The Economist (November 9th 2019)

70 Pages·2019·13.947 MB·English

by  The Economist

In defence of billionaires
Cameroon’s forgotten war
A hard-headed guide to diversity
Our poll of Britain’s swing seats
NOVEMBER9TH–15TH2019
“On the edge of a precipice”
Macron’s stark warning to Europe
Contents The EconomistNovember9th2019 3
The world this week Britain
5 Asummary of political 23 Swing seats: the Tory
andbusinessnews tipping point
24 Pacts in Northern Ireland
Leaders
26 Crime and politics
9 The future of Europe
28 Pollsters’ new methods
Acontinent in peril
28 Quotes from the
10 Cameroon’s forgotten
campaign trail
war
29 Climate policy heats up
Words and weapons
29 The new Speaker
10 Squeezing the rich
In defence of billionaires 30 BagehotCorbyn’s
securityquestions
12 Fakenudes
Sex,liesandpolitics
On the cover Europe
14 Genetics
Europe is “on the edge of a Adesignforlife 31 Spain’s election
precipice”, says France’s 32 The Camry in the gold
president. Is he right? Leader, mine
Letters
page 9. In a blunt interview,
16 OntheBible,Greece, 33 Sexualised disinformation
Emmanuel Macron spoke to
Congress,Chile,Syria, 33 Stopping speeding
The Economistabout Europe’s
Canada,windenergy, Estonians
fragile place in a hostile world:
AtlanticCity
briefing, page 19. A government 34 CharlemagneRecognising
led by Jeremy Corbyn would theArmeniangenocide
Briefing
present a radical challenge to
Britain’s global alliances: 19 Macron’sviewofthe United States
Bagehot,page30 world
35 Warrencare
Apresidentonamission
•In defence of billionaires 36 Off-year elections
Large personal fortunes are an
37 Quid pro...so what?
unreliable guide to where
37 Political advertising
government policy has gone
wrong: leader,page 10. Have 38 Milwaukee’s north side
billionaires accumulated their 39 Odessa on the Intracoastal
wealth illegitimately? Page 69
40 LexingtonThe veterans
ofAmerica’slongwars
•Cameroon’s forgotten war
Abastion of stability in central
Africa could fall apart if outsiders The Americas
do not help: leader,page 10. 41 The protests in Bolivia
Areport from a conflict that has
42 Jamaica’s successful IMF
driven 500,000 from their
LexingtonThe wars in programme
homes, page 45
Iraq and Afghanistan
•A hard-headed guide to have cost most Americans
diversityHow to make your firm nothing. That is why they
more inclusive,page 59 continue, page 40
•Our poll of Britain’s swing Middle East & Africa
seatsThe first in our five-part 45 The crisis in Cameroon
series of constituency polls finds
47 Iran and the bomb
the Conservatives struggling to
47 Jerusalem’s new
win in a crucial Midlands
necropolis
marginal,page 23
48 Saudi Arabia’s reforms
1 Contents continues overleaf
4 Contents The EconomistNovember9th2019
Asia Finance & economics
49 An Asian trade deal 67 Revisiting the euro’s
north-south rift
50 Pakistan’s opposition
51 Cycle rickshaws in 68 The trade war’s mini-truce
Bangladesh 69 Distressed debt funds in
despair
51 Thailand’s bulky monks
52 The Fukushima accident 69 The lives of the 0.0001%
52 Taiwan and China 70 ButtonwoodThe
illiquidity premium
53 BanyanPacificpolitics
71 Mexico’s lurch left
China 72 The quandaries of
litigation finance
54 Hong Kong’s hostility to
mainland Chinese 72 Video games and fraud
55 Debating face-scans 74 Free exchange
Belligerenttradeunions
56 ChaguanThe market and
mother tongues
Science & technology
76 The new genetics
International
57 Censoring speech online
Books & arts
79 Museums in Ethiopia
Business 80 When America fed Russia
59 Diversity memo 81 The story of Palm Beach
61 Too much lovin’ at 82 Emmanuel Carrère
McDonald’s 82 Reimagining George Eliot
61 Postcard from Hong Kong
62 Sparks fly over PG&E
Economic & financial indicators
62 TikTok time-bomb
84 Statisticson42economies
63 Bartleby The benefits of
fitter workers
Graphic detail
64 Japan Inc in China
85 Smogtendstobeworstinmiddle-incomecountries
65 SchumpeterHard times
for SoftBank
Obituary
86 Huang Yong Ping, master of the Chinese avant-garde
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The world this week Politics The EconomistNovember9th2019 5
Colombia’sdefenceminister America’sJusticeDepartment An attack on a checkpoint in
saidhewouldresignamid chargedtwoformeremployees southern Thailandkilled 15
accusationsthatthearmyhas ofTwitterwithsupplying people; it was the worst in the
committedatrocities.One personalinformationondis- region for years. The attackers
senatoraccusedtheminister sidentstoSaudiArabia. were militants fighting what
ofcoveringupthealleged they see as the oppression of
bombingofaguerrillacampin JihadistslinkedtoIslamic ethnic Malays in Thailand.
whichchildrenwerekilled. Statekilledmorethan50
soldiersinMaliinanattackon Rodrigo Duterte, the president
Adruggangmurderednine anarmybase,amonthaftera of the Philippines, put the
membersofaMormonfamily similarassaultinwhichmore vice-president, Leni Robredo,
inSonora,astateinnorthern than40soldierswerekilled. in charge of his campaign
AstheBritishgeneralelection Mexico.Sixchildrenandthree Thetwoattacksareamongthe against drug dealers, during
campaignofficiallygotunder womendied,perhapsbecause worstsince2013,whenFrench which thousands of suspects
wayastreamofmpsan- thekillersmistookthemfor forcespushedjihadistsoutof have been summarily shot
nouncedtheywouldnotstand rivals.TheLeBaronfamily thetownsinthenorthofMali. dead. The president and vice-
again.Sofarover70have brokeawayfromthemain- president are elected separate-
steppeddown,morethan streamMormonchurchand TheInternationalCriminal ly in the Philippines, and Ms
twicethenumberwhochose settledinMexicointheearly Courtsentencedaformerrebel Robredo is a staunch critic of
nottofacetheelectoratein 20thcentury.Thevictimswere chiefintheDemocratic Mr Duterte.
2017.Morethan60ofthose Americancitizens. RepublicofCongoto30years
supportedRemain,andmost inprisonforwarcrimes.Bosco
representedconstituencies Ntagandawasknownas“The Classic Don
thatvotedforBrexit.TheCon- Not co-operating Terminator”.Hisarmyforcibly America formally notified the
servatives’campaigngotoffto Iran took another step away recruitedchildrenandcom- unof its intention to withdraw
abadstart,withtheresigna- from the nuclear deal it signed mittedmassrape.Hissentence from the Paris agreement to
tionofacabinetminister.Polls in 2015 by injecting gas into wasthelongestyetimposedby combat climate change,
stillgivethemadouble-digit centrifuges at its Fordow facili- thecourt. through which countries have
leadoverLabour. ty. The devices could produce pledged (with varying degrees
enriched uranium to be used of sincerity) to cut greenhouse-
JohnBercowstooddownas for nuclear energy or, if highly Follow the leader gas emissions. The Trump
SpeakerofBritain’sHouseof enriched, a bomb. Iran said it administration argues that the
Commonsaftertenyearsinthe would reverse the move if the accord would hurt American
chair.MrBercowwasknown deal’s other signatories— businesses. The decision can
forcrying“orderrrr!”and Britain, China, France, Ger- be undone if a Democrat wins
breakingparliamentarycon- many and Russia—provide the presidential election.
ventions.Hisreplacement,Sir economic relief.
LindsayHoyle,hashintedata Elizabeth Warren, one of the
returntoconventionand Anti-government protests leading candidates to be the
decorum,promisingthathe continued in Iraq andLeba- Democratic presidential candi-
willweartheSpeaker’swig“on non. Demonstrators in both date, unveiled details of her
traditionaldays”. countries are seeking big ambitious health-care plan. Ms
changes to political systems Warren wants to spend
Inanattempttoshowvoters dominated by an old elite and In the 22nd consecutive week- $20.5trn over a decade to trans-
thatthegovernmentispre- riddled with corruption. In end of unrest in Hong Kong, form America’s private market
paredtotoughenupimmigra- Iraq the authorities have protesters attacked the office for health insurance into a
tionpolicy,France’sprime responded with violence. More building of Xinhua, a news government-run programme.
minister,ÉdouardPhilippe, than 260 people have been agency owned by the Chinese To raise this extraordinary
announcedplanstoclearout killed since the unrest began government. A Chinese news- sum, she would hike taxes,
somemigranttent-camps,as last month. Adel Abdul-Mahdi, paper, Global Times, accused especially on companies and
wellastoimposequotasfor the prime minister, has said he them of deliberately provoking the rich.
migrantworkersandlimit is willing to resign if a replace- the mainland’s authorities. Xi
migrantaccesstonon-urgent ment is found. Jinping met Hong Kong’s em- Beto O’Rourkedropped out of
healthcare. battled chief executive, Carrie the Democratic race. Once the
The government of Yemen Lam, in Shanghai and reiterat- darling of the left, Mr O’Rourke
reached a power-sharing deal ed his support for her. struggled to make an impact in
Over a barrel with southern separatists. The a crowded field.
A much-hyped Brazilianauc- two are meant to be on the Deadly smog engulfed much of
tion of rights to drill for off- same side in a civil war that northern India, thanks in part The Democrats did well in a
shore oil was a disappoint- pits the Saudi-backed govern- to farmers burning stubble and smattering of elections, win-
ment. Two of the four ment against Houthi rebels, to revellers letting off fire- ning the governor’s race in
deepwater depositsgot no bids but they have been fighting crackers to celebrate Diwali, a Kentuckyand taking control
at all. Observers blamed the each other recently.Saudi Hindu holiday. The govern- of the state legislature in
high fees set by the govern- Arabia, which hosted the talks, ment of Delhi closed all the Virginiafor the first time in 20
ment, and uncertainty about said it hoped the deal would city’s schools and instituted years. The Republicans held on
the future of both Brazil’s lead to a broader agreement sweeping measures to limit to the governor’s mansion in
policies and global oil demand. ending the war. traffic, to little avail. deep-red Mississippi.
6 The world this week Business The EconomistNovember9th2019
ers,tocombinetheirbusiness- buy Air Europa, a smaller mestically, small investors will
es.Adealwouldreportedlybe Spanish rival to Iberia. The deal receive bonus shares if they
valuedataround$30bn. will increase iag’s share of the keep the stock until at least 180
Europe-to-Latin America days after the flotation.
AmericaandChinaweremak- market from roughly a fifth to a
ingprogressintradenegotia- quarter. Michael O’Leary, the Malaysia’s prime minister,
tions,witheachconsideringa boss of Ryanair, Europe’s big- Mahathir Mohamad, said he
reductionintariffs.Thecon- gest low-cost airline, was not was prepared to take Goldman
clusionof“phaseone”ofa happy. He claims the takeover Sachsto court if it did not
tradetruceisuncertainbe- will hurt competition and increase its offer of compensa-
causeofcivilunrestinChile, wants regulators to force iagto tion for its role in the sprawl-
whichhascancelledtheapec sell off some assets. ing 1mdb-fund scandal. Mr
Masayoshi Son, the chief exec- meetingwherethedealwasto Mahathir said recently that he
utive of SoftBank, acknowl- besigned.Meanwhile,the Concerns about data privacy had rejected an offer of $2bn
edged that he made a mistake WorldTradeOrganisationgave were raised following the from the bank.
by betting on WeWork, as his Chinaofficialapprovalforthe announcement that Googleis
group revealed a $4.6bn write- firsttimetoimposetariffson to buy Fitbit, a wearable device
down of its investment in the America,inadisputeoversteel that tracks a user’s exercise and Boom and bust
office-rental startup. Overall, pre-datingtheircurrentspat. healthy habits. Google and One of the pioneers of Ameri-
SoftBank reported a quarterly Fitbit stressed that the $2.1bn ca’s shale-gas revolution,
net loss of ¥700bn ($6.4bn)— deal would not compromise Chesapeake Energy, warned
“red ink of the deepest red”, Not lovin’ it their commitment to transpa- in a filing that it was in danger
said an unusually contrite Mr Steve Easterbrook was sacked rency on data use and that of failing as a “going concern”
Son. The Japanese conglomer- by McDonald’sas its chief information would not be sold if cheap gas prices persist. The
ate had to rescue WeWork after executive for having a romance on to third parties. As well as company has amassed almost
it abandoned an ipoamid with an employee. Although recording a person’s heart rate, $10bn in debt, five times its
questions about its valuation the relationship was consensu- running pace, calorie burn and market value, amid a glut in
and a shortage of cash. Mr Son al, McDonald’s said it “violated so on, Fitbit also retains perso- American oil and gas output,
is now taking steps to beef up company policy and demon- nal information and location which has driven prices down.
oversight of SoftBank’s many strated poor judgment”. Mr details.
interests, such as demanding Easterbrook has been credited The British government
at least one seat on the board of with revitalising the fast-food Saudi Aramcoat last con- banned frackingin England,
any firm it sinks money into. chain by spicing up its menu. firmed that it is to launch an after an official report found
Its share price has doubled ipo, the details of which will be that it was not possible to
Part of SoftBank’s loss was also since March 2015, when he provided in a prospectus predict when and where earth
connected to its investment in became ceo. scheduled to be published on tremors caused by the process
Uber. The ride-hailing com- November 9th. The state- for extracting shale gas might
pany reported another quarter- International Airlines Group, owned Saudi oil firm will sell occur. Environmentalists were
ly loss, of $1.2bn, and said it did the parent company of several shares on the Tadawul stock delighted. Others accused the
not expect to turn an annual carriers, including British exchange in Riyadh. In an government of pulling a pre-
profit until 2021. Its share price Airways and Iberia, agreed to effort to widen its appeal do- election stunt.
tumbled to another record low,
in part because of expectations
that Uber’s shares will flood
the market now that investors
who were locked in to holding
them after the company’s ipo
in May are free to sell.
The Federal Communications
Commission formally ap-
proved the long-delayed merg-
er of Sprint, which is owned by
SoftBank, and T-Mobile, Deut-
sche Telekom’s American
subsidiary. A lawsuit brought
by a coalition of statesattempt-
ing to block the deal on anti-
trust grounds is due to be heard
in court next month.
hp, one of the world’s biggest
makers of personal computers
and printers, confirmed that it
had received a “proposal” from
Xerox, a smaller company
focused on office photocopi-
Leaders Leaders 9
A continent in peril
Europe is “on the edge of a precipice”, says France’s president. Is he right?
Today’s europe owesitsexistencetotheUnitedStates.Amer- Takedefence.MrMacronthinksthathisnew European Inter-
ica fought two worldwarsonEuropeansoil;Americandiplo- ventionInitiativeandtheeu’sPermanentStructured Co-opera-
macy was midwife to whatbecametheEuropeanUnion;Ameri- tion,underpinnedbytheEuropeanDefenceFund, can integrate
can arms protected western Europe from Soviet invasion; and militaryoperationsandboostEurope’scapabilities, by implica-
American statesmen oversawGermanunification.Now,inadra- tionprovidingafoundationforEurope’spost-natodefence. But
matic plea to all Europeans,France’spresident,EmmanuelMac- these building-blocks are rudimentary. America’s departure
ron, has warned that America is cutting Europe loose. The old wouldleavevastholesinareaslikeairandmissile defence, intel-
continent is “on the edge of a precipice”, he warns. Unless it ligenceandsurveillance,andaerialrefuelling. Its military bud-
wakes up, “we will no longerbeincontrolofourdestiny.” get is twice as large as the rest of nato’s combined. European
In his Elysée Palaceoffice,MrMacronspoketoTheEconomist governments will be reluctant to plug the gap, since they have
in apocalyptic terms (seeBriefing).nato,thetransatlanticalli- other priorities. It may be easier to adapt nato, so that it both
ance, is suffering from “brain-death”, he says; Europe needs to protectsEuropeandisalsomoreusefultothe United States.
develop a military forceofitsown.Theeuthinksofitselfasjusta And then there is diplomacy. Mr Macron thinks Europe can
market, but it needs to act as a political bloc, with policies on best establish its global influence as a power that mediates be-
technology, data and climatechangetomatch.PastFrenchpresi- tweenthegorillasofChinaandtheUnitedStates. Its role will be
dents have argued that Europe cannot rely on America, and “tostopthewholeworldfromcatchingfire”,he says. A first step
should look to Franceinstead.MrMacronisnotjustrehashing wouldbetogetagriponitsownregionbyrebuilding relations
this view. He believes thatAmericaandEuropehavesharedin- withRussia—ataskthatheacceptscouldwell take a decade.
terests and has worked tirelessly to keep good relations with Again, however, that ambition assumes a unity of purpose
President Donald Trump. But he argues that for the first time thattheeuseldomachieves.Manyofitsmembers tend to shun
America has a president who “does not share our idea of the hard power for a foreign policy focused on human rights and
European project”. AndevenifMrTrumpisnotre-elected,his- commerce. As Mr Macron’s Russian proposal illustrates, power
torical forces are pullingtheoldalliesapart. politicsrequiresyoutodealwithpeoplewhose actions you de-
American priorities are changing. When plore.Forhim,realpolitikisnecessary for Euro-
President Barack Obama,whowasintentonpiv- pean values to prevail. It is not clear his fellow
oting towards Asia, chosenottopunishtheuse Europeanleaderswouldagree.
of chemical weapons in Syria it signalled that Last is industrial policy. Mr Macron wants
America was losing interestintheMiddleEast. the state to take strategic decisions over key
Mr Trump’s recent abandonment of America’s technologies, and favours a policy to foster
Kurdish allies inSyrianotonlyreinforcedthis, European champions. This tends to channel
but also undermined nato.Americadidnotin- fundsandcontractstopolitically connected in-
form its allies, and Turkey, a nato member, cumbents.Abetterwaytocreate a thriving tech-
promptly invaded Syria.“Strategicallyandpolitically,”MrMac- nology ecosystem would be to encourage more competition. If
ron says, “we need to recognisethatwehaveaproblem.” MrMacronwillnotembracethat,whyshould others?
Asked whether he is confident that an attack on one nato Theeu’sformulaisunique:anarrangement between states,
member would today be seen as an attack on all—the idea that withoutanyhegemon,thatkeepsthepeace.But how do you get
underpins the alliance’s credibility—Mr Macron says that he 27countries—plusBritain,abigpowernowin the eu’s departure
does not know. He acknowledges that nato thrives operation- lounge—toagreetobuildfullyfunctionalarmed forces, let alone
ally, but he calls for Europe“toreassesstherealityofwhatnato convince Europe’s foes that they would ever be used? Mr Mac-
is in the light of the commitmentoftheUnitedStates.” ron’s critics scoff that he is “drunk on power”. Some countries,
Europe, he says, has yet to grasp the immensity of the chal- includingPolandandtheBalticstates,would be alarmed at the
lenge ahead. It still treats the world as if commerce and trade ideaofpartingwithAmericaandpursuingdetente with Russia.
alone were able to ensure peace. But America, the guarantor of Others,includingGermany,ItalyandSpain,are too embroiled in
world trade, is becomingprotectionist.Authoritarianpowersare domesticwoestoentertainagrandglobalvision.
on the rise—including Russia and Turkey on Europe’s borders. Plentyoftimesinthepast,piouscallsfor Europe to make its
While America and China spend vast sums on artificial intelli- weightfeltintheworldhaveturnedouttobe empty. This time,
gence, which they see as an essential component of their hard Mr Macron argues, must be different. He is asking his fellow
power, the eu devolves too much say to industry. Mr Macron leaderstoimaginehowEuropewillthrivein a dangerous world
warns that slow-moving,head-in-the-cloudsEuropemustopen without a cast-iron American alliance. How should they deal
its eyes and prepare itselfforatougher,lessforgivingworld. with Russia, with the conflict and religious fundamentalism
It is an astonishingly bleak picture for a centrist European roilingtheMiddleEastandnorthAfrica,andwith the authoritar-
politician and an avowedinternationalist.Butitisalsounusu- ianchallengeofChina?Hedeservesananswer. 7
ally thought-through and, as far as Mr Macron is concerned, a
spur to action. It is hardtooverstatethescaleofthechangeheis For the podcast and the full transcript, go to
asking from his fellowEuropeans. economist.com/macronaudio
10 Leaders The EconomistNovember9th2019
Cameroon’s forgotten war
Words and weapons
A bastion of stability in central Africa could fall apart if outsiders do not help
For37yearsonemanhasruledCameroon,astaggeringlycor- make up the un’s shelter kit. Cameroon’s main backers have
rupt,oil-richstateincentralAfrica.PresidentPaulBiyaisan looked away, hoping Mr Biya’s government would quell the re-
old-fashioned autocrat. When democracy swept across Africa bellionandgetbacktofightingjihadistsintheSahel.Insteadof
after the cold war ended, he called it a “distasteful passing fe- corrallingthewarringparties,theAfricanUnionandunSecurity
tish”.Thenherealisedhewouldattractlessforeigncriticismif Councilhavestoodaside,rousingthemselvesonlyto“welcome”
he quietly intimidated opponents and rigged elections instead and“praise”MrBiya’s“nationaldialogue”,ashamtowhichkey
of banning them. He has done so ever since, and kept on good separatistleaderswerenotinvited.
termswithWesternpowersbyposingasachampionofstability Thisisadisgrace.Theconflict,althoughbloody,isnotintrac-
inafissileregion.Histroops,trainedandequippedbyFrance,Is- table.MostpeopleinCameroon’stwoEnglish-speakingregions
raelandAmerica,battlethejihadistsofBokoHaramandIslamic areprobablymoderateandwouldbehappywithsomemoreau-
StatearoundLakeChad.Theyalsoregularlydonbluehelmetsto tonomy and an end to the fighting. They could find common
keeppeaceincountriessuchastheCentralAfricanRepublic.Yet groundwiththoseonthegovernmentsidewhomightbewilling
MrBiyacannotkeepthepeaceathome. togiveabitmorepowertotheregions.
Instead, a country that was once seen as an Thelongerthefightingpersists,theharderit
exporter of security is now being wrenched willbetoresolve.Withthearmyandseparatists
apart. A secession struggle rages in its English- instalemateonthebattlefield,peacecancome
speakingregions.Governmentforcesareburn- only through talks. For those to happen, both
ing villages, shooting young men and raping sidesneedtobuildtrust.Theseparatistsshould
women (see Middle East & Africa section). The startbyliftingtheruinousbantheyenforceon
conflict has killed thousands and forced more childrengoingtogovernmentschoolsinthear-
than500,000peoplefromtheirhomes. eastheycontrol,whichthreatenstocreatealost
Thestrifebeganasaseriesofpeacefulprot- generation of illiterates. Rebel leaders abroad
ests in 2016. Anglophones were aggrieved at their marginalisa- shouldtonedowntheirinflammatorytalkofsecession.Thegov-
tion in a country dominated by French-speakers. Cameroon is ernment should release political prisoners and prosecute sol-
too rigidly centralised to satisfy minorities: only1% of govern- diersresponsibleforabuses.
ment spending is locally controlled, compared with more than Outsiders should press Mr Biya to make peace. President
50% in neighbouring Nigeria. Strikes and demonstrations over Donald Trump has rightly scaled back military assistance be-
theerosionofEnglish-stylecommonlawandthedominanceof cause of atrocities committed by the army. He has also kicked
Francophoneofficialshavesincemutatedintowhatlookslikea Cameroonoutofaprogrammewhichgrantsduty-freeaccessto
civilwar.Itcouldgetmuchworse,aschaosgrows,armedsepa- the us market to African countries that respect human rights.
ratistskillandsoldiersinflicthorrorsoncivilians. European governments should also turn the screws, especially
Theoutsideworldhasbarelynoticedthisdisasterunfolding. France, Mr Biya’s closest ally. The ageing strongman once said
Appealsforemergencyassistancehaveattractedlessthanone- thatonlyone-partyrulecouldholdCameroontogether.Infact,
fifthoftheirtarget:lessthanhalfthepeoplewhohavelosttheir his overcentralised autocracy has created pressures that could
homes have been given the two pieces of plastic and rope that blowitapart.Onlydialogueanddevolutioncansaveit.7
Squeezing the rich
In defence of billionaires
Large personal fortunes are an unreliable guide to where government policy has gone wrong
Bashing billionaires is gaining popularity—especially ment goes wrong is a more novel and serious idea. It is also mis-
among candidates to be America’s president. Elizabeth War- guided. Personal wealth is at best an unreliable signal of bad be-
ren wants to take up to 6% of their wealth in tax every year. Ber- haviour or failing policies. Often the reverse is true.
nie Sanders says they “should not exist”. “Every billionaire is a The left’s charge is based on a kernel of truth. When competi-
policy failure,” goes a common left-wing slogan. In Britain’s elec- tion is fierce and fair, persistently high profits should be difficult
tion, too, the super-rich are under fire. Jeremy Corbyn, the leader to sustain. Yet on both sides of the Atlantic too many companies
of the Labour Party, says that a fair society would contain none. crank out bumper profits in concentrated markets. Some billion-
On October 31st he vowed to “go after” Britain’s plutocrats, sin- aires have thrived where competition has failed. Facebook and
gling out five individuals and bemoaning a “corrupt system”. Google dominate online advertising; Warren Buffett likes firms
Left-wingers blasting inequality is nothing new. But the idea with “moats” that keep rivals out. Meanwhile America’s political
that vast personal fortunes are made possible only when govern- system is riddled with lobbyists cheerleading for incumbents. 1
12 Leaders The EconomistNovember9th2019
2About a fifth of America’s billionaires made their money in in- Taxes should be levied progressively. But that does not justify
dustries in which government capture or market failure is com- limitless redistribution or punitive levies. Ms Warren’s proposed
monplace (see Finance section). wealth tax has already doubled once during her campaign.
Yet many others operate in competitive markets. The retailers Thomas Piketty, an economist behind many of the most-cited
owned by Mike Ashley, one of Mr Corbyn’s targets, are known for inequality statistics, wants a wealth tax of up to 90% on the rich-
low prices and ruthless competition (as well as questionable est billionaires. Such expropriation would surely chill incen-
working conditions), not rent-seeking. For every Mark Zucker- tives to innovate and to allocate capital efficiently. An economy
berg, the boss of Facebook, there are several technology entre- with fewer entrepreneurs might have fewer billionaires but
preneurs with lots of rivals. Think of Anthony Wood, who would ultimately be less dynamic, leaving everyone worse off.
created Roku, a video-streaming platform; or Tim Sweeney, co- Wealth is worrying when it becomes entrenched or shielded
founder of the firm behind “Fortnite”, a video game. Nobody can from disruptive forces. Where that decay has set in, govern-
seriously accuse these innovators of having sewn up their mar- ments should tackle it directly. Whatever Mr Corbyn says, Britain
kets or of depending on state favours. The same goes for sports- is hardly corrupt by global standards—bribery is rare, for exam-
men such as Michael Jordan or musicians like Jay-Z, billionaires ple.But it does have a problem with inherited wealth, the source
both. Even hedge funds face ferocious competition for investors’ of one-fifth of billionaires’ fortunes. Higher inheritance taxes
funds, which is why so many are throwing in the towel. would be welcome there and in America, where it is too easy to
When capitalism functions well, competition whittles pro- pass wealth between the generations.
fits away for some but also produces them for others as entrepre- A broader agenda of attacking rents while maintaining dyna-
neurs seize markets from sleepy incumbents. Their success will mism would weaken excessive intellectual-property and copy-
eventually set off another cycle of disruption, but in the mean- right protections, which often last too long. (Selling Lucasfilm
time fortunes can be made. The founders of MySpace, a social- more than three decades after the first “Star Wars” film should
media website, got rich when they sold it to News Corp; Facebook not have netted George Lucas $4bn.) It would shake up antitrust
subsequently ate its lunch. Blockbuster, a video-rental store, enforcement to promote competition in old and new industries
helped make Wayne Huizenga a billionaire; then Netflix arrived. alike. Most important, it would fix America’s campaign-finance
This process creates vast benefits for society. According to esti- laws to rid its political system of corporate capture at both state
mates by William Nordhaus, an economist, between 1948 and and federal level.
2001innovators captured only 2% of the value they created. Per- Doing all this would achieve much more than an indiscrimi-
haps that is why billionaires are tolerated even by countries with nate attack on the rich—and without the associated damage. By
impeccable social-democratic credentials: Sweden and Norway all means, correct policy failures. But billionaires are usually the
have more billionaires per person than America does. wrong target.7
Fake nudes
Sex, lies and politics
As deepfake technology spreads, expect more bogus sex tapes of female politicians
Adulterer, pervert, traitor, murderer. In France in 1793, no well-organised disinformation campaigns in 70 countries, up
woman was more relentlessly slandered than Marie Antoin- from 48 in 2018 and 28 in 2017.
ette. Political pamphlets spread baseless rumours of her deprav- Consider the case of Rana Ayyub, an Indian journalist who
ity. Some drawings showed her with multiple lovers, male and tirelessly reports on corruption, and who wrote a book about the
female. Others portrayed her as a harpy, a notoriously disagree- massacre of Muslims in the state of Gujarat when Narendra
able mythical beast that was half bird-of-prey, half woman. Such Modi, now India’s prime minister, was in charge there. For years,
mudslinging served a political purpose. The revolutionaries critics muttered that she was unpatriotic (because she is a Mus-
who had overthrown the monarchy wanted to lim who criticises the ruling party) and a prosti-
tarnish the former queen’s reputation before tute (because she is a woman). In April 2018 the
they cut off her head. abuse intensified. A deepfake sex video, which
She was a victim of something ancient and grafted her face over that of another woman, was
nasty that is becoming worryingly common: published and went viral. Digital mobs threat-
sexualised disinformation to undercut women ened to rape or kill her. She was “doxxed”: some-
in public life (see Europe section). People have one published her home address and phone
always invented rumours about such women. number online. It is hard to prove who was be-
But three things have changed. Digital technol- hind this campaign of intimidation, but its pur-
ogy makes it easy to disseminate libel widely and anonymously. pose is obvious: to silence her, and any other woman thinking of
“Deepfake” techniques (manipulating images and video using criticising the mighty.
artificial intelligence) make it cheap and simple to create con- Similar tactics are used to deter women from running for
vincing visual evidence that people have done or said things public office. In the run-up to elections in Iraq last year, two fe-
which they have not. And powerful actors, including govern- male candidates were humiliated with explicit videos, which
ments and ruling parties, have gleefully exploited these new op- they say were faked. One pulled out of the race. The types of im-
portunities. A report by researchers at Oxford this year found age used to degrade women vary from place to place. In Myan-1
14 Leaders The EconomistNovember9th2019
2mar, where antipathy towards Muslims is widespread, detrac- Stamping out the problem altogether will be impossible. Any-
tors of Aung San Suu Kyi, the country’s de facto leader, circulated one can make a deepfake sex video, or hire someone to do it, for a
a photo manipulated to show her wearing a hijab. By contrast in pittance, and then distribute it anonymously. Politicians will in-
Iran, an Islamist theocracy, a woman was disqualified from tak- evitably be targets. Laws against libel or invasion of privacy may
ing the seat she had won when a photo, which she claims is doc- deter some abuses, but they are not much use when the perpetra-
tored, leaked showing her without one. tor is unknown. Reputable tech firms will no doubt try to remove
High-tech sexual slander has not replaced the old-fashioned the most egregious content, but there will always be other plat-
sort, which remains rife wherever politicians and their propa- forms, some of them hosted by regimes that actively sow disin-
gandists can get away with it. In Russia, female dissidents are formation in the West.
dubbed sexual deviants in pro-Kremlin media. In the Philip- So the best defence against sexual lies is scepticism. People
pines, President Rodrigo Duterte has joked about showing a should assume that videos showing female politicians naked or
pornographic video of a female opponent, which she says is a having sex are probably bogus. Journalists should try harder to
fake, to the pope. In China, mainland-based trolls have spread expose the peddlers of fake footage, rather than mindlessly link-
lewd quotes falsely attributed to Tsai Ing-wen, Taiwan’s first fe- ing to it. Some day, one hopes, voters may even decide that it is
male president. Beijing’s state media say she is “extreme” and none of their business what public figures look like under their
“emotional” as a result of being unmarried and childless. clothes, or which consenting adults they sleep with.7
Genetics
A design for life
A new type of genetic profiling promises cleverer, better-looking children. What could possibly go wrong?
Debate about using science to create “bespoke” human be- for it, it may also be possible to snp-profile an embryo and thus
ings of one sort or another usually revolves around the ideas foretell its future. As well as disease risk, height and intelligence,
of genetic engineering and cloning. People worry about these for snp-profiling might eventually be capable of predicting (albeit
two reasons. One is practical. The tinkering involved could end imperfectly, for environment also plays a role) things as diverse
up harming the resulting individual. The other is a more visceral as television-viewing habits, likelihood of being bullied at
dislike of interfering with the process of reproduction, perhaps school and probability of getting divorced.
best encapsulated in the phrase “playing God”. At the moment, non-medical attributes are not on the menu
There is, however, a third way that the genetic dice which are offered by would-be embryo snp-profilers. But if the technique
thrown at the beginning of human life might be loaded—and it works it is hard to believe that they will not be on someone’s
does not involve any risky tinkering. It is a twist on the well-es- menu in the future. And that does raise questions.
tablished procedure of in vitrofertilisation (ivf). The twist would What all this amounts to is, in essence, a supercharged ver-
be to decide, on the basis of their dna, which of a group of avail- sion of an existing process known as assortative mating. It is al-
able embryos should be implanted and brought to term. ready true that intelligent, successful (and therefore probably
The result would be a child optimised with the best-available rich) people seek each other out as partners. In doing so, they
genetic profile for a long and healthy life. And bring to the table whatever genetic variations
this is not science fiction. Two American firms helped make them intelligent, successful and
have been working on the idea for some time, rich, which they then pass on to their children.
and one of them is now implementing it (see snp profiling—available, at least to start with,
Science & technology section). only to those who can afford it—will enhance
Single-nucleotide polymorphism (snp, or that by letting parents pick tall, good-looking
“snip”) profiling, as the technique is called, and above all clever offspring.
promises healthier offspring—a clear good. It For a single generation, that may not matter
may also provide a way to upgrade things only too much to the rest of society. It would be but
tangentially associated with health, such as height and, more one extra privilege that the rich enjoy. Piled generation on gener-
controversially, intelligence. Moreover, it is a technique that ation, however, it really might create a genetic elite. snp-profil-
could be applied generation on generation, to improve grand- ing is already used to enhance desired attributes in livestock, so
children and great-grandchildren still further. it seems reasonable to assume it will work on people.
snps are the smallest possible differences between individ-
uals’ dna—single genetic letters. Individually, most have little The gene genie is out of the bottle
consequence. But there are millions of them in every human ge- Perhaps that is tomorrow’s problem. For the moment there
nome and their combined effects can be big. snpprofiling looks seems no reason beyond envy to oppose embryosnp-profiling.
for particular combinations of snps that research has shown are But, from H.G. Wells’s Eloi in “The Time Machine” to Aldous
associated with the risks of developing illnesses such as cancer, Huxley’s Alphas in “Brave New World”, science fiction is full of
diabetes and heart disease. This is important medical informa- breeding programmes for elite humans that have gone wrong.
tion for people now alive, and can be used to recommend screen- Sci-fi always enjoys portraying dystopias, and mostly they do not
ing programmes, changes of behaviour and prophylactic drugs. come true. But it might be wise to debate the matter now, just in
For those willing to undergo ivf, and with the money to pay case this time people really are unknowingly playing God.7
16 Letters The EconomistNovember9th2019
wasapparentduringthe2019 andservice.Acorruptand Canada. If this new govern-
WhowrotetheBible? electoralcycle,whichwasnot kleptocraticpoliticalclass ment does not reach out and
YourobituaryforHarold accompaniedbyadropintax colludeswithmultinational give alienated workers a voice
Bloomnotedthathislistof revenue,thusbreakinganoth- predatorstoprivatisealmost they will unite against what
greatwritersin“TheWestern erregularpatternofthepast. everything,andruthlesslysack they perceive as elitist, de-
Canon”was“almostallmale” prof.diomidisspinellis Chile’snaturalbounties. tached and nepotistic poli-
(October26th).Inthatsame AthensUniversityof Theneoliberalmodel ticians and will eventually find
book,Bloomalsocreditedthe EconomicsandBusiness indeedworksphenomenally a leader they can rally around.
earliestsourceoftheBibletoa wellforChile’sself-serving christopher kissel
woman.“TheBookofJ”,which elitistfew.Butitisabsolutely Houston
Bloomwrotebefore“TheWest- Can’tpay,won’tpay dysfunctionalfortherestof
ernCanon”,embracedthe “Wallofsilence”(October12th) thepopulationandisindire
documentaryhypothesis, discussedtheoptionsfor needofageneralrethink. The true cost of wind energy
whichholdsthattheTorah,the Congresswhendealingwith carlhaas As you said, Britain’s “offshore”
firstfivebooksoftheBible, thosewhowon’tco-operate Copenhagen carbon footprint is high
werewrittenprimarilybyfour withtheinquiryintoimpeach- (“Omissions”, October 19th).
authors,conventionallyre- ingDonaldTrump.Youraised This is particularly so in
ferredtoasJ,E,PandD.Those thepossibilityoffining CluelessintheMiddleEast respect of Britain’s enthusi-
workswerelateredited,prob- witnesseswhoareheldin Iagreedwithyourcritical astic development of offshore
ablybyEzratheScribearound contemptasonesolution. assessmentofDonaldTrump’s wind energy, which requires
444bc,intothesinglenarra- Oneconcernaboutletting decisiontowithdrawfrom the development of a huge
tivewehavetoday. Congressfineindividualsis Syria(“Nowaytosaygoodbye”, sub-sea infrastructure to sup-
BloomhadarguedthatJ,the theseparationofpowersand October19th).Itisworthadd- port it. In use, wind energy has
earliestofthefourauthors, theassignedrolesofthe ingthatthisisonlythelatest a small carbon footprint. How-
wasawoman,possiblya branchesofgovernment.The exampleoftheabsenceofany ever, the cradle-to-grave car-
daughterorgranddaughterof SupremeCourthasnever clearWesternstrategyinthe bon footprint of a whole off-
KingDavidintheJerusalem expresslyendorsedtheprac- MiddleEastandwiderregion shore wind farm is high and it
courtsofDavid’ssuccessors, tice.Puttingasidethethorny aftertheattacksofSeptember is all “spent” before any of the
SolomonandRehoboam.But constitutionalquestion,there 11th2001.Exceptforabrief “clean” electricity is generated.
in“TheWesternCanon”,he arealsopracticalproblems. periodinIraqbetween2007 And at the end of its design life
endorsedasuggestionfroma Assumethatthecontemnoris and2010,theAmerican-led of 25 years (well before 2050) it
“shrewdreviewer”ofhis fined$25,000foreachdayhe Westernalliancehasneverhad is all derelict. Sustainable?
earlierworkidentifyingJas doesn’tco-operate.Whatifhe acoherentideaofwhatpoliti- Show me the numbers.
Bathsheba,whowasDavid’s refusestopay?Congresshasno calorderitisattemptingto jim platts
wifeandSolomon’smother. obviousmechanismtoforce createinAfghanistan,Iraq, Cambridge, Cambridgeshire
stephensilver thepayment.EvenifCongress LibyaandSyria.
SanFrancisco werefoundtohavetheconsti- Iamnofanofhisworkbut
tutionalauthoritytoimposea SunTzu’saphorismthat Agambling failure
fine,itisnotclearhowCon- “tacticswithoutstrategyisthe Your article on the “organic”
Greek tax reforms gresswouldcollectthemoney. noisebeforedefeat”seemsapt. nature of corruption and fraud
It is true that tax amnesties on johnminan anthonyking in Atlantic City (“Fix your hair
underreported income were Professoroflawemeritus Chairofwarstudies up pretty”, October 12th) passed
once a regular feature of Greek UniversityofSanDiego UniversityofWarwick by the fact that America’s
tax administration (“To hell Coventry president was once the largest
and back”, October 5th). How- casino operator and employer
ever, in order to strengthen the Fading South American model in the city. When he opened his
tax-compliance culture, no tax The Chilean economy, praised Populism, eh! Taj Mahal casino and hotel in
amnesty has been put in effect time and again by The Econo- Justin Trudeau’s new minority 1990, financed in part by $675m
for the financial years after mist, should “not need rein- Liberal government in Canada in junk bonds, Donald Trump
2009. The current scheme vention”, says Bello (October will have to forge alliances called it “the eighth wonder of
concerns only payments of 26th). That is an all too predict- with the New Democrats and the world” and boasted that it
already assessed tax obliga- able conclusion from someone Greens, parties that are hostile would make Atlantic City great
tions that are in arrears, which who once attended a cocktail to the oil and gas industry again.
amount to a whopping €104bn party in Santiago with 60 other (“The chastening of Justin The Taj Mahal filed for
($116bn). Most of this is owed people representing “half of Trudeau”, October 26th). A bankruptcy protection the next
by bankrupt businesses. Chile’s gdp”. The adage that coalition under a left-wing tent year and sold for four cents on
Greece’s tax administration seven families have a strangle- will further exacerbate ten- the dollar in 2017.
improved by leaps and bounds hold on the country is no joke. sions with western Canada’s james lilliefors
during the country’s financial The middle classes are indebt- oil-producing provinces, Naples, Florida
crisis. Most filing moved from ed up to their ears to almost which are big contributors to
paper forms to online systems. anybody: their bank, super- Canadian prosperity.
The establishment of the market, pharmacy, dentist, I am a Canadian engineer Lettersarewelcomeandshouldbe
Independent Authority for educational institutions and and worked in an oil-sand addressedtotheEditorat
TheEconomist,TheAdelphiBuilding,
Public Revenue modernised health-care providers. They mine for four years. Western
1-11JohnAdamStreet,LondonWC2N6HT
management and demon- also pay European-level prices, Canadians will not surrender Email:[email protected]
strably reduced political inter- and sometimes more, for every quietly. It is naive to think that Morelettersareavailableat:
Economist.com/letters
ference in tax collection. This imaginable basic commodity populism cannot happen in