Table Of Content

Mind the gender pay gap Get ready for Trump’s trade war Tesla’s pile-up of woes Japan’s sex trade: more kinky, less carnal APRIL7TH–13TH2018 Solving murder How to curb killing in the emerging world’s cities Contents TheEconomistApril7th2018 3 30 AbortioninPoland 6 Theworldthisweek Forcingtheissue 30 Russianfire Leaders Blazeofindignation 9 Crime 32 Charlemagne Solvingmurder TheEUvOrban 10 Frenchstrikes Howtostayontrack UnitedStates 10 Dataprivacy 33 Segregation Copythat Comingapart 11 Airlines 34 Immigration GenderpayTomakepayfairer, Dragonsfly Beveryafraid makeitmoretransparent: 12 Britain’sgenderpaygap leader,page12.Despiteits 35 Statefinances Howtonarrowit ThewisdomofMrMicawber flaws,anewobligationon Onthecover Britishfirmstoreportthe 36 Criminaljustice Violentdeathissettosoarin Letters Don’tthrowawaythatkey differencebetweenmen’sand someoftheemergingworld’s women’spaycouldchange cities.Howtocurbthe 14 On deep-sea mining, 36 Blue-collartelevision employmentpractices,page21 killing:leader,page9.Latin airlines,Peru,autonomous Thisisus vehicles,fishing,MPs America’smurderproblemis 37 Themedia aharbingerforthedeveloping Out-Foxed world,page16 Briefing 38 Lexington 16 MurderinLatinAmerica Murphy’sluck Shiningsomelight TheEconomistonline TheAmericas Dailyanalysisandopinionto Britain 39 CostaRica supplementtheprintedition,plus 21 Thegenderpaygap Aliberalnewpresident audioandvideo,andadailychart Economist.com XY>XX 40 Guatemala 22 Transatlantictrade EfraínRíosMontt E-mail:newslettersand mobileedition Theelusiveartofthedeal 40 Peru SegregationHalfacentury Economist.com/email 23 Taxingsoftdrinks Makingthemostofmoss afterMartinLutherKing’s Printedition:availableonlineby Sweettalk 41 Bello assassination,classdivides 7pmLondontimeeachThursday 24 Foreigntakeovers Lulaandthejudges arereplacingovertracism, Economist.com/printedition Anembarrassmentofriches page33 Audioedition:availableonline 24 Criminaljustice MiddleEastandAfrica todownloadeachFriday Eastereggsits 42 Ethiopianpolitics Economist.com/audioedition 25 Violentcrime Anewhope London’sbleeding 43 ProtectionisminRwanda 25 Localelections Trump’sothertradewar BinsorBrexit? 43 Africanmunicipalfinances 26 Bagehot Howtofundacity JeremyHunt,survivor Volume427Number9086 44 IsraelandGaza Willitboilover? PublishedsinceSeptember1843 totakepartin"aseverecontestbetween Europe 45 Libyanpolitics intelligence,whichpressesforward,and 27 ElectioninHungary Rushingintoadisaster anunworthy,timidignoranceobstructing ourprogress." Orban’sdesign 45 ElizabethandtheProphet HungaryViktor Orban is set to EditorialofficesinLondonandalso: 28 Germany’sHeimatpolitics Isthecaliphaqueen? continue his illiberal reign as Beijing,Berlin,Brussels,Cairo,Chicago,Madrid, Homelandinsecurity prime minister, page 27. The MexicoCity,Moscow,Mumbai,Nairobi,NewDelhi, NewYork,Paris,SanFrancisco,SãoPaulo,Seoul, 29 Frenchoverseasterritories EU is tolerating—and Shanghai,Singapore,Tokyo,WashingtonDC MigrationtoMayotte enabling—authoritarian kleptocracy in Hungary: 29 EUdigitalrights Charlemagne, page 32 Whatdotheyknow? 1Contents continues overleaf 4 Contents The EconomistApril7th2018 65 Insuringthegigeconomy Asia Yourpolicyisarrivingin 46 Japan’ssexindustry twominutes Moresmuttythanslutty 66 Thailand’seconomy 47 PoliticiansinMyanmar Anewshade Outoftheirleague 66 Economicsdegrees 47 TheAryanmigrations Namegame Steppesons 67 DeutscheBank 48 FakenewsinAsia Embattled Alllies 68 Freeexchange 49 CorruptioninSouthKorea Fakenews SexinJapanAsthepopulation Thepresidentialcurse AirlinesChina’s carriers are ages,thesextradeis the new force in air travel, 50 Banyan becominglesssexual,page46 Scienceandtechnology page 60. Their success could Taiwan,evertheflashpoint 69 Africanscience be good for passengers Countdown everywhere: leader, page 11 China 70 Automotiveengineering 51 Alleviatingdrought Theartofreflection Thewrongsolution Subscription service 71 Psychology 52 Artificialrain For our full range of subscription offers, Heartandsoul including digital only or print and digital HopeinTibet’sclouds combined visit 71 Palaeontology Economist.com/offers Eyesofthebeholder You can also subscribe by mail or telephone at International 72 Rocketscience the details provided below: 53 Householdsmoke North-eastofEden Telephone: +44 (0) 845 120 0983 Howtheotherhalfcooks Web: Economist.com/offers Post: The Economist Tesla’swoesElonMusk’scar 54 Wood-burninginEurope Booksandarts SubscriptionCentre, Cosyanddeadly P.O. Box 471, companyisheadingforacash 74 EdwardAlbee Haywards Heath, crunch,page55.Howpaint Animalsincaptivity RH16 3GY UK jobscanmakeautonomous Business 75 Russianideology carssafer,page70 Subscription for 1 year (51 issues) 55 Tesla Gettingintotheirheads Print only UK – £145 Thenextcircleofhell 75 Aradicalyear 56 TheGDPR Borntobewild Thejoysofdatahygiene 76 EdwardLear Principal commercial offices: The Adelphi Building, 1-11John Adam Street, 57 CBSandViacom Sometimesweary, London WC2N 6HT Dramakings sometimescheery Tel: +44 (0) 20 7830 7000 58 SupermarketsinChina 77 Africanfiction Rue de l’Athénée 32 TwoMarace Continentalcrossings 1206 Geneva, Switzerland Tel: +4122 566 2470 58 Semiconductor-makers 750 3rd Avenue, 5th Floor, New York, NY 10017 Shiftingsilicon 80 Economicandfinancial Tel: +1212 5410500 60 AirlinesinChina indicators 1301Cityplaza Four, Nowboarding Statisticson42economies, 12 Taikoo Wan Road, Taikoo Shing, Hong Kong Tel: +852 2585 3888 TradetensionsAmericaand 61 TakedaandShire plusacloserlookat Chinasquareupforanasty Foreignadvances renewable-energy Other commercial offices: investment Chicago, Dubai, Frankfurt, Los Angeles, tradewar,page63 62 Schumpeter Paris, San Francisco and Singapore Thesubscriptionaddiction Obituary Financeandeconomics 82 Winnie Mandela Adangerous woman 63 US-Chinatrade Blowforblow 64 The New York Fed Aneutral answer 64 Spotify Play list PEFC certified This copy of The Economist is printed on paper sourced from sustainably managed forests certified by PEFC PEFC/16-33-582 www.pefc.org Registeredasanewspaper.©2018TheEconomistNewspaperLimited.Allrightsreserved.Neitherthispublicationnoranypartofitmaybereproduced,storedinaretrievalsystem,ortransmittedinanyformorbyanymeans,electronic,mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Newspaper Limited. Published every week, except for a year-end double issue, by The Economist Newspaper Limited. The Economist is a registered trademark of The Economist Newspaper Limited. Printed by Wyndeham Peterborough Limited. 6 The world this week The EconomistApril7th2018 Politics sentenceforacceptingabribe accusedEritrea ofsupporting platform, who wounded three from a construction firm. He is anti-governmentprotests, Mr workerswith a gun before currentlyleadingin pollsfor Abiycalled foran end to “years killingherself. Itissuspected October’spresidential election ofmisunderstandings”. thatshe held a grudge against butthe conviction could make the tech giantforfiltering some itimpossible forhim to run. Itwasannounced thatEgypt’s ofhervideos. president, Abdel-Fattah al-Sisi, CarlosAlvarado won Costa wasre-elected with 97% ofthe I’m spinning around Rica’spresidential election. A vote. Some voterssaid they China’s firstspace station, formerlabourministerforthe were paid to casta ballot, yet Tiangong-1, crashed into the governingcentre-leftCitizens’ turnout, at41%, wassixper- Pacific. Itwaslaunched in 2011 Action Party, he beatFabricio centage pointslowerthan in and received two visitsby Alvarado (no relation), a con- 2014, when the lastelection Chinese astronauts. Scientists servative evangelical pastor, washeld. on the ground lostcontrol of it with 60.8% ofthe vote. in 2016. France’sfourmain railway The formerGuatemalan The South China MorningPost unionswenton strike in prot- dictator, Efraín RíosMontt, saysthat500 testburnershave estagainstreformsplanned by died while awaitinga second been builtin orderto send PresidentEmmanuel Macron. trial on chargesthathe com- silveriodide particlesinto the He proposesto end railway mitted crimesagainsthuman- atmosphere overTibet. When workers’ special employment ityduringthe country’scivil the water-laden airofthe status, which includesemploy- war. In 2013 he became the first monsoon hitsthe particles, ice mentforlife. Energyworkers, formerhead ofstate found crystalsshould form and boost rubbish collectorsand Air guiltyofgenocide byhisown precipitation. Ifthe full project France employeesare also on country’scourts. The convic- involvingtensofthousands of strike. The stoppagesare the tion waslateroverturned on a burnersiscompleted, itwould mostseriousthreatyetto Mr legal technicality. Winnie Madikizela-Mandela, be the world’slargestcloud- Macron’sagenda ofreforms. the veteran anti-apartheid seedingoperation. Afire in a Venezuelan jail activistand ex-wife ofNelson Italy’s president, Sergio Matta- killed 68 people butelicited Mandela, a formerpresident, The lowerhouse ofMalay- rella, launched formal co- silence from the socialistpresi- died atthe age of81. Many sia’s parliamentpassed a bill alition talksbetween the par- dent, NicolásMaduro. Police South Africans hailed heras a thatwould impose prison ties, a month aftera legislative sprayed tear-gasatfamily “motherofthe nation”, but sentencesand fineson those election produced a fragment- memberswho flocked to the otherssawherasan angryand who spread “fake news”. ed parliament. The populist prison fornews. flawed individual. India’s government, however, Five StarMovementemerged retracted newrulesthatwould asthe largestparty. Butto reach On second thoughts Ian Khama, a retired army have rescinded the credentials amajority, a pactwould be Israel cancelled a deal with general, stepped down as ofjournalistsfound to have needed with othergroups. Five the UN to relocate African presidentofBotswana. He published falsehoods. Starhasalreadyruled outa migrantswho entered the handed the thinlypopulated coalition with Forza Italia, the countryillegally, manyseeking butdiamond-rich countryto centre-rightpartyofSilvio asylum. The deal would have hisdeputy, Mokgweetsi Ma- Berlusconi, a formerprime resettled some in the West, sisi, aftera decade atthe helm. ministerand billionaire. with othersgranted temporary The newpresidentinheritsa residence in Israel. Binyamin countrythathaslongbeen Russian police arrested Ziyavu- Netanyahu, the prime min- heralded asa beacon ofAfri- din Magomedov, a Dagestani ister, said he still wants“to can democracyand sound billionaire, on chargesofracke- remove the infiltrators”. economicmanagement. teering. MrMagomedov, who ownsgrain and construction Speakingto an American Trumped businesses, isassociated with magazine, Muhammad bin PresidentDonald Trump or- DmitryMedvedev, Russia’s Salman, the crown prince of dered the National Guard to prime minister, and the arrest Saudi Arabia, said “the Israe- America’ssouthern border Rodrigo Duterte, the president isseen aspartofa power lishave the rightto have their upon hearingthata caravan of ofthe Philippines, acted on struggle within the elite. Mr own land”. Itwasa rare recog- roughly1,000 Central Ameri- histhreatto close the island of Magomedovhascome under nition ofIsrael’srightto exist can migrantswastravelling Boracay, a beach resortthat is fire overalleged irregularities byan Arab leader. north through Mexico. Many one ofthe country’smost in the construction ofa foot- ofthe migrantswere fleeing populartouristattractions. ball stadium in Kaliningrad for AbiyAhmed, Ethiopia’s new povertyand violence in Hon- From April 26th, he said, tour- the World Cup thisyear. prime minister, wassworn in. duras, a countrywracked by istswill be turned awayfor six He immediatelyoffered a protestsaftera contested presi- monthswhile the authorities Banged up hand offriendship to Eritrea. dential election. extend and repairthe inade- Brazil’ssupreme courtruled The recently-warringcountries quate sewage system. Infra- bysixvotesto five thatLuiz have been locked in a bitter The headquartersofYouTube, structure problemshave left Inácio Lula da Silva, a former borderdispute. In starkcon- avideo-sharingwebsite, in the tropical paradise more of a president, can be jailed while trastto hispredecessor, Hai- California wasstormed by “cesspool”, ashe tactfully he appealsagainsta 12-year lemariam Desalegn, who Nasim Aghdam, a userofthe described the island. 1 The EconomistApril7th2018 Theworldthisweek 7 Business bookraised itsestimate of the company, in a deal valuingit at aconfrontation with the state numberofpeople affected by $9.5bn. The purchase reflects a ofCalifornia, where rulesare the Cambridge Analytica data battle between Alibaba and stricterthan in the restof the Atradewarseemed ever breach, from 50m to 87m. Tencentforthe “online-to- country. more likely. The Trump admin- offline” market. istration identified over1,300 Sharesin Teslafell afternews Marketing misery Chinese products, including emerged thatone ofitscars Disneystepped into a stand- WPP, an advertisinggroup, carpartsand television sets, had crashed in semi-autono- offbetween RupertMurdoch announced itwasinvestigat- thatitwould whackwith mousmode. Regulatorsre- and British regulators. The ingwhetheritschiefexecutive, tariffsof25%. Itplansto imple- buked itforpublishingdetails authoritieshad held up Mr SirMartin Sorrell, misused mentthese aftera period of ofthe incidentwhile an in- Murdoch’sacquisition ofSky, a companyassets. (He rejected consultation. In response vestigation wasgoingon. The television network, on the the allegations.) The probe China threatened to slap du- firm also reported itsproduc- ground thatitwould give him addsto the company’swoes: it tieson 106 American goods. tion figuresforthe Model 3, its too much poweroverthe isunderpressure from clients Donald Trump’sdemandsto mass-marketelectriccar, media. Disney, which isalso in to cutcostsand isfighting off cutitstrade surpluswith which remain well below talksto buypartsofMrMur- competition from digital rivals. America by$100bn were, it target. In an effortto calm doch’sfirm, 21stCenturyFox, said, “impossible”. concernsaboutitsfinances, offered to buySky’snews More than 10,000 British em- Tesla insisted itwould not channel whetheritspurchase ployerscomplied with a dead- need to raise fundsthisyear. ofFoxgoesahead ornot. line to reporttheirgenderpay gaps. The declarationsputthe Spotify, a music-streaming CBS, an American broadcaster, average median differential service with over70m paying made a bid fora struggling between male and female users, listed itssharesin New sibling, Viacom.The offerwas earningsat12%. Gapswere York. The Swedish firm opted rejected astoo low. Viacom widestin the construction and foran unconventional direct had originallyacquired CBSin finance sectors, and narrowest listing, allowingexistingin- 2000 before spinningitoff in in food and accommodation vestorsto trade sharesfreely 2006, butthe fatesofthe two services. instead ofissuingnewstock. networkshave since diverged. The share price ended the first John Williamswasappointed dayoftradingat$149, above Carmakers rejoice the presidentofthe NewYork Tough talkon tariffsspooked levelsatwhich ithad traded in America’sEnvironmental Federal Reserve, a role that American investors. The Dow the private market. Thatval- Protection Agencysaid that comeswith a standingvote on Jones Industrial Averagefell ued the companyat$26.5bn, emissions standardsforcars America’smonetary-policy by2%, before recovering. Firms makingitthe largestlisting and lighttrucksplanned by the body. Those hopingfora fresh with the mostto lose were the since Snap, the parentofSnap- Obama administration were face were disappointed: Mr worsthit: the share price for chat, floated lastyear. unrealisticallyhigh and would Williamswaspreviouslythe Boeing, an aeroplane-maker be revised. ScottPruitt, the chiefoftheSanFranciscoFed. and a bigexporterto China, Alibaba, a Chinese e-com- EPA’schief, also backed a fell bynearly5% on the news merce firm, gobbled up Ele.me, single national standard for For other economic data and before regainingground. The China’sbiggestfood-delivery emissions, which could spark news see Indicators section price ofsoyabeans, which accountfora large share of American agricultural exports to China, tumbled. Going postal MrTrump tookseveral shots at Amazon. He accused the e-commerce giantofenjoying unfairadvantagesovercon- ventional retailers, alleging thatitunderpaysthe USPostal Service fordeliveryand that it doesnotpayall itssalestaxes. The company’sshare price fell byaround 5% when the presi- dentfirstaimed fire. Amazon made no comment. Anotherprivacyscandal hit the tech world. Researchers discovered thatGrindr, a datingapp aimed atgaypeo- ple, had been sharingitsusers’ HIVstatuswith two third- partyfirms. Facinga backlash, the firm agreed to stop. Face- Leaders The EconomistApril7th2018 9 Solving murder Violentdeath is setto soarin some cities ofthe developing world. Howto curb the killing THEplanethasrarelybeenso 1992.Aweakstatefailedtocaterforhundredsofthousands of peaceful. Even with terrible newcitydwellers, driven into slumsbyfightingin the hills. fightingin such placesasCongo, The police were unable to cope with violent new residents Syria and Yemen, warsbetween who arrived in the slums: streetgangslike MS-13 and Barrio 18. and within countries are be- In 2015 El Salvadorbecame the world’smostdeadlycountry coming less common and less barSyria. The police still do notknowwho iskilling whom or deadly. But a dark menace why. Ninety-five percentofmurdersgo unsolved. looms. Some ofthe developing Yetthe continentalso hassome ofthe biggestimprovers. In world’scitiesthreaten to be engulfed bymurder. manyColombian citiesmurderused to be the leadingcause of Ofthe 560,000 violentdeathsaround the world in 2016, death. The rate in Cali in 1994 was124 per100,000, fourtimes 68% were murders; warscaused just18%. Murderhasbeen fall- worse than NewYorkatitsmostlethal. The mayorwas a sur- ingin rich countries(though London issufferingan outbreak— geon who realised thatmurderwaslike a disease. Following see Britain section), butithaslongplagued Latin America and an approach pioneered in NewYorkand copied acrossthe rich isstartingto climb in partsofsouthern Africa, the Middle East world, he setup “violence observatories” to studyprecisely and Asia. The world often goesto greatlengthsto stop wars. howpeople, placesand behaviourled to killings. They found Justimagine ifitputasmuch effortinto stoppingmurders. that, even amid a raging drugs war, most murders resulted Latin America shows what is at stake. It has 8% of the from drunken brawls. Restrictionson alcohol and guns helped world’speople but38% ofitsrecorded murders(see Briefing). cutmurdersby35%. OtherColombian citiestweaked Cali’sev- Countingthe costsofpolice, hospitals, victims’ lostincomes idence-based policingto suittheirown needs—Medellín, for and so on, the bill forviolentcrime comesto 3.5% ofGDP. The example, targeted drugcartels. Police and judicial reform, and greatertoll ishuman: mothersand fathersburyingchildren, aid from the United States, were crucial, too. In 2017 Colom- children broughtup withouta parentand societiesdeprived bia’smurderrate was24 per100,000, the lowestfor42 years. oftensofthousandsofcitizensin the prime oftheir lives. The killingin Latin America hasbeen shaped bylocal fac- There isno excuse forthissuffering. Manyofthe emerging tors—political violence, crowded prisons, North America’sap- world’sproblemsare intractable. Murderisnotone of them. petite fordrugs. In Colombia an offensive againstguerrillas helped cutmurders. Yetthe continentholdsbroad lessons. Dustydeath Because impunityencouragesmurder, youmightthink that High murder rates have lots of causes: fragile government; the secretistough policing. The Salvadorean government sent gunsand fightersleftoverfrom wars; familiesbroken up and soldiersinto the streetsand threwpettycriminalsin prison. forced into the citybyrural violence and poverty; drugs and Butboth the criminalsand the population were brutalised and organised crime thatpolice cannotorwill notconfront; and the murderrate rocketed. Oryoucould buypeace with truces large numbersofunemployed youngmen. and special dealsbetween rival gangs. El Salvadortried that, The mixofcausesin each countryisunique butin every too, but the truce fell apart and the slaughter resumed. Al- case rapid, chaoticurbanisation makesthe problem worse. Ur- though murdersthere have fallen slightlyin the past two years, banisation itselfiswelcome, because itboostsincomes and killinghasbecome a wayoflife. growth. Itneed notlead to violence—lookatIndia and China, Instead, toughnessneedsto be targeted. Murderisextraor- which have relativelylowcrime rates. Butitcan feed a vicious dinarilyconcentrated—80% ofviolentkillingsin Latin Ameri- cycle, asthe proliferation ofmurderdestroystrustbetween the can citiesoccuron just2% ofstreets. Detailed crime statistics police and the people theyare meantto protect. Residents keep enable the police to getto gripswith the local factors behind offthe streets. Theyno longersupportthe authorities. Impuni- the killing. Iftheyknowexactlyhowand where to apply their tygrowsand the level ofviolence climbsfurther. efforts, theycan make arrestsand preventviolence. Thatiswhatfacessome ofthe world’spoorcities. Many al- readyhave the ingredientsofa murderculture. Overthe next Learning from murder decadesthese citiesare setto growrapidly. Asmuch as90% of The good newsisthatyoudo nothave to solve all the complex urban growth will take place in the poorworld. By2030, ac- social causesofmurderto begin to cutthe murderrate. Colom- cordingto HSBC, a bank, 42 ofthe 50 most-populouscitieswill bia’s innovative mayors helped create a virtuous cycle in be in emerging markets. Dhaka, Karachi and Lagos, each which the police caughtand punished murderers, and citizens crammed with roughly25m people, will join the ten largest. concluded thatthe police were there to help them and thatthe To understand where thiscan lead, considerLatin America, streetswere safer. Busierstreetsdiscouraged murder and other where seven countries account for a quarter ofthe world’s violentcrime. Once the virtuouscycle startsto turn, the entire murders. Killings often started rising in its cities because of criminal-justice ecosystem can growstronger. drugsand gangs. Since Latin America urbanised a generation Ifall countriescutmurderratesto match the best in theirre- before otherdevelopingcountries, ithashad time to find out gion, 1.35m liveswill be saved by2030, saysthe Small Arms which policieshelp stop the killing—and which fuel it. Survey. Iftheyfall backto the worst, an extra 1.25m liveswill be El Salvador, though offthe main drug-traffickingcorridor, lost. Trusted police forces armed with good statistics could hasstruggled to establish peace since the end ofcivil warin spare millionsoflives, and an ocean ofhuman suffering.7 10 Leaders TheEconomistApril7th2018 Frenchstrikes How to stay on track IfEmmanuelMacronisdefeatedbyrailwayunions,hisreformprogrammewill be derailed MAYHEM at railway sta- Despitetheunions’scarestories, MrMacron doesnot plan tions. Gridlock on the toprivatiseSNCF. Norishisreform plan particularlyradical. roads. The scenes of strife in Onlynewrailemployeeswould be withouttheirperks. Cur- Francethisweekwereasfamil- rentstaff—includingthose on strike—will keep theirs. Even so, iar as they were symbolic. On 77% oftrain driversjoined the firstdayofindustrial action. April3rdtraindriversandother EquallyworryingforMrMacron, AirFrance staffare also on rail staff began a rolling strike, strike.Anddiscontenthasspread to universitycampuses. planned for two out of every ItgoeswithoutsayingthatMrMacron needsto keep his fivedays,thatmaylastformonths.Itcouldbeare-runofthe nerve.Agovernmentdefeated once bythe streetwill suffer ir- strikesthatparalysedthecountryin1995,forcingAlainJuppé, revocabledamage to itsreformistcredentials. MrMacron’sre- JacquesChirac’sprimeminister,tobackdowninthefaceof formofSNCFisonlypartofa biggereffortto reshape the wel- chaos. How President Emmanuel Macron handles the con- farestateinacountrywhere the publicsectorconsumes 56% of frontationwithunionswilldeterminewhetherhelivesupto GDP,thehighestin the EU. MrMacron rightlywantsto trim the hiselectoralpromiseto“unblock”France,orjoinsthelonglist civilservice.Thatwill be difficultunlesshe can end the jobs- ofFrenchleadersdefeatedbytherevoltofthestreet. for-lifeculture. Fortunately,there are reasonsto thinkthatFrance isnotthe Agrèveproblem countryof23yearsago. Fora start, MrMacron waselected on a StrikesarepartofFrance’scultureofprotest.Theyareseldom promise to liberalise the economy and harmonise France’s justademandforbetterwagesorworkingconditions.Rather, myriadpension regimesso thatthe same rulesapplyto all. In theyareapoliticalshowofforce.Havingfailedtomobilise contrast,afterMrChiraccame in vowingto heal the “social workers against MrMacron’s labourreform last September, fracture”,hishard line wasseen asa broken promise. In 1995 hardlineunionsnowsenseachancetotesthisresolve.They publicopinionbacked the grévistes, and supportgreweven as knowhowtheFrenchromanticisetheirrailwaysasajewelof thestrikesdragged on. Todaycommuterlinesare creaking, and stateplanning,anddisdainBritish-styleprivatisation. moreoftheFrench acceptthe need forchange. Atthe age of50, TheFrenchhigh-speedtrainnetworkisindeedamarvel. mostFrenchpeople have manyyearsoftoil ahead ofthem. ButSNCF,thestaterailwaycompany,isladenwithdebtsand Whyshouldtrain driversbe different? illpreparedforupcomingcompetitionunderEuropeanUnion Thisisthusa contestthatMrMacron can win. Buthe needs rules.StaffoftheFrenchrailwayenjoyextraordinaryprivilege, tosoundtherightnote—ofdetermination butnotarrogance. datingfromthedayswhenshovellingcoalintosteamengines Heshouldcontrol histendencyto Jupiter-like haughtiness. His waspunishingwork.Inacountrywithalifeexpectancyof82 fightisnotonlyto defeatunreasonable unions, butto win the years,traindriverscanretireat50(risingtojust52by2024) allegianceofeveryone else. The French often fearchange asan ratherthanat62,thenationalretirementage.Unlikemostpub- assaultontheirwayoflife. MrMacron needsto persuade the lic workers, they enjoy free train tickets, they receive free silent majority that, far from destroying public services, his healthcareand,insomecases,subsidisedhousing. growth-boostingreformsare the bestwayto save them. 7 Dataprivacy Copy that America needs a data protection law. Take Europe’s and improve on it AMERICA rarely looks to the sumerstherightto transfertheirdata to anotherorganisation. bureaucrats of Brussels for It requires companies to define how they keep data secure. guidance. Commercial freedom And itletsregulatorslevybigfinesiffirmsbreakthe rules. appeals more than dirigisme. America hasenacted privacyrulesin areassuch ashealth But when it comes to data pri- care. Butithasneverpassed an overarchingdata-protection vacy, the case for copying the law. The latestattempt, the ConsumerPrivacyBill of Rights, in- best bits of the European Un- troduced in 2012 bythe Obama administration, died a slow ion’sapproach iscompelling. death in Congress. The GDPRshould inspire anothertry. The General Data Protection Regulation (GDPR) isdue to The failingsofAmerica’sself-regulatoryapproach are be- come into force nextmonth. Itisrules-heavyand has itsflaws, comingclearerbythe week. Large partsofthe online economy butitspremise thatconsumersshould be in charge of theirper- are fuelled by data that consumers spray around without sonal data isthe rightone. The lawletsusersgain access to, and thought. Companies’ arcane privacypoliciesobfuscate what to correct, information thatfirmshold on them. Itgives con- theydo with theirusers’ information, which often amountsto 1 TheEconomistApril7th2018 Leaders 11 2prettymuchanythingtheyplease.Facebookisembroiledin ica is movingin the opposite direction. States that have de- crisisafternewsthatdataon87musershadbeenpassedtoa tectedaneedforgreaterprivacyare draftingtheirown laws. political-campaignfirm.Identity-theftiswidespread;thean- California,forinstance, haspendinglegislation that would es- nualcosttoAmericanconsumersexceeds$16bn,accordingto tablishadata-protection authorityto regulate howthe state’s some estimates. On March 29th Under Armour, a clothing bigtechfirmsuse Californians’ personal data. brand, said that hackers had gained access to information Internationally, too, America isincreasinglyan outlier. Any about150musersofitsMyFitnessPalapp. AmericanfirmthatservesEuropean customerswill soon have Thesescandalsarechangingthecalculusaboutthebenefits nochoicebuttocomplywith the GDPR; some firmsplan to ofself-regulation.Opponentsofprivacylegislationhavelong employ the rules worldwide. Other countries are adopting argued thatthe imposition ofruleswould keep technology GDPR-stylelaws. Asimilarregime on both sidesofthe Atlantic companiesfrominnovating.Yetastrustleachesoutofthesys- wouldhelpkeep data flowingacrossborders. The alternative, tem,innovationislikelytosuffer.Ifconsumersfretaboutwhat ofaregulatorypatchwork, would make itharderforthe West smartphoneappsmaydowiththeirdata,fewernewofferings toamassashared stockofAItrainingdata to rival China’s. will take off—especially in artificial intelligence. It emerged thisweekthatGrindr,adatingappaimedatgaypeople,had Puttingthepersonal into data beensharingdetailsofusers’HIVstatuswithotherfirms.Tim Americaneednotadoptthe GDPRwholesale. The legislation Cook,thechiefexecutiveofApple(which,admittedly,hassold isfarfromperfect. Atnearly100 articleslong, itistoo complex itselfontheideathatitscustomers’datashouldnotbeasource andtriestoachieve too manythings. The compliance costs for ofprofit),hascalledprivacya“humanright”.EvenMarkZuck- smaller firms, in particular, look burdensome. In addition, erberg,Facebook’sboss,hassignalledanopennesstoregula- partsoftheGDPRare outofstep with America’sconstitutional tion. It is striking that many of the firms preparing for the guaranteeoffree speech: a “rightto be forgotten” ofthe kind GDPR’sarrivalinEuropeenthusethatthelawhasforcedthem thatthenewlawenshrineswill notfly. toputtheirdatahouseinorder(seeBusinesssection). Buttheseareargumentsforusingthe GDPRasa template, Theneedtominimiselegalfragmentationonlyaddstothe notforignoringthe issue ofdata protection. IfAmerica contin- caseforAmericatoadoptbitsoftheGDPR.Onereasonbehind uesontoday’spath, itwill fail to protectthe privacy ofitsciti- thenewrulesintheEUwastoharmonisedata-protectionlaws zensandlong-term health ofitsfirms. America’sdata econ- sothatfirmscandobusinessacrossEuropemoreeasily.Amer- omyhasthrivedso farwith hardlyanyrules. Thatera isover. 7 Airlines Dragons fly The take-offofChinese aviation could be good forpassengers everywhere OVERthe pastfewdecades, andAmericaonChinese airlinesrose from 37% to 61%. Chinese airlines established airlinesin Eur- Losingthe battle to flypeople in and outofChina isone Passengers carried, m ope and America have been hit thing. Butthe menace to the world’sestablished carriersgoes 600 byone thingafteranother. First deeper. Justasthe Gulfairlinesexpanded byoffering connect- 400 came low-costcarriers, chipping ing flights to international passengers through their Middle 200 awayattheirshort-haul routes. Eastern hubsso, too, are Chinese airlinesturningthemselves 0 Lately, a newcrop ofsuper-con- into connectors. The cheapestwayto getfrom London to Aus- 1990 2000 10 17 necting airlines in the Gulf, tralia, forinstance, isno longervia Dubai orAbuDhabi but Emirates,EtihadandQatarAirways, haslured awaytheir long- through Guangzhou, Shanghai or Wuhan. The Chinese au- haul passengerswith superiorservice and lowerfares. Now thoritieshave loosened visa requirementsto encourage this loomsthe biggestthreatofall—the rise ofseveral promising kind oftransfertraffic. Chinese airlines(see Businesssection). Unfortunately, the re- China’sarrival asan aviation superpowerhasprompted sponse ofthe incumbentsrisksdeprivingpassengersof the two responses from big Western carriers—both predictable, benefitsfrom thislatestwave ofcompetition. neither good. The Europeans are crying foul about govern- China’sairlinesare risingup the world rankingsat a breath- mentaid, justastheydid when the Gulfairlinesbecame a takingpace. In 2007 passengersin China made 184m journeys threat. The bossesofAirFrance-KLMand Lufthansa wail that byair; lastyeararound 550m did. The International AirTran- theyare the victimsof“unfairtrade”. Theyare lobbyingfor sportAssociation, a trade group, predictsthatChina will leap- rulesthatwould letthe European Union place unilateral sanc- frogAmerica asthe world’sbiggestmarketin the comingfive tions on subsidised foreign rivals, Chinese carriers among years. Duringthe next two decades Airbus and Boeing, the them, even before anyinvestigation hasbeen concluded. world’stwo bigmanufacturersofpassengeraircraft, forecast The factthatChinese airlinesbenefitfrom support from the thatChinese carrierswill buymore jetsthan American ones. state isnotin question. Butthe outrage ofrivalsis shamelessly Passengers who had a choice used to avoid Chinese air- confected. Around the world, the aviation industryhas been lines. Delayswere common, accidentsfrequentand the food builton governmentsupport. CE Delft, a research firm, reckons inedible. However, after a concerted effort to improve stan- thatFrench airlinesget€1bn ($1.2bn) in energysubsidiesalone dards, theyare winningflyersover. OAG, a data firm, reckons each year. Unilateral sanctionsmightbenefitincumbents, but thatin 2011-17 the proportion ofpassengerseatsbetween China would restrictchoice and harm passengers. Atit-for-tat battle 1 12 Leaders The EconomistApril7th2018 2overflyingrightswouldhitEuropeharderthanChina,which leaptfrom5%to 25%. Three JVsaccountforalmost80% ofthe isfastbecomingasizeablenetexporteroftourists. transatlantic market. The established American airlines ThebigthreeAmericancarriershavetakenadifferenttack. wouldlovetoteam up with Chinese rivalsin orderto domi- Theyarealsohappytoplaytheprotectionistcardwhenitsuits natethePacific, too. them. American, Delta and United have all been lobbying Neithershutoutnorcarve-up isgood forpassengers. In an hardagainsttheGulfcarriers,forinstance.ButwithChinathey idealworld,Europe and America would seekopen-skies deals sniffanopportunityaswellasathreat.Theywantanopen- with China but design them to nurture competition rather skiestreaty,whichwouldallowairlinestoflybetweenanyair- thanmuteit.Airline JVswould be barred from gaininganti- portinthetwocountries. trustimmunity. Airportslotswould be allocated more fairly, so that the best landing and take-off times were not hoarded. Faretrade Statehandoutswould be transparent. Intheory,passengershavemuchtogainfromadealofthis Alas,thechancesofreachingsuch a sensible accommoda- sort.Inpractice,open-skiesdealsopenthedoortojointven- tion with China’s airlines are low. Rising trade tensions be- tures(JVs),whicharegrantedimmunityfromantitrustrules tween America and China are onlypartofthe explanation and so can potentially lead to higher prices. In 2006-16 the (seeFinancesection). The real problem isthatbigWestern car- share of long-haul passenger traffic controlled by such JVs rierswouldnotmuch like such policieseither. 7 Britain’sgenderpaygap How to narrow it To make payfairer, make itmore transparent PITY Britain’s press officers. biaswithrigorousstatisticsistricky, and made more so bythe Gender pay gap April 4th was the deadline growth ofthe knowledge economy—itisharderto compare Britain,women’smedianhourlypay as%ofmen’s for employers in Britain with the jobs of two consultants than two factory hands. Politi- Employers 800 250 workersormore to publish cians, courts and bureaucrats are ill-placed to compare jobs Menearn Women more earnmore details of the difference be- from afar, letalone to setpay. Betterforfirmsto be open about 400 tween the average pay oftheir theirpayand aware ofbiases, which maybe unconscious. 0 male and female employees, Atthe heartofunequal payisthe asymmetrybetween em- 25 50 75 100 125 150 under a new annual reporting ployers, who know everyone’s salary, and employees, who requirement(TheEconomistGroup recorded a median gap of are entitled to know no one’s but their own. As collective 29.5%). The overall figuresare eye-opening: eightoutof ten em- wage-bargaininghasbeen replaced bysalariesthatare negoti- ployerspaymen more than women. Theresa May, the prime ated individually, firmshave had more scope to payunequally. minister, haspromised to tackle this“burninginjustice”. Transparencywould help overcome thisand make the labour Some take the numbersto mean thatwomen are paid less marketmore efficient, asworkersand employerscould find than men forthe same job. In factthe exercise bluntly com- the jobsoremployeesthatsuited them best. paresemployees’ paywithoutaccountingfortheirdiffering Howfarshould thisgo? In Sweden firmswith more than roles—so PremierLeague football clubshave vastbutmeaning- ten employeesfall undera publicombudsman, who can in- lesspaygaps, asthe men on the pitch are compared with the specttheirmandatorypaysurvey, carryoutin-depth audits women on the turnstiles. Thismayeven create perverse incen- and askforchanges. In America several bigfirmshave begun tives, as firms could appear better by outsourcing low-paid voluntarypaysurveys, often undershareholderpressure. jobsdone bywomen. Yetthe exercise could also lead to deeper More radically, in Finland, Norway and Sweden anyone questioningofwhatcausesdifferencesin pay(see Britain sec- can lookup whattheircolleaguesand neighboursearn. For tion). To thatextent, the mad scramble amongfirms—not just many, this economists’ ideal is a step too far. But discretion fordata, butalso forjustifications—isencouraging. could be preserved byborrowingfrom a newGerman policy that lets workers in firms with at least 200 employees ask Even Stevens, and Stephanies aboutaverage paywithin a peergroup. Thisgivesworkers the Two problemsstand out. First, the data confirm thattoo few toolsto bargain with, withoutsacrificinganyone’sprivacy. women hold seniorpositions. Firmshave gotbetterat attract- Such measurescould help iron outotherdiscrimination. ingfemale entrants, buttheyleaktalent, so women become The firstpaysurveyofSalesforce, a cloud-computing firm, in rarerhigherup the ranks. Remediesto fixthatare well known: 2016 led to $3m in salarycorrectionsthatbenefited men as well generousparental leave (formen and women alike), afford- aswomen. Itsnextsurveydealtwith discrimination based on able child care and flexible workinghoursall help ensure that ethnicity, leadingto a further$3m in corrections. motherhood need notmarkthe end ofa woman’scareer. Britain’sexercise hasstimulated reflection in firms thathad Second, women still face beingpaid lessthan men for doing given barriers to, and biases in, pay and promotion little jobsthatare fundamentallysimilar. Manysuspectthat clear- thought. The goal should notbe to eliminate gapsbut to get cutsexism hasgiven wayto more subtle discrimination. Bir- firmsto thinkaboutwhich differencesin seniorityand payare mingham council wassuccessfullysued forrewardingmale- justified and which are not. The factthatmosthave accompa- dominated worklike street-sweepingmore generouslythan nied theirdata with analysisand explanations, and that some female-dominated worklike cleaning. However, quantifying have settargets, isatleasta start. 7 14 Letters The EconomistApril7th2018 flightsthatdon’tbeginorend totheprosecutor,alongwith cannotdrive the carsoftoday, Thebeautifulbrinysea intheirowncountry(or,inthe theevidenceIandothershave autonomousvehicleshold the “Racetothebottom”discussed caseofEuropeanUnionair- presented.Odebrechtofficials promise offreedom to go thenewtechnologiesbehind lines,inEUterritory).Aslong havesaidthatthefeespaidtoa anywhere forthe firsttime. thepushtominetheocean asthiscrabbedframework formerbusinesspartner’sfirm ALISA MOSKALEVA floor(TechnologyQuarterly, reigns,therewillbenoMarri- wereentirelylegalandnotpart San Francisco March10th).Thearticlewas ottsofthesky.Onlythrough ofanybriberyscheme.All aptlytitled,asthereisnosuch JVsandcode-sharingareair- makeclearthatthesupposed Fisherman’s friend thingasan“environmentally linesabletoreplicatesomeof linkisapoliticallymotivated sensitiveway”tominethe whatmightbepossibleina constructwithnocredible Itistrue thatBritain’sfishing deepseabed.Thedeepseais moreconventionalregulatory evidence.Mostchillingwas industryistoo small to jeop- thelargestsourceofspecies setting. theswiftpaceofproceedings ardise a future Brexitdeal on andecosystemdiversityon JVsreceiveimmunityonly whichallowednotimeforthe trade (“Afishytransition”, Earth.Miningislikelytocause inliberalisedopen-skiesmar- roleofdueprocesssofunda- March 24th). Fishingcontrib- irrevocablelossofbiodiversity, ketsinwhichgovernments mentaltothefunctioningofa utesjust0.07% to British GDP, theworld’snaturalinheri- havegivenupthepowerto transparentdemocracy. almostnothing. The industry tance.Intheareawherethe regulateentry,routes,capacity Ihavewelcomedafull employsonly12,000 people dredgingcompanyyoumen- andprice.Becauseliberalisa- investigationofmyfinances outofa total labourforce of tionedplanstowork,atypical tionisaprerequisitetoimmu- and,asaprivatecitizen,will 33.6m, ora mere 0.04%. 30-yearoperationwouldcover nity,itisnoexaggerationtosay continuetoworktoassurethat However, thisdoesnot about10,000squarekilo- thatairlines’desiretoserve Peruviancitizensenjoyhealth mean thatthe industryshould metresofoceanbottom.And theircustomersbetterthrough andsafetyalongwiththeir be leftto fend foritselfor to sedimentplumeswillextend immunisedJVshascracked humanandcivilrights. meetitsdemise, especially thedamageovermanythou- opentheglobalaviationmar- PEDROPABLOKUCZYNSKI since forcertain communities sandsofsquarekilometres ketplaceinwaysunimaginable Lima itisa matteroflife and death. beyondtheminingarea. even20yearsago.Notsurpris- Rather, itshould be guaranteed Atlastmonth’ssessionof ingly,itisaround64%cheaper supportbythe British govern- The road to somewhere theInternationalSeabed toflytodaythanin1996. mentifBrexitbecomesa reali- Authority,anMITresearcher IATA’smembers,notjust ty— supportthatwould not taskedwithcreatingafinancial legacyairlinesbutagrowing bearheavilyon the Treasury. modelforseabedmining numberofnew-modelair- ALI EL-AGRAA acknowledgedthathehad lines,havelongsupportedthe London omittedanycostestimatesof questformoreopenandcom- environmentaldamagesand petitivemarkets. On the bench thelossofecosystemservices. BRIANPEARCE TheISAmustfillthatgap, Chiefeconomist Charlemagne referred to Jaro- anddosotransparently:many InternationalAirTransport slawKaczynski asa “back- ofitsmostimportantfindings Association bench MP” holdingno consti- arenowhiddenunderacloak Geneva tutional position (March 3rd). I ofconfidentiality.Theworld agree with the latter, butMr needsanopendebateonthe Kaczynski, the leaderofPo- Peruvian politics exploitationofthedeepsea- Talkofa “freedom to go any- land’srulingLawand Justice bed. Yourarticle concerningmy where” thatautonomous party, defiantlysitson the MATTHEWGIANNI resignation containsa number vehicleswill somehowforce centre ofthe frontbench in OnbehalfoftheDeepSea ofoutrageousinaccuracies usto give up issilly(“Who is parliament. Defiantly, because ConservationCoalition (“Odebrechtclaimsitsbiggest behind the wheel?”, March hisofficiallyallocated seat isto Amsterdam scalp”, March 24th). From day 3rd). I cannot“go anywhere” in the side ofthe bench. Accord- one ofourgovernment, the mymid-size sedan. I can only ingto the rules, all MPsmust super-majorityofthe opposi- go to destinationsthatcan be vote from theirdesignated Freedom forairlines tion in Congresstried to bring reached byroad. And thatroad seats. Butneitherthese rules, Correctlynotingthatairline down myadministration, needsto be passable. Acheck- noranyothers, seem to apply jointventures(JVs) are a way claimingthe scalpsoffive of pointwith armed guards, a to MrKaczynski. forcarriersto overcome gov- mycabinetministers, includ- barricade, a pothole oreven a Asyoupointed out, every- ernmentrestrictionson cross- ingthe transportminister, now trafficjam will take awaymy one should knowwho isreally borderinvestmentisonlya Peru’snewpresident. Despite freedom asmuch asany in the driver’sseat. Butin small partofthe story(“Come the opposition’sfierce efforts, fiddlingwith software settings Poland we letthe driversit flywith me”, March 17th). ouradministration keptPeru in an autonomousvehicle. A where he wants. Airlinesare hamstrungevery- growingwithoutinflation or governmentbenton restricting KAROL KRAS where byanachronisticre- bloated publicdebtand the mobilityofitspeople London7 strictionson theirability to do worked successfullyto im- alreadyhasplentyofoptions business. Theyare prohibited prove the environmentand fordoingso byregulating from operatingdomestic“feed- publichealth while expanding accessto roads. Lettersarewelcomeandshouldbe er” servicesin anycountry but majorinfrastructure and clean Autonomousvehicleswill addressedtotheEditorat TheEconomist,TheAdelphiBuilding, theirown; notallowed to mininginvestment. change ourcitiesand present 1-11JohnAdamStreet, exercise corporate control over Asforthe alleged illegal trade-offs, butthose who think LondonWC2N6HT airlinesin anycountrybut linkbetween me and Ode- thatcarsdo notlimitourmo- E-mail:[email protected] theirown; and even forbidden brecht, I referyouto the state- bilityare kiddingthemselves. Morelettersareavailableat: from operatinginternational mentsofmyformercolleagues Fordisabled people, who Economist.com/letters

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Mind the gender pay gap Get ready for Trump’s trade war Tesla’s pile-up of woes Japan’s sex trade: more kinky, less carnal APRIL7TH–13TH2018 Solving murder How to curb killing in the emerging world’s cities Contents TheEconomistApril7th2018 3 30 AbortioninPoland 6 Theworldthisweek Forcingtheissue 30 Russianfire Leaders Blazeofindignation 9 Crime 32 Charlemagne Solvingmurder TheEUvOrban 10 Frenchstrikes Howtostayontrack UnitedStates 10 Dataprivacy 33 Segregation Copythat Comingapart 11 Airlines 34 Immigration GenderpayTomakepayfairer, Dragonsfly Beveryafraid makeitmoretransparent: 12 Britain’sgenderpaygap leader,page12.Despiteits 35 Statefinances Howtonarrowit ThewisdomofMrMicawber flaws,anewobligationon Onthecover Britishfirmstoreportthe 36 Criminaljustice Violentdeathissettosoarin Letters Don’tthrowawaythatkey differencebetweenmen’sand someoftheemergingworld’s women’spaycouldchange cities.Howtocurbthe 14 On deep-sea mining, 36 Blue-collartelevision employmentpractices,page21 killing:leader,page9.Latin airlines,Peru,autonomous Thisisus vehicles,fishing,MPs America’smurderproblemis 37 Themedia aharbingerforthedeveloping Out-Foxed world,page16 Briefing 38 Lexington 16 MurderinLatinAmerica Murphy’sluck Shiningsomelight TheEconomistonline TheAmericas Dailyanalysisandopinionto Britain 39 CostaRica supplementtheprintedition,plus 21 Thegenderpaygap Aliberalnewpresident audioandvideo,andadailychart Economist.com XY>XX 40 Guatemala 22 Transatlantictrade EfraínRíosMontt E-mail:newslettersand mobileedition Theelusiveartofthedeal 40 Peru SegregationHalfacentury Economist.com/email 23 Taxingsoftdrinks Makingthemostofmoss afterMartinLutherKing’s Printedition:availableonlineby Sweettalk 41 Bello assassination,classdivides 7pmLondontimeeachThursday 24 Foreigntakeovers Lulaandthejudges arereplacingovertracism, Economist.com/printedition Anembarrassmentofriches page33 Audioedition:availableonline 24 Criminaljustice MiddleEastandAfrica todownloadeachFriday Eastereggsits 42 Ethiopianpolitics Economist.com/audioedition 25 Violentcrime Anewhope London’sbleeding 43 ProtectionisminRwanda 25 Localelections Trump’sothertradewar BinsorBrexit? 43 Africanmunicipalfinances 26 Bagehot Howtofundacity JeremyHunt,survivor Volume427Number9086 44 IsraelandGaza Willitboilover? PublishedsinceSeptember1843 totakepartin"aseverecontestbetween Europe 45 Libyanpolitics intelligence,whichpressesforward,and 27 ElectioninHungary Rushingintoadisaster anunworthy,timidignoranceobstructing ourprogress." Orban’sdesign 45 ElizabethandtheProphet HungaryViktor Orban is set to EditorialofficesinLondonandalso: 28 Germany’sHeimatpolitics Isthecaliphaqueen? continue his illiberal reign as Beijing,Berlin,Brussels,Cairo,Chicago,Madrid, Homelandinsecurity prime minister, page 27. The MexicoCity,Moscow,Mumbai,Nairobi,NewDelhi, NewYork,Paris,SanFrancisco,SãoPaulo,Seoul, 29 Frenchoverseasterritories EU is tolerating—and Shanghai,Singapore,Tokyo,WashingtonDC MigrationtoMayotte enabling—authoritarian kleptocracy in Hungary: 29 EUdigitalrights Charlemagne, page 32 Whatdotheyknow? 1Contents continues overleaf 4 Contents The EconomistApril7th2018 65 Insuringthegigeconomy Asia Yourpolicyisarrivingin 46 Japan’ssexindustry twominutes Moresmuttythanslutty 66 Thailand’seconomy 47 PoliticiansinMyanmar Anewshade Outoftheirleague 66 Economicsdegrees 47 TheAryanmigrations Namegame Steppesons 67 DeutscheBank 48 FakenewsinAsia Embattled Alllies 68 Freeexchange 49 CorruptioninSouthKorea Fakenews SexinJapanAsthepopulation Thepresidentialcurse AirlinesChina’s carriers are ages,thesextradeis the new force in air travel, 50 Banyan becominglesssexual,page46 Scienceandtechnology page 60. Their success could Taiwan,evertheflashpoint 69 Africanscience be good for passengers Countdown everywhere: leader, page 11 China 70 Automotiveengineering 51 Alleviatingdrought Theartofreflection Thewrongsolution Subscription service 71 Psychology 52 Artificialrain For our full range of subscription offers, Heartandsoul including digital only or print and digital HopeinTibet’sclouds combined visit 71 Palaeontology Economist.com/offers Eyesofthebeholder You can also subscribe by mail or telephone at International 72 Rocketscience the details provided below: 53 Householdsmoke North-eastofEden Telephone: +44 (0) 845 120 0983 Howtheotherhalfcooks Web: Economist.com/offers Post: The Economist Tesla’swoesElonMusk’scar 54 Wood-burninginEurope Booksandarts SubscriptionCentre, Cosyanddeadly P.O. Box 471, companyisheadingforacash 74 EdwardAlbee Haywards Heath, crunch,page55.Howpaint Animalsincaptivity RH16 3GY UK jobscanmakeautonomous Business 75 Russianideology carssafer,page70 Subscription for 1 year (51 issues) 55 Tesla Gettingintotheirheads Print only UK – £145 Thenextcircleofhell 75 Aradicalyear 56 TheGDPR Borntobewild Thejoysofdatahygiene 76 EdwardLear Principal commercial offices: The Adelphi Building, 1-11John Adam Street, 57 CBSandViacom Sometimesweary, London WC2N 6HT Dramakings sometimescheery Tel: +44 (0) 20 7830 7000 58 SupermarketsinChina 77 Africanfiction Rue de l’Athénée 32 TwoMarace Continentalcrossings 1206 Geneva, Switzerland Tel: +4122 566 2470 58 Semiconductor-makers 750 3rd Avenue, 5th Floor, New York, NY 10017 Shiftingsilicon 80 Economicandfinancial Tel: +1212 5410500 60 AirlinesinChina indicators 1301Cityplaza Four, Nowboarding Statisticson42economies, 12 Taikoo Wan Road, Taikoo Shing, Hong Kong Tel: +852 2585 3888 TradetensionsAmericaand 61 TakedaandShire plusacloserlookat Chinasquareupforanasty Foreignadvances renewable-energy Other commercial offices: investment Chicago, Dubai, Frankfurt, Los Angeles, tradewar,page63 62 Schumpeter Paris, San Francisco and Singapore Thesubscriptionaddiction Obituary Financeandeconomics 82 Winnie Mandela Adangerous woman 63 US-Chinatrade Blowforblow 64 The New York Fed Aneutral answer 64 Spotify Play list PEFC certified This copy of The Economist is printed on paper sourced from sustainably managed forests certified by PEFC PEFC/16-33-582 www.pefc.org Registeredasanewspaper.©2018TheEconomistNewspaperLimited.Allrightsreserved.Neitherthispublicationnoranypartofitmaybereproduced,storedinaretrievalsystem,ortransmittedinanyformorbyanymeans,electronic,mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Newspaper Limited. Published every week, except for a year-end double issue, by The Economist Newspaper Limited. The Economist is a registered trademark of The Economist Newspaper Limited. Printed by Wyndeham Peterborough Limited. 6 The world this week The EconomistApril7th2018 Politics sentenceforacceptingabribe accusedEritrea ofsupporting platform, who wounded three from a construction firm. He is anti-governmentprotests, Mr workerswith a gun before currentlyleadingin pollsfor Abiycalled foran end to “years killingherself. Itissuspected October’spresidential election ofmisunderstandings”. thatshe held a grudge against butthe conviction could make the tech giantforfiltering some itimpossible forhim to run. Itwasannounced thatEgypt’s ofhervideos. president, Abdel-Fattah al-Sisi, CarlosAlvarado won Costa wasre-elected with 97% ofthe I’m spinning around Rica’spresidential election. A vote. Some voterssaid they China’s firstspace station, formerlabourministerforthe were paid to casta ballot, yet Tiangong-1, crashed into the governingcentre-leftCitizens’ turnout, at41%, wassixper- Pacific. Itwaslaunched in 2011 Action Party, he beatFabricio centage pointslowerthan in and received two visitsby Alvarado (no relation), a con- 2014, when the lastelection Chinese astronauts. Scientists servative evangelical pastor, washeld. on the ground lostcontrol of it with 60.8% ofthe vote. in 2016. France’sfourmain railway The formerGuatemalan The South China MorningPost unionswenton strike in prot- dictator, Efraín RíosMontt, saysthat500 testburnershave estagainstreformsplanned by died while awaitinga second been builtin orderto send PresidentEmmanuel Macron. trial on chargesthathe com- silveriodide particlesinto the He proposesto end railway mitted crimesagainsthuman- atmosphere overTibet. When workers’ special employment ityduringthe country’scivil the water-laden airofthe status, which includesemploy- war. In 2013 he became the first monsoon hitsthe particles, ice mentforlife. Energyworkers, formerhead ofstate found crystalsshould form and boost rubbish collectorsand Air guiltyofgenocide byhisown precipitation. Ifthe full project France employeesare also on country’scourts. The convic- involvingtensofthousands of strike. The stoppagesare the tion waslateroverturned on a burnersiscompleted, itwould mostseriousthreatyetto Mr legal technicality. Winnie Madikizela-Mandela, be the world’slargestcloud- Macron’sagenda ofreforms. the veteran anti-apartheid seedingoperation. Afire in a Venezuelan jail activistand ex-wife ofNelson Italy’s president, Sergio Matta- killed 68 people butelicited Mandela, a formerpresident, The lowerhouse ofMalay- rella, launched formal co- silence from the socialistpresi- died atthe age of81. Many sia’s parliamentpassed a bill alition talksbetween the par- dent, NicolásMaduro. Police South Africans hailed heras a thatwould impose prison ties, a month aftera legislative sprayed tear-gasatfamily “motherofthe nation”, but sentencesand fineson those election produced a fragment- memberswho flocked to the otherssawherasan angryand who spread “fake news”. ed parliament. The populist prison fornews. flawed individual. India’s government, however, Five StarMovementemerged retracted newrulesthatwould asthe largestparty. Butto reach On second thoughts Ian Khama, a retired army have rescinded the credentials amajority, a pactwould be Israel cancelled a deal with general, stepped down as ofjournalistsfound to have needed with othergroups. Five the UN to relocate African presidentofBotswana. He published falsehoods. Starhasalreadyruled outa migrantswho entered the handed the thinlypopulated coalition with Forza Italia, the countryillegally, manyseeking butdiamond-rich countryto centre-rightpartyofSilvio asylum. The deal would have hisdeputy, Mokgweetsi Ma- Berlusconi, a formerprime resettled some in the West, sisi, aftera decade atthe helm. ministerand billionaire. with othersgranted temporary The newpresidentinheritsa residence in Israel. Binyamin countrythathaslongbeen Russian police arrested Ziyavu- Netanyahu, the prime min- heralded asa beacon ofAfri- din Magomedov, a Dagestani ister, said he still wants“to can democracyand sound billionaire, on chargesofracke- remove the infiltrators”. economicmanagement. teering. MrMagomedov, who ownsgrain and construction Speakingto an American Trumped businesses, isassociated with magazine, Muhammad bin PresidentDonald Trump or- DmitryMedvedev, Russia’s Salman, the crown prince of dered the National Guard to prime minister, and the arrest Saudi Arabia, said “the Israe- America’ssouthern border Rodrigo Duterte, the president isseen aspartofa power lishave the rightto have their upon hearingthata caravan of ofthe Philippines, acted on struggle within the elite. Mr own land”. Itwasa rare recog- roughly1,000 Central Ameri- histhreatto close the island of Magomedovhascome under nition ofIsrael’srightto exist can migrantswastravelling Boracay, a beach resortthat is fire overalleged irregularities byan Arab leader. north through Mexico. Many one ofthe country’smost in the construction ofa foot- ofthe migrantswere fleeing populartouristattractions. ball stadium in Kaliningrad for AbiyAhmed, Ethiopia’s new povertyand violence in Hon- From April 26th, he said, tour- the World Cup thisyear. prime minister, wassworn in. duras, a countrywracked by istswill be turned awayfor six He immediatelyoffered a protestsaftera contested presi- monthswhile the authorities Banged up hand offriendship to Eritrea. dential election. extend and repairthe inade- Brazil’ssupreme courtruled The recently-warringcountries quate sewage system. Infra- bysixvotesto five thatLuiz have been locked in a bitter The headquartersofYouTube, structure problemshave left Inácio Lula da Silva, a former borderdispute. In starkcon- avideo-sharingwebsite, in the tropical paradise more of a president, can be jailed while trastto hispredecessor, Hai- California wasstormed by “cesspool”, ashe tactfully he appealsagainsta 12-year lemariam Desalegn, who Nasim Aghdam, a userofthe described the island. 1 The EconomistApril7th2018 Theworldthisweek 7 Business bookraised itsestimate of the company, in a deal valuingit at aconfrontation with the state numberofpeople affected by $9.5bn. The purchase reflects a ofCalifornia, where rulesare the Cambridge Analytica data battle between Alibaba and stricterthan in the restof the Atradewarseemed ever breach, from 50m to 87m. Tencentforthe “online-to- country. more likely. The Trump admin- offline” market. istration identified over1,300 Sharesin Teslafell afternews Marketing misery Chinese products, including emerged thatone ofitscars Disneystepped into a stand- WPP, an advertisinggroup, carpartsand television sets, had crashed in semi-autono- offbetween RupertMurdoch announced itwasinvestigat- thatitwould whackwith mousmode. Regulatorsre- and British regulators. The ingwhetheritschiefexecutive, tariffsof25%. Itplansto imple- buked itforpublishingdetails authoritieshad held up Mr SirMartin Sorrell, misused mentthese aftera period of ofthe incidentwhile an in- Murdoch’sacquisition ofSky, a companyassets. (He rejected consultation. In response vestigation wasgoingon. The television network, on the the allegations.) The probe China threatened to slap du- firm also reported itsproduc- ground thatitwould give him addsto the company’swoes: it tieson 106 American goods. tion figuresforthe Model 3, its too much poweroverthe isunderpressure from clients Donald Trump’sdemandsto mass-marketelectriccar, media. Disney, which isalso in to cutcostsand isfighting off cutitstrade surpluswith which remain well below talksto buypartsofMrMur- competition from digital rivals. America by$100bn were, it target. In an effortto calm doch’sfirm, 21stCenturyFox, said, “impossible”. concernsaboutitsfinances, offered to buySky’snews More than 10,000 British em- Tesla insisted itwould not channel whetheritspurchase ployerscomplied with a dead- need to raise fundsthisyear. ofFoxgoesahead ornot. line to reporttheirgenderpay gaps. The declarationsputthe Spotify, a music-streaming CBS, an American broadcaster, average median differential service with over70m paying made a bid fora struggling between male and female users, listed itssharesin New sibling, Viacom.The offerwas earningsat12%. Gapswere York. The Swedish firm opted rejected astoo low. Viacom widestin the construction and foran unconventional direct had originallyacquired CBSin finance sectors, and narrowest listing, allowingexistingin- 2000 before spinningitoff in in food and accommodation vestorsto trade sharesfreely 2006, butthe fatesofthe two services. instead ofissuingnewstock. networkshave since diverged. The share price ended the first John Williamswasappointed dayoftradingat$149, above Carmakers rejoice the presidentofthe NewYork Tough talkon tariffsspooked levelsatwhich ithad traded in America’sEnvironmental Federal Reserve, a role that American investors. The Dow the private market. Thatval- Protection Agencysaid that comeswith a standingvote on Jones Industrial Averagefell ued the companyat$26.5bn, emissions standardsforcars America’smonetary-policy by2%, before recovering. Firms makingitthe largestlisting and lighttrucksplanned by the body. Those hopingfora fresh with the mostto lose were the since Snap, the parentofSnap- Obama administration were face were disappointed: Mr worsthit: the share price for chat, floated lastyear. unrealisticallyhigh and would Williamswaspreviouslythe Boeing, an aeroplane-maker be revised. ScottPruitt, the chiefoftheSanFranciscoFed. and a bigexporterto China, Alibaba, a Chinese e-com- EPA’schief, also backed a fell bynearly5% on the news merce firm, gobbled up Ele.me, single national standard for For other economic data and before regainingground. The China’sbiggestfood-delivery emissions, which could spark news see Indicators section price ofsoyabeans, which accountfora large share of American agricultural exports to China, tumbled. Going postal MrTrump tookseveral shots at Amazon. He accused the e-commerce giantofenjoying unfairadvantagesovercon- ventional retailers, alleging thatitunderpaysthe USPostal Service fordeliveryand that it doesnotpayall itssalestaxes. The company’sshare price fell byaround 5% when the presi- dentfirstaimed fire. Amazon made no comment. Anotherprivacyscandal hit the tech world. Researchers discovered thatGrindr, a datingapp aimed atgaypeo- ple, had been sharingitsusers’ HIVstatuswith two third- partyfirms. Facinga backlash, the firm agreed to stop. Face- Leaders The EconomistApril7th2018 9 Solving murder Violentdeath is setto soarin some cities ofthe developing world. Howto curb the killing THEplanethasrarelybeenso 1992.Aweakstatefailedtocaterforhundredsofthousands of peaceful. Even with terrible newcitydwellers, driven into slumsbyfightingin the hills. fightingin such placesasCongo, The police were unable to cope with violent new residents Syria and Yemen, warsbetween who arrived in the slums: streetgangslike MS-13 and Barrio 18. and within countries are be- In 2015 El Salvadorbecame the world’smostdeadlycountry coming less common and less barSyria. The police still do notknowwho iskilling whom or deadly. But a dark menace why. Ninety-five percentofmurdersgo unsolved. looms. Some ofthe developing Yetthe continentalso hassome ofthe biggestimprovers. In world’scitiesthreaten to be engulfed bymurder. manyColombian citiesmurderused to be the leadingcause of Ofthe 560,000 violentdeathsaround the world in 2016, death. The rate in Cali in 1994 was124 per100,000, fourtimes 68% were murders; warscaused just18%. Murderhasbeen fall- worse than NewYorkatitsmostlethal. The mayorwas a sur- ingin rich countries(though London issufferingan outbreak— geon who realised thatmurderwaslike a disease. Following see Britain section), butithaslongplagued Latin America and an approach pioneered in NewYorkand copied acrossthe rich isstartingto climb in partsofsouthern Africa, the Middle East world, he setup “violence observatories” to studyprecisely and Asia. The world often goesto greatlengthsto stop wars. howpeople, placesand behaviourled to killings. They found Justimagine ifitputasmuch effortinto stoppingmurders. that, even amid a raging drugs war, most murders resulted Latin America shows what is at stake. It has 8% of the from drunken brawls. Restrictionson alcohol and guns helped world’speople but38% ofitsrecorded murders(see Briefing). cutmurdersby35%. OtherColombian citiestweaked Cali’sev- Countingthe costsofpolice, hospitals, victims’ lostincomes idence-based policingto suittheirown needs—Medellín, for and so on, the bill forviolentcrime comesto 3.5% ofGDP. The example, targeted drugcartels. Police and judicial reform, and greatertoll ishuman: mothersand fathersburyingchildren, aid from the United States, were crucial, too. In 2017 Colom- children broughtup withouta parentand societiesdeprived bia’smurderrate was24 per100,000, the lowestfor42 years. oftensofthousandsofcitizensin the prime oftheir lives. The killingin Latin America hasbeen shaped bylocal fac- There isno excuse forthissuffering. Manyofthe emerging tors—political violence, crowded prisons, North America’sap- world’sproblemsare intractable. Murderisnotone of them. petite fordrugs. In Colombia an offensive againstguerrillas helped cutmurders. Yetthe continentholdsbroad lessons. Dustydeath Because impunityencouragesmurder, youmightthink that High murder rates have lots of causes: fragile government; the secretistough policing. The Salvadorean government sent gunsand fightersleftoverfrom wars; familiesbroken up and soldiersinto the streetsand threwpettycriminalsin prison. forced into the citybyrural violence and poverty; drugs and Butboth the criminalsand the population were brutalised and organised crime thatpolice cannotorwill notconfront; and the murderrate rocketed. Oryoucould buypeace with truces large numbersofunemployed youngmen. and special dealsbetween rival gangs. El Salvadortried that, The mixofcausesin each countryisunique butin every too, but the truce fell apart and the slaughter resumed. Al- case rapid, chaoticurbanisation makesthe problem worse. Ur- though murdersthere have fallen slightlyin the past two years, banisation itselfiswelcome, because itboostsincomes and killinghasbecome a wayoflife. growth. Itneed notlead to violence—lookatIndia and China, Instead, toughnessneedsto be targeted. Murderisextraor- which have relativelylowcrime rates. Butitcan feed a vicious dinarilyconcentrated—80% ofviolentkillingsin Latin Ameri- cycle, asthe proliferation ofmurderdestroystrustbetween the can citiesoccuron just2% ofstreets. Detailed crime statistics police and the people theyare meantto protect. Residents keep enable the police to getto gripswith the local factors behind offthe streets. Theyno longersupportthe authorities. Impuni- the killing. Iftheyknowexactlyhowand where to apply their tygrowsand the level ofviolence climbsfurther. efforts, theycan make arrestsand preventviolence. Thatiswhatfacessome ofthe world’spoorcities. Many al- readyhave the ingredientsofa murderculture. Overthe next Learning from murder decadesthese citiesare setto growrapidly. Asmuch as90% of The good newsisthatyoudo nothave to solve all the complex urban growth will take place in the poorworld. By2030, ac- social causesofmurderto begin to cutthe murderrate. Colom- cordingto HSBC, a bank, 42 ofthe 50 most-populouscitieswill bia’s innovative mayors helped create a virtuous cycle in be in emerging markets. Dhaka, Karachi and Lagos, each which the police caughtand punished murderers, and citizens crammed with roughly25m people, will join the ten largest. concluded thatthe police were there to help them and thatthe To understand where thiscan lead, considerLatin America, streetswere safer. Busierstreetsdiscouraged murder and other where seven countries account for a quarter ofthe world’s violentcrime. Once the virtuouscycle startsto turn, the entire murders. Killings often started rising in its cities because of criminal-justice ecosystem can growstronger. drugsand gangs. Since Latin America urbanised a generation Ifall countriescutmurderratesto match the best in theirre- before otherdevelopingcountries, ithashad time to find out gion, 1.35m liveswill be saved by2030, saysthe Small Arms which policieshelp stop the killing—and which fuel it. Survey. Iftheyfall backto the worst, an extra 1.25m liveswill be El Salvador, though offthe main drug-traffickingcorridor, lost. Trusted police forces armed with good statistics could hasstruggled to establish peace since the end ofcivil warin spare millionsoflives, and an ocean ofhuman suffering.7 10 Leaders TheEconomistApril7th2018 Frenchstrikes How to stay on track IfEmmanuelMacronisdefeatedbyrailwayunions,hisreformprogrammewill be derailed MAYHEM at railway sta- Despitetheunions’scarestories, MrMacron doesnot plan tions. Gridlock on the toprivatiseSNCF. Norishisreform plan particularlyradical. roads. The scenes of strife in Onlynewrailemployeeswould be withouttheirperks. Cur- Francethisweekwereasfamil- rentstaff—includingthose on strike—will keep theirs. Even so, iar as they were symbolic. On 77% oftrain driversjoined the firstdayofindustrial action. April3rdtraindriversandother EquallyworryingforMrMacron, AirFrance staffare also on rail staff began a rolling strike, strike.Anddiscontenthasspread to universitycampuses. planned for two out of every ItgoeswithoutsayingthatMrMacron needsto keep his fivedays,thatmaylastformonths.Itcouldbeare-runofthe nerve.Agovernmentdefeated once bythe streetwill suffer ir- strikesthatparalysedthecountryin1995,forcingAlainJuppé, revocabledamage to itsreformistcredentials. MrMacron’sre- JacquesChirac’sprimeminister,tobackdowninthefaceof formofSNCFisonlypartofa biggereffortto reshape the wel- chaos. How President Emmanuel Macron handles the con- farestateinacountrywhere the publicsectorconsumes 56% of frontationwithunionswilldeterminewhetherhelivesupto GDP,thehighestin the EU. MrMacron rightlywantsto trim the hiselectoralpromiseto“unblock”France,orjoinsthelonglist civilservice.Thatwill be difficultunlesshe can end the jobs- ofFrenchleadersdefeatedbytherevoltofthestreet. for-lifeculture. Fortunately,there are reasonsto thinkthatFrance isnotthe Agrèveproblem countryof23yearsago. Fora start, MrMacron waselected on a StrikesarepartofFrance’scultureofprotest.Theyareseldom promise to liberalise the economy and harmonise France’s justademandforbetterwagesorworkingconditions.Rather, myriadpension regimesso thatthe same rulesapplyto all. In theyareapoliticalshowofforce.Havingfailedtomobilise contrast,afterMrChiraccame in vowingto heal the “social workers against MrMacron’s labourreform last September, fracture”,hishard line wasseen asa broken promise. In 1995 hardlineunionsnowsenseachancetotesthisresolve.They publicopinionbacked the grévistes, and supportgreweven as knowhowtheFrenchromanticisetheirrailwaysasajewelof thestrikesdragged on. Todaycommuterlinesare creaking, and stateplanning,anddisdainBritish-styleprivatisation. moreoftheFrench acceptthe need forchange. Atthe age of50, TheFrenchhigh-speedtrainnetworkisindeedamarvel. mostFrenchpeople have manyyearsoftoil ahead ofthem. ButSNCF,thestaterailwaycompany,isladenwithdebtsand Whyshouldtrain driversbe different? illpreparedforupcomingcompetitionunderEuropeanUnion Thisisthusa contestthatMrMacron can win. Buthe needs rules.StaffoftheFrenchrailwayenjoyextraordinaryprivilege, tosoundtherightnote—ofdetermination butnotarrogance. datingfromthedayswhenshovellingcoalintosteamengines Heshouldcontrol histendencyto Jupiter-like haughtiness. His waspunishingwork.Inacountrywithalifeexpectancyof82 fightisnotonlyto defeatunreasonable unions, butto win the years,traindriverscanretireat50(risingtojust52by2024) allegianceofeveryone else. The French often fearchange asan ratherthanat62,thenationalretirementage.Unlikemostpub- assaultontheirwayoflife. MrMacron needsto persuade the lic workers, they enjoy free train tickets, they receive free silent majority that, far from destroying public services, his healthcareand,insomecases,subsidisedhousing. growth-boostingreformsare the bestwayto save them. 7 Dataprivacy Copy that America needs a data protection law. Take Europe’s and improve on it AMERICA rarely looks to the sumerstherightto transfertheirdata to anotherorganisation. bureaucrats of Brussels for It requires companies to define how they keep data secure. guidance. Commercial freedom And itletsregulatorslevybigfinesiffirmsbreakthe rules. appeals more than dirigisme. America hasenacted privacyrulesin areassuch ashealth But when it comes to data pri- care. Butithasneverpassed an overarchingdata-protection vacy, the case for copying the law. The latestattempt, the ConsumerPrivacyBill of Rights, in- best bits of the European Un- troduced in 2012 bythe Obama administration, died a slow ion’sapproach iscompelling. death in Congress. The GDPRshould inspire anothertry. The General Data Protection Regulation (GDPR) isdue to The failingsofAmerica’sself-regulatoryapproach are be- come into force nextmonth. Itisrules-heavyand has itsflaws, comingclearerbythe week. Large partsofthe online economy butitspremise thatconsumersshould be in charge of theirper- are fuelled by data that consumers spray around without sonal data isthe rightone. The lawletsusersgain access to, and thought. Companies’ arcane privacypoliciesobfuscate what to correct, information thatfirmshold on them. Itgives con- theydo with theirusers’ information, which often amountsto 1 TheEconomistApril7th2018 Leaders 11 2prettymuchanythingtheyplease.Facebookisembroiledin ica is movingin the opposite direction. States that have de- crisisafternewsthatdataon87musershadbeenpassedtoa tectedaneedforgreaterprivacyare draftingtheirown laws. political-campaignfirm.Identity-theftiswidespread;thean- California,forinstance, haspendinglegislation that would es- nualcosttoAmericanconsumersexceeds$16bn,accordingto tablishadata-protection authorityto regulate howthe state’s some estimates. On March 29th Under Armour, a clothing bigtechfirmsuse Californians’ personal data. brand, said that hackers had gained access to information Internationally, too, America isincreasinglyan outlier. Any about150musersofitsMyFitnessPalapp. AmericanfirmthatservesEuropean customerswill soon have Thesescandalsarechangingthecalculusaboutthebenefits nochoicebuttocomplywith the GDPR; some firmsplan to ofself-regulation.Opponentsofprivacylegislationhavelong employ the rules worldwide. Other countries are adopting argued thatthe imposition ofruleswould keep technology GDPR-stylelaws. Asimilarregime on both sidesofthe Atlantic companiesfrominnovating.Yetastrustleachesoutofthesys- wouldhelpkeep data flowingacrossborders. The alternative, tem,innovationislikelytosuffer.Ifconsumersfretaboutwhat ofaregulatorypatchwork, would make itharderforthe West smartphoneappsmaydowiththeirdata,fewernewofferings toamassashared stockofAItrainingdata to rival China’s. will take off—especially in artificial intelligence. It emerged thisweekthatGrindr,adatingappaimedatgaypeople,had Puttingthepersonal into data beensharingdetailsofusers’HIVstatuswithotherfirms.Tim Americaneednotadoptthe GDPRwholesale. The legislation Cook,thechiefexecutiveofApple(which,admittedly,hassold isfarfromperfect. Atnearly100 articleslong, itistoo complex itselfontheideathatitscustomers’datashouldnotbeasource andtriestoachieve too manythings. The compliance costs for ofprofit),hascalledprivacya“humanright”.EvenMarkZuck- smaller firms, in particular, look burdensome. In addition, erberg,Facebook’sboss,hassignalledanopennesstoregula- partsoftheGDPRare outofstep with America’sconstitutional tion. It is striking that many of the firms preparing for the guaranteeoffree speech: a “rightto be forgotten” ofthe kind GDPR’sarrivalinEuropeenthusethatthelawhasforcedthem thatthenewlawenshrineswill notfly. toputtheirdatahouseinorder(seeBusinesssection). Buttheseareargumentsforusingthe GDPRasa template, Theneedtominimiselegalfragmentationonlyaddstothe notforignoringthe issue ofdata protection. IfAmerica contin- caseforAmericatoadoptbitsoftheGDPR.Onereasonbehind uesontoday’spath, itwill fail to protectthe privacy ofitsciti- thenewrulesintheEUwastoharmonisedata-protectionlaws zensandlong-term health ofitsfirms. America’sdata econ- sothatfirmscandobusinessacrossEuropemoreeasily.Amer- omyhasthrivedso farwith hardlyanyrules. Thatera isover. 7 Airlines Dragons fly The take-offofChinese aviation could be good forpassengers everywhere OVERthe pastfewdecades, andAmericaonChinese airlinesrose from 37% to 61%. Chinese airlines established airlinesin Eur- Losingthe battle to flypeople in and outofChina isone Passengers carried, m ope and America have been hit thing. Butthe menace to the world’sestablished carriersgoes 600 byone thingafteranother. First deeper. Justasthe Gulfairlinesexpanded byoffering connect- 400 came low-costcarriers, chipping ing flights to international passengers through their Middle 200 awayattheirshort-haul routes. Eastern hubsso, too, are Chinese airlinesturningthemselves 0 Lately, a newcrop ofsuper-con- into connectors. The cheapestwayto getfrom London to Aus- 1990 2000 10 17 necting airlines in the Gulf, tralia, forinstance, isno longervia Dubai orAbuDhabi but Emirates,EtihadandQatarAirways, haslured awaytheir long- through Guangzhou, Shanghai or Wuhan. The Chinese au- haul passengerswith superiorservice and lowerfares. Now thoritieshave loosened visa requirementsto encourage this loomsthe biggestthreatofall—the rise ofseveral promising kind oftransfertraffic. Chinese airlines(see Businesssection). Unfortunately, the re- China’sarrival asan aviation superpowerhasprompted sponse ofthe incumbentsrisksdeprivingpassengersof the two responses from big Western carriers—both predictable, benefitsfrom thislatestwave ofcompetition. neither good. The Europeans are crying foul about govern- China’sairlinesare risingup the world rankingsat a breath- mentaid, justastheydid when the Gulfairlinesbecame a takingpace. In 2007 passengersin China made 184m journeys threat. The bossesofAirFrance-KLMand Lufthansa wail that byair; lastyeararound 550m did. The International AirTran- theyare the victimsof“unfairtrade”. Theyare lobbyingfor sportAssociation, a trade group, predictsthatChina will leap- rulesthatwould letthe European Union place unilateral sanc- frogAmerica asthe world’sbiggestmarketin the comingfive tions on subsidised foreign rivals, Chinese carriers among years. Duringthe next two decades Airbus and Boeing, the them, even before anyinvestigation hasbeen concluded. world’stwo bigmanufacturersofpassengeraircraft, forecast The factthatChinese airlinesbenefitfrom support from the thatChinese carrierswill buymore jetsthan American ones. state isnotin question. Butthe outrage ofrivalsis shamelessly Passengers who had a choice used to avoid Chinese air- confected. Around the world, the aviation industryhas been lines. Delayswere common, accidentsfrequentand the food builton governmentsupport. CE Delft, a research firm, reckons inedible. However, after a concerted effort to improve stan- thatFrench airlinesget€1bn ($1.2bn) in energysubsidiesalone dards, theyare winningflyersover. OAG, a data firm, reckons each year. Unilateral sanctionsmightbenefitincumbents, but thatin 2011-17 the proportion ofpassengerseatsbetween China would restrictchoice and harm passengers. Atit-for-tat battle 1 12 Leaders The EconomistApril7th2018 2overflyingrightswouldhitEuropeharderthanChina,which leaptfrom5%to 25%. Three JVsaccountforalmost80% ofthe isfastbecomingasizeablenetexporteroftourists. transatlantic market. The established American airlines ThebigthreeAmericancarriershavetakenadifferenttack. wouldlovetoteam up with Chinese rivalsin orderto domi- Theyarealsohappytoplaytheprotectionistcardwhenitsuits natethePacific, too. them. American, Delta and United have all been lobbying Neithershutoutnorcarve-up isgood forpassengers. In an hardagainsttheGulfcarriers,forinstance.ButwithChinathey idealworld,Europe and America would seekopen-skies deals sniffanopportunityaswellasathreat.Theywantanopen- with China but design them to nurture competition rather skiestreaty,whichwouldallowairlinestoflybetweenanyair- thanmuteit.Airline JVswould be barred from gaininganti- portinthetwocountries. trustimmunity. Airportslotswould be allocated more fairly, so that the best landing and take-off times were not hoarded. Faretrade Statehandoutswould be transparent. Intheory,passengershavemuchtogainfromadealofthis Alas,thechancesofreachingsuch a sensible accommoda- sort.Inpractice,open-skiesdealsopenthedoortojointven- tion with China’s airlines are low. Rising trade tensions be- tures(JVs),whicharegrantedimmunityfromantitrustrules tween America and China are onlypartofthe explanation and so can potentially lead to higher prices. In 2006-16 the (seeFinancesection). The real problem isthatbigWestern car- share of long-haul passenger traffic controlled by such JVs rierswouldnotmuch like such policieseither. 7 Britain’sgenderpaygap How to narrow it To make payfairer, make itmore transparent PITY Britain’s press officers. biaswithrigorousstatisticsistricky, and made more so bythe Gender pay gap April 4th was the deadline growth ofthe knowledge economy—itisharderto compare Britain,women’smedianhourlypay as%ofmen’s for employers in Britain with the jobs of two consultants than two factory hands. Politi- Employers 800 250 workersormore to publish cians, courts and bureaucrats are ill-placed to compare jobs Menearn Women more earnmore details of the difference be- from afar, letalone to setpay. Betterforfirmsto be open about 400 tween the average pay oftheir theirpayand aware ofbiases, which maybe unconscious. 0 male and female employees, Atthe heartofunequal payisthe asymmetrybetween em- 25 50 75 100 125 150 under a new annual reporting ployers, who know everyone’s salary, and employees, who requirement(TheEconomistGroup recorded a median gap of are entitled to know no one’s but their own. As collective 29.5%). The overall figuresare eye-opening: eightoutof ten em- wage-bargaininghasbeen replaced bysalariesthatare negoti- ployerspaymen more than women. Theresa May, the prime ated individually, firmshave had more scope to payunequally. minister, haspromised to tackle this“burninginjustice”. Transparencywould help overcome thisand make the labour Some take the numbersto mean thatwomen are paid less marketmore efficient, asworkersand employerscould find than men forthe same job. In factthe exercise bluntly com- the jobsoremployeesthatsuited them best. paresemployees’ paywithoutaccountingfortheirdiffering Howfarshould thisgo? In Sweden firmswith more than roles—so PremierLeague football clubshave vastbutmeaning- ten employeesfall undera publicombudsman, who can in- lesspaygaps, asthe men on the pitch are compared with the specttheirmandatorypaysurvey, carryoutin-depth audits women on the turnstiles. Thismayeven create perverse incen- and askforchanges. In America several bigfirmshave begun tives, as firms could appear better by outsourcing low-paid voluntarypaysurveys, often undershareholderpressure. jobsdone bywomen. Yetthe exercise could also lead to deeper More radically, in Finland, Norway and Sweden anyone questioningofwhatcausesdifferencesin pay(see Britain sec- can lookup whattheircolleaguesand neighboursearn. For tion). To thatextent, the mad scramble amongfirms—not just many, this economists’ ideal is a step too far. But discretion fordata, butalso forjustifications—isencouraging. could be preserved byborrowingfrom a newGerman policy that lets workers in firms with at least 200 employees ask Even Stevens, and Stephanies aboutaverage paywithin a peergroup. Thisgivesworkers the Two problemsstand out. First, the data confirm thattoo few toolsto bargain with, withoutsacrificinganyone’sprivacy. women hold seniorpositions. Firmshave gotbetterat attract- Such measurescould help iron outotherdiscrimination. ingfemale entrants, buttheyleaktalent, so women become The firstpaysurveyofSalesforce, a cloud-computing firm, in rarerhigherup the ranks. Remediesto fixthatare well known: 2016 led to $3m in salarycorrectionsthatbenefited men as well generousparental leave (formen and women alike), afford- aswomen. Itsnextsurveydealtwith discrimination based on able child care and flexible workinghoursall help ensure that ethnicity, leadingto a further$3m in corrections. motherhood need notmarkthe end ofa woman’scareer. Britain’sexercise hasstimulated reflection in firms thathad Second, women still face beingpaid lessthan men for doing given barriers to, and biases in, pay and promotion little jobsthatare fundamentallysimilar. Manysuspectthat clear- thought. The goal should notbe to eliminate gapsbut to get cutsexism hasgiven wayto more subtle discrimination. Bir- firmsto thinkaboutwhich differencesin seniorityand payare mingham council wassuccessfullysued forrewardingmale- justified and which are not. The factthatmosthave accompa- dominated worklike street-sweepingmore generouslythan nied theirdata with analysisand explanations, and that some female-dominated worklike cleaning. However, quantifying have settargets, isatleasta start. 7 14 Letters The EconomistApril7th2018 flightsthatdon’tbeginorend totheprosecutor,alongwith cannotdrive the carsoftoday, Thebeautifulbrinysea intheirowncountry(or,inthe theevidenceIandothershave autonomousvehicleshold the “Racetothebottom”discussed caseofEuropeanUnionair- presented.Odebrechtofficials promise offreedom to go thenewtechnologiesbehind lines,inEUterritory).Aslong havesaidthatthefeespaidtoa anywhere forthe firsttime. thepushtominetheocean asthiscrabbedframework formerbusinesspartner’sfirm ALISA MOSKALEVA floor(TechnologyQuarterly, reigns,therewillbenoMarri- wereentirelylegalandnotpart San Francisco March10th).Thearticlewas ottsofthesky.Onlythrough ofanybriberyscheme.All aptlytitled,asthereisnosuch JVsandcode-sharingareair- makeclearthatthesupposed Fisherman’s friend thingasan“environmentally linesabletoreplicatesomeof linkisapoliticallymotivated sensitiveway”tominethe whatmightbepossibleina constructwithnocredible Itistrue thatBritain’sfishing deepseabed.Thedeepseais moreconventionalregulatory evidence.Mostchillingwas industryistoo small to jeop- thelargestsourceofspecies setting. theswiftpaceofproceedings ardise a future Brexitdeal on andecosystemdiversityon JVsreceiveimmunityonly whichallowednotimeforthe trade (“Afishytransition”, Earth.Miningislikelytocause inliberalisedopen-skiesmar- roleofdueprocesssofunda- March 24th). Fishingcontrib- irrevocablelossofbiodiversity, ketsinwhichgovernments mentaltothefunctioningofa utesjust0.07% to British GDP, theworld’snaturalinheri- havegivenupthepowerto transparentdemocracy. almostnothing. The industry tance.Intheareawherethe regulateentry,routes,capacity Ihavewelcomedafull employsonly12,000 people dredgingcompanyyoumen- andprice.Becauseliberalisa- investigationofmyfinances outofa total labourforce of tionedplanstowork,atypical tionisaprerequisitetoimmu- and,asaprivatecitizen,will 33.6m, ora mere 0.04%. 30-yearoperationwouldcover nity,itisnoexaggerationtosay continuetoworktoassurethat However, thisdoesnot about10,000squarekilo- thatairlines’desiretoserve Peruviancitizensenjoyhealth mean thatthe industryshould metresofoceanbottom.And theircustomersbetterthrough andsafetyalongwiththeir be leftto fend foritselfor to sedimentplumeswillextend immunisedJVshascracked humanandcivilrights. meetitsdemise, especially thedamageovermanythou- opentheglobalaviationmar- PEDROPABLOKUCZYNSKI since forcertain communities sandsofsquarekilometres ketplaceinwaysunimaginable Lima itisa matteroflife and death. beyondtheminingarea. even20yearsago.Notsurpris- Rather, itshould be guaranteed Atlastmonth’ssessionof ingly,itisaround64%cheaper supportbythe British govern- The road to somewhere theInternationalSeabed toflytodaythanin1996. mentifBrexitbecomesa reali- Authority,anMITresearcher IATA’smembers,notjust ty— supportthatwould not taskedwithcreatingafinancial legacyairlinesbutagrowing bearheavilyon the Treasury. modelforseabedmining numberofnew-modelair- ALI EL-AGRAA acknowledgedthathehad lines,havelongsupportedthe London omittedanycostestimatesof questformoreopenandcom- environmentaldamagesand petitivemarkets. On the bench thelossofecosystemservices. BRIANPEARCE TheISAmustfillthatgap, Chiefeconomist Charlemagne referred to Jaro- anddosotransparently:many InternationalAirTransport slawKaczynski asa “back- ofitsmostimportantfindings Association bench MP” holdingno consti- arenowhiddenunderacloak Geneva tutional position (March 3rd). I ofconfidentiality.Theworld agree with the latter, butMr needsanopendebateonthe Kaczynski, the leaderofPo- Peruvian politics exploitationofthedeepsea- Talkofa “freedom to go any- land’srulingLawand Justice bed. Yourarticle concerningmy where” thatautonomous party, defiantlysitson the MATTHEWGIANNI resignation containsa number vehicleswill somehowforce centre ofthe frontbench in OnbehalfoftheDeepSea ofoutrageousinaccuracies usto give up issilly(“Who is parliament. Defiantly, because ConservationCoalition (“Odebrechtclaimsitsbiggest behind the wheel?”, March hisofficiallyallocated seat isto Amsterdam scalp”, March 24th). From day 3rd). I cannot“go anywhere” in the side ofthe bench. Accord- one ofourgovernment, the mymid-size sedan. I can only ingto the rules, all MPsmust super-majorityofthe opposi- go to destinationsthatcan be vote from theirdesignated Freedom forairlines tion in Congresstried to bring reached byroad. And thatroad seats. Butneitherthese rules, Correctlynotingthatairline down myadministration, needsto be passable. Acheck- noranyothers, seem to apply jointventures(JVs) are a way claimingthe scalpsoffive of pointwith armed guards, a to MrKaczynski. forcarriersto overcome gov- mycabinetministers, includ- barricade, a pothole oreven a Asyoupointed out, every- ernmentrestrictionson cross- ingthe transportminister, now trafficjam will take awaymy one should knowwho isreally borderinvestmentisonlya Peru’snewpresident. Despite freedom asmuch asany in the driver’sseat. Butin small partofthe story(“Come the opposition’sfierce efforts, fiddlingwith software settings Poland we letthe driversit flywith me”, March 17th). ouradministration keptPeru in an autonomousvehicle. A where he wants. Airlinesare hamstrungevery- growingwithoutinflation or governmentbenton restricting KAROL KRAS where byanachronisticre- bloated publicdebtand the mobilityofitspeople London7 strictionson theirability to do worked successfullyto im- alreadyhasplentyofoptions business. Theyare prohibited prove the environmentand fordoingso byregulating from operatingdomestic“feed- publichealth while expanding accessto roads. Lettersarewelcomeandshouldbe er” servicesin anycountry but majorinfrastructure and clean Autonomousvehicleswill addressedtotheEditorat TheEconomist,TheAdelphiBuilding, theirown; notallowed to mininginvestment. change ourcitiesand present 1-11JohnAdamStreet, exercise corporate control over Asforthe alleged illegal trade-offs, butthose who think LondonWC2N6HT airlinesin anycountrybut linkbetween me and Ode- thatcarsdo notlimitourmo- E-mail:[email protected] theirown; and even forbidden brecht, I referyouto the state- bilityare kiddingthemselves. Morelettersareavailableat: from operatinginternational mentsofmyformercolleagues Fordisabled people, who Economist.com/letters

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