Amazon's empire

100 Pages·2017·8.84 MB·English

A special report on the future of Europe
The Trump doctrine: US and them
Science’s publishing problem
Terror in London
MARCH 25TH–31ST 2017
Amazon’s empire
And what could threaten it

Contents The EconomistMarch25th2017 3
33 New York’s homelessness
5 The world this week
Masses huddled
33 Justice in Louisiana
Leaders Gremlins and phantoms
7 Corporate ambitions 35 Lexington
Amazon’s empire Denver’s mayor
8 The future of the EU
Can Europe be saved?
The Americas
10 Donald Trump and
36 Coca-growing in Colombia
multilateralism
An unwelcome resurgence
China first
37 Floods in Peru Terror in LondonThe attack
10 Scientific publishing
Taking a battering on Parliament was just the
Breaking free
sort that security services had
37 Cuban pensioners
11 Open banking Hustling, cradle to grave been expecting. It is also the
On the cover Vaulting ambition hardest to prevent, page 47.
38 Bello
The world’s most remarkable New terrorism fears will hit
Come together, right now
company may eventually be Letters Middle Eastern airlines and
threatened by its own their passengers, page 56
16 On Liberia, Charles
success:leader, page 7. Middle East and Africa
Murray, France, electric
Investors think Amazon is
cars, dead words, the 39 Yemen
going to grow faster, bigger
OECD Beggar thy neighbour
and for longer than almost
40 Syria
any firm in history,
The race for Raqqa
pages 17-19 Briefing
41 Contraceptives in Egypt
17 Amazon
Abitter pill
Primed
The Economist online 41 South Africa
The thin robed line
Daily analysis and opinion to
Asia
supplement the print edition, plus 42 African rubbish
audio and video, and a daily chart 21 Thai politics Plastic bantastic
Generals’ disarray
Economist.com
The Trump doctrineThe
22 Political parties in Japan
E-mail:newsletters and Special report: president’s foreign policy will
The enemy within
mobile edition The future of the EU not bring America the greatness
Economist.com/email 22 State politics in India After page 42 he promised: leader, page 10.
Agent orange
Print edition: available online by Mr Trump seems bent on
7pm London time each Thursday 23 THAAD in South Korea weakening the United Nations,
Economist.com/print Here’s looking at you Europe page 51. What American
Audio edition:available online 24 Hydrological jurisprudence 43 Russia in the Middle East budget cuts might mean for
to download each Friday Try me a river Desert bear climate change, page 52
Economist.com/audioedition 25 Banyan 44 Spanish art
Trawler diplomacy Rebirth of the Prado
44 France’s election
Lucky Emmanuel
China
45 Reverse Balkanisation
26 Soft power
Acommon market of
Volume422 Number9033 Abig project to buy love their own
Published since September 1843 46 Charlemagne
to take part in "a severe contest between United States Italy, the leaden-toed
intelligence, which presses forward, and
an unworthy, timid ignorance obstructing 29 The Supreme Court boot of Europe
our progress." Neil Gorsuch: the natural
EALNSiãdtemloiwata nP oD,at rMeauil,aelh oBlxi ,,oie cSNiffiojeei noCcwegui tYs,ly, o B, iSr nMekh r,Loal Piosnncang,or dhBiwsoar,,iun M,Ss Saasuinnemn ldFgsb r,aaaa Cplinsa,o coiNrri:esoac,i, roT Coo,h bkiiyc,oa ,go, 3300 GTShe-med eaFnBnt Iva rPyO mTUiSllennials 47 TBPearrrirtlioaarimn ine nLto unnddoenr attack TIbfhe iecto iEsmu teroo asp uleoratvn imv Ueo,nr etiho flene EaxUtib 6mle0u:st
Washington DC Explaining remaining
48 Attitudes towards Brexit leader, page 8. As it marks its
32 Health fads The harder they come 60th birthday, the EU is in
California freezin’ 50 Bagehot poor shape: see our special
Mayor of the Midlands report after page 42. Italy,
host of the anniversary party,
is the country most likely to
bring it down: Charlemagne,
page 46
1Contents continues overleaf
4 Contents The EconomistMarch25th2017
International Science and technology
51 Donald Trump and the 69 Open science
world Time’s up
US v UN 70 Judging research
52 Cutting climate funds Alternative truths
Lean, not green 71 Geology
The devils and the details
Business 71 Animal experiments
Dirty secrets
53 Uber’s future
Hard driving 72 Palaeontology
Uber’s woesThe ride-hailing Old hipsters Communicating science
54 Bottled water
giant is going through the Medical research is poorly
Liquid gold
biggest crisis in its short served by the journals charged
history. Can it stay in the fast 56 Business travel Books and arts with disseminating its results:
lane? Page 53 The laptop ban 73 Traditional conservatives leader, page 10. Scientific
56 Tyre manufacturing Fight or flight? journals are now slowing
Puncture repair 74 Identity and politics progress. But that is about to
58 Brazil’s food business What kind of somewhere? change, page 69
Dead meat 74 New immigrant fiction
59 Construction firms This land is not your land
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61 China’s economic
Web: Economist.com/offers
Power playChina is spending diplomacy E-mail: [email protected]
billions on a huge project to Closer to centre-stage 80 Economic and financial P ost: TShueb sEccroipntoimonis Cte ntre,
win admiration and boost its 62 Buttonwood indicators Tanjong Pagar Post Office
global influence. Can it Sovereign bonds Statistics on 42 economies, PO Box 671
succeed? Page 26. The country 64 Bangladesh Bank heist plus a closer look at Singapore 910817
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Publisher: The Economist. Printed by Times Printers (in Singapore).
M.C.I. (P) No.030/09/2016 PPS 677/11/2012(022861)
The world this week The EconomistMarch25th2017 5
Frenchpresidential election, principal said thatthe wife of Israelshotdown a Syrian
Politics
were boosted aftera nearly the prime minister, Shinzo missile usingitsnewadvanced
four-hourlongtelevision Abe, had given a donation on Arrowsystem. The missile had
debate. Pollsshowthatin a hisbehalf. MrAbe denied been fired atan Israeli jet that
second-round run-offhe doingso. had attacked sitesin Syria
would easilydefeatMarine Le where weaponswere being
Pen, the leaderofthe anti- RexTillerson paid hisfirst visit moved too close forcomfort to
immigrantNational Front. to ChinaasAmerica’ssecre- Israel’sborder.
taryofstate. Before hisarrival,
Jeroen Dijsselbloem, the Dutch he said the two countrieswere Activistsin Zimbabwetookto
head ofthe Eurogroup of ata “historicmoment” in their the streetsdemandingelector-
finance ministers, implied that relationship, and needed a al reformsin a bid to avert
southern Europeanstateshad “fresh conversation” aboutit. ballot-riggingin a national
spentthe moneytheybor- Butthe visitdid notappear to vote scheduled for2018. They
rowed duringthe euro crisis on narrowdifferencesbetween demanded the abolition ofthe
“drinksand women”. António China and America overhow state-appointed electoral
Aterroristattacked central Costa, the Portuguese prime to deal with North Korea. commission. Some opposition
London. The British-born man minister, called forhim to groupshave called forthe vote
drove a caralongthe pave- resign. No, Mr President to be supervised bythe UN.
mentacrossWestminster In extraordinarytestimonyto
Bridge, killingatleasttwo Taxin’ Thaksin Congress, JamesComey, the Love me tender
people and leavingaround 40 The Thaigovernmentsaid it head ofthe FBI, confirmed that
injured. He then entered the had discovered a “miracle of hisagencywasinvestigating
groundsofParliament, the law” thatwould allowitto Russian linksto Donald
heartofBritain’sdemocracy, claim $350m in taxesfrom Trump’scampaign. He also
and fatallystabbed an Thaksin Shinawatra, a de- dismissed an allegation that
unarmed policeman before posed prime ministernow MrTrump waswiretapped at
beingshotdead. This livingin exile. MrThaksin the behestofBarackObama.
“marauding” method ofterror deniesthatanytaxisowed. Earlier, the White House said it
attack—usinga vehicle to mow would “notrepeat” itsclaim
people down in a crowded North Koreasuccessfully thatGCHQ,Britain’sintelli-
area—wassimilarto atrocities tested a powerful newengine gence-gatheringagency, had
carried outbyIslamistslast to be used in itsmissiles. Buta assisted in the supposed spy-
yearin France and Germany. separate testappeared to go ing. MrTrump feeblyblamed
wrongwhen the missile FoxNewsasthe claim’ssource. China suspended meatim-
The British governmentan- exploded justafterlaunch. portsfrom Brazil afterBrazilian
nounced thatithad informed Neil Gorsuch’snomination police raided several meat-
the European Council ofits hearingin the Senate to be a packingplantsthatsoldunhy-
intention to invoke Article 50 justice on the Supreme Court gienicproduce. Brazil isa big
ofthe Lisbon treatyon March started smoothly. Democrats exporterofmeatand China is
29th, triggeringthe legal re- asked tough questions; Mr itsbiggestcustomer. The EU
questto leave the EU. There is Gorsuch emphasised his and South Korea also restricted
still little clarityfrom the gov- independence. When asked some imports. With no appe-
ernmentaboutitsintentions, aboutabortion he said he tite foranotherhitto the reces-
and votersappearto be con- would have “walked outthe sion-bound economy, Michel
fused, too. Asurveythisweek door” ifDonald Trump had Temer, Brazil’spresident, invit-
showed thatboth Leave and asked him to overturn Roe v ed diplomatsand journalists
Remain supporterswantto Wadeasa condition ofhis to dinnerata steakhouse.
maintain free trade. Butthat appointment.
will be hard ifthe government The Bharatiya Janata Party, Perusuffered itsworststorms
doesnotbend on freedom of which runsIndia’snational Feeling the pinch in decades, caused byEl Niño-
movementforEUmigrants. government, selected Yogi The 68 countriesinvolved in type currentsoffitscoast. With
Adityanath to be chiefminister the coalition againstIslamic itscitiescaughtoffguard, at
Angela Merkel, the German ofthe country’smostpop- Statemetin Washington to least75 people were killed and
chancellor, visited Washington ulousstate, UttarPradesh. The reviewprogress, asfighters 100,000 lefthomeless.
fora meetingwith Donald holyman isa divisive figure, supported byAmerican spe-
Trump. Despite momentsof havingcampaigned forthe cial forcesmoved evercloser to Arare insightinto Cuban
tension—such aswhen Mr construction ofa Hindutem- Raqqa, the capital ofthe self- publicopinion waspublished
Trump appeared to refuse to ple on the site ofa demolished styled caliphate, which isnow byNORCatthe Universityof
shake herhand—German mosque, and fordescribing almostsurrounded. In Iraq, the Chicago. Surveyed late last
media feltthatthe meeting assertive women as“demons”. army, backed bycoalition air year, only13% ofCubansthink
wentwell. MrTrumptweeted power, made gainsin Mosul. the economyisdoingwell.
thatmedia reportsofthe event Ascandal deepened in Japan Two-thirdswantmore private
were “fake news”. regardinga nationalist Syrianrebelslaunched an ownership ofbusinessand
kindergarten thathasbeen attackon a suburb of 56% wantto starttheirown
The electoral fortunesof accused ofracism buthas Damascus, the firstlarge-scale firm. Perhapsnotsurprisingly,
Emmanuel Macron, an in- benefited from the patronage fightingso close to the capital overhalfsaid theywould
dependentcandidate in the ofpublicofficials. The school’s forfouryears. leave the countryiftheycould. 1
6 Theworldthisweek The EconomistMarch25th2017
newopioidpainkillerthat AkzoNobel, a Dutch makerof votersdecided lastJune to
Business
claimsto be lessaddictive than paintsand coatingsand owner leave the EUhasmade imports
the prescription pillslinked to ofthe Duluxbrand, swiftly more expensive. Inflation is
Uberlaunched a charm offen- an addiction epidemicthatis rejected a sweetened takeover nowabove the BankofEng-
sive, holdingitsfirstpress sweepingAmerica. Nektar offerof€22.4bn ($24.1bn) from land’stargetof2%. Atitsrecent
conference since a wave ofbad Therapeutics’ share price shot PPG, an American rival. It said meeting, one ofthe central
publicitycrashed overthe up by40% aftera studyfound the newprice still did not bank’spolicymakersvoted to
firm. Arianna Huffington, a thatitsdrugdampensassociat- reflectthe “significantun- raise interestratesbecause of
memberofthe board, backed ed feelingsofeuphoria. certaintiesand risks” to its inflationarypressures.
TravisKalanick, the belea- shareholdersofa deal, such as
guered founderand chief America and Britain banned anyantitrustissuesthatmay Admittingwhatsome analysts
executive, butsaid there can be passengersfrom takinglaptops arise. ElliottManagement, an thinkisinevitable, the owner
“no room…forbrilliantjerks” and otherlarge electronic American activisthedge fund ofthe Searsand Kmartretail
in the future. Afewdaysearlier devicesaboard flightsthat with a small stake in Akzo, chainsin America said that
the executive in charge of originate in several Middle threatened to use the com- “substantial doubtexists”
promotingUber’simage Eastern and north African pany’sbylawsto call fora aboutwhetheritcan continue
resigned acrimoniously, saying countries, prompted bythe shareholdermeeting. asa goingconcern. SearsHold-
thathisbeliefswere threatofa terrorattackfrom ingsreported a $2.2bn losslast
“inconsistent” with whathe explosiveshidden in such The pounding to your pocket year. Ithascashed in a few
experienced atthe firm. devices. The American and investmentsto stayafloat.
British restrictionsdiffer re- Britain’s consumer prices
Amessy web gardingthe countriesand % change on a year earlier Ahissing sound
Googletookstepsto give airlinesaffected. American stockmarketshad a
4
advertiserssome control over BANK OF rockyweek. The S&P500, Dow
the placementofadson The cut-throatcompetition ENGLAND 3 JonesIndustrial Average and
TARGET
2
YouTube afteritemerged that amongIndia’stelecomscom- NASDAQindicesrecorded
adsfrom blue-chip companies paniesspurred anothermerger 1 theirbiggestdailyfallsof the
+
had been found nextto offormerrivalswhen Voda- 0 yearso far, asthe wrangling in
–
extremistcontent. Some big foneagreed to combine its 1 Washington overthe health-
advertisersthreatened to pull businessin the countrywith 2012 13 14 15 16 17 care bill led investorsto fret
theirbusiness. Underlining the Idea Cellular, creatingIndia’s Source: Thomson Reuters thatDonald Trump’slow-tax,
conundrum ofpolicingthe biggestproviderofmobile- Consumerpricesin Britain low-regulation economic
internet, the EU’sdigital phone services. The marketin rose by2.3% yearon yearin agenda maynotbe easyto
commissionercriticised a India wasjolted lastyearby February. Thatwasup from pass. One monthlysurveyof
proposed German lawthat the entryofJio, a super-cheap 1.8% in Januaryand the steep- fund managersfound thata
would slap a €50m ($54m) fine carrierthatsuppliesa six- estmonthlyincrease in net34% thinksharesare over-
on social networksthatfail to month free service. Lastmonth inflationsince October2012. valued, the highestproportion
delete hate speech orfake Bharti Airtel, the formernum- Highertransportcostswere since 2001.
news. berone, strucka deal to buy blamed, butfood pricesrose
the Indian operationsofNor- forthe firsttime in three years. Other economic data and news
In a nod to the newrealpolitik, way’sTelenor. The slide in the pound since can be found on pages 80-81
the G20dropped a pledge to
“resistall formsofprotection-
ism” from the communiqué of
ameetingoffinance ministers.
The phrase had been regularly
inserted in G20statementsand
wasconsidered non-conten-
tious, butthe American dele-
gation soughtitsremoval.
Steven Mnuchin, America’s
treasurysecretary, said the
administration “couldn’tbe
happierwith the outcome”.
Two daysafterthe meeting
German economicofficialshit
backatAmerican complaints
thatGermany’sgianttrade
surplusisa problem. The head
ofthe country’sCouncil of
EconomicExpertssaid that
“problemscan arise on both
sides: surplusesand deficits.”
Abiotech companyin San
Francisco published positive
resultsfrom a clinical trial fora
Leaders The EconomistMarch25th2017 7
Amazon’s empire
The world’s mostremarkable firm mayeventuallybe threatened byits own success
AMAZONisan extraordinary The companywill be able to keep spending, and itsspending
company. The formerbook- will keep makingitmore powerful. Theirfaith issustained by
seller accounts for more than Amazon’srecord. Ithashad itsfailures—itsattempt to make a
halfofevery new dollar spent smartphone wasa debacle. Butthe businessisstarting to crank
online in America. It is the outcash. Lastyearcashflow(before investment) was$16bn,
world’s leading provider of more than quadruple the level five yearsago.
cloud computing. ThisyearAm- IfAmazon’sapproach to time-framesisunusual, so too is
azon will probablyspend twice the sheerbreadth ofitsactivities. The company’slistofcurrent
asmuch on television asHBO, a cable channel. Itsown-brand and possible competitors, asdescribed in itsannual filings, in-
physical productsinclude batteries, almonds, suitsand speak- cludes logistics firms, search engines, social networks, food
erslinked to a virtual voice-activated assistantthat can control, manufacturersand producersof“physical, digital and interac-
amongotherthings, yourlampsand sprinkler. tive media ofall types”. Awingspan thislarge ismore reminis-
YetAmazon’sshareholdersare workingon the premise that centofa conglomerate than a retailer, which makesAmazon’s
itisjustgettingstarted. Since the beginningof2015 itsshare share price seem even more bloated: stockmarketstypically
price hasjumped by173%, seven timesquickerthan in the two applya “conglomerate discount” to reflecttheirinefficiencies.
previousyears(and 12 timesfasterthan the S&P500 index). Manyofthese servicessupportAmazon’sown expansion
With a marketcapitalisation ofsome $400bn, itisthe fifth- and thatofothercompanies. The obviousexample isAWS,
most-valuable firm in the world. Neverbefore hasa company which powersAmazon’soperationsaswell asthose ofother
been worth so much forso longwhile makingso little money: firms. ButAmazon also rentswarehouse space to other sellers.
92% ofitsvalue isdue to profitsexpected after2020. Itisbuildinga $1.5bn air-freighthub in Kentucky. Itistesting
Thatisbecause investorsanticipate both an extraordinary technologyin storesto letconsumersskip the cash register al-
rise in revenue, from salesof$136bn lastyearto halfa trillion together, and experimenting with drone deliveries to the
overthe nextdecade, and a jump in profits. The hopes invested home. Such tools could presumably serve other customers,
in itimplythatitwill probablybecome more profitable than too. Some thinkthatAmazon could become a newkind of util-
any other firm in America. Ground for scepticism does not ity: one that provides the infrastructure ofcommerce, from
come much more fertile than this: Amazon will have to grow computingpowerto paymentsto logistics.
fasterthan almostanybigcompanyin modern historyto justi-
fyitsvaluation. Can itpossiblydo so? Agiantcannothide
Itiseasyto tickoffsome ofthe pitfalls. Rivals will notstand And here lies the real problem with the expectations sur-
still. Microsoft has cloud-computingambitions; Walmart al- roundingAmazon. Ifitgetsanywhere close to fulfilling them, it
readyhasrevenuesnudging$500bn and isbeefingup online. will attractthe attention ofregulators. Fornow, Amazon isun-
If anything happened to Jeff Bezos, Amazon’s founder and likelyto triggerantitrustaction. Itisnotyetthe biggestretailer
boss, the gap would be exceptionallyhard to fill. But the strik- in America, its most mature market. America’s antitrust en-
ingthingaboutthe companyishowmuch ofa chance it hasof forcerslookmainlyata firm’seffecton consumersand pricing.
achievingsuch unprecedented goals(see pages17-19). Seen through thislens, Amazon appearspristine. Consumers
applaud it; itisthe mostwell-regarded companyin America,
Anewsortofbasket-case accordingto a Harrispoll. (AWSisa boon to startups, too.)
Thisislargelydue to the firm’sunusual approach to two di- Butasitgrows, so will concernsaboutitspower. Even on
mensionsofcorporate life. The firstofthese istime. In an era standard antitrust grounds, that may pose a problem: if it
when executivesroutinelywhinge aboutpressure to produce makesasmuch moneyasinvestorshope, a rough calculation
short-term results, Amazon isresolutelyfocused on the distant suggestsitsearningscould be worth the equivalentof 25% of
horizon. MrBezosemphasisescontinual investmentto propel the combined profitsoflisted Western retail and media firms.
itstwo principal businesses, e-commerce and Amazon Web Butregulatorsare also changingthe waytheythinkabout tech-
Services(AWS), itscloud-computingarm. nology. In Europe, Google standsaccused ofusingits cloutasa
In e-commerce, the more shoppersAmazon lures, the more search engine to extend itspowerto adjacentbusinesses. The
retailersand manufacturerswantto sell theirgoodson Ama- comparative immunity from legal liability of digital plat-
zon. ThatgivesAmazon more cash fornewservices—such as forms—forthe postingofinflammatorycontenton Facebook,
two-hourshippingand streamingvideo and music—which en- say, orthe vettingofdriverson Uber—isbeingchipped away.
tice more shoppers. Similarly, the more customersuse AWS, Amazon’sbusinessmodel will also encourage regulators to
the more Amazon can investin newservices, which attract thinkdifferently. Investorsvalue Amazon’sgrowth overpro-
more customers. A third virtuous circle is starting to whirl fits; that makes predatory pricing more tempting. In future,
around Alexa, the firm’svoice-activated assistant: asdevelop- firmscould increasinglydepend on toolsprovided bytheir big-
ersbuild servicesforAlexa, itbecomesmore useful to consum- gestrival. IfAmazon doesbecome a utilityforcommerce, the
ers, givingdevelopersreason to create yetmore services. callswill growforitto be regulated asone. Shareholders are
So longasshareholdersretain theirfaith in thismodel, Am- rightto believe in Amazon’spotential. Butsuccesswill bring it
azon’s heady valuation resembles a self-fulfilling prophecy. into conflictwith an even strongerbeast: government. 7
8 Leaders The EconomistMarch25th2017
The future of the European Union
How to save Europe
Ifitis to survive, the European Union mustbecome a lotmore flexible
ON MARCH 25th 1957, with the election ofanothergovernmentcommitted to a referen-
the shadowofthe second dum on EUoreuro membership, could tearthe union apart.
world war still hanging over Isthere a betteralternative? The answer, asourspecial re-
them, six European countries portargues, isto pursue, more formallythan now, an EUthatis
signed the foundingtreatyof a far more flexible. In Euro-speak, this means embracing a
new sort of international club. “multi-tier” system, with the countriesofa much widerEu-
The European Union, asthe club rope takingpartto differentdegreesin itspolicies—and able to
came to be called, achieved suc- move from one tierto anotherwith relative ease.
cesson a scale itsfounderscould barelyhave imagined, not
onlyunderpinningpeace on the continentbutcreating a single The greatBritish break-off
marketaswell asa single currency, and bringinginto itsfold ex- There hasrecentlybeen a flurryofinterestin the notion ofa
dictatorshipsto the south and ex-communistcountries to the “multi-speed” Europe. ButwhatmostEUleadersmean bythe
east, asitexpanded from sixmembersto 28. Yeteven astoday’s term isthatcore membersshould be able to pursue common
European leadersgatherin Rome thisweekend to celebrate the policiesin areaslike defence, fiscal orwelfare policy; itimplies
60th anniversary, theyknowtheirprojectisin bigtrouble. thatall countriesare movingtowardsthe same destination. A
The threatsare both external and internal. Internally, the broader, “multi-tier” Europe would find a place fornon-mem-
flawsthatbecame glaringlyevidentin the euro crisis have yet bersaswell. The continentconsistsof48 countriesand 750m
to be fixed. Prolonged economic pain has contributed to a people, notjustthe 28countriesand 510mpeople in the union,
plunge in supportforthe EU. Populist, anti-European parties still lessthe 19 and 340m in the euro.
are attacking the EU’s very existence—not least in France, The core ofEurope will be those countriesthatshare the
where Marine Le Pen isdoinguncomfortablywell in the presi- single currency. To solve the euro’sills, theyneed more integra-
dential campaign, even ifthe National Frontleaderis unlikely tion and shared institutions—from a properbankingunion to a
to win in May. The mostdramaticresultofthe anti-EUback- common debt instrument. The next tier would comprise a
lash so farisBrexit. Britain’sprime minister, Theresa May, will loosergroup than nowofEUmembersthatare notreadyto ac-
notbe in Rome forthe birthdayparty; on May29th she plansto ceptthe sacrifice ofsovereigntyneeded to join the euro, which
invoke Article 50 ofthe EUtreatyto startthe Brexitprocess. Ne- some will notdo formanyyears, and maynever.
gotiationsoverBritain’sdeparture will consume much time Beyond that a multi-tier Europe should accommodate
and energyforthe nexttwo years; losingsuch a bigmember is widely differing countries. That means a changed mindset
also a huge blowto the club’sinfluence and credibility. more than changed treaties: in the language ofEurocrats, ac-
The external pressuresare equallyserious. The refugee cri- ceptinga menuthatisà la carte, notprixfixe. Thisisanathema
sishasabated, butmainlythanksto a dodgydeal with Turkey. in Brussels, where the idea thatyoucan pickand choose the
Anewlyaggressive Russia underVladimirPutin and, in Do- bitsofthe EUthatyoulike isfrowned upon, butitiswhat Euro-
nald Trump, an American president who is unenthusiastic peans increasingly want. Countries like Norway orSwitzer-
aboutboth the EUand NATO, make thisa terrible time for Eu- land maywish to be closelybound to the European single mar-
rope to be weakand divided. Thata projectsetup to underpin ket. Otherssuch asBritain maynotbe readyto accept the single
Europe’spost-warsecurityshould falteratthe verymoment market’srules, butstill wish to trade asfreelyaspossible with
when thatsecurityisunderthreatisa bitterirony. Itisalso a re- the EU. Theymightseeka biggerrole in otherareassuch asde-
minderofhowmuch isatstake ifEurope failsto fix itself. fence and security. And places like Turkey, the western Bal-
kans, Ukraine and Georgia mightprefera similarassociated
Never-closerunion statusinstead oftoday’sunsatisfactorysituation, where they
The traditional response ofEU-enthusiaststo such challenges are told theyare eligible to be full membersbutknow theywill
isto pressfora bold leap towardscloserunion. The euro needs neverbe allowed to join.
thisifitisto succeed, theyargue. Equally, theysay, more pow- To work, a multi-tierEurope should be pragmaticabout the
ersoughtto shiftto the centre to allowthe EU to strengthen its rulesthateach tierentails. Those in the outergroup mightnot
external bordersand ensure thatitspeakswith one loud voice acceptfullyfree movementofpeople, forinstance, but thatis
to the likesofMrPutin and MrTrump. Yetthe evidence isthat no reason to wall offtheiraccessto the EU’ssingle market. Nor
neitherEuropean votersnortheirelected governments want should there be a stigma ofsecond-classstatusforthose out-
this. Ifanything, publicopinion favoursthe reverse. side the core: afterall, theyinclude Denmarkand Sweden, two
Ifever-closerunion isnotpossible, anotherBrussels tradi- ofEurope’smostsuccessful countries. Waysshould be found
tion is simply to muddle through. The euro crisis is past its forcountrieswith militaryordiplomaticclout(eg, post-Brexit
worst, immigration haspeaked and Brexitwill be managed Britain) to join in foreign and defence policies.
somehow. If, afterthisyear’selections, Emmanuel Macron is Forthe European projectto survive another60 years, the
France’spresidentalongside eitherAngela Merkel orMartin keyisflexibility, in both directions. JustasBritain isleavingthe
Schulz as Germany’s chancellor, the club would be under EU, anothercountrymightone dayleave the euro. Any such
staunchlypro-EUleadership. Yetmuddlingalonghasrisks of step will be hard to manage. Butifthe union cannotembrace
itsown. Arenewed financial crisisthatupsetthe euro again, or differentiation, itfacesthe riskofdisintegration instead.7

10 Leaders The EconomistMarch25th2017
Donald Trump and multilateralism
China first
The president’s foreign policywill notdeliverthe American greatness he promised
ALMOST exactly a hundred Histreasurysecretary, Steven Mnuchin, removed a vow to
years ago, America was resistprotectionism from a recentG20statement. Hissecretary
poised to send troopsto Europe ofstate, RexTillerson, who headsa departmentsuffering from
to fightin a warwhich was not acripplinglackofdirection, wentto China, accompanied bya
in the country’s narrow, short- single reporterfrom a friendlynewswebsite, and used lan-
term self-interest. Fifty thou- guage aboutthe need formutual respectand non-confronta-
sand ofthem would die, more tion thatdelighted CommunistPartybosses—withoutobvious
than fell in eitherVietnam orKo- concessionsin return. Some ofthismaybe attributed to inex-
rea. Thatcarnage started an argumentthathasnotlet up since: perience. Butthere isa thread runningthrough itall thatsug-
doesAmerica have a broad interestin maintainingglobal sta- gestsan overarchingdesign based on two assumptions. The
bilityand prosperity? Orshould itconserve itsblood and trea- firstisthatAmerica cannotafford the costsofaid and diplo-
sure and letthe restofthe world go to hell? Acouple ofmonths macy. The second isthatmultilateral institutionsmake Ameri-
into hispresidencyitisclearthatDonald Trump’scampaign ca weaker. Both are wildlymistaken.
slogan, “America First”, means somethinglike the latter. He No doubtsome ofthe moneyspenton aid and diplomacy
wants a more powerful army, but can treat allies with con- iswasted. Buttheyaccountforonly1% offederal expenditure,
temptand thinksaid and diplomacyare a waste oftime. He and cuttingthem could do greatharm. Aid helpsmake poor
believesthatthe multilateral institutionswhere countries try countries richer and therefore more stable. Soft power is
to worktogether, builtbyAmerica atgreatcostin money and cheaperthan hard power, and nearlyalwaysa necessary com-
livesduringthe 20th centuryin the hope ofpreventingwar, are plementto it. Forexample, afterAmerica helpsitsIraqi alliesto
riddled with bad deals. defeatIslamicState, itwill need diplomacyand aid to make
sure thatthe terroristgroup doesnotmake a comeback. Mr
Enemies ofState Trump’ssecretaryofdefence, General JamesMattis, once putit
Hisbudgetproposesto cutfundingto the State Department well: “Ifyoudon’tfund the State Departmentfully, then I need
and spendingon foreign aid by28%. Italso suggestsbigcuts to to buymore ammunition ultimately.”
America’scontribution to the United Nationsand World Bank, Multilateral institutionssuch asthe UN, World Trade Orga-
includingwithdrawingall fundingforanythingto do with cli- nisation, IMF and World Bank may occasionally constrain
mate change (see page 51). When Angela Merkel, leader of America, but overall they enhance its influence. Most have
America’sbiggestEuropean ally, visited Washington the presi- theirheadquartersin America. And yes, Uncle Sam foots a dis-
denttreated herfrostily, and aftershe lefthe publicly scolded proportionate share ofthe bills. Yetthishasalso given Ameri-
Germanyfornotspendingmore on itsdefence. He refused to cansexceptional swayoverglobal rulescoveringeverything
withdraw an accusation that Britain, another steadfast ally, from trade to security. Walkaway, and the resultwill notbe a
had spied on him—a charge forwhich he hasno evidence, and betterdeal. Itwill be China firstand America’salliesdimin-
which hisown National SecurityAgencysaid would be “epi- ished; notpeace through strength so much asweakness some-
callystupid” had itactuallyhappened, which itdid not. howconjured outofprimacy.7
Scientific publishing
Breaking free
Medical research is poorlyserved bythe journals charged with disseminating its results
SCIENCE advances fastest seminatingknowledge have the capacityto do real harm: dur-
Preprint submissions when data and conclusions ing the Zika crisis, sponsors of research had to persuade
By month, ’000
are shared as quickly as possi- publishersto declare thatscientistswould notbe penalised for
10
ble. Yetitiscommon practice for releasingtheirfindingsearly. Norare elite journals the guard-
arXiv
medical researchersto hoard re- iansofqualitythattheyoften claim to be. The number ofpa-
5
Biomed sults for months or years until persso flawed thattheyneed to be retracted hasrisen sharply
preprints
0 research ispublished in an aca- in the past two decades. Studies in elite journals (such as
1991 95 2000 05 10 17
demic journal. Even then, the Natureand Science) are no more statisticallyrobustthan those
data underpinninga studyare often notmade public. in lesserjournals.
The incentive to withhold findingsispowerful. Journal pa- Science should not, and need not, be shackled byjournal
persare the de facto measure ofa scientist’sproductivity. To publication. Three sensible reforms would ensure that re-
win research moneyand getpromoted, scientistsneed to ac- searchers’ results could be communicated to more people
crue an impressive listofpublications. Yetthe delays in dis- more quickly, withoutanycompromise on quality. Step one is 1