The Economist (December 7th 2019)

78 Pages·2019·16.123 MB·English

by  The Economist

The carbon-capture conundrum
NATO: the good, the bad, the ugly
A special report on the Asian tigers
Our books of the year
DECEMBER7TH–13TH2019
Britain’s nightmare
before Christmas
Contents The EconomistDecember7th2019 7
The world this week United States
11 Asummary of political 25 Refugee resettlement
andbusinessnews
26 Impeachment’s next phase
28 Christian adoptions
Leaders
29 An American theocracy
13 Britain’s election
30 LexingtonJoe Biden’s
The nightmare before
stickiness
Christmas
14 NATO’s summit
The Americas
Good, bad and ugly
31 “Wexit” in Canada
14 Unrest in the Arab world
System failure 32 Desi Bouterse’s murder
conviction
16 SergeyBrinandLarry
PageleaveAlphabet 34 BelloJair López Obrador
On the cover
Searchresult
Adivided country faces an 18 Climatechange
election that will tear it still Reversegear
further apart: leader, page 13. Asia
Under Boris Johnson, the Letters 35 India’s wilting economy
spectre of no-deal would
20 Onbillionaires,groceries, 36 Smuggling in Central Asia
return in December 2020,
theNationalHealth 37 Measles and Samoa
page 54. If the Lib Dems surge,
Service,windpower,
they could hurt the Tories as 37 Falsehood in Singapore
KurtVonnegut
muchasLabour,page85 38 BanyanOnions in Indian
politics
•The carbon-capture Briefing
conundrumThinking seriously
22 Negativeemissions
China
about pulling carbon dioxide out
Thechroniccomplexity
of the atmosphere is difficult, 41 Battling in the UN
ofcarboncapture
but necessary: leader, page 18. 42 The China-Russia border
Climate policy depends on being
Specialreport: 44 ChaguanMore babies
able to trap carbon dioxide. That
Asiantigers needed, without quotas
is hard: briefing, page 22
Stillhunting
•NATO:the good, the bad, the
Afterpage44
uglyNew troublemakers have
emerged in the alliance: leader,
Middle East & Africa
page 14. NATO marks its 70th
45 Iraq’s uncertain future
anniversary in chaotic fashion,
page 50 46 Arabs lose faith
46 Repression in Iran
•A special report on the Asian
tigers After half a century of 47 Algeria’s unfair election
success, South Korea, Taiwan, 47 Sudan’s terrible traffic
Hong Kong and Singapore must
48 Identity in Africa
reinvent their economies, after
page 44
Bagehot Truth has been
•Our books of the yearThe
the first casualty of
best books of 2019 were about
Britain’s election,page 57
the IRA, Harper Lee’s lost work,
rational economics and an Ohio
housewife,page 79. And by our
own staff: this year our writers
went to the Moon and back,
page 82
1 Contents continues overleaf
8 Contents The EconomistDecember7th2019
Europe Finance & economics
49 German politics 67 Scrambled ESG
50 NATO comes to London 68 Trumpeting tariffs
51 France faces huge strikes 69 Transatlantic tax tensions
51 Turmoil in Malta 69 Euro-zone reforms come
acropper
52 China and the Czechs
53 Charlemagne The Five 70 ButtonwoodInvesting in
rehab economies
Starsburnout
71 Insurance in Myanmar
Britain 71 Which currencies are best?
54 If the Tories win… 72 P2P’s perilous punt
55 ...and if they don’t 73 Free exchangeJapanese
56 Rehabilitating terrorists lessons
57 BagehotPants on fire
Science & technology
75 Replacing satellites fast
76 Rome’s timber trade
International
76 Malaria lingers on
58 PISA results: the parable
77 Trillion-transistor chip
of Finland
77 Maternal centipedes
78 Tosavefuel,mimicbirds
Books & arts
79 Books of the year
Business 82 Books by our writers
60 Aramco’s listless IPO
61 Mining Guinea’s iron
mountain
62 Italy’s steel saga
62 China’s cow cash
Economic & financial indicators
63 Bartleby How to
84 Statisticson42economies
Christmas party
64 Alphabet turns a Page
Graphic detail
and a Brin
85 If the Lib Dems surge, they could hurt the Tories as
65 Schumpeter Corporate muchasLabour
conquistadors
Obituary
86 Jonathan Miller, accidental cultural icon
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The world this week Politics The EconomistDecember7th2019 11
education.Hehadbeenre- tionsofbriberyinconnection Russia activated a 3,000km
leasedontemporarylicence. withtheallocationoffishing natural-gas pipelineto supply
Questionswereraisedabout rightstoIceland’sbiggest the Chinese market. The pipe-
theeffectivenessofarehabili- fishingfirm. line cost $55bn and will pro-
tationprogrammeforjiha- vide 38bn cubic metres of gas a
dists,whichthekiller,whowas Theun’sWorldFood year to China by 2024.
tackledbythepublicandshot Programmesaiditwilldouble
deadbypolice,hadcompleted. thenumberofpeopleitis
feedinginZimbabweto4.1m, Just in time for Christmas
asrisinginflationandacol- The impeachment proceed-
Inthedock lapsingeconomypushnearly ingsagainst Donald Trump
AmilitarycourtinSuriname 8mpeopleintohunger. moved to the House Judiciary
The political leaders of nato convictedthecountry’spresi- Committee, after the Intelli-
countries gathered in London dent,DesiBouterse,ofmurder gence Committee released its
for a meeting. Donald Trump andsentencedhimto20years Watching the news report, finding that the presi-
sparred with both Emmanuel inprison.In1982soldiers The government of Singapore dent “subverted usforeign
Macron, the president of killed15opponentsofthe used its new “fake-news” law policy towards Ukraine…in
France, who recently described militaryregimethenledbyMr for the first time, ordering favour of two politically moti-
the military alliance as being in Bouterse.Hewillnotbeginhis Facebook, among others, to vated investigations”. The
a state of “brain-death”, and sentenceuntiladecisionis publish a notice next to a post Judiciary Committee will now
with Justin Trudeau, Canada’s madeonhisappeal.Hemaybe explaining that the authorities consider whether to bring
prime minister, who was re-electedpresidentnextyear. deemed it to contain formal charges.
caught on camera mocking the falsehoods.
American president. Despite AcourtinHonduras The Senate confirmed Dan
these mini-rows, nato, at 70 sentencedthekillersofBerta Australia’sgovernment re- Brouillette as America’s energy
years old, is in better shape Cáceres,anenvironmental pealed a law allowing asylum- secretary. He replaces Rick
than it sometimes looks. activist,to50yearsinprison. seekers held in offshore deten- Perry, one of the “three amigos”
Shewasmurderedin2016after tion centres to be brought to who managed Mr Trump’s
Germanyexpelled two campaigningtopreventthe Australia for medical treat- contacts with Ukraine.
Russiandiplomats in retalia- buildingofadamthatwould ment under exceptional cir-
tion for the killing of a Che- havefloodedlandinhabitedby cumstances. It argues that the
chen separatist in Berlin in theLencapeople,anindige- measure encouraged unautho-
August. The government has nousgrouptowhichshe rised immigrants to try to
been slow to act over the case. belonged. reach the country by boat.
Finland’sprime minister, During a surprise visit to
Antti Rinne, resigned after a Regime change Afghanistan, Donald Trump
key political ally withdrew Adel Abdul-Mahdi, the prime said that America would re-
support. He had been in office minister of Iraq, said he would sume peace talks with the
for just six months. step down amid large protests Taliban. He also implied that a
over corruption, poor gov- ceasefire would be part of any
The prime minister of Malta, ernance and unemployment. deal—an idea the Taliban have
Joseph Muscat, said he would His resignation is unlikely to long resisted. Kamala Harriswithdrew from
stand down, though not until satisfy the demonstrators, who the Democratic race for presi-
January, as allegations over the want other changes too. The China said it had suspended dent. A year ago Ms Harris was
murder of an investigative authorities have killed over port calls in Hong Kongby seen as a possible front-runner
journalist who had been look- 400 people since October, American navy vessels in for the nomination, but she
ing into official corruption when the unrest began. response to America’s new law never hit her stride, squeezed
threatened some of his closest in support of democracy in the between her party’s progres-
associates. Human-rights groups said up territory. China also reacted sive and moderate wings. Joe
to 450 Iranians were killed angrily to the passage by Amer- Biden said he would consider
With a week to go before an during protests over a rise in ica’s House of Representatives her as a possible running-
election, Britain’spolitical the state-controlled price of of a draft law that would re- mate, should he win.
parties tried to limit last-mi- fuel last month. The regime quire sanctions to be imposed
nute blunders. Boris Johnson, was accused of trying to hide on Chinese officials for vio- Lori Lightfoot, the mayor of
the Conservative leader, con- the scale of its crackdown by lations of human rights in the Chicago, sacked Eddie John-
tinued to dodge scrutiny from shutting down the internet. far-western region of Xinjiang. son as chief of police. Mr John-
the bbc’s fiercest interviewer, son led America’s second-
who has already mauled other Hage Geingob won a second Riot police clashed with biggest police force through a
candidates. The Tories enjoy a term as president of Namibia hundreds of people protesting tumultuous three years. But
ten percentage-point lead, but in an election overshadowed in Wenlou, a town in southern Ms Lightfoot said she fired him
are worried they may again fail by claims of corruption against China about 100km from Hong for lying to her about an
to get a majority. senior members of swapo, Kong, over the building of a incident where he was found
which has ruled since the crematorium. The police fired asleep at the wheel of his car.
Two people were murdered in country’s independence in tear-gas and reportedly beat Mr Johnson said he didn’t
Londonby a convicted terro- 1990. Two former ministers and detained dozens of “intentionally mislead or
rist at a conference on prison have been arrested on allega- protesters. deceive” anyone.
12 The world this week Business The EconomistDecember7th2019
Inanunexpectedmove,Sergey it imposed in October on a UniCredit, Italy’s biggest bank, In the wake of lvmh’s offer to
BrinandLarryPagestepped range of European goods fol- said it would cut 10% of its take over Tiffany, more con-
downfromtheirrespective lowing the wto’s first ruling. workforce, close 500 branches solidation beckoned in the
rolesaspresidentandchief and take other measures to cut luxury-goods industry as
executiveofAlphabet, In contrast with souring trade costs, as it seeks approval for a Kering, a French group that
Google’sparentcompany.The relations elsewhere, Japan’s €2bn ($2.2bn) share buy-back includes the Gucci and Saint
pairfoundedtheinternetgiant Diet approved a trade deal with programme. After years of Laurent brands in its stable,
inagaragewhileatStanfordin America that slashes tariffs on paltry profits, it is rare for a was said to be interested in
1998.Theywillretaintheir American beef and pork im- European bank to return cash buying Moncler, an Italian
combinedvotingmajorityin ports in return for lower levies to investors; UniCredit must skiwear-maker.
thecompanyandcontinueto on Japanese industrial goods. convince the European Central
sitontheboard.SundarPichai The limited agreement is a Bank that it can do so without Mike Pompeo, America’s secre-
becomesAlphabet’schief substitute for a Pacific-wide weakening its capital buffers. tary of state, strongly urged
executiveinadditiontohisjob trade pact that Mr Trump with- European countries to shut out
runningGoogle,expandinghis drew America from. Separately, Huaweifrom building 5g
brieftooversee“moonshot” Japan’s government unveiled a Crude oil net* imports networks, because of fears over
United States, barrels per day, m
projects,suchasdriverlesscars larger-than-expected ¥13trn data security. The euis to
15
andelectricity-generating ($120bn) spending planto discuss the matter at a forth-
12
kites.MessrsBrinandPage stimulate the economy. coming meeting. Huawei
9
assuredMrPichaitheywould responded angrily, describing
6
stillbearoundtooffer“advice Brazil’sgdpwas 1.2% higher in Mr Pompeo’s allegations as
3
andlove,butnotdaily the third quarter than in the “defamatory and false”.
0
nagging.” same three months last year.
-3
The pace of its economic ex-
1973 80 90 2000 10 19
pansion is quickening follow- In the hot seat
Source: EIA *Includes petroleum products
Playing a game ing a severe recession in The unannounced that Mark
Stockmarkets had an unsettled 2015-16. Consumer spending Americaexportedmorecrude Carney will become its envoy
week amid uncertainty about and business investment rose oil and refined petroleum on financing climate action
America and China reaching a in the quarter, helped by falling products in September than it when he steps down as go-
trade dealbefore December interest rates. imported, the first time it has vernor of the Bank of England
15th, when tariffs are due to been a net exporter of oilfor a next year. The job may present
rise on a raft of Chinese goods. Also pulling out of the dol- whole month since records more headaches for Mr Carney
Donald Trump’s ruminations drums, Turkey’s economy began in the 1940s. Boosted by than Brexit ever did. This
about being prepared to wait expanded by 0.9% in the third production from lighter shale week’s climate-change summit
until after November’s presi- quarter, following nine oil, America’s net exports in Madrid declared the past
dential election to reach an months of contraction. Growth averaged 89,000 barrels a day decade to be the hottest on
agreement spooked investors was spurred by agriculture and in September, the difference record. New research suggest-
at first, but was then dismissed industry. Construction, which between the 8.7m it imported ed that emissions may have
as a negotiating tactic. has been championed by the and the 8.8m it exported. declined in America and the eu
government, continued to American refineries still rely this year, but risen in China,
Mr Trump said he wanted to struggle, shrinking by 7.8%. on heavier foreign crude oil. India and the rest of the world.
raise tariffs on metal imports
from Braziland Argentina,
accusing both countries of
manipulating their currencies.
Finding himself on a roll, the
president also threatened to
impose 100% tariffs on $2.4bn-
worth of French goods, in-
cluding champagne, after the
United States Trade Repre-
sentative found that France’s
digital tax discriminates
against American companies
such as Amazon, Facebook and
Google, and is “inconsistent
with prevailing tax principles”.
The World Trade Organisation
rejected the European Union’s
claim that it no longer provides
illegal state aid to Airbus, a
second victory in recent
months for Boeingin the pair’s
15-year dispute. In response the
ustrsaid it would look to
increase the retaliatory tariffs
Leaders Leaders 13
Britain’s nightmare before Christmas
A divided country faces an election that will tear it still further apart
British voterskeep beingcalledtothepolls—andeachtime interventionist and culturally conservative one. Angling for
the options before them are worse. Labour and the Conserva- working-class, Leave-voting seats in the north, he has proposed
tives, once parties of the centre-left and -right, have steadily extra state aid, buy-British government procurement and a
grown further apart in the three elections of the past four years. sketchy tax-and-spending plan that does not add up. Also, he has
Next week voters face their starkest choice yet, between Boris absorbed the fatal lesson of the Brexit campaign: that there is no
Johnson, whose Tories promise a hard Brexit, and Jeremy Cor- penalty for lying or breaking the rules. He promised not to sus-
byn, whose Labour Party plans to “rewrite the rules of the econ- pend Parliament, then did; he promised not to extend the Brexit
omy” along radical socialist lines. Mr Johnson runs the most un- talks, then did. This chicanery corrodes trust in democracy. Like
popular new government on record; Mr Corbyn is the most Mr Corbyn he has normalised prejudice, by displaying his own
unpopular leader of the opposition. On Friday the 13th, unlucky and failing to investigate it in his party (both men are thought
Britons will wake to find one of these horrors in charge. racist by 30% of voters). For all these reasons this newspaper can-
At the last election, two years and a political era ago, we re- not support the Conservatives.
gretted the drift to the extremes. Today’s manifestos go a lot fur- That leaves a low bar for the Liberal Democrats, and they clear
ther. In 2017 Labour was on the left of the European mainstream. it. They, too, have become more extreme since we backed them
Today it would seize 10% of large firms’ equity, to be held in funds in 2017. Under a new leader, Jo Swinson, they have gone beyond
paying out mostly to the exchequer rather than to the workers the idea of a second referendum for an irresponsible promise to
who are meant to be the beneficiaries. It would phase in a four- reverse Brexit unilaterally. This has deservedly backfired. Yet
day week, supposedly with no loss of pay. The list of industries to their economic approach—a moderate increase in spending,
be nationalised seems only to grow. Drug patents could be forc- paid for by broad-based tax increases—is the most sensible of
ibly licensed. The bill for a rapid increase in spending would fall the main parties, and is the only one to be honest about the cost
on the rich and companies, whose tax burden would go from the of an ageing society. On climate change and social policy they
lowest in the g7 to the highest. It is an attempt to deal with 21st- strike the best balance between ambition and realism. As last
century problems using policies that failed in the 20th. time, they are the only choice for anyone who rejects both the
Nor has Mr Corbyn done anything to dampen hard Brexit of the Conservatives and the hard-
concerns about his broader worldview. A critic left plans of Labour.
of Western foreign policy and sympathiser with Yet they will not win. So why back them? The
dictators in Iran and Venezuela who oppose it, practical reason is to restrain whoever ends up
he blamed natofor Russia’s invasion of Ukraine in Downing Street. Voters worry that backing
in 2014. Last year he suggested samples of a the Lib Dems plays into Mr Corbyn’s hands, but
nerve agent used to poison a Russian former spy our modelling suggests that votes and seats
in Salisbury should be sent to Moscow, so Vladi- would come fairly evenly from both parties (see
mir Putin could see if it was his. Under such a Graphic detail). Mr Corbyn is preparing to gov-
prime minister, Britain could not rely on receiving American in- ern with the Scottish National Party, which would back most of
telligence. Nor has Mr Corbyn dealt with the anti-Semitism that his programme in return for another independence referendum.
has taken root in Labour on his watch. Some Remainers might Having more Lib Dems would check his plans. Likewise, they
swallow this as the price of a second Brexit referendum, which would rein in Mr Johnson. Some Tories cling to the hope that if
Mr Corbyn has at last promised. We have long argued for such a he wins a big majority he will drop the populist act and rediscov-
vote. Yet Mr Corbyn’s ruinous plans at home and bankrupt views er his liberal instincts. They are deluded. If he wins the Brexit-
abroad mean that this newspaper cannot support Labour. backing seats he is targeting with his promises of more state aid,
The Conservatives, too, have grown scarier since 2017. Mr do they expect him to switch back to the fantasy of building Sin-
Johnson has ditched the Brexit deal negotiated by Theresa May gapore-on-Thames? The opposite is true: the bigger the Tory ma-
and struck a worse one, in effect lopping off Northern Ireland so jority, the more drastic the party’s transformation.
that Britain can leave the European Union’s customs union. The The principled reason is that the Lib Dems are closest to the
public are so sick of the whole fiasco that his promise to “get liberalism on which this newspaper was founded. A strong Lib
Brexit done” wins votes. But he would do no such thing (see Brit- Dem showing would signal to voters who favour open markets
ain section). After Britain had left the euearly next year, the hard and a liberal society that the centre is alive. The past few years
work of negotiating a trade agreement would begin. Mr Johnson have shown why Parliament needs good people such as Sam Gyi-
says he would do this by the end of 2020 or leave without one. mah, who left the Tories because of their extremism, and Chuka
No-deal is thus still on the table—and a real prospect, since get- Umunna, who left Labour because of theirs. The course of Brexit
ting a deal in less than a year looks hard. The best estimates sug- has been repeatedly changed for the better by independent-
gest that leaving without a deal would make average incomes 8% minded mps making the running. If Britain withdraws from the
lower than they would otherwise have been after ten years. euin January, the Lib Dem mps will be among the best advocates
Brexit is not the only problem with Mr Johnson’s new-look of a deep trade deal and the strongest opponents of no-deal.
Tories. He has purged moderates and accelerated the shift from There is no good outcome to this nightmare of an election. But
an economically and socially liberal party into an economically for the centre to hold is the best hope for Britain. 7
14 Leaders The EconomistDecember7th2019
NATO’s summit
The good, the bad and the ugly
New troublemakers emerge in the alliance
Somuchtalkof“crisis”hassurroundednato’s70th-birthday that,givenTurkey’sactionsinSyria,itmightnotbeabletocount
year that it has been easy to forget there are reasons to cele- onthemutualdefenceenshrinedinArticleFive.
brate. Not only has the alliance proved remarkably durable by The most surprising troublemaker, and the reason relations
historical standards, but since 2014 it has responded aptly to have turned ugly, is Mr Macron himself. In a recent interview
Russia’saggressioninUkraine,refocusingonitscoremissionof with The Economist he said that nato was experiencing “brain-
collective defence. It has deployed multinational battlegroups death”. He champions a stronger European defence, which Eu-
into the three Baltic states and Poland and committed to im- ropeneeds,andonDecember4thinsistedthatthiswould“not
proved readiness. Goaded by criticism from President Donald beanalternativetonatobutoneofitspillars”.Butthereislin-
Trump, its members have raised their spending on defence. gering suspicion of his intentions among other allies. That is
Thoughmanycountries,notablyGermany,stillfallshortoftheir partlybecauseofhisenthusiasmfora“strategicdialogue”with
promises, nato now estimates that between 2016 and 2020 its Russia.Hehasemphasisedthethreatofterrorismoverthetask
EuropeanmembersandCanadawillshelloutanextra$130bn. ofdefendingagainstVladimirPutin’saggression.MrMacronis
Thisnewmoneyhelpsexplainonewelcomedevelopmentat takingalongviewandisseekingtostimulatefreshthinking,but
themeetingofnatoleadersinBritainthisweek. most of his allies understandably hear his
Mr Trump, previously the disrupter-in-chief, wordsasathreattotheprogressofthepastfive
whousedtocalltheorganisation“obsolete”and years(seeEuropesection).Russia’sactions,not
causedconsternationatasummitinBrusselsin just in Ukraine but also on nato territory (in-
2018 by threatening to withdraw if Europeans cluding by sending assassins to Salisbury in
failed to take on a fairer share of the burden, Britain and, possibly, Berlin’s Tiergarten), call
has—however briefly—become a defender. In for a strong response. Any desire for conces-
LondonthisweekheblastedPresidentEmman- sionswillbeseeninMoscowasweakness.
uelMacron’scriticismoftheallianceas“nasty” InBritainnatopaperedoverthecracks.The
and“disrespectful”.Hemadenosignofblockingsternwordson summit’sdeclarationaffirmeditsmembers’commitmenttoAr-
RussiaorthereiterationofArticleFiveofnato’streaty,thecor- ticleFiveandproclaimedthat“Russia’saggressiveactionscon-
nerstoneofthealliance.America’scommitmentwillbeondis- stitute a threat to Euro-Atlantic security”. That is welcome, but
playnextyear,whensome20,000ofitstroopsaretopractisere- theallianceneedstofindanewstrategiccoherence.EvenifMr
inforcingEuropeinanexercisecalledDefender2020. Trumpremainsinfavour,America’sfocusisshiftingineluctably
Thebadnewsisthatotherdisruptershaveemerged.Thevis- to its rivalry with China in Asia and beyond. Exercises and in-
cerally anti-nato Jeremy Corbyn could conceivably become creasingreadinesswillcementtheallianceatamilitarylevel—
primeministerofoneofitsleadingmembersafternextweek’s andthiswillendurewhilethepoliticianscomeandgo.Workon
Britishgeneralelection.Turkey’spresident,RecepTayyipErdo- newish areas such as space and cyberwarfare will help, too.
gan,hascausedconsternationbybuyingaRussiananti-aircraft Eventually, a strategic dialogue with Russia might make sense.
system,obstructingnato’sdecisionsoneasternEuropeandin- Buttothrivenatoalsoneedsagreatercommonpurpose.Once
vadingnorthernSyriawithoutregardforhisallies’interests.He theimpetuscamefromAmerica.MrMacronwasrighttopoint
responded with personal insults to a suggestion by Mr Macron outthatinfutureEuropewillhavetoplayalargerpart.7
Unrest in the Arab world
System failure
Time for Iraq and Lebanon to ditch state-sponsored sectarianism
As many arab leaders have fallen in the past year as did dur- constructed a sectarian political system long before the civil war
ing the Arab spring. And still the wave of protests over cor- of 1975-90, and buttressed it afterwards. Iraq’s system was set up
ruption, unemployment and threadbare public services contin- in 2003, after America’s invasion. It did not prevent Sunnis from
ues to sweep across the Middle East and north Africa. Turnover at fighting Shias. But the civil war is over in Iraq, as in Lebanon. It
the top has not mollified the masses, because rather than pro- would seem risky to upset these fragile arrangements.
ducing real change it has reshuffled entrenched elites. Particu- Leaving them be would be even riskier. Start with Iraq, where
larly in Iraq and Lebanon, many of the protesters now want to America aimed to satisfy all groups but instead created a system
tear down entire political systems. It is a dangerous moment. Yet that encourages patronage and empowers political parties (and
the protesters are right to call for change. militias) which entrench the country’s ethnic and sectarian divi-
Both Iraq and Lebanon divvy up power among their religions sions. It is difficult to get ahead in Iraqi politics—or indeed in
and sects as a way of keeping the peace between them. Lebanon life—without associating with one of these parties. They treat 1
16 Leaders The EconomistDecember7th2019
2ministries like cash machines and hand out government jobs in both countries, especially the young, appear to be losing their
based on loyalty, not merit. Many people depend on them for ac- personal faith, too (see Middle East and Africa section).
cess to health care, education or a salary. Hence politicians long The people of Iraq and Lebanon deserve political systems that
ago exposed as corrupt and incompetent can remain in power. do more to reflect their views and represent their interests. That
The situation is similar in Lebanon, where the warlords who means unpicking state-backed sectarianism. Increased transpa-
razed the country became politicians who loot it. The govern- rency would help expose the worst patronage schemes; stronger
ment has racked up huge debts to fund Sunni, Shia and Christian institutions might curb them. Militias should be brought under
patronage schemes. The World Bank estimates that the waste as- the official chain of command. If Lebanon stopped forcing can-
sociated with the power-sharing system costs Lebanon 9% of didates to compete for seats that are allocated by religion, more
gdpeach year. The government cannot even keep the lights on. might run on secular platforms, not sectarian ones. In Iraq the
Or perhaps it does not want to, since the businessmen who sell electoral law helps entrench big parties, while the electoral com-
generators are often connected to sectarian leaders. With a fi- mission caters to elites. Both need reform.
nancial crisis looming, Lebanon must restructure its debt and Such steps may not satisfy the protesters. And they will be re-
introduce reforms. Its leaders seem incapable of doing so. sisted by vested interests and their foreign supporters. Hizbul-
Sectarian government is not only ineffective—it is also un- lah, a Shia militia-cum-political party in Lebanon, and the Shia
representative. Lebanon has not held a census since 1932, but The militias of Iraq thrive under today’s system and fear being con-
Economistobtained voter-registration lists from 2016. They show strained. They are backed by Iran, which uses them to extend its
that the allotment of parliamentary seats to each religion does influence. But Iran has also been rocked by big protests. The les-
not match the share of voters from each faith. Polls show that Ira- son for it is the same. Reform a political system that has failed
qis have lost trust in religious parties and leaders. Many people the people, or risk seeing it come crashing down. 7
Sergey Brin and Larry Page leave Alphabet
Search result
Google’s departing co-founders leave three unanswered queries
“Yeah, ok, whynot? I’ll just give it a try.” With those words azon began in e-commerce, for example, but is now big in cloud-
Sergey Brin abandoned academia and poured his energy computing. In China Tencent has shifted from video games to a
into Google, a new firm he had dreamed up with a friend, Larry huge array of services. Alphabet has not stood still: it bought
Page. Incorporated in 1998, it developed PageRank, a way of cata- YouTube in 2006 and shifted to mobile by launching Android, an
loguing the burgeoning world wide web. Some 21 years on, operating system, in 2007. But it still makes 85% of its sales from
Messrs Brin and Page are retiring from a giant that dominates the search-advertising. A big bet on driverless cars has yet to pay off.
search business. Alphabet, as their firm is now known, is the As the firm matures, it should start paying a dividend.
world’s fourth-most-valuable listed company (see Business sec- The second question is how closely the company might end
tion), worth $910bn. In spite of its conspicuous success, they up being regulated. Alphabet’s monopoly in the search business
leave it facing three uncomfortable questions—about its strat- has led to worries that it may squeeze other firms unfairly. Its
egy, its role in society and who is really in control. huge store of data raises privacy concerns. And because it is a
Silicon Valley has always featured entrepreneurs making conduit for information and news, its influence over politics has
giant leaps. Even by those standards Google come under ever more scrutiny. All this augurs
jumped far, fast. From the start its search engine much tighter regulation. Alphabet has already
enjoyed a virtuous circle—the more people use paid or been subject to $9bn in fines in the eu,
it and the more data it collects, the more useful and in America politicians on both sides of the
it becomes. The business model, in which ad- aisle support tighter rules or, in some cases, a
vertisers pay to get the attention of users around break-up. If it were to be regulated like a utility,
the world, has printed money. It took Google profits could fall sharply.
just eight years to reach $10bn in annual sales. The last question is who will be in control.
Its peak cumulative losses were $21m. By com- Messrs Page and Brin famously sought “parental
parison, Uber has incinerated $15bn and still loses money. supervision” in 2001and hired an external chief executive. Both
Today Alphabet is in rude health in many respects. Its search founders will now relinquish any executive role, handing the
engine has billions of users, who find it one of the most useful reins to Sundar Pichai, a company stalwart. Yet dual-class shares
tools in their lives. One recent study found that the typical user mean they will still control over 50% of the firm’s voting rights.
would need to be paid $17,530 to agree to forfeit access to a search This structure is popular in Silicon Valley. But there is little evi-
engine for a year, compared with $322 for social-media sites, dence that it ages well. Of today’s digital giants, two have so far
such as Facebook. Alphabet cranks out colossal profits. Many faced succession—Microsoft and Apple. They have prospered
pretenders have tried to mimic the Google approach of having a partly because their founders or their families did not retain vot-
vast customer base and exploring network effects. Only a few, in- ing control after they left the scene. Alphabet’s founders should
cluding Facebook, have succeeded at such a scale. forfeit their special voting rights and gradually sell their shares.
There are uncertainties, however. Take strategy first. Other Their firm faces deep questions—best to give someone else the
tech giants have diversified away from their core business—Am- freedom to answer them.7
18 Leaders The EconomistDecember7th2019
Climate change
Reverse gear
Pulling carbon dioxide out of the atmosphere will be difficult, but it is necessary
Of the wisdomtaughtinkindergartens,fewcommandments That raises two problems, one technological, the other psy-
combine moral balance and practical propriety better than chological. The technological one is that sucking tens of billions
the instruction to clear up your own mess. As with messy tod- of tonnes of carbon dioxide out of the atmosphere every year is
dlers, so with planet-spanning civilisations. The industrial na- an enormous undertaking for which the world is not prepared.
tions which are adding alarming amounts of carbon dioxide to In principle it is simple to remove carbon dioxide by incorporat-
the atmosphere—43.1bn tonnes this year, according to a report ing it in trees and plants or by capturing it from the flue gas of in-
released this week—will at some point need to go beyond today’s dustrial plants and sequestering it underground. Ingenious new
insufficient efforts to stop. They will need to put the world mach- techniques may also be waiting to be discovered. But planting
ine into reverse, and start taking carbon dioxide out. They are no- trees on a scale even remotely adequate to the task requires
where near ready to meet this challenge. something close to a small continent. And developing the engi-
Once such efforts might have been unnecessary. In 1992, at the neering systems to capture large amounts of carbon has been a
Rio Earth summit, countries committed themselves to avoiding hard slog, not so much because of scientific difficulties as the
harmful climate change by reducing greenhouse-gas emissions, lack of incentives (see Briefing).
with rich countries helping poorer ones develop without exacer- The psychological problem is that, even whilethe capacity to
bating the problem. Yet almost every year since Rio has seen ensure negative emissions languishes underdeveloped, the
higher carbon-dioxide emissions than the year before. A stagger- mere idea that they will one day be possible eats away at the per-
ing 50% of all the carbon dioxide humankind has put into the at- ceived urgency of cutting emissions today. When the 2°C limit
mosphere since the Industrial Revolution was added after 1990. was first proposed in the 1990s, it was plausible to imagine that it
And it is this total stock of carbon that matters. The more there is might be met by emissions cuts alone. The fact that it can still be
in the atmosphere, the more the climate will shift—though cli- talked about today is almost entirely thanks to how the models
mate lags behind the carbon-dioxide level, just as water in a pan with which climate prognosticators work have been revised to
takes time to warm up when you put it on a fire. add in the gains from negative emissions. It is a trick that comes
The Paris agreement of 2015 commits its signatories to limit- perilously close to magical thinking.
ing the rise to 2°C. But as António Guterres, the This puts policymakers in a bind. It would be
unsecretary-general, told the nearly 200 coun- reckless not to try to develop the technology for
Global CO2 storage
tries that attended a meeting in Madrid to ham- Cumulative, tonnes, m negative emissions. But strict limits need to be
300
mer out further details of the Paris agreement kept on the tendency to demand more and more
200
this week, “our efforts to reach these targets Global daily CO2 of that technology in future scenarios. As at kin-
have been utterly inadequate.” emissions, 2018 100 dergarten, some discipline is necessary.
The world is now 1°C (1.8°F) hotter than it was 0 The first discipline is to keep in mind whose
before the Industrial Revolution. Heatwaves 1970 80 90 2000 10 19 mess this is. One of the easiest routes to nega-
once considered freakish are becoming com- tive emissions is to grow plants. And the world’s
monplace. Arctic weather has gone haywire. Sea levels are rising cheap land tends to be in poor places. Some of these places would
as glaciers melt and ice-sheets thin. Coastlines are subjected to welcome investment in reforestation and afforestation, but they
more violent storms and to higher storm surges. The chemistry would also need to be able to integrate such endeavours into de-
of the oceans is changing. Barring radical attempts to reduce the velopment plans which reflect their people’s needs.
amount of incoming sunshine through solar geoengineering, a The second discipline is for those who talk blithely of “net
very vexed subject, the world will not begin to cool off until car- zero”. When they do so, they should be bound to say what level of
bon-dioxide levels start to fall. emissions they envisage, and thus how much negative emitting
Considering that the world has yet to get a handle on cutting their pledge commits them to. The stricter they are about its use,
emissions, focusing on moving to negative emissions—the re- the less they are in reality accommodating today’s polluters.
moval of carbon dioxide from the atmosphere—might seem pre-
mature. But it is already included in many national plans. Some Government capture
countries, including Britain, have made commitments to move The third discipline is that governments need to take steps to
to “net zero” emissions by 2050; this does not mean stopping all make negative emissions practicable at scale. In particular, re-
emissions for all activities, such as flying and making cement, search and incentives are needed to develop and deploy carbon-
but taking out as much greenhouse gas as you let loose. capture systems for industries, such as cement, that cannot help
The Intergovernmental Panel on Climate Change estimates but produce carbon dioxide. A price on carbon is an essential
that meeting the 1.5°Cgoal will mean capturing and storing hun- step if such systems are to be efficient. The trouble is that a price
dreds of billions of tonnes of carbon dioxide by 2100, with a me- high enough to make capture profitable at this stage in its devel-
dian estimate of 730bn tonnes—roughly 17 times this year’s car- opment would be unfeasibly high. For the time being, therefore,
bon-dioxide emissions. In terms of designing, planning and other sticks and carrots will be needed. Governments tend to
building really large amounts of infrastructure, 2050 is not that plead that radical action today is just too hard. And yet those very
far away. That is why methods of providing negative emissions same governments enthusiastically turn to negative emissions
need to be developed right now. as an easy way to make their climate pledges add up. 7
20 Letters The EconomistDecember7th2019
andlowerprices(“Powertothe no good promising larger for perhaps 10% of health.
Taxing the super rich people”,November16th). hospitals if standards cannot Income is the main determi-
The political left gets many I’mperplexedbyyourzig- be maintained. School leavers nant of health. Spending more
things wrong, but by identi- zagapproach.Inoneedition prefer to do a social-science on health care crowds out
fying billionaires as a “policy Disney’stakeoverofLucasfilm degree rather than join a prac- spending on things like hous-
failure” they are exactly right. isrent-seekingprofiteering,in tical nurse-training scheme, ing, education, the environ-
As you say, on average billion- thenextitisgoodforthecon- which involves unsocial hours, ment and benefits, which are
aires inherit one-fifth of their sumer.Iagreewiththesecond discipline and the stress of more important for health. The
wealth (“In defence of billion- argument.MrLucasgenerated dealing with patients who are nhsdoesn’t need more money,
aires”, November 9th). These agreatamountofentertain- often poor, old and sick. it needs a radical rethink.
transfer payments are unrelat- mentformillionsanddeserves Other problems include the richard smith
ed to any effort or talent. hisreward. European Working Time Direc- Former editor of the
Therefore, high inheritance timkilpatrick tive, which abolished the British Medical Journal
taxes would not just be “wel- Brussels requirement for newly trained London
come” but are necessary for a doctors to be resident in hospi-
well-functioning capitalist Taxesontherichdonotdemo- tals in order to gain full regis-
system. Furthermore, the tivatethemfromtryingto tration. The supervisory sys- More on wind power
inequality of income and, becomericher.Nordotaxes tem that was akin to a firm, Kit Beazley (Letters, November
more importantly, wealth, is a demotivatethenot-yet-rich where consultants and senior 23rd) missed the point about
disincentive for the vast major- fromtryingtobecomerich. nurses maintain standards and wind power. The worry I raised
ity of individuals who can’t WhenBillGateslaunched teach doctors and nurses on a (Letters, November 9th) is that,
expect to be millionaires when Microsoftin1975thetoprateof designated ward, has been as wind-turbine towers, foun-
they are toddlers (hello, Do- taxwas70%. demolished. Doctors leave dations and infrastructure get
nald Trump). Research has benaveling university with huge debts. seriously bigger, particularly
shown that inequality can Sydney Small wonder therefore that, offshore, are the carbon foot-
suppress economic growth. particularly in general practice, print figures silently getting
William Nordhaus con- trainees opt for limited hours worse, not better? The project-
flates billionaires and innova- Thesellbydate and no home visits. Hence the ed financial cost per megawatt
tors when he says that the Thetimeaconsumersavesby deluge of patients attending hour is central to every wind-
latter collect only 2% of the shoppingforgroceriesonline accident and emergency. farm project and is public
value they create. To the extent isindeedimportant(Schum- Three measures are needed. knowledge. If the projected
that billionaires have made peter,November16th).But First, the reinstitution of pay carbon footprint was pub-
their fortunes in property, unlikeshoppinginaphysical and accommodation for nurses lished as an equally important
where corruption abounds, or store,thecustomerdoesnot in training. Second, pilot pro- figure for every wind-farm
in finance, where “innova- gettoselectthequalityofthe jects in hospitals where the globally, all calculated on an
tions” can remove vast food,ormoreimportant,getto ward/firm/residents’ mess agreed basis, we would know,
amounts of value in crises, this checktheexpirydate.Super- system can be reintroduced. project by project, if we are
argument falls flat. marketshaveidentifiedthe Third, upping the pre-registra- actually making technical
kenneth reinert online-deliverychannelasone tion status of qualifying doc- progress or not. It is these
Professor of public policy wheretheycandistributetheir tors from one to two years, detailed numbers that I want
George Mason University close-to-out-of-dategoods, with the second year including the public to have. Then we can
Arlington, Virginia cleaningouttheirinventory. six months in a&eand in gen- have a meaningful conversa-
m.j.faherty eral practice. tion on sustainability.
You condemned George Lucas London f.d. skidmore jim platts
for the money he made by Consultant surgeon Cambridge, Cambridgeshire
selling Lucasfilm to Disney, London
reasoning that it rewards him The pulse of a nation
for “Star Wars”, a film he made Regarding the politics of Brit- Increased demand in the nhs Agreen lament
over 40 years ago. However, the ain’s National Health Service is usually put down to ageing, Your article on the Kurt Vonne-
price Disney paid was for the (“Spin doctors”, November and it does play a role. More gut museum (“So it goes”,
commercial behemoth (I pur- 16th), senior medics are ac- important is “supply-led de- November 16th) reminded me
posely avoid the word empire cused of being traditionalists mand”. Constant innovation of his epitaph for the 20th
here) created through the life because a lifetime of ethical means that there is more that century: “The good Earth—we
of the franchise. The fact that practice tells us what will doctors can do. But many of could have saved it, but we
the Star Wars brand has flour- work. The ministers in charge those innovations lead to what were too damn cheap and lazy.”
ished and is still evident in have had zero training in the has been described by Alain patrick leach
everyday life (the Pentagon’s complex interaction between Enthoven, an economist, as Adjunct faculty
jedicontract being a good medical science and the man- “flat of the curve medicine”: no Colorado School of Mines
example) is testament to the agement of hospitals and or minimal improvement at Denver
creativity and ingenuity of the doctors, relying instead on high cost. This is particularly
firm that Mr Lucas created. civil servants, who provide true when we move towards
Indeed, in your next issue you them with top-down plans to death, with around 20% of Lettersarewelcomeandshouldbe
glorified Disney’s new stream- reform clinical practice. health-care budgets being addressedtotheEditorat
TheEconomist,TheAdelphiBuilding,
ing service offering “Star Wars” The acute problem facing spent on the last year of life.
1-11JohnAdamStreet,LondonWC2N6HT
and described the sale of Lu- the nhsis a lack of adequate Another common mistake Email:[email protected]
casfilm as benefiting the con- applicants for nursing and is to confuse health care and Morelettersareavailableat:
Economist.com/letters
sumer through more choice paramedical professions. It is health. Health care accounts