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China at 70—pomp and protests Big Tech and the state gird for battle Europe’s anti-populist backlash What would Trump’s gators cost? OCTOBER5TH–11TH2019 Masters of the universe How machines are taking over Wall Street Contents The EconomistOctober5th2019 5 The world this week United States 8 Asummary of political 21 Texas won’t turn blue andbusinessnews 22 On impeachment 23 Aunion retreat Leaders 24 Kennedy 4.0 11 Robo-investing 24 University admissions Masters of the universe 25 Alligators in the desert 12 Greece’s debt odyssey End extend and pretend 26 LexingtonDougJones 12 Kashmir Vale of tears The Americas 13 Technology and politics 27 Peru’s president v congress Openseason 28 Chile’s lithium-battery dream 14 Politicalrhetoric On the cover Downwiththepeople 28 Inuit orthography Forget Gordon Gekko. 30 BelloArgentina’s difficult Computers increasingly call Letters roadtoredemption the shots on Wall Street: 16 OnBrexit,Afghanistan, leader,page 11. How machines popes,Einstein, Asia manage markets: briefing, Columbus,T.Boone page18 31 India’s courts and Kashmir Pickens 32 Elections in Afghanistan •Chinaat 70—pomp and protests Official celebrations 33 Bumpkins’ brides in Japan Briefing for National Day showed a 33 Halal-crazy Indonesia 18 Robo-investing worrying contempt for history: Marchofthemachines 34 Making Indian computer Chaguan,page 40. Weapons on chips parade, page 38. Hong Kong 35 BanyanThe next phase in riots, page 37 theSouthChinaSea •Big Tech and the state gird for battleThe American China government is lining up against 37 Violence in Hong Kong the technology companies, 38 Cutting-edge weapons page 55. Europe has so many complaints it hardly knows 40 ChaguanParading 70 where to begin, page 56 years of Communism •Europe’s anti-populist backlashAfter a series of reverses, the populists are down but not out, page 45. Politicians Middle East & Africa who invoke “the people” are 41 Crisis in Lebanon usually up to no good: leader, 42 Roads to ruin in Iraq page 14 43 Netanyahu makes his case •What would Trump’s gators LexingtonDoug Jones, a 43 Angola’s oil decline cost? The president would like prophet of Deep South 44 Reform in Ethiopia to reinforce his wall with a moderation, illustrates reptile-infested moat. We tot up liberalism’s present pains the bill,page 25 and future promise, page 26 1 Contents continues overleaf 6 Contents The EconomistOctober5th2019 Europe Finance & economics 45 Populists under pressure 63 Unshackling Greece’s economy 46 Culture war in France 47 Direct democracy in 65 Achallenge to FATCA Belgium 65 Boeing v Airbus 48 European commissioners 66 Turmoil for India’s banks on trial 66 Credit Suisse’s spying 48 GamblinginFinland furore 67 Another cloud over crypto Britain 68 Germans against the ECB 49 Anew Brexit proposal 68 How streaming is 50 Prince Harry v the press changing pop 51 BagehotRichard Milhous 70 Free exchangeWealth Johnson taxes Science & technology 71 Open-source computing International 72 Super-black coatings 53 The competition between 73 Sand-swimming lizards sports 73 SpaceX’s Starship 74 Oceanic litter Books & arts 75 Art and faith in Russia Business 76 Stories from Bosnia’s war 55 Big Tech v the state 77 Poverty in London 56 Der Techlash 77 George Gershwin’s life 57 “On your way” delivery 78 JohnsonThe new insults 57 Uberising luck in Africa 58 Bartleby From rags to Richer Economic & financial indicators 59 How woke is Nike? 80 Statisticson42economies 59 Delisting China Graphic detail 60 Schumpeter Labour in 81 Moderncitiesaddpeoplebyspreading the 21st century Obituary 82 Jacques Chirac, president of many parts Subscription service For our full range of subscription offers, including digital only or print and digital combined, visit: Economist.com/offers Volume433 Number9163 PublishedsinceSeptember1843 You can also subscribe by mail, telephone or email: One-year print-only subscription (51 issues): Please totakepartin“aseverecontestbetween North America intelligence, which presses forward, The Economist Subscription Center, United States..........................................US $189 (plus tax) and an unworthy, timid ignorance P.O. 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Canada Post publications mail (Canadian distribution) sales agreement no. 40012331. Return undeliverable Canadian addresses to The Economist, PO Box 7258 STN A, Toronto, ON M5W 1X9. GST R123236267. Printed by Quad/Graphics, Saratoga Springs, NY 12866 8 The world this week Politics The EconomistOctober5th2019 acquitted,sincehisparents Inacloselywatchedcase,a Some 20,000 people took to hadabsolvedhimofblame,a judgeruledthatHarvarddoes the streets in Moscowto factorPakistanicourtsoften notdiscriminateagainst demand the release of those takeintoaccount. Asian-Americansinitsappli- arrested in earlier demonstra- cationsprocess,findingthatit tions over the exclusion of passes“constitutionalmuster”. opposition figures from a city Vizcarra’svictory Theplaintiffsarguedthat council election. Peru’spresident,MartínViz- Harvard’saffirmative-action carra,dissolvedthecountry’s policyfavoursblackandHis- congress,whichhasobstruct- panicapplicants.Thematter Atinderbox edhislegislativeprogramme, willprobablyendupinthe As many as 25 soldiers were andproposedtoholdacon- SupremeCourt. killed and another 60 are Chinastaged a huge parade to gressionalelectioninJanuary. missing after jihadists attacked celebrate 70 years of Commu- Congressrefusedtoacceptits two army bases in Mali. Sepa- nist rule. It involved more than dissolutionandvotedtosus- Two borders for four years rately al-Shabab, a jihadist 100,000 civilians, 15,000 pendMrVizcarraaspresident. Boris Johnson, Britain’sprime group affiliated with al-Qaeda, troops and hundreds of weap- Itinstalledthevice-president minister, made a new Brexit attacked a convoy of Italian ons. Some of the equipment inhisplace,butshequitafter offer to the European Union. troops and an air base used by had not been shown in public justhoursinthejob. His proposal includes customs American forces in Somalia. before, including the df-41 checks, but not at the border in The attacks highlight the intercontinental ballistic Guyanaistoholdelectionson Northern Ireland, plus a regu- deteriorating security across missile, which can hit any part March2nd.Thegovernment latory border in the Irish Sea. the Sahel and into the Horn of of America. But a “white paper” lostavoteofconfidencelast Mr Johnson is determined to Africa. issued by China said the December.NextyearGuyanais leave the euon October 31st, country had “no intention” of expectedtobeginreceiving but is hampered by Parlia- At a pre-trial hearing lawyers challenging the United States, revenuefromvastreservesof ment’s legal stipulation that he for Binyamin Netanyahu, or supplanting it. oildiscoveredoffshore.The must ask for an extension if Israel’s prime minister, argued imfthinksthatitseconomy there is no deal. that he should not be charged In Hong Kong, meanwhile, maygrowby85%. with corruption. The attorney- thousands of people marked general will decide whether to the occasion as a “day of ProsecutorsinNewYork Britain proceed with the indictments. Votingintention*,2019,% mourning” by staging an unau- allegedthattheyoungerbroth- Meanwhile, talks between Mr thorised march. Some people eroftheHonduranpresident, 40 Netanyahu’s Likud party and Conservative Boris Johnson later clashed with police in JuanOrlandoHernández,had Blue and White, a centrist elected leader 30 several locations. A policeman accepted$1mfromJoaquín Labour party, over forming a govern- shot a teenage student in the Guzmán,aMexicandrugbaron 20 ment have stalled. chest—the first injury in- knownas“ElChapo”,thatwas LibDem BrexitParty volving live ammunition since intendedforthepresident.Mr 10 Hundreds of people protested Green pro-democracy unrest broke Hernándezsaidtheclaimwas in Lebanonas the government SNP 0 out in the city four months ago. absurd,andnotedthatprose- grappled with a worsening Jun Jul Aug Sep Oct cutorsneverallegedthathe economic crisis. Enormous Source: Politico *Poll of polls Afghansvoted in a presi- hadreceivedthemoney. debt and shrinking foreign dential election. The Taliban Brexitisnottheonlytrouble investment have led to fears had vowed to disrupt the for Mr Johnson. Hard on the that the Lebanese pound will polling, which nonetheless On a mission heels of the controversy sur- be devalued and prices raised. was relatively peaceful. Democrats in the House of rounding his relationship with Iraqisalso took to the streets to Turnout was extremely low. Representatives pushed ahead an American businesswoman protest against unemployment The results will not be with an impeachment in- when he was mayor of London, and corruption. Security forces announced until November. vestigationof Donald Trump’s a female journalist accused Mr responded with live fire; at request to the Ukrainian presi- Johnson of groping her thigh in least 18 people were killed and North Koreaagreed to resume dent to dig up dirt on the son of 1999, when he was her boss. He hundreds wounded. disarmament talks with Amer- his rival, Joe Biden. Subpoenas denied it happened. Despite its ica after a hiatus of eight were sent to Mike Pompeo, the leader’s problems theConser- Software developers in Lagos, months. It later tested a mis- secretary of state, and to Ru- vative Partyholds a resilient Nigeria’smain commercial sile, which it said it launched dolph Giuliani, the president’s lead in the polls. city, started a campaign against from a submarine near its lawyer. In a Twitter meltdown, harassment by the police, who coast into Japanese waters. Mr Trump claimed the Demo- Sebastian Kurz and his People’s single out people carrying crats were staging a “coup”. Party were the clear winners in laptops or smartphones for A court in Pakistansentenced Austria’ssnap election, caused extortion. The arrests threaten the brother of Qandeel Baloch, Bernie Sanderscancelled after his government collapsed a boom in startups. a social-media star, to life in events in his campaign for the following a scandal connecting prison for her murder. He said Democratic presidential nomi- his coalition partners, the Ugandabanned people from he had killed her to preserve nation until further notice, Freedom Party, and Russian wearing red berets, which are the family’s honour, after she after he had heart stents insert- money. However, he is still associated with an opposition posted pictures of herself ed to relieve some chest pains. short of a majority, and is movement led by Bobi Wine. online. Activists for women’s The 78-year-old has kept up a casting around for an alterna- Mr Wine was recently charged rights had feared he would be gruelling campaign schedule. tive to join a new government. with “annoying” the president. 10 The world this week Business The EconomistOctober5th2019 A15-yeardisputeoversub- had an acrimonious relation- central bank would cut interest gear and clothing company, sidiesintheaerospacein- ship with Mr Khan; the pair rates again, despite recent was sold to Kathmandu, a New dustrycametoapartialclimax reportedly had a blazing row at remarks by its new governor Zealand outdoor specialist. whentheWorldTradeOrgani- a cocktail party in January. that there was limited room for The men, now in their 70s, sold sationruledthatAmerica manoeuvre. their firm for A$350m ($235m). couldlevy$7.5bn-worthof Wells Fargonamed Charles tariffsonexportsfromthe Scharf as its new chief PayPal became the first foreign A report from Kroll, a corporate EuropeanUnionbecauseofthe executive, six months after company to enter China’s investigations and consultan- illegalaidgiventoAirbus.Next Tim Sloan resigned in the payments industrywhen it cy firm, highlighted the rep- yearthewtowillprobably aftermath of a mis-selling took a 70% stake in a domestic utational risk to businesses approveEuropeanpenaltieson scandal. Mr Scharf has led digital-payments firm. Ameri- from fake news on social Americabecauseofitsaidto Bank of New York Mellon and can companies have been media. Across the company Boeing.Thedecisionaddsto Visa and was a senior executive trying for years to break into a bosses surveyed in 13 coun- alreadyheightenedtradeten- at JPMorgan Chase during the market that is dominated by tries, 84% felt threatened by sions.Americasaiditwould financial crisis. Alibaba and Tencent. attempts to manipulate mar- startimposingthetariffson kets with fake stories, either by October18th,of10%onaircraft India’scentral bankreassured Japan’s sales taxrose from 8% competitors or short sellers. and25%onarangeofother the public that the banking to 10%. The increase had been One American cosmetics goods,includingcheese, system is “safe and stable and postponed in 2015 and again in company saw sales drop by a olives,wineandwhiskey. there is no need to panic” as 2017 amid worries of a slump in fifth after a campaign on Twit- another scandal emerged. consumer spending, which ter falsely claimed it tested its Curbs had to be imposed on happened after a previous raise products on animals. Economic policy uncertainty withdrawals by nervous savers to the tax in 2014. Food and Global average 1997-2015=100 from Punjab and Maharashtra non-alcoholic drinks continue 400 Co-operative Bank as it came to be taxed at 8%. The guru 300 under scrutiny for financial The leaked transcript of Mark irregularities. Another bank Novartisannounced a Zuckerberg’scomments at a 200 faced restrictions on its ability partnership with Microsoftto staff meeting provided a 100 to make new loans. apply artificial-intelligence glimpse into the inner technology to medicine. In one thoughts of Facebook’s boss. 0 Faced with a sharp downturn of the biggest collaborations in Mr Zuckerberg said that Eliza- 2005 10 15 19 in the country’s housing mar- the field, the Swiss drugmaker beth Warren’s proposal to Source: Economic Policy Uncertainty ket, Australia’scentral bank said the research would start break up big tech companies Earlier,thewtosaiditnow cut its main interest rate by a with tackling personalised would “suck” and “you go to expectsglobaltradeflowsto quarter of a percentage point, remedies for eye degeneration, the mat and you fight” over increasebyjust1.2%thisyear, to 0.75%, the lowest ever. cell and gene therapy and drug something so “existential”. downfromthe2.6%itforecast design. When asked about brain- inAprilandtheslowestpace A drop in Turkey’sannual computer interfaces, he joked sincethefinancialcrisis. inflation rate to 9.3%, the Founded in 1969 by two men that disapproving headlines Unresolvedtradeconflicts lowest in almost three years, making surfboards in a garage, would say “Facebook wants to haveledtogreateruncertainty increased the betting that the Rip Curl, an Australian surfing perform brain surgery”. aboutpolicy,causingbusi- nessestoputoffinvestment. Thegrowthofexportsand importsslowedacrossall regionsinthefirsthalfof2019. Meanwhile,anindexofAmeri- canmanufacturingfelltoits lowestlevelsinceJune2009. Perils of the cocktail party The chairman of Credit Suisse said the bank had been wrong to conduct surveillance on Iqbal Khan, a former executive, over fears he would lure away staff and clients. The bank’s chief operating officer, who admitted to acting alone in ordering the operation, and the head of security, resigned. A review by a law firm called in by Switzerland’s second-big- gest bank cleared Tidjane Thiam, the chief executive, of any involvement. Mr Thiam Leaders Leaders 11 Masters of the universe Forget Gordon Gekko. Computers increasingly call the shots in financial markets The job of capital markets is to process information so that Untilnowtheriseofcomputershasdemocratised finance by savings flow to the best projects and firms. That makes high cutting costs. A typical etfcharges 0.1% a year, compared with finance sound simple; in reality it is dynamic and intoxicating. It perhaps 1% for an active fund. You can buy etfs on your phone. reflects a changing world. Today’s markets, for instance, are An ongoing price war means the cost of trading has collapsed, grappling with a trade war and low interest rates. But it also re- and markets are usually more liquid than ever before. Especially flects changes within finance, which constantly reinvents itself when the returns on most investments are as low as today’s, it all in a perpetual struggle to gain a competitive edge. As our Briefing adds up. Yet the emerging era of machine-dominated finance reports, the latest revolution is in full swing. Machines are tak- raises worries, any of which could imperil these benefits. ing control of investing—not just the humdrum buying and sell- One is financial stability. Seasoned investors complain that ing of securities, but also the commanding heights of monitor- computers can distort asset prices, as lots of algorithms chase ing the economy and allocating capital. securities with a given characteristic and then suddenly ditch Funds run by computers that follow rules set by humans ac- them. Regulators worry that liquidity evaporates as markets fall. count for 35% of America’s stockmarket, 60% of institutional These claims can be overdone—humans are perfectly capable of equity assets and 60% of trading activity. New artificial-intelli- causing carnage on their own, and computers can help manage gence programs are also writing their own investing rules, in risk. Nonetheless, a series of “flash-crashes” and spooky inci- ways their human masters only partly understand. Industries dents have occurred, including a disruption in etf prices in from pizza-delivery to Hollywood are being changed by techno- 2010, a crash in sterling in October 2016 and a slump in debt logy, but finance is unique because it can exert voting power over prices in December last year. These dislocations might become firms, redistribute wealth and cause mayhem in the economy. more severe and frequent as computers become more powerful. Because it deals in huge sums, finance has always had the Another worry is how computerised finance could concen- cash to adopt breakthroughs early. The first transatlantic cable, trate wealth. Because performance rests more on processing completed in 1866, carried cotton prices between Liverpool and power and data, those with clout could make a disproportionate New York. Wall Street analysts were early devotees of spread- amount of money. Quant investors argue that any edge they have sheet software, such as Excel, in the 1980s. Since is soon competed away. However, some funds then, computers have conquered swathes of the are paying to secure exclusive rights to data. financial industry. First to go was the chore of Imagine, for example, if Amazon (whose boss, “executing” buy and sell orders. Visit a trading Jeff Bezos, used to work for a quant fund) started floor today and you will hear the hum of servers, trading using its proprietary information on e- not the roar of traders. High-frequency trading commerce, or JPMorgan Chase used its internal exploits tiny differences in the prices of similar data on credit-card flows to trade the Treasury securities, using a barrage of transactions. bond market. These kinds of hypothetical con- In the past decade computers have graduated flicts could soon become real. to running portfolios. Exchange-traded funds (etfs) and mutual A final concern is corporate governance. For decades com- funds automatically track indices of shares and bonds. Last pany boards have been voted in and out of office by fund manag- month these vehicles had $4.3trn invested in American equities, ers on behalf of their clients. What if those shares are run by exceeding the sums actively run by humans for the first time. A computers that are agnostic, or worse, have been programmed to strategy known as smart-beta isolates a statistical characteris- pursue a narrow objective such as getting firms to pay a dividend tic—volatility, say—and loads up on securities that exhibit it. An at all costs? Of course humans could override this. For example, elite of quantitative hedge funds, most of them on America’s east BlackRock, the biggest etffirm, gives firms guidance on strategy coast, uses complex black-box mathematics to invest some and environmental policy. But that raises its own problem: if as- $1trn. As machines prove themselves in equities and derivatives, sets flow to a few big fund managers with economies of scale, they are growing in debt markets, too. they will have disproportionate voting power over the economy. All the while, computers are gaining autonomy. Software pro- grams using aidevise their own strategies without needing hu- Hey Siri, can you invest my life savings? man guidance. Some hedgefunders are sceptical about aibut, as The greatest innovations in finance are unstoppable, but often processing power grows, so do its abilities. And consider the lead to crises as they find their feet. In the 18th century the joint- flow of information, the lifeblood of markets. Human fund man- stock company created bubbles, before going on to make large- agers read reports and meet firms under strict insider-trading scale business possible in the 19th century. Securitisation caused and disclosure laws. These are designed to control what is in the the subprime debacle, but is today an important tool for laying public domain and ensure everyone has equal access to it. Now off risk. The broad principles of market regulation are eternal: an almost infinite supply of new data and processing power is equal treatment of all customers, equal access to information creating novel ways to assess investments. For example, some and the promotion of competition. However, the computing rev- funds try to use satellites to track retailers’ car parks, and scrape olution looks as if it will make today’s rules look horribly out of inflation data from e-commerce sites. Eventually they could date. Human investors are about to discover that they are no lon- have fresher information about firms than even their boards do. ger the smartest guys in the room. 7 12 Leaders The EconomistOctober5th2019 Greece’s debt odyssey Time to end extend and pretend Greece wants freedom. Its creditors don’t want it to have a free lunch. A new grand bargain is required TenyearsagothismonthGeorgePapandreou,thenthenewly Thepenaltermsofthedealof2018reflectmistrust.Northern elected prime minister of Greece, announced to the world politicians could not sell a deal at home that appeared to let thatthegovernment’sbookshadbeencookedandthatthebud- Greeceoffthehook.AsrecentattacksinGermanyonthedoveish getdeficitin2009wasinfactdoublepreviousestimates.Inves- policies of the European Central Bank illustrate, suspicions in torspanickedandGreecelostaccesstocapitalmarkets,eventu- thenorththattheyareunderwritingthesoutharestillalive. allyforcingittoseekhelpfromtheEuropeanUnionandtheimf. For its part Greece has shirked the reforms needed if it is to Aseverefinancialcrisis,togetherwithswingeingspendingcuts start growing fast enough to catch up with the rest of the euro demandedbythecreditors,plungedGreeceintooneofthedeep- area.Thepreviousgovernment,ledbySyriza,aleft-wingparty, est downturns experienced by a rich country since the second hit its fiscal targets but slid back on reform. Banks are stuffed worldwar. with dud loans and the framework for dealing with them is in- Nowanothernewprimeminister,KyriakosMitsotakis,istry- complete.Taxrevenuesrelyontoonarrowabase,inturnrequir- ingtogetGreecebackonitsfeet(seeFinancesection).Though inghighratesthatdeterhiring.Inregisteringpropertyorresolv- the economy has begun expanding again, growth is lacklustre ingbusinessdisputes,theWorldBank’s“DoingBusiness”report andoutputisnearlyaquarterbelowitslevelin ranksGreeceinthebottomthirdofcountries. 2007.Thecountryleftitsthirdbail-outlastyear Greece Thereisawayout.WhenGreeksvotedinJuly withapublicdebtof180%ofgdp.Itisnowsub- Generalgovernmentgrossdebt,%ofGDP for Mr Mitsotakis, who stood on a platform of jecttothetermsofadebt-reliefdealstruckwith 200 reform, they turned their back on populism. 150 its European creditors. This deal was designed Creditors should take that as a sign of good 100 tolooktoughinordertobepalatabletoelector- faith.Theyshouldalsosetoutanewgoal—that, 50 atesinthenorthofEurope,whohatetheideaof in exchange for more reforms, Greece should 0 bailingoutsoutherners,butexpertsagreethatit getadebtwrite-downthatisbigenoughtoallow 2004 10 15 18 iswildlyunrealistic.Thetimehascometostop it to service its debts sustainably without run- pretendingandsettleGreece’sfinancesonceandforall. ning a primary surplus. During this period, provided Greece The agreement of 2018 extends the maturities of some of passes milestones on reforms, its fiscal-surplus targets should Greece’sloansandofferssomeinterest-raterelief.Inreturn,as graduallyberelaxed.Asagoodwillgesture,theeucouldmean- wellascontinuingreforms,Greecemusthitdraconianfiscaltar- while release over €1bn a year of profits from a bond-buying gets.Itmustrunaprimarysurplus(ie,beforeinterestpayments) schemetogiveGreeceextrafiscalspace. of 3.5% of gdp a year until 2022, and of 2.2%, on average, until YetMrMitsotakishasbeenslowtohonourhispromiseofre- 2060.Thequestionofdebtreliefisnottoberevisiteduntil2032. form.Heneedstorolluphissleeves.Hehaswonpublicsupport Thatthesetargetsarefancifulisanopensecret.Onlyahand- and impressed the markets—the premium of Greek ten-year fulofcountrieshavepulledoffsuchafeat—mostwereresource- governmentbondyieldsoverGermanoneshasfallenbyhalfthis richandthriving.ToexpectGreecetocommittosuchfiscalmas- year.HemustpersuadenorthernersthatGreecehasearnedsome ochismforfourdecadesisnotsensible.Astheimfpointsout,it flexibility.Thismeansfacinguptotheproblemsthatholdback willeventuallyneedrealdebtrelief.Andastheeconomyisstill the economy. For ten years governments and creditors have depressed,thereisastrongcaseforsomefiscallooseningnow. muddledthrough.Greeksdeservebetter.7 Kashmir Vale of tears The courts’ refusal to curb repression in Kashmir should alarm all Indians It is two months now since India’s parliament abruptly sible only on the authorities’ say-so. In theory the ruling Bhara- amended the constitution to downgrade Jammu & Kashmir tiya Janata Party (bjp) is integrating Kashmir into the rest of In- from a partly autonomous state to a territory administered by dia. In practice it has turned the valley into a vast open-air the central government. That means it is also two months since detention centre. the Indian authorities detained some 2,000 prominent Kashmi- That the bjphas it in for Kashmiris is hardly news. The mani- ris—politicians, businessmen, activists, journalists—to prevent festo the party put out before it won its thumping victory in na- them from protesting. They continue to be held without charge, tional elections earlier this year called for the scrapping of Jam- many in unknown places. Meanwhile the 7m-odd residents of mu & Kashmir’s special status. The state is the only one in India the Kashmir valley, the state’s main population centre, are under with a Muslim majority, and the Hindu-nationalist bjpdislikes a lockdown of a different sort. Mobile phones and the internet anything that smacks of privileges for Muslims. The bjp also remain cut off; getting around is hard and getting in or out is pos- likes to parade its defiance of Pakistan, which controls a slice of 1 The EconomistOctober5th2019 Leaders 13 2Kashmir and claims the rest, and has vehemently denounced the detention without trial for the Kashmiris rounded up by the au- upheaval in the valley. For Narendra Modi, the prime minister thorities and another month during which humbler Kashmiris and leader of the bjp, picking on Kashmir presents an easy op- will be deprived of rights that other Indians take for granted. portunity to pose as a resolute nationalist who will not hesitate Few of those other Indians will care very much. The Kashmir to confront his enemies. valley is hemmed in by the Himalayas at the northern extreme of But if Mr Modi’s actions are not that surprising, the reaction the country, far from most Indians’ thoughts and experience. It of the courts has been (see Asia section). India’s judges are noto- has been in some degree of turmoil since partition and indepen- riously meddlesome and difficult. No question is beneath their dence 71 years ago. It suffers separatist violence, now mostly scrutiny: what destinations state-owned airlines should fly to, home-grown rather than instigated by Pakistan, which demands say, or just how close a liquor store can be to a highway. They a response from India’s security services—though that does not have dealt all sorts of embarrassing defeats to the central govern- justify today’s wholesale lockdown. To the extent that the rest of ment in recent years, inventing a previously unknown right to the country gives Kashmiris any thought, it tends to see them as privacy that almost scuppered a huge biometric identification troublemakers, if not traitors. Many Indians are toasting Mr scheme, and voiding a lucrative auction of mobile-telephone li- Modi for at last giving them their comeuppance. cences. Yet on the many glaring abuses occurring in Kashmir Both gleeful and indifferent observers ought to be more wor- they have remained resolutely—and shamefully—silent. ried. Mr Modi’s authoritarian instincts are not confined to Kash- Although the courts in Kashmir are in theory functioning, mir. If the courts continue to let him, he will doubtless continue lawyers are striking, making it hard for petitioners to get any- to reshape India in keeping with the bjp’s plainly stated goals. where. The chief justice of the Supreme Court in Delhi has de- That includes stripping 1.9m poor and illiterate residents of the clared that he is simply too busy to hear all the cases related to state of Assam of their citizenship, for example, if they do not the government’s actions in Kashmir. He passed them to other have the correct paperwork to prove that they are Indian citizens. benches of the Supreme Court, one of which gave the govern- Then there is the bjp’s plan to finish the job begun by Hindu zeal- ment a further month to contemplate its response. Conveniently ots in 1992 by building a temple on the site of the mosque they de- enough, that pushes any ruling about whether or not the govern- molished. Events in Kashmir show that the government is ready ment’s downgrading of Jammu & Kashmir from a state to a terri- to trample Indians’ civil rights in order to squelch resistance to tory was constitutional until after the change takes effect, on Oc- its actions. If the Supreme Court is willing to look away today, tober 31st. It will also mean, in all likelihood, a further month of who is to say that the government will not feel free to carry on? 7 Technology and politics Open season The rise of open-source computing is good for competition—and may offer a way to ease the tech war To theaverage capitalist “open source” software may seem Google, Nvidia and Qualcomm (see Science section). In August like a pretty odd idea. Like most products, conventional com- ibmmade its Power chip designs open-source. These moves are puter software—from video games to operating systems—is de- welcome, for two reasons. veloped in secret, away from the prying eyes of competitors, and The first is economic. The chip business is highly concentrat- then sold to customers as a finished product. Open-source soft- ed. risc-vcompetes with closed-source designs from Arm, a Jap- ware, which has roots in the collaborative atmosphere of com- anese-owned firm which monopolises the market for tablet and puting’s earliest days, takes the opposite approach. Code is pub- smartphone chips, and is a dominant presence in the fast-grow- lic, and anyone is free to take it, modify it, share it, suggest ing “internet of things”. ibm’s Power will challenge Intel’s grip on improvements or add new features. desktops and data-centres. A dose of competi- It has been a striking success. Open-source tion could lower prices and quicken innovation. software runs more than half the world’s web- The second reason is geopolitical. America sites and, in the form of Android, more than and China are waging a technological cold war; 80% of its smartphones. Some governments, in- it threatens to damage a computer industry that cluding Germany’s and Brazil’s, prefer their offi- has become thoroughly globalised. The open- cials to use open-source software, in part be- source model, were it to be widely adopted, cause it reduces their dependence on foreign might help defuse these tensions, by giving both companies. The security-conscious appreciate sides at least some of what they want. the ability to inspect, in detail, the goods they are using. It is per- Start with China. In May America blacklisted Huawei, a Chi- fectly compatible with making money. In July ibmspent $34bn nese tech giant which makes both smartphones and mobile-net- to buy Red Hat, an American maker of a free open-source operat- work equipment. That underlined, to other Chinese firms and to ing system, which earns its crust by charging for ancillary ser- the country’s leadership, the risks of a model in which Chinese vices like customer support and training. tech firms build their products on American software and hard- Now the model is spreading to chips. risc-vis a set of open- ware designs. Under the label “Made in China 2025”, the country source designs for microchips that was initially developed a de- is investing billions to try to boost its domestic capacity. cade ago at the University of California, Berkeley. These days it is Open-source components offer an alternative supply chain, attracting attention from many big technology firms, including less subject to any individual country’s control. Alibaba, a Chi-1 14 Leaders The EconomistOctober5th2019 2nese e-commerce giant, has already shown off a machine-learn- torship to steal secrets—or, worse, to sabotage societies that are ing risc-vchip. Xiaomi, a maker of smartphones and other con- increasingly dependent on networked computers. sumer gadgets, is planning to use risc-v chips in its fitness Here too, open-source technologies can begin to change the bands. Were Android not open source, Huawei would be in an mood. Most Chinese products remain closed-source “black box- even deeper hole than it already is. es” containing software and hardware whose inner workings are Other countries are interested, too. India’s government has unknown. Particularly for software, and to some extent with been investing in risc-vdevelopment in the past year; it is also hardware, an open-source model would give buyers the ability to keen to develop a technology ecosystem that minimises foreign compare what they have with what they were promised. To the dependence (see Asia section). In an effort to reassure the com- extent that they can verify, they will not have to trust. panies using its technology, the risc-v Foundation is moving The tech war is a battle for influence between an incumbent from America to neutral Switzerland. superpower and an aspirant one. A complete rupture would be Many in the West, meanwhile, see China’s growing techno- extraordinarily costly and force most countries to take sides. logical prowess as a malign development. One worry is that Chi- Open-source computing can help calm tempers. That would be nese products may be Trojan horses, allowing a repressive dicta- good for everybody. 7 Political rhetoric Down with the people Politicians who invoke “the people” are usually up to no good Since the first three words of the preamble to the United a democracy but, inevitably, inconvenient for presidents and States’ constitution thundered into the world’s political lexi- prime ministers who are not particular about the means they use con, “the people” has been one of the favourite invocations of to achieve their ends. President Donald Trump has referred to those in, or in pursuit of, power. It has also been one of the most the media as “enemies of the people”; Poland’s ruling pis party abused. No state has been as undemocratic or unpopular as the justifies its attacks on the legal system and the opposition by ref- Democratic People’s Republic of Korea. The People’s Movement erence to its connection to the narod; Boris Johnson, Britain’s for the Liberation of Angola has paid more attention to liberating prime minister, has set himself up as defending the will of “the the country’s assets into its leaders’ foreign bank accounts than people” against those in Parliament and the courts who are stop- to freeing Angolans from the oppression of poverty. In the media ping Britain from leaving the European Union without a deal. the formula signals a determination to ignore popular taste: the Once a politician has defined those who elected him as “the People’s Daily makes no more effort to appeal to its Chinese read- people”, then he embodies their will and it is but a short step to ers than Pravda did to tell the truth to its Soviet ones. So when defining his own enemies as the nation’s. After Polish mps called Downing Street frames the election Britons are expecting as “Par- for an euinvestigation of their government, the prime minister, liament versus the people”, the people should beware. Jaroslaw Kaczynski, called them traitors. Mr Johnson calls a law References to “the people” are standard fare in political designed to avoid a chaotic departure from the eu“the Surrender speech. Emmanuel Macron, France’s president, Act”, and accuses its supporters of “collabora- likes to bang on about the mandat du peuple, and tion”. Mr Trump tweets that “what is taking the responsibility it confers. This is fine; the place is not an impeachment, it is a COUP, in- danger arises when “the people” are weap- tended to take away the Power of the People, onised against a supposed enemy. their VOTE, their Freedoms, their Second It is not just politicians who do this. Princess Amendment, Religion, Military, Border Wall, Diana said she wanted to be the “queen of peo- and their God-given rights as a Citizen of The ple’s hearts”—in implied contrast to the awk- United States of America!” ward husband who commanded the affections If “the people” are thwarted by the courts or of nobody but his mistress. But with the rise of populism, the tac- parliament, they may be driven to unconstitutional action. tic is spreading among politicians. Sometimes the enemy is a That’s what some Britons thought the Conservative Party chair- foreign one. Hugo Chávez, Venezuela’s late demagogue, called man meant when he said that, if they were denied Brexit, they on the people to resist “the empire”—George W. Bush was unpop- would “look at other ways of initiating change”. And it is what ular worldwide, and thus a convenient target. Today Mexico’s some Americans concluded when Mr Trump retweeted a pastor’s president, Andrés Manuel López Obrador (amlo), unwilling to warning that impeachment would “cause a Civil War like frac- antagonise his northern neighbour, prefers the vaguer “mafia of ture in this Nation”. If “the people” take matters into their own power”. Sometimes it is a religious minority, such as Muslims, hands, what is a president to do? At a recent press conference, who are clearly excluded from the ruling Bharatiya Janata Party’s amlo declared, “I believe that not only you’re good journalists celebration of its success in India “in inciting amongst the peo- but you’re also prudent...And if you cross the line, well, you ple a desire for a unique cultural Indic renaissance”. Any of these know what happens, right? But it’s not me, it’s the people.” He did foes may be used to whip up support for a struggling politician. not specify what the people might do, but Mexico’s journalists But the target is usually the institutions that stand in the poli- understand the risks: 12 have been murdered this year. tician’s way, especially the legislature, the courts and the media. Voters should keep an ear cocked for this dangerous phrase. It Such checks and balances are essential to the proper workings of marks the user out not as a democrat but as a scoundrel.7 16 Letters The EconomistOctober5th2019 Askingpeopletovoteina cessationofformalcombat Communist International’s It’s time to leave secondreferendumwouldbe operationsin1989,thatpre- liaison office with East and Clearly you have thrown cau- anincrediblemarkofdisre- sagedthecollapseoftheNaji- South-East Asian communist tion to the wind regarding any spect.Itwouldmeanthat bullahregimeandtheeventual parties, all of them illegal at the reluctance to hold back on your democracyhasbeenreplaced Talibantakeoverin1996.The time. He also supported, after ill-concealed bile regarding withaperniciouskindof parallelsarenotencouraging. an about turn, the Moscow Boris Johnson (“The reck- dictatorshipwherepeopleare Inallthis,Britainhasre- show trials. Yet, in 1931he had oning”, September 28th). You stillallowedtospeakup,but sponsibilitiesdistinctfrom written in a private letter: say he is the worst prime min- theirvoicesareneverheard. ourdutyasanatoally.These Iam not for punishment at all, ister in living memory, an kenjioshiguru aretosupportandsustainthe but only for measures that opinion so grossly uncharita- Yokohama,Japan legitimateAfghangovernment serve society and its protec- ble that it could only emanate anditssecurityforcesandto tion. In principle I would not from rabid, Brussels-infatuat- Charlemagnehasthecheekto protectourpartnersinthat be opposed to killing individ- ed journalists, wholly given mention“theeu’scommit- struggle,especiallyourformer uals who are worthless or over to Remain propaganda. A menttofreetrade”andthe interpreters.Ourhistoryand dangerous in that sense. I am few lines later, you say he is Doharoundofmultilateral engagementwithAfghanistan against it only because I do not trust people, ie, the courts. “inadequate” to the task and tradenegotiations(September andthesacrificesofthecam- only in office because of Brexit. 14th).Infact,theeuwasthe paigndemandnothingless. Stalin seems to have become Is this surprising when one principalculpritinwrecking colonel(ret’d)simon trustworthy to Einstein. His considers how deliberately the thisroundtodefendtheeco- diggins politics cannot be reduced to deep-state establishment has nomicobscenityofthecom- Defenceattaché,Kabul2008-10 supporting free opinion; he done its best to scupper Brexit monagriculturalpolicy,which Rickmansworth,Hertfordshire may even sometimes have altogether? It would dishonour youdescribedas“disgraceful” ignored that principle. the wishes of 17.4m of us atthetime(“Deadlockedin freddy litten stupid, brainless, moronic, Doha”,March29th2003).That Thepopesoncapitalism Munich uneducated, gormless half- articleforetoldthatthefailure SchumpeterdescribedCatho- wits, who want our govern- ofDohawouldresultin“trade- licsocialteachingas“pro- ment back, who want to con- divertingbilateralorregional capitalist”(September7th). Hello, Columbus trol our own borders, make our tradedeals”.Theeuisnot True,thechurchhaslong For those who may not be able own laws, spend our own committedtofreetrade.Itis rejectedcollectivismand to get to Columbus, Indiana, to money, and who do not wish to committedtomanagedtrade championedprivateenter- check out its surprising Mod- be ruled by France and Ger- toprotectthecap. prise.Butpopeshavealso ernist buildings, I recommend many and their back-scratch- charlesefford cautionedagainstcapitalism, an offbeat movie called, some- ing bureaucrats, manipulating London notleastitsneoliberaliter- what unsurprisingly, “Colum- a hopeless crony capitalism. ation.PiusXIIblamed“the bus” (“Modernism in the You know very well that the exploitationofprivatecapital” cornfields”, September 14th). It euro is on life support and can NATO in Afghanistan (aswellas“stateabsolutism”) features most of the architec- only prosper if fiscal union is Regarding the stalled peace forworkingpeople’s“servi- tural gems referred to in your achieved, which implies the deal with the Taliban in tude”.PaulVIcriticisedthe article, and it got sparkling end of the nation state. The Afghanistan (“Talking chop”, “unbridledliberalism”inher- reviews. As Rotten Tomatoes Lisbon treaty demands full September 14th), the over- entincapitalism.JohnPaulII says, “‘Columbus’…balances compliance in fiscal and mon- whelming brunt of the fighting condemnedtheincreasingly the clean lines of architecture etary policy, in defence and is conducted by the Afghan “intrusive,eveninvasive, against the messiness of love.” social interaction, of which the National Security Forces who, characterofthelogicofthe nigel brachi most economically damaging because of their limited train- market”.BenedictXVIcalled Edmonton, Canada and socially divisive is ing and capability, are taking for“aneweconomicmodel”. uncontrolled immigration. huge casualties. The Afghan PopeFrancisstandssquarelyin Is it right-wing to resist government stopped pub- thistradition,whichdoesn’tfit Alegendary oil man these negative developments? lishing the data in 2017 but one neatlyonthesecularleft-right T. Boone Pickens didn’t just Is it wrong to want sovereignty reliable estimate suggests ideologicalspectrum. show inefficient firms who was returned? Is it unacceptable to some 20 are killed each day. danbrendel boss (Buttonwood, September wish not to be a continental This affects morale and recruit- Oceanside,California 21st). When Drake, a hip-hop European? You leave me al- ment; their natoco-operation star, posted a humble brag on most speechless at your lack of troops have to work hard to Twitter that making “the first patriotism (let me guess, you keep them going. Despite the Einstein’s politics million is the hardest”, Pickens have a house in France and collective effort, the Afghan It is interesting that the Albert shot back: “the first billion is a friends in Tuscany). For you government controls just over Einstein exhibition in Shang- helluva lot harder.” democracy is dead, replaced by 50% of the country, at best. hai ignores the fact that he yacov arnopolin technocracy, the rule of Plato’s This demonstrates that, supported some communist London golden souls who know (how although a peace settlement is causes in the 1920s and 1930s, do they?) all the outcomes, the ultimately the only way to though not all (“Relatively ideal way forward, the pre- settle Afghanistan, this is not revealing”, September 21st). Lettersarewelcomeandshouldbe scriptions for universal happi- the time to tinker with nato Einstein campaigned, for addressedtotheEditorat TheEconomist,TheAdelphiBuilding, ness, unlike us benighted, force numbers. We should not example, for the freedom of the 1-11JohnAdamStreet,LondonWC2N6HT dead-wood, has-beens. forget that it was the with- Noulens couple, who had been Email:[email protected] david maples drawal of Russian co-operation arrested in Shanghai in 1931for Morelettersareavailableat: Economist.com/letters Petersfield, Hampshire troops in 1992, not the Soviets’ being leading members of the

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