a PE of 23. It has been even seem likely to be protracted. Troubles thinglike as acute. But there is no shortage dearer relative to emerging-market stocks elsewhere are a drain on confidence. Rus- ofreasons forinvestors to be wary. in the past—but only rarely. sia is anothertarget ofUS sanctions. Mexi- Unloved asset classes have at least one co has NAFTA negotiations hanging over charm—they tend to sell at a discount. The Sound FX it. Elections in Brazil are likely to be frac- price you pay for a stream of company There other factors to consider. Currency tious. China’s economy is slowing. The earnings in emerging markets is lower riskis one. In rich countries, stocks and cur- valuation gap with America may already than in the rich world—and farlower than rencies sometimes move in offsetting di- be stretched. But it could still widen. in America. After a Turkey-inspired sell- rections. When the pound slumped after It would be nice ifit were easy to judge off in the foreign-exchange market, cur- the Brexit vote in June 2016, it prompted a when to lighten up on dear stocks and rencies look fairly valued. A lot of fund rally in British stocks, as companies’ for- load up on cheaper ones. People who can managers would be putting their careers eign earnings became more valuable in do this reliably are rare. For everyone else, at risk by buying assets that have just fall- sterling terms. Emerging markets are differ- valuation must come into the reckoning. en a lot. But those with longer horizons ent. The prices of shares and currencies Betting on emerging markets at this junc- may find it worthwhile to take a look. tend to rise and fall in tandem. ture would be gutsy. But sometimes the It is not so much that emerging mar- Buying cheap stocks is no good if the time to buy is when others are scared. kets are cheap, but that they are not dear. currencies they are denominated in are There was plenty to fear 20 years ago. The The price-to-earnings, or PE, ratio for the overvalued. But is not obvious that they emerging-market crisis had rattled much dollar index of emerging-market stocks is are. Even before the recent selling, real ex- ofAsia and would soon roil Brazil and Ar- 14, a bit below its average since 1996. It change rates in most big emerging markets gentina. Even so, emerging-market stocks looks even better value when you com- were below their ten-year averages. A bout reached a low in dollarterms a few weeks pare its PE ratio to that of the S&P 500 in- of high inflation would upset that reckon- after the Russian default. Within 18 dex of American stocks over time. At the ing. Currencies might then need to fall to months they had doubled. The Economist August 18th 2018 Finance and economics 59

Australian pensions the rest). As the commission was told, funds’ trustees are “surrounded by tempta- Not so super tion” to prioritise their profits over members’ interests. “It’s hopelessly conflicted,” lamented Michael Hodge, a lawyer for the inquiry. Australians pay far more for pensions SYDNEY than their peers in other rich countries. In Amuch-lauded private-pension system 2014 the Grattan Institute, a think-tank, cal- comes underscrutiny culated that fees were more than three AUL KEATING, a formerprime minister times the median for the OECD, a group of PofAustralia, callsthe country’ssuperan- mostly rich countries. Administration fees nuation system “the envy of the devel- have been falling, yet funds still cream off oped economies”. In many ways, it is. The A$30bn annually, not far off what the “super”, as Aussies call their private-pen- country spends on defence. The institute sion provision, was a crowning achieve- reckons the average 30-year-old Australian ment of Mr Keating’s premiership. In 1992 will lose about A$250,000, or a quarter of he made it compulsory for employers to their total balance, in fees before they re- set aside 3% of all but the very lowest-in- tire. At such a price, you might hope for come workers’ wages. The payment has juicy investment returns. Yet the reverse is since crept up to 9.5%, and, by law, will rise true: the dearest funds tend to do badly for furtherin 2021. their members, partly because earnings Today 15m working Australians are sit- are eaten away by charges. “As a popula- Litigation finance ting on a nest-egg for retirement. With as- tion,” says John Daley, Grattan’s chiefexec- sets of about A$2.6trn ($1.9trn), their priv- utive, “we are being taken fora ride.” Appealing returns ate-pension pot has grown into one of the One issue is that job-hopping workers largest in the world. It is almost universal, accrue new supers, and often forget to which should relieve pressure on the merge them. About a third of all accounts, means-tested public-pension system. Aus- 10m in total, are such “unintended multi- NEW YORK tralia, in other words, has less reason to ples”. Each super charges fees and tacks on Third-partyfunding forlawsuits panic about supporting retiring baby- life- and disability-insurance policies, of- attracts investors and lawyers alike boomers than most other countries. ten without employees knowing. Research Yet pride is not the only emotion the by the Productivity Commission, which ONTINGENT fees, in which clients system evokes. In December 2017, advises the government, finds that Austra- C pay lawyers only if a case is won, have prompted by a spate of banking scandals, lians pay A$1.9bn a year in excess insur- long been a feature of America’s legal sys- the government set up a royal commission ance premiums. tem. Many other countries used to bar to investigate malpractice in the financial The inquiry has exposed more egre- them, wary of importing America’s ambu- sector. In the past two weeks it has been giousrip-offs. National Australia Bank, one lance-chasing culture. But a belated accep- hearing evidence on the super industry, ofthe country’s big lenders, is already pay- tance of their benefits means they are now and the results have not been pretty. ing over A$100m to compensate savers widely allowed. “No-win, no-fee” arrange- Most complaints relate to how funds who paid for advice they never received. It ments help shift risks from parties to a suit run by big banks and asset managers ad- also emerged that the bankcharged for ser- to their lawyers, and make it less likely that minister the money. These hold about a vices rendered to members who were a would-be plaintiff decides not to press a third of all pension assets (industry, gov- dead. Another lender, Commonwealth strong case forfear ofa big financial loss. ernment and corporate funds account for Bank of Australia, was revealed in April to Around a decade ago, some lawyers have made similar charges. This week the took the principle of risk-shifting further. inquiryheard ithad been too slowto trans- They accepted money from third parties to fermembers to cheaper funds. fund cases in exchange for some of the Cosiness between funds and the banks winnings. Litigation finance has since tak- that control them is another problem. One en off. Fortune 500 companies and New report found that almost 80% of their trus- York’s elite law firms increasingly tap out- tee-board directors hold positions in relat- side capital when pursuing multi-million- ed financial institutions. Another suggests dollar suits. that big lenders pay out returns on simple Funds that invest in litigation are on the cash investments that are a fraction of the rise. In the past 18 months some 30 have market rate. launched; over $2bn has been raised. Last The commission will issue a final re- year Burford Capital, an industry heavy- port in February. It may follow the Produc- weight, put $1.3bn into cases—more than tivity Commission and recommend that triple the amount it deployed in 2016. Lee savings should be injected by default into DruckerofLake Whillans, a firm that funds one of several “best in show” funds. These lawsuits, says he gets calls weekly from in- would be judged on long-term returns, stitutional investors seeking an asset un- fees and advice, and revised every four correlated with the rest of the market— years by an independent panel. Others payouts from lawsuits bear no relation to draw a different conclusion: they want to interest-rate rises or stockmarket swings. give workers more access to their money if Such outside funding does not just en- they buy a house or return to university. able plaintiffs to pursue potentially lucra- Whatever happens, the super industry has tive cases. It also allows law firms to hedge High fees down under lost some ofits shine. 7 risk. Some clients, worried about the mis-1 60 Finance and economics The Economist August 18th 2018

2 aligned incentives caused by law firms’ are up for appeal, where the timespan is arise. Bentham IMF, a litigation funder sky-high hourly rates, insist on partial or short—usually 18-24 months—and the based in New York, has joined Kobre & full contingency-payment schemes. Out- chance of a loss slimmer, offer lower re- Kim, a lawfirm, to setup a $30m fund forIs- side funding lets firms recoup some rev- turns. New cases that are expected to take raeli startups to pursue claims against mul- enue even ifthey do not win a case. “Firms years offerhigher potential payouts. tinationals—for example, over trade-secret that lose are still going to take a bath,” says Amaturingmarket means more sophis- violations. A burgeoning secondary mar- Nicholas Kajon of Stevens & Lee. “But the ticated offerings. To spread risk, funders are ket is likely to develop further, allowing in- write-offwon’t be quite as bad.” bundling cases into portfolios and taking a vestors to cash out before long-running Returns are usually a multiple of the in- share of the proceeds. Last year Burford suits are closed. Burford recently sold its vestment ora percentage ofthe settlement, ploughed $726m into portfolio deals, com- stake in an arbitration case concerning two or some combination of the two. Funders pared with $72m into stand-alone suits. Argentine airlines for a return of 736%. of a winning suit can expect to double, tri- As funders compete for high-quality in- Such mouth-watering profits should keep ple or quadruple their money. Cases that vestments, opportunities in new markets luring capital into the courtroom. 7

Innovation in insurance Forensic accounting Icing on the cake Seeking the devil NEW YORK in the details Life-insurance policies that bake in ancillary services arrive in America EOPLE only contact their insurers PALERMO when things go wrong and they need P New software helps uncoverMafia to make a claim. This generally means crime masked as ordinary business losses forthe insurer. It also means stress and hassle for the customer. In order to OR an inkling of how hard it is for Ital- mitigate both problems, insurers increas- Fian authorities to identify Mafia activi- ingly offer extra services alongside their ty, consider how mobsters disguise the bog-standard policies. pizzo, or protection payments, they extort. Aviva, a British insurer, for instance, The owner ofa business may find that cus- installs sensors on customers’ water tomershave been scared offbya menacing pipes to detect even minuscule leaks, so stranger. Within days a mysterious man that these can be repaired before causing visits. He may request a regular donation greater damage. This spares Aviva the for a poor family, or ask a business to cost ofa bigger claim, and the client the switch to a new supplier. Owners put two misery ofa flooded basement. Other and two together, says Daniele Maran- benefits are intended mainly to foster nano, an anti-Mafia activist in Palermo: customer loyalty. Porto Seguro, a Brazil- “There’s no need forfurtherexplanations.” ian insurer, offers access to locksmiths, Such concealment is more common electricians and taxi services. than in decades past, when payments Life insurers have so farbeen slower A few rivals dangle the odd optional were often collected monthly in cash. That to catch on. But that is changing. Often extra. Ladder, a life-insurance startup, has made it harder to spot extortion by an- ancillary services nudge people to live offers some help on financial planning alysing a business’s books, says Antonio more healthily. AXA, a French insurer, through an online tool. State Farm, a large Basilicata of the Anti-Mafia Investigation gives its customers access to check-ups. American insurer, gives clients a discount Directorate (DIA) in Rome. But software de- Union Life, a Chinese one, guarantees on in-home sensors that monitor old veloped by Crime&tech, a firm in Milan, policyholders a place in an old people’s people’s health. But the MassMutual can still help identify companies with home and advises them on activities in policies that Haven Life sells are the first probable Mafia links by crunching finan- retirement. Desjardins, a Canadian insur- in America to offerother services as part cial and operational data. er, offers advice during treatment and ofthe package. Crime&tech’s software identifies not recovery from illness. This is not forlackofdemand. A sur- pizzo schemes as such, but firms that may On August15th Haven Life, an Ameri- vey by Bain & Company, a consultancy, be under mafioso control or involved in can life-insurance agency and a subsid- finds that American consumers have Mafia crimes such as illegal gambling and iary ofMassMutual, an insurer, an- very similar preferences to Australian, trafficking in people, drugs or arms. Its al- nounced it would include a set of British and Chinese ones on the sorts of gorithms lookat many variables. Business- ancillary benefits for its customers. That services they want from life insurers. es with little or no bankfinancing are more makes it a pioneer in its home market. But America is not a friendly place for likely to have taken out a Mafia loan. Bor- Haven Life’snew perks fit neatly into innovative insurers. New policies must rowerswho struggle to repaymay“convert the global trend. Its ancillary benefits be approved by each ofits 50 state regu- the debt into stock” held by the Mafia cred- centre on health and planning fordeath. lators. Mr Ben-Zvi says that some states’ itor, often behind the smokescreen of a fig- A digital service forcompiling a will, and laws are too inflexible, and do not allow urehead administrator, says Michele Ric- online storage for important documents, forsuch ancillary benefits. The result is cardi of Crime&tech. The software are included. Policyholders also get that Haven Life will notinitially offer the considers the age and sex of a firm’s ad- discounts on family-health services at perks in five states, including Florida and ministrators. Those who are old, young or some clinics, and access to a genetic New York, though the firm hopes to make female are more likely to be figureheads. health test. Yaron Ben-Zvi, the firm’s boss, them available nationwide. Even when It also looks for anomalies in payroll says the initiative is squarely meant to an offering suits insurers and their cus- and invoice data that may reveal attempts increase customer loyalty. tomers, it can still take time to spread. to conceal illicit payments, especially in sectors where Mafia activity is strongest: 1 The Economist August 18th 2018 Finance and economics 61

Tax breaks in Africa import duties. Rwanda gives a corporate- tax holiday to big investors such as Volks- Slipping through wagen, which has opened a new assembly plant in the country. the net Such incentives rarely bring the investment or jobs that are promised, says Ous- mane Sonko, a formertax inspector who is KAMPALA now a member of parliament in Senegal. African governments let too many When surveyed, most businesses in Afri- taxpayers offthe hook can countries say they would have invest- AX collection in Africa resembles an ed even without tax breaks. They tend to Texasperating fishing expedition, in rank other factors, such as stability and the which the big fish wriggle into tax havens cost of raw materials, more highly. Firms and the tiddlershide in the informal sector. congregate in industrial parks for the reli- It is made even harder by a self-inflicted able electricity and decent roads. Paying problem. Governments give out a range of forthese means taxing more, not less. exemptions, thereby poking holes in their Meanwhile ordinary citizens often foot The code breaks the silence own nets. the bill, argues Jason Braganza of Tax Jus- Consider “tax expenditures”, a mea- tice Network Africa, a campaign group. 2 construction, retail, waste removal, food sure ofthe revenue lost by deviations from Uganda, forexample, has slapped new lev- services and transport. A high share of a usual tax rates. Taxmen in Kenya and ies on cooking oil, mobile money and even firm’s wealth kept liquid is a red flag. Uganda let about 5% of GDP slip through social media—all measures approved by To create the software Crime&tech ana- their fingers in this way, according to the politicians who have exempted their own lysed police reports, court documents and World Bank. In the few African countries allowances from tax. academic studies, many conducted by re- where data are available, governments for- Some governments see tax breaks as a searchers at Transcrime, a think-tankat Mi- go revenues worth a third of those they ac- tool of industrial policy, East Asian-style. lan’s Catholic University of the Sacred tually collect. The cost is felt in crowded Others dish out goodies to reward allies or Heart, from which Crime&tech is a spinoff. classrooms and on rutted roads. create political leverage, says Mick Moore The team also used data on the roughly Not all that money should, or could, be of the International Centre for Taxand De- 5,000 Mafia-linked firms that have had recouped. The figures include concessions velopment. Tax expenditures come under their assets seized by the authorities in the for items like textbooks and medicines. less scrutiny than conventional spending. past 30 years. The result, says Francesco And not every tax expenditure is a give- In four-fifths of sub-Saharan African coun- Calderoni, one of Crime&tech’s founders, away, argues Maya Forstater of the Centre tries, for example, governments have the is “an identikit ofa Mafia business”. for Global Development, a think-tank. For discretion to negotiate bespoke tax breaks example, firms that export goods orimport with individual companies. Businesses You’ve been made, man capital equipment may be entitled to val- lobby hard against any tightening ofrules. Analysis by corporate-investigations firms ue-added-tax refunds, but the process can Mounting debt may be the one thing such as Kroll, which is based in New York, be so unworkable that some governments that forces a rethink. Median public-debt is probably still a more accurate way to just grant exemptions instead. levels in the region are over50% ofGDP, up spot the Mafia’s fingerprints. But that can The full range of tax breaks is bewilder- from 30% in 2012. The IMF and World Bank cost more than €1,500 per firm scrutinised. ing, however. Incoming foreign aid, from are urging governments to close up fiscal Automation cuts costs dramatically. An the salaries of consultants to the fees col- holes. So too are civil-societygroups. Some early version of Crime&tech’s software as- lected by subcontractors, is often tax-ex- countries, such as Ghana, are trying to sessed the “Mafia risk” of some 4,000 empt. Special economic zones are popping streamline exemptions. A good place to firms that placed bids on contracts for Expo up like volcanic islands, forming a low-tax start would be to audit tax breaks and strip 2015, a fair in Milan. The software found archipelago that stretches across the conti- away the most indulgent. Those that re- probable Mafia links that had hitherto nent. In Ghana a single factory can be de- main should be temporary and transpar- been unknown to the DIA. clared a “free zone”, which entitles it to a ent. Taxmen will catch more fish with Crime&tech’s Italian clients include ten-year tax holiday and exemptions on stronger nets. 7 two police forces, two regional government bodies and companies keen to avoid suppliers and contractors affiliated with the Mafia. Crime&tech also licenses its technology to Bureau Van Dijk (BVD), a subsidiary of Moody’s, a credit agency. De- mand is brisk, BVD’s Milan office reports, with intelligence agencies and tax authorities among those using the service. Other firms are developing similar products. Consorzio CBI, a research outfit in Rome funded by Italian banks, is improving software that tries to sniff out Mafia connections by looking for clues such as atypical transfers between a firm’s depart- ments. In an effort to curb Mafia involvement in public contracts, Italy’s finance ministry is using the software to keep an eye on more than 10,000 bank accounts. Computer says no, mafioso. 7 A stitch in time 62 Finance and economics The Economist August 18th 2018 Free exchange When the levy breaks

Dismal scientists seekcannierways to make carbon taxes palatable CONOMISTS view pricing greenhouse-gas emissions as an el- Nordo they raise a lot ofcash: $30bn annually worldwide. Three- Eegant way to reduce them. There are more than 70 national quarters of covered emissions are priced under $10 per tonne. and regional schemes, covering perhaps a fifth of global emis- As a result, carbon prices have not been high enough to drive sions, which charge polluters for the carbon dioxide they belch real changes in behaviour. The price in the EU’s carbon market out. But that leaves an awful lot of the world to be convinced of more than doubled to €18 ($20) thisyear, afterplansto remove ex- the merits ofsuch schemes. Sceptics point to the lacklustre decar- cess permits were announced. But forecasts still put it below bonisation record of places that already price carbon. Higher Messrs Stiglitz’s and Stern’s band. In 2013 Britain introduced an charges would help; but then the politics also has to add up. additional levy on top of the EU carbon price that was meant to Governments have two ways to price carbon. They can levy a increase every year. But it has since frozen the fee until 2021. Poli- tax on each tonne ofCO2 emitted, an approach pioneered by Fin- cies that increase energy bills are rarely popular. land in 1990. Or they can issue a fixed number of pollution per- And taxes that appear high may in practice have little bite. mits to companies, which can then trade the permits with others. Sweden’s rates in excess of Skr1,000 ($108) per tonne favour the The European Union (EU), a handful of American states and, climate-friendly hydro and nuclear power plants that already starting this year, China have opted for some version of this “cap- produce much ofits electricity. True, car emissions are lower than and-trade” approach. These schemeshave tended to be limited to theywould have been in the absence ofthe tax—by11% in an aver- a few carbon-intensive industries, such as power generation, oil- age year, according to one study. But they have dipped by only 4% refining and steel- and cement-making. since the tax was introduced in 1991. Taxes might stem growth in AnewIMF working paper by Ian Parry, Victor Mylonas and emissions, but they do not foster deep decarbonisation, observes Nate Vernon finds that taxes raise around twice as much revenue Michael Mehling of the Massachusetts Institute of Technology. as today’s cap-and-trade schemes, and are roughly 50% better at Unless, that is, they get much higher. cutting emissions (see chart). A levy of $70 on each tonne of CO2 by 2030 would typically raise between 1% and 2.5% of GDP in the Tax and spend G20 club of big economies. It would also allow most to come How, though, to make high taxes palatable? Labels help. Behav- close to, or even exceed, their pledges under the Paris climate ioural economists have discovered that one way to make taxes agreement of 2015, which aims to keep global temperatures no acceptable is to rebrand them as “fees” or “contributions”. Alber- more than 1°C or so hotter than today. Researchers from the Pots- ta, in Canada, and Switzerland call their taxes “levies”. A more dam Institute and the Mercator Institute find that if developing substantive approach is to return the money raised to citizens or countries were to replace fuel subsidies with carbon taxes consis- affected businesses. Switzerland’s programme doles out two- tent with the Paris target, the windfall would cover much—95% in thirds of its receipts to households—SFr68 ($68) for each citizen India’s case—ofwhat they must spend on infrastructure and pub- last year—and to firms. The rest goes towards green investments, lic services to meet the UN’s sustainable-development goals. such as renewable power. This builds public support and makes Politicians scoff at such hypotheticals. They are loth to upset it hard fora future government to reverse course. voters, who dislike taxes, or powerful lobbies in industries that It also makes a typically regressive taxmore equitable. Anders would be hardest hit. So cap-and-trade schemes, which can issue Fremstad of Colorado State University and Mark Paul of Duke new permits to depress prices, outnumber tax-based ones. The University calculate that taxing a tonne of CO2 at $49 would taxes that exist tend to be symbolic. As a result, merely 1% of the leave 59% of Americans worse off, including 75% of the bottom emissions covered by both pricing schemes fetch more than $40 half, ifthe revenue were used to lowerpersonal-income taxes. By pertonne ofCO2. That is the lowerlimit ofthe $40-80 range that a contrast, recycling the receipts as lump-sum payments would World Bank-backed committee chaired by Joseph Stiglitz and leave 89% ofthe bottom halfwith an average net gain of$788. Lord Nicholas Stern, two economists, considers necessary by Democrat-controlled state legislatures in California and Mas- 2020 to stay on trackforthe Paris goal. Existing programmes have sachusetts are debating such “fee and dividend” measures. A barely dented global emissions, which ticked up again last year. group of Republican grandees, including two former secretaries of state, are recommending a similar proposal to their climate- change-sceptical party. Anew paperco-written by Lord Stern and Tax benefits Carbon tax* pointedly entitled “Making carbon pricing work for citizens” sin- Impact of carbon-pricing schemes Emissions-trading system* gles it out as the best choice in most circumstances. Other options exist. The Republican plan also includes duties CO2 emissions reduction Revenue 2030 estimate, % 2030 estimate, % of GDP on dirty imports and taxcredits forclean exports, to support busi- 0 1020304050 01234 nesses that face competition from high-carbon jurisdictions. Mr Mehling reckons such border adjustments may be legal; World India India Trade Organisation anti-discrimination rules favour products China China that are “necessary to protect human, animal or plant life or health”. Calculating the carbon footprint of products would be United States Turkey tricky but not impossible. A trade partner’s industry average Turkey United States could serve asa benchmarkfordutiesorcredits, unless an export- er there can demonstrate that its wares use less carbon; develop- Japan Japan ing countries could be cut some slack. This is one race to the bot- Britain Britain tom even environmentalists would welcome. 7

Source: IMF *$70 per tonne CO2, 2015$ Sources for this story can be found at Economist.com/carbon2018 Science and technology The Economist August 18th 2018 63

Also in this section 64 A dead parrot story 65 The wheat genome 65 An ancient relationship

For daily analysis and debate on science and technology, visit Economist.com/science

Construction technology sion of their steel reinforcing or pre- stressed tendons. A bridge too far A report from the American Road & Transportation BuildersAssociation in Jan- uary is even more sobering. It reckoned that 54,259 ofthat country’s 612,677 bridges are “structurally deficient”. These problem bridgeshave an average age of67 yearsand are crossed by vehicles 174m times every Crumbling infrastructure worries civil engineers day. At the present rate of repair and re- HE first bridges were likely to have bridge is calculated so that the remaining placement, it will take 37 years to remedy Tbeen built by early man shoving a fall- cables will be capable ofholding the struc- all the problems, says Alison Premo Black, en tree across a stream. Since then, con- ture up. The Morandi bridge is different be- the organisation’s chiefeconomist. struction techniques have come on a bit— cause itwassupported bypre-stressed con- What is going wrong with these from wood to stone, wrought iron and crete tendons. The tendons are made from bridges? The difficulty is that concrete, or then steel. In the 20th century, reinforced bundles of steel wires tightened to pro- rather the steel used to reinforce it, can fail concrete appeared. Concrete is an im- duce compressive strength and then en- in a number of ways. Salt, ice and the mensely strong material, especially when cased in concrete. The bridge was designed pounding of weather can cause tiny frac- coupled with steel. But the sudden col- by Riccardo Morandi, a proponent of this tures in the concrete’s surface. As these lapse of the Morandi bridge in Genoa this type of bridge. Only a few have been built crackscreep inward, theyletin water. Once week (pictured above), with a tragic loss of around the world. the water reaches the steel reinforcing or life, adds to the concern of civil engineers Concerns about Genoa’s bridge had tendons, it corrodes them. This enlarges that many bridges around the world been raised in the past. The Italian media the cracks, which can cause the concrete to which use reinforced concrete are deterio- has reported that in 2016, Antonio Bren- fall apart. That this is happening is evident rating faster than was expected. cich, a specialist in reinforced concrete at from rusty streaks on crumbling concrete. The Genoa bridge is based on a design the University of Genoa, described the called a cable-stayed bridge, although it is a bridge as a “failure of engineering” and Heavy traffic somewhat unusual variant. Such a bridge that sooner or later it would have to be re- Other factors compound the deterioration uses one or more towers, from which run placed. Daniele Zonta, a civil-engineering of bridges, such as a constant cyclic vibra- cables that support the deck of the bridge. expert at the University of Strathclyde, in tion from traffic, says Mehdi Kashani, an This is different from a suspension bridge, Britain, says that since the opening of the expert in structural mechanics at the Uni- such as the Golden Gate Bridge in San bridge in 1967 the tendons have required versity of Southampton, in Britain. This is Francisco, in which the cables holding up continuous monitoring and maintenance. troublesome for bridges designed in the the deck are suspended vertically from a Although the design ofthe bridge is un- 1960s, when traffic flows were lower, cars main cable anchored at either end of the usual, it is much too early to say if that were smaller and lorries much lighter. On bridge. Cable-stayed bridges are widely played any fundamental part in the col- top ofthat, extreme weather can take a toll, used, mainly for spans shorter than those lapse. And in other respects, the Morandi with heat and cold expanding and con- crossed in one go by a suspension bridge. bridge is far from atypical. All around the tracting the structure, floods eroding away A familiar feature of a cable-stayed world bridges built long ago, particularly foundations and high winds buffeting the bridge is that the cables form a fan-like pat- those using reinforced concrete, are deteri- bridge. This is why regular inspections and tern emanatingfrom the supportingtower. orating. Even back in 1999, a study found maintenance are essential. Ifone ofthe cables is damaged or breaks, it that around 30% of road bridges in Europe New methods of monitoring structures should be obvious; the loading on the had some sort of defect, particularly corro- are available to help engineers spot pro-1 64 Science and technology The Economist August 18th 2018

2 blems before they become critical. Instead Archaeology where wild scarlet macaws are found. Ar- of the arduous task of climbing up bridges chaeologists had presumed that these or erecting scaffolding, camera drones can A dead parrot birds were brought by traders on foot easily take a close-up picture of just about across the desert that makes up much of any part of a bridge. Electronic sensors can story the centre of Mexico. Doubtful that many provide regularreadings ofany movement macaws would survive such a treacherous in the structure. And laser scanners are ca- journey, however, Douglas Kennett of pable of picking up fine details and dis- Pennsylvania State University and Ste- Evidence ofearlynative American playing them as a three-dimensional im- phen Plog of the University of Virginia col- parrot breeding age. All this should help, but only if laborated with a group ofcolleagues to see regimes exist to ensure that careful moni- ETWEEN 900 and 1200 a group of na- if there were any genetic clues in the par- toring and preventive maintenance take B tive Americans lived in Chaco Canyon, rots’ remains. place. Ifsuch tasks are skipped, for whatev- in what is now north-western New Mexi- The researchers collected DNA samples er reason, the result could be disaster. “The co. They were part of the peoples known from the bones ofthe Chaco Canyon birds, Genoa bridge is not the first to fall down,” asthe Ancestral Pueblo. Theytraded exten- along with a smaller sample of contempo- says Dr Kashani. “And unfortunately it will sively with communities in the distant rary macaw bones from the Mimbres re- not be the last.” south: items such as cocoa beans, copper gion in southern New Mexico. In total, bells and jewellery made from marine they were able fully to reconstruct the mi- Repairor replace? shells have been found in Pueblo Bonito, a tochondrial genomes of 14 macaws. Sur- Monitoring and repair are not the only op- multi-storey great house in the canyon prisingly, they found an exceptionally low tions. When bridges were beingbuilt in the with over 600 rooms. But none ofthese re- genetic diversity between the birds. As 1950s, 60s and 70s, many were expected to mains have presented archaeologists with they report in Proceedings of the National last for more than 100 years. But the decay more ofa quandary than the parrots. Academy of Sciences this week, all of the of reinforced concrete leads some civil en- The bones of 35 scarlet macaws have macaws that lived in the Chaco Canyon re- gineers to think that such bridges may been excavated from various sites in the gion between 900 and 1200 were very have a life ofonly 50-60 years. That means area. Birds play an important role in native closely related to one another. thousandsofbridgesare comingto the end American mythology, and parrots became of their days. Refurbishment is possible, part of the culture of some groups. Parrots Not stunned but it is slow and very costly. It might end were kept as pets and their feathers were Although it is possible that a small popula- up being more expensive than building a highly prized. But since the nearest natural tion living along the very northern natural new bridge. population of these birds is—and was— range ofmacaws was visited by traders col- New structures can also take advantage some 2,000km away, the question has lecting birds, and that this resulted in the of advances in engineering. There has been how so many of these parrots could parrots of Chaco Canyon all being rela- been huge progress in materials science, so have ended up in this canyon. tives of one another, it is something that much so that it is now possible to tinker Archaeologists have known that the the researchers believe to be extremely un- with the internal structure ofsubstances to breeding of macaws began at Paquimé, likely. Their alternative theory is that a few make concrete more robust and steel better nearthe modern-day city ofChihuahua, in macaws were carefully nurtured during at resisting rust. Ultra-high-performance Mexico, because the site has dozens of pre- the arduous trek across central Mexico and concrete is already being made in some served egg shells and the skeletal remains then used to establish a breeding pro- countries to toughen buildings against of several hundred birds. But that was in gramme somewhere in the south-western such things as earthquakes and bombs. about 1250, long after the parrots first United States or northern Mexico long be- Apart from just sand and cement, other in- turned up in Pueblo Bonito. fore Paquimé got in on the act. Where that gredients are added to these super con- In those ancient times the people ofthe earliest of breeding colonies might have cretes, such as quartz and various reinforc- American south-west had no horses, wag- been remains a mystery, but that it might ing materials. In some tests, the addition of ons or waterways to connect them to the have existed at all is further testament to plant fibres has been shown to produce distant regions of south-eastern Mexico how treasured parrots were. 7 markedly stronger concrete. Self-healing concrete is also being explored. Different methods can be used, but the basic idea is that, should cracks appear in the surface, they will trigger a chemical reaction that seals them up again. Wholesale replacement of elderly bridges would be an expensive exercise, however. The Governor Mario M Cuomo Bridge, which opened as a replacement for the old Tappan Zee Bridge which crosses the Hudson River in New York, is expected to become fully operational later this year. It is also a cable-stayed bridge, but one of a more traditional design. It is expected to cost some $4bn. The old bridge, built largely from steel and concrete in the 1950s, was knocked up for some $60m, which in today’s terms would be a bargain $564m. The Tappan Zee Bridge was predicted to have a lifetime ofonly50 years; itmanaged nearly 62. Its replacement is supposed to last for a century. Time will tell. 7 Were you from the canyon? The Economist August 18th 2018 Science and technology 65

The wheat genome Ancient plants Breaking bread Enduring relationship

Me and mybeetle YCADS lookthe part offoliage on a ists curious about how long the plants Revealing the wheat genome could lead “Jurassic Park” film set for a reason. have relied upon this method. The an- to hypoallergenic bread C The plants are indeed very ancient. They swer, it seems, is just about for ever. NE ofthe mostsurprisingthingsabout evolved during the Permian period, According to a study by Chenyang Cai Othe announcement this week that the millions ofyears before the first dino- ofthe University ofBristol, in Britain, genome ofwheathasbeen fullymapped is saurs existed. Although classified in the reported in Current Biology this week, how long it has taken. As well as the hu- same group as conifers, cycads do not cycads have been luring beetles to do man genome, a draft of which was com- release their pollen into the wind like the their bidding for nearly100m years. Dr pleted in 2000, scientists have tackled rest oftheir kin. Instead, each species of Cai has found the evidence in a fossil. everything from rice to the clearhead ice- cycad that remains today relies on a Seeing two organisms interacting with fish and the black cottonwood tree. The specific type ofbeetle forpollination. one another in a fossil is remarkably rare; world’s most widely cultivated crop has This is unusual for a non-flowering plant it usually involves finding the teeth ofa taken all this time because it was really dif- like the cycad, and has left palaeobotan- predator lodged in the bones ofprey.So it ficult; the “Mount Everest” of plant genet- was particularly exciting forDr Cai when ics, according to some. he spotted cycad pollen fossilised along- That difficulty arises from the fact that side a 2mm-long beetle found in north- wheat is not one genome but three over- ern Myanmar (pictured). lapping and similar ones, the result of nat- The beetle died 99m years ago, when ural hybridisation. It is more than five it got trapped inside sticky tree sap. This times the size of the human genome and sap eventually hardened into amber comprises some 107,000 genes (humans around the insect and preserved its have about 24,000). Genomes are general- corpse in pristine condition. Since the ly figured out by breaking them into small- amber is clear, Dr Cai and his colleagues er pieces, sequencing those pieces and have been able to study the beetle and then working out how they fit together. the other material that got lodged in the With so many similar-looking sequences, sap. Their analysis revealed not just the the international team of researchers, cycad pollen but also that the bug be- whose findings were reported in Science longs to the family Boganiidae, ofwhich and whose efforts focused on a variety of cycad-pollinating beetles are a part. bread wheat called Chinese Spring, had a Crucially,the beetle has cavities just huge job on their hands. below its jaw filled with tiny hardened Their achievement comes at an oppor- hairs that are used by these insects today tune time. Humans have been tinkering to feed upon and transport cycad pollen. with wheat for almost 10,000 years, but In the face ofthe fierce competition new tools are becoming available for the brought about by the evolution offlow- precise manipulation of genomes. Gene- ering plants, the asteroid impact that did editing using a technique called CRISPR, in the dinosaurs, the rise ofmammals along with a fully annotated genetic se- and numerous ice ages, cycads seem to quence, promises a new era in wheat culti- have come up with a reproductive plan vation, introducing traits to improve Evidence in amber and stuckto it steadfastly. yields, provide greater pest resistance and to develop hardier varieties. Of particular interest will be how de- One possibility is using diagnostic tech- ditional fermentation stage in making coding the genes might contribute to un- niques to identifywheat varieties that con- bread. And his guess is that this fermenta- derstanding, and perhaps even mitigating, tain gluten which is easier to digest, says tion would have broken up the proble- various immune diseases and allergies as- Rudi Appels, another of the associated pa- matic proteins into smaller and more di- sociated with eating bread. This possibility per’s authors. Normally the gut can break gestible pieces. This might explain why is explored by Angela Juhász of Murdoch down the large proteins found in gluten, some coeliacs (and, indeed, some others University, in Western Australia, and her but when this process fails and those pro- who complain that bread is indigestible) colleagues in an associated paper in Sci- teins arrive in the lower gut they interact can happily eat sourdough bread, which is ence Advances. with the gut’s membrane and cause im- still made using traditional methods. Coeliac disease, for instance, is an immune problems. In the future, says Dr Ap- It also seems that non-coeliac wheat mune reaction to eating gluten; the related pels, wheat might also be fine-tuned to be sensitivity might not be due to gluten at all, genes are the glutenins and gliadins that less allergenic. This might be done by edit- but a poorly absorbed carbohydrate com- are expressed in the starchy endosperm of ing the wheat genome so that it contains ponent of wheat: fructans and galacto-oli- the wheatgrain. Adifferentsetofallergens, more digestible proteins. gosaccharides, along with another aller- including amylase trypsin inhibitors Those who have trouble with gluten gen, the amylase trypsin inhibitors which found in a thin layer of cells that surround may find, however, that the source of their are implicated in activating the innate im- the endosperm, are implicated in an illness problem lies more in the processing of mune system. Again, fermented bread called baker’s asthma; these could be of bread rather than the genetics ofwheat. Dr may have fewer of these hard-to-digest concern to people who suffer non-coeliac Appels says that many commercial bakers bits. Now that scientists have the genome, wheat sensitivity. use processes that eliminate part ofthe tra- such theories should be easier to prove. 7 66 Books and arts The Economist August 18th 2018

Creativity and censorship in Turkey Also in this section The art of survival 67 The Russian 20th century 68 Americans at war 68 A novel of Chinese immigration ISTANBUL 69 The ship that changed the world Recep Tayyip Erdogan wants Turkish artists to be more docile. But artisticfreedom Johnson will return next week is hard to crush URKEY’S president often complains painting, some of it inventive and some arrests of hundreds of army officers and Tthat the one area of national life on dreadfully kitsch, and practically all of it other secularists on bogus charges, did not which his conservative, Islamist-rooted stripped of political content. The show’s dampen the mood. Gallery owners such government has not made a permanent motto, seemingly aimed at the govern- as Haldun Dostoglu, a veteran of the local mark is culture and the arts. Earlier this ment’s religious and nationalist constitu- scene, could hardly believe their eyes. year, standing inside the Hagia Sophia—a ency, was: “Youtoo have your art”. “Things I could not imagine were happen- Byzantine basilica converted into a A few years can feel like a lifetime in Is- ing,” he says. “Tate Modern was knocking mosque by the Ottomans and then into a tanbul. Only a decade ago, the city was fast on my door. Istanbul was becominga mag- museum bymodern Turkey’ssecularfoun- becoming the hip new darling of the art net forEurope.” ders—Recep Tayyip Erdogan made his case world. Sales were booming, galleries Things began to unravel in the summer for an art that evoked his country’s reli- mushrooming, and foreign collectors and of2013. Demonstrations against breakneck gious and imperial lineage, as well as its artists pouring in. Several private contem- urban development, which snowballed modern ambitions. porary-art museums opened. Mr Erdo- into mass anti-government protests, were For many years, the president said, the gan’s administration, having won over met with force; Mr Erdogan accused for- arts in Turkey had been hostage “to a men- many Turkish liberals by promising demo- eign powers of plotting his overthrow. tality that was more Western than the cratic reforms and opening accession talks More chaosensued, includinga corruption West, at odds with the nation’s values, and with the European Union, seemed scandal and a string of terror attacks. A unaware of the rich heritage left behind by pleased. Artists began to confront social coup attempt in 2016 resulted in over 250 our ancestors.” The secular establishment, and historical taboos, including the plight deaths, and was followed by tens of thou- which Mr Erdogan has helped to depose of the country’s religious and ethnic mi- sands ofarrests, mass purges and a surge in over the past decade, would no longer mo- norities, with renewed confidence. nationalist rhetoric. Istanbul’s image was nopolise Turkish culture, he promised, nor badly tarnished. The number of foreign look down on artists who supported his Afterthe fall visitors to the biennale plummeted, says government. The sentiment fitted the occa- The first Istanbul art biennale, held in 1987, Mr Dostoglu. sion—the launch of a festival in Istanbul had reputedly attracted 10,000 visitors. By Money began to dry up. According to dedicated to Ottoman and Islamic arts and 2013 attendance reached over 330,000. The one study, some 12,000 millionaires, in- crafts. The work on display ranged from gradual erosion of democracy in the early cluding several big collectors, have recent- calligraphy to ceramics and miniature years of Mr Erdogan’s rule, including the ly left Turkey. A currency crisis that has1 The Economist August 18th 2018 Books and arts 67

2 seen the Turkish lira lose about 40% of its paganda have had a less devastating im- cosm ofindividual lives, but his unique ac- value against the dollar since the start of pact on contemporary art than on Turkish cess to his in-laws gives him material other this year is bound to force others to tighten journalism and popularculture. Some sub- writers have lacked, which in turn fills his their belts. Sales have dropped, and some versive, politically charged work is still be- book with a warmth and generosity that ofthe biggest galleries have closed. ing created. Mr Top—whose recent pieces are captivating. He opens with a winter Promising artists have decamped too. include a video depicting the pedlars who trip to Transylvania with his wife’smother, Many no longersee a future forthemselves sell Turkish flags at political rallies and on a hunt for her father’s grave. Lieutenant in Turkey; scores have moved abroad, es- businesses that produce them en masse— Nerses Gukasyan was killed in the second pecially to Berlin, now home to a thriving and others like him have not been cowed. world war, when she was five; it was not Turkish art scene. And, like otherpublic fig- “The art world is a much freer space until 2002 that she discovered where ex- ures and intellectuals, those who have compared to other areas of expression,” actly he had been buried. After a long trek stayed must contend with the caprices and reckons Beral Madra, a well-known critic into snowy forests, they find him at last: risks ofauthoritarianism. and curator. One reason is that the visual one of 1,236 Soviet servicemen lying to- Critical artists, especially those who arts in Turkey have always depended less gether beneath a concrete obelisk. tookpart in the protests of2013, have come on state support than on the private sector. As a scene-setter, the vignette is appo- under increasing fire from the president Another is that, being more diffuse and site. Individual loss meets official indiffer- and his ministers. Ali Kazma, a video artist lower profile, they are intrinsically harder ence; personal sacrifice meets the immen- interested in the relationship between la- to police than newspapers, television and sity of history. After this opening Mr bour, culture and the human body, repre- cinema. Taming the art scene will be O’Clery withdraws, leaving the stage to his sented Turkey at the Venice Biennale in tougher than Mr Erdogan thinks. 7 in-laws, and a tale made extraordinary by 2013. “In the eyes of the state,” he says, its sheer unremarkableness. Every Russian “Western-oriented, progressive and free- family, no matter how apparently ordin- thinking people have all become suspect.” Surviving Russian history ary, haslived through enough upheavals to Some have been imprisoned. Zehra Do- fill a book. What befell Mr O’Clery’s rela- gan, a Kurdish painter, was sentenced to Tale of the century tives also happened to millions of others, nearly three years last year for her depic- in an age ofcollective suffering and surviv- tion of a town destroyed in clashes be- al that defies comprehension. tween Turkish troops and Kurdish insur- The story proper begins in Nagorno- gents. The painting, in which Ms Dogan Karabakh, where the Gukasyan family, reimagined army vehicles as scorpions ethnic Armenians, do well in the Commu- The Shoemaker and His Daughter. By Conor (see previous page), was judged to be terro- nist Party; it moves on to Grozny, in Chech- O’Clery. Doubleday Ireland; 384 pages; £14.99 rist propaganda. Osman Kavala, a popular nya, where they hold a secure place in the entrepreneur and arts patron arrested after USSIA demands to be written about. Soviet middle class, thanks to their ideo- a smear campaign in the pro-government RJournalists posted to Frankfurt or Brus- logical reliability, sobriety and hard work. media, has spent ten months behind bars. sels rarely take a year off to tell the coun- Yet whenever they looklike finally making Artefacts have been impounded as well as try’s back-story over 350 pages, but Mos- a success of themselves, their lives are in- people. An Istanbul municipality removed cow correspondents find the prospect hard variably shattered. An unfortunate deci- a statue of the word “Kostantiniyye”, a ref- to resist. ConorO’Clery ofthe Irish Times is sion to sell a car outside the official chan- erence to the city’s formername, after prot- the latest to grapple with Russia’s tumultu- nels leads to a prison term, and relocation ests by a handful of Islamists. ous recent past, but he does it in an unusual to Siberia to escape the shame. Through The arrests, plus a state of emergency way. “The Shoemakerand His Daughter” is dedication and focus the family re-estab- declared after the attempted coup and lift- the story of his wife’s relatives, and how lishes itself, but it still takes MrO’Clery’s fa- ed onlythissummer, have had a chilling ef- they survived the savagery of the Russian ther-in-law—the shoemaker of the title—13 fect. Artists have become more cautious, as 20th century—the wars, the reforms, the years to get backin a position where he can have galleries and collectors. As a result, crashes, the revolutions. own a car again. much of the work emerging from Turkey Mr O’Clery is not the first person to re- This is not a book about heroic dissi- today is decorative rather than provoca- count Russia’s history through the micro- dents or murderous fanatics, but about tive. “You go to the big shows”, says Sena, everyday people trying to navigate a sys- an independent feminist artist, “and it’s as tem that frustrates them yet provides them if there’s nothing happening in this coun- with priceless opportunities. “In the Sibe- try.” A gallery owner says he is anxious ria of the 1980s, a city-dweller can spend about displaying a piece featuring a nude the day in a mad search forsausage and the woman at an upcoming fair. “Five years evening listening to a sublime piano recital ago, I would never get nervous about criti- by Svyatoslav Richter,” Mr O’Clery writes. cising Erdogan, the army or the police,” Then the family’s lives are destroyed once says Hasan Ozgur Top, a young artist. more, when their hard-earned savings are “Now I have to think twice, or three times, inflated to nothing by post-Soviet “shock about the price I might have to pay.” therapy”, and thugs arise to fill the space Yet there are still reasons for optimism. vacated by the party. Artists who made a name for themselves “The Shoemaker and His Daughter” during the boom of the early 2000s, such does not purport to take readers inside Jo- as Mr Kazma, TanerCeylan and Banu Cen- sef Stalin’s mind, nor to reveal the myster- netoglu, have shone on the international ies of Vladimir Putin’s modern kleptoc- stage. Some ofthe wealthiest Istanbul fam- racy, but it will give them a new respect for ilies continue to make it their mission to the people who have endured the Krem- support Turkish art. The number of youn- lin’s many experiments. It is enchantingly ger collectors is growing, and domestic at- written, thoughtfully structured and a tendance at festivals remains high. And the model for all the other journalists who waves of censorship and nationalist pro- The price of a car pass through Moscow. 7 68 Books and arts The Economist August 18th 2018

American ﬁction Anchors away

A River of Stars. By Vanessa Hua. ican life as seen through a newcomer’s Ballantine Books; 304 pages; $27 eyes. Scarlett gawks at frozen Thanks- giving turkeys, “hard and gleaming as the NLYthe wealthiest Chinese women decapitated head ofa marble statue”. She Omake their way to Perfume Bay, a delights over her first slider (mini ham- five-star secret compound near Los Ange- burger), noting that nothing signifies les forexpectant mothers. Here the wealth and refinement “more than din- spoiled wives ofShanghai bosses—all ing on toy-sized food”. carrying prized male heirs—consume The insights on parenthood are acute. diets rich in superstition (no bananas, Having a child pushes Scarlett to recon- which cause babies to slip out early); sider her own childhood, and to see her schedule Caesareans on auspicious often harsh mother more compassion- dates; and pickEnglish names worthy of ately. She becomes more aware ofthe fact their princelings (perhaps Stanley, in that she—that everyone—will die. She honour ofMorgan Stanley, orWarren, had always known this, ofcourse, “but after Warren Buffett). In time they return until now, she’d never felt such desola- home with the ultimate status symbol: a tion.” Motherhood has contracted her son with American citizenship. life, “everything a blur except fora few Scarlett Chen, the Chinese heroine of metres around her, and yet how infinite, “ARiver ofStars”, Vanessa Hua’s delight- how intense the universe now seemed.” America’s warriors ful first novel, is sent to this lavish prison In the end, every narrative thread is by her married lover, Boss Yeung, who tied in a cutesy bow. Yet a novel about No off button runs the factory in the Pearl River delta foreigners coming to America with stars which she helps manage. But she flees in their eyes and anchor babies in their when she learns that Boss Yeung wants to wombs is bound to feel timely. Without pay her offand bring up the child him- wading into policy debates, Ms Hua self. She escapes with Daisy, a privileged dramatises the stories and contributions 17-year-old ABC—American-born Chi- ofimmigrants who believe in grand The Fighters: Americans in Combat in nese—who is hunting forher own child’s ideals and strive to live up to them. Afghanistan and Iraq. By C.J. Chivers. father, a college student who has mysteri- Simon & Schuster; 374 pages; $28 and £20 ously disappeared. E’RE here because we’re here. The bookfollows the two women as “WWe’re here because another unit they evade Boss Yeung’s detectives and came here and set up, and we replaced reinvent themselves with their new-born them, and no one knows what else to do.” babies in San Francisco’s Chinatown. For Such was Specialist Robert Soto’s summa- Scarlett, America is a land ofpromises tion of America’s military strategy in the and dreams. She knows that in China the Korengal Valleyin Afghanistan—otherwise illegitimate child ofa single mother known as “The Valley ofDeath”. would be “second-class in every way”. Specialist Soto had decided to enlist as She lacks the connections to send her a child, when he saw the rubble at Ground offspring to a good Chinese school. And Zero in New York. As an FNG (“fucking even the most senior women in her new guy”) in the Korengal Valley in 2008, factory were expected to serve tea and life was a farcry from the rhetoric of politi- deferto men at meetings. America has its cians and strategies of generals. The Tali- setbacks, but it is still a land of opportuni- ban could hardly shoot straight. Yet Ameri- ty. Besides, the French fries smell as “gold- ca was not winning. en as a day at the beach”. Some 2m Americans have served in Ms Hua is a breezy, unfussy storyteller Iraq and Afghanistan since 9/11. C.J. Chiv- and an astute observer. She nicely cap- ers, a former marine and Pulitzer-winning tures some ofthe idiosyncrasies of Amer- The streets of San Francisco warcorrespondentforthe New York Times, has done as much as any journalist to record and understand those conflicts. In conditions). Nevertheless, these intimate foes became the hunted. The Pentagon “The Fighters” he picks six individuals to sketches amount to an indictment. For all built an archipelago of bases consisting of portray the young fighting men who most- their bravery, ordinary fighters had little wooden shacks behind blast walls, but the ly remain unknown to their compatriots. hope of turning official policy into reality need to supply them offered perfect oppor- Readers should not expect an explana- on the ground. They were victims of the tunities for ambush. The wizardry of tion of the complex, violent forces Ameri- failures and follies of their superiors; most drones and night-vision equipment was ca unleashed in the Muslim world. The en- who served “suffered wounds—physical, usuallyno match forthe intelligence the in- emies are faceless, the wars’ overseers psychological, moral, or all three.” surgents could gather from countless or- nebulous, distant figures (Mr Chivers re- All too often, those sent out to hunt al- dinary eyes. Firepower counted for little gards the grunts as betterjudges ofmilitary Qaeda, the Taliban and America’s other against the enemy’s ability to time strikes, 1 The Economist August 18th 2018 Books and arts 69

2 then quietly melt away. alley” and risk being shot by snipers, or opposite (anti-) those of Europeans. A cen- The catchwords of counter-insurgency drive through and riskbeing blown up. tury before Cook, a Dutch seaman called doctrine—“protect the population”— He captures the idealism of volunteers, Abel Tasman had returned with reports of sounded noble in field manuals. But what the exhilaration of killing the enemy for a land whose people were “rough, uncivi- if the population did not want America’s the first time, the comradeship of men un- lised, full of verve”. Yet still the bottom- protection? And how could the grunts pos- der arms, the agony of loved ones at home right corner ofmaps remained indistinct. sibly win hearts and minds when they and the disorientation ofreturning to civil- It was a tantalising smudge. This was spoke no Arabic or Pushtu? The doctrine ian life. His stories are by turn stomach- the great age of labels, in which educated appeared to work during the surge in Iraq churning (a marine medic tries to gather men roamed the earth naming and (they in 2007-08, but Mr Chivers attributes that his splintered jaw and teeth after being felt) tamingit. Surveyingthe world today is success mostly to other factors. In short, shot in the face) and tender (the girlfriend like looking at a schoolboy’s desk: the the military experts in Washington “man- of one traumatised special-forces soldier scratched names remain, even if many of aged, again and again, to make war look throws herself on top of him as he whim- the boysare forgotten. Thisenjoyable book like a bad idea”. pers during a thunderstorm). breathes life into characters better remem- The pen-portrait format sometimes These wars, Mr Chivers notes, “seemed bered for their namesakes than them- creates a jagged narrative. And Mr Chivers to have no off button”. When the fighting selves: Tasman (Tasmania), Louis Antoine offers disappointingly little insight into seems purposeless, why do the service- de Bougainville (bougainvillea) and Carl how things might have been done better, men keep going? To stay alive and, above Linnaeus (Linnaean classification). or whether the wars should have been all, to keep their buddies alive: “They The Royal Society, the moving spirit be- fought at all. But he superbly explains how looked after themselves, platoon by pla- hind Endeavour’s mission, was less con- small units fight, and the impossible gam- toon, squad by squad, truck crew by truck cerned with colonisation than with sci- bles young officers must take: send men to crew,each marine having the other’s back, ence. Its chiefinterest was in observing the search for hidden bombs down “ambush and staying wide ofthe higher-ups.” 7 transit of Venus: by measuring its duration from both hemispheres, the data could be used to accurately calculate the distance of The Enlightenment’s flagship the sun. Botany was a close second. By the summer of1768 the team had been chosen. There were dragons On July 30th Cook, his crew and a bump- tious young botanist named Joseph Banks left their last London anchorage. Their triumphant voyage changed the world. Its very map could be redrawn; the sun could be set more securely in the sky and, thanks to Banks’s samples, the cata- The storyofa voyage that redrew the map—and the ship that completed it logue of known plants increased by a fifth. NE clear moonlit night in June 1770, The reputation (and in some cases egos) of JamesCookran into yetmore proof of Endeavour: The Ship and the Attitude Endeavour’s crew swelled similarly. Lin- O By Peter Moore. how remarkable the newly explored conti- that Changed the World. naeus was so impressed by the trip that he Chatto & Windus; 432 pages; £20. To be nentofAustralia was. Literally: his ship, En- gave Banks his own binomial classifica- published in America by Farrar, Straus & deavour, ran aground on the Great Barrier tion, addressing a letter to “Immortalis Giroux next year Reef. The next 23 hours were spent bailing Banks”. Banks was not the sort to demur. water in terror, until finally Endeavour slid He may be immortal; Endeavour was free. Ship, captain and the intelligence he Terra Australis, she was the craft chosen for not. She limped on, transporting first food had gathered returned to England—and a the perilous undertaking. It had been over to the Falkland Islands, then troops to the rapturous welcome. two millennia since Aristotle discussed American war of independence, before fi- Rarely has a craft been so well named. the idea of a southern continent in which nally being scuttled off the coast of New- As Peter Moore shows in his new book, En- men would stand with their feet (-podes) port, Rhode Island, in 1778. 7 deavour was more than merely the first English vessel to reach New Zealand and Australia’s east coast. She was also a float- ing laboratory, a vast seed-bank and an international observatory. Along with sails and anchors she carried telescopes, micro- scopes, two artists and several scientists. Endeavour was the spirit of the Enlighten- ment under sail. She was also much less elegant than is Mr Moore’s immersive account of her life, from acorn to ending. The ideals she came to serve belied herearthy beginnings. Built in Whitby of Yorkshire oak, twisted and hardened by Yorkshire winds, Endeavour had been designed to carry not intellectuals but coal. When Australian Aboriginals first saw her, they imagined she was a “big bird” with animals clustering about her wings. Her crew referred to their matronly ship as “Mrs Endeavour”. Yet when Britain decided to seek out Mrs Endeavour takes a break 70 Appointments

The Economist August 18th 2018 Tenders Property 71

MINISTRIA E INFRASTRUKTURËS DHE ENERGJISË

Contract notiication to be completed by contracting authority, which will be published in the Public Announcement Bulletin 1. Name and address of the Contracting Authority Name MINISTRY OF INFRASTRUCTURE AND ENERGY Address Road “Abdi Toptani”, No. 1 Tel/Fax +355 4 222 2245 E-mail [email protected] Web Address www.infrastruktura.gov.al 2. Type of procurement procedure: “Consultancy service” 3. Object of the contract / framework agreement “Independent engineering services for the implementation of the concession contract / ppp for the upgrading, construction, operation and maintenance of the Arber Road” 4. The reference number of the procedure / lot ______5. Limit Fund: 446,218,904 ALL (four hundred and forty six million and two hundred and eighteen thousand and nine hundred and four) without VAT. For the year 2018 the available fund 833,333 ALL (eight hundred thirty-three thousand and three hundred and thirty-three) without VAT. 6. Duration of the contract or time limit for execution: 42 months (12 months defect liability) 7. Time limit for submitting a request for expression of interest: 31/08/2018 at 11.00. 8. Time limit for opening requests for expressions of interest: 31/08/2018 hours 11.00. On behalf of Contractor Authority Gentian Keri

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The Economist August 18th 2018 72 Economic and ﬁnancial indicators The Economist August 18th 2018

Economic data % change on year ago Budget Interest Industrial Current-account balance balance rates, % Gross domestic product production Consumer prices Unemployment latest 12 % of GDP % of GDP 10-year gov't Currency units, per $ latest qtr* 2018† latest latest 2018† rate, % months, $bn 2018† 2018† bonds, latest Aug 15th year ago United States +2.8 Q2 +4.1 +2.9 +4.2 Jul +2.9 Jul +2.4 3.9 Jul -465.5 Q1 -2.7 -4.6 2.94 - - China +6.7 Q2 +7.4 +6.6 +6.0 Jul +2.1 Jul +2.1 3.8 Q2§ +68.3 Q2 +0.6 -3.7 3.34§§ 6.90 6.68 Japan +1.0 Q2 +1.9 +1.2 -0.9 Jun +0.7 Jun +1.0 2.4 Jun +201.8 Jun +3.7 -3.8 0.09 110 111 Britain +1.3 Q2 +1.5 +1.3 +1.2 Jun +2.5 Jul +2.4 4.0 May†† -106.3 Q1 -3.5 -1.8 1.38 0.79 0.78 Canada +2.3 Q1 +1.3 +2.3 +3.8 May +2.5 Jun +2.2 5.8 Jul -53.8 Q1 -2.6 -2.3 2.27 1.32 1.28 Euro area +2.2 Q2 +1.5 +2.1 +2.5 Jun +2.1 Jul +1.7 8.3 Jun +474.0 May +3.4 -0.7 0.31 0.88 0.85 Austria +3.4 Q1 +9.7 +2.9 +6.2 May +2.0 Jun +2.2 4.7 Jun +9.5 Q1 +2.3 -0.4 0.57 0.88 0.85 Belgium +1.3 Q2 +1.2 +1.6 +2.9 May +2.2 Jul +2.0 6.0 Jun +0.2 Mar nil -1.1 0.73 0.88 0.85 France +1.7 Q2 +0.6 +1.8 +1.7 Jun +2.3 Jul +1.9 9.2 Jun -10.2 Jun -0.6 -2.4 0.67 0.88 0.85 Germany +1.9 Q2 +1.8 +2.1 +2.5 Jun +2.0 Jul +1.8 3.4 Jun‡ +323.5 Jun +7.8 +1.1 0.31 0.88 0.85 Greece +2.3 Q1 +3.1 +1.8 +1.2 Jun +0.9 Jul +0.7 19.5 May -2.0 May -1.2 -0.3 4.28 0.88 0.85 Italy +1.1 Q2 +0.7 +1.2 +1.7 Jun +1.5 Jul +1.3 10.9 Jun +56.1 May +2.6 -2.0 3.16 0.88 0.85 Netherlands +2.9 Q2 +2.8 +2.7 +3.5 Jun +2.1 Jul +1.6 4.8 Jun +91.3 Q1 +9.6 +0.8 0.44 0.88 0.85 Spain +2.7 Q2 +2.3 +2.7 -2.0 Jun +2.2 Jul +1.7 15.2 Jun +20.7 May +1.4 -2.7 1.27 0.88 0.85 Czech Republic +3.4 Q1 +2.0 +3.5 +3.4 Jun +2.3 Jul +2.2 2.4 Jun‡ +0.9 Q1 +0.5 +0.9 2.14 22.8 22.3 Denmark -1.4 Q1 +1.2 +1.6 -1.8 Jun +1.1 Jul +1.0 3.9 Jun +19.5 Jun +7.4 -0.7 0.28 6.59 6.35 Norway +0.3 Q1 +2.5 +1.9 +0.6 Jun +3.0 Jul +2.3 3.8 May‡‡ +22.8 Q1 +7.4 +5.4 1.74 8.48 7.96 Poland +5.2 Q1 +3.6 +4.4 +6.8 Jun +2.0 Jul +1.8 5.9 Jul§ -0.1 Jun -0.4 -2.2 3.16 3.84 3.67 Russia +1.8 Q2 na +1.7 +3.8 Jul +2.5 Jul +3.0 4.7 Jun§ +64.6 Q2 +4.0 +0.3 8.56 67.5 59.9 Sweden +3.3 Q2 +4.2 +2.8 +5.4 Jun +2.1 Jul +1.9 7.2 Jun§ +16.8 Q1 +3.3 +1.1 0.48 9.23 8.10 Switzerland +2.2 Q1 +2.3 +2.2 +9.0 Q1 +1.2 Jul +0.8 2.6 Jul +72.9 Q1 +8.9 +0.8 -0.03 0.99 0.97 Turkey +7.4 Q1 na +4.3 +7.0 May +15.8 Jul +12.8 9.7 May§ -57.4 Jun -5.9 -2.8 21.17 6.05 3.54 Australia +3.1 Q1 +4.2 +2.9 +4.3 Q1 +2.1 Q2 +2.2 5.3 Jul -36.8 Q1 -2.5 -1.0 2.59 1.39 1.28 Hong Kong +3.5 Q2 -0.9 +3.4 +1.0 Q1 +2.4 Jun +2.1 2.8 Jun‡‡ +14.3 Q1 +3.9 +1.9 2.19 7.85 7.82 India +7.7 Q1 +10.1 +7.2 +7.0 Jun +4.2 Jul +4.6 5.6 Jul -48.7 Q1 -2.4 -3.6 7.82 69.9 64.1 Indonesia +5.3 Q2 na +5.3 +1.0 Jun +3.2 Jul +3.5 5.1 Q1§ -24.2 Q2 -2.4 -2.5 7.98 14,600 13,358 Malaysia +5.4 Q1 na +5.7 +1.1 Jun +0.8 Jun +0.8 3.4 Jun§ +12.2 Q1 +2.9 -3.3 4.07 4.10 4.30 Pakistan +5.4 2018** na +5.4 +2.7 May +5.8 Jul +5.2 5.9 2015 -18.0 Q2 -5.9 -5.4 10.00††† 124 105 Philippines +6.0 Q2 +5.3 +6.6 +17.9 Jun +5.7 Jul +5.1 5.5 Q2§ -1.9 Mar -1.6 -2.7 6.77 53.5 51.4 Singapore +3.9 Q2 +0.6 +3.2 +7.4 Jun +0.6 Jun +0.8 2.1 Q2 +64.6 Q2 +18.6 -0.7 2.46 1.38 1.37 South Korea +2.9 Q2 +2.8 +2.8 -0.4 Jun +1.5 Jul +1.7 3.7 Jun§ +72.5 Jun +4.8 +1.0 2.50 1,128 1,140 Taiwan +3.3 Q2 +3.1 +2.6 +0.4 Jun +1.7 Jul +1.6 3.7 Jun +84.8 Q1 +13.4 -0.9 0.82 30.9 30.3 Thailand +4.8 Q1 +8.1 +4.0 +4.7 Jun +1.5 Jul +1.2 1.1 Jun§ +50.3 Q1 +9.4 -2.9 2.65 33.3 33.3 Argentina +3.6 Q1 +4.7 +1.3 -2.9 Jun +30.9 Jul +24.2 9.1 Q1§ -33.8 Q1 -4.7 -5.7 10.24 30.0 17.0 Brazil +1.2 Q1 +1.8 +1.6 +3.5 Jun +4.5 Jul +3.9 12.4 Jun§ -13.9 Jun -1.0 -7.0 9.15 3.92 3.20 Chile +4.2 Q1 +4.9 +3.7 +5.0 Jun +2.7 Jul +2.4 7.2 Jun§‡‡ -3.1 Q1 -1.6 -2.0 4.48 667 650 Colombia +2.5 Q2 +2.3 +2.5 +1.3 Jun +3.1 Jul +3.3 9.1 Jun§ -9.8 Q1 -3.2 -1.9 6.86 3,053 2,982 Mexico +2.7 Q2 -0.4 +2.2 +0.2 Jun +4.8 Jul +4.6 3.4 Jun -15.9 Q1 -1.7 -2.3 7.88 19.3 17.9 Peru +3.2 Q1 +5.6 +3.7 +10.5 May +1.6 Jul +1.4 6.6 May§ -2.9 Q1 -1.6 -3.5 na 3.32 3.25 Egypt +5.4 Q1 na +5.4 +3.8 May +13.5 Jul +16.1 9.9 Q2§ -7.7 Q1 -2.4 -9.6 na 17.9 17.7 Israel +4.1 Q1 +4.7 +3.9 +4.2 May +1.4 Jul +1.3 3.9 Jun +9.7 Q1 +2.2 -2.4 1.99 3.69 3.62 Saudi Arabia -0.9 2017 na +1.0 na +2.1 Jun +4.4 6.1 Q1 +19.9 Q1 +7.5 -3.9 na 3.75 3.75 South Africa +0.8 Q1 -2.2 +1.5 +1.3 Jun +4.6 Jun +4.8 27.2 Q2§ -12.2 Q1 -3.2 -3.6 9.02 14.7 13.3 Source: Haver Analytics. *% change on previous quarter, annual rate. †The Economist poll or 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. The Economist August 18th 2018 Economic and ﬁnancial indicators 73

Markets % change on Agricultural commodities August 15th 2017=100, $ terms Dec 29th 2017 Prices of edible oils have fallen over the Index one in local in $ 140 Aug 15th week currency terms past year. This reﬂects rising production United States (DJIA) 25,162.4 -1.6 +1.8 +1.8 throughout the 2017-18 season, after Wheat China (Shanghai Comp) 2,723.3 -0.8 -17.7 -22.3 weakness the year before when El Niño, a 120 Japan (Nikkei 225) 22,204.2 -1.9 -2.5 -0.5 climatic phenomenon, played havoc with Palm oil Soyabeans Britain (FTSE 100) 7,497.9 -3.6 -2.5 -8.7 crops. An ample supply of palm oil in Canada (S&P TSX) 16,148.5 -1.0 -0.4 -5.2 Indonesia and Malaysia, as well as of 100 Euro area (FTSE Euro 100) 1,170.5 -3.6 -3.2 -8.8 coconut oil in the Philippines, has damp- Euro area (EURO STOXX 50) 3,359.1 -3.9 -4.1 -9.7 Soyabean oil Austria (ATX) 3,287.3 -3.7 -3.9 -9.5 ened prices. In July the price of soya- 80 3,759.8 -2.7 -5.5 -11.0 beans hit a ten-year low, because of Belgium (Bel 20) Coconut oil France (CAC 40) 5,305.2 -3.6 -0.1 -5.9 concerns that impending Chinese tariﬀs Germany (DAX)* 12,163.0 -3.7 -5.8 -11.3 would reduce demand from the world’s 60 Greece (Athex Comp) 720.3 -5.0 -10.2 -15.4 largest consumer of them. The price of Italy (FTSE/MIB) 20,906.4 -4.1 -4.3 -9.9 wheat, on the other hand, has risen. Netherlands (AEX) 552.7 -3.7 +1.5 -4.4 40 Scorching temperatures have created AS O N D JFMAMJJA Spain (IBEX 35) 9,386.8 -3.7 -6.5 -12.0 drier conditions for the crop, with smaller 2017 2018 Czech Republic (PX) 1,068.5 -1.5 -0.9 -7.7 European harvests likely. Sources: CME Group; Thomson Reuters Denmark (OMXCB) 914.5 +0.5 -1.4 -7.2 Hungary (BUX) 35,826.1 -3.1 -9.0 -18.3 Norway (OSEAX) 999.8 -2.7 +10.2 +6.3 Poland (WIG) 59,114.1 -1.6 -7.3 -16.0 Other markets The Economist commodity-price index Russia (RTS, $ terms) 1,055.2 -5.3 -8.6 -8.6 2005=100 % change on % change on Sweden (OMXS30) 1,593.6 -1.8 +1.1 -10.3 Dec 29th 2017 one one Switzerland (SMI) 8,926.2 -2.7 -4.9 -6.7 Index one in local in $ Aug 7th Aug 14th* month year Turkey (BIST) 90,262.9 -6.9 -21.7 -50.9 Aug 15th week currency terms Dollar Index Australia (All Ord.) 6,415.7 +1.0 +4.0 -3.5 United States (S&P 500) 2,818.4 -1.4 +5.4 +5.4 All Items 143.1 141.0 -0.9 -1.5 Hong Kong (Hang Seng) 27,323.6 -3.7 -8.7 -9.1 United States (NAScomp) 7,774.1 -1.4 +12.6 +12.6 Food 148.1 145.4 +1.0 -1.5 India (BSE) 37,852.0 -0.1 +11.1 +1.5 China (Shenzhen Comp) 1,481.8 +1.0 -22.0 -26.4 Indonesia (IDX) 5,816.6 -4.6 -8.5 -15.0 Japan (Topix) 1,698.0 -2.7 -6.6 -4.7 Industrials Malaysia (KLSE) 1,785.9 -1.0 -0.6 -2.0 Europe (FTSEurofirst 300) 1,485.6 -2.7 -2.9 -8.5 All 137.9 136.4 -2.9 -1.6 Pakistan (KSE) 42,446.6 -0.7 +4.9 -6.3 World, dev'd (MSCI) 2,115.7 -2.3 +0.6 +0.6 Nfa† 136.2 133.3 -4.6 +2.6 Singapore (STI) 3,234.1 -2.8 -5.0 -8.1 Emerging markets (MSCI) 1,023.4 -5.2 -11.7 -11.7 Metals 138.7 137.7 -2.2 -3.2 South Korea (KOSPI) 2,258.9 -1.8 -8.5 -13.1 World, all (MSCI) 508.3 -2.7 -0.9 -0.9 Sterling Index Taiwan (TWI) 10,716.8 -3.2 +0.7 -2.9 World bonds (Citigroup) 926.7 -0.7 -2.5 -2.5 All items 201.0 201.1 +2.3 -0.8 Thailand (SET) 1,676.3 -2.6 -4.4 -6.5 EMBI+ (JPMorgan) 777.5 -1.9 -7.0 -7.0 Argentina (MERV) 27,008.2 +1.2 -10.2 -43.6 Hedge funds (HFRX) 1,260.6§ -0.3 -1.2 -1.2 Euro Index Brazil (BVSP) 77,077.9 -2.6 +0.9 -14.7 Volatility, US (VIX) 14.6 +10.9 +11.0 (levels) All items 153.5 154.1 +1.8 +1.4 Chile (IGPA) 26,645.9 -0.9 -4.8 -12.2 CDSs, Eur (iTRAXX)† 71.5 +12.3 +58.4 +49.2 Gold Colombia (IGBC) 11,946.5 -2.0 +4.1 +1.7 CDSs, N Am (CDX)† 62.6 +8.0 +27.6 +27.6 $ per oz 1,211.9 1,197.7 -2.4 -5.8 Mexico (IPC) 48,556.7 -2.7 -1.6 -0.2 Carbon trading (EU ETS) € 18.1 +2.8 +122.5 +109.6 West Texas Intermediate Peru (S&P/BVL)* 19,533.4 -3.4 -2.2 -4.6 Sources: IHS Markit; Thomson Reuters. *Total return index. $ per barrel 69.2 67.0 -1.5 +41.0 Egypt (EGX 30) 15,357.4 -3.2 +2.3 +1.4 †Credit-default-swap spreads, basis points. §Aug 14th. Israel (TA-125) 1,403.6 -1.6 +2.9 -3.2 Sources: Bloomberg; CME Group; Cotlook; Darmenn & Curl; FT; ICCO; Indicators for more countries and additional ICO; ISO; Live Rice Index; LME; NZ Wool Services; Thompson Lloyd & Saudi Arabia (Tadawul) 7,865.7 -4.2 +8.8 +8.8 Ewart; Thomson Reuters; Urner Barry; WSJ. *Provisional South Africa (JSE AS) 55,646.2 -3.7 -6.5 -21.0 series, go to: Economist.com/indicators †Non-food agriculturals. 74 Obituary V.S. Naipaul The Economist August 18th 2018

a noble purpose to his life, the call of greatness. He had moved slowly into writing, first fascinated by the mere shapes of the letters, requestingpens, Waterman ink and ruled exercise books to depict them; then intrigued by the stories his father read to him; then, in London, banging out his first attempts on a BBC typewriter. For a long time he failed to devise a story. Beginnings were laborious, punctuation sacred: he fil- leted an American editor for removing his semicolons, “with all theirdifferent shades of pause”. Once going, though, he wrote at speed, hoping to reach that state of exalta- tion when he would understand himself, as well as his subject. Truth-telling, defying the darkness, was his purpose. His travels through the post- colonial world, to India, Africa, the Carib- bean and South America, made him furious: furious that formerly colonised peoples were content to lose their history and dignity, to be used and abandoned, and to build no institutions of their own, like the Africans of “In a Free State” squealing in their forest-language in the kitchens oftou- rist hotels. He mourned the relics of colonial rule, the overgrown gardens and col- No settled place lapsed polo pavilions, the mock-Tudor lodges and faded Victorian bric-à-brac he saw in Bundi or Kampala; but even more than these, the loss ofhuman potential. Many people were offended, and he cared not a whit whether they were or not. It was his duty and his gift to describe VidiadharSurajprasad Naipaul, writer, died on August11th, aged 85 things exactly: whether the marbled end- E WAS struck again and again by the to one’s portion ofthe earth.” paper of a dusty book, the stink of bed Hwonderofbeingin hisown house, the Which portion of the earth, though, bugsand kerosene, the waythatpurple jac- audacity ofit: to walkdown a farm track in was the question. Mr Naipaul’s ancestors aranda flowers shone against rocks after Wiltshire to his own front gate, to close his were Indian, but that part lay in darkness, rain, or the stupidity ofmost people. He re- doors and windows on his own space, pri- pierced only by his grandmother’s prayers sisted all editing, of writing or opinions. vacy and neatness, to walk on cream car- and quaint rituals ofeating. Journeys to In- Without apology, he also slapped his mis- pet through book-lined rooms where, still dia later, which resulted in three books ex- tress once until his hand hurt. Severity and in a towelling robe at noon, he could sum- coriatingthe place, convinced him that this pride came naturally to his all-seeing self. mon a wife to make coffee or take dicta- was not his home and never could be. He tion. Outside, he could wander over lawns was repelled by the slums, the open defe- To the plantation to the manor house, or a lake where swans cation (picking his fastidious way through The further purpose of writing was to give glided, or visit the small building that butts and twists ofhuman excrement), and order to his life. He carefully recorded all served as his wine cellar. Vidia, his friends by the failure of Indian civilisation to de- events, either in his memory for constant called him; he disliked his name, but liked fend itself. His place of birth and growth replays or in small black notebooks con- the derivation, from the Sanskrit for seeing was Trinidad, principally Port ofSpain, the signed to his inside jacket pocket. Convert- and knowing. He looked hard, with his ea- humid, squalid, happy-go-luckycity, sticky ing these to prose imposed a shape on dis- gle stare, and saw things as they were. with mangoes and loud with the beat of order; it provided a structure, a shelter, The house, which he rented, was paid rain on corrugated iron, that provided the protection. His rootless autobiographical for by his books, more than 30 of them. He comedy in “Biswas” and “Miguel Street”. heroes often dreamed of such calm places: had not taken up writing to get rich or win But he had to leave. England was his lure, a cottage on a hill, with a fire lit, ap- awards; that was a dreadful thought. as for all bright colonial boys who did not proached at night through rain; a room fur- Dreadful! To write was a vocation. None- know their place, and his Trinidadian ac- nished all in white, looking towards the theless his fourth book, “A House for Mr cent soon vanished in high-class articula- sea; or in “The Mimic Men” the most allur- Biswas”, based on his father’s search for a tion; but Oxford was wretched and Lon- ing vision, an estate house on a Caribbean settled place, had luckily propelled him to don disappointing. He kept leaving, island among cocoa groves and giant im- fame, and in 2001 he had won the Nobel travelling, propelled by restlessness. Books mortelle trees, whose yellow and orange prize for literature. He had been knighted, resulted, but not calm. Not calm. flowers floated down on the woods. too, though he did not care to use the title. Much of his agitation, even to tears, Though he ended his days in Wiltshire, Hence the country cottage, as well as a du- came from the urge to write itself; what he more or less content, it was somebody plex in Chelsea. For, as Mr Biswas said, was to write about, and in what form. The else’s sun he saw there, and somebody “how terrible it would have been…to have novel was exhausted. Modernism was else’shistory. Hisdeep centre remained the lived without even attempting to lay claim dead. Yet literature had taken hold of him, place from which he had fled. 7