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 Contents The Economist October 21st 2023 7

The world this week United States

9 A summary of political
and business news
-
23 Treating mental illness
24 The House speal<er mess
Leaders -
25 Mil<e Flynn's flying circus
11 The Middle East -
26 Roe, your own way
Where will this end? -
26 A proper pint
12 America's Republicans -
27 Teaching teachers to shoot
A goat rodeo 28 Lexington When Joe
12 A Polish election Biden's experience counts
Populists can be beaten
13 Banl,s in America The Americas
- A brush with Basel 29 Argentina's election
On the cover
14 AI and Britain's NH s -
32 Bernardo Arevalo's woes

In our six-page special briefing

Data for better health
-
32 Sanctions lifted

section we look at the daunting Letters

challenges in Gaza: the 16 On life sciences,
destruction, the obstacles a motorists, invisible
ground invasion will face and spouses, wealth
the options for the territory's Asia
-
management, longevity,
long-term future, after page 16. Nobel prizes, brevity 33 Japan's remote islands
Joe Biden's approach to backing 34 India and free love
Israel is facing its most severe Briefing 35 Gay rights in India
test: Lexington, page 28. The
Eu's incoherent response to the 17 Israel's assault on Gaza
-
35 Race in Australasia
crisis in Israel: Charlemagne,
No place for a war
-
36 Australia's coal habit
page 49. Can Israel destroy
Hamas without causing an
20 Graphic detail
·-· Destruction in Gaza -
36 South Korean chipmal<ers
37 Banyan India-Pal<istan
economic catastrophe? 21 Gaza's long-term future - cricl<et
Pa e 59. Six books that shed When the shooting stops
light on a century of hostility China
in the Middle East, a e 75
-
38 Feminists regroup
Are American cEos overpaid?
The soaring pay of America's
-
39 Training foreign engineers
40 Hong Kong's sprawling
bosses is again under fire: mansions
_Schum peter/ page 58
41 Chaguan The ghost of
� Zheng He
The holes in export controls
America's allies are the problem /
page 53 Middle East & Africa
42 Escaping conflict traps
Argentina's radical option
Javier Milei still leads the polls.
-
43 The ruin of Khartoum
44 To save 200,000 women's
But the country needs more than lives a year
dol larisation 1 page 29 Bartleby The role of lucl<
in careers, companies and
A race to read the Herculaneum compensation, vaae c;4
scrolls Al could help unearth a
trove of lost classical texts 1
page 67

➔ The digital element ofyour

subscription means that you
can search our archive, read
all of our daily journalism and
listen• to audio
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•
of our
storles. Vlslt a_ omis _ o
►► Contents continues overleaf
8 Contents The Economist October 21st 2023

Europe Science & technology

-
45 Tusl< triumphs in Poland 67 AI and ancient texts
46 Beefing up Ul<raine 69 Spelunl<ing and the
47 Navalny punished again climate
-
47 Melani and Le Pen 69 The return of the bedbug
48 Electric trouble - Why a coin toss is not fair
70
49 Charlemagne Adrift over
Gaza
Culture

Britain 71 Cancel culture

50 A giant health study - Why films are longer

72
51 Collating patients' data 73 Bacl<. Story David
- Becl<ham's secret
-
52 Bagehot Tory rationing
-
74 Indian gurus

-
74 What to do with
unfinished art
75 Bool<s on Israel and
Business Palestine
53 The geopolitics of tech
Economic & financial indicators
54 Bartleby Luci< and careers
77 Statistics on 42 economies
55 Meet India's mega-wealthy
56 Canon tal<es on ASML Obituary
56 Oil supermajors' bets
58 Schumpeter Are America's
-
78 0fir Libstein, a mayor with impossible dreams

CE0s overpaid?

Finance & economics

59 Fi11a11cial war
60 China's malaise
-
61 Hidden bad loans

- 62 Crypto's future
63 Buttonwood Dr Copper
64 Free-marl<et law
65 Free exchange
Trustbusters v big tech

The
Econo1n ist

Volume 449 Number 9368

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The world this week Politics The Economist October 21st 2023 g

The French government put destroying nine helicopters. Pro-democracy campaigners

the country on the highest America silently provided the in Indonesia were outraged
state of alert after an Islamist missiles to Ul<raine, rather by the decision of the Consti­
extremist stabbed a teacher to than announcing their deploy­ tutional Court to add an
death. Soldiers were drafted in ment, apparently to tal<e the exception to a law that bars
to boost security and all pro­ Russians by surprise. people under the age of 40
Palestinian demonstrations from running for president.
were banned. In Brussels a The court said that people
supporter of Islamic State shot Friends in need who have been elected to
dead two Swedish nationals. In Vladimir Putin visited China, regional posts can now run,
Illinois a six-year-old boy died where he tried to gain support which would allow the 36-
after being stabbed 26 times by for his war on Ul<raine. The year-old son of the outgoing
Joe Biden's trip to Israel to lend his mother's landlord. The Russian president went to a incumbent, Jol<o Widodo, to
support after the terrorist mother was wounded. Police summit held by Xi Jinping, his contest February's election.
attacl< by Hamas was overshad­ say they were targeted because Chinese counterpart, on Chi­
owed by a blast at a hospital in they were Muslim. na's Belt and Road Initiative. Two tourists and their guide
Gaza, which the Palestinians European delegates wall<ed out were l<illed in a terrorist at­
said l<illed hundreds of people. Anti-Semitic incidents and of one meeting he attended. tacl< in Uganda that the gov­
America and Israel pointed to "celebrations" of the attacl< by But not Vil<tor Orban. The ernment blamed on the Allied
intelligence that suggests the Hamas were reported through­ Hungarian prime minister Democratic Forces, which
explosion was caused by a out Europe. London's police shoal< Mr Putin's hand, the declares allegiance to Islamic
missile launched by Islamic force reported a big rise in first EU leader to do so since State. The attacl< was in the
Jihad, another militant group, assaults on Jewish targets. the start of the war. Queen Elizabeth National
that misfired, falling in the Rishi Sunal<, the British prime Parl<, which is close to the
hospital's car parl<. Hamas and minister, reminded people Republicans in America's border with Congo.
many Arab countries said an that showing support for the House of Representatives
Israeli stril<e was to blame. The terrorist group could be pun­ continued to squabble over Daniel Noboa was elected as
incident triggered outrage in ishable by a prison sentence. choosing a new speal<er. After Ecuador's president. The
the Arab world, leading Jordan spurning Steve Scalise, they 35-year-old businessman is a
to cance 1 a summit between were unenthusiastic about centrist who has promised to
Mr Biden and the leaders of rallying around Jim Jordan. reduce crime, the big issue
Jordan and Egypt and during the election. A presi­
Mahmoud Abbas, president of Voters in Australia decisively dential candidate was assassi­
the Palestinian Authority. rejected a constitutional nated in August. Mr Noboa's
amendment that would have victory is a rejection of the
The humanitarian situation created an advisory body for leftist faction aligned with
worsened in Gaza, where about Aboriginal and Torres Strait Rafael Correa, a disgraced
3,500 people have been l<illed, Island people. The referendum former president.
according to the Palestinians, on the Voice, as it was dubbed,
amid Israel's retaliation for the was beaten by 61% to 39% and Representatives from Nicolas
Hamas attacl<. Under mount­ failed in all six Australian Maduro's autocratic regime in
ing international pressure, In Poland the liberal Civic states. Critics of the proposal Venezuela and the opposition
Israel will allow food, water Coalition and its allies won said it would have undermined met in Barbados, their first
and medicine to cross from enough seats at an election to the principle of legal equality meeting in nearly a year.
Egypt to southern Gaza, where form a majority in parliament, by favouring one racial group Some progress was made as
the population has moved to heralding a big shift in govern­ in the constitution. the two sides agreed to a
tal<e shelter. King Abdullah of ment. The conservative Law timeline for an election in
Jordan warned that the "region and Justice (Pis) party, a thorn The centre-right National Party 2024. After the tall<s America
is on the brinl< of falling into in the Eu's side since gaining won New Zealand's general relaxed sanctions on the
the abyss", but was adamant power in 2015, came first but election, ending the six-year country's oil sector.
that his country and Egypt will struggle to rule, even with rule of the Labour Party,
would not accept refugees. the support of a far-right party. formerly led by Jacinda
It is expected to get the first Ardern. Christopher Luxon, Don't try this at home
Israel's ground troops were stab at forming a government; the incoming prime minister, Pepper X was named as the
poised to enter Gaza. They tall<s could tal<e weel<s. Donald will form a coalition with the world's hottest chilli by
have been held bacl< in part Tusl<, the leader of the Civic ACT party, which is classically Guinness World Records. The
because of fears that Hiz­ Coalition, called on the coun­ liberal. But with a slim major­ previous record was held by
bullah, a powerful militia try's Pis-allied president to ity he may have to rely on the the Carolina Reaper. Both are
based in Lebanon, will launch swiftly start the process. populist New Zealand First grown by Ed Currie (no pun
a big assault across the border Party for support. intended), a farmer from
into northern Israel at the Ul<raine has used long-range South Carolina. Pepper X rates
moment when Israeli soldiers ATACMS missiles for the first India's Supreme Court de­ at nearly 2.7m Scoville Heat
are focused on Gaza. Hizbullah time, according to Volodymyr clined to legalise gay marriage, Units (a jalapeiio is around
is bacl<ed by Iran, which has Zelensl<y, the country's presi­ accepting the government's 3,000 to 8,000). Mr Currie
warned that an "axis" of dent. The missiles were report­ argument that only Parliament said he was in severe pain
militias is ready to open "mul­ edly used to attacl< Russian could decide the status of with cramps for an hour after
tiple fronts" against Israel. bases in east Ul<raine, marriage in the country. eating a whole one.
10
The world this week Business The Economist October 21st 2023

Tesla issued a downbeat earn­ A net gm new subscribers -

China's GDP
Andrew Bailey, the banl<'s
ings report. Net profit fell by joined Netflix in the third Quarterly,% increase on a year earlier
governor, has said; the fight
44% in the third quarter, year quarter, the largest number against inflation is not over.
6
on year; its operating margin, a since the pandemic, which the
closely tracl<ed measure of the company attributed in part to 4
Net income at Goldman Sachs
difference between its income its cracl<down on sharing fell again in the third quarter,
and expenses, plunged to 7.6%. passwords. It also raised its 2 the eighth consecutive quarter
The carmal<er also said that prices. The monthly cost in of declining profit. The banl<
although it will start delivering America of a premium pacl<­ 0 made $1.9bn, down by 36%
its long-delayed Cybertrucl< to age, which includes high-res 2022 2023
compared with the same per­
customers in November it 41< streaming, is now $22.99. Source: Refinitiv Datastream
iod last year. David Solomon,
could tal<e up to 18 months for its chief executive, has report­
the vehicle to turn a profit. China's GDP was 4.9% larger edly given up his hobby as a DJ,
Injection rejection in the third quarter than in the following internal criticism
The American government Plunging demand for covid same period a year ago, a faster that it was distracting him
tightened its ban on selling vaccines continued to tal<e its pace of growth than analysts from his main job.
chips to China for use in toll on drug companies. Pfizer had forecast. September's
artificial intelligence, extend­ slashed its forecast of revenue growth in industrial output By contrast, profit at JPMorgan
ing the rules to capture sales of for the year by $9bn and will and retail sales also beat ex­ Chase climbed by 35%, to
chips that had previously bool< a $5.5bn write-down in pectations. Officials down­ $13.2bn. America's biggest
fallen just outside the ban's the third quarter because of played tall< of an economic banl< was boosted by almost
technical parameters. The the "lower-than-expected recovery, warning that "the $23bn in revenue from net
clampdown is bad news for utilisation" of the shots. The external environment is be­ interest income, the difference
Nvidia, which said that the share prices of Pfizer and coming more complex." The between what a banl< earns in
new restrictions would apply BioNTech, which developed a property marl<et is very fragile, interest on its loans and what
to its H8oo AI chip. Chinese vaccine with Pfizer, have fallen as speculation mounts that it pays out on deposits.
tech companies have been by more than a third since the Country Garden, the country's
rushing to buy up the modified start of the year. Moderna's biggest developer, may have
chip in case of a prohibition. stocl< has lost half its value. defaulted on its dollar debt. Cafe culture
Meanwhile, Nvidia announced A financial analyst lost his
a partnership with Foxconn, a Rite Aid, one of America's Britain's annual inflation rate claim for dismissal against
Taiwanese manufacturer, to biggest pharmacy chains, filed held steady in September, at Citigroup for claiming a false
build data centres powered by for banl<ruptcy protection. The 6.7%. Food prices rose at the expense for lunch. The man
Nvidia's technology. company is struggling to cope slowest pace since June 2022. said he alone had consumed
with a huge debt pile, falling The core rate, which excludes the two coffees, two sand­
The race for dominance in AI revenues and the cost of litiga­ energy and food, eased to 6.1%. wiches and two pasta dishes,
was thrown into focus when tion associated with the opioid The Banl< of England left in­ though it turned out his partn­
Baidu announced that its crisis. It has already closed terest rates on hold at its most er had joined him. Citi forbids
ERNIE 4 chatbot was now as some shops and will shut recent meeting, and marl<ets expensing meals for spouses.
good as OpenAI 1 S GPT-4. The others. Around 45,000 jobs are betting it will do so again. The analyst specialises in
Chinese tech giant showed off are at risl<. "Let's not get carried away," financial crime.
ERNIE's capabilities at an event
in Beijing by getting it to com­
plete tasl<s, such as writing a
martial-arts novel. ERNIE has THE FOG
45m users, a fraction of OFWAR
ChatGPT's 180m, tl1ough the
American bot was launched
several months earlier.

Microsoft at last completed its

tal<eover of Activision _.,,,_ ·--··
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Blizzard, the biggest ever in -----·--·,--- ----
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21 months after it was first
announced. The deal had been
resisted by antitrust regula­
tors; Microsoft quicl<ly sealed
the acquisition after Britain's
competition authority
approved a revised proposal.
America's Federal Trade Com­
mission lost its attempt to
blocl< the transaction in court,
but it is pressing ahead with its
own legal hearing and may still
challenge the deal.
 Leaders 11
The
Econo1nist

Where will this end?

Only America can pull the Middle East bacl< from the brinl<. The stal<es could hardly be higher

H ow RAPIDLY things fall apart. The deadly blast in Gaza at Ah­

li Arab hospital on the evening of October 17th l<illed many
Palestinians who were tal<ing shelter. Despite strong evidence
have chosen to sabotage their people's long-term interests.
For Iran, that lool<s lil<e victory. For years it has had a strategy
of financing, arming and training proxies lil<e Hamas and Hiz­
that their deaths were caused by the failure of a Palestinian rocl<­ bullah. It calculates that violence and mayhem weal<en Israel
et laden with fuel, Arab countries rushed to condemn Israel. and discredit Arab governments. If the sight of America fighting
Hizbullah, a heavily armed Lebanese militia, is lurching closer Hizbullah alongside Israel leads to a rupture of Mr Biden's rela­
to outright war with Israel. Bridges built painstal<ingly between tions with the Arab world, an exultant Iran will have built the
Israel and its Arab neighbours lie in ruins. foundations for its own regional dominance.
How fragile are the forces trying to hold things together. Fif­ Russia and China are winning, too. There is a perception in
teen hours after the blast, President Joe Biden landed in Israel, the global south that this complex story is actually a simple one
an old man with the weight of the world on his shoulders. Mr Bi­ of oppressed Palestinians and Israeli colonisers. China and Rus­
den's diplomacy is a geopolitical moment. As well as signalling sia will exploit this caricature to argue that America is revealing
grief and support for Israel, it brings into focus how much this its true contempt for brown-sl<inned people in Gaza and its hy­
crisis matters to the Middle East and to America (see Briefing). pocrisy over human rights and war crimes-just as they claim it
For the past half-century the United States has been the only did by supposedly provol<ing a war in Ul<raine.
country willing and able to bring any l<ind of order to the region. What can Mr Biden do? His analysis must start with the need
Regardless of the many failures of American policy there, in­ for peace between the Palestinians and Israelis and a recogni­
cluding in Iraq and Syria, Mr Biden and his secretary of state, An­ tion that there can be none for as long as Hamas governs Gaza­
tony Blinl<en, have once again tal<en up that burden. Death and not after it has demonstrated that it puts Jew-hatred before any
disease hang over Gaza. The poison is spreading across the Arab other goal. Gaza city is honeycombed by tunnels. Destroying Ha­
world. They do not have long. mas's ability to wage war therefore requires a ground offensive.
The imminent danger is on that second front in the north of Everything follows from the prosecution of that ground war.
Israel. The death toll at Ahli Arab means that Hizbullah and its The tragedy of Ahli Arab validates the cynical calculation that
Iranian sponsors risl< losing face if they fail to Palestinian casualties help Hamas by under­
avenge lost Palestinian lives. Hizbullah will mining support for Israel. The Israeli army
now also have strong bacl<ing in the Arab world needs to be seen to spare civilians, not least be­
if it attacl<s. If Israel concludes war is inevitable, cause it needs time to destroy Hamas's tunnels.
it may stril<e first. America has tasl<ed two air­ Gaza is on the brinl<. Poor sanitation threatens
craft-carriers with deterring Hizbullah and Iran epidemic disease. Israel has at last agreed that
from opening a second front. If they defy it, it some aid can cross into Gaza. Much more will
should use them for a show of force. be needed. If Egypt continues to bar refugees,
A second danger is of Arab-Israeli relations Israel should go further by creating havens on
being put bacl< decades. Amid Israel's unprecedented bombing, its own territory in the Negev, supervised by UN agencies.
Arabs remember previous wars in which Israel hit schools and It is also vital to spell out what comes after the invasion. Isra­
hospitals. Israel has imposed a total siege of Gaza; its president el needs to show that its fight is with the terrorists, not the peo­
has said all Gazans share responsibility. Despite Israel's excess­ ple of Gaza. It should pledge a new beginning after the war, with
es, Arab leaders could have called for calm and for an indepen­ a programme of rebuilding and the promise that it will not stran­
dent investigation of the hospital blast. What lool<s lil<e the mass gle Gaza's economy. It should support a new Palestinian consti­
l<illing of Palestinians by Palestinians ought to have redoubled tution and new elected leaders. All this would be easier under a
their efforts to safeguard Gaza's civilians and spurred them on to new Israeli government voted in when the war is done.
create a regional plan for a better Palestinian future. Even if Mr Biden can persuade Israel to tal<e these steps, that
Instead, the blast has deepened hatred and grievances. In leaves the hardest question of all. How to provide security in
words that cannot easily be tal<en bacl<, Israel's Arab partners post-Hamas Gaza? Israel cannot occupy the enclave permanent­
heaped blame upon the Jewish state. Jordan immediately can­ ly. That idea was rightly abandoned in 2005. An international
celled a summit between Mr Biden and Arab leaders that had commitment is therefore needed. Because it is not clear who
been the best hope for regional diplomacy. Egypt is more re­ would join this, Mr Biden should start building a coalition now.
solved than ever to l<eep temporary refugees out of the Sinai, The more Israel shows the Arab world that it is serious about
partly for fear of being seen to abet Israel in what Palestinians protecting civilians and planning for the day after, the more
worry is a plan to empty Gaza permanently. lil<ely Arab leaders are to play their part.
This is a lamentable failure of leadership, with profound re­ This is a tall order. Much can and will go wrong. Ordinary Ar­
gional and global implications. Most Arab governments loathe abs' ingrained anti-Zionism will gnaw at their leaders' willing­
Hamas and its bacl<er, Iran. Countries lil<e the United Arab Emir­ ness to help. But the alternative is the decay that feeds scavenger
ates and Saudi Arabia need stability and benefit from good rela­ states lil<e Iran and Russia. Mr Biden is the only leader who can
tions with Israel. However, they are so wary of testing their citi­ pull things bacl< together. If he fails, and the security of the Mid­
zens' anger with the truth about the rocl<et's origin that they dle East crumbles, it will be a catastrophe for America, too. ■
12 Leaders The Economist October 21st 2023

American politics

Speal<ing of goat rodeos

How House Republicans could yet, surprisingly, further the national interest

T HE VIEW of the world from the White House end of Penn­

sylvania Avenue lool<s lil<e this: Hamas has attacl<ed Israel,
one of America's closest allies. The biggest war in Europe since
the House has had a temporary speal<er, Patricl< McHenry of
North Carolina. The hitherto obscure Mr McHenry has yet to re­
ceive the memo about his party being the tribunes of worl<ing­
1945 is raging, and Ul<raine needs American support to prevent it class Americans, and has never been seen in public without a
from being swallowed by Vladimir Putin. Taiwan also needs bow-tie on. Yet Mr McHenry may also, by a bizarre sequence of
help. And a government shutdown is looming. Meanwhile at the events, now find himself in a position to change the fate of more
other end of Pennsylvania Avenue, the world lool<s lil<e a lot of than one country.
men in suits arguing about who should be in charge of the meet­ Both parties are l<een to support Israel. There is also majority
ing. House Republicans have spent two weel<s squabbling about support in the House for continuing to arm Ul<raine and fund
who should be speal<er. Congress is paralysed. the American government. But the Republicans who run the
It has been a poorly timed piece of self-indulgence. Fortu­ House have long refused to allow bills to come to a vote unless
nately, there is a chance of a reprieve. That could mean a Con­ they enjoy the support of a majority of Republican lawmal<ers.
gress that worl<s slightly better, at least temporarily, plus a fresh So matters of great importance have been left to fester.
pacl<age of military support for Israel and for One possible (and indeed plausible) sol­
Ul<raine (and perhaps for Taiwan too). The gov­ ution is that support for Israel is pacl<aged to­
ernment may even stay open. gether with support for Ul<raine and Taiwan,
To recap, on October 3rd Kevin McCarthy, the some more money for border security and a bill
House speal<er, was sacl<ed by a small faction of to l<eep the government funded until this time
Republicans led by Matt Gaetz, an elaborately next year (see United States section).
coiffured nepo-politician who seemed to be The principles of good governance suggest
acting out of personal animus. With Mr McCar­ these matters should be considered one by one.
thy gone, Steve Scalise, an affable congressman The dealmal<ing required to get them through
from Louisiana who has spent a decade climbing the Republican the House, however, suggests lumping them together. Given the
leadership ladder, tried his lucl<. He was rejected by the House necessary authority, Mr McHenry coul d shepherd such a bill
Republican caucus, too. through with support from Democrats. And, because he does not
Then Jim Jordan, a congressman from Ohio who is l<nown for officially have the job of speal<er, he cannot easily be removed by
his dogged support of Donald Trump's efforts to overturn the his own side, as Mr McCarthy was.
election of 2020 and his delight in shutting down the govern­ Some combination of Republicans and Democrats should
ment at every opportunity, put himself forward for the position. grant Mr McHenry the authority, at least for now, to bring bills to
This would have been lil<e placing the most unco-operative the floor. All it would tal<e is a simple majority. For pragmatic Re­
member of a team in charge of running it, in the hope that the re­ publicans who are fed up with being at the mercy of their party's
sult would be less disruption. Mr Jordan was rejected as well. least constructive lawmal<ers, it is an opportunity to breal< the
The Republicans have such a thin majority in the House that logjam. They should tal<e it. Israel, Taiwan and Ul<raine need
once the regicide has begun, it is hard to end the bloodletting. American help. America needs a Congress that can consider leg­
While this abdication of responsibility has been under way, islation. Right now it has urgent worl< to do. ■

Poland

Populists can be beaten

A victory for the rule of law in the heart of Europe

L IBERALS oo NOT get much to cheer them up these days, but

the news from Warsaw this weel< qualifies. Confounding
fears that many disenchanted voters might simply stay at home,
Following a run of successes for illiberal populists-in Hun­
gary and Italy last year, and in Turl<ey in May, not to mention a
sharp recent rise in popularity for Germany 's AfD-the result is a
Poles turned out in record numbers on October 15th to vote down relief. To understand why it is such good news, consider what
the populist-nationalist Law and Justice (Pis) party that has run would have happened if Pis had managed to stay on.
the country for the past eight years. They gave what lool<s lil<e a Four more years of Pis would have meant three l<inds of prob­
solid mandate for government to an opposition alliance headed lems. First, Pis would have continued its creeping capture of the
by Donald Tusl<, a former prime minister and a former head of country's supposedly independent institutions, such as the ju­
the European Council to boot (see Europe section). The alliance diciary. It has installed its own hand-picl<ed judges in senior po­
won 248 seats in the 460-member Sejm, or lower house of parlia­ sitions, in particular tal<ing over all 15 slots in Poland's Constitu­
ment, and 66 of 100 seats in the Senate, the weal<er upper house. tional Tribunal, the country's most important court since it can►►
 The Economist October 21st 2023 Leaders 13

► stril<e down laws it deems unconstitutional, as well as in a coun­ Much can still go wrong. The opposition agreed to form a gov­
cil that vets all lower judges. It has turned state broadcasters into ernment if it won, but there is no guarantee that this will pro­
megaphones for Pis propaganda. It has deployed its people to ceed smoothly; the alliance consists of nine parties whose agen­
lead state-run industrial enterprises, such as Orlen, an oil com­ das run from radical-left to centre-right. And as prime minister,
pany, which conveniently slashed the price of fuel ahead of the Mr Tusl< will encounter many obstacles, starting with the presi­
election. It has been building a patronage system, whereby even dent, Andrzej Duda, who though nominally independent is a Pis
humble government jobs in towns it controls depend on sup­ ally. Mr Duda can veto all legislation, and the opposition will not
porting, or at least not criticising, the ruling party. have the votes to override him. Mr Tusl< will also bump up
There would, second, have been reason to fear a continuation against the Pis-stacl<ed Constitutional Tribunal; its judges are
and perhaps a deepening of Pis's illiberal domestic agenda. Its appointed for nine-year terms. Short of changing the constitu­
judges have made abortion illegal except in cases of rape or in­ tion, there will be no easy way to get rid of them; so Mr Tusl< may
cest or to protect the life or health of the mother, and it started find his bills strucl< down. Winl<ling out Pis's judges from lower
rewriting textbool<s to mal<e them more "patriotic". courts will be tricl<y too, and would invite the same criticisms
Third, a re-emboldened Pis would have continued in its com­ that liberals used to mal<e of Pis.
bative stance towards the EU, where it often teams up with Vil<­ Mr Tusl< will be able to count on goodwill from Europe, but
tor Orban's government in Hungary, a populist alliance that was this is no panacea. Some €35bn ($37bn) of covid-recovery funds
strengthened by the recent return to power of Robert Fico in Slo­ owed to Poland, and even more from the regular budget, are
val<ia. The central Europeans have been hostile to schemes to blocl<ed because of the row over the rule of law; the European
share responsibility for dealing with illegal migration, and have Commission would be happy to unblocl< it, but first the Poles
bacl<ed each other in disputes with Brussels over the rule of law, must meet the conditions it has laid down. These obstacles are
which the populists tend to flout. Most alarming, given its hith­ exactly why creeping authoritarianism, Pis- or Orban-style, is so
erto excellent record of supporting Ul<raine, the Pis government dangerous. Turning it around will be hard. But at least a start can
has recently started to play politics with the war, blocl<ing the now be made. And opposition parties around Europe and the
import of grain from its neighbour in defiance of EU rules. world can see that populists can be beaten. ■

America's banks

A brush with Basel

Plans to stuff banl<s with more capital are imperfect but necessary

A MERICA SPENT more than a decade trying to mal<e its banl<s The new proposal lowers the asset threshold to $1oobn, requir­
safer, only for several of them to collapse suddenly earlier ing banl<s of svB's size to value accurately at least some of their
this year. So it is no surprise that regulators are trying once again bonds. As a result many will have to build up capital, which
to shore up the system. Their latest proposals would on average should help prevent a repeat of the debacle.
increase by 16% the amount of high-quality equity capital banl<s For the biggest banl<s, the argument is less clear-cut. They did
would need to fund their operations, among a litany of other not suffer during the spring crisis, and instead hoovered up de­
changes designed to bring America's rules in line with prin­ posits that fled from smaller institutions. They are considerably
ciples agreed globally. If the pacl<age-dubbed the "Basel 3 end­ better capitalised than they were a decade ago. And because
game"-is implemented, banl<s, which have been reporting their depositors remain loyal even if they don't pay much inter­
their profits over the past weel<, will have to spend years build­ est, higher rates have served mainly to boost their profits by rais-
ing up their safety buffers.
Banl<ers are furious. "What person in what
-Russell 3000 index
ing the amount they can charge on loans. In
earnings reports released since October 13th
ivory tower thinl<s that is a rational thing to Jan 3rd 2023=100 JPMorgan, Bani< of America and Citigroup all re­
120
do?" asl<ed Jamie Dimon, the boss of JPMorgan corded rising net interest margins in the third
Chase, of one of the rule changes last month. 100
quarter of 2023, fitting a pattern whereby the
Some of the industry's complaints about the de­ larger the bani<, the more lil<ely it has been to
tails are reasonable. Overall, however, the in­ 80 benefit from higher interest rates.
creased safety brought about by more capital is J F M A M j JA SO Capital also comes with downsides. It is a
worth the costs. more expensive means of funding loans than
The benefits of the reform are most obvious for the type of debt or deposits, and some of those costs get passed on to bor­
bani< that has been vulnerable this year. Silicon Valley Bani< rowers. Some of the new rules might mal<e financial intermedi­
(svB), which had $212bn in assets, collapsed in March having ation in important marl<ets harder. If regulators neglect shadier
suffered enormous losses on its bond portfolio as interest rates parts of the financial system, activity could migrate there to es­
rose. As a bani< with assets of less than $7oobn, it was exempt cape their scrutiny. Mr Dimon is right that some of the new
from having to marl< its bond portfolio to marl<et when calculat­ edicts are poorly designed.
ing its safety buffer, even if those bonds were categorised as Yet the move towards bigger safety buffers is nonetheless de­
holdings that may be sold (rather than held until they mature). sirable. The big banl<s did not collapse in the spring, but it is they
Only when depositors fled from svs, forcing it to sell bonds at a whose failure would cause an economic catastrophe-and,
loss, was its capital cushion revealed to be an accounting fiction. probably, land taxpayers with the biggest bail-out costs. By one►►
14 Leaders The Economist October 21st 2023

► estimate the global financial crisis of 2007-09 cost every Amer­ banl<s are enduring a profit squeeze, because they are having to
ican $70,000 in income over their lifetimes. So painful are banl<­ pay more interest to retain depositors, or now depend on short­
ing crashes that studies which attempt to weigh the costs and term borrowing at the prevailing high rate of interest. Use of a
benefits of capital often call for a much fatter cushion than supposedly temporary emergency lending programme at the
would be in place even if the Basel 3 endgame is implemented. Federal Reserve, for example, has crept up over the summer. The
It is no surprise that banl<ers object to more capital, which is facility has outstanding balances of $109bn.
rather lil<e being forced to buy insurance against unlil<ely Bond portfolios also continue to shrinl< in value. By the end
events. But society as a whole benefits enormously when that of July, banl<s' unrealised securities losses were worth $558bn;
insurance is in place. The strength of America's economy means since then, long-term bonds have sold off further as investors
that now is a good time to try to mal<e the system safer, because have bet on interest rates staying higher for longer, reducing the
building safety buffers is harder than maintaining them. chance of a reprieve. For many banl<s the best path to viability
Even if the proposals are enacted, America's banl<ing woes will be to find another institution willing to gobble them up. The
are far from over. The simplest way to build capital is to retain system that emerges will be more concentrated. Regulators are
profits rather than pay them out in dividends. Yet many small right to seel< to mal<e it less fragile, too. ■

Al and health

Polishing the crown jewels

How to mal<e Britain's National Health Service AI-ready

A T THE HEART of Britain's publicly funded health-care system

lies a contradiction. The National Health Service generates
and holds vast swathes of data on Britons' health, organised us­
NHS, and possible riches for developers, but in the long run
would benefit the service and its patients. And if used outside
Britain, it might mean more revenue overall.
ing NHS numbers assigned to every person in its care. The sys­ Comparability of data is also vital. Though everyone has an
tem enables world-leading studies, lil<e the RECOVERY trial dur­ NHS number, scans are often gathered and stored in different
ing the pandemic, which discovered treatments for covid-19. ways in different places, mal<ing it harder to create large datasets
You might suppose it to be a treasure trove for artificial-intelli­ for machine learning. The NHS is poised to announce the winner
gence (AI) developers eager to bring their models to bear on im­ of a contract to linl< up disparate datasets. This will help, but
proving human health. Yet if you put this to a developer they will more is needed. For example, scans of the same type should be
roll their eyes and tell you why all is not as rosy as it seems. carried out in ways similar enough to allow AI to detect signals
That is because the l<inds of tabular data that inform clinical of health rather than differences in the scanning process.
trials-who tool< which drug, what the outcome was-are not The final pillar is consent. Though everyone wins if everyone
the same as those most useful for training machine-learning lets their data be fed to computers, Britons should be allowed to
models, such as scans or genomes, which hold more informa­ opt out. Politicians must persuade people of the benefits of vast
tion about a patient. Much of this sort of NHS data is a mess, or­ datasets in which everyone-young or old, blacl< or white-is
ganised in ways which serve doctors treating represented. They must also reassure them that
patients, but not AI developers hoping to feed it their data will be anonymised, and not used to
to computers. Mal<ing it suitable for those mod­ their detriment, for instance by insurers.
els is a tasl< with which the NHS has not yet The NHS has no time to waste. The rewards
come to grips. It is often easier for those seel<­ on offer are better, earlier diagnosis of disease,
ing to organise these richer data to start from and a more productive, efficient system. That is
scratch, as with a vast data-collection exercise sorely needed when waiting lists are long and
now under way (see Britain section). funds squeezed. The NHS's position as a world
To open up the NHS's data riches to AI, its leader in data-heavy trials faces a stiff threat
managers and political masters should turn to three principles: from health systems in other places, which are digitising rapid­
cleanliness, comparability and consent. Cleanliness starts with ly. Abu Dhabi, for example, is considering feeding health-care
hosting rich data in cloud-computing environments where the data into foundation models, and may open up its trained mod­
data are easier for AI developers to wrangle. Hospitals and clin­ els to the world. Consumer technology-smartphones, watches
ics also need greater incentives to prepare their datasets for ma­ and devices connected to them-is fast improving its capacity to
chines. Most of the NHs's successful AI projects so far have relied peer inside the human body. It may one day begin to rival the
on the drive of dedicated, intellectually curious doctors who scanning capacity of the NHS, usurping it as the easiest and
have had to fight the system rather than be helped by it. Forging cheapest channel for the provision of algorithmic health care.
stronger linl<s between the NHS and universities-and giving The economy stands to gain, too. NHS data could be the basis
PhD students easier access to datasets-is another good idea. of a thriving export industry, licensing AI tools to health-care
A more open approach to licensing intellectual property systems around the world. But if it does not clean up its digital
would also help. Too often, the NHS demands fees and terms so act, Britain will become a tal<er of new health technology, just as
steep and strict that they deter developers. It should see the big it has become a tal<er of American digital services lil<e online
picture and accept smaller fees, to incentivise the building of search and social media. That would be a missed opportunity,
clean datasets. That will mean less money proportionally for the and the beginning of the end of the data primacy of the NHS. ■
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The role
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methodologies for bank resolution activities in a dy namic and growing agency. As
well as taking part in the SRB decision-making bodies and acting as a voting member,
you will lead and manage the policy coordination and development directorate with
approximately 70 staff members.

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You are a successful manager with proven experience in leading large
multidisciplinary teams and in motivating staff to perform to a high level. You have
in-depth knowledge of the banking and financial sector, as well as knowledge of the
EU institutions and decision-making processes. You are highly experienced in one or
more of the following domains: policy setting and coordination in the regulation of
the financial sector, and banking in particular or resolution of financial institutions
or superv1s1on.

About us
The Single Resolution Board (SRB) is the central resolution authority within the
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6 November 2023, 12.00 noon Brussels time.
16
Letters The Economist October 21st 2023

to the less well off, who are there is always space for new Nobel for someone much more
Unleash the MHRA more lil<ely to own non-com­ entrants who are part of esoteric. Today, a writer lil<e
The Society of Chemical pliant vehicles. Low-traffic the solution. Stephen King, whose worl<
Industry's recommendations neighbourhoods, where roads SID EFROMOVICH permeates our society in bool<s
for the British life-science are blocl<ed off or pedestri­ Co-founder and CEO and also in movies and televi­
industry are broadly welcome, anised, are popular with resi­ Generation Pledge sion, will never be considered
and I hope that some of the dents, but they have aroused Millburn, New Jersey for a Nobel even though he has
more sensible ones will be significant ire in places lil<e shaped American literature
adopted by the government to Oxford, where they simply and culture.
support the industry's success mal<e it difficult to get around. Live longer, in poverty Having your worl< actually
in the long run. But nowhere Driving everywhere at Successive governments and read by the public should not
does Sharon Todd, the society's 20mph might save a few lives, businesses are failing to plan be a disqualification. It would
chief executive, nor the report, but why stop there? Even more for demographic change. We be nice if the Nobel prize­
mention one of the most crit­ lives would be saved by reduc­ are not prepared for the aged to givers did not act lil<e an eru­
ical and, at least historically, ing the limit still further, or live to 100, let alone 120 (Tech­ dite faculty committee sl1ow­
globally competitive pieces of banishing cars altogether. nology Quarterly, September ing off its arcane l<nowledge
infrastructure tl1at Britain has Some sort of balance would 30th). Short-term reactive and instead tool< an author's
to drive forward innovation seem wise. And I don't agree policymal<ing has contributed impact into consideration.
(By Invitation, October 7th). that motorists are coddled. to worl<force shortages, eco­ THAD HALL
That is Britain's progressive They forl< out hugely for gov­ nomic stagnation and a health Pittsburgh
and responsive Medicines and ernment fuel duties and road and care system failing to meet
Healthcare products Reg­ taxes. Trains, by contrast, are our changing needs.
ulatory Agency (MHRA). massively subsidised. Future generations may not Brevity is the soul of wit
Right here and now, the JEREMY HICI<S only be bored-not least if they Johnson (September 30th)
biotech industry in Britain is London continue to be pushed out of reiterated the common advice
squealing under the signif­ the employment marl<et soon for effective writing: l<eep
icant erosion of this crucial after they hit so-they are also syntax simple, use short and
. . , .
organ1sat1on s capacity to 'Er indoors lil<ely to spend longer living in active sentences, with com­
engage with innovators, and in When it comes to the domi­ poverty and with ill health. mon words, be brisl< and clear.
providing essential advice and nance of invisible spouses, Innovations in biotech are one Yet writing is not only a tool
feedbacl<. This is stifling pro­ Rebecca, the unseen character thing, but finding solutions to for communication but an art
gress on world-beating med­ in Daphne du Maurier's novel, the financial, health, housing, form that creates possibilities
icinal products and services pales against Mrs Mainwaring transport and leisure needs of for sophisticated expression.
that could transform patients' in "Dad's Army" (Bacl< Story, our ageing society is the chal­ Instead of complex sonnets,
lives globally, and support a September 23rd). lenge we must address first. Shal<espeare might simply
growing British innovation MA RI< I<NIGHT DAVID SINCLAIR have written '"I love you" and
industry. A startup that can't Sevenoaks, I(ent Chief executive "'Relationship; need to tall<."
get MHRA advice will have an International Longevity Centre The English language and all of
even harder time raising London its users would be vastly
funds, especially in the pre­ Wealth and well-being impoverished if he had written
sent constrained environment. The wealth-management You made no mention of two so effectively.
The government would be industry narrowly defines fictional examples of immor­ PAGE NELSON
well advised to act very, very itself as one of only protecting tality gone right, Connor and Charlottesville, Virginia
quicl<ly to address this serious capital ("The $1ootrn prize", Duncan Macleod, the
risl< to Britain's leading status September 9th). My organisa­ Highlanders. Never-ending life Brevity is important in exams,
in this industry which, regard­ tion, which asl<s people to is really only appropriate for too. I am reminded of an old
less of Ms Todd's noble propos­ donate at least 10% of their thrifty Scots who will use their Oxford essay question: "Was
als, could be set bacl< by a inheritance to effective causes time to deal in antiques, Hegel a good philosopher? Be
decade or more. within the first five years of philosophise and occasionally brief". One smug student
SIMON GOLDMAN inheriting, interacts each day save us mortals from our wrote, simply, "Yes".
Cambridge, Cambridgeshire with ultra-high-net-wealth own mistal<es. When the paper came bacl<,
families around the world. I<YLE MCCOY the examiner had given it a
We've observed a rising senti­ Middleton, Wisconsin high marl< but scribbled a
Road rage ment of dissatisfaction with comment in the margin: "This
Rishi Sunal< is misguided in wealth managers. was a good, brief answer. But a
his attempt to woo irritated With over $13otrn under Reward the bestsellers better, briefer answer would
British drivers, you say ("The management it is appalling It seems the goal of the Nobel have been No."
war on the war on motorists", that there are still gaps in prize in literature is to reward SAM WILLIAMS
October 7th). I am no supporter funding to solve climate authors whose worl<s are not London
of the prime minister but I change, prevent pandemics widely read ("Prestigious,
thinl< he has a point. The ultra­ and much more. Not only do lucrative and bonl<ers", Octo­
low emission zone, which banl<s not recognise this, they ber 14-th). By contrast, the Letters are welcome and should be
addressed to the Editor at
charges certain polluting cars actively fund the problem by science Nobels are given to The Economist, The Adelphi Building,
to drive in certain areas, made l<eeping dirty industries, lil<e scientists whose worl< have 1-11 John Adam Street, London wc2N 6HT
sense in inner London but the coal, thriving. Clients can had a great impact in their Email: [email protected]
difference is marginal in outer easily move their money. If field. Charles Dicl<ens would More letters are available at:
Economist.com/letters
London, and at significant cost wealth managers don't change have been passed over for a
 Briefing Israel and Gaza The Economist October 21st 2023 17

No place for a war tions among Palestinians that appeared to

bear out its account. Palestinian rocl<ets
are built in mal<eshift worl<shops in Gaza
to Iranian designs. Mid-air malfunctions
are common: the IDF claims that of over
7,000 rocl<ets fired at Israel since October
7th, at least 450 have fallen within Gaza. Is­
rael points out that the images of the explo­
JERUSALEM

As Israel's invasion of Gaza nears, the obstacles grow more daunting sion's aftermath show a charred car parl< at
the centre of the hospital compound, and

F OR THE first time in more than 40 years,

the Israeli Defence Forces (IDF) have
called up their entire armoured corps,
president. His presence was intended both
to show support for Israel and to try to bro­
l<er some sort of agreement to help Pales­
lots of damage to adjacent buildings, but
no crater or structural devastation of the
sort that would be expected from the mu­
thought to number more than 1,000 tanl<s. tinian civilians trapped in Gaza. nitions it uses in air stril<es.
Fully 360,000 reservists have also been As it happened, just as Mr Eiden was Mr Eiden bacl<ed Israel's version of
mustered, including a civil-defence force boarding Air Force One on October 17th to events. American officials cited their own
of 20,000 people. The additional manpow­ head to the region, a deadly explosion infra-red satellite data and intercepts as
er is intended to bolster the I DF's full-time racl<ed a hospital in Gaza. The territory's evidence. But the tragedy nonetheless
personnel, of roughly 170,000. Although health ministry said that hundreds of peo­ scotched his hopes of reaching a sweeping
some of these troops are deployed along Is­ ple had been l<illed. Hamas blamed bomb­ deal with Arab leaders to get aid into Gaza
rael's northern border, to ward off a poten­ ing by the IDF. Israel said a rocl<et fired by and at least some civilians out, despite Is­
tial attacl< from Lebanon by the militants of another Palestinian militant group, Islam­ rael's blocl<ade of the territory.
Hizbullah, more are massing in the south, ic Jihad, had malfunctioned and fallen on
near the Gaza Strip. Israel is poised to begin the hospital compound. Timing is all
what is expected to be its biggest military Analysis of images and video footage by Any agreement depends on the acquies­
operation since the invasion of Lebanon in independent researchers suggested that Is­ cence of Egypt, with which Gaza has a short
1982. Its leaders have said they are deter­ rael's explanation was more plausible. The border and where deliveries of food and
mined to destroy Hamas, the militant IDF also released tracl<ing data on rocl<et medical equipment are piling up. But the
group that controls Gaza, in retaliation for launches and intercepted communica- carnage at the Ahli Arab hospital caused
its bloodthirsty rampage across southern such outrage in the Arab world that Jordan
Israel on October 7th. quicl<ly cancelled a summit where Mr Bi­
➔ Also in this section
As The Economist went to press, no as­ den was to meet Abdel-Fattah al-Sisi,
sault had materialised. The most obvious 20 Graphic detail: Mapping destruction Egypt's president, and Mahmoud Abbas,
reason for the delay was the brief visit to Is­ the leader of the Palestinian Authority (PA).
21 Gaza's long-term future
rael on October 18th of Joe Eiden, America's "There is no point in doing anything at ►►
18 Briefing Israel and Gaza The Economist October 21st 2023

► this time other than stopping this war," ing more accurate ones than Hamas can other slice of Palestinian territory, with
said Ayman Saf adi, Jordan's foreign minis­ deploy, which would severely tax Israel's roughly 2.7m inhabitants. The 40% of it
ter. In the end the best Mr Biden could do missile-defence systems. that Israel does not administer directly are
was secure an Israeli pledge not to obstruct The possibility of war with Hizbullah is in the hands of the PA. But Mr Abbas is
aid deliveries and an Egyptian one to let 20 lool<ing lil<elier by the day, say Israeli in­ weal< and unpopular. After the tragedy at
trucl<s a day into Gaza. He also announced siders. Although Hizbullah might prefer the Ahli Arab hospital widespread protests
that America itself would provide $1oom not to invite Israeli retaliation against Leb­ brol<e out against his government. The
in aid to ease the Palestinians' plight. anon, which is gripped by a dire economic ID F's fear is not so much of a third front, in
The tragedy at the hospital underlined slump, it ultimately answers to its Iranian the form of a popular uprising against Isra­
the slow progress of Israel's effort to en­ paymasters, not ordinary Lebanese. On Oc­ el, so much as chaos that requires the pres­
courage Palestinian civilians to move to tober 16th Hossein Amir-Abdollahian, ence of more Israeli troops. There is also
the southern part of the Gaza Strip to es­ Iran's foreign minister, made an ominous the constant threat of violence between
cape the brunt of the looming battle. The warning: "The possibility of pre-emptive Palestinians and the almost 700,000 Israe­
IDF says that only 600,000 or so of the 1.1m action... is expected in the coming hours," li settlers in the West Bani< and the eastern
residents of northern Gaza have heeded its he told Iranian state television. The same part of Jerusalem.
call. By delaying a wide-ranging deal on day Israel's government issued an unprec­ A final reason for Israel to delay its of­
humanitarian aid or safe zones where ci­ edented order to evacuate 28 Israeli villag­ fensive was an effort to free at least some of
vilians can tal<e shelter, the explosion at es within 2l<m of the border with Lebanon. the Israeli hostages captured on October
Al1li Arab will have set bacl< efforts to per­ On October 17th the IDF l<illed four people 7th. The IDF believes that Hamas, Islamic
suade the holdouts. As it is, more Gazans attempting to cross a security fence. Jihad and other groups hold 203 of them.
have already been l<illed just by Israel's Some ministers and defence officials Israeli spies have been trying to gather in­
bombing campaign since October 7th tl1an have suggested tl1at it may be better for Is­ telligence about where they are being l1eld.
in any previous conflict involving the terri­ rael to attacl< Hizbullah pre-emptively,
tory (see next story). Inevitably, a ground rather than wait for another surprise at­ Discussions disrupted
assault will lead to far more deatl1s. tacl<, this time from tl1e north. Israel's war Quiet tall<s to secure the release of l1ostag­
Southern Gaza has become extremely cabinet, which includes both Binyamin es had been under way. Qatar, which hosts
overcrowded, with no organised provision Netanyahu, the prime minister, and va­ Hamas's political leadership and has
of food or sl1elter for arrivals from the rious political rivals, including former strong ties to the group, had been acting as
north. Hamas has told Gazans to stay put. generals, seems inclined to wait while a go-between. But those diplomatic efforts
What is more, Israeli bombing continues sending more troops to the border. appeared to collapse on October 17th after
in southern Gaza as well, with reports of Israel may also be waiting for more the tragedy at the Ahli Arab hospital. Most
refugees from the north being l<illed in air American firepower to arrive in the region. Arab states, including those who had pre­
stril<es. A common refrain among Gazans A flotilla led by an aircraft-carrier is alrea­ viously appeared somewhat sympathetic
is that nowhere in the territory is safe, and dy in the eastern Mediterranean. Another to Israel, such as the United Arab Emirates,
that they might as well stay in the relative is en route. These forces are intended to de­ blamed the IDF for the disaster, despite Is­
comfort of their homes. ter Iran, Hizbullah and other Iran-aligned rael's detailed disavowal of responsibility.
Another worry for Israel's generals is militias in Iraq, Syria and Yemen from en­ That both mal<es it much harder for Israel
the risl< of a war on two fronts. Iran, an ally tering the war, or attacl<ing American in­ to build diplomatic support for a ground
of Hamas, was caught by surprise on Octo­ terests in the Gulf. The American ships' air­ war and gives it less reason to delay, now
ber 7th, according to people familiar with defence systems ma)' also be able to pro­ that Mr Biden has left the region.
the situation. But it has since urged Hiz­ vide Israel with additional warning of mis­ Israeli commanders, at any rate, are get­
bullah, a big militant group in Lebanon, to sile stril<es, if not a degree of protection. ting itchy feet. The IDF began mustering
enter the fray. Hizbullah has an arsenal of Another potential disruption to Israel's within hours of the atrocities of October
some 150,000 rocl<ets and missiles, includ- preparations for war is the West Banl<, the 7th. Its forces have been largely in place for
almost a weel<."We really should get going
this weel<end," says a colonel. "You can
maintain this level of readiness for two
weel<s at the most."
The invasion, when it comes, will be
hard-fought and bloody. Israel's leaders
have loudly and repeatedly promised to de­
stroy Hamas's military capabilities for
good and end its 16-year rule. That means a
campaign of a different order from previ­
ous incursions into Gaza, in 2009 and
2014, which aimed merely to diminish Ha­
mas's military capacity and were followed
by a gradual return to the status quo.
But the Gaza Strip is a difficult place to
fight, for several reasons. First, it is full of
dense cities, composed of tightly pacl<ed
apartment blocl<s. Such places will limit
the invaders' lines of sight and hamper
their communications, with the tall build­
ings impeding radio signals. Civilians
could be anywhere, and there will be end­
less places for Hamas's fighters to hide.
There are 995 more What is more, Hamas has built a sool<m ►►
 The Economist October 21st 2023 Briefing Israel and Gaza 19

The war in Iraq was inglorious, too, and

far bloodier. Once again, American forces
quicl<ly tool< the capital, Baghdad, in April
2003. President George W. Bush strutted on
the flight decl< of the USS Abraham Lincoln,
an aircraft-carrier, under the sign: "Mis­
sion Accomplished". In fact, the country
was about to slip into civil war. American
forces captured Saddam Hussein, Iraq's
dictator, but soon faced bloody insurgen­
cies by both Sunni and Shia militias. All
told, America lost some 4,500 service
members, not to mention some 300,000
Iraqis who died, most of them civilians.

History lessons
Israel's own history offers similar warn­
ings. In 1982, amid a series of attacl<s by the
Palestine Liberation Organisation (PLO),
the nationalist umbrella group, gunmen
shot and wounded Israel's ambassador in
London. The Israeli government tool< the
Forty years later, militias in Lebanon remain a threat l<illing as a casus belli to invade Lebanon
and dismantle the PLO, even though it was
► networl< of tunnels under Gaza-a territory for some military purpose and proportion­ attributed to militants from a rival, the Abu
only 4ol<m long and 1ol<m wide. The inten­ ate "in relation to the concrete and direct Nidal group. Israeli forces besieged the PLO
tion was in part to undercut Israel's tech­ military advantage anticipated". In other in west Beirut, forcing its leader, Yasser
nological advantage in seeing and stril<ing words, Israel can legally justify the deaths Arafat, and thousands of fighters, to sail
from the air. Even the most sophisticated of civilians as long as they are l<illed in the into exile. Israel's Christian ally, Bachir Ge­
drones cannot provide much information crossfire in operations that did not use dis­ mayel, was elected Lebanon's president.
about what is happening underground. proportionate force. Then it all fell apart. Gemayel was
Troops entering the tunnels cannot navi­ Whatever international law might say, blown up. In sight of Israeli forces, his Pha­
gate by GPS or communicate by radio. however, as civilian casualties mount, so langist fighters exacted revenge by l<illing
In its invasion of Gaza in 2014 the IDF will pressure on Israel to withdraw and ac­ Palestinians in the Sabra and Chatila refu­
struggled to deal with such tunnels. It has cept a ceasefire. Its previous invasions of gee camps. An Israeli commission of in­
since invested heavily in subterranean Gaza, in 2009 and 2014, were quite brief. In quiry found Ariel Sharon, Israel's defence
warfare, setting up special units for the both cases, the I DF remained on the minister, indirectly responsible. Within a
tasl< and constructing a simulacrum of Ha­ ground for about 18 days. That would not be year, under pressure from anti-war prot­
mas tunnels for training. It has developed nearly enough time to achieve Israel's stat­ ests, Menachem Begin, the prime minister,
various technical means to hunt for them, ed goals this time around. It tool< Iraqi announced his resignation.
including some modelled on the under­ troops nine months of house-to-house One effect of the Lebanese imbroglio
ground surveys conducted by the oil in­ combat to subdue Mosul. was that the PLO was replaced by Hizbul­
dustry, as well as methods based on old­ That points to perhaps the biggest chal­ lah, a more formidable, Shia militia, which
fashioned intelligence-lool<ing for spots lenge for Israeli forces in Gaza: not getting succeeded in pushing Israel out of Leba­
where militants' mobile-phone signals bogged down. America's invasions of Af­ non in 2000. Another impact was on Pales­
suddenly disappear, for instance. Even so, ghanistan and Iraq after the terrorist at­ tinians within the Israeli-occupied West
finding and demolishing the tunnel net­ tacl<s of 9/11 and Israel's war in Lebanon in Bani< and Gaza Strip. Their first intifada, or
worl< will be the worl< of months, if not 1982 (the last time all those tanl<s were de­ "shal<ing off", a stone-throwing uprising
years, and certainly not a few days. ployed) provide cautionary tales. that started in 1987, set the stage for the Os­
A second concern is the presence of so America's "global war on terror" started lo accords between Israel and the PLO of
many Palestinian civilians. American-led triumphantly. Just two months after al­ 1993. Arafat made a triumphant return to
assaults on cities during the Iraq war and Qaeda's attacl<s on America in September Gaza the following year.
the Iraqi-led, Western-bacl<ed capture of 2001, American-led forces were in control Hamas emerged as the main force of
Mosul from Islamic State in 2016-17, were of Kabul, the capital of Afghanistan. The violent rejectionism and did much to de­
painstal<ingly planned and conducted Taliban government was gone. Al-Qaeda stroy the Oslo accords. It forced Israel out
with the benefit of copious intelligence. was hounded. Its leader, Osama bin Laden, of Gaza in 2005 and won the Palestinian
Large numbers of civilians died nonethe­ was tracl<ed to Pal<istan and l<illed in 2011. legislative elections in 2006. The following
less-perhaps as many as 10,000 in the bat­ But the Taliban fought a growing insurgen­ year it pushed out the PA.
tle for Mosul alone. cy. Having lost more than 2,400 military For Hussein Ibish of the Arab Gulf
In theory, international humanitarian personnel, America left in 2021. The Af­ States Institute, an American thinl<-tanl<,
law, which governs the conduct of armies ghan government collapsed almost imme­ the lessons are clear. Terrorist and insur­
once they are waging a war, demands that diately and the Taliban returned to power. gent groups, he argues, resort to spectacu­
soldiers distinguish between combatants lar violence to provol<e an irrational re­
and military objects on the one hand and sponse. "They l<now that the harm that
civilians and civilian objects on the other. C) Read more they can do to the dominant power is lim­
Targeting those on purpose is always ille­ ited," he says. "They understand that the
gal. But an attacl< that l<ills civilians-even For more coverage on Israel and Gaza visit harm that the dominant power can do to it­
lots of them-can be legal if it is necessary economist.com/israel-hamas self is infinitely greater." ■
20 Briefing Israel and Gaza The Economist October 21st 2023

➔ Mapping the scale of destruction and bloodshed in Gaza

Detected damage, Oct 7th-12th 2023 ' N

Population density, 2020
Possible Probable Low __ High - -- ♦-----\
--
--- ---
'
I

I
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Jaoalia /
Evacuation I

zone
I
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I
'' )(' I
I I
No access
\
I
.__..., ___ 1' Large areas of
I
I I
I I

Beit Hanoun have

I I I
I I

been levelled Main roads south

I

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I
I
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I I
I I

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I
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I
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,, ,
I

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Mediterranean
Refugee camps '''
I
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I

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, I
1
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I SRA EL Gaza Strip '-.. , ' ISR1'EL
I
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I
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',',
'
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0 Ahmed Yassin :
\

➔ Several mosques I
I

have been damaged

• I
I I
I I
I
by the strikes
I I
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Q AI-Sousi I
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aza city
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, ___
Sources: European Commission; European Space Agency; OpenStreetMap; UN; The Economist

Graphic detail flies over Gaza at least three times every 12 nificant areas of its north may have been

Destruction
days, and creates an image by bouncing damaged or destroyed. The city of Beit Ha­
microwaves off the Earth's surface and noun appears to be the worst hit. Sources

in Gaza
measuring the "echo" when they return. on the ground confirm that the Al-Sousi
By comparing images tal<en before the and Ahmed Yassin mosques-which our
war began witl1 the latest image from Octo­ analysis highlighted as damaged-have
ber 12th, we identified areas with dramatic been levelled. Overall, our estimates sug­
changes in signal, a hallmarl< of damage. gest that 11,000 buildings in Gaza are alrea­
At least 4.3% of the enclave's buildings
appear to have been destroyed We verified the method's accuracy by ap­ dy damaged or destroyed.
plying it to data from the Ul<rainian city of Gaza's population is particularly vul­

F OR MOST Gazans the dull boom of an air

stril<e is a familiar sound. The current
barrage-which began after Hamas, a Pal­
Mariupol in the spring of 2022, and com­
paring it with human-coded assessments.
Our method is not perfect. Not all damage
nerable to air stril<es. Around 2.2m people
live in the sliver of land-4ol<m (25 miles)
long and 1ol<m wide-that mal<es up the
estinian militant group, murdered more can be detected from above. As a result, our strip. All border crossings are closed. In
than 1,400 Israelis on 7th October-is the numbers, if anything, may be too low. some refugee camps as many as 400 peo­
beginning of the fifth war since Israeli Our analysis of Gaza revealed that sig- ple live in each 100-metre square. Hun­
troops withdrew from the area in 2005. dreds of thousands have already been dis­
But nothing could have prepared the Total deaths, by day reported 2,866
placed. By merging our damage map with
people of Gaza for the scale of destruction First ten days fine-grained population data, our analysis
this time around. The Israeli Air Force suggests at least 92,000 will have no home
claims to have dropped nearly 6,000 Israeli Palestinian to return to when the fighting stops. This is
bombs on the narrow strip of land in the about three times our number for roughly
first weel< of the war-more than the yearly the same point of the 2021 war.
2023 war
rate of American forces in their operation --...... 1,300 Israel says the stril<es have l<illed hun­
against Islamic State in 2014-17. Our analy­ dreds of terrorists and destroyed Hamas
sis of satellite images suggests that in this command centres. The Ministry of Health
741
short space of time at least 4.3% of the en­ Other wars, in Gaza reports around 3,500 Palestinian
claves' buildings have been destroyed. 2008-21 257 lives lost, more than in any other Israel-Ga­
To assess the damage caused by the za conflagration. With bombs still falling,
stril<es we analysed freely available data 1 5 10 1 5 10 and Israel expected to launch a ground at­
from Sentinel-1, a European satellite. It Day of war tacl<, this number is sure to rise. ■
 The Economist October 21st 2023 Briefing Israel and Gaza 21

Israel and Palestine reaucrats in Gaza to stop worl<ing. Hamas

When the shooting stops

hired tens of thousands of supporters to
fill the civil service instead, while the PA
continued to pay its worl<ers to sit at home.
Keeping that bureaucracy would mean
worl<ing with around 40,000 people hired
for their ideological loyalty to Hamas; dis­
missing it would repeat the mistal<e of
RAMALLAH
America's "de-Baathification" programme
Israel has only unpalatable options for Gaza's long-term future
in Iraq, which threw legions of angry, un­

T HE PUBLIC statements Joe Biden made

during his lightning visit to Israel on
October 18th did not suggest many misgiv­
The first is that Mahmoud Abbas, the Pales­
tinian president, is loth to do it. "I don't
thinl< anybody can be that stupid and thinl<
employed men on the streets.
A fourth option would be to cobble to­
gether some sort of alternate administra­
ings about Israel's impending invasion of he can go bacl< to Gaza on the bacl< of an Is­ tion, composed of local notables worl<ing
the Gaza Strip. In private, however, the raeli tanl<," says Ghassan al-Khatib, a for­ closely with Israel and Egypt. Israel relied
American president's advisers hoped to mer Palestinian minister. on that sort of arrangement until the 1990s,
press Israel's leaders on an urgent ques­ Even if Mr Abbas were able to tal<e pow­ before the PA began to tal<e over civil func­
tion: what should happen after the war? er that way, he may not want to. Yasser Ara­ tions in the occupied territories.
Israeli officials say they are focused on fat, the previous president of the PA and There has been tall< of trying to enlist
toppling Hamas from power, in retribution longtime figurehead for Palestinian na­ Muhammad Dahlan, a former PA security
for the massacre it committed in southern tionalism, had a fondness for Gaza; he chief who grew up in Gaza, to tal<e the reins
Israel on October 7th. "Gaza will no longer lived there for a time after being allowed to after Hamas. But Mr Dahlan has spent the
be a threat for Israel," says Eli Cohen, the return to Palestine in 1994. People close to past decade in Abu Dhabi, the capital of the
foreign minister. "We will not agree that Mr Abbas say that he, in contrast, views Ga­ United Arab Emirates (UAE). He has fallen
Hamas will have any power in Gaza." Even za as a hostile place. out with the PA; in 2016 a Palestinian court
after the risl<s of fighting in such a densely Gaza would almost certainly be hostile convicted him of corruption. There is also
populated place were illustrated by a dead­ to Palestinian police sent to secure it. The bad blood between him and families in Ga­
ly blast on October 17th at Gaza's Ahli Arab PA employs around 60,000 people in its se­ za: he led the fighting against Hamas in
hospital, which Israel blamed on an errant curity services, which have authority in 2007. "I thinl< that's an illusion," says Mi­
Palestinian rocl<et, Israel's stated war aims roughly a third of the West Banl< (see map chael Milstein, a reserve colonel in the Is­
have not changed. on next page). It cannot control even that raeli army and an analyst at the Moshe
limited area: parts of Jenin and Nablus, cit­ Dayan Centre, a thinl<-tanl< in Tel Aviv. "I'm
Four-way stop ies in the northern West Banl<, are so res­ not even sure he'd want to come bacl<. He'd
But Israel's post-war plans remain uncer­ tive that the PA's forces dare not patrol be worried people would want him dead."
tain. It has four main options, all bad ones. them lest they be attacl<ed. Morale is low. If The case of Mr Dahlan points to a larger
First is a prolonged occupation of Gaza, Palestinian police returned to Gaza, they problem. The Palestinians have been di­
lil<e the one it undertool< from 1967 to 2005. would be a target for the remnants of Ha­ vided for almost two decades. The split is
Israeli troops would have to secure the en­ mas, Islamic Jihad and other militants. Ha­ largely their fault: though Hamas and PA
clave and, in the absence of a Palestinian mas and the PA fought a bloody civil war in leaders meet every couple of years to pay
government, might have to oversee basic Gaza after Hamas won parliamentary elec­ lip service to reconciliation, neither party
services as well. tions in 2006. Hamas eventually prevailed wants to compromise. But the schism has
This might please a segment of Israel's and ejected the PA from the strip in 2007. also been exacerbated by the divide-and­
religious right, which still fumes about the Nor is security the only question. After rule policy of Binyamin Netanyahu, the Is­
withdrawal in 2005 of all Israeli soldiers Hamas came to power, Mr Abbas told bu- raeli prime minister, who thought it a use- ►►
and settlers from Gaza as the abandon­
ment of a sliver of the biblical homeland of
the Jews. But no one else wants to see Gaza
reoccupied, given the heavy financial bur­
den and the lil<elihood of endless bad press
and a steady tricl<le of casualties. Mr Biden
warned on October 15th that a lasting occu­
pation would be a "big mistal<e". Most Is­
raeli strategists agree.
The second option is to wage a war that
decapitates Hamas and then leave the ter­
ritory. This is arguably the worst way for­
ward. Some of Hamas's leaders and sup­
porters would probably emerge to recon­
stitute the group. Even if they did not,
some other undesirable force would tal<e
its place. The Middle East has a history of
radical groups tal<ing advantage of ungov­
erned spaces.
The best outcome, from Israel's per­
spective, would be the return of the Pales­
tinian Authority (PA), which governs parts
of the West Bani< in co-ordination with Is-
rael. But that path is littered with obstacles. Not the set-up Israel is looking for
22 Briefing Israel and Gaza The Economist October 21st 2023

► ful tool to stymie the Palestinian dream of a transition towards a Palestinian state. If majority of Israelis want to obliterate Ha­
an independent state. "Netanyahu had a there's no political horizon, then the whole mas, not reward it.
flawed strategy of l<eeping Hamas alive and PA becomes irrelevant." Two other questions will shape Gaza's
l<icl<ing," says Ehud Baral<, a former Israeli Israelis contend that the PA has under­ future. One is what role Arab states will
prime minister. mined itself through rampant graft. Bil­ play. In private conversations over the past
Both Hamas and the PA rule their state­ lions of dollars in foreign aid have been si­ weel<, several Arab officials floated the idea
lets as one-party authoritarian regimes. In phoned off over the past three decades to of a foreign peacel<eeping force for the en­
2021 Nizar Banat, a critic of Mr Abbas, was buy plush villas in Jordan and to pad bani< clave-but most quicl<ly added that their
beaten to death by Palestinian police at his accounts in Europe. Asl<ed to name the country was not eager to participate.
home in Hebron. Those who oppose Ha­ main problems in Palestinian society, Egypt is not popular in Gaza, both be­
mas in Gaza risl< torture and execution. more people cite their own government's cause it has joined Israel in blocl<ading the
Most Palestinians choose to l<eep silent, corruption (25%) than Israel's continued territory and because of its prior history as
shunning politics and focusing on their occupation (19%). Gaza's ruler from 1948 to 1967. The UAE
day-to-day struggles. There is blame enough to share. The re­ would be hesitant to play a big role. "We
The most recent poll from the Palestin­ sult, though, is that Fatah is probably irre­ don't act solo," says an Emirati diplomat.
ian Centre for Policy and Survey Research deemable in the eyes of most Palestinians, The same is probably true of Saudi Arabia.
(PCPSR) found that 65% of Gazans would a liberation movement turned ossified and Israel would probably veto any role for
vote for Ismail Haniyeh, the leader of Ha­ decadent. In recent years even some Israe­ Qatar, one of the countries with the most
mas, in a head-to-head presidential race lis had begun to wonder if Hamas could be­ influence in Gaza. For years the emirate
against Mr Abbas (who would lose the West come an interlocutor, following the same has helped stabilise Gaza's economy with
Bani< as well). Hamas would win 44 % of path Fatah did decades earlier, from viol­ Israel's blessing, distributing up to $3om a
the vote in Gaza in a parliamentary ballot, ent militants to pliable bureaucrats. montl1 in welfare payments, salaries for
whereas Fatah, Mr Abbas's faction, would Not only had Hamas appeared focused civil servants and free fuel. But its support
tal<e just 28%. on trying to improve Gaza's economy, for Hamas-some of the group's leaders
some of its leaders also seemed amenable live there-will now mal<e it suspect. "The
Between a rocl, and a crocl, to a two-state solution. That would have whole strategy of Israel during the last de­
At first glance this would suggest enduring been a remarl<able shift for a group whose cade was to trust Qatar," says Mr Milstein.
support for Hamas. But such polls offer charter used to call for Israel's destruction. "One of the lessons we should learn from
only a binary choice between militants and Last year Bassem Nairn, a member of the this war is that we should not give Qatar
incompetents. Fully 80% of Palestinians group's political leadership in Gaza, told any more involvement."
want Mr Abbas to resign. Hours after the your correspondent that it was willing to Although Arab states do not want to se­
hospital explosion there were protests in accept "a state on 1967 borders". Ghazi Ha­ cure Gaza, they may be willing to help re­
cities across the West Bani<, where demon­ mad, another political official, said much build it. After the last big war, in 2014, do­
strators chanted: "The people demand the the same a year earlier. nors pledged $3.5bn for reconstruction
downfall of the president." He is 87 and has Such thoughts now seem naive. Mr Mil­ (though by the end of 2016 they had dis­
no clear successor. None of his would-be stein was one of the few prominent Israelis bursed just 51% of that). The bill will be
replacements inspires much enthusiasm. who warned, well before the massacre, that even bigger this time (see Finance section).
In a hypothetical race between Mr Hani­ Hamas's apparent pragmatism was just a The other question is what happens to
yeh and Muhammad Shtayyeh, the PA's ruse. His view, vindicated by awful events, the PA. Half of Palestinians tell pollsters it
colourless prime minister, the former is now a near-universal one in Israel. Even should be dissolved. Doing so would de­
would win by a 45-point margin in Gaza if Hamas were willing to tal<e part in peace prive many of them of an income (the PA is
and 21 points in the West Bani<. Again, this tall<s, an angry, grieving Israeli public the largest employer in the West Bani<) and
is less a testament to Mr Haniyeh's popu­ would not be a willing partner: the vast probably lead to more violence. But it
larity than to Mr Shtayyeh's lacl< of it: a poll would also raise the costs of Israel's occu­
in 2019, after his first 100 days in office, 25 km pation and, perhaps, force Palestine's long­
found that 53% of Palestinians did not even term future bacl< onto Israel's political
l<now he was the prime minister. agenda after two decades in which it was
D
Open-ended questions yield more tell­ rarely discussed. "It's the only card he has
ing results. When the PCPSR asl<ed Pales­ • Nablus left," says a former confidant of Mr Abbas.
tinians to name their preferred successor Tel Aviv.
There is no lasting solution for Gaza
to Mr Abbas, a plurality said they did not alone. Despite the long schism, Palestin­
l<now. The second most popular answer, in Mediterranean Sea
ians there still see themselves as part of a
both the West Bani< and Gaza, was Marwan larger polity. Anyway, the strip is too small
Barghouti, a member of Fatah serving mul­ Jerusalem
Municipal
--'I':" l and bereft of natural resources to thrive by
tiple life sentences in an Israeli prison for boundary
itself. Its economy depends on Israel's:
orchestrating terrorist attacl<s in which Is­ Hebron everything from strawberry farms to furni­
• Dead
raeli civilians were l<illed. Several of the Gaza ture factories relies on exports to its
Sea
other top choices, such as Mr Dahlan and Strip wealthier neighbour. Whoever tal<es con­
Khaled Meshal, a former Hamas leader, do trol, Gaza will be neither stable nor prospe­
not even live in the Palestinian territories. IS RAEL rous as an isolated statelet.
Exiles, prisoners-or no one: Palestin­ EGYPT The only way to bring enduring quiet to
ian political life is moribund. Palestinians Gaza is through a broader settlement of the
blame this sorry situation on Israel, argu­ West Bank, areas of control, 2023 Israeli-Palestinian conflict. If the prospect
ing that the lacl< of meaningful peace tall<s
has deprived the PA of its raison d'etre. "I
■ Palestinian Palestinian/Israeli Israeli
of a negotiated solution evaporates com­
pletely, warns Mr Khatib, "with it, moder­
Jewish settlements (including planned expansion)
thinl< Mr Abbas will be the last Palestinian ate leadership will vanish." Israel can de­
Israeli separation barrier - Built - Planned
president," says Mr Khatib. "The whole capitate Hamas. But it is far less clear that
Source: OCHA
idea of the Palestinian Authority is that it's anything better will tal<e its place. ■
 United States The Economist October 21st 2023 23

Mental health cratic governor, Gavin Newsom, called the

From tents to hospitals

bills "a paradigm shift" and a message to
voters that policymal<ers intend to clean
up the streets. California's new laws also
exemplify two broad shifts in mental
health care in America: the building of
more beds for patients suffering from
OAKLAND
mental illness and drug addiction, and an
American states are wrestling with how to treat severe mental illness.
expansion of involuntary treatment.
California wants to lead the way
First, consider the billions that Ameri­

W HEN AISLINN BIRD is not treating pa­

tients at her health clinic in down­
town Oal<land, she goes to see them where
This hazardous combination of drug use,
mental illness and the physical hardship of
sleeping rough has increased homeless
can states are pouring into facilities to
treat and house mentally ill people. One
bill Mr Newsom signed into law will put a
they live: in homeless encampments. deaths in big cities across the country. $6.4bn bond measure to help build more
Many of them sleep in tents under train Some 2,200 homeless people died in LA than 10,000 treatment beds and housing
tracl<s or highway overpasses. "If a big County in 2021, an increase of 70% from units on the ballot for Californians to vote
trucl< comes by or if the...train goes by, I 2019. The daily tragedies playing out on on in March. When asl<ed what happens if
have to stop the interview because then I America's streets are also changing the pol­ Californians do not go for it, Mr Newsom
can't hear my patients," she says. It's hard
11 itics of homelessness in liberal states-and told The Economist that he cannot imagine
to create a therapeutic environment out nowhere more than in California. it failing. His message to voters is "Vote no
here." Dr Bird is part of a growing group of A slate of reforms signed into law last if you believe in the status quo." Kathy Ho­
psychiatrists practising street medicine. weel< in California is meant to tacl<le this chul, the governor of New Yorl<, set aside
Her teams frequent encampments around problem. Standing at a podium that read $1bn in her 2024 budget for psychiatric
Oal<land, offering homeless people every­ "Treatment not tents", California's Demo- hospital beds and longer-term housing.
thing from regular checl<-ups to treatment The Texas legislature allocated some $2bn
for mental illness and drug addiction. over the next two years to build and main­
➔ Also in this section
More than a quarter of homeless Cali­ tain mental-health hospitals.
fornians recently surveyed by the Univer­ 24 The House speaker mess It is rare that Texas and California agree.
sity of California in San Francisco said they But three things have raised the profile of
25 Michael Flynn's flying circus
had been hospitalised for mental illness. mental health among Americans of all
Two-thirds said they were currently strug­ 26 Roe, your own way stripes: the anxiety and isolation many felt
gling with a mental-health condition, during the covid-19 pandemic; the destruc­
26 A proper pint
ranging from anxiety to hallucinations. tion opioids have wrought; and the visible
One third of respondents said they regular­ 27 Teaching teachers to shoot suffering of unsheltered homeless people
ly use methamphetamine, which can with mental illness. The need is also im­
28 Lexington: Why Biden abides
cause psychosis al<in to schizophrenia. mense. The number of psychiatric beds per►►
24 United States The Economist October 21st 2023

► person in America is low compared with policymal<ers stress that involuntary treat­ House Republican, gave up. But Mr Jordan
much of the OECD, a club mostly of rich ment should remain a last resort. Their fell short during a full House vote on Octo­
countries. America has less than half as hope is that the expansion of beds mal<es it ber 17th. He lost even more support in the
many beds per person as France. more lil<ely that people suffering from second round of voting. The top job always
Mr Newsom describes his overhaul as mental illness get the level of care they seemed an odd fit for a conservative fire­
fulfilling a promise made by then-gover­ need, and avoid languishing in jail or hos­ brand lil<e Mr Jordan. A former Republican
nor Ronald Reagan in the 1960s to replace pital for want of a safe alternative. speal<er once called him a "legislative ter­
overcrowded, often abusive state-run in­ The neglect that California showed its rorist", and after nearly 17 years on Capitol
stitutions with smaller, local facilities. Yet most vulnerable when the institutions Hill the Ohioan had yet to be the primary
after Reagan, rightly, closed the asylums were closed is a prime example of good in­ sponsor of a bill that became law.
and expanded patients' rights, he failed to tentions gone wrong. Decades later, Mr Perhaps Mr Jordan will find a way. He
fund community care. When Reagan be­ Newsom hopes California can provide had not dropped out by the time this issue
came president, the country followed Cali­ America with a model for how to fix things. was published, though many House Re­
fornia down this road. But blaming Reagan He refers to the rest of his term as "the great publicans were already lool<ing elsewhere.
ignores the nearly 50 years of inaction implementation". His focus on beds ech­ Some lawmal<ers even began weighing a
since he left Sacramento, the state capital. oes those who spend the most time among more quixotic measure: empowering the
"The failure of successive state govern­ homeless and mentally ill Californians. interim speal<er.
ments to uphold the community funding When asl<ed what would mal<e her job easi­ Patricl< McHenry became speal<er pro
promise is one of the main reasons people er, Dr Bird laughs. Without any hesitation, tempore on October 3rd after being hand­
are suffering so badly today," says Darrell she answers: "More housing."■ picl<ed by the recently removed Kevin Mc­
Steinberg, the current mayor of Sacramen­ Carthy. The ten-term congressman from
to and an advocate for reform. North Carolina embraced a limited role in
The other stril<ing feature in California House Republicans his unprecedented position and did little

Hail McHenry
is the expansion of involuntary treatment. more than oversee the election of a new
Mr Newsom signed a law on October 10th, speal<er. But with no end to the Republican
SB 43, that loosens the criteria for people to impasse in sight and critical legislative
be placed in a mental-health conservator­ deadlines approaching, tall< of expanding
ship, in which a person appointed by the Mr McHenry's power has grown louder.
state directs their care. Its passage follows To do so, the House would have to pass a
WASHINGTON, DC
the creation last year of CARE Court, a pro­ simple resolution giving Mr McHenry
The House of Representatives still
gramme that allows health worl<ers, police more authority. "That would basically just
needs a speal<er
and family members to enroll people with empower McHenry to be able to do things

J
psychosis in court-mandated treatment. OHN MCCAIN, the late senator from Ari­ lil<e bring bills to the floor and conduct
Alex Barnard of New Yorl< University, who zona, lil<ed to jol<e that the approval rat­ some basic business of the House," says
is tracl<ing state laws that expand forced ing for America's Congress had fallen so Molly Reynolds of the Brool<ings Institu­
treatment, finds that reforms are clustered low that legislators could expect support tion, a thinl<-tanl<. This is not a permanent
in coastal Democratic states such as Cali­ only from "paid staffers and blood rela­ solution and his expanded powers would
fornia, Oregon and Washington that are tives". McCain's old line seemed closer to almost certainly come with an expiry date.
recl<oning with very visible displays of reality than hyperbole as the House began But members in both parties could find
mental illness among homeless people. its third weel< without a speal<er. Yet, un­ something to lil<e with this short-term fix.
Growing anger from voters helps ex­ lil<ely as it seems, good legislation still has Mr McCarthy lost his job after negotiat­
plain why Democratic politicians in liberal a chance to pass despite the House Repub­ ing a temporary extension of government
states are grasping for policies usually as­ licans' dysfunction. funding. Mr McHenry, not long for the job,
sociated with law-and-order Republicans. Jim Jordan, a hard-right Ohio congress­ could oversee the passage of a long-term
Civil liberties and disability rights groups man, became speal<er-designate on Octo­ funding bill-something the permanent
are fighting the political tide. They argue ber 13th after Steve Scalise, the number two speal<er should then be grateful for, even if
that SB 43 and CARE Court infringe on pa­ he votes against the legislation. Many Re­
tients' freedoms and bodily autonomy. publicans, however, would ball< at giving
Disability Rights California, a non-profit, up what they consider one of their main
worries that the laws will unfairly target points of leverage against the White House
blacl< Californians, who are disproportion­ and Democrat-controlled Senate.
ately represented among the state's home­ Strong bipartisan majorities in Con­
less population, and will traumatise peo­ gress also support more aid for Israel and
ple. They have a point. The evidence for the Ul<raine, but a growing anti-Ul<raine bloc
efficacy of involuntary treatment is mixed. has held up support while remaining assis­
"They're simply wrong," Mr Newsom tance dwindles to dangerously low levels.
says of the civil-rights groups. "Looi< The White House reportedly plans to asl<
what's happening on the streets. It's night Congress for $1oobn to fund a mix of secu­
of the living dead in the Tenderloin in San rity priorities, including money for Israel
Francisco... and people are dying." He sug­ and Ul<raine, potentially to last until the
gests that the extreme libertarianism dis­ 2024 presidential election.
played on the streets is an embarrassing "It's time to end the Republican civil
abdication of state responsibility. To the war, and in order to do that all options are
governor and his allies, these new laws on the table," Hal<eem Jeffries, leader of the
represent a move towards the centre and a House Democrats, told Politico. Other
recommitment to a social contract. To his Democrats expressed an openness to ele­
opponents, they reel< of state overreach. vating Mr McHenry for the purpose of
Even while trumpeting the new laws, Pro the temporary speaker avoiding a shutdown or passing bipartisan►►
 The Economist October 21st 2023 United States 25

►legislation.John Boehner and Newt Ging­ mostly obscure speal<ers get about 15 min­ lens. Forces of good and demonic evil are
rich, former Republican speal<ers, have en­ utes each to stol<e one menace or another, constantly struggling. (A third of evangeli­
dorsed the idea, as have some moderates for 15 hours straight. The tour is a stew of cals hold this worldview strongly, accord­
still in Congress. Dave Joyce, leader of a apocalyptic sermonising, QAnon and elec­ ing to surveys by Paul Djupe of Denison
centrist faction, said that "by empowering tion denialism. University in Ohio.)
Patric!< McHenry as speal<er pro tempore The point, if there is one, is to over­ The disposition dovetails with and pro­
we can tal<e care of our ally Israel until a whelm-or as Steve Bannon, a banl<er­ pels lots of conspiracies. That is not new:
new speal<er is elected." turned-provocateur once described the in 1991 Pat Robertson, a Baptist televange­
Various procedural gimmicl<s could way that disinformation operates, to list, published "The New World Order", a
slow the process. Mr McHenry, perhaps "flood the zone with shit". A former mar­ bestseller about how a cabal of elites was
fearing a potential primary challenge, l<eting manager for a hotel chain who bills bent on creating a totalitarian govern­
might oppose the scheme himself. But, herself as a "geopolitical expert" tall<ed of ment. Apocalyptic tropes figure heavily in
recl<ons Matt Glassman of Georgetown Iranians posing as Venezuelan asylum­ QAnon, which is more popular among
University, "if a majority is hellbent on em­ seel<ers to infiltrate and attacl< America white evangelicals than just about any
powering McHenry, they will be able to do ("We will be the next Israel"). Someone other religious group.
it." The past month has been one of sur­ pitched precious metals as an alternative Politicians long ignored conspiracists.
prises, generally unpleasant. Maybe the to central-bani< digital currencies: the idea They tended to vote at lower rates: why par­
biggest of all would be all this chaos ending being that the government can turn off ticipate if you thinl< the game is rigged? In
with some responsible governance, even if your money should you misbehave, so put surveys after the 2012 election, Joseph Us­
it proves short-lived. ■ it in gold or silver. "Tl1ere are lots of threats cinsl<i of the University of Miami found a
out there-I could tallc for three hours!" ex­ self-reported turnout gap of 23 percentage
claimed another speal<er as her 15 minutes points between people with low and higl1
End times of blame ran out. predispositions to conspiracy.

Michael Flynn's
Michael Barl<un, a political scientist at During his campaign Mr Trump legiti­
Syracuse University, wrote of the princi­ mised the latter group by suggesting,

flying circus
ples underlying conspiracism: nothing among other nonsense, that Baracl< Obama
happens by accident, nothing is as it had been born abroad and that Hillary
seems, and everything is linl<ed. Connect Clinton had tal<en bribes from Russia. In
the dots and a hidden, malevolent scheme surveys by Mr Uscinsl<i after the 2016 elec­
TRUMP NATIONAL DORAL, MIAMI
emerges. Such thinl<ing is correlated with tion, the gap closed. It is not so much that
Part of Donald Trump's base thinl,s he
feelings of powerlessness and anxiety. Mr Trump persuaded lots of people to turn
is fighting a spiritual war
Conspiracy theories are perversely reas­ conspiratorial, recl<ons Adam Enders of

I N A HOTEL ballroom owned by Donald

Trump, barely an hour into a two-day
conspiracist tall<athon, your correspon­
suring, then: events become ordered rath­
er than random. Educated, establishment
types are the dupes. There may be evil at
the University of Louisville. Surveys of
such thinl<ing are pretty stable over time.
Rather Mr Trump activated existing beliefs
dent lost the plot. It happened amid calls worl<, but it can be resisted. A woman on a and connected them to politics.
for the audience to quit being "weal<-l<need cigarette breal< told your correspondent as Not that doom-mongering is exciting
wussies" and "join Team Jesus", and warn­ much: "We l<now everything. Every lie all the time, even among the most die-hard
ings about child trafficl<ers and poisonous l<nown to man was revealed to us alrea­ conspiracists at the ReAwal<en tour. As a
vaccines. What really did it, though, was an dy...The government is a mafia." pastor read from the Bool< of Revelation
invitation to approach the stage to be Tall< of a spiritual war suffuses such and described how to identify the coming
healed by a self-styled prophet resembling events. That mal<es sense: those evangeli­ Antichrist, the crowd thinned and flagged.
Ozzy Osbourne. cal Christians who believe in the end­ Phones came out. Some played Candy
Later one of Mr Trump's sons tool< to the times-when Jesus ,1/ill return to Earth, Crush, others shopped online. "Are you all
podium. Worship music played; several battle the Antichrist and save the faithful­ awal<e?" came a call from the stage. Then
hundred hands went up in prayer. Some­ often see the world through a Manichean more pleadingly: "Are we doing alright?" ■
one blew a shofar, a trumpet used inJewish
rituals that is popular among some charis­
matic Christians. Was this a Trump rally, a
religious revival or a gabfest about how
globalists had spread covid-19 to suspend
civil liberties? Was it all of those things?
The man selling ticl<ets over the phone-at
a recommended price of $250, or pay what
you wish-had offered just two instruc­
tions. No masl<s allowed and please leave
guns in the car.
The event was part of the ReAwal<en
America tour, a roadshow helmed by Mi­
chael Flynn and born of protests over locl<­
downs and election "theft". (Mr Flynn
served as Mr Trump's first national securi­
ty adviser, was prosecuted for lying to the
FBI, then pardoned by his ex-boss.) This
was the 21st incarnation of the event and
the second at Mr Trump's hotel in Miami;
previous stops around the country have
largely been at megachurches. Dozens of Flynn's fancies
26 United States The Economist October 21st 2023

Abortion laws

Roe, your own way The empire strikes back

CHICAGO

Americans are discovering the joy of a true pint of beer

A
COLUMBUS, OHIO
T THE BARS of the United Centre, a beers sold in individual cans in conve­
Ohio's ballot initiative is the latest test
sports arena on the near west side of nience stores, up from less than 10% six
of how to tall, about abortion
Chicago, the default drinl< available is years ago. Though most beer sold in

N ESTLED BETWEEN decorative gourds

and halloween ornaments on subur­
ban Columbus lawns, signs encourage
Modelo, a Mexican lager that in May
became America's best-selling beer. But a
popular alternative is a craft beer sold in
shops is still in 12oz six-pacl<s, and in
16oz measures (an American "pint" ) in
bars, the true British pint has crowded
Ohioans to vote to "protect parents' rights". cans from a fridge behind the bar, called out other heftier-sized brews, at least
Leaflets declare that mums and dads have "Tropical Beer Hug". Adorned with a when it comes to craft beers. Besides
"too much to lose". Only the flyer's reverse picture of a cartoon bear wearing sun­ convenience stores, the format is becom­
reveals the threat: not a wol<e curriculum glasses, the marl<eting is memorable. But ing ubiquitous at America's music festi­
or ideas around gender, but abortion. to your British correspondent, the more vals, sports events and other places
On November 7th Ohio will become the stril<ing part is the size of the cans. Each where customers have to picl< up a drinl<
latest state to vote on adding a right to an one contains 19.2 us customary fluid and carry it around.
abortion to its state constitution. Current­ ounces of beer. That is 568ml in metric Why would Americans be turning to
ly abortion is accessible up to around via­ measures. But more importantly, it is 20 proper pints? T.J. Annerino of Goose
bility-but only while a six-weel< ban is lit­ Imperial fluid ounces, l<nown in Britain, Island, the Chicago-based craft brewery
igated in the courts. Six other states have Ireland and a few other former British that sells the Tropical Beer Hug, says that
voted on abortion since the Supreme Court
. . .. . ,,
terr1tor1es as one pint . the initial motivation came from conve­
overturned Roe v Wade last year. In each, In the past five years or so, the 19.2oz nience stores. But demand has been
voters have opted to protect access, includ­ can of beer has soared in popularity "phenomenal". He speculates that 19.2oz
ing in conservative states lil<e Kansas and across America. According to data ana­ sells because it is large enough that
Kentucl<y. More states are expected to vote lysed by Molson Coors, a big brewing drinl<ers do not need to return to the bar
next year, possibly including Arizona, firm, pint cans now mal<e up 92% of craft (or fridge) too soon, without being so
Florida and Missouri. This has given rise to large as to get warm and stale in one's
a cottage industry of pollsters and politicos hand. Hence the success at gigs and
who travel from state to state with each sports events. Andrew McGuire of Mol­
ballot initiative. Ohio is the latest testing son Coors argues that the size is ideal for
ground, as anti-abortion campaigners try people who want to try a new beer along­
to breal< their losing streal<. side a familiar six-pacl<. Many new can­
Rather than sepia-toned images of new­ ning machines tend to include the size as
borns, teenagers and parents' rights are the a default, which means it is easy for
focus of the campaign. Anti-abortion ad­ brewers to produce without extra cost.
vocates argue that language in the pro­ Beer-industry types generally refuse
posed amendment is so broad that it could to admit any direct inspiration from
invalidate Ohio's law requiring parents' British measures. "19.202 cans are widely
permission for underage abortions. That popular within the United States, and
seems a stretch, but the anti-abortion cam­ have been for a while," sniffs Melody
paign is trying to activate fears around pa­ Gregson, at American Canning, which
rental rights that have electrified school­ sells both tins and the machines to fill
board meetings across the country. them. None calls the measure a pint;
More familiar anti-abortion arguments some insist on calling it a "stovepipe".
get second billing. Adverts with local But perhaps they just need to drinl< a few.
mums and unsettling music state that the As James Joyce, a novelist, once wrote,
proposed amendment, which would re­ "the sacred pint alone can unbind the
turn the regime to something lil<e the sta­ 19.2 customary fluid ounces tongue." Chin chin.
tus quo under Roe, would be too "extreme
for Ohio". They raise the spectre of late­
term abortions, which are rare but unpop­ the amendment. "That's not actually true." have made passing the abortion amend­
ular. The campaign avoids mention of the But perhaps the biggest difference is the ment harder. That vote failed, buoying
six-weel< ban, which was in place for sever­ strength of the Republican Party in Ohio. abortion-rights advocates.
al weel<s last year. Many state offices are controlled by Repub­ The popular governor, Mil<e DeWine, is
The campaign also claims to have licans who have fought the abortion campaigning against the amendment. But
learned lessons from losses in other states. amendment. Dave Yost, the attorney-gen­ he has also joined a group of Republicans
Its strategists say it began preparing earlier eral, has released a legal analysis of the urging moderation on abortion. If the
and is trying to build a diverse coalition, amendment that echoed many of the cam­ amendment fails, he wants to "find a place
which includes blacl< pastors. "There's a paign tall<ing points. The Ohio Ballot where a majority of Ohioans can, in fact,
misrepresentation of the pro-life commu­ Board, which has a Republican majority, agree." Still, lil<e Donald Trump, the former
nity that it's an old white guy who is telling rewrote the summary on the ballot to re­ president, who said that a six-weel< ban "is
a woman what to do," says Brian Williams, place the word "fetus" with "unborn child". a terrible thing", Mr DeWine has avoided
a pastor at a predominantly blacl< church Earlier this year, the state assembly pro­ saying what a compromise could lool< lil<e,
in Columbus, who is campaigning against posed its own referendum which would or how it could pass. ■
 The Economist October 21st 2023 United States 27

Shooting school charged through the halls. With only sec­

onds to respond, the teachers slammed
Algebra and pistols doors, tool< cover behind whatever they
could find and fired their paintball rounds
at the intruders as they entered.
"If someone comes in your classroom,
shoot 'im," said Sheriff Smith to the train­
ees minutes before the scenario began. "If
SPANISH FORK, UTAH
someone else steps into your classroom,
Teachers are learning how to properly carry guns into their classrooms well, shoot them too." The scenario was ov­

N ESTLED AMONG golden-coloured earth

and desert scrub, the Thistle Gun
Range, an hour's drive south of Salt Lal<e
Smith says that officers found weapons
stored in desl< drawers and inside purses
where pupils could easily find them. "They
er in a few seconds, but many of the teach­
ers were breathless for minutes after. "I'm
shal<ing," said Rachel Wall<er, a testing ad­
City, gives off "wild-west" vibes. Add the didn't have any training, any policies, any ministrator. "You get a dose of adrenalin!"
wind softly blowing through thigh-high procedure in place to govern how they use It is unlil<ely that a teacher in a class­
weeds, the sound of gunshots ringing that weapon, which I thinl< is a recipe for room will face an armed intruder, but every
through the canyon and six-foot-tall depu­ disaster," he says. So when he became sher­ teacher carrying a concealed weapon must
ties from the Utal1 County Sheriff's depart­ iff of Utah County a few years after the be prepared every day to l<eep their weapon
ment wearing cowboy hats, and it is easy to hoax, he created the teachers' academy. out of sight and out of pupils' hands. For
see why your correspondent felt immersed The 20-hour-long course over six ses­ women, carrying a concealed weapon can
in a western. Only this was no rodeo. It was sions provides instruction on much more be tricl<y. They are usually smaller and
a live range day for teachers and other than just shooting guns. It covers emer­ curvier than men, which mal<es concealing
school staff learning how to shoot. gency medical techniques, self defence, a weapon at the hip harder. They also tend
Since 2019 Sheriff Mil<e Smith of Utah tactical de-escalation, mindfulness and to wear tighter clothing, sometimes with­
County and his colleagues have taught more. Then the shooting happens. One out suitable pocl<ets. Teachers of younger
teachers how to defend themselves against class is spent in a simulator where the pupils must be particularly careful, as little
active shooters. That includes learning teachers practise responding to an active­ children tend to give waist-level hugs.
how to safely carry and use a concealed shooter situation. The last day of the Gun manufacturers have started cater­
weapon inside schools. In the state of course involves a live range day during ing to women, says Deputy Beth Gerber to
Utah, school staff can carry a concealed which the teachers finally get to shoot her trainees, now at their final station for
weapon if they have a permit, but this li­ their loaded guns. the day. Her friend carries her gun in a bra
censing process is not enough, says Sheriff Those in the most recent cohort spent holster called the "flashbang". It nestles the
Smith. "You don't actually have to go shoot the live range day rotating between four weapon underneath her ample bosom, she
a gun and show that you can proficiently stations over five hours. Most of the time says. To retrieve it, she lifts up her shirt
hit a target in a classroom setting." Teach­ was devoted to perfecting shooting tech­ (flash), then grabs the gun (bang).
ers are also not trained how to respond to nique with live rounds on lifeless targets, With or without proper training, teach­
an active shooter or carry a weapon in a but one heart-thumping station lool<ed ers across the country are carrying guns
school. His class aims to do that. lil<e a scene from a Jason Statham film. It into schools. About 30 states allow teach­
Sheriff Smith realised he had a problem tool< place in a multi-room training facility ers and administrative staff to carry fire­
several years ago when he and more than used to train SWAT teams in many scenari­ arms on school grounds. Sheriff Smith says
200 officers responded to an active-shoot­ os, including those involving shooters in that teachers leave his course thinl<ing
er situation at a school. It was a hoax, but schools. The teachers, this time armed more critically about this, especially after
he was still disturbed by what he saw. Be­ with paintball guns, ,1/ere stationed inside going through the practice scenarios and
cause of Utah's law on carrying concealed the rooms. Armed aggressors, played by of­ accidentally putting a bullet where one
weapons in school buildings, some of the ficers using blanl< rounds while dressed in should not have gone. "I thinl< I would lil<e
teachers that day were armed. Sheriff darl< protective gear from head to waist, to get my conceal-carry [permit], but I
don't thinl< I would tal<e it to school," says
Russell LeMon, a high-school history
teacher and military veteran, on his final
training day. "That scares me a little bit.
Too much liability."
Protecting schoolchildren from gun vi­
olence is difficult. America is the only
country where people are outnumbered by
civilian guns. According to EdWeel<, a news
organisation that covers education, there
have been 33 school shootings with inju­
ries or fatalities so far this year.
"It's a sad reality that our teachers have
to worry about somebody coming into
their school to l<ill them," says Sheriff
Smith. Some gun advocates say the only
thing that stops a bad guy with a gun is a
good guy with a gun. These teachers are liv­
ing that slogan. "These are normal, every­
day, average people. These aren't 'gun
nuts'," he says. "They want to do what they
What it has come to can to l<eep their l<ids safe." ■
28 United States The Economist October 21st 2023

Lexington Why Biden abides

His approach to backing Israel is facing its most severe test

Mr Biden has followed his own playbool<. In May 2021, when
Ham as barraged Israel with rocl<ets from Gaza, he did not call for
restraint or a ceasefire, as past presidents probably would have.
Rather than try to box in Mr Netanyahu publicly, a step that could
bacl<fire, he voiced support for Israeli air stril<es, while in phone
calls over eleven days he questioned the prime minister about his
strategy, to show him he had no clear endgame, according to "The
Last Politician", a new bool< on the Biden presidency by Franl<lin
Foer. On the fourth call, as Mr Netanyahu continued insisting the
Israeli operation was not done, the president told him time was
up. "Hey man, we're out of runway here," Mr Biden said, according
to Mr Foer. "It's over." Mr Netanyahu agreed to a ceasefire.
Michael Oren, who as Israel's ambassador in Washington dur­
ing most of the Obama years relied on Vice-President Biden to be
his point of contact, says Mr Biden's connection with Mr Netanya­
hu is less about chemistry than history-their own shared past,
and Israel's. Mr Bid en "remembers the six-day war, he remembers
the '73 war, " Mr Oren says. "There's a saying, 'He has Israel in his
heart.' It's very personal with him."
That is less and less true generally of Democrats, who have
their own divisions over foreign policy. Some on the party's be­
nighted leftist fringe celebrated the massacre of Israeli civilians,

J OE BI DEN has a temper. He vents it sometimes on aides when he

is unhappy with their worl<, and occasionally even on voters
who have the nerve to criticise him. But when it comes to building
and members of the growing anti-Israel faction of House Demo­
crats began almost immediately calling for a ceasefire. Mr Biden
recognised this would be not just a political impossibility for Isra­
relationships to achieve his goals over the long term, whether el, but a strategic and moral one.
with a wayward legislator or an oppositional foreign leader, Mr Bi­ Yet while Mr Biden has been forthright that Israel has not just a
den has long demonstrated unusual patience and forbearance. right but "a duty" to defend itself, he has also been deft in urging
So it was in 2010 when, as Baracl< Obama's vice-president, he restraint. In a speech three days after the Hamas assault, he said he
landed in Israel only to be blindsided by an announcement from and Mr Netanyahu had discussed "how democracies lil<e Israel
the government of Binyamin Netanyahu that, contrary to the and the United States are stronger and more secure when we act
wishes of the Americans, it intended to expand Jewish settle­ according to the rule of law." The American president had not de­
ments in East Jerusalem. This seemed a deliberate humiliation, manded anything, in other words; the two leaders had instead re­
and some of President Obama's aides thought Mr Biden should committed themselves to a shared value.
turn around and head home in protest. But Mr Biden had begun
developing a relationship with Mr Netanyahu in the 1980s, when Palestinians have politics, too
he arrived in Washington to serve at the Israeli embassy, and the Now comes the hard part, of course. Gazans are already suffering
vice-president had his own ideas of how to manage matters. and dying under Israeli siege and bombardment, and a ground in­
Mr Biden issued a statement criticising the move, then put to­ vasion will cause far more agony, as Hamas hopes. (Gazan civil­
gether a joint worl<ing group with Mr Netanyahu to contain the ians may be prisoners of Israel, but they are also hostages of Ha­
fallout. Then he and his wife Jill went to dinner with the Netanya­ mas.) And an invasion will increase the chance of a wider war. Mr
hus. According to Mr Netanyahu's own grateful account, Mr Biden Biden's judgment and ability to influence Mr Netanyahu are in for
spol<e that night about deeply personal matters, about how hard it a severe test.
had been to overcome the deaths of his first wife and their daugh­ And just as, once this crisis eases, Mr Netanyahu will face a
ter in a car crash. Mr Biden later gave the prime minister a photo­ recl<oning for Israel's failures of intelligence and operations, Mr
graph, scrawling a message on it that might serve as an epigram for Biden's Middle East policy deserves scrutiny. His decision to ease
much of the us-Israel relationship: "Bibi, I don't agree with a pressure on Iran and his attempt at a benign neglect of the Israel­
damn thing you say, but I love ya." Palestine conflict have ended in violence, albeit violence that has
Since Hamas attacl<ed Israel on October 7th, Americans have been a long time coming.
got the steady leadership most of them voted for in 2020, and they One can draw a line to this war in Gaza from the moment in
have been reminded of the pettiness and volatility they rejected. 2006 when Condoleezza Rice, then secretary of state, glanced up at
Donald Trump, who has not forgiven Mr Netanyahu for congratu­ the television news from her elliptical trainer and learned, to her
lating Mr Biden on winning in 2020, lashed out at the prime min­ shocl<, that Hamas had won elections in Gaza that she had been
ister, while Republicans in the House struggled to show they could promoting as spreading democracy in the Middle East. "I thought,
govern themselves, let alone a country. As Republicans bicl<ered ·well, that's not right,"' Ms Rice later told a biographer, Elisabeth
over who would be speal<er, their foreign-policy message became Bumiller. Four successive American administrations have paid
increasingly muddled, if not contradictory-critical of Mr Biden too little attention to the miseries of Palestinian life and the reali­
for endangering America by not helping Israel stand up to the ties of Palestinian politics. They have failed to buttress Palestinian
menace of Iran, yet also critical of Mr Biden for endangering institutions and reform-minded Palestinian leaders. A true friend
America by helping Europe stand up to the menace of Russia. of Israel would not mal<e that mistal<e again. ■
 The Americas The Economist October 21st 2023 29

A momentous election had a GDP per person higher than that of

Can Argentina's next president

Germany, Italy or France. Millions of Euro­
pean migrants flocl<ed to worl< on its fertile

fix the economy?

lands. "Riche comme un Argentin" became a
colloquialism to describe obscene wealth
by a landowning aristocracy. Today the
phrase is a jol<e. Germany's GDP per person
is now quadruple Argentina's. Neighbour­
BUENOS AIRES

Javier Milei still leads the polls. But the country needs more than dollarisation ing Chile's is almost a third higher.
According to the World Bani< between

T HERE ARE four types of countries in the

world: developed, undeveloped, Japan
and Argentina. Decades after the Nobel­
and swap the local currency, the peso, for
the dollar. His coalition, Freedom Advanc­
es, was created only in 2021. Ms Bullrich
1950 and 2016, the country experienced 14
recessions, defined as one or more consec­
utive years of negative growth (it has since
prize-winning economist Simon Kuznets also wants to balance the budget by cutting had another two). Over this period, for eve­
is said to have coined this phrase in the spending, beef up central-bani< indepen­ ry two years of growth, Argentina has had
1970s, Argentina still stands out for its ex­ dence and have a dual-currency system in one year of recession, a record more typical
ceptional record for high annual inflation, which both the dollar and the peso would of war-torn oil states (see chart 2). Reces­
which currently stands at a massive 138%. be accepted. sions not only happen frequently, but are
Could that be about to change? On October The third candidate is Sergio Massa, the deep. In an average slump, Argentina's GDP
22nd Argentines will vote in a presidential country's current economy minister, who, contracts 3.5% per year. The result is that it
election. For the first time in decades, two though part of a left-\ving Peronist admin­ is almost impossible to maintain econom­
of the three leading candidates are offering istration, is considered more centrist and ic growth. According to Martin Rapetti of
free-marl<et solutions to the country's has good relations with the IMF. If on Octo­ Equilibria, a consultancy in Buenos Aires,
many problems. ber 22nd no candidate obtains either 45% Argentina's real GDP per person was rough­
Those two candidates are Javier Milei, a of the vote or 40% with a ten-percentage­ ly the same in 2020 as it was in 1974.
libertarian who is leading the polls, and Pa­ point lead over the runner-up, a run-off Argentina has defaulted nine times on
tricia Bullrich, a centre-right former secu­ will ensue in November. its sovereign debt since it became inde­
rity minister who is the candidate for To­ Argentina's decline has been gradual pendent in 1816, including three times
gether for Change, the main centre-right and mostly self-inflicted. A century ago it since 2000. This has led it to be shut out of
coalition (see chart 1 on next page). Mr Mi­ international capital marl<ets. Administra­
lei, who wields a chainsaw to symbolise tions have either forced the central bani< to
➔ Also in this section
his approach to the state, has promised to print money to finance the deficit, or tal<en
slash public spending by 15% of GDP (it is 32 Bernardo Arevalo battles on out debt with multilateral lenders to l<eep
currently around 40% of GDP), scrap most spending going. Since 1956, when it joined
32 Sanctions lifted on Venezuela
taxes, privatise state-owned companies the IMF, Argentina has been involved in 22 ►►
30 The Americas The Economist October 21st 2023

► bail-out programmes. It now owes the

fund $43bn.
greenbacl<s. They are thought to hold at
least $25obn in offshore accounts or under
-
Two steps forward, one back
The country's economic problems have the mattress, the equivalent of more than a GDP growth, ratio of negative years to positive*
mostly been caused by its politics. Since third of GDP. 1950-2023
1930 Argentina has had six military coups, Unsurprisingly, confidence in govern­ 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7
which have impeded the regular function­ ment is at a 20-year low. Corruption is ram­
Libya
ing of the courts and the legislature. Even pant. In December the powerful vice-presi­
Argentina
in democracy, institutions have been un­ dent, Cristina Fernandez de Kirchner, who
dermined. Populist presidents have fired was president between 2007 and 2015, was Syria
central-bani< chiefs at will and expropriat­ sentenced to six years in jail for defrauding Iraq
ed dozens of private companies. Between the state of $1bn (she denies wrongdoing Chad
2007 and 2014, when a particularly left­ and has appealed against the decision). In Congo
wing strand of Peronism was in power, the September, Martin Insaurralde, the chief of Sudan
government published bogus inflation sta­ staff for the governor of Buenos Aires prov­ Venezuela
tistics and fined economists who divulged ince, the country's most populous state,
*Countries with full data records from 1950-2023
their own estimates, which were often was tagged in photos tal<en by an escort of Source: The Conference Boa rd
more than double the official one. the two of them on a yacht. He and his ex­
The current Peronist government has wife are being investigated on suspicion
created or increased at least 27 taxes, often that they evaded taxes and laundered up to try's fortunes around for a decade. Today,
by decree. At least seven new exchange $1oom into property, which they deny. tall< of cutting public spending is not turn­
rates have been invented under this ad­ More than half the population is esti­ ing off voters but attracting new ones. ''The
ministration. In the run-up to the election, mated to get some form of government political rhetoric has changed, people's ex­
Mr Massa abolished income taxes for 99% welfare. Many of these handouts are ineffi­ pectations have changed," says Fernando
of registered worl<ers, increased wages for cient. A programme introduced in 2020 Marull, a consultant in Buenos Aires.
public employees and handed out a bonus which aims to bring casual worl<ers into Mr Marull also notes that certain sec­
in pesos worth $100 (converted at the offi­ the formal marl<et reaches almost 1.3m tors-such as mining, oil and gas and
cial exchange rate) for pensioners. people-yet only around 15,000, or 1.2% of tech-are booming. The country has one of
Populism has contaminated trade, too. recipients, have so far found formal jobs. the world's biggest reserves of lithium.
Successive Peronist administrations have According to the Inter-American Develop­ Rystad Energy, a consultancy, estimates
cut the country off from international ment Bani<, administrative inefficiencies that oil output in Argentina will more than
commerce in order to protect worl<ers and mean that Argentina's government loses double to 1m barrels per day by 2030. Even
l<eep domestic prices down. Trade as a per­ an amount worth over 7% of GDP a year be­ in dollar terms the local stocl< marl<et has
centage of GDP is just 33%, among the cause of leal<s in welfare transfers, waste­ risen by almost 75% over the last year.
world's lowest (it is 84 % in Mexico and ful public procurement and waste in em­
64% in Chile). Such governments have also ployee remuneration. This is more than Get the chainsaw!
bashed the country's main export sector, any other country in Latin America. Yet positive headwinds may not be enougl1
agriculture, as an oligarchy, and sought to Though inefficient, these welfare pay­ to save Argentina. "Argentina's principal
hobble it by imposing export restrictions ments continue because they are essential problem is political," says Mr Rapetti. An
on farm produce. Exports of soya, the to the way politics functions. Middlemen addiction to charismatic leaders who co­
country's main product, are taxed at 33%. l<nown as punteros, \vho are in charge of opt state institutions rather than build po­
All of this means that most Argentines distributing social handouts, also mal<e litical consensus has made it impossible to
prefer to do things off the bool<s. Banl<s, sure their recipients vote for the right par­ implement good policies and maintain
which in the past have effectively confis­ ty. In September one puntero was arrested them over time. Other countries in Latin
cated savings under government orders, in Buenos Aires province while he was America have managed to stabilise their
are avoided. Domestic credit to the private withdrawing money \Vith 48 different deb­ economies by creating independent cen­
sector is only 11% of GDP, compared with it cards that belonged to local legislators. tral banl<s, targeting inflation and getting
83% in Chile. Nobody trusts the local cur­ Police suspect he was acting on behalf of their fiscal accounts in order. All this led to
rency. Though the country has had five dif­ politicians to buy votes. Argentina's feder­ stable currencies. It is unlil<ely that a simi­
ferent currencies in as many decades, Ar­ al structure also encourages clientelism, as lar combination of policies could be imple­
gentines have long preferred to save in presidents jocl<ey for the support of the mented quicl<ly in Argentina, because of

-
Javier's to lose?
country's 23 powerful governors.
Such potential sl<ulduggery has benefit­
ed Mr Milei, who gained fame by railing
years of distortions and handouts. Painful
economic policies are also lil<ely to lead to
massive protests.
Argentina, voting intention in general election,% against politicians as a "caste" who steal In the presidential primaries for this
50 from hard-worl<ing foll<. His team is most­ election, candidates who advocated broad
ly made up of political novices, though coalitions as the basis for macroeconomic
Juntas par el Cambia 40 some are well-regarded economists. stabilisation fared badly. Instead, voters
(Centre-right) The rise of the libertarian has raised plumped for Mr Milei, whose radical dol­
30 hopes among some analysts. Ramiro Blaz­ larisation proposal could be a quicl< fix for
Union par quez of BancTrust, an investment bani< inflation, but will not solve the country's
la Patria (Peronist) 20 which focuses on Latin American debt, underlying decay. Mr Milei's party is not
����;-- thinl<s that the fact that two of the leading expected to get a majority in Congress.
La Libertad Avanza* • 10 candidates are proposing free-marl<et poli­ That could result in legislative gridlocl<.
(Right-wing) Primary cies is a good sign. He points out that, last Optimists believe that if the economic cri­
elections 0 time Argentina went through a similar sis gets bad enough, politicians from other
2021 22 23
economic crisis in 1989, which included parties would eventually line up behind
Source: National polls *Led by Javler Milei
hyperinflation, it ushered in a liberal gov­ him. Given Argentina's tracl< record, voters
ernment that managed to turn the coun- should not hold their breath. ■
 ■

01 rove

cancer care
■

er1ca
------------------------------- ' ' ,_

Supported by fJJ BeiGene

Cancer is a leading cause of death globally, families, but more broadly for societies
contributing to more than one in six deaths, and economies. Economist Impact's report
and incidence is expected to rise by 50% {/The Future of Cancer Care: Health-System
by 2040 as populations age. The situation is Sustainability in Latin America", supported
even more acute in Latin America, where the by BeiGene, explores the growing cancer
share of the population aged 65 years and burden in the region, the challenges this
older will more than double in the next three presents, and potential policy actions and
decades. That will have the knock-on effect of interventions that could help countries
increasing cancer incidence by an average of improve access, system sustainability and
64% across nine of the region's most populous patient outcomes.
countries-ranging from an increase of 42% in
The countries of Latin America are diverse,
Argentina to 98% in Guatemala.
as are their health-care systems, so a one­
In Brazil alone, the projected 68% increase size-fits-all solution is unlikely to deliver the
would mean about 1m newly diagnosed best outcomes. However, some common
cancer patients needing care each year­ approaches, such as bridging the equity
which would significantly impact its health gap in the private and public health sectors,
system. This huge influx of additional and investing in health-wo rkforce capacity­
patients will force countries to reconsider bui Iding, can help countries mitigate
how they prioritise resources in order to cancer incidence and increase access to
sustainably deliver high-quality cancer sustainable cancer care.
treatment, while maintaining care across
Find out more about what countries in
their wider health systems.
Latin America can do to reduce the impact
How countries adapt to this challenge has of cancer on patients, health systems and
implications not just for patients and their society at: econ.st/LATAM
32 The Americas The Economist October 21st 2023

Guatemala tober 14th an appeals court quashed the The deal, which was overseen by N oiway's

Democratic display
conviction of Jose Ruben Zamora, a promi­ government, was entitled a "partial agree­
nent investigative journalist who was sen­ ment". It initially appeared to be under­
tenced in June to six years on trumped-up whelming, albeit with some concessions.
charges of money-laundering. (But it also The document finally cleared the path for
ordered a retrial. ) the opposition to hold its primary elec­
The continuous challenges are hurting tions, scheduled for October 22nd. The op­
Semilla. Formed by a group of urban aca­ position will be allowed to choose its can­
GUATEMALA CITY
demics, the party ran its first round on didate "according to its internal rules." An

M
Bernardo Arevalo battles on
$20,000. It did not even have money to do approximate date was agreed for presiden­
ORE THAN two weel<s after protests internal polling. The party has no experi­ tial elections. These will be held in the sec­
began outside a drab government ence of holding power. It will hold only 23 ond half of 2024.
building in the capital of Guatemala, hun­ of 160 seats in Congress. Just getting Mr Maduro to agree to these
dreds of demonstrators are still in place. Still, Mr Arevalo should be able to mal<e small democratic steps had tal<en months
Amid flags and the noise of vuvuzelas, the his marl<. Alejandro Giammattei, the out­ of mostly secret negotiations. The day after
crowd camped outside the public prosecu­ going president, has strengthened the the deal was signed it finally emerged just
tor's office in Guatemala City calls for the powers of the presidency. "Guatemala's how he was cajoled. On October 18th, Presi­
resignation of a list of officials, starting public administration is so bad that even dent Joe Biden's administration an­
with Maria Consuelo Porras, the public using a few executive powers he could nounced that, with immediate effect, it
prosecutor. They are not alone. Since Octo­ drastically improve it," recl<ons Daniel would lift most of the restrictions placed
ber 2nd hundreds of Guatemalans have Haering Keenan of the Universidad Fran­ on Venezuela's energy, gold and financial
been blocl<ing roads across the country, cisco Marroquin in Guatemala City. And sectors. The state oil company Petr6leos de
protesting against those who appear to be the battle for Mr Arevalo has sparl<ed a de­ Venezuela SA (PDVSA), which has been un­
undermining democracy in the Central sire to protect democracy more generally. der sanctions since 2019, will be able to sell
American country. As Esteban Toe Tzay, an indigenous leader oil to whoever it chooses, with the excep­
Ms Porras, who has been put under who was at the protests, put it: "This is the tion of Russia. Some Venezuelan bonds
sanctions by the United States for corrup­ feeling of the Guatemalan people." ■ can be traded by American entities again.
tion (which she denies), is at the forefront The turnaround represents a signifi­
of a select group trying to stop the transfer cant financial boost for Mr Maduro's gov­
of presidential power to Bernardo Arevalo. ernment, particularly the change of rules
Since his landslide win in elections in Au­ for PDVSA. For the last four years it has been
gust, on an anti-corruption platform, Mr bypassing sanctions by selling oil on the
Arevalo has become a symbol of hope in a blacl< marl<et, for as much as a 40% dis­
country and region w here democratic count. "I thinl< this could almost double
bacl<sliding has become the norm. Maduro's revenues from oil: he will be re­
Initially "the pact of the corrupt", as ceiving a much lower discount, and ex­
Guatemalans refer to a small elite drawn porting more," says Francisco Monaldi, at
from the ranl<s of the political, military and Rice University in Houston, Texas. Mr Ma­
judicial spheres, claimed, without evi­ duro was certainly jubilant when he ap­
dence, that the elections were fraudulent peared on state television. "It is a world
and forced the ballot boxes to be reopened. consensus that sanctions against Venezue­
The result stayed the same. Then they tried la be lifted," he gushed.
to suggest that Semilla (Seed), Mr Arevalo's But the wily dictator has more to do if
party, was fraudulently formed and should he really wants to come in from the cold.
be dissolved. That case is continuing. Antony Blinl<en, America's secretary of
Most recl<on these attempts to stop Mr state, said that the Biden administration
Arevalo from being sworn in on January has given Mr Maduro only until the end of
14th will fail. Although some Guatemalans November to start releasing political pris­
are fed up with the roadblocl<s, the peace­ Venezuela oners and any "wrongfully detained"

Blowout
ful protests are putting pressure on the Americans. On October 19th five Venezue­
elite, as are many foreign governments. lans-journalists and politicians who had
Keeping Mr Arevalo from power would risl< been imprisoned for years-were set free.
a widespread uprising. "The most sacred Another, more difficult, request for the
thing in a democratic country is the vote," regime to comply with involves the oppo­
says Alida Vicente, a lawyer and elected sition primary election, on October 22nd.
member of an indigenous administration The clear favourite to win is Maria Corina
CARACAS
in Palin, in the south, who travelled to the Machado, a conservative. She has already
President Joe Biden lifts sanctions
capital to join the protest. been banned from holding office. Mr Blin­
On October 16th Guatemala's interior
minister resigned, after a group of 50 peo­
ple wielding guns, wooden planl<s and
N 1coLAs MADURO, Venezuela's autocrat­
ic president, has managed to stay in
power by undermining his country's
l<en made clear that, also by the end of No­
vember, Mr Maduro's government must
"define a specific timeline and process for
stones l<illed a protester while trying to democratic politics. So few held out much the expedited reinstatement of all candi­
disperse a protest. Many businesspeople hope when, on October 17th, members of dates". He warned that "failure to abide by
are supporting Mr Arevalo, either because his government and the opposition jetted the terms of this arrangement will lead the
they are l<een to be close to those in power to Barbados to stril<e a deal in order to set United States to reverse steps we have tal<­
or for fear of American sanctions if they do out how free and fair presidential elections en". Mr Maduro has a poor tracl< record of
otheiwise. The courts are divided. While could be held in 2024. l<eeping his part of a bargain. Now he is
the case against Semilla continues, on Oc- Such cynicism seemed well founded. about to be tested. ■
 33

Japanese geography of Zeami Motol<iyo, Noh's pre-eminent

Islands of the Rising Sun

playwright, who was exiled to the island in
the early 15th century. Those farther afield,
including the Nansei, the Ogasawara and
the islets around Hol<l<aido, are relatively
recent additions. Incorporating them
played a "crucial role in the Japanese na­
THE OGASAWARA, RISHIRI, SADO AND YONAGUNI
tion-building process" of the mid-to-late
Remote outposts underpin Japan's maritime power, but face mounting pressures 19th century, says Ishihara Shun of Meiji
Gal<uin University in Tol<yo. Their strategic

F ROM AFAR, the Japanese archipelago ap­

pears to consist of just a few islands.
Zoom in and more come into view, dotting
Sado, off the northern coast of Honshu, or
Rishiri, near Hol<l<aido, demographic
change is hollowing out communities. Cli­
value came to the fore during the second
world war, when Iwo To, a specl< in the Oga­
sawara, became the site of a terrible, leg­
the map lil<e the inl< splatters of a calligra­ mate change threatens the already fragile endary battle. (Iwo Jima, its widely l<nown
phy brush. Japan has around 14,000 is­ supply chains of places lil<e the Ogasawara, anglicised name, resulted from a Japanese
lands, some 400 of which are inhabited. a group of islands halfway to Guam, which military mispronunciation.)
These often-remote abodes, l<nown as ri­ rely on ferries to connect tl1em to the After the war, the ritou struggled to l<eep
tou, define the country's borders. Though mainland. In the Nansei, the islands that up as Japan boomed. (The Nansei and the
small, and sometimes tiny, together they stretch between Taiwan and Kyushu, resi­ Ogasawara remained under American oc­
shape Japan's identity as an ocean nation dents are mal<ing flight plans in case of a cupation for decades.) Many in Tol<yo con­
and underpin its maritime power. war with China. sidered them an encumbrance. But percep­
The ritou are often overlool<ed. Fewer Remote islands closer to the mainlands tions changed as international maritime
than 1% of Japan's 125m people live outside have been Japanese for centuries. Visitors law evolved. In 1982, the United Nations
its five main islands, Honshu, Kyushu, Shi­ to Sado can find dozens of thatched-roof Convention on the Law of the Sea granted
l<ol<u, Hol<l<aido and Ol<inawa. Remote is­ Noh theatres, a testament to the influence states exclusive rights over marine re­
lands mal<e up about 2% of Japan's land sources extending 200 nautical miles
mass. Yet they account for half of the exclu­ (37ol<m) beyond their territorial waters.
➔ Also in this section
sive economic zone (EEZ) which helps Ja­ That "changed the shape of the nation" and
pan punch above its weight at sea: it is the 34 India and free love helped Japan become a "maritime great
world's 62nd-largest country yet has the power", says Iwashita Al<ihiro of Hol<l<aido
35 Gay rights in India
sixth-largest marine area (see map on next University. The ritou conferred it with vast
page). The combined coastlines of the ri­ 35 Race in Australasia fishing waters and undersea resources.
tou, 20% of Japan's total, are longer than Marine riches draw China's attention.
36 Australia's coal habit
the whole of Brazil's. They are also store­ Oil and gas reserves are one reason that it
houses of cultural and biological diversity. 36 South Korean chip makers covets a group of uninhabited islands in
Yet these quietly consequential islands the East China Sea that Japan controls and
37 Banyan: India-Pakistan cricket
face mounting pressures. On islands lil<e calls the Senl<al<u (China claims them and ►►
34 Asia The Economist October 21st 2023

► calls them the Diaoyu). Deposits of rare­ local marl<ets-some 70% of the ritou have Remoteness is not in and of itself a
earth minerals, perhaps equivalent to hun­ fewer than 500 inhabitants. death sentence. Tal<e the Ogasawara, the
dreds of years' worth of global demand, Many islands hope simply to arrest the most remote of all the inhabited ritou, ac­
have been discovered in hard-to-extract slide. On Sada, the population of 49,000 is cessible only by a ferry that tal<es 24 hours
mud on the sea floor near Minamitorishi­ projected to drop to 19,000 by 2060; the lo­ to travel one way. The population has been
ma, which belongs to the Ogasawara; Chi­ cal government's goal is to l<eep the decline stable for years; if anything, housing is in
nese research ships have been spotted sur­ to 30,000. Government subsidies aim to scarce supply. The internet l<eeps islanders
veying the sea floor nearby. On distant Chi­ encourage migration to the island. But connected to modern services; what can­
chijima, the main island of the Ogasawara, they are up against powerful social forces not be found in the small handful of shops
locals recall with horror a night in 2014 that are pushing young people away. "They can be ordered from Amazon. Tropical
when hundreds of large Chinese fishing hear from their parents and grandparents weather, stunning vistas and an open­
boats descended on the island to harvest that there's no point in staying, that you minded community attract many new­
its coral. "The fact that China is interfering should leave, go mal<e it in Tol<yo," laments comers. For many of them, living so far off
in these areas is a testament to their value," Watanabe Kazuya, a local official. the map has its own wonderful appeal. ■
says Itol<azu Kenichi, the mayor of Yonagu­
ni. China's threats to nearby Taiwan have
also spurred Japan to reinforce defences on
some remote islands in tl1e south-west.
Yet the biggest challenge for most ritou
Playing it safe during Navratri
is a severe version of one that much of Ja­
MUMBAI
pan faces: shrinl<ing, ageing populations.
Social-media influencers are battling to educate young Indians about sex
"They cling to the memory of their golden
age," says Saito Jun, an author who has vis­
ited hundreds of islands. The population
of remote islands shranl< by nearly 60% be­
T HIS WEEI< marl<s the start of Navratri,
a Hindu festival spanning nine nights
that honours the goddess Durga. In
Gujarat, Karnatal<a, Madhya Pradesh,
Maharashtra and Rajasthan have all
banned sex education in schools-with
tween 1955 and 2010 (excluding those occu­ western India, men and women cele­ predictable results. According to a survey
pied by America). By contrast, Japan's over­ brants will re-enact the fight between published in 2021, 78% of young men had
all population began declining only in good and evil by clanl<ing wooden sticl<s had unprotected sex with their last
2008. On the 300-odd inhabited ritou not and swaying in circles together to loud partner. The incidence of venereal dis­
linl<ed to the mainland by bridge, 37% of music. Some go further. Navratri's em­ ease among adolescents is growing.
the population was over 65 years old in phasis upon heady mingling between the This is a chronic failing. Social-media
2020, compared with 29% nationally. If sexes has long been associated with free influencers such as Tanaya Narendra, an
they were a prefecture, it would have been love. The Hindu nationalist government embryologist with 1.1m followers on
one of the most aged in the country. These of Gujarat once attributed a rise in abor­ Instagram, are at least trying to fill the
trends worry security-conscious officials. tions in the state to the festival. Condom gap. I am an ordinary girl from a small
11

"It's important that people live there-it sales are reported to soar ahead of it. town in Uttar Pradesh. So people are not
serves to patrol the borders," says Tsul<a­ "We stocl< up a few weel<s beforehand intimidated by me," she explains. A study
moto Kuniyoshi of the remote-islands de­ and sell 30-40% more than usual during among teenage girls in northern India
partment at the infrastructure ministry. Navratri", says Mahendra Kumavat last year found a higher understanding of
Decades of state-bacl<ed investments of I<&s Pharmacy in the Gujarati city of sex, birth control and pregnancy among
have sought to mal<e remote-island life Ahmedabad. The growing scale of the social-media users than non-users. If
more attractive. Yet health care remains far festivities, as India gets richer, is creating they want to play with love this Navratri,
more precarious even than in rural areas opportunities for surreptitious coupiing. tl1ey are lil<elier to do so safely.
on the mainland, acl<nowledges Kosal<a Reduced family sizes have meanwhile
Katsuya, a town-hall official on Rishiri. Lo­ made parents less able to rely on one of
cals there must trel< to bigger islands to their offspring to police libidinous teens.
give birth; helicopters evacuate those who Some go so far as to hire detectives in­
need emergency surgery. Many remote is­ stead. 0n two occasions we do great
11

lands do not have high schools, and some business: one is Valentine's Day and
are losing elementary and middle schools. another is Navratri", says Lalit Raval, a
Complex logistics mean higher prices for former air force officer, who runs a priv­
consumers. Businesses struggle with tiny ate detective agency in Gujarat.

- RUSSIA Territorial
waters
Some condom sellers are seizing the
opportunity. In 2021 Nyl<aa, an e-com­
merce outfit, slashed prices of condoms
0-12 and lubes as part of a "Navratri sale". A
Rishiri-' nautical
CHINA miles few years earlier Man force, an Indian
Exclusive condom mal<er, ran hoardings featuring
N. KOREA Sado"'- Economic a former porn star called Sunny Leone
Zone
S. KOREA
■
LI
12-200 with the slogan, "This Navratri, play, but
Tsushima- Tokyo nautical with love". The signs were castigated by
fa" uShikok
u miles
lhlfl
Ky Hindu activist groups and tal<en down.
Senkaku/ -.�· • JAPAN
Ogasawara Is.
India's rulers are generally averse to
Diaoyu Is. �<1,,'
tall<ing about sex. Condom advertise­
Chichijimf
'"b

\... �
"-ok·inawa I'" Minami­ ments deemed explicit by the govern­
TAIWAN \..Yonaguni lwo To torishima
ment were subsequently banished from
750km daytime television across the country. Let the festivities begin
 The Economist October 21st 2023 Asia 35

Gay rights in India These naysayers (some of them indige­

Don't rely on the

nous) objected to special rules for any
group. The opposition campaigns also saw

courts
"an awful lot of race-baiting", notes Mr
O'Sullivan. Maori leaders complained in
September of "dog whistling and outright
public displays of racism from political
DELHI
candidates". Australians displayed "con­
The Supreme Court refuses to legalise
tempt for us", said an Aboriginal academic,
same-sex marriage
Marcia Langton, after the referendum. De­

T HE MOOD in India's gay community was

hopeful on October 17th as the Supreme
Court in Delhi began to deliver its verdict
cades-long reconciliation efforts are in ru­
ins, she and other activists say.
Yet many Australians see the verdict
on a raft of petitions asl<ing it to allow differently. It "doesn't indicate that Austra­
same-sex couples to marry. Yet it soon be­ lians are unsympathetic" to Aboriginal
came clear that the five judges would not people, argues Greg Melleuish of the Uni­
recognise gay unions. Instead they sided versity of Wollongong, but that "they did
with the government's view that changing not thinl< this was the way to solve their
the institution of marriage was a job for problems." Aussies are always reluctant to
Parliament rather than the court. change their constitution; only eight of 45
The verdict is a bitter setbacl< for gay referendums on doing so have succeeded.
rights. It is a victory for India's Hindu­ And no-campaigners could cite particular
nationalist government, which considers reasons for caution in this case. Important
same-sex marriage an "urban elitist" idea Indigenous relations details of the Voice were unclear, they not­

No special
at odds with Indian culture. It also casts a ed, including the issue of how its members
shadow over the Supreme Court's record of would be elected and held accountable.

measures
advancing personal rights and social pro­ Had the government of Anthony Albanese
gress despite conservative opposition. been more willing to negotiate on such is­
The petitioners argued that marriage sues, the centre-right parties might have
was a fundamental right guaranteed by In­ been persuaded to bacl< it.
dia's constitution, which should therefore The debate is in a sense starl<er in New
SYDNEY
be available to all. To mal<e it so, they asl<ed Zealand, because it has made far more pro­
Has Australasia lurched right on race?
the court to tinl<er with the Special Mar­ gress on relations with indigenous people.
riage Act, which governs unions between
people from different faiths or countries
(Indian personal laws being largely reli­
I NDIGENOUS PEOPLE in Australasia have
had a tough month. In a referendum on
October 14th Australian voters rejected
It had been almost two decades since race
was a big electoral issue there. In contrast
to Australia, New Zealand's 19th-century
gion-based, with different rules for people their Labor government's proposal to es­ colonists signed a treaty with Maori lead­
of different faiths). If the act referred to tablish an indigenous advisory body, or ers, recognising Maori rights. Though they
"spouses" rather than husband and wife, "Voice to Parliament". On the same day were flouted, this provided a legal basis,
they said, it would cover same-sex couples. New Zealanders elected the most conser­ way bacl< in 1970, for New Zealand to inves­
There was reason to thinl< the court vative governing coalition since the adop­ tigate and provide redress. It has reached
would be sympathetic. D. Y. Chandrachud, tion of proportional representation in settlements with almost go Maori tribes,
the chief justice, is an outspol<en advocate 1993. The new prime minister, Chris Luxon, or iwi, offering apologies and compensa­
of liberal values. Many of the court's recent pledges to scrap policies designed to boost tion of Nz$2.6bn ($1.6bn). The process has
decisions have challenged prevailing con­ Maori influence in politics. Have the two had bipartisan support for decades-yet
servative attitudes to sex and relationships countries moved right on race? now faces scrutiny. ACT New Zealand's
in India and expanded rights against fierce Australians certainly moved against the leader, David Seymour, wants a referen­
government opposition. In 2014 the court "Voice", which was meant to give Aborigi­ dum on the extent of its powers. "No one
recognised a third gender; in 2018 it decri­ nal people more say in policymal<ing. Polls should be treated differently based on who
minalised gay sex. A ruling in 2017 over­ last year suggested two-thirds would ap­ their ancestors were," he says.
turned the law that made adultery a crimi­ prove the necessary constitutional amend­ The final mal<e-up of New Zealand's co­
nal offence, emphasising the sexual auton­ ments. Yet over 60% voted "no", rejecting alition will not emerge until November.
omy of women within a marriage. the proposal in every state. Similarly, in But Mr Luxon is already expected to axe a
Mr Chandrachud rejected the govern­ dismissing their Labour government, New new Maori Health Authority, intended to
ment's censorious depiction of same-sex Zealanders rejected its schemes to pro­ give tribes more power over health policy
marriage and recommended some recog­ mote the Maori language and hazy plans to and close a seven-year life-expectancy gap.
nition for same-sex unions in his minority "co-govern" with tribes. The country's He will also scrap unpopular plans to share
opinion. Even so, he and the other judges right-wing minor parties, ACT New Zealand management of water infrastructure
agreed with the government that it was up and New Zealand First, called these "divi­ with iwi. Whether he might end some of
to the legislature to mal<e appropriate sive race-based policies". Both increased his predecessor's more cosmetic mea­
changes to the laws that regulate marriage. their vote. Results are still coming in, but sures, such as pushing civil servants to
That was a cop-out. There will be no law Mr Luxon's centre-right National Party speal< Maori, is unclear-but many Labour
to recognise same-sex marriage under the may need both minnows for a majority. supporters would not mind if he did. "La­
ruling Bharatiya Janata Party. Even if the Critics on both sides of the Tasman had bour brought the race issue to the forefront
opposition wins the election in 2024, the same complaint, that "indigenous poli­ because they moved at a pace that is not in
which is unlil<ely, it will not be a priority. cies risl< dividing the nation along racial line with the public," says Sir John Key, a
The court's decision precludes most future lines", notes Dominic O'Sullivan of Charles former conservative prime minister. Much
attempts at legal challenge. ■ Sturt University in New South Wales. the same happened in Australia. ■
36 Asia The Economist October 21st 2023

Australian energy er such as hydro. Meanwhile, investment South Korea's chip industry

Lucl<y but sooty Chipping away

in green energy is flagging.
That is partly due to years of stop-start
climate policy, which tied up parliament
and toppled three Australian prime minis­
ters. Between 2013 and 2022, conservative
SYDNEY
governments tore up a carbon price SEOUL

Australia's energy transition scheme created by Labor and resisted Some good news for South I<orea's
is in trouble emissions cuts. "The problems we face besieged chipmal,ers
now are a legacy of that dysfunction," ar­

H UGE OPEN-CUT coal mines carve up the

Hunter Valley in New South Wales. For
decades the fuel extracted from them has
gues Kane Thornton of the Clean Energy
Council, a renewables association. Austra­
lia still lacl<s an overarching policy to sup­
I T HAS BEEN an anxious year for Samsung
Electronics and SI< Hynix, South Korea's
leading chipmal<ers. Last October America
been hauled by train to nearby power sta­ port its renewable targets, relying instead restricted exports of advanced chipmal<ing
tions, l<eeping lights on across south-east­ on a tangle of state and federal incentives. equipment to China in an attempt to crip­
ern Australia. But their turbines are wind­ Power lines are another problem. The ple its ability to procure or produce chips
ing down. One ageing coal plant shut in national grid may need 10,oool<m of new for weapons systems. The South Korean
April. Three others in New South Wales are cables to linl< up solar and wind farms. The firms, which rely on China as both a manu­
due to close within a decade. The state is federal government has allocated A$2obn facturing base and marl<et, received a year­
jettisoning coal so fast it is attempting an ($13bn) in low-cost debt to draw invest­ long exemption, but fretted about what
"industrial revolution in 15 years", said its ment. But Australia's size mal<es the pro­ might happen after it expires.
energy minister, Penny Sharpe. ject hard and NIMBY-ist farmers are fight­ On October 9th their minds were put
Australia, the world's second biggest ing it. Some protested in tractors at Victo­ somewhat at ease. South Korea's govern­
coal exporter, is finally trying to clean up ria's parliament in August, waving signs ment announced that, thanl<s to ''close co­
its power sector, its biggest source of saying "don't fight the hand that feeds operation" with America, the waivers
greenhouse-gas emissions. It still relies on you". Landowners are a "human toll" in a would become indefinite. Yet the unpre­
coal for 57% of electricity generation and "recl<less race to renewables", said David dictability of the Sino-American tech war
emits more from burning it, per person, Littleproud of the rural National Party. (see Business section) and China's at­
than any other G20 country. But its states The hold-ups leave state governments tempts to bolster domestic manufacturers
and centre-left federal government little choice but to prop up coal plants. "I mean South Korea's most important indus­
have set targets to slash emissions to net don't thinl< anyone appreciated how diffi­ try may still have to lool< beyond China.
zero by 2050 or earlier. The Labor prime cult this would be," says Tony Wood of the Chips made up some 19% of South Ko­
minister, Anthony Albanese, aims to get Grattan Institute, a thinl<-tanl<. He argues rea's total exports in 2022, more than any
82% of electricity from renewables by for a policy to boost renewables invest­ other product. Memory chips, which store
2030. That is ambitious-and the transi­ ments, for example by putting a price on information, mal<e up almost 60% of that
tion is already running into problems. carbon emitted from coal plants, or mal<­ total, and South Korean companies control
The most pressing is that Australia has ing retailers buy more clean power. "We about the same percentage of the global
deployed enough cheap renewables to un­ need levels of co-ordination between the marl<et. Factories in China are l<ey to this
dercut its ageing coal plants, but not to re­ states, industry and government that we dominance. Samsung manufactures 40%
place them. Clean power generation, most­ haven't seen since wartime", he says. In­ of its NAND chips in the country, while SI<
ly from wind and solar, has more than dou­ deed it is hard to match Australia's ambi­ mal<es 20% of its NAN D chips and 40% of
bled in a decade, to 37% of the total. One in tions on the energy transition with its pro­ its DRAM chips there. China is a big marl<et
three Aussie households has installed PV gress. It will not become a renewables su­ for both, accounting for 16% and 44% of
panels on its roof-more, per person, than perpower if it cannot l<eep the lights on. ■ their respective sales in 2021. So the ex­
any other nation. By comparison, Austra­ emption is hugely valuable; it allows the
lia's coal plants are old, expensive to main­ firms to l<eep sending spare parts to their
tain and power firms are hastening their factories in China.
closure. Over half the 15 stations on the Chey Tae-won, the head of SI< Group,
eastern seaboard are due to shut by 2035. has said it is "not possible to give up the
That could leave a big generation gap. Chinese marl<et". Yet even with the exemp­
State governments which share responsi­ tion it may be harder to mal<e chips there.
bility for energy with the commonwealth, The details of the extended regime are not
are stepping in to prop up ailing coal plants public, but if they constrain the use of spe­
to avert blacl<outs. On September 5th the cific types of equipment it might be diffi­
Labor government of New South Wales cult for South Korean companies to up­
said it would negotiate to l<eep its biggest grade their factories beyond a certain
coal power station, Eraring, open beyond point. Japanese and Dutch export restric­
2025, which is when its owner, Origin En­ tions on semiconductor technology used
ergy, wants to close it. Victoria, another La­ by Samsung and SI< Hynix remain in place.
bor-held state, is paying two power compa­ And if companies want to receive tax in­
nies not to close their stations early. centives offered by America's CHIPS Act, a
Australia's bounteous renewables re­ law designed to encourage semiconductor
sources should help it adjust. It is as rich in manufacturers to set up shop in America,
sun and wind as fossil fuels. Yet the tasl< is they may be constrained by limits it puts
daunting. The federal government esti­ on the expansion of production in China.
mates that to meet its targets, Australia Chinese demand for South Korean
must install around 44GW of renewables, chips is also uncertain. China's sluggish
plus batteries and reliable sources of pow- Kicking coal into the long grass economic recovery from the pandemic, ►►
 The Economist October 21st 2023 Asia 37

► and the stocl<piles of chips that semicon­ helpful marl<et conditions, China's indus­ South Korea. If America mal<es another
ductor firms have built up as a result, mean trial policy and its ad,lancing chip industry such move to hamstring China's semicon­
South Korean exports of semiconductors mean export levels are unlil<ely to recover. ductor development, Samsung and SK
to China are down this year. And China has The unpredictability of the Sino-Ameri­ could again face being collateral damage.
been pumping money into its own semi­ can tech war creates further risl<. South Ko­ For these reasons, both firms will prob­
conductor industry. As a result YMTC, Chi­ rean officials lil<e to say the row highlights ably try to reduce their dependence on Chi­
na's memory-mal<ing champion, has sur­ the relative closeness of America and na as a manufacturing location. Both are
vived being cut off from global chipmal<ing South Korea. It also reveals America's ten­ already lool<ing to open more facilities in
tool supply chains by American export dency to design industrial policy without America and South Korea. Manufacturing
controls. It is due to complete a new facto­ consulting allies. Its roll-out last August of costs are higher there than in China, de­
ry this year, relying on Chinese machine the Inflation Reduction Act, which incen­ spite the inducements both countries are
tools instead of foreign ones. Almost 56% tivises EV and battery manufacturers to re­ offering chipmal<ers. That is the new reali­
of South Korean semiconductor firms sur­ route supply chains away from China and ty chipmal<ers, and ultimately their cus­
veyed by the Banl< of Korea in June said un- towards America, was a particular shocl< to tomers, will increasingly face. ■

Cricl<et and geopolitics

In cricket and otherwise, India is leaving its rivalry with Pal<istan behind

I N THE BUILD-UP to India's World Cup

clash with Pal<istan in Ahmedabad on
October 14th, Indian news anchors spol<e
struggling. Three decades of jihadist vio­
lence have made foreign sports teams
afraid to visit Pal<istan, giving it near­
explain why polls show Indian public
sentiment towards Pal<istan growing
more hostile, even as the country fades
of "the greatest rivalry". For once they pariah status. By banning Pal<istanis from from view. India's ruling Bharatiya Janata
were not exaggerating. Cricl<et contests its lucrative domestic tournaments, India Party, which has risen by peddling fear of
between the South Asian giants have has compounded the problem. The team Muslims, has encouraged this. Its sup­
been their main interaction off the bat­ trounced in Ahmedabad had no star ap­ porters are the most hostile of all.
tlefield for three-quarters of a century. proaching the stature of Mr Khan (a great All these changes were evident at the
Into them each has poured subcontinen­ cricl<et captain, though an awful prime match in Ahmedabad-the sixth India­
tal volumes of love and hate, nationalist minister, who is now in prison). Pal<istan clash your columnist has wit­
chest-beating, aching for peace, addic­ Pal<istan's relative decline has changed nessed on the subcontinent and by far
tion to the fray-and the wholehearted the bilateral relationship. Contemptuous the most depressing. The first encoun­
commitment of two great and fascinat­ of its neighbour, and now globally mind­ ters were during an uplifting Indian tour
ingly contrasting cricl<et cultures. Even ed, India has downgraded it. The days of of Pal<istan in 2004, part of a promising
for cricl<et ignoramuses, India-Pal<istan expanded transport linl<s and people-to­ peace process. India's cricl<eters and
bouts are an essential window onto people exchanges, generally for cricl<et thousands of Indian fans were embraced
South Asian politics and culture. What, games, are over. Indian diplomats spend by Pal<istani crowds as long-lost cousins.
then, to mal<e of the Ahmedabad match, more time on Bangladesh than Pal<istan­ By contrast, there were no Pal<istani fans
which was attended by Banyan and end­ never mind China and America, the great in Ahmedabad, because India had re­
ed in an easy Indian victory? powers India increasingly counts itself fused to give them visas. And the Indian
Mostly that the rivalry has become among. "No one is thinl<ing about Pal<i­ fans Banyan spol<e with expressed only
extremely lopsided, in cricl<et as other­ stan," says an official in Delhi. Save in one disdain for their neighbours. Asl<ed what
wise. India's win was its eighth on the regard: India's fear of Pal<istani terrorism. they l<new of Pal<istanis, three students
trot over Pal<istan in World Cups. And it That most divisive facet of the relation­ from Mumbai said only "terrorism".
was significantly crushing. The contest ship has become more dominant as "Everyone hates them," a middle-aged
was held in the recently opened Na­ others, including economic ties and cul­ man, listening in from the row in front,
rendra Modi Cricl<et Stadium, the cricl<et tural affinity, have fallen away. This helps volunteered. Meanwhile, the crowd
world's biggest, and attended by over screamed abuse at the visiting players.
100,000 raucously partisan Indian fans. After one, Mohammad Rizwan, was
It was an illustration of the demographic dismissed, jubilant Indians chanted a
and economic heft powering India's rise Hindu victory cry, "Jai Shri Ram", at him.
in cricl<et and beyond. Pal<istan's players, India-Pal<istan cricl<et has been
only a couple of whom had visited India charged in the past. But never has the
before, visibly wilted in the arena. hostility seemed so unidirectional and
This denotes a big change. In the detached from geopolitical reality. The
decades after British India's bloody parti­ security threat to India from Pal<istan,
tion, Pal<istan outperformed India off though real, is diminished. The potential
and on the field. Its GDP per head was benefits of co-operation between the
50% more than India's in 1970. Its cricl<­ world's most populous country and,
eters, led by dashing fast-bowlers such as soon enough, its third-most populous
Imran Khan, beat India's much more are growing as environmental and pop­
often than they lost to them. But Indians ulation pressures bite. Yet the prospects
are now much richer than Pal<istanis, of realising them, in cricl<et and other­
and their cricl<eters among the world's wise, have never lool<ed more remote.
wealthiest and best, while Pal<istan's are Pal<istan is unable and India unwilling.
38
China The Economist October 21st 2023

Chinese feminism was from the internet that China's #MeToo

Standing up
movement emerged in 2018. Women ac­
cused prominent professors, businessmen
and television personalities of sexual as­
sault, and in some cases launched law­
suits. But most of these failed, and accus­
ers were sometimes sued for defamation.
NEW YORK
One of the most high-profile #MeToo
As China cracl<.s down on feminists, its women build a movement abroad cases was brought by a woman named
Zhou Xiaoxuan who had accused Zhu Jun,

T wo CHINESE women sit on the stage of

a basement comedy club in Manhattan.
They wear matching blazers and speal<
about sexual harassment or immigrant
hardships; and even accounts of detention
and abuse by Chinese police. Most of their
a television presenter, of forcibly l<issing
her when she was an intern. Mr Zhu denies
the accusation; Chinese courts dismissed
highly formal Mandarin, just lil<e present­ stories are funny. Many are bittersweet. the case in 2021. Ms Zhou and her suppor­
ers on Chinese state television. But their These are not good times for Chinese ters were censored online, while national­
"news commentary" is acid. Chinese who consider themselves feminists. In the ists were permitted to spread videos call­
youths who have recently been mal<ing early 2010s women's rigl1ts activists were ing #MeToo a plot to destabilise China.
nuisance phone calls to Japan-in protest able to mount frequent public protests in That same year Huang Xueqin, one of the
at the release of waste water from the China. They occupied men's toilets and first Chinese journalists to report on #Me­
wrecl<ed Ful<ushima nuclear plant-have marched through the streets in red-stained Too cases, was arrested and charged with
shown "commendable spirit" insists one wedding dresses to protest gender inequal­ "inciting subversion of state power".
of the newsreaders, to a guffawing crowd. ity and domestic violence. Activity of this As it cracl<s down on feminists the
Despite having "no jobs or incomes" these sort ended abruptly in 2015. That year five Communist Party has also ramped up pro­
nationalistic youngsters have "spent their prominent feminists were detained just motion of traditional gender roles. Xi Jinp­
own money on long-distance calls". before International Women's Day, for ing, China's leader, has called for a revival
The pair are performers at a Chinese planning a campaign against sexual ha­ of Confucian ideas that encourage women
feminist stand-up show called "Nvziz­ rassment on public transport. to be good wives and mothers, and to teach
huyi" (a play on words that can be read ei­ In the aftermath of those arrests, Chi­ their families to love the country. Since he
ther as "Women's Ideas" or "Good Ideas"). It nese feminism largely moved online. It came to power, China has restricted access
is part of a new, irreverent form of diaspora to divorce by implementing a 30-day man­
activism led by young Chinese women. datory "cooling-off period", banned ef­
Each month "Nvzizhuyi" invites Chinese ➔ Also in this section feminate men from appearing on televi­
citizens, mostly women, onto the stage in sion, and encouraged regional govern­
39 Training foreign engineers
New Yori< to say things that they could nev­ ments to experiment with schemes that
er utter in public bacl< home. Their rou­ 40 Hong Kong's sprawling mansions might prompt people to procreate.
tines incorporate stories about coming out All this has silenced many feminist ac­
41 Chaguan:The ghost ofZheng He
to their conservative parents; complaints tivists or forced them to flee overseas. Sev- ►►
 The Economist October 21st 2023 China 39

► eral of the people who are involved in the ment and discrimination at worl<. A care­ there is no organiser. There are just indi­
New Yorl< comedy nights have seen the fully managed consultation on the amend­ viduals who disagree with you." Chinese
sharp end of the party's paranoia. One of ment drew more than 700,000 comments women who object to Mr Xi's big push for
the event's organisers, Liang Xiaowen, left online, mal<ing it one of the most widely­ family values have been showing their dis­
China in 2016 but remained active in femi­ discussed legal changes in recent years. pleasure by simply opting out. Many are
nist groups until 2021, when her WeChat Reproductive rights have also grabbed the delaying or rejecting marriage and child­
and Weibo accounts were shut down. A public's attention. A woman who sued a birth. China had 6. 8m marriages in 2022,
state-run tabloid accused Ms Liang of re­ hospital for the right to freeze her eggs-il­ roughly half the number in 2013. China's
ceiving payments from abroad to help legal for unmarried women in China-re­ population shranl< last year for the first
America foment unrest in China. (China's cently sparl<ed a debate about widening ac­ time in six decades.
propagandists have been doubling down cess to in vitro fertilisation. The people who run "Nvzizhuyi" have
on their claim that feminism is a tool of Women in China will continue to de­ no delusions that they can transform Chi­
"hostile foreign forces" ; the Communist mand better treatment, says Ms Li, even if nese politics from afar. "If you fantasise
Youth League has called radical feminism a they cannot band together in action. The about some l<ind of overnight, earth-shal<­
"poisonous online tumour" that provol<es feminist movement will just become ing change, it's not really possible," says Ms
"gender antagonism".) increasingly "decentralised and individ­ Liang. Their goal, instead, is to "quietly
Li Maizi, one of the "Feminist Five" de­ ualised", she thinl<s. "The government l<eep some seeds alive" within the space
tained in the cracl<down in 2015, decided to feels very helpless about this: they thinl< they have created abroad, she says. One day
leave China last year, not long after police there must be an organiser. But in this era, they may bring those seeds bacl< home. ■
came into her apartment and arrested her
flatmate for putting up posters protesting
against draconian covid locl<downs. Ms Li Global influence

Training days
had been under heavy surveillance and had
also lost her social media accounts; she felt
voiceless and powerless. "This was my bot­
tom line: if I cannot do any useful activities
in mainland China, it's time to leave."
For the feminists who have found their
way to New Yorl<, comedy is one way to re­
build their movement. The stage at the
China is educating engineers around the world
"Nvzizhuyi" open-mic night in early Octo­
ber was decorated witl1 slogans, including
one calling Mr Xi a "dictator" and "#notmy­
president". The event serves two purposes,
C HIN ESE OFFICIALS often tall< of the Belt
and Road Initiative, a global infrastruc­
ture building spree, in hyperbolic terms.
2016 China has set up some 27 vocational
colleges in two dozen countries, mostly
poorer ones. These "Luban Worl<shops"
says Ms Liang. She argues that years of On October 17th and 18th Xi Jinping, China's (named after a fabled carpenter from the
choosing to censor oneself online and in leader, hosted a big summit in Beijing to fifth century BC) have trained thousands of
public-as many Chinese are forced to­ celebrate the tenth anniversary of what the students in fields including artificial intel­
eventually leads to self-censored thinl<ing. government lil<es to call the "project of the ligence, electric vehicles, railway opera­
Participating in stand-up is an antidote, of century" (see Chaguan). Lately this hype tions and robotics. One of the newest
sorts. And it is important to hold the events has masl<ed an awl<ward reality. Since 2020 worl<shops opened on September 4th at
in Chinese, says Ms Liang, because it is the China has scaled bacl< the scheme as gov­ Meru University of Science and Technolo­
language they were censored in. It is very ernments have found it harder to repay gy in Kenya.
easy to be funny when tall<ing about poli­ Chinese infrastructure loans. The purpose is not charity. Lu ban worl<­
tics, she adds, because China's version of it Yet in recent years one part of the pro­ shops promote technology and standards
has become so absurd. ject has stood out as a quiet success. Since that China wants to export to developing
The show also aims to encourage more countries. Gear for the new worl<shop in
people to get involved in feminist activ­ Kenya will come from Huawei, a Chinese
ism. Momo, in her twenties, says she telecoms giant America would lil<e to see
sought out independent reporting about excluded from its allies' mobile networl<s,
the cracl<downs on Xinjiang and Hong for fear its l<it could assist Chinese spying.
Kong when she was still living in China, Huawei (which denies America's allega­
and also followed many online feminist tions) helped build Kenya's mobile net­
groups before they were censored. But only worl< and is now worl<ing with its biggest
after coming to America as a graduate stu­ telecoms provider to roll out SG services.
dent in 2021 did she finally meet lil<e­ The worl<shops also help assuage wor­
minded Chinese women in person. Momo ries about the Belt and Road. Participating
was shocl<ed when she attended her first governments sometimes complain that
open mic last year and heard someone on the companies which win its infrastruc­
the stage say, "I love to have sex." She felt a ture projects rely too much on labour and
twinge of concern when the speal<ers start­ supplies from China. Several Lu ban worl<­
ed jol<ing about politics, but also a thrill. shops now provide training directly relat­
Within a few months she was on stage ed to Belt and Road projects. One in Djibou­
mal<ing her own jol<es. ti has trained employees of a new rail line
Women's rights in China have made to Ethiopia. That $4bn railway was built
some progress despite the shrinl<ing space and financed by China but struggled to
for organising. In 2022 the government mal<e a profit after opening in 2018.
amended a women's protection law to add The Luban programme has echoes of
stronger language against sexual harass- It all fits together China's earlier drive to expand its influ- ►►
40 China The Economist October 21st 2023

► ence by opening more than 500 "Confucius Property tensions go up without the proper permits.

There goes the

Institutes" to teach Mandarin in universi­ Liber Research Community, an NGO, iden­
ties around the world. Yet so far it has tifies some 170 homes in eight rich neigh­

neighbourhood
avoided the controversies that have bourhoods that it believes have spread into
dogged those institutes, many of which more space than they are entitled to. In
closed after being accused of promoting some cases, it says, the overspill covers a
propaganda and stifling dissent. This is in HONG KONG
larger area than the official plot.
part because the Luban worl<shops focus A landslip in Hong I<ong fuels The landslip in Redhill has bolstered
on technical sl<ills and in part because Chi­ resentment of the rich old complaints about lax and partial polic­
na has spent more time consulting host ing of rules. In theory rigging up unautho­
governments before setting them up. "Un­
lil<e Confucius Institutes, Luban worl<­
shops are actually different in each coun­
T HE MILLIONAIRES of Redhill Peninsula,
a posh coastal community in Hong
Kong, are a little poorer than they were.
rised structures or encroaching on public
spaces can land homeowners in jail. But on
some occasions authorities permit them to
try, because of the different sl<ills that are Last month a supertyphoon named Saola start paying the government rent for the
demanded by host countries," says Niva brought the city rainfalls heavier than any additional land, recl<ons Liber. When prop­
Yau of the Atlantic Council, an American this century. At Redhill, a big chunl< of sod­ erty owners are forced to reverse alter­
thinl<-tanl<. She sees them as evidence that den earth slipped into the sea. Though the ations or retreat from government-owned
China is responding to criticism of Belt landslip mostly spared surrounding hous­ land, appeals can hold things up for years.
and Road without abandoning core goals, es, it exposed basements that had been dug Hong Kong's government says it han­
such as exporting its technology. without permission and that may have dles things as well as possible, given its re­
The worl<shops compete with training contributed to the collapse. Prompted by sources. Last year it sent out more than
that America, Japan and other rich coun­ journalists, the government began an in­ 16,000 orders to rectify "illegal structures"
tries offer countries in the global south. vestigation, which is still going on. By Oc­ and brought 3,600-plus prosecutions. Crit­
Germany, for example, has given more tober 6th it had found a dozen houses in ics say it is meel< when tal<ing on the rich.
than 100 countries guidance on how to co­ the area that brol<e rules in some way. Activists say the government enforces the
py its famed system of vocational educa­ Hong Kong's systems of planning often laws selectively and sometimes uses them
tion. The Luban worl<shops are unusual, lool< dysfunctional. One guess is that as to hassle people it linl<s with the pro-de­
though, in providing equipment as well as many as one in four properties in the terri­ mocracy movement. Mount Zero, an inde­
teaching, and in having their own brand. tory have been altered or extended without pendent bool<shop, was recently told by
When the Luban programme began it the right permissions. Canopies on flat government inspectors that its front step
was led by the local government in Tianjin, roofs create room for recreation. External was illegally occupying public land.
a big city near Beijing that was l<nown for balconies are walled in. And landlords Things may be coming to a head. Chi­
technical training (local authorities have have been chopping their buildings into na's leaders worry about Hong Kong's
been encouraged to support and profit ever-smaller, "subdivided" apartments. cramped housing. They thinl< property
from Belt and Road). The first worl<shop Ten years ago a government report said prices helped stir up big protests in 2019.
(pictured on previous page) opened in that widespread disregard for planning Local media, though much cowed since the
Thailand in 2016; it used equipment sent rules and building regulations could introduction in 2020 of a noxious nation­
by a Tianjin chemical company. For a time "cause injuries and fatalities". al-security law, increasingly report on vio­
Luban worl<shops cropped up in rich coun­ The liberties tal<en by Hong Kong's rich­ lations of planning. Climate change is in­
tries as well as poor ones. Between 2018 est residents are often the largest-and, creasing the severity of wet and wild
and 2020 a worl<shop at Crawley College, given the cramped quarters most Hong weather; this raises the risl< that shoddy ex­
near London, taught Chinese cuisine; one Kongers put up with, the ones that most of­ tensions or overloaded hillsides will col­
in Portugal still offers training in electrical ten cause a stir. Gardens and swimming lapse. Right now Redhill is "under the spot­
automation and industrial robots. The pro­ pools sometimes sprawl beyond a proper­ light", says Brian Wong of Liber. But he
gramme was not always restricted to Belt ty's registered boundaries. Three-story ex- thinl<s there are similar risl<s elsewhere. ■
and Road participants: India (a sceptic) has
a Luban worl<shop in Chennai.
More recently, however, the pro­
gramme appears to have been co-opted by
China's central government. It has grown
to involve training providers and compa­
nies from outside Tianjin, and been linl<ed
more explicitly to Mr Xi's foreign policy. In
2018 Mr Xi pledged to open ten worl<shops
in Africa; a dozen have since opened there.
In May he promised leaders of Central
Asian countries that China would set up
more worl<shops in their region (the first
opened in Tajil<istan last December).
It remains to be seen how long China
will subsidise Luban worl<shops, and how
far they will live up to their promise. Some
are questionable, such as one in war-torn
Mali that teaches traditional Chinese
medicine. But for the moment they repre­
sent a refreshing example of China's gov­
ernment listening to critics-and learning
from its mistal<es. ■ What lies beneath
 The Economist October 21st 2023 China 41

Chaguan Xi Jinping's China wants to be loved

It presented the Belt and Road Forum as an oasis of peace in a dangerous world
warships, guns, horses or swords," he declared. "Rather, they are
remembered as friendly emissaries leading camel caravans and

, sailing ships loaded with goods." Without mentioning the con­

flicts raging in the Middle East and Ul<raine, Mr Xi contrasted this
Chinese focus on trade and development with the selfishness of
world powers that are bent on "ideological confrontation". He an­
nounced a Global Initiative for Artificial Intelligence Governance.
Thougl1 global in name, this promotes a very Chinese worldview.
It would defer to the laws (and censors) of sovereign states, and
prohibit America's current export controls on chips that enable AI.
In a volatile world, Mr Xi said, the BRI is "on the right side of histo­
ry". He added a rebul<e for countries that practise "economic coer­
cion". Foreign leaders in the hall were polite enough not to snigger
or gasp, though China routinely uses trade as a weapon.
As ever in China, much of this propaganda is aimed at domes­
tic audiences. Chinese state media offered blanl<et coverage of the
forum, asserting that over 140 countries sent representatives.
They did not mention that just 21 heads of state and government
turned up, fewer than attended the first and second forums, held
in 2017 and 2019-not least because few Western governments
wished to share a stage with President Vladimir Putin of Russia,
Mr Xi's guest of honour. Only one leader from the European Union
''VERY FEW CHINESE" l<now about the ruthless side of Zheng attended, the Kremlin-friendly Vil<tor Orban of Hungary.
He, the Ming-dynasty explorer and eunuch admiral, a schol­ Mr Putin gave a speech directly after Mr Xi's. To a stril<ing ex­
ar once observed to Chaguan, unexpectedly, over tea in a Beijing tent it reflected his growing dependence on China. As a result of
courtyard house. Pouring fresh cups, the scholar-a member of Western sanctions imposed after his invasion of Ul<raine, China is
China's national-security establishment-warmed to his theme. now the largest buyer of Russian energy, and Chinese exports to
In China, he explained, Zheng He is seen as a 15th-century ''Santa Russia have soared. Thanl<ing his "dear friend" Mr Xi for the invi­
Claus", leading his fleet to Africa, Arabia and Asia to hand out por­ tation to Beijing, Mr Putin played dutiful cheerleader for the BRI.
celain and sill<s on behalf of his mighty, far-off emperor. But in Sounding at times lil<e his own transport minister, Mr Putin reeled
such places as Sri Lanl<a, Zheng He is remembered as a terror, who off lists of BRI-compatible railway lines and logistics corridors
punished local rulers for defying his imperial writ and shipped that Russia plans to build. He praised the opening last year of a
some of them bacl< to China as captives. The Chinese public is bridge across the Amur river between China and Russia, not men­
"blissfully ignorant" about that history, sighed the scholar, blam­ tioning that Russian officials dragged their feet on that project for
ing his country's desire "to be loved". years before rushing to finish it once the Ul<raine war brol<e out.
Much the same desire suffused the Third Belt and Road Forum, Forgetting Russia's long-standing wariness of Chinese investment
held in Beijing on October 17th and 18th. The forum commemorat­ in the Arctic, he invited "interested states" to tal<e part in the de­
ed the first ten years of the Belt and Road Initiative (BRI), a lending velopment of a Northern Sea Route opening up as sea ice retreats.
and infrastructure scheme that has seen China build dams, bridg­
es, ports and more on four continents. In part, the opening speech Putin as a character witness
by Xi Jinping, the Communist Party chief, was a guide to how the In interviews with Chinese state media, Mr Putin offered still
BRI is changing. With China's growth slowing, and many existing more praise. When offering economic opportunities to other
BRI projects mired in debt, there is less emphasis now on billion­ countries, Mr Xi's China never imposes or enforces its will, he
dollar loans and on pouring concrete, and more on promoting said. This, he averred, mal<es the BRI different from policies
Chinese standards and technologies, notably in green and digital pushed by countries with a heavy colonial legacy. Once more, that
infrastructure, and on "small yet smart" grassroots projects. In language echoes Chinese tall<ing points. China's white paper casts
larger part, though, Mr Xi's speech was a call for China to be loved. the BRI's model of development as a challenge to "the exploitative
Addressing foreign dignitaries in the Great Hall of the People, colonialism of the past". It is the spirit of the Belt and Road to ad­
Mr Xi made a case for Chinese exceptionalism. He presented his vocate equality, it argues, in contrast to those who push "the supe­
country as a peace-loving giant, guided by the centuries-old spirit riority of Western civilisation".
of the Sill< Road. In this telling, China's Sill< Road spirit is not a Attacl<s on Western arrogance resonate with many developing
charitable impulse, but something more dependable: namely, a countries. If the BRI offers useful technologies, sl<ills or invest­
pragmatic pursuit of prosperity via mutually profitable trade. ments, many governments will tal<e that deal. Some countries
Though Mr Xi did not mention Zheng He by name, his govern­ support China's proposals for global governance, especially if that
ment's white paper on the BRI, published on the forum's eve, cites means fewer questions about their political systems, or human
the navigator as an inspiration, hailing his seven maritime expe­ rights. But those leaders in the Great Hall of the People are not
ditions that "boosted trade along the maritime sill< routes". dupes. For one thing, many remember their history, and how Chi­
The admiral's ghost hung over the speech as Mr Xi repeated one nese naval fleets and armies brought their countries much more
of his favourite claims about China's past. "The pioneers of the an­ than trade over the centuries. Mr Xi's China is tal<en seriously, es­
cient sill< routes won their place in history not as conquerors with pecially by its neighbours. Love has nothing to do with it.■
42
Middle East & Africa The Economist October 21st 2023

Liberia and Sierra Leone recurring violence. What can Africa and

Escaping the conflict trap

the world learn from these two countries?
First, long conflicts rarely end in deci­
sive military victories, so diplomacy and
negotiations are needed. The wars in Libe­
ria and Sierra Leone both ended in agree­
ments, signed under heavy diplomatic
pressure, that tried to tacl<le the root caus­
DAKAR
es of the violence. In Sierra Leone, some
Liberia and Sierra Leone show the possibilities-and limits-of recovery
fighting resumed after the agreement until

T HE ELECTION on October 10th in Liberia

(pictured) may have seemed a sleepy
affair. But it was far more remarl<able than
Liberia and neighbouring Sierra Leone,
where another bloody civil war ended in
2002, are poor, troubled countries with ro­
a small British military intervention
pushed the rebels towards a version of the
deal they had already signed.
it appears. Just 20 years ago the west Afri­ py democracies. Yet both are in much bet­ Another lesson for peacebuilders is
can country was emerging from two devas­ ter shape than 20 years ago. The level of ex­ how to disarm combatants. Some 180,000
tating bouts of civil war in which drug-ad­ treme poverty has plummeted. Both coun­ fighters handed in their guns across the
dled commanders forced child soldiers to tries were resilient enough to remain two countries, but unlil<e in other con­
l<ill their parents, among other atrocities. stable through an Ebola crisis in 2014-16. flicts, they were not integrated wholesale
The war l<illed perhaps 250,000 people­ Since the wars, power has changed hands into the regular army. This was sensible,
roughly a twelfth of the population. peacefully between rival parties once in Li­ argues a forthcoming bool< by two experts:
As with every poll since the war, this beria and twice in Sierra Leone. Alan Doss, who was the UN's top person in
election tool< place amid some fears of vio­ No post-war president in either country post-war Liberia and before that its num­
lence and a few deadly clashes. Yet on the has sought to flout constitutional term ber two in Sierra Leone, and David
day the voting was calm, helped by a pledge limits, as has happened in several other Harris of Bradford University. In Liberia
by all political parties to ensure a peaceful countries in west Africa. Unusually, nei­ the army was disbanded. Sierra Leone's
election. After a tight race there will be a ther country has fallen bacl< into war, was restructured and downsized. The se­
run-off between the incumbent, George whereas many other poor ones-from nior ranl<s were depoliticised. Liberia even
Weah, once a famous footballer, and Jo­ Cameroon and Congo to Somalia and Su­ had a foreigner in charge of its new armed
seph Boal<ai, a former vice-president. dan-have been stucl< in a "conflict trap" of forces. Now 61% of Liberians say that they
Though some worry that violence may yet trust the army, up from 46% in 2012, ac­
erupt if the result in the next round is cording to Afrobarometer, a pollster.
➔ Also in this section
close, it has so far been the fourth generally Much of this was possible thanl<s to ro­
peaceful and broadly fair presidential elec­ 43 The ruin of Khartoum bust support from outsiders. Nigeria, the
tion since the civil war, and the first since regional hegemon, was "hellbent on end­
UN peacel<eepers left in 2018. 44 Saving200,ooo lives a year ing the war", recalls Gyude Moore, a former►►
 The Economist October 21st 2023 Middie East & Africa 43

► post-war cabinet minister in Liberia. "Even crepancies were found between the official says, echoes to the sound of gunfire and
long after the war ended, Nigeria still re­ count and a parallel sample-based one shelling "every day and every night".
mained really, really involved." America conducted by civil-society groups. The op­ The first shots of Sudan's civil war were
and Britain also played an important part, position has since boycotted parliament. fired in Khartoum, where the two rival
ensuring that u N peacel<eeping missions "They could have gone to court: they warlords had their headquarters. On one
were sent, and pushing through sweeping didn't," retorts Mr Sengeh. The opposition side is Sudan's de facto president, General
debt relief and a fourfold increase in aid says the courts are not impartial. Abdel Fattah al-Burhan, who leads the Su­
per person. Still, optimism is growing that the cri­ danese Armed Forces (SAF). On the other is
Liberia and Sierra Leone also had inter­ sis will be resolved. Mediators from EC0- the leader of the RSF, Muhammad Hamdan
nationally respected leaders after the con­ WAS, the African Union and the Common­ Dagalo, better l<nown as Hemedti. Since
flict. President Ellen Johnson Sirleaf in Li­ wealth have once again returned to Sierra then the fighting has spread far beyond the
beria and President Ahmed Tejan Kabbah Leone. On October 16th they began tall<s be­ capital's barracl<s. In West Darfur, the RSF
in Sierra Leone won broadly credible elec­ tween the rival parties. and allied Arab militias are waging a geno­
tions. Ms Johnson Sirleaf had worl<ed for Thus the final lesson is that good things cidal campaign against the Masalit, a blacl<
the UN and the World Banl<, from which tal<e time and unrelenting effort to come to African ethnic group. Nationwide, some
her finance minister was directly second­ fruition. For hungry, hopeful people in 9,000 civilians have reportedly been
ed. Mr Kabbah was a former UN official. Be­ countries trying to emerge from conflict in l<illed, though this is probably a massive
cause both presidents abided by term lim­ Africa-and for their foreign helpers who underestimate. More than 5.6m have been
its, they gave their rivals a strong incentive may be distracted by other crises in places driven from their homes.
to stay in politics rather than resume fight­ such as Ul<raine and the Middle East-that Though the fighting has spread, Sudan
ing, note the two authors. is perhaps the hardest lesson of all. ■ is unusual in the degree to which the cen­
Sierra Leone and Liberia also faced up to tre of its war is the country's capital. Ever
the atrocities of the wars, at least to some since British imperialists founded the
degree. Both held Truth and Reconciliation Sudan and its capital modern city on the banl<s of the Nile, pow­

Africa's Aleppo
Commissions (TRCs), which heard from er and wealth in Sudan have been concen­
both victims and perpetrators. "The TRC is trated in Khartoum. The RSP, whose ranl<­
critical," says David Sengeh, the chief min­ and-file are mostly drawn from far-flung
ister (prime minister) of Sierra Leone. Its and downtrodden regions, are now exact­
recommendations are a guide "to mal<e ing their revenge. "The RSP believe they
sure you don't go there [bacl< to conflict]." cannot create a state in their own image
Balancing truth, reconciliation and jus­ After six months of civil war, little unless they violently destroy the old one,"
tice is tough. Sierra Leone established a remains of I<hartoum argues Kholood Khair of Confluence Advi­
special court and successfully prosecuted sory, a Sudanese thinl<-tanl<. In recent
some perpetrators. But some criticised the
cost of $3oom. In Liberia Ms Johnson Sir­
leaf controversially ignored the TRC's rec­
M OHAMMED HUSSAIN, a merchant, is a
refugee in his own city. A few months
after civil war brol<e out in Khartoum's
weel<s, RSF fighters are alleged to have
burnt land-registration records and tal<en
over whole residential neighbourhoods.
ommendation to establish a court, partly streets in April, he tried to tal<e his sicl< fa­ "Every house is occupied," says another Su­
out of fears it could rel<indle conflict. Yet ther to hospital. But the roads were blocl<ed danese analyst. "The city is theirs."
demands from victims and activists to do by soldiers from the Rapid Support Forces Though the RSP controls most of down­
so have since grown louder. (RSF), a rebellious paramilitary group that town Khartoum, including districts that
Alas, not all the lessons can be applied is trying to seize control of the country. Un­ host the presidential palace and other gov­
elsewhere. Conflict is easier to end for able to get medical l1elp, his father died. ernment ministries, the SAP remains holed
good when it is not about in1posing a par­ Last n1onth, fighters from the RSF seized up in several well-fortified bases in the city
ticular vision on society, say Messrs Doss Mr Hussain's home, robbing him and centre. It also controls the air base at Wadi
and Harris. In Sierra Leone and Liberia the threatening to l<ill him. He fled to relatives Saidna, to the north. For months the RSP
fight was primarily about power and re­ in another part of the city. Khartoum, he has been trying to overrun these redoubts
sources, though this was often refracted of the army. The SAP has responded with a
through ethnic divisions, rather than ide­ combination of air stril<es, including by
ology, religion or secession. This made it armed drones, and the occasional raid on
easier to get leaders to do deals. Jihadism residential districts and warehouses used
in the Sahel and secessionist fighting in by the RSP, says Nathaniel Raymond, a
Cameroon do not lend themselves so easily conflict monitor at Yale University. Mr Bur­
to compromise. han, who fled from the army headquarters
Law and order may simply be easier to in August, now runs what is becoming a de
sustain in small countries. The Economic facto capital in Port Sudan, on the Red Sea.
Community of West African States (Eco­ Since the civil war began six months
WAS), a regional club, could do a lot in Libe­ ago, more than half the capital's popula­
ria. "It can't do the same in Mali," says Mr tion has fled. "Everyone I l<now has left
Moore. And peace has lasted because peo­ now," says Waleed Adam, who escaped in
ple had suffered so grievously that they July after RSP troops raided his apartment.
said "never again", argues Mohamed Ibn Most of those who have remained are too
Chambas, a Ghanaian who was the head of old or too infirm to leave. Many are also too
the executive arm of EC0WAS at the time. poor. Civilians who try to get out risl< being
The path from war to an enduring peace robbed or forced to pay bribes to go
is long. In Liberia the last UN peacel<eepers through armed checl<points. "If you forget
left only after a deployment of 15 years. And your ID card for any reason the RSF arrest
obstacles still abound. Sierra Leone's elec­ you," says another recent escapee.
tion in June sparl<ed controversy after dis- King of the rubble Many parts of the city are, in effect, un- ►►
44 Middle East & Africa The Economist October 21st 2023

► der siege. Aid agencies can barely operate drawing the jol<er from a pacl< of cards.
and medical care hardly exists. In August Even here, there is cause for hope. Suc­
an airstril<e hit one of the city's largest hos­ cessive governments have made maternal
pitals. "Nowhere is safe," says Mustafa Mo­ health a priority, training more midwives
duay, a teacher who has stayed put. and monitoring deaths closely. Since 2010
Many of the capital's historic land­ a donor-bacl<ed initiative has made health
marl<s as well its factories have been care free for pregnant and breast-feeding
ground to dust. "Old Khartoum has been women. It worl<s imperfectly, and under­
effectively demolished," says Magdi el-Gi­ paid staff still asl< for a contribution from
zouli of the Rift Valley Institute, a thinl<­ patients. But the scheme helps explain
tanl<. The presidential palace was hit by an why 83% of births now happen in clinics,
airstril<e in May. The iconic Greater Nile Pe­ compared with 50% before fees were abol­
troleum Operating Company Tower, one of ished. Mortality, though still high, has
the capital's tallest buildings and a symbol dropped below the African average.
of the regime of the former dictator, Omar Women in poor countries die because
al-Bashir, was set alight last month. Khar­ they are slow to seelc care, slow to reach
toum, says Mr Raymond, faces the fate of hospital, and slow to be treated. Lives can
Dresden, a historic German city destroyed be saved by spotting warning signs early.
by Allied air raids in the second world war. Sierra Leone is having trials for a blood­
Whichever side conquers the capital will pressure monitor, l<nown as CRADLE,
be left ruling over little more than ruins. ■ which uses a simple traffic-light system. If More joy, less sorrow
the device flashes red, a patient should be
referred for emergency treatment. Maria­ Another way to reduce maternal deaths
Health ma Momoh, a midwife and public-health is to empower women. When they have

No miracles
specialist, says it lets worl<ers with even control over their fertility, they have fewer
basic training mal<e fast decisions. babies and at wider intervals, which reduc­

required
Another innovation, used in several es the risl< of complications. Governments
other African countries, is a plastic drape can help by boosting access to contracep­
that is placed beneath the woman during tives. In Senegal improved supply chains
KEN EMA
delivery. By noting how much blood has led to fewer shortages of pills and implants
How to save the lives of 200,000 collected, health worlcers can quiclcly as­ in public health centres, notes Gloria Il<ile­
mothers a year sess danger. A recent trial in Kenya, Nige­ zi of Exemplars in Global Health, which
ria, Tanzania and South Africa combined studies good practice. When women's

P REVENTING MATERNAL deaths is not

difficult, says Hannah Saidu, who man­
ages a maternity unit in Sierra Leone, so
the use of a calibrated drape with a bundle
of treatments, such as oxytocic drugs and
uterine massage. Severe bleeding was 60%
health is a priority they are also more lil<ely
to receive treatments like iron supple­
ments, which reduce the risl< of severe
long as "you have sl<illed midwives, and lower in trial hospitals. bleeding in childbirth.
you l<now what to do". If that is obvious, it Innovation only worl<s when there are One recent study estimates that when
still bears repeating. About 200,000 wom­ robust health systems to support it. One countries introduce quotas for women in
en in sub-Saharan Africa die in childbirth reason that Nigeria fares so badly is that parliament, maternal mortality falls by 7-
every year, largely from bleeding, hyper­ only half of births there are attended by 12% as reproductive-health services im­
tensive disorders and infection. The World sl<illed staff. In Rwanda, which has a sys­ prove. As important are the conversations
Health Organisation estimates that there tem of community-based health insur­ that happen around the cool<ing stove or
are 545 deaths in the region for every ance, almost every birth is. Ethiopia has the water pump. In Sierra Leone, unwed
100,000 live births, a rate four times higher mobilised a "health development army" of pregnant teenagers are often thrown out
than in south Asia and 90 times higher volunteers to encourage women to attend by their families and are afraid to visit clin­
than in western Europe. health centres. In many countries, the ics, says Mangenda Kamara of Lifeline Ne­
Tl1e rate in Africa l1as fallen by a third growth of cities is bringing women closer hemiah Projects, a grassroots organisa­
since 2000, but still has a way to go. There to hospitals, where they get better care tion. She is pioneering a scheme that pairs
has been barely any progress in Nigeria, than in rudimentary rural clinics. girls with an older mentor, who encourag­
the continent's most populous country,
where a woman has a 1 in 19 chance of dying
in childbirth over her lifetime. By contrast,
-
Saved lives
es them to go for antenatal checlc-ups and
goes with them to hospital during labour.
More than 250 girls have been mentored;
mortality has fallen by three-quarters in Maternal deaths per 100,000 live births none (in that small sample) has died.
Angola, Ethiopia, Mozambique, Rwanda 2,000 Cheap innovation, stronger health sys­
and Sierra Leone (see chart). Those num­ tems and women's empowerment are
bers point to an encouraging truth: coun­ achievable anywhere. But globally, pro­
tries do not have to wait until they are rich 1,500 gress is slowing. There has not been quite
to start saving women's lives. Nigeria
the same focus on maternal mortality as
Consider Sierra Leone, which was once, 1,000 there has been on diseases lil<e AIDS and
alongside South Sudan, the worst place in malaria, says Rasa Izadnegahdar of the Bill
Ethiopia
the world to give birth. Health clinics still & Melinda Gates Foundation, a philan­
regularly run short of drugs. Blood sup­ 500 thropic outfit. Innovation has therefore
plies are so limited that patients muster spread more slowly than need be. The UN
their own donations from relatives; one 0 has a goal of reducing maternal mortality
I I I I I I I I I I I I I I I I I
doctor describes giving his own blood be­ 2000 05 10 15 20
worldwide to 70 deaths per 100,000 live
fore operating on a patient. A woman's life­ Source:WHO
births by 2030. On current trends that tar­
time risl< of maternal death is the same as get will be missed. ■
 Europe The Economist October 21st 2023 45

➔ Also in this section

46 Beefing up Ukraine's defence
47 Alexei Navalny's latest punishment

• • • 47 Meloni and Le Pen

-
•

48 The EU's troubled electricity market

• •

• 49 Charlemagne: Ad rift over Gaza

• •

. •. • . . • ... . ,·
•
• •

Poland to govern together, a majority of 248 out of

Tusl<'s triumph
the 460 seats in the Sejm, the lower house
of parliament. Pis has just 194, and no
other party so far wants to join them.
The opposition was jubilant. For eight
years it had been shut out, not just from
government but by Pis's tal<eover of state
institutions. "Poland won, democracy
WARSAW
won," declared Donald Tusl<, the former
A pro-European liberal unseats the hard right
prime minister and ex-president of the

T HE POLLS closed at 9pm on October

15th, but those still queueing were al­
lowed to cast their votes, so at one polling
er since 2015, came first. But it tool< just
35.4% of the vote, down from 43.6% in
2019. The main opposition alliance, the
European Council who leads 1<0. He will al­
most certainly return to office.
Pis deployed the state media and state­
station near Wroclaw balloting continued centrist Civic Coalition (1<0), got 30.7%. An­ owned companies, both stuffed with cro­
until almost 3am. A pizzeria delivered 300 other centrist outfit, Third Way, drew nies, to blitz the country with propaganda.
free pies to those standing outside. "Better 14.4 %, well above expectations. Lewica Tl1at gave it a "clear advantage", according
to wait four hours than four years," a voter (The Left), an alliance of leftists and social to a report by the Organisation for Security
there told Gazeta Wyborcza, a newspaper. democrats, managed 8.6%. The hard-right and Co-operation in Europe, a watchdog.
Many had worried that the vicious cam­ Confederation party won 7.2%. That gave But it was not enough. The post-election
paign would discourage voters from show­ 1<0, Third Way and Lewica, which promised rally at Pis's headquarters in Warsaw was a►►
ing up. Instead turnout reached 74%, Po­
land's highest rate ever-higher even than
in the election in 1989 that brought an end
-
The return of the Donald
to communism. Poland, parliamentary election results, number of seats and% share of vote
Indeed, this election may have been Po­
land's most important since 1989. Rule-of­ 2023 The Left PO/Civic Coalition Third Way PiS/United Right Confederation
law advocates said it was the last chance to
Seats 65 194 ••
stop the country's right-wing populist gov­
ernment from seizing control of the Share 8.6 30.7 14.4 35.4 7.2 3.7
courts, filling the state with apparatchil<s
and wrecl<ing Poland's standing in the EU. Others 1
2019 The Left PO/Civic Coalition Polish Coalition PiS/United Right Confederation
The voters gave the opposition a surpris­
ingly decisive victory. That augurs a Seats 30 235 1
lll
change of direction for Poland and a big Share 12.6 27.4 8.6 43.6 6.8 1.0
setbacl< for Europe's hard right.
Source: Polish interior ministry
The Law and Justice (Pis) party, in pow-
46 Europe The Economist October 21st 2023

► shadow of those in earlier years. Its leader, vetoed by Mr Duda or blocl<ed by the Pis­ ously corrupt company-in wartime.
Jaroslaw Kaczynsl<i, grimly acl<nowledged controlled constitutional tribunal. Mr Smetanin, a design engineer who
it might not be able to form a coalition. Mr Tusl< has promised to unlocl< €35bn rose from the shop floor to the director's
Days later the party still seemed to be in de­ ($37bn) in post-covid aid that the European office, is on one level uniquely qualified
nial. "Evil has temporarily won," said Mar­ Union has withheld over Pis's meddling for the unenviable job. At the start of the
el< Susl<i, a Pis MP. Another, Ryszard Ter­ with the courts. Poles who expect Mr war in February 2022 he was to be found in
lecl<i, warned that his fraction would not Tusl<'s years in Brussels to smooth the way his native Kharl<iv, 35l<m from the Russian
be "an easy, gentle and pliant opposition". may be disappointed. Meeting some EU border, as the director of its famed but fad­
When Pis swept to power in 2015, it was conditions will be easy, but one crucial re­ ed tanl< factory. He lived in the factory
Mr Tusl<'s party that was seen as corrupt form has been blocl<ed by the constitution­ through the terrifying first weel<s, as
and out of touch. By contrast, Pis had its al court. The European Commission will bombs fell through its roofs, while a group
ear to the ground. It wooed Poles with gen­ try to sticl< to its requirements, to refute of l<ey worl<ers continued production in
erous child benefits and infrastructure in­ the charge PIS always made: that its cut-off breal<s between the shelling. Every defence
vestments, especially in the country's of Poland is about politics, not the rule of contract was eventually fulfilled. "If the
poorer east. But the party's obsession with law. "It's not that just because they have a mortars or artillery were landing near,
control of state institutions and its con­ different prime minister, we will say all the you'd wait half an hour before starting
stant infighting gradually left it sealed in­ problems are gone," says a commission of­ again," he recalls.
side its own media bubble. Its vicious elec­ ficial. Still, the promise of a firmly pro-Eu But there are questions about the pos­
toral campaign, which blasted Mr Tusl< for prime minister in Warsaw is a sea change sibility, and even the desirability, of turn­
his partly German ancestry and Brussels for Poland-and for Europe. ■ ing around an umbrella organisation built
connections, appealed only to its core on corruption and favour from its very ear­
voters. Pis also attacl<ed Confederation, its ly days. When the Soviet Union brol<e up in
only potential coalition partner. Many Ukraine's arms industry 1991, Ul<raine inherited one of the world's

From corruption
Confederation supporters switched to largest military complexes: shipbuilding,
Third Way, according to Marcin Palade, a tanl<s, aviation, missiles. Over the next two

to production
pollster-thus aiding the opposition. years Ul<raine created three agencies that,
By contrast, the opposition's broad with the help of poor and corrupt officers,
spread of parties drew in new voters. So did siphoned off whatever they could on the
clever tactics. Lul<asz Litewl<a, a new MP for KYIV
blacl< marl<ets. Ul<raine stopped mal<ing
the Left, was given the lowest position on How a 31-year-old hopes to fix ammunition. Factories stood idle. The
his party's regional list, but won nearly Ul<raine's state-owned defence giant most advanced products were refashioned
twice as many votes as the party leader for the export marl<et.
after he used his electoral posters to adver­
tise dogs up for adoption at a local shelter.
Social-media campaigns helped raise turn­
I N MARCH Ul(RAINE abruptly rebooted its
defence-industry team. Olel<sandr Ka ­
myshin, a hyperactive manager with a re­
In 1996, with the government close to
banl<ruptcy, the three agencies were tal<en
over by a new enterprise with close con­
out among those aged 18-29 to a remarl<­ formist pedigree, was appointed to head a nections to Russia's security services. (The
able 69%, according to an exit poll by Ipsos, beefed-up strategic-industries ministry. two countries' defence industries were
up from 46% in 2019. Pis came last among He has previously turned around the rail­ then closely integrated.) A successor struc­
these voters. The opposition's upbeat cam­ ways and has the confidence of the presi­ ture came into existence in 2010. The new
paign in the final weel<s went down well dent's inner circle. Still more surprising is company, Ul<roboronprom, was supposed
with voters tired of polarisation. the recent appointment of Herman Smeta­ to be about synergy, but in reality it was
It may be some time before Mr Tusl< nin, a little-l<nown 31-year-old, to run the about personal enrichment. "Ul<roboron­
gets to form a coalition. The president, state defence consortium popularly prom was dead at birth," says a source who
Andrzej Duda, comes from Pis, and may l<nown as Ul<roboronprom. He is to sort worl<ed in the company at the time.
give that party a (futile) first shot. That out the sprawling, inefficient and notori- When war came in 2014, and full-scale
could delay the transition until mid-De­ invasion in 2022, Ul<roboronprom mobil­
cember. Negotiations will not be easy: the ised but struggled. There were notable suc­
opposition's three groupings are made up cesses, though. Perhaps half a dozen of
of nine sharply different parties. After the what were over a hundred operating units
election Wladyslaw Kosinial<-Kamysz, were still able to produce competitive pro­
who leads an agrarian party within Third ducts. The Pavlohrad chemical plant, for
Way, said he opposes including ideologi­
11 instance, delivered gunpowder, a com­
cal issues" (such as liberalising abortion) modity most in demand in any war. The
in the coalition agreement. Anna Maria Zu­ Luch Design Bureau in Kyiv produced Stug­
l<owsl<a, a Left MP, said that in that case na anti-tanl< guided missiles that helped
"farmer issues" would be treated similarly. stop Russia's march on Kyiv, and the Nep­
Once it forms a government, the oppo­ tune cruise missiles that famously sanl<
sition has pledged to undo Pis's efforts to Russia's Blacl< Sea flagship, the Moskva.
turn Poland into a copy of Vil<tor Orban's But it has been private enterprise, inde­
Hungary. This will be hard. Returning in­ pendent of state-owned Ul<roboronprom,
dependence to the state media and state­ that has set the pace in this war. Stril<e
owned companies will require removing drones, the new addition to a conflict that
the cronies whom Pis has installed, which otherwise often resembles the first world
could degenerate into its own form of cro­ war, are almost all produced privately. The
nyism. Re-establishing an independent ju­ new drone entrepreneurs believe it is they
diciary will mean undoing Pis's politicisa­ who now represent the new face of Ul<rai­
tion of the body that nominates judges. nian defence innovation. "I see it as my
That will need legislation, which could be Can Smetanin turn it around? mission to resurrect previous glories," says ►►
 The Economist October 21st 2023 Europe 47

► Vitaliy Kolesnichenl<o, the director of Air­ his supporters and to haunt Vladimir Pu­
Logix, a Kyiv-based drone developer. tin, whose thugs tried to poison him in
Mal<ing Ul<roboronprom exciting, well 2020 and then subjected him to torturous
paid but less loss-mal<ing is one of the co­ conditions in jail when he returned to Rus­
nundrums facing Mr Smetanin. He says his sia the following year after being treated in
focus is on l<eeping things simple: increas­ Germany. Mr Navalny's rare appearances in
ing production, restructuring the business courts (mostly via video linl<) have turned
and tacl<ling corruption. There is already into political speeches, and visits by his
progress on the first, he reports. Shell pro­ lawyers have l<ept him in touch with the
duction is up by anything between 100% to outside world. "His voice from behind bars
1 ,000% in the few months he has been in sounded unbearably loud for Putin," Leo­
charge, depending on the precise type. nid Voll<ov, Mr Navalny's chief of staff,
Weapon production in every category is in­ wrote on X (formerly Twitter) from Vilnius,
creasing, despite constant Russian attacl<s. Lithuania's capital.
Reform of the governing structure will in­ So Mr Putin decided to turn down the
troduce new subholding clusters of com­ volume, and to deprive Mr Navalny of his
panies, which will be organised around last channel of communication. On Octo­
specialisation: armoured vehicles, avia­ ber 13th three of Mr Navalny's lawyers-Va­
tion, shipbuilding and so on. The 34 of 66 dim Kobzev, Alexei Liptser and Igor Sergu­
units still organised as state companies nin-were arrested and accused of "partic­
will soon be turned into limited-liability ipation in an extremist community"; that
companies or joint-stocl< companies with is, of passing Mr Navalny's words to the
supervisory boards. Appointments of fac­ outside world. Olga Mil<hailova, another of Europe's populists

Greater danger
tory directors, a major source of corruption his lawyers, had left the country by the
in the past, will henceforth be done by an time her offices were raided.
independent commission. Mr Navalny learned the news from a
A candid ministerial insider suggests journalist during one of his appeal hear­
that public-private partnership may be the ings. "I don't understand what's going on.
only hope for Ul<roboronprom and its team My lawyer is not here. All the other lawyers
PARIS
of young reformers. "Can you turn around are not here. Nobody is allowed to visit me.
Marine Le Pen poses a greater threat
60-odd underfunded, corrupt factories? I I am isolated and cut off from any informa­
don't thinl< so. But can you use them as
to Europe than Giorgia Meloni
tion," he told the judge. Even the radio in
platforms for private development? May­
be." A high-level government source agrees
that Mr Smetanin will find the job of rescu­
his cell has been turned off, he said, to
plunge him into complete silence. Shortly
after that, news came that Mr Navalny's
W HEN GIORGIA MELONI tool< over as It­
aly's prime minister in October 2022,
Europe's liberals trembled. Her party, the
ing Ul<raine's slumbering defence giant fifth lawyer, who was supposed to attend Brothers of Italy, has roots in post-war neo­
hard going. "Logically, he has no hope. But the appeal hearing, had fled the country. fascism, and her electoral pitch, promising
we do live in a country called Ul<raine, so The practice of jailing not only dissi­ a clampdown on illegal immigration,
he does have a chance." ■ dents but also their lawyers has been tried promised uncompromisingly hard-right
and tested in Belarus, but is relatively new politics. A year on, the pragmatic Ms Mel­
in Russia. Some 200 Russian defence law­ ani has not turned out to be the disruptive
Russia yers have signed a petition denouncing the force some feared. Which mal<es centrists

Alexei Navalny
climate of fear in which they operate, and in neighbouring France worry that this
calling for a stril<e. Two volunteers have could help Marine Le Pen.

loses his lawyers

now come forward to help Mr Navalny. France is not due to hold a presidential
Having no legal representation and no vote until 2027. But Ms Le Pen has twice
contact with the outside world mal<es Mr made it to the run-off, each time to be beat­
Navalny especially vulnerable, as he has en by Emmanuel Macron. The constitution
Vladimir Putin's latest attacl< been awaiting a transfer to one of Russia's forbids him from standing for a third con­
on his enemy toughest prisons for a year. ("I feel lil<e a secutive term. Already, between 2017 and
tired rocl< star on the verge of depression. 2022, Ms Le Pen increased her run-off vote

A LEXEI NAVALNY, Russia's best-l<nown

opposition leader, has been in captivi­
ty for more than 1,000 days, and in solitary
I've reached the top of the charts and
there's nothing more to strive for," he jol<ed
when he heard of his transfer order.)
from 34% to 41%. Under France's central­
ised presidency, the possibility of a Le Pen
victory raises particular concern.
confinement for 224 of them. He was de­ All this is part of the Kremlin's prepara­ Ms Melani and Ms Le Pen share more
nied medical treatment when ill, has been tion for next March's presidential election, than hard-right rhetoric. Lil<e Ms Melani,
refused visits by his family for more than a which is sure to be farcical. Mr Putin will Ms Le Pen has tried to distance her party,
year and is not allowed to mal<e telephone aim to demonstrate total political control now called National Rally (RN), from the
calls. Yet Mr Navalny, ever stoical, has de­ and to l<eep his opponents demoralised. A thuggish discourse of its former self: in her
scribed his imprisonment not as martyr­ few hours after losing his lawyers, Mr Na­ case, the National Front. Unsavoury char­
dom, but as a nuisance and a challenge that valny somehow managed to convey that by acters still move in her circle. But Ms Le
needs to be overcome. January 15th he will produce his strategy Pen has promoted the more respectable­
The challenges continue to mount. In for how best to tacl<le Mr Putin's election, lool<ing among them, notably Jordan Bar­
August Mr Navalny was sentenced to an ad­ though it is not clear how he will now be della, a 28-year-old Euro-deputy who now
ditional 19 years in prison for "extremism" able to communicate it. "Prison exists only runs her party. She has also ditched some
on top of the eleven-and-a-half years he in your mind," Mr Navalny wrote in one of of the party's most Eurosceptic positions,
was already serving for "fraud". But even his early posts. If so, he remains the freest including a past promise to tal<e France out
then he continued to communicate with man in Russia. ■ of the euro, which proved unpopular. ►►
48 Europe The Economist October 21st 2023

► Ms Le Pen has worl<ed hard to normalise ruling coalition. On September 17th Ms Le budget rules and energy policies.
the party too. Her suit-wearing deputies Pen was guest of honour at his party's an­ The visit seemed to go well. The tandem
hecl<le far less than do members of the nual jamboree in Lombardy, a stronghold. even made progress on perhaps the most
other main parliamentary opposition bloc, Launching her party's campaign for next tricl<y dossier, a reform of the EU electricity
NUPES, a left-wing alliance. The party June's elections to the European Parlia­ marl<et that is meant to ease the burden of
wants to show that it is not there just to ment there, she vowed to "put Europe bacl< price spil<es for European households and
rant and blocl<, but is ready-lil<e Ms Mel­ in its place". Polls suggest the RN will beat businesses and to bolster Europe's com­
ani in Rome-to govern. Mr Macron's centrists into second place. petitiveness against America and China.
The chief reason to thinl< that Ms Le Pen It could be that, as Ms Melani runs into Yet behind the scenes France and Germany
poses a far greater threat is geopolitical. Ms domestic difficulty, particularly over eco­ continued to argue. That went on until the
Melani is no friend of Russia's Vladimir nomic management, this will rub off on Ms very day of a meeting of EU energy minis­
Putin. Ms Le Pen's party, by contrast, tool< a Le Pen too. On immigration, argues Domi­ ters on October 17th. And even though they
€gm loan from a Kremlin-linl<ed banl< nique Reynie, head of Fondapol, a thinl<­ managed to stril<e a compromise, there is
(which it has just paid bacl<). During her tanl<, "Melani demonstrates the impotence plenty of bad blood. Paris sees the deal as a
presidential campaign in 2022 Ms Le Pen of populists." The number of migrants ar­ French victory; the Germans insist that
briefly used a photo of her next to Mr Putin riving in Italy has surged on her watch. For their views largely prevailed.
in a flyer, published before he sent the now, though, Ms Melani is also showing The core of the row is over how EU
tanl<s into Ul<raine. Although she de­ that the populist right can run a big Euro­ members can subsidise their industries in
nounced the invasion, at a parliamentary pean country. That is enough to mal<e the face of the hefty increases in energy
hearing in May this year Ms Le Pen contin­ French centrists shudder. ■ prices that followed Russia's invasion of
ued to defend the referendum held in Cri­ Ul<raine. France wants to extend to all its 56
mea after Russia annexed the Ul<rainian nuclear power plants instruments called
territory in 2014. EU energy market "contracts for difference" (cfo). These are

High tension
Moreover, in office Ms Melani has been guarantees issued by the government that
a firm bacl<er of NATO, and of arming Ul<­ oblige it to stump up for the difference if
raine. Ms Le Pen, on the other hand, not marl<et prices turn out lower than an
only wants to pull France out of NATO's in­ agreed ''stril<e price", but let it pocl<et the
tegrated military command. She has also extra if the marl<et price is higher. Berlin
argued against the alliance's expansion BERLIN
wants cfos to be an incentive for invest­
even to Sweden and Finland, let alone Ul<­ Paris and Berlin compromise on ment in renewable energy that should be
raine. She tl1inl<s "Russian paranoia" about reform of the electricity marl<et applied only to new plants. It worries that
NATO on its borders should be "tal<en into their use for France's nuclear fleet will de­
account", lifting an argument straight from
the Moscow script, and has criticised
France for sending heavy weaponry to Ul<­
W HEN EMMANUEL MACRON and Olaf
Scholz met for a coupie of days of
tall<s along with their top ministers in
ter investment in renewables.
The compromise strucl< in the small
hours of October 18th says that govern­
raine. Ms Melani, says an RN official disap­ Hamburg earlier this month, the French ments can apply cfos to investments
provingly, is "very Atlanticist". president and the German chancellor tried aimed at "substantially" upgrading exist­
Ms Melani has so far played by EU rules, to present a united front. They munched ing plants to increase their capacity or to
but Ms Le Pen still vows to overturn them. Fischbrotchen (fish sandwiches) with their prolong their lifetime. But any revenue
Her scheme is to lean on lil<e-minded gov­ wives and tool< a tour of Hamburg harbour. gleaned must not distort competition and
ernments-in Hungary and Sloval<ia, The two-day meeting was meant to reset trade in the internal marl<et. It should
though not for much longer in Poland-to the most important bilateral relationship therefore go to consumers, and to industry
transform the EU from within into an "alli­ within the EU, one that had become only under tight restrictions.
1
ance of nations". She wants to hold a refer­ increasingly troubled owing to a host of ac­ ' This was absolutely not a German cru­
endum to amend the French constitution rimonious disagreements on defence, EU sade against nuclear energy," says Sven
in order to entrench its "superiority" over Giegold, a state secretary at Germany's
EU law. And she vows to reduce France's economy ministry. Germany's opposition
contribution to tl1e EU budget. If otl1ers do to the French proposal was simply to en­
not co-operate, insists Jean-Philippe Tan­ sure a level playing field. By extending cfos
guy, an RN deputy who helped run Ms Le to its entire nuclear fleet, France hoped
Pen's presidential campaign, "we would that a low stril<e price fixed with EDF, the
force their hand", for instance by refusing state-owned electricity firm, would allow
to pay. Anything of the sort would begin to the government to pocl<et the extra rev­
pull the EU apart. enue from high marl<et prices that it could
Such is the tall<. Whether a French pres­ then pass bacl< to industry. This would give
ident could enact such changes is another French industry an unfair advantage.
matter. Even were Ms Le Pen to win the The compromise will still need to go
presidency, her party would not by itself through the EU parliament. Moreover, lots
secure a parliamentary majority. Any con­ of the detail is unresolved. The mutual irri­
stitutional change has to be approved ei­ tation is unlil<ely to subside in the coming
ther by referendum or by a three-fifths ma­ months. "Both countries are increasingly
jority in a joint sitting of both houses. Par­ committed to an energy strategy that is
liament also has to approve any nomina­ viewed by the other as doomed to fail,"
tion to the Constitutional Council. writes Shahin Vallee of the German Coun­
A good measure of Ms Le Pen's distance cil on Foreign Relations. France will con­
from Ms Melani is the fact that her real ally tinue to double down on nuclear energy;
in Italy is not the prime minister but Mat­ Germany instead is betting the country's
teo Salvini, a more populist member of the The electron wars energy future on its renewables. ■
 The Economist October 21st 2023 Europe 49

Charlemagne Bacl< to cacophony

The Eu's incoherent response to the crisis in Israel has exposed the limits of its geopolitical heft
cians have instead lool<ed within: a virtual meeting of 27 national
leaders was arranged on October 17th to get everyone on the same
page, which was not Mrs von der Leyen's. A fraught personal rela­
tionship between her and Charles Michel, who as European Coun­
cil president chairs meetings of EU leaders, used to be the stuff of
the Brussels cocl<tail circuit. Now it lool<s as if it made the bloc
(
even more impotent than it might otherwise have been.
The episode is damaging for Mrs van der Leyen, who since the
war in Ul<raine had been the face of a more forceful, geopolitical
Europe. Her influence-and that of the EU-seemed to extend be­
yond Ul<raine. A speech she gave in March calling for a "de-risl<­
ing" rather than a "decoupling" of economic relations with China
had set a new tone in the relationship there; she has worl<ed close­
ly with America, too. New buzz phrases lil<e "strategic autonomy"
and "Team Europe" had hinted at the bloc playing its full part in
geopolitics, a third power in a bipolar world.
But in trying to project a similarly forceful EU in the Middle
East, the unity that underpinned Europe's previous efforts was
lacl<ing. Some countries in Europe, notably Mrs van der Leyen's
native Germany, align instinctively with Israel, and emphasise its
right to defend itself. But others, such as Spain and Ireland, are
more closely attuned to the plight of Palestinians, and warn of an

N OTHING SCREAMS "great power" lil<e an aircraft-carrier.

on October 10th Thierry Breton, the European commissioner
And so

hailing from France, raised the idea of the EU availing itself of such
impending humanitarian disaster. Many simply felt the dispute
was beyond the paygrade of the Eu's central institutions. Ul<raine
united the continent: European leaders jointly visited Kyiv after
a seafaring airbase. Alas, even before the merits of a floating jet­ the city beat bacl< Russian attacl<ers last year. This latest crisis di­
launcher for a bloc with neither navy nor air force could be consi­ vides it. This weel< the German chancellor, Olaf Scholz, travelled to
dered, the Eu's geopolitical ambitions fared as poorly as a plane Israel alone. France's Emmanuel Macron is considering a later trip.
lurching off the decl< and into the drinl<. In the days around Mr Mrs von der Leyen might have sensed that conflict in the Mid­
Breton's flight of fancy, a fumbled response to the terrorist attacl<s dle East was always going to be uniquely polarising. Israel is both
in Israel on October 7th left Europe lool<ing muddled. A union that close enough for Europe to care about-its scientists benefit from
had found its foreign-policy voice over Ul<raine has rediscovered EU funding schemes, Israeli football teams play in European com­
its penchant for cacophony. A bout of chaotic diplomacy and in­ petitions and its crooners participate in the Eurovision Song Con­
ternal squabbling has set bacl< the cause of a "geopolitical EU" to test-yet too remote for a conflagration there to feel directly
match China and America. threatening. Every EU country has its own relationship with the
Europe's response to the crisis started off badly and got steadily region, coloured by their Muslim and Jewish populations. Most
worse. Beyond the usual lighting-up of buildings in the colours of fear a spillover of the violence onto their own streets. Anti-Semitic
whichever country is mourning its dead, the first reaction of note incidents in Europe have flared since the Hamas stril<e; France and
to come out of Europe was the announcement that the EU would Belgium have both endured terrorist attacl<s. Others fret that a re­
suspend all development aid to Palestinians-a serious move, gional conflagration could result in a new wave of migration to
considering the bloc is their largest donor. The policy was re­ Europe, as happened after wars in Syria and Afghanistan.
versed the very same day amid rising concerns in national capitals
about the living conditions of innocent Gazans caught up in the Eyeless in Gaza
fighting. Later in the weel<, on October 13th, the commission's Divided or otherwise, it is unlil<ely Europe would have had much
boss, Ursula van der Leyen, travelled to Israel. The message she de­ sway on Israel's response to being attacl<ed. But its impotence is
livered there was dutifully sympathetic. But national capitals starting to lool< serial. The EU for years painted itself as a mediator
fumed that she had failed to emphasise their concern that any re­ in a territorial dispute pitting Azerbaijan against Armenia, yet
sponse from the Israeli side needs to l<eep within the boundaries could do little but meel<ly protest when Azerbaijan turfed tens of
of international law. Government after government briefed that thousands of Armenians out of a disputed enclave last month. A
she was speal<ing not for the EU, merely for herself. As the furore deal with Tunisia to help cut migration across the Mediterranean
mounted, Mrs von der Leyen's team speedily announced that the has floundered: Tunisia returned €6om ($63m) the EU had paid it
Eu's humanitarian aid to Gaza was to be tripled. to seal the agreement. Even closer to home, disorder reigns as Kos­
The war in Ul<raine had given the EU a measure of geopolitical ovo and Serbia l<eep tussling despite entreaties from Brussels.
swagger. In the face of war, the club had found new means to be The Eu's fans hoped that its impressive response to Russia's in­
relevant, for example by paying for arms to be sent to hit bacl< at vasion of Ul<raine had exorcised a set of demons which have long
Russian invaders. That l<ind of unified resolve now lool<s lil<e a haunted it: that it is a construct perfectly adept at standardising
one-off. Attempts at forging a coherent response to a crisis just be­ phone chargers and mal<ing farmers rich, but one that scarcely
yond its shores have been caught up in bicl<ering between nation­ matters when it comes to high politics. A fortnight of disunion has
al capitals and even between different EU institutions in Brussels. made the EU lool< as plodding as ever: a club that does not shape
Far from projecting power to the outside world, European politi- geopolitics so much as endure its effects. ■
so Britain The Economist October 21st 2023

➔ Also in this section

51 Collating NHS patients' data
52 Bagehot: Tory rationing
➔ Read more at: Economist.com/Britain
The troubled SNP gathers
Perky manufacturing
A land rush for vineyards
The state of Dartmoor

The NHS l<eeping many alive who would, without it,

From sicl<ness service

be dead. But not being dead is not the same
as being healthily alive: an average Briton

to health service
may reach only 60 or so in good fettle (see
chart on next page). As Raghib Ali, the chief
medical officer of Our Future Health (and
its volunteer number one), says: "What we
WATFORD
have... is not really a National Health Ser­
vice but a national sicl<ness service."
The world's largest health-research study wants to save lives-and the NHS
It was never meant to be lil<e tl1is. When

V OLUNTEER NUMBER ONE rolled up his

sleeve on July 12th last year. Volunteer
two put out an arm to give blood the same
queues forming. The plan is to recruit sm
people-almost as many as there are in
Norway-and get them weighed, mea­
in 1943 Winston Churchill promised Brit­
ain a health service "from the cradle to the
grave" no one dreamt that Britons would
day. Volunteer 100 stepped onto the scales sured, quizzed, genotyped, phenotyped. spend so long with one foot in that grave,
on August 3rd. A tape measure was slipped Then to put the data to worl< to see who gets or cost so much as they stood there. On the
around the waist of volunteer1,ooo on Sep­ sicl<, with what, and when, and why-and contrary: it was thought that the NHS
tember 30th. Then things sped up: volun­ if intervening early can help. The aim is would get cheaper over time as Britons­
teer 100,000 gave blood this March. The simple. To save them-and the NHS. Be­ laid in their cradles by NHS midwives, for­
roll is now growing so fast-by thousands cause as Sir John Bell, regius professor of tified by NHS vaccinations-would gaze
every day-that putting a precise number medicine at Oxford University and the through their newly issued NHS spectacles
in print is pointless: by the time you read study's chair, says, the NHS is "not sustain­ to a bright, healthy future. The NHs's very
this it will be out of date. By the end of this able in its current form". existence, wrote William Beveridge, its ar­
year this research study-called Our Future The NHS has two main problems. The chitect, would lead to "a reduction in the
Health-will be Britain's largest of its l<ind. first is that it worl<s badly. The second is number of cases requiring it". It was, one
By the end of next year, the world's. that it worl<s well. Its failings-waiting politician later said, "a miscalculation of
Across Britain, the study is unfurling. lists, queuing ambulances, costs invari­ sublime dimensions".
In Liverpool and in London, in Manchester ably labelled "spiralling" -are well l<nown. In its first year the NHS promptly ran
and Grimsby and Oxford, in dreary super­ Its successes are harder to see-but are twice over budget, not helped by those NHs
marl<et car parl<s, mobile vans are drawing there in those same lists, queues and costs. specs, of which twice as many pairs (8m)
up, cubicle curtains being drawn bacl< and For all exist, in part, because the NHS is were handed out as had been expected. ►►
 The Economist October 21st 2023 Britain 51

► Aneurin Bevan, the father of the NHS,

grumbled that "cascades of medicine [are]
-
Three score years and then
lar software doctors have diagnosed cancer
patients quicl<er when their scans, pre­
pouring down British throats-and they're Britain, disability-free life expectancy at birth scriptions and appointments are collated
not even bringing the bottles bacl<." It has By region, 2018-20, years in one place. When one hospital trust com­
not got cheaper: the budget for NHS Eng­ Female • Male
bined data to monitor barriers to dis­
land is £169bn ($205bn) this year. Its prog­ charges, the number of long stays fell by
-"v- 56 58 60 62 64 66
nosis is "hopeless, actually", says Sir John. London over a third. Opportunities go far beyond
People tend to use the verb "collapse" to de­ helping doctors see more patients. Artifi­
South East
scribe the end of the NHS. It will not. It will cial intelligence trained on large datasets
do something worse: it will ebb. Those who East of England spots patterns human eyes never could.
can afford to leave, will. Those who can't South West The covid-19 response proved the bene­
will stay and queue and suffer. "Our NHS" fits of joining up data. With the help of Pa­
East Midlands
will, almost imperceptibly, become "Their lantir Technologies, an American firm,
NHs". And Bevan's dream will be lost. West Midlands real-time insights gleaned from combined
To save it Britain must do no less than Scotland datasets enabled officials to dispatch ven­
"pivot the way we deliver health care", says North West
tilators and personal protective equipment
Sir John. The NHS must stop mainly treat­ to where they were most needed, and to de­
ing people who are manifestly very sicl< Wales sign vaccination campaigns targeting the

•
and get them when they still, ostensibly, Yorkshire and the Humber most vulnerable. Because software engi­
seem well. Which is why, on a rainy Friday North East neers were linl<ing data rather than build­
afternoon, Dr Ali, slight, clever, softly spo­ Source: ONS
ing a central repository, data stores could
l<en, is standing in an unprepossessing be built and refined more quicl<ly. This
Tesco car parl< in Watford outside a yellow marl<ed a departure from previous clunl<y,
van. On it is the Our Future Health logo­ tests and, if necessary', treatment. costly, failed NHS data projects.
and the NHS one. (The study is a public­ It will not be perfect: inevitably there The FDP was intended to be the latest it­
private partnership: one-third of its £239m will be false positives and consequent eration of covid-era ingenuity. Instead it
budget is funded by government, two­ anxiety. It remains to be seen whether the appears to be running on the same old
thirds by life-sciences companies.) Inside, NHS-a cantanl<erous, intransigent 75- scripts. Poor communication meant that
people wait as a fine drizzle falls. year-old patient-will accept its medicine. until recently some NHS trusts' own data
The unprepossessing air of this study­ Dr Ali is optimistic: "It's quite hard to see chiefs were unsure of what the FDP was
all those car parl<s-is not accidental. The how the study could fail." And in Watford meant to do. As pressures have mounted
life-expectancy gap between Britain's ricl1- and in Grimsby and in Manchester, volun­ on front-line services, "digital transforma­
est and poorest local authorities is ten teers queue, and roll up their sleeves. Some tion" has again been deprioritised. Hospi­
years. Yet the gap in expectancy of life to help the NHS. Some to help themselves. tals still spend £ 234m ($285m) a year on
without ill health is 20. And those at the Some to help both. Because we are all in storing paper records, according to the
bottom of such ranges tend not to volun­ this together. For no\\r. ■ Times Health Commission.
teer for medical studies. Dr Ali is obsessed The procurement process has also
by ensuring that they do. Which is why raised the antennae of privacy activists.
those yellow vans are drawing up in the car Health data They would always have twitched at the

Joining up the bots

parl<s of Tesco, Asda, Lidl and Morrisons. front-runner for the £48om contract: Pa­
"Not Waitrose." Medical trials don't need lantir, which has combined data for the
more Waitrose shoppers. CIA. (Comments by the firm's co-founder,
As the rain falls, Dr Ali welcomes volun­ Peter Thiel, lil<ening Britons' affection for
teers in. The NHs's size is its great weal<­ the NHS to Stocl<holm syndrome, only add
ness-it is unwieldy and all but impossible to activists' misgivings.) To the suspicious,
to reform-but also its strength. The RE­ An imperfect but necessary attempt the fact that the firm initially handled the
COVERY trial, which found that a cheap ste­ to bring together patients' data NHs's covid analytics for a mere £1 has the
roid cut covid deaths by a third, yielded a feel of a stitch-up. Since data will be used
result within 100 days. Sir Martin Landray,
a professor of epidemiology at Oxford who
ran RECOVERY and now runs Protas, a not­
B EING IN HOSPITAL is rarely fun. But
some things in the National Health Ser­
vice (NHS) contrive to add to patients'
for direct patient care in the FDP, people
cannot opt out of sharing it. Though it will
be anonymised, this risl<s eroding trust in
for-profit founded to improve clinical pains. When IT systems cannot tall< to each what the NHS does with data.
trials tacl<ling common conditions, says other, the sicl< must drive themselves dizzy No surprise then that the winner of the
that in its breadth (almost 70m people) and repeating their medical histories in every contract, due to be revealed in September,
length of coverage (from cradle to grave) new interaction. Without good systems to is yet to be announced. But even if the FDP
the NHS is "almost unique...The opportuni­ manage data, operating rooms often lie does goes ahead, after myriad delays, some
ties are really enormous." empty despite endless demand. Such sna­ wonder if it will ultimately prove obsolete.
Our Future Health is trying to mal<e the fus are not only maddening, but harmful. The contract lasts seven years, which risl<s
most of them. Each volunteer will generate Each delay to treatment compounds bacl<­ locl<ing the NHS into the software. The FDP
hundreds of data points for researchers logs exacerbated by stril<es and the co­ is lil<ely to be outpaced by projects that
immediately; billions when their genomes vid-19 pandemic, pushing the NHS waiting share data beyond the NHS, and can adapt
are sequenced. That data will be married to list in England to a record 7.75m cases. more nimbly to innovation.
their NHS data; AI will be used to crunch Such inefficiencies are not inevitable. That doesn't mean it shouldn't go
the lot. Then the worl< will begin: volun­ Many can be reduced by stitching together ahead. Trusts will still be free to pursue
teers will (if they wish) be told what condi­ disparate datasets across the NHS, as an their own plans. But for the NHs's laggards
tions they are at risl< of and, for certain upcoming project, the Federated Data Plat­ the project should be the start, not the end,
conditions (some cancers, diabetes, heart form, or FDP, should do. Its boring name of joining up data. In these difficult times,
disease) be put on NHS pathways, for more belies big ambitions. In pilots using simi- the NHS needs all the help it can get. ■
52 Britain The Economist October 21st 2023

Bagehot Caught short

How rationing became the fashion under the Tories

£1oobn ($12obn) high-speed railway, the prime minister painted it
as redistribution. In fact it was rationing. Money saved could be
spent on other schemes, he argued. Given Britain's record in
building infrastructure, it is fair to assume few will materialise.
The result will be that trains remain congested and further pres­
sure is heaped on roads. Since politicians fear pricing roads prop­
erly to manage demand, expect more traffic jams. Ultimately, gov­
ernment policy is for people to travel less.
Sometimes rationing mal<es for subtle savings. Cutting bene­
fits for, say, children with special needs would be cruel and un­
popular. Mal<ing them hard to get attracts less attention. Profes­
sional email-slingers may not be daunted by a 39-page application
to unlocl< four figures' worth of benefits; others may struggle
without help. Often, what lool<s lil<e government generosity is in
fact more rationing. Amid a glut of green measures, Mr Sunal< in­
creased the subsidy for installing a heat pump to £7,500 from
£5,000. At the same time, the government did not increase fund­
ing for the programme. Fewer people will benefit.
The effects of rationing are most pernicious in housing. A dis­
cretionary planning system, with building approved or denied by
planners and politicians, inevitably leads to shortages of homes in
the manner Kornai would recognise, argues Anthony Breach of

W HEN WANDSWORTH PRISON opened in south-west London in

1851, its Victorian architects thought it was fit for 1,000 in­
mates. Today it hosts 1,600. The conditions are worse than
Centre for Cities, a thinl<-tanl<. In 2020, the Conservatives prom­
ised to loosen the system. Bacl<bench MPs scuppered it; the minis­
ter responsible was ejected. Strict rationing remains even where
Dicl<ensian: cells designed for one in the 19th century now house the government has tried to remove it.
two, or more. Vermin are rife. A recent report labelled the prison Where some rationing is supposed to happen, such as in health
"overcrowded" and "squalid". care, shortages have reached new highs. In the National Health
Wandsworth is the norm rather than the exception. A prison Service in England, waiting lists stand at nearly Sm cases, in a
estate with a capacity of 88,782-even allowing for Wandsworth­ country of 56m people. Those in the queue are the lucl<y ones.
style overcrowding-holds 88,225. Judges, realising they had no­ Each morning across Britain, patients are forced to call a GP at 8am
where to send rogues, delayed sentencing. On October 16th the on the dot if they want an appointment. In 2005, Sir Tony Blair was
Conservative government reversed-engineered a solution: letting berated on the BBC's "Question Time" by angry guests annoyed be­
criminals out early and sending fewer of them to jail. cause GPs only offered appointments inconveniently soon. Now,
For a party elected to hang 'em and flog 'em, or at least locl< 'em only inconsistent rationing-and grumpy receptionists-l<eep
up, this is a remarl<able shift. Prisons are overcrowded in part be­ acute care from being overwhelmed.
cause Conservative politicians have demanded longer sentences.
At the same time, the government refused to build enough new Completely irrational
prisons. The 20,000 extra places promised by the mid-202os will When Kornai explained his theory to an audience of Maoists in
not arrive until 2030 at the earliest. And so the government finds Koll<ata in 1975, they reacted with horror. Better to suffer shortage
itself rationing prison places instead. than iniquity, ran their logic. Voters in Kenilworth have similar in­
Such rationing is in vogue. Prisons are simply the most absurd stincts. Allowing the marl<et to police access to services mal<es
example of a tactic increasingly deployed by the government. Britons feel icl<y. Charging to see a GP is politically forbidden: eight
From health care to welfare via heat-pump subsidies and plan­ in ten voters oppose the idea. Whenever road-pricing is men­
ning, erratic rationing has become the norm. Politicians are not tioned, critics are quicl< to label it a "poll tax on wheels". The Tories
willing to increase taxes enough to cover the real costs of the ser­ are allergic to the high taxes required for a European-sized state
vices voters demand. Nor are voters willing to pay them. And nei­ but no longer have the cojones to support marl<et-based solutions.
ther side is willing to forgo the dream of comprehensive services Rationing is the miserable compromise.
on the cheap. The results are shortages, which can be managed Forcing Britons to queue, cajole receptionists or go without the
only by queues, unpredictable rationing and ministerial dil<tat. services they are owed is no way to run a country. The fix for Brit­
It is a familiar problem. Janos Kornai, a Hungarian economist, ain is the same as it was for the eastern bloc. "The lasting solution
examined how Soviet economies failed to supply enough of the to misery lies in reforming production, not distribution," wrote
things people wanted. When things running out was the "normal Kornai. "Rationing systems that spread misery equally may as­
state for the system, not an unusual event" it was a "shortage econ­ suage feelings of injustice for a while, but they will not solve any­
omy". In Britain, mercifully, capitalism thrives in the private sec­ thing." Britain's public services must become more efficient. Mal<­
tor. Supermarl<et shelves are full and a brand new BMW is yours, if ing them so will not be cheap, but it beats the alternatives. Britons
you can afford it. When it comes to government services it is an­ must either pay more for those services, expect less or face up to a
other story. Shortages reign. Where the Russians built a shortage future of erratic provision, in which stamina, persistence and lucl<
economy, the Tories have created a shortage state. trump need-and people who would otherwise be in HMP Wands­
When Rishi Sunal< cancelled the Manchester leg of HS2, a worth are wandering in the streets. ■
 Business The Economist October 21st 2023 53

Business and geopolitics In practice, their policies are not always

Control shift
aligned with Uncle Sam's. The result could
be a mesh of rules that, once in place,
would impose costs on technology compa­
nies without doing much to bolster na­
tional security in the way that the regimes'
architects envisioned.
SINGAPORE AND TAIPEI
This is not the first time that the demo­
America's allies are the holes in its export-control fence cratic world has attempted to stem the flow
of technology to undemocratic adversar­

A MERICA MAI<ES no bones about want­

ing to stop China, its autocratic rival
for geopolitical supremacy, from getting
definite waivers to install equipment that
falls under these restrictions in their fac­
tories in China. Four days later TSMC, Tai­
ies. After the second world war 17 coun­
tries, led by America, established the Co­
ordinating Committee for Multilateral Ex­
hold of advanced technology. On October wan's chipmal<ing champion, also re­ port Controls to limit exports of strategic
17th American officials extended restric­ ceived a dispensation. The carve-outs were resources and technologies to the Commu­
tions on sales to the country of advanced secured (and announced) by governments nist bloc. The body was disbanded in 1994,
microchips used in training artificial-in­ in Seoul and Taipei, \\rhich are l<een to pro­ once the Soviet threat was no more.
telligence (AI) models. This is the latest set tect their domestic firms' vast commercial America's efforts to co-ordinate some
of export controls designed to prevent cut­ interests in China. They also shine a light of its anti-Chinese restrictions have so far
ting-edge tech that America helped create, on the l<notty nature of the American-led been much more piecemeal. The closest
meaning most of it these days, from mal<­ global export-control regime. President Joe Biden's administration has
ing its way to the Chinese mainland. It also American sanctions' global pretensions come to co-ordination is an opaque agree­
seel<s to close a loophole, which allowed depend on the co-operation of allies. In ment sealed in January with Japan and the
Chinese firms' foreign subsidiaries to pro­ principle, democratic governments in Asia Netherlands. This was important to Amer­
cure chips that their parents were barred and Europe are similarly wary of China, ica because Dutch and Japanese compa­
from purchasing. and are devising their own export controls. nies, such as ASML and Tol<yo Electron, re­
The loophole is almost certainly not the spectively, are the sole manufacturers of
last one that will need closing. Just this sophisticated chipmal<ing tools without
month America itself created room for a ➔ Also in this section which it is almost impossible to produce
few more. Last year it imposed sweeping the most advanced semiconductors. In Ju­
54 Bartleby: Luck and career success
restrictions that cut off people and firms in ly Japan's government introduced rules
China from many advanced technologies 55 Meet India's mega-wealthy limiting the exports of advanced chip tech­
of American origin, including types of cut­ nology. Its Dutch counterpart followed suit
56 Canon takes onASML
ting-edge chips, the software to design in September.
them and the tools to manufacture them. 56 Oil supermajors' trading bets Lool< closer, though, and the nuts and
On October 9th it granted two South Kore­ bolts of the three countries' export con­
58 Schumpeter:Are CEOs overpaid?
an chipmal<ers, Samsung and SK Hynix, in- trols vary considerably. The Bureau of In- ►►
54 Business The Economist October 21st 2023

► dustry and Security (BIS), America's ex­ Various national regimes diverge in European Union. For now individual EU
port-control agency, publishes an "entity other meaningful ways. American allies in members retain discretion over export
list" of thousands of companies, including Europe and Asia have not sought to copy controls related to their national security.
plenty of Chinese ones, that are barred the extensive, extraterritorial reach of But given the bloc's single marl<et in goods,
from being sold certain types of technolo­ American sanctions. Ji\s a result, Asian and which lets technology flow across borders
gy. Japan has no such public entity list. In­ European companies that wish to continue unimpeded, Eurocrats in Brussels want a
stead, it has announced a list of 23 specific selling technology to Chinese customers greater say.
types of product which require an export can in theory establish subsidiaries in On October 3rd the European Commis­
licence. The Japanese government has as­ places without strict export controls (at sion presented a list of areas deemed criti­
siduously avoided mentioning China spe­ least as long as these firms do not rely on cal to the bloc's economic security. It
cifically, for fear of sparl<ing the ire of a big American inputs). would lil<e the ability to impose Eu-wide
trading partner. The Netherlands' controls, The situation in Europe is complicated export controls in these areas, which in­
too, are "country-neutral" and applied to a further by the division of responsibilities clude advanced chips, quantum comput­
handful of products. between national governments and the ing and artificial intelligence. It is unclear►►

Fortune tells

The role of luck in careers, companies and compensation

L UCI< PLAYS a big and often unacl<nowl­

edged part in career success, starting
in the womb. Warren Buffett has tall<ed
tioners believe that lucl< affects the out­
come of exploration projects. The authors'
analysis of 50 years of drilling on the
talent and hard worl<. Although some
have argued that entrepreneurs are sim­
ply people fortunate enough to have a
of winning the "ovarian lottery" by being Norwegian Continental Shelf concluded large appetite for risl<, sl<ill does matter.
born in America when he was, and being that the differences in success rates be­ A paper from 2006 by Paul Gompers of
wired in a way that pays off in a marl<et tween individual firms were random. Harvard University and his co-au thors
economy. Good lool<s are associated witl1 There is a long-running debate about showed that founders of one successful
higher pay and a greater chance of being whether lucl< affects executives' pay. A company have a higher chance of suc­
called to interview in hiring processes. recent paper by Martina Andreani and ceeding in their next venture than en­
Your experience of discrimination will Lal<shmanan Shival<umar of London trepreneurs who previously failed. Better
reflect your circumstances of birth. Business School and Atif Ellahie of the technology and greater expertise reduce
The early way-stations in a career are University of Utah suggests that it does. the role of chance; the average success
often marl<ed by chance: a particularly The academics lool<ed at the impact of a rates in oil exploration, for example,
encouraging boss, say, or an assignment big corporate-tax cut in America in 2017, have gone up over time.
that leads you off in an unexpected but an event which resulted in large one-off But if lucl< does play a more important
defining direction. Lucl< can affect the tax gains and losses for firms that were role in outcomes than is often acl<nowl­
pathways of the most rational-minded based on past transactions and that could edged, what does that mean? For individ­
professions. A paper published in 2022 not be attributed to managers' sl<ills. They uals, it suggests you should increase the
by Qi Ge of Vassar College and Stephen found that larger windfall gains led to chances that chance will worl< in your
Wu of Hamilton College found that higher pay for CE0s of less scrutinised favour. Partners at Y Combinator, a start­
economists with harder-to-pronounce firms; tax losses did not seem to affect up accelerator, encourage founders to
names, including within ethnic groups, their earnings. Lucl<y things. apply to their programmes by tall<ing
were less lil<ely to be placed into academ­ Just as some people blindly believe that about increasing the "surface area of
ic jobs or get tenure-tracl< positions. merit determines success, so it is possible lucl<": putting yourself in situations
Names can worl< against economists to get too hung up on the role of chance. where you may be rejected is a way of
in other ways. Another study, by Liran CE0s may well be rewarded for lucl< but giving lucl< more opportunity to stril<e.
Einav of Stanford University and Leeat slogging to the top of companies involves An awareness of the role that lucl<
Yariv, now of Princeton University, found plays ought to affect the behaviour of
that faculty with earlier surname initials managers, too. Portfolio thinl<ing reduc­
were more lil<ely to receive tenure at top es the role of lucl<: Messrs Mill<ov and
departments, an effect they put down to Navidi mal<e the point that the probabil­
the fact that authors of economics papers ity of stril<ing it lucl<y in oil exploration
tend to be listed alphabetically. goes up if firms complete numerous
Performing well can be due to lucl<, independent wells. If lucl< can mean a
not talent. In financial marl<ets, asset bad decision has a good result, or vice
managers who shine in one period often versa, managers should learn to assess
lose their lustre in the next. The rise of the success of an initiative on the basis of
passive investing reflects the fact that process as well as outcome.
few stocl<picl<ers are able persistently to And if the difference between sl<ill
outperform the overall marl<et. The and lucl< becomes discernible over time,
history of the oil industry is shot through then reward people on consistency of
with stories of unexpected discoveries. A performance, not one-off highs. Mr
recent paper by Alexei Mill<ov and Wil­ Buffett might have had a slice of lucl< at
liam Navidi of the Colorado School of the outset, but a lifetime of investing
Mines found that 90% of industry practi- success suggests he has maximised it.
 The Economist October 21st 2023 Business 55

► how long it will tal<e the 27 EU members to Indian plutocracy and health care. All<em Laboratories, a

Wealth
reach the consensus required to grant the mal<er of generic drugs, helped elevate 11
commission such powers-if it can be people onto the list, the most of any com­

distribution
reached at all. pany. Asian Paints lifted ten, Tube Invest­
Things get blurrier still when it comes ments of India, which expanded from pro­
to enforcing the rules. In most countries ducing bicycle parts to various other com­
the bureaucratic capacity to police export­ MUMBAI
ponents, eight, and Pidilite Industries, a
control regimes is limited. America's BIS, A new survey of the ultra-rich provides mal<er of adhesives, seven.
widely considered to be better endowed The demography and geography of In­
a window into a changing economy
than similar agencies in other countries, dian wealth is broadening, too. The 20-
has fewer than 600 employees and an an­
nual budget of just over $2oom-a modest
figure given the outfit's global remit. Its
I NDIAN PLUTOCRACY can seem set in
stone. The top two spots in the annual
rich list compiled by Hurun, which tracl<s
year-old founder of Zepto, a delivery firm,
mal<es an appearance, as does, for the first
time, the 94-year-old founder of Precision
Asian and European counterparts must such things, invariably go to the Ambani Wires India, a mal<er of electrical cabling.
mal<e do with far less. and Adani clans. This year is no different. Most of India's rich still hail from Mumbai
The relevant agencies often lacl< the ex­ Mul<esh Ambani came in first, with a for­ (328), Delhi (199) and Bangalore (100), In­
pertise to assess exporters' requests for a li­ tune of $98bn. He displaced Gautam Ada­ dia's commercial, political and tech capi­
cence to sell products abroad. That re­ ni, a rival industrialist and last year's win­ tals, respectively. But 21 other cities made
quires an understanding of how a particu­ ner, whose riches clocl<ed in at $58bn. Peer the cut this year, bringing the total number
lar piece of equipment could be used. It is lower down the ranl<ing, though, and the of places plutocrats call home to 95.
almost impossible to tell how such equip­ story is one of change. And although plenty of rich Indians are
ment will actually be employed once it ar­ First, the ranl<s of India's ultra-wealthy still based abroad, most of the new money
rives in China. This year the BIS set aside a are growing. Hurun's lastest list identifies is at home. Most of it is also the product of
relatively piddling sum of $6m for inspec­ 1,319 fortunes of $12om or more (its bench­ the real economy rather than of financial
tions to be conducted abroad-and little if marl< for inclusion). That is 216 more than engineering. Only one private-equity bar­
any of this is lil<ely to be spent on the Chi­ last year. The main sources of affluence are on made the list-Manish Kejriwal, foun­
nese mainland, where American inspec­ not what you might consider the tradition­ der of Kedaara Capital, and his family is
tors are not exactly welcomed with open al routes to riches, such as industry, fi­ worth $36om. The biggest rewards in India
arms. Many of the Bis's poorer cousins in nance and information technology. In­ still accrue to the builders rather than to
other countries depend wholly on the ex­ stead they are consumer goods, materials the moneymen. ■
porting businesses themselves to deter­
mine the actual end-use of their products,
something the companies cannot l<now for
-
Crore principals
sure either. India, Hur un rich list*, August 30th 2023
The result is a mishmash of opaque
rules and fitful enforcement actions. Top ten members Wealth by sector, $bn Number on rich list
Manufacturers of sensitive technologies
Rank, name Wealth t, $bn 0 100 200 300
are left guessing about what business they
(1) Mukesh Am bani 98.0 305
can and cannot do with Chinese firms.
Four Taiwanese firms-Cica-Huntel< (2) Gautam Adani 57.5
248
Chemical Technology Taiwan, L& I< Engi­ 165
(3) Cyrus Poonawalla 33.8
neering, Topco Scientific and United Inte­ 7
grated Services-recently found them­ (4) Shiv Nadar 27.7 Information technology 96
selves under investigation by Taiwan's (5) Gopichand Hinduja 21.4 Financials 107
government after reports surfaced that (6) Dilip Shanghvi 19.9 Energy 11
they were involved in building a new net­ Industrials 140
(7) LN M itta I 19.7
worl< of chip factories in China. The four 52
companies all deny that they have brol<en (8) Radhakishan Damani 17.4
84
any sanctions. (9) Kumar Mangalam Birla 15.2 I Consumer staples
Capital goods 71
14.6 I
Lael< of co-ordination may also explain
(10) Niraj Bajaj Communication services 33
why the system is not l<eeping high tech
out of China as intended. In South Korea,
SK Hynix is lool<ing into how some of its Wealth by age group, $bn Number on rich list Wealth by state, $bn
older memory chips ended up in the latest
smartphone made by Huawei. SI< Hynix
2 91 552 597 77
denies doing business with the Chinese te­
lecoms giant. The Huawei smartphone in 800
question, the Mate 60 Pro, also sported ad­
600
vanced microprocessors furnished by
SMIC, China's biggest chip manufacturer. 400 ___..:;:....__ Maharashtra
Both Huawei and SMIC feature on the Bis's Gujarat 525
entity list and were thought incapable of 200 126
such chipmal<ing feats. Export comptrol­
lers in America and its allies are still trying 0.4 0
to worl< out how exactly the two companies 25 and 26-45 46-65 66 and Unknown
under over
pulled them off. This is unlil<ely to be the
*Wealth above 1,000 crore rupees ($120m) tshared with family
last China-related surprise they have to Sources: Hurun India; The Economist
� Overseas 169 No entries
contend with. ■
56 Business The Economist October 21st 2023

Chipmaking highly standardised in order to minimise by America's export controls from buying

Lithography
the share of chips that turn out faulty. ASML's EUV machines, since they all rely on
Since ASML has long been the only game in bits and bobs of American origin (see earli­

lessons
town for cutting-edge chips, that standar­ er article). It has also struggled to develop
disation means that fabs are being de­ lithography machines of its own. The cur­
signed around its machines, which are the rent American restrictions do not, how­
size of a double-decl<er bus. The fabs that ever, explicitly cover nanoimprint tech­
Canon tries to cracl< ASML's dominance chipmal<ers are currently busy putting up nology. That leaves Canon free to sell it to
of circuit-etching tools around the world will not suddenly switch customers across the Sea of Japan-at least
to nanoimprint lithography. It may tal<e for the time being and perhaps for longer.

P URVEYORS OF CHIPMAl(ING tools sel­

dom attract attention. Yet many inves­
tors' heads turned on October 13th, when
five years for Canon's tools to be used in
mass production, thinl<s Gaurav Gupta of
Gartner, a research firm, and only once
It is unclear whether the Japanese firm's
machines include enough American
l<now-how to ever fall under America's an­
Canon unveiled a new piece of l<it. It is easy they have proved themselves. ti-Chinese strictures. Probably no necl<s
to see why. The Japanese company, which One place where Canon could mal<e craned more at Canon's announcement
mal<es optical equipment, claims that its headway more quicl<ly is China. Since 2019 than those of national-security hawl<s in
"nanoimprint" lithography machine can Chinese companies have been prevented Washington and Beijing. ■
etch the very smallest transistors used in
the most advanced microchips. Such feats
have hitherto been the preserve of ASML, a
Dutch manufacturer of lithographic tools.
Canon hopes to eat furtl1er into ASML's
business by eventually cranl<ing out two­
nanometre chips.
The possibility of breal<ing ASML's
stranglehold on the supply chain for cut­
ting-edge chips is intriguing. The firm has
long enjoyed the biggest monopoly in the
concentrated semiconductor industry. The
world's three biggest chip manufactur­
ers-Intel, Samsung and TSMC-depend
entirely on its extreme-ultraviolet (Euv)
technology to produce the cutting-edge
microprocessors that go into smartphones
and the powerful data-centre servers on
which the computing cloud lives.
ASML's EUV rigs use high-powered la­
sers to etch electrical blueprints onto cir­
cular silicon discs. Canon's alternative, by
contrast, directly stamps chip designs on Big oil

Spread bets
such wafers using a patterned mould. In
theory, this allows it to mal<e more detailed
patterns. And because it involves fewer
steps and avoids the need for expensive la­
sers and supersmooth mirrors, it could be
much cheaper than EUV lithography.
ASML's share price dipped by more than 2%
and Canon's rose by nearly as much on the
The energy supermajors are beefing up their trading arms
nanoimprint news.
In practice, Canon has its worl< cut out.
Dylan Patel of SemiAnalysis, a semicon­
ductor-research firm, points out that na­
I N THE 1950s the oil marl<et was in the gift
of the "Seven Sisters". These giant West­
ern firms controlled 85% of global crude
ously. Russia's war in Ul<raine, geopolitical
tensions between the West and China, and
fitful global efforts to arrest climate change
noimprint lithography is prone to defects reserves, as well as the entire production are all injecting volatility into oil markets
because of the precision required to align process, from the well to the pump. They (see chart 1 next page). Gross profits of
wafers and moulds. The technique is also fixed prices and divvied up marl<ets be­ commodity traders, which thrive in uncer­
not yet effective in dealing with complex tween themselves. Trading oil outside of tain times, increased 60% in 2022, to
chip designs, including for processors the clan was virtually impossible. By the $115bn, according to Oliver Wyman, a con­
used in artificial-intelligence models, that 1970s that dominance was cracl<ed wide sultancy. Yet this time it is not the upstarts
involve many layers of chemical deposits. open. Arab oil embargoes, nationalisation that have been muscling in. It is the de­
Mr Patel predicts that Canon's tool will be of oil production in the Persian Gulf and scendants of the Seven Sisters and their
used for mal<ing parts of memory chips, the arrival of buccaneering trading houses fellow oil giants, which see trading as an
which have fewer layers, rather than for such as Glencore, Vital and Trafigura saw ever-bigger part of their future.
advanced "logic" chips, which process in­ the Sisters lose their sway. By 1979, the in­ The companies do not lil<e to tall< about
formation rather than store it. dependent traders were responsible for this part of their business. Their traders'
Even if Canon can overcome all these trading two-fifths of the world's oil. profits are hidden away in other parts of
technical hurdles, chipmal<ers may be lath The world is in turmoil again-and not the organisation. Chief executives bat
to replace their EUV l<it with its machines. only because the conflict between Israel away prying questions. Opening the bool<s,
Chip fabrication plants (fabs for short) are and Hamas is at risl< of escalating danger- they say, risl<s giving away too much infor- ►►
 The Economist October 21st 2023 Business 57

► mation to competitors. But conversations

with analysts and industry insiders paint a
-
Trade finance
Gulf's powerful producers away from
America and its allies. All that is creating
picture of large and sophisticated opera­ Gross profits from energy trading*, $bn vast arbitrage opportunities for traders.
tions-and ones that are growing, both in 12 Another reason to expect persistent vo­
size and in sophistication. latility is climate change. A combination of
In February ExxonMobil, America's 10 increasing temperatures, rising sea levels
mightiest supermajor, which abandoned and extreme weather will disrupt supply of
8
large-scale trading two decades ago, an­ fossil fuels with greater regularity. In 2021 a
nounced it was giving it another go. The 6 cold snap in Texas l<nocl<ed out close to
Gulf countries' state-run oil giants are 40% of oil production in America for about
game, too: Saudi Aramco, Abu Dhabi Na­ 4 two weel<s. Around 30% of oil and gas re­
tional Oil Company and QatarEnergy are BP serves around the world are at a "high risl<"
2
expanding their trading desl<s in a bid to of similar climate disruption, according to
l<eep up with the supermajors. But it is 0 Verisl< Maplecroft, a risl< consultancy.
Europe's oil giants whose trading ambi­ 2019 20 21 22 23
Then there is the energy transition,
tions are the most vaulting. Source: Bernstein *Semi-annual
which is meant to avert even worse climate
BP, Shell and TotalEnergies have been extremes. In the long run, a greener energy
silently expanding their trading desl<s system will in all lil<elihood be less volatile
since the early 2000s, says Jorge Leon of The supermajors' trading desl<s are lil<e­ than today's fossil-fuel-based one. It will
Rystad Energy, a consultancy. In the first ly to stay busy for a while, because the be more distributed and thus less concen­
half of 2023 trading generated a combined world's energy marl<ets lool< unlil<ely to trated in the hands of a few producers in
$2obn of gross profit for the three compa­ calm down. As Saad Rahim of Trafigura unstable parts of the world. But the path
nies, estimates Bernstein, a research firm. puts it, "We are moving away from a world from now to a climate-friendlier future is
That was two-thirds more than in the same of commodity cycles to a world of com­ riven with uncertainty.
period in 2019 (see chart 2), and one-fifth of modity spil<es." And such a world is the Some governments and activist share­
their total gross earnings, up from one­ trader's dream. holders are pressing oil companies, espe­
seventh four years ago. Oliver Wyman esti­ One reason for the heightened volatility cially in Europe, to reduce their fossil-fuel
mates that the headcount of traders at the is intensifying geopolitical strife. The con­ wagers. Rystad Energy recl<ons that partly
world's largest private-sector oil firms flict between Israel and the Palestinians is as a result, global investment in oil and gas
swelled by 46% between 2016 and 2022. just the latest example. Another is the war production will reach $54obn this year,
Most of that is attributable to Europe's big in Ul<raine. When last year Russia stopped down by 35% from its peal< in 2014. De­
three. Each of these traders also generates pumping its gas west after the EU imposed mand for oil, meanwhile, continues to rise.
one and a half times more profit than sev­ sanctions on it in the wal<e of its aggres­ "That creates stress in the system," says Ro­
en years ago. sion, demand for liquefied natural gas land Rechtsteiner of McKinsey.
Today BP employs 3,000 traders world­ (LNG) rocl<eted. The European superma­
wide. Shell's traders are also thought to jors' trading arms were among those rush­ Future traders
number thousands and TotalEnergies' per­ ing to fill the gap, mal<ing a fortune in the This presents opportunities for traders,
haps 800. That is almost certainly more process. They ral<ed in a combined $15bn and not just in oil. Mr Rechtsteiner notes
than the (equally coy) independent traders from trading LNG last year, accounting for that heavy investment in renewables with­
such as Trafigura and Vital, whose head around two-fifths of their trading profits, out a simultaneous increase in transmis­
counts are, respectively, estimated at according to Bernstein. sion capacity also causes bottlenecl<s. In
around 1,200 and 450 Uudging by the dis­ This could be just the beginning. A re­ Britain, Italy and Spain more than 150-giga­
closed number of employees who are cent report from McKinsey, a consultancy, watts' -worth of wind and solar power,
shareholders in the firms). It is probably models a scenario in which regional trade equivalent to 83% of the three countries'
no coincidence that BP's head of trading, blocs for hydrocarbons emerge. Russian total existing renewables capacity, cannot
Carol Howle, is a frontrunner for the Brit­ fuel would flow east to China, India and come online because their grids cannot
ish company's top job, recently vacated by Turl<ey rather than west to Europe. At the handle it, says BloombergNEF, a research
Bernard Looney. same time, China is trying to prise the firm. Traders cannot build grids, but they

-
Crude awakening
can help ease gridlocl< by helping channel
resources to their most profitable use.
Europe's three oil supermajors are al­
Brent crude, $ per barrel, 2022 prices ready dealing in electric power and carbon
US recessions
credits, as well as a lot more gas, which as
200
the least grubby of fossil fuels is consi­
Iranian Dotcom Covid-19
revolution bubble pandemic
dered essential to the energy transition.
begins Last year they had twice as many traders
150
transacting such things than they did in
Arab oil First Gulf 2016. Ernst Franl<l of Oliver Wyman esti­
boycot t war mates that gross profits they generated
100
rose from $6bn to $3obn over that period.
Other green commodities may come next.
50 David Knipe, a former head of trading at BP
Global
now at Bain, a consultancy, expects some
financial of the majors to start trading lithium, a
• •
CrlSIS
0 metal used in battery-mal<ing. If the hydro­
1963 70 75 80 85 90 95 2000 05 10 15 20 23
gen economy tal<es off, as many oil giants
Sources: World Bank; Refinitiv Datastream; NBER
hope, that will offer another thing not just
to produce, but also to buy and sell. ■
58 Business The Economist October 21st 2023

Schumpeter How much is too much?

The soaring pay of America's bosses is again under fire

Amy Barrus of the Council of Institutional Investors, which repre­
sents pension funds and other asset managers. Ordinary Ameri­
cans, though, are furious. A survey in 2019 by David Larcl<er and
Brian Tayan of Stanford University found that 86% of them
thought bosses were overpaid. Is it time, then, to rein in CEO pay?
One consideration is what the benchmarl< should be. CEOs are
far from the only group rolling in cash, notes Alex Edmans of the
London Business School. Last year LeBron James made $127m
throwing balls in hoops and endorsing shoes. Tom Cruise pocl<et­
ed $1oom for acting in "Top Gun: Mavericl<". Such celebrities do
not seem obviously worthier than bosses steering colossal corpo­
rations responsible for many billions of dollars of capital and tens
or even hundreds of thousands of jobs.
And bosses' pay lool<s lil<e chump change when compared with
the scale of their companies. The total compensation of s&P 500
CEos last year was equal to 0.5% of net profit of the index's firms,
and 0.03% of their combined marl<et value. Investors seem to be­
lieve a good boss is worth many times that. On October uth Dollar
General, an American discount retailer, announced its previous
boss would return to the helm after lacl<lustre results under his
successor. Its share price jumped by 9% the next day. As compa­
nies have grown bigger-the average s&P 500 firm last year gener­
''WE'RE FED up with falling behind," declared Shawn Fain, the ated more than twice the revenues it did in 1990, after inflation­
boss of America's United Auto Worl<ers (UAW), last month and more global, the CEo's job has also become harder, argues Ste­
after the union began a campaign of intermittent stril<es at Ford, ven Kaplan of the University of Chicago Booth School of Business.
General Motors (GM) and Stellantis, America 's "big three" carmal<­ Judging by the European experience, paying bosses less is not
ers. A month in, the two sides are still at loggerheads. Jim Farley, obviously a good idea. The earnings gap between American and
Ford's chief executive, has argued that the 36% pay rise over four European bosses is partly the result of less competition for execu­
years demanded by the stril<ing worl<ers would cripple his busi­ tives in Europe, which has fewer big firms. It also reflects a more
ness. The UAW has countered that the average pay of the big three's egalitarian attitude to pay that has not translated into better per­
CEOs is 40% higher than it was in 2019, compared with 6% for the formance. Europe's firms exhibit lower sales growth, profitability
union's members, which is well below inflation. Last year Mr Far­ and shareholder returns, and its worl<ers are less productive. All
ley ral<ed in $21m in pay, Carlos Tavares, his counterpart at Stellan­ that contributes to the continent's sluggish economic growth.
tis, $25m and Mary Barra of GM, $29m. The average full-time UAW Earlier this year Julia Haggett, head of the London Stoel< Ex­
member made less than $60,000. (Exor, the biggest shareholder in change, warned that Britain's companies risl<ed being hamstrung
Stellantis, part-owns The Economist's parent company.) by their inability to attract executive talent. Last year Laxman Na­
America's bosses are certainly well compensated. After lan­ rasimhan quadrupled his pay by abandoning the top job at Recl<itt
guishing in the 2000s, median pay for CEOs of big companies in Bencl<iser, a London-listed consumer-goods company, to run Star­
the s&P 500 index has climbed by 18% over the past decade, adjust­ bucl<s, an American coffee chain. In Japan, where CEO pay is even
ing for inflation, twice the rise in the median full-time wage in lower than in Europe, companies lil<e Toyota have started beefing
America. The typical s&P 500 boss earned more than $14m last up compensation pacl<ages with stocl<-based incentives.
year, according to figures from MyLogIQ, a data provider. That is
around 250 times as much as the average worl<er. It is also more Greed is good. Right?
than bosses earn in Britain (where chiefs of FTSE 100 firms tool< All this sounds lil<e a compelling argument in favour of letting
home just shy of $5m), let alone in France and Germany (where American cEos off the hool< for their rich rewards. In practice,
CEOs are paid still less). Some American corporate chieftains ral<e though, shareholders should watch for two things. For one, the
in many times that. In 2022 Sundar Pichai of Alphabet, a tech titan, American marl<et for CEOs is far from perfectly efficient. Many
received a $218m stocl< award, following a similar-sized bounty in bosses loom large over their boardrooms, and may cow notionally
2019. In 2021 David Zaslav of Warner Bros Discovery, a media giant, independent remuneration committees. Two in five s&P 500 cEos
received stocl< options worth an estimated $203m (subject to hit­ also chair their boards. A recent survey of American company di­
ting certain performance hurdles). rectors by Pwc, a consultancy, showed that one in two thought ex­
Investors, for their part, do not seem overly bothered. Last year ecutives were overpaid. Any reservations they may harbour, and
only 4% of s&P 500 companies failed to win majority support in express in the comfort of an anonymous survey, dissipate when
(non-binding) "say on pay" votes, according to Meridian, an exec­ confronted with a flesh-and-blood chairman.
utive-compensation adviser. As Lucian Bebchul< of Harvard Law A more immediate concern is that paying vast sums to bosses
School explains, America's big institutional investors pay little at­ when times are tough for common foll< can have unwanted conse­
tention to the marl<et-wide level of compensation, focusing in­ quences, if it emboldens employees to mal<e demands that their
stead on what share of a CEo's pay is tied to the firm's performance, companies cannot afford. This risl<s happening in Detroit, which
and on how much they earn relative to other bosses. American must compete globally with lower-cost carmal<ers. The free mar­
cEos' pay is "so stratospheric we have become numb to it", says l<et for CEOs, in other words, is also subject to political economy. ■
 Finance & economics The Economist October 21st 2023 59

The financial conflict estinian economy still depends on hand­

War by other means

outs. On the eve of the war, the average Is­
raeli was 15 times richer than the average
Palestinian. Only a third of West Banl<ers
have access to a sewage system; some 10%
manage without a water supply. West
Banl<ers have been allowed to worl< in low­
sl<illed jobs in Israel, but have been subject
ISTANBUL
In its fight against Barnas, Israel uses economic weapons as well as military ones to tight restrictions on their movement.
In Gaza, things have been even worse.

I N LESS THAN a fortnight, some 3,500 Ga­

zans have been l<illed, 12,000 injured and
more than a million displaced-on whose
means possible, which requires using eco­
nomic as well as military weapons.
Averting a humanitarian catastrophe is
Growth in GDP per person in the West Bani<
averaged 2.8% a year from 2007 to 2022.
The average Gazan became poorer during
behalf America and the u N are attempting made all the more difficult by the miser­ the same period, with the local economy
to open a passage into Egypt. Entire neigh­ able pre-war state of the Palestinian econ­ shrinl<ing by 2.5% a year. The territory has
bourhoods in the strip have been bombed omy. Israel, Gaza and the West Bani< share a operated under a near total blocl<ade from
to dust. Cut off from food, water and med­ single marl<et, governed by a deal that the Israel since Hamas tool< power in 2007. Un­
ical supplies, the UN warned on October UN brol<ered in 1994. The idea behind the til recently, it was supplied with electricity
16th that Gaza's 2.3m people were on "the agreement was that Palestinians would by Israel, but received only a third of the
verge of an abyss". Since Israel's stril<es be­ worl< in Israel and that Israeli capital would amount it sought. Each of the three wars
gan, war has drained nearly every source of flood into Gaza and the West Bani<, where fought between the two sides-in 2008,
economic life from the territory. rich returns were waiting. In reality, Israeli 2014 and 2021-cost Gaza the equivalent of
For the better part of two decades, Gaza restrictions remained in place and the Pal- at least a year of GDP.
has relied on support from international If there is nothing for an economy to
donors for its financial survival. On Octo­ generate, it is not just growth that suffers.
➔ Also in this section
ber 18th Binyamin Netanyahu, Israel's Unemployment is rife. More than half of
prime minister, said that his country 60 Will China escape deflation? the Gazan adult population were living be­
would allow a modest amount of food and low the IM F's poverty line in 2021. There are
61 The threat from hidden bad loans
medicine across Egypt's border into the few ways to mal<e money. One way used to
territory, which would be the first supplies 62 Thorny questions for Binance be dealing imports and exports through
let in since Hamas launched its brutal at­ tunnels under Gaza's southern border, but
63 Buttonwood: Farewell to Dr Copper
tacl< against Israel on October 7th. Israel's Egypt cleared out most after a bust-up with
allies, including America, are pushing for 64 Free-market economics and the law Hamas in 2014. Another way is to rebuild
more to be admitted. Yet at the same time, what war destroys. One of Gaza's main
65 Free exchange:Taking on big tech
Israel wants to suffocate Hamas by any businesses is construction, which grew by ►►
60 Finance & economics The Economist October 21st 2023

-
Bad and worse
business spending. As charities run so
many of the strip's schools and hospitals,
and the PA l<eeps the lights on, Hamas is
GDP per person, 2015 prices, Q1 2000=100 able to spend lavishly elsewhere.
200 It finances its spending with an adroit
tax system. Though Gaza gets no imports
150 from Israel, it does get them from Egypt,
100
from which trade had recently increased,
and the West Bani<. Hamas taxes food and
50 fuel crossing the Egyptian border; picl<s up
I I I I I I I I I'
16.5% of the value of products from baby
I I I I

2000 05 10 20 23
food to jeans; charges three shel<els ($0.75)
per l<ilo of fish caught by fishermen; and
Unemployment rate,%
50 levies income tax. Altogether economists
40 recl<on that Hamas may tal<e in somewhere
30 in the region of 1.5bn shel<els a year.
West Bank 20 Other sources of finance are already in
10 Israel's sights. Gaza's various Islamist
0 groups receive maybe $1oom a year from
I I I I I I I I I I
2002 05 10
I I I
15
I I I
20 22
I
Iran, according to America's best guess.
Source: Haver Analytics
Hamas also receives individual donations
from the Gulf and the West, some of which
are furtively transferred across borders us­
► 20% last year. It will presumably grow by ing cryptocurrencies. Israel and its allies Property woes
more once tl1is round of war ends. have already come down hard on these
Others cobble together incomes from a sources of finance where possible, freezing Still in the mire
range of outside sources. Some 70,000 Ga­ accounts in Istanbul and London.
zans remain on the payroll of the Palestin­ Will aid to Gaza end up strengthening
ian Authority (PA), even though its officials the position of Hamas? In the past, Israel
who run tl1e West Bani< were l<icl<ed out of has been wary of multilateral organisa­
HONG KONG
Gaza by Hamas in 2007, and none of them tions worl<ing in the strip. Other govern­
actually goes to worl<. Qatar deposits
The Chinese economy may be growing
ments have found that linl<s between char­
cash-some $1om a month-into the bani< ities and Hamas are rare, however. In Gaza,
faster, but serious problems remain
accounts of thousands more locals. The PA
pays Gaza's electricity bills, which Israel
subtracts from the tax it collects on behalf
few believe rumours that Hamas taxes aid.
So grim is the situation that a few bits of
11

fuel getting lost is worth it", argues the boss

C HIN AS EMERGENCE from its covid-19
controls was meant to be the biggest
economic event of the year. Instead, the re­
of the PA in the West Bani<. The UN educates of a thinl<-tanl< in Gaza. opening has turned into one of the biggest
300,000 Gazan children; a networl< of hos­ Israeli policymal<ers also face dilem­ disappointments. In a recent survey by
pitals it runs with charities provides the mas in the West Bani<. Just a few thousand Bani< of America, fund managers in Asia
territory with basic health care. Gazans worl< in Israel; in contrast, a quar­ expressed their "fatigue and frustration"
ter of the West Banl<'s labour force worl<s with China's weal< growth and the lacl< of a
The strip's assets over the border or in Jewish settlements. concerted government response.
Another organisation on which Gazans de­ Israel does allow exports and imports On the face of it, economic data re­
pend is Hamas, whose administrative through the West Banl<-the duties on leased on October 18th should cheer them
branch runs the strip's government. Since which mal<e up around two-thirds of the up. The figures showed that China's econ­
it tool< power, Hamas has expanded the PA's budget. These taxes are collected by Is­ omy grew by 4.9% in the third quarter,
public payroll from roughly 20,000 to rael and occasionally l1eld up for months at compared with a year earlier-faster than
50,000 civil servants. Last year its spend­ a time before being transferred. Some Is­ expected. And its growtl1 compared with
ing contributed o.8% to GDP growth, com­ raeli officials reportedly want to cut such the previous quarter was stronger still:
pared with 0.3% from all household and payments, either to redirect money to­ 5.3% at an annualised rate. The economy ►►

-
Opposite of autarky
wards Gazan reconstruction or in the
hopes of stopping pa}rments to Gazan fam­
ilies. Other Israeli officials insist that the
-
Deflated
Palestinian territories, government PA needs more, not less, funding in order to China, GDP price deflater
revenue and spending as% of GDP l<eep a fragile peace. % change on a year earlier
30 In some ways, the choices facing Israeli 9
politicians are exaggerated versions of
25 ones that they have faced in the past. When
Donor aid 6
20 Israel wanted to contain Hamas, it made no
Non-tax sense to help the group collect taxes. Now
Domestic 15 that Israel wants to destroy Hamas, it 3
tax mal<es no sense in military terms to allow
10
Customs supplies into Gaza. Yet if it restricts the 0
revenues*
5 flow of supplies even more harshly, a hu­
0 manitarian disaster �'ill ensue. On October -3
2016 17 18 19 20 21 22 17th Gaza's health ministry begged for gen­ I
2009
I I
11
I I
13
I I
15
I I
17
I I
19
I I
21
I I
23
I

Sources: Haver Analytics; IMF *Collected by Israel

erators. Without them, it said, hospitals Sources: Haver Analytics; The Economist
were about to shut down. ■
 The Economist October 21st 2023 Finance & economics 61

► should now have little trouble meeting the Thus fatigue and frustration should not growth target in sight, policymal<ers may
government's growth target of "around give way to complacency. At the IMF's an­ now be tempted to wait and see how the re­
5%" for this year. UBS, a banl<, raised its nual meeting, Pierre-Olivier Gourinchas, covery evolves before pursuing further
forecast for 2023 from 4.8% to 5.2%. the fund's chief economist, called for stimulus. In the face of a hostile America
The source of the growth was also en­ "forceful action" from China's government and turbulent geopolitics, it appears l<een
couraging. Consumption contributed al­ to restructure struggling property develop­ to l<eep its fiscal powder dry.
most 95% of it, noted Sheng Laiyun of Chi­ ers, contain financial dangers and rede­ Still, it is hard to see how deflation
na's National Bureau of Statistics. There ploy fiscal measures to help households. strengthens China's position. The IMF now
are signs that the country's beleaguered The government has tal<en some steps. thinl<s that China's prices, as measured by
households may be coming out of their It has allowed a growing number of local its GDP deflator, will fall this year com­
shells. Demand for longer-term loans is governments to issue "refinancing bonds", pared with last. Combined with the yuan's
growing; the saving rate, adjusted for the which will help clear late payments to sup­ weal<ness, GDP could shrinl< in dollar
season, fell below 30% of disposable in­ pliers and replace the more expensive debt terms. Indeed, China's economy will gain
come for the first time since the pandemic, owed by local-government financing vehi­ little ground on America's in the next five
according to Yi Xiong of Deutsche Banl<. cles. The authorities seem l<een to prevent years, according to the fund (see chart 2).
One reason for this may be improve­ any of these vehicles from defaulting. The contrast with the IMF's April fore­
ments in the job marl<et. Urban unemploy­ But preserving financial stability is not cast is starl<. In the space of six months, the
ment fell to 5% in September from 5.2% in the same as reviving growth. The govern­ fund has shorn off more than $15trn, in to­
the previous month and the average worl<­ ment's efforts to stimulate demand have so day's dollars, from China's cumulative GDP
weel< lengthened. Household debt burdens far been both piecemeal and grudging. Its for the years from 2023 to 2028. Few econo­
have also eased a little. Chinese policymal<­ fear of doing too much seems to outweigh mies can match China's scale. And that in­
ers have instructed banl<s to cut the inter­ its fear of doing too little. With the official cludes the scale of its disappointments. ■
est rate on outstanding mortgages in line
with the lower rates available for new ones.
On October 13th the central banl< an­ Financial threats

The hangover worsens

nounced that the interest rate on existing
mortgages, worth 21.7trn yuan ($3trn), had
been lowered by 0.73 percentage points,
which should free up over 1oobn yuan of
spending power a year.
But the good news for households was
not matched by good news for houses. The
SHANGHAI
property marl<et remains dangerously
China's banl<s may be loaded up with hidden bad loans
weal<. The amount of residential floor
space sold by property developers in Sep­
tember was 21% below that sold last year.
Increasingly, China's developers must ac­
W HEN JINZH0U BANI<, in north-east­
ern China, showed signs of distress
at the start of the year, state media suggest­
it is possible that a large portion of Jin­
zhou 's lending bool< is unrecognised bad
debt. The bani< has said almost nothing
tually finish buildings before they can sell ed that a billionaire named Li Hejun might about its condition since earlier this year.
them. Completed buildings accounted for be to blame. Mr Li, a solar-panel tycoon, If hidden bad debts such as these lurl< at
almost a quarter of sales in September, was once China's richest man. His firm was Jinzhou Banl<, they may lurl< elsewhere,
compared with less than 13% in 2021. l<nown to have tight linl<s to the banl<. And too. This is worrying, for Chinese finance
The threat of deflation lingers, too. Chi­ it was not long after word spread that he is already in a mess. Local governments are
na's annual non1inal growth, which in­ had been arrested that Jinzhou Banl< sus­ struggling to repay lenders at least 65trn
cludes inflation, was 3.5% in the third pended trading in its shares and told inves­ yuan ($9trn) in off-balance-sheet debts.
quarter, lower than the real, inflation-ad­ tors it would restructure its operations. Many of the country's big property devel­
justed figure. This suggests that prices of Oddly, the banl<'s finances lool< to have opers have already defaulted on offshore
goods and services fell by almost 1.4%, the been in good shape. The firm's overall bad­ bonds and owe trillions of yuan-worth of
second drop in a row (see chart on previous debt level was low in the first half of 2022, unbuilt homes to local residents. China's
page), which mal<es the current period Chi­ the last period for which detailed informa­ largest wealth-management firms have
na's worst deflationary spell since 2009. tion is available. Although one concerning started to default on payments owed to in­

-
Second thoughts
figure sticl<s out-more than 50% of its
personal-business loans had become non­
performing-this type of loan comprised
vestors. Given that the type of hidden debts
possibly on Jinzhou's balance-sheet have
so far received little attention, the banl<'s
China's GDP relative to America's,% just 1% of its total. Small- and micro-enter­ troubles ought to come as a warning.
At market exchange rates prise loans, which mal<e up about half of Problems with loans to the smallest
90 the banl<'s loan bool<, appeared normal, firms began with covid-19. As China shut
April 2023 forecast
with only 3% having gone sour. down, the central banl< put a moratorium
80 But was this the whole story? In theory, on the repayment of loans for small- and
there is no meaningful distinction be­ micro-enterprises until June 2020 in order
70
tween personal-business loans and small­ to halt a wave of defaults. After less than
Actual October 2023 60 and micro-enterprise loans, says Jason three months, officials estimated that
forecast Bedford, a veteran banl<ing analyst. The 7oobn yuan in payments had been de­
50
two types are used in similar ways and ferred. The moratorium has been extended
40 should offer similar risl<. In practice, several times since then, with officials cit­
J'<y- though, there is a crucial difference: small­ ing the continued impact of covid. No esti­
2010 15 20 25 28 and micro-enterprise loans remain co­ mate for the total amount of unpaid loans
Source: IMF
vered by a covid-era moratorium allowing exists and banl<s will not be required to
banl<s to avoid recognising bad debts. Thus disclose them publicly until next year. ►►
62 Finance & economics The Economist October 21st 2023

► The moratorium has also coincided wunderl<ind, and cz was his shadowy foil.
with another state initiative. In order to Keen to avoid being pinned down by na­
stimulate the economy, the central govern­ tional laws, his exchange was based "no­
ment has leant on banl<s to extend loans to where". Binance had long been under in­
the smallest firms, and to do so at the low­ vestigation for possible money-laundering
est possible interest rates. Although such and criminal-sanctions violations by
policies have been attempted for years, America's justice department. cz had in­
banl<s have been resistant, preferring to vested in FTX before the two turned on
lend to the large, often state-owned com­ each other. Then SBF publicly goaded cz
panies with which they have relationships about his legal problems, and a tweet by cz
already. This time the policy has worl<ed, probably helped set off the run on FTX.
however. A cracl<down on the banl<ing in­ Now, with FTX out of the picture and
dustry, culminating in the arrest of the SBF on trial, charged with various l<inds of
president of one of China's largest com­ fraud, which he denies, cz lool<s a lot lil<e
mercial banl<s last year, has made bosses the last man standing in crypto. Binance
more willing to follow official edicts. utterly dominates crypto trading (see
As a result, at the beginning of the year chart). A whopping 40-50% of it by volume
about 28% of all loans in China had been tal<es place on the platform. The big ques­
given to small- and micro-enterprises, up tion, which cz discussed in an interview
from 24% at the end of 2019. Many of these with The Economist in Bahrain on October
loans represent simply the renewal of old­ 11th, is how Binance will now evolve.
er, unpaid debts. It is well l<nown that For as long as crypto exchanges have ex­
small firms struggled during the pandem­ isted, financial laws have been ill-suited to
ic. Despite this, there has hardly been an Crypto's future them. Given the nature of the assets that

Rivals crushed
upticl< in non-performing loans, notes Ali­ are traded, they are in effect hybrids of ex­
cia Garcia Herrero of Natixis, a bani<. changes, brol<ers and settlement firms. If
Another result has been what some crypto exchanges were largely unregulated
view as a catastrophic mispricing of assets. that was at least partly because few laws
Small firms are usually judged to pose the had been written to govern them.
greatest risl<s, but loans to small- and mi­ ZALLAQ
But, in the wal<e of FTX's collapse, the
cro-enterprises have nevertheless been After FTx's implosion, will Binance situation is starting to change. Legislators
provided at rocl<-bottom interest rates. come over to the light side? and regulators around the world are rush­
Banl<s have offered them at an average of ing to pen new laws or cracl< down on the
4% annual interest, down from 6% or so in ''THE LUI<E SI<YWALI<ER and the Darth industry. This has two big implications for
2019. To mal<e matters worse, a recent Vader of crypto." That is how Michael exchanges. First, regulators want to mal<e
surge in long-term deposits, which are re­ Lewis, author of "Going Infinite", a recent sure that they are not mishandling or im­
munerated at higher rates, means banl<s' bool< about the rise and fall of Sam Banl<­ properly using customer funds, as FTX did.
margins have been squeezed even tighter. man-Fried, founder of FTX, a now-banl<­ Second, they want to ensure that exchang­
Only a few lenders have hinted at the rupt crypto exchange, is supposed to have es are not facilitating financial crimes.
amount of loans they have deferred. Min­ described the intense rivalry between his cz insists that customers can trust his
sheng Bani<, one of China's largest, said in subject and Changpeng Zhao (pictured), exchange. "There are so many ways" Bi­
its mid-term report last year that it had the boss of Binance, a rival firm. nance is structured differently to FTX, he
provided 212bn yuan in renewed loans and Until Mr Banl<man-Fried's exchange says. The firm has met heavy redemption
deferred payments in the previous six collapsed with an $8bn hole in its balance­ requests from clients, including in choppy
months, equivalent to 9% or so of its entire sheet, the analogy seemed apt. The two marl<ets. He points out that the Securities
corporate loan bool<. Since then, it has de­ men controlled the two largest crypto ex­ and Exchange Commission (SEC), Ameri­
clined to mal<e similar disclosures. The changes in the world. Both were l<nown by ca's financial regulator, spent a long time
central banl< is providing funds to banl<s, acronyms: "sBF" and "cz". Young, talented investigating Binance for this l<ind of mis­
which can be used to support specific parts and seemingly in favour of playing nice conduct. The regulator could provide "zero
of the economy. In a recent report it said with regulators, SBF was something of a evidence" that Binance was commingling
that it had handed out 2.7trn yuan in loans
for small firms in the first half of this year.
Any loan moratorium comes with a
-
CZ-peasy
user funds, says cz, "which actually helps
us to prove that we don't do it." Other com­
plaints by the SEC, including that the com­
gamble: that a period of forgiveness will al­ Eight biggest centralised crypto exchanges pany issued securities without a licence,
low struggling companies to get bacl< on by trading volume, June 2023, $bn are still to be heard in court.
their feet after a shocl<. The initial decision 0 50 100 150 200 250 Yet it is the second requirement that
may have saved tens of thousands of firms might turn out to be tricl<ier for Binance. In
Binanee
and even a few banl<s from going under. December Reuters, a news service, report-
Now the fate of the pile of debt-however Upbit ed that prosecutors at America's justice de­
big it may be-depends on China's eco­ OKX partment were split on whether or not to
nomic fortunes over the coming months. Coinbase charge the firm with money-laundering or
Although the purchasing-managers' index Bybit
sanctions violations. According to Bloom­
for manufacturers shows that the outlool< berg, another news service, Binance with­
for large companies has improved slightly, Kucoin drew its application to become a licensed
the one for small and medium-sized com­ Bitget exchange in Singapore in 2021, where it
panies has continued to contract. The eco­ MEXC was based at the time, in part owing to its
nomic hangover from the covid era has lin­ Source: CoinGecko
inability to comply with strict anti-money
gered. It could now be about to intensify. ■ laundering rules. The SEC quotes evidence ►►
 The Economist October 21st 2023 Finance & economics 63

► from a former employee, who admitted zen "the small number of accounts" solic­ in addition to such policies, a full licence
that the company thought it was an "unli­ iting donations in support of Hamas, to means that authorities lool< at "your wallet
censed securities exchange" and "did not comply with international sanctions laws. infrastructure, your security, your custom­
want to be regulated, ever". The test for the firm now will be in er support policies, your refund policy.
cz dismisses this as "private chat by an Europe. America is cracl<ing down on cryp­ They lool< at your whole business."
ex-employee", and adds it "was not the to, and is unlil<ely to pass new laws soon. A crypto exchange can no longer argue
right thing by far". He notes that Binance is By contrast, European legislators have that it cannot comply with national rules
"the most licensed crypto firm in the written a "Marl<ets in Crypto-Assets" or because they do not exist. Failing to meet
world", with permission to operate in 18 "MicA" frameworl<, which entered into Europe's standards would reveal that Bi­
countries across Asia, Europe and the Mid­ force in June. Exchanges can l<eep operat­ nance does not want, or is unable, to follow
dle East (its American arm operates in 44 ing under existing licences until 2026, un­ even clear laws. In "Star Wars", Yoda warns
states). Binance now appears to be playing less refused under MiCA, which will re­ Lul<e Sl<ywall<er that it is easier to amass or
nice with various authorities. A spol<esper­ quire strong policies against money-laun­ wield power by turning to the Darl< Side. It
son confirms that in recent days it has fro- dering and terrorist financing. cz says that, is harder to operate in the light. ■

The red metal no longer tells investors much about the global economy

D OCTORS ARE famously reluctant to

hang up their stethoscopes. But a
time comes in the career of every medic
solar-energy capacity this year, according
to Goldman Sachs, a banl<, almost double
the amount it installed last year. And
their copper-light predecessors. In
Europe sales of new petrol-powered cars
will be banned from 2035.
when their sl<ills fade, and a gentle push methods for storing energy require the The squeeze on supplies will there­
is the best thing for them-and their metal, too. Pumped-storage hydropower is fore be historic, meaning that slcy-high
patients. The same applies for the meta­ one example. This in\rolves moving water copper prices will no longer be indicative
phorical physicians of the financial from one reservoir to another, either to of optimism on the part of industrial
world, whose ability to diagnose the hoard excess energy from wind and solar machinery-mal<ers, construction firms,
marl<et's health changes over time. Now power or to release it. China already has electronics manufacturers and the lil<e.
the end may be nigh for the most illustri­ 30% of the world's hyd ropower-storage Instead, rising demand for copper will
ous of all such physicians: Dr Copper. capacity, at 50Gw. Another 8gGW of capac­ increasingly reflect a desire among poli­
Copper, a metal crucial to the con­ ity is being built, which will require vast ticians for more environmentally friend­
struction of all manner of fittings, pipes amounts of copper. ly energy, and sometimes also a reduced
and wires, has earned its nicl<name on Other countries are also spending big dependence on imports.
Wall Street owing to its role as a bell­ on the green transition, and putting in In normal times, building an electri­
wether for the health of global industry. place legislation that will increase appe­ cal networl< from scratch would at least
A surge in copper prices is tal<en as an tite for the metal. s&P Global, a financial­ be a signal of greater economic activity to
early sign of an economic upswing; a big data firm, suggests that demand for re­ come. However, the energy transition is
drop is a portent of recession, or at the fined copper will almost double by 2035, intended to replace existing activity,
very least a manufacturing downturn. to 49m tonnes. Batteries, energy transmis­ rather than add to it. In the case of energy
So what is going on at the moment? sion, solar cells, transport-all need the infrastructure, China's new solar in­
Manufacturing lool<s peal<y. Global in­ metal. An electric car contains over 50 vestment this year can generate 150
dustrial output is up by just 0.5% year on l<ilograms of the stuff, more than twice the gigawatt-hours of energy when worl<ing
year, well below the average of 2.6% over amount used in a conventional vehicle. at full pelt, which is equivalent to almost
the past two decades, and the rich world Across the world new rules, intended to 90,000 barrels of oil per hour. That is
is in an industrial recession. A wobble of reduce emissions, will steer consumers energy which China now does not need
a similar scale in 2015 sent copper prices towards electric vehicles and away from to purchase from overseas producers.
plunging by about a quarter. Yet so far The result may well be good for the plan­
this year they are down by only 6%. et, but it will not have much effect on
Futures maturing in 2025 are flat, and aggregate economic activity.
those maturing in 2026 are up a bit. With so much of the growth in de­
The breal<down in the usual rules of mand for copper locl<ed in, and proceed­
thumb is most stril<ing in China, which ing in large part according to legal dil<tat,
consumes over half of the world's annual the metal's price will over time say less
copper supply. Its stricl<en housing and less about the state of the global
marl<et might have led you to thinl< the economy, and more and more about the
metal was doomed. After all, investment state of the energy transition. Copper
in property, once a l<ey driver of copper prices will still be worth watching, then,
demand, is down by 9% year on year. albeit for different reasons. Investors
Curiously, though, Chinese demand for wanting a hint about the state of the
the metal is up by around 10% this year. global economy will be replaced by
The explanation for this lies in the policymal<ers wanting a sense of how
radical shifts that are under way in the their green policies are faring. Dr Cop­
energy system. China will install around per's retirement may be a sad moment,
150 gigawatts (Gw) of copper-intensive but it is not the end of the story.
64 Finance & economics The Economist October 21st 2023

Political economy de-Silanes, used data from more than 100

Not so civil anymore

countries to tease out the impact of legal
origins on the regulation of startups, the
stringency of labour protections and the
efficiency of contract enforcement. "What
we found is that regulation was consistent­
ly less onerous and contract enforcement
consistently more efficient in common­
How free-marl<et economics has reshaped legal systems around the world law jurisdictions," says Mr Shleifer. The
difference was sharpest in the barriers fac­

T HE LEGAL system that operates in the

United Arab Emirates (UAE)-lil<e that
in many countries across the Gulf-is a
foundation for an economy than central
planning. A decentralised judiciary has ac­
cess to "local l<nowledge" -the subtleties
ing entrepreneurs. The number of forms to
fill out and business days needed to pro­
cess an application, and the cost of admin­
blend of French civil and Islamic Sharia and idiosyncrasies of actual legal cases­ istrative fees, were all higher under civil­
law. But this summer Dubai announced that a centralised legislature does not. This law jurisdictions. In 2001 Paul Mahoney of
that it was exploring the introduction of is analogous to the way in which the butch­ the University of Virginia analysed data
English common law to 26 free-trade er, the brewer and the bal<er are better from across the world and found that, in
zones. These are jurisdictions that are ex­ placed to l<now what goods to produce, in the three decades to 1992, GDP per person
empt from local taxes and customs duties, what quantities and at what marl<et price had grown 0.7 percentage points a year
and have their own independent legal sys­ than a collection of �'ell-meaning bureau­ slower in civil-law countries than in their
tems and courts. The region is increasingly crats. A legal system based on judicial pre­ common-law counterparts.
dotted by such common-law islands, re­ cedent allows judges to adapt the body of These findings were influential, partic­
flecting the belief that the Anglosphere's law to real-world circumstances. ularly at multilateral institutions. The
legal tradition is better for business. World Banl<'s Ease of Doing Business Index
Such an idea can be traced bacl< to Frie­ Common sense was shaped by the legal-origins theory. In­
drich Hayel<. Fifty years ago this month, The arguments put forward by Hayel< deed, Mr Djanl<ov jointly founded and ran
the Nobel-prize-winning economist and mostly concerned the law's ability to pro­ the initiative from 2003. In the decade and
philosopher published the first volume of tect individual liberty', but they apply to its a half to 2020, more than 400 studies using
his magnum opus, "Law, Legislation and ability to promote economic growth, too. data from the index were published. Lead­
Liberty". In it, he argued that the common­ Twenty-five years ago, in a landmarl< study ers including France's Emmanuel Macron,
law approach is more amenable to freedom in the Journal of Political Economy, Andrei Germany's Angela Merl<el and Japan's Abe
than its civil-law counterpart. Later, in the Shleifer, Rafael La Porta and Florencio Lo­ Shinzo made rising up the ranl<ings a goal.
1990s, Hayel<'s ideas inspired the legal­
11 pez-de-Silanes, then at Harvard University, The result was a wave of reform in civil-law
origins theory", which made both an em­ as well as Robert Vishny of the University countries, which tended to ranl< lower. As
pirical and theoretical case that common of Chicago, used data from 49 countries to Mr Djanl<ov notes, there was "a dramatic
law is better for the economy. The theory show that investors' rights are better pro­ international convergence in rules and
has been as influential as it has been con­ tected in common-law countries. The pa­ regulation to the common-law standard".
troversial, leading to sweeping reforms in per gave credence to Hayel<'s ideas and set Has this produced a surge in economic
civil-law countries around the world. off a flurry of research into the relationship growth? Perhaps not. More recent studies
The common-law tradition emerged in between legal origins and the economy. have splashed cold water on the legal-ori­
England. Under its strictures, the judiciary In three subsequent papers, Simeon gins theory, says Holger Spamann of Har­
is bound by precedent: principles estab­ Djanl<ov, a World Banlc economist, worl<ing vard University. Ones that control for a
lished by judges in previous cases are bind­ with Messrs Shleifer, La Porta and Lopez- wider array of confounding factors have
ing for future ones. This establishes case found that a country's legal tradition does
law on an equal footing with legislation. In have an effect on its economic prospects,
contrast, the civil-law tradition traces bacl< but one that is not nearly as strong as the
to the Code Napoleon, a legal system that original studies implied. Moreover, some
was set up in France under Napoleon Bona­ economists argue that legal traditions act
parte, which restricted both the indepen­ as a proxy, indirectly capturing the impact
dence and the discretion of the judiciary, of entirely different inheritances, such as
subordinating it to the legislature. those relating to colonial legacies or cul­
England's approach was transplanted tural attitudes. Under this reading, moving
across the globe by the British empire and from a civil-law approach to a common­
underpins the legal systems of 80 or so law one is unlil<ely to be worth the signifi­
countries, including America. The Code cant hassle for places lil<e Dubai.
Napoleon was transplanted across Europe Yet such a switch may nevertheless
by French occupations during the Napole­ have been worth it in an earlier era, albeit
onic Wars and was introduced around the for the wrong reasons. Before it was dis­
world by the French empire. China, Japan, continued in 2021, when World Banl< staff
South Korea and Taiwan all based their were alleged to have fiddled data partly in
modern legal systems on Germany's ap­ response to pressure from China, the Ease
proach, which is also based on civil law. In of Doing Business Index made civil-law
total, civil-law traditions underpin the le­ countries seem lil<e a less attractive desti­
gal systems of about 150 countries today, nation for foreign investors. For a time,
including around 30 mixed systems. then, the legal-origins theory may have be­
Hayel< argued that common law is a bet­ come self-fulfilling-leading to faster eco­
ter basis for a legal system than civil law for nomic growth simply because it was sup­
similar reasons that marl<ets are a better A little less French posed to lead to faster economic growth. ■
 The Economist October 21st 2023 Finance & economics 65

Free exchange Internet monopoly

Trust busters have accused Amazon and Google of locl<ing out competition. Do they have a point?
nant search engine has a larger expected ad revenue from an extra
user. The twist is that if a smaller competitor happened to grow, it
would be willing to pay more for additional users, thus bidding up
how much Google would have to pay-and explaining why Google
may be willing to pay large sums to prevent rivals from gaining a
foothold. Yet it is easier to use a different search engine on an
iPhone than it was to download a new browser on Windows. And
Microsoft's dominance in operating systems seems to have been
greater than Google's is in search. So the case is not airtight.
The case against Amazon is stronger. Luigi Zingales of the Uni­
versity of Chicago thinl<s that if the alleged facts are found to hold,
the FTC should win. Sellers complain that Amazon penalises them
for offering cheaper prices on other platforms by downranl<ing
products or removing tl1em from the "Buy Box", which allows in­
stant purchases. Antitrust scholars call practices that force sellers
to behave similarly across platforms "most-favoured-nation"
(MFN) treatment, and they have come under growing scrutiny. In
the past Amazon has had explicit MFN contracts with sellers.
The problem, according to the FTC, is that Amazon has raised
the cost of doing business on its platform. It charges sellers a fee
for selling, one for using its logistics services and more for adver­
tising. Sellers say that it is next to impossible to qualify for the Buy

A NTI-MONOPOLY CASES have been l<nown to reshape corporate

America. In 1984 AT&T's telephone networl< was found to l1ave
excluded competing firms. The company was controversially bro­
Box without paying for logistics, and that buying ads has become a
must because search results are increasingly cluttered with them.
Although the exact figures are redacted, regulators allege that Am­
l<en up in a move that ultimately led to a boom in innovation azon now collects a larger share of sales on its marl<etplace as fees
among its rivals. Meanwhile, a case against Microsoft in 1998 may than it did a decade ago. In a competitive marl<et, Amazon's cost
have l<ept the door open for Google's subsequent rise. Microsoft hil<es and restrictions on pricing more cheaply elsewhere would
had bundled together its Internet Explorer browser with its Win­ cause sellers to leave the platform. And in fact, some large retail­
dows operating system, and made other browsers more difficult to ers, lil<e Nil<e, have done so. But Amazon's marl<et share in e-com­
install. Some business historians thinl< the case, by stopping this merce has grown (it currently stands at 40-50% in America), sug­
practice, made life easier for new browsers. It may also have dis­ gesting most sellers feel that the platform is too important to quit.
tracted Microsoft from developing its own search engine. Amazon denies all this. As with Google, there is a chance that
Today, two big cases could redefine the limits of monopolies in the case becomes a debate about how dominant the firm really is
the internet age. On September 12th America's Department of Jus­ (Amazon argues that it is dwarfed by the multitude of bricl<-and­
tice (DoJ) began its court battle against Google over the firm's deals mortar stores). American retail is efficient and broadly consumer­
to obtain default status on phones and browsers. On September friendly-hardly the sign of an industry in need of repair. Amazon
26th the Federal Trade Commission (FTC), chaired by Lina Khan, also says that if a seller can offer a lower price on another platform,
sued Amazon for allegedly penalising third-party sellers that of­ it should do so on its site, too. One can imagine a seller thinl<ing
fered lower prices on other sites, among other harmful practices. that Amazon Prime customers are rich and price insensitive, and
In both cases, the government thinl<s the tech giants are so domi­ therefore charging more on Amazon than other platforms.
nant that their attempts to preserve marl<et power are suspect.
This raises a question: what counts as anticompetitive? Ready for a remedy
Historically, practices that might be ignored for a startup have But if that is the case, Amazon has plenty of options available, says
not been tolerated in a dominant firm. John Rocl<efeller's Standard Fiona Scott Morton, formerly of the DOJ. Imagine, for example,
Oil was brol<en up in 1911, in part for stril<ing deals with railroads that Amazon thinl<s that the seller of a particular item is charging
that made it impossible for other oil firms to compete. Antitrust too much. It is free to prioritise other sellers of that item in its
historians still debate the extent to which these deals were abu­ search results. If it cannot find any on its platform, it can recruit
sive-after all, Standard Oil benefited from economies of scale and one from outside. If it still cannot find one, then perhaps Amazon
bull< orders commonly receive discounts. But its size and bargain­ is simply an expensive platform on which to do business.
ing power led to scrutiny. Before the firm's breal<-up, it had cor­ In this final case, a possible solution is a so-called behavioural
nered 90% of oil refineries. Microsoft's bundling was found to be remedy, in which Amazon is made to stop penalising sellers that
problematic because it had over 90% of the marl<et for operating offer lower prices elsewhere. In Europe, where Amazon has also
systems on personal computers. In both cases, the courts believed faced scrutiny, the company has made several concessions, in­
that dominant firms had made life too difficult for newcomers. cluding treating all sellers the same when granting access to the
Today's cases have echoes of those past. Start with Google. It much sought-after Buy Box. Ms Khan of the FTC has said she does
pays more than $1obn to Apple and other companies to be the de­ not lil<e remedies that only target the behaviour of companies,
fault search engine on their platforms. The DOJ argues this creates since they are at best short-term fixes when set against more dras­
a barrier to entry for competitors. Because having lots of data lets a tic measures, lil<e breal<ing them up. Sometimes, however, noth­
search engine show users more tailored advertisements, a domi- ing more is needed than a slap on the wrist. ■
 • •
•
•
Since its beginning in 1999, PNM, or PT Permodalan Nasional Madani, has strived to serve Indonesia's population by utilising their
specialised skills and services for the greater good. The local state-owned financial institution provides lending programmes, business
coaching, and business support to underprivileged entrepreneurs who run micro, small and medium enterprises. Today, PNM is the largest
micro-lending firm in the world and still focuses on providing financial and intellectual support to small businesses. Their most successful
programmes target specific demographics, such as female business owners, and have inaugurated an invigorated era of women-led
entrepreneurs far and wide throughout Indonesia.
In the mid-1990s, Indonesia was going through a financial crisis
that shook the country's economy. When compared to the US Dollar,
the weakened Indonesian Rupiah led to sky-high prices of essential
commodities and widespread bankruptcy. The Indonesian gov­
ernment identified that one of the critical issues concerning the
country's socioeconomic status was extreme poverty, and helping to
create an ecosystem of micro, small and medium enterprises was
believed to be the answer to help the underprivileged. PNM was
created in this context to support Indonesian entrepreneurs by
offering economic and intellectual tools. The lending firm has grown
and adapted throughout the years to engage in extensive social,
political, and economic issues to become a solution to the poverty
problem and to lead Indonesia towards a better future.
PNM has successfully implemented a world-class financial
inclusion programme for over 14 million Indonesians spread over
17,000 islands. Their success could be analysed from various angles,
but ultimately it comes down to dissecting their unique operations
and innovative strategies. The financial institute has worked tire­
lessly to expand its operational reach to provide access to financial
services for the pub I ic to foster sustainable economic empowerment Indonesia is an archipelago nation, presenting particular
and deliver tangible benefits for enhancing the business capacity of geographical challenges when attempting to reach the most remote
its customers and, as a result, the Indonesian economy. Alongside areas and potential customers. By thoughtfully placing PNM offices
Bank Rakyat Indonesia and Pegadaian, PNM has become a solution around the country, the company has the potential to play a crucial
for accessing financial services and providing digital literacy, such role in transforming the social environments where they are located.
as using e-commerce and social media through various business In Indonesian local cultures, word of mouth is the best and most
training programs. reliable way to spread the news about the next best thing. PNM
All of PNM's initiatives have resulted from extensive in-house understood that to expand their business, they would need to be on
research and development efforts. Through extensive analysation, the ground in these local markets. The company placed Account
PNM studied pre-existing ministerial demographic informa­ Officers in strategic areas and took a traditional route when working
tion and noticed that with or attracting new clients by partaking in door-to-door visits or
female customers engaging in community events.
NUMBER OF CIJSIOMER PNM MEU.U
v.. 2016- 2023 and female-run busi- PNM's goal is to continue to assist clients through microlending
14,6 � nesses were some­ and education via financial literacy and other related methods of
times left out of the empowerment to increase the quantity and quality of income
financial system and generation. The institution is firmly committed to helping the gov­
that there were no ernment in various connected programmes to alleviate extreme
specific policies or poverty, widespread literacy that support the customers' business
programmes to in­ and other programmes initiatives such as access to clean water and
c Iu d e t h e m . T h e sanitation to enhance customers welfare. As of May 2023, PNM has
enormous potential provided services to micro, small and medium enterprises in Indo­
for women entre­ nesia through 4,539 service offices in 35 out of 38 provinces and 431
0 1 8 1 Zl preneurs in Indone- cities, and with their word-of-mouth community and innovative
sia was facing chal­ programmes, they'll keep growing until they've reached their goals.
lenges due to traditional cultural oversights. Thanks to PNM, the
Mekaar programme was finally created in 2015 to close the gender
gap. The Mekaar programme provides services for underprivileged
female micro and small business owners, whether they begin from Find out more at pnm.co.id
scratch or are looking to build on their already established
enterprise.
With regards to the strategy, PNM decided to play an active role
within their local communities by participating in activities address­
ing three crucial pillars: reducing extreme poverty even in remote
areas, local socioeconomic growth, and building women's capacity in Pennodalan Nasional Madani
leadership roles.
 Science & technology The Economist October 21st 2023

Al archaeology by side. For classicists, this is heady stuff.

The villa in question is thought to have be­
Unrolled at last longed to Lucius Calpurnius Pisa, the fa­
ther-in-law of Julius Caesar. The ability to
read its well-stocl<ed library could signifi­
cantly expand the number of texts that
have survived from antiquity. Already
there is excited speculation about forgot­
Artificial intelligence could help unearth a trove of lost classical texts ten plays, new worl<s of philosophy-or
even lost Homeric poems.

T HE OBJECT l<nown as P.Herc.Paris.3 res­

embles a darl< grey lump of charcoal,
about the size and shape of a banana. That
Lul<e Farritor, a computer-science student
at the University of Nebrasl<a-Lincoln,
earning him a $40,000 prize. Mr Farritor
Efforts to read the scrolls began in the
1750s, when the villa was rediscovered. At­
tempts to unpicl< them with l<nives caused
explains its nicl<name: Banana Boy. It is in built on worl< by Casey Handmer, a former them to disintegrate. Recognising their
fact a papyrus scroll, found in the ruins of a NASA physicist, whose examination of x­ fragility, Antonio Piaggio, a conservator
villa in the Roman town of Herculaneum, ray images of Banana Boy's charred layers from the Vatican, built a machine in 1754 to
in Campania. Along with hundreds of identified a characteristic "cracl<le pattern" unroll them slowly, using weights on
other scrolls in the villa's library, it was car­ indicating the presence of inl<. strings. Even then, the unrolled scrolls fell
bonised when scorching gases engulfed to pieces. And the resulting fragments
the town during the same eruption of Scroll up were almost impossible to read: charcoal­
Mount Vesuvius, in 79AD, that also buried The same word was later found by Youssef based inl< is hard to see against the shiny
the nearby town of Pompeii. Nader, a robotics student at the Free Uni­ blacl< of charred papyrus. But the few char­
Although the scrolls survived, their versity of Berlin. (Dr Handmer and Mr Na­ acters that could be read revealed some
charring means that unrolling them is al­ der both received $10,000 prizes.) Mr Na­ scrolls to be philosophical worl<s written
most impossible. Now, nearly 2,000 years der has since produced an image from the in ancient Greel<.
later, words from inside Banana Boy have scroll showing four columns of text, side A quarter of a millennium later, in 1999,
been revealed for the first time, after vol­ scientists from Brigham Young University
unteers competing in a prize challenge illuminated some of those fragments with
used x-rays and artificial intelligence to do ➔ Also in this section infrared light. That created a strong con­
the unrolling virtually. trast between papyrus and inl<, mal<ing the
69 Spelunking and the climate
The first word to be found, announced writing more legible. Multi-spectral imag­
on October 12th, was "porphyras", which 69 The return of the bedbug ing in 2008, combining many wavelengths
means "purple" in ancient Greel< (see pic­ of light, was even better, revealing previ­
70 Why a coin toss is not fair
ture on next page). It was uncovered by ously unreadable words. Many fragments ►►
68 Science & technology The Economist October 21st 2023

► turned out to belong to texts written by a soon increased that to over $1m. To get the ons the spur of competition means the
Greel< philosopher called Philodemus of ball rolling, an initial challenge was posted equivalent of ten years' worth of research
Gadara. Until then, they had been l<nown on Kaggle, a website that hosts data-sci­ has been done in the past three months.
only from mentions in other worl<s. (Cice­ ence contests, to improve the inl<-detec­ An active community of volunteers is
ro, though, was a fan of his poetry.) tion model developed by Dr Parsons. now applying the new tools to the two
Around 500 scrolls remain unopened. More than 1,200 teams entered. Many scanned scrolls. Mr Friedman thinl<s there
Given the damage it does, physical unroll­ competed in subsequent challenges to im­ is a 75% chance that someone will claim
ing is no longer attempted. Instead the fo­ prove the tools for inl< detection and "seg­ the grand prize of $700,000, for identify­
cus has shifted towards finding ways to un­ mentation", as the process of transforming ing four separate passages of at least 140
wrap them virtually, by using 30 scans of the 30 scans into 20 images of the scroll's characters, by the end of the year. "It's a
the rolled-up scrolls to produce a series of surface is l<nown. Scrutinising segmented race now," he says. "We will be reading en­
legible 20 images. The pioneer of this ap­ images from Banana Boy, Dr Handmer real­ tire bool<s next year."
proach is W. Brent Seales, a computer sci­ ised that the cracl<le pattern signified the Being able to read Banana Boy would in­
entist at the University of Kentucl<y. In presence of inl<. Mr Farritor used this find­ deed just be the beginning. Only a small
2009 he arranged for Banana Boy, and an­ ing to fine-tune a machine-learning model fraction of Greel< and Roman literature has
other scroll l<nown as Fat Bastard, to be to find more cracl<les, then used those survived into modern times. But if the
scanned in a computerised tomography cracl<les to further optimise his model, un­ hundreds of other scrolls recovered from
( CT) x-ray machine, of the sort usually used til eventually it revealed legible words. the villa could be scanned and read using
for medical scans. This produced detailed Mr Nader used a different approach, the same tools, it would dramatically ex­
images of their internal structures for the starting with "unsupervised pretraining" pand the number of texts from antiquity.
first time. But the inl< within the scrolls on the segmented images, asl<ing a mach­ Dr Seales says he hopes the Herculaneum
could not be made out. ine-learning system to find whatever pat­ scrolls will contain "a completely new, pre­
In 2015 Dr Seales analysed a different terns it could, with no external hints. He viously unl<nown text". Mr Friedman is
carbonised scroll found in 1970 at En-Gedi, tweal<ed the resulting model using the hoping for one of the lost Homeric epic po­
near the Dead Sea in Israel. It had been winning entries from the Kaggle inl<-de­ ems in particular.
written using a metal-rich inl<, which tection challenge. After seeing Mr Farri­ Even more important, all this might in
stood out strongly from the papyrus in x­ tor's early results, he applied this model to turn revive interest in excavating the villa
ray images. (The text turned out to be the the same segment of Banana Boy, and more fully, says Mr Friedman. The existing
Bool< of Leviticus.) This confirmed that, in found what appeared to be some letters. He scrolls were recovered from a single corner
the right circumstances, digitally unroll­ then iterated, repeatedly refining his mod­ of what scholars believe is a much larger li­
ing a carbonised scroll and reading the el using the found letters. Slowly but surely brary spread across several floors. If so, it
contents could indeed be done. its ability to find more letters increased. All might contain thousands of scrolls in
The next step was to combine the exist­ the results were assessed by papyrologists Greel< and Latin.
ing approaches into a new one. In 2019 Dr before the prizes were awarded. One reason that classical texts are so
Seales arranged for Banana Boy, Fat Bastard scarce is that the papyrus upon which they
and four fragments of other scrolls to be Multae manus onus levius reddunt were written does not survive well in
scanned at high resolution using the Dia­ No less important than the technology is Europe's temperate, rainy climate. So it is a
mond Light Source in Britain, a particle ac­ the way the effort has been organised. It is, delicious irony, notes Dr Seales, that the
celerator that can produce much more po­ in effect, the application of the open­ carbonisation of the scrolls, which mal<es
werful x-ray light than a CT scanner. He source software-development method, Mr them so difficult to read, is also what pre­
then paired infrared images of the frag­ Friedman's area of expertise, to an archae­ served them for posterity-and that frag­
ments, in which the inl< can be readily ological puzzle. "It's a unique collaboration ments of scrolls that disintegrated when
seen, with x-ray scans of the same frag­ between tech founders and academics to they were unrolled physically would even­
ments in which it cannot. bring the past into the present using the tually provide the l<ey to unrolling the rest
Earlier this year Stephen Parsons, a tools of the future," he says. Dr Seales reel<- of them virtually. ■
graduate student worl<ing with Dr Seales,
fed the two sets of images into a machine­
learning model, which used the infrared
scans to teach itself how to recognise the
faint signs of inl< in the x-ray ones. By ap­
plying the resulting model to x-ray images
from the rolled-up scrolls it would be pos­
sible to reveal their contents. At this point,
deciphering the scrolls had, in theory, been
reduced to a very complex software pro­
blem. But that software still needed to be
improved and scaled up.
Enter Nat Friedman, a technology exec­
utive and investor with an interest in an­
cient Rome. Mr Friedman offered to help
fund Dr Seales's worl<. Over a whisl<y, they
decided that the best way to accelerate
things was to organise a contest, with priz­
es handed out for completing various
tasl<s. Mr Friedman and Daniel Gross, an­
other entrepreneur, launched the Vesuvius
Challenge in March, with a prize fund of
$250,000. Other tech-industry donors Purple prose
 The Economist October 21st 2023 Science & technology 69

Spelunking and the climate

The weather
underground
What a Serbian cave can tell you about
the weather 2,500 years ago

I Fvou LIVE in northern Europe or North

America, your weather depends partly
on what the northern polar jet stream is up
to.Jet streams are powerful and persistent
winds that snal<e around the Earth from
west to east, several miles above the sur­
f ace. The meanderings of the northern po­
lar jet stream can bring cold air down from
the Arctic over the American Midwest, or
send waves of Atlantic storms crashing
into Ireland or Scandinavia.
As with most sorts of weather, scien­
tists suspect that the flow of the jet streams
is being affected by climate change. Data A record, if you know how to look
from the past century and a half suggest
that the northern jet stream has become ment's eight protons are joined by ten neu­ northern Canada almost as far as the west­
stronger over that time. But a century is not trons instead of the usual eight. Water ern coast of Ireland. It is thought to be
all that long in climatic terms, and it is not from the Atlantic has less. By examining caused by the melting of Greenland's ice
entirely clear whether the strengthening is the proportions of that isotope in the sta­ sheets and the weal<ening of the great oce­
a natural phenomenon. lagmite's layers, the researchers hoped to anic conveyor belts that transport warmer
In a paper published in Geology, Miaofa be able to detect when Serbia had been ex­ water from the tropics into the higher
Li at Fujian Normal University and Slobo­ posed to more Atlantic storms or more northern latitudes. Perhaps more data,
dan Marl<ovic at University of Novi Sad, in Mediterranean ones, and thus what the jet gleaned from otl1er stalagmites in other
Serbia, shed new light on that question. stream had been doing. caves, might help unravel the mystery. ■
Climate scientists routinely examine an­ Drs Li and Marl<ovic and their col­
cient air trapped in polar ice to glean in­ leagues examined two stalagmites, one
sights into the state of the climate hun­ 380mm specimen from Cerjansl<a and one Evolutionary biology

Why bedbugs are

dreds or even thousands of years ago. The 238mm one from Prel<onosl<a. Using traces
researchers point out that something very of two other elements, uranium and thori­

everywhere
similar can be accomplished by lool<ing at um, they were able to date both stalag­
the chemical mal<eu p of rocl< formations mites. The one from Cerjansl<a grew be­
in a pair of Serbian caves. tween 434BC and 1913, while the one from
As with many caves, the floors of both Prel<onosl<a Cave was formed between
Cerjansl<a Cave and Prel<onosl<a Cave, both 798Bc and 404. They then analysed 581 Lil<e bacteria, they have become
in Serbia's south-east, are dotted with thin samples of an oxygen-containing mineral
resistant to chemical attacl<
spires of rocl< called stalagmites. These are called calcium carbonate.
formed, very slowly, by water as it drips
down from the rocl< above. Each droplet
carries dissolved minerals. If water drips
The researchers conclude that the
North Atlantic jet stream seems to be
stronger today than it has been at any time
T o ERNEST HEMINGWAY, Paris was a
movable feast. To a bedbug, so are Pari­
sians. In videos on social media, the seats
onto the same spot over many years, a sta­ during the past 2,500 years. And their con­ of the city's metro are seen swarming with
lagmite gradually forms as the minerals fidence in their method was boosted when bedbugs, tiny insects no bigger than an ap­
are deposited. Crucially, analysing the they were able to see in the rocl<s the signa­ ple pip, which feed on human blood.
minerals from which the stalagmite is tures of climatic events l<nown to have The health risl< from bedbugs is minor:
made can reveal information about the wa­ happened from other sources, such as the itchy bites and a small risl< of allergies and
ter that made it. Roman Warm Period, which lasted be­ secondary infections. As the present panic
The researchers were interested in Ser­ tween 300Bc and 200, and the Dari< Ages suggests, the bigger impact tends to be psy­
bia specifically because of how its location Cold Period, which ran from roughly 300 to chological, says Clive Boase, an entomolo­
affects its weather. The sort of rain the 700. Intriguingly, the data suggest the jet gist and pest-control consultant. Mosqui­
country gets depends on the strength of stream was stronger during cooler periods toes, leeches and other parasites are un­
the northern polar jet stream. When it is and weal<er during warmer ones-the op­ pleasant, but do not colonise your home. If
blowing strongly, it tends to blow in clouds posite of the trend being seen today. a traveller brings bedbugs bacl< from their
that formed over the Atlantic Ocean. When Why the modern jet stream appears to holidays, they can start an infestation that
it is weal<, clouds tend to drift in from the be doing the opposite is not yet clear. The can be very difficult to shift.
Mediterranean instead. researchers raise as one possibility the at­ Schadenfreude among the non-French is
Those two bodies of water have unique mospheric influence of something called unwise. The story is not so much one of
chemical signatures. Water from the Medi­ the North Atlantic Warming Hole. This is a bad hygiene and dirty trains as it is another
terranean has more of a rare isotope of oxy­ persistent blob of unusually cool water cautionary tale of globalisation, climate
gen l<nown as oxygen-18, in which that ele- that stretches from the Hudson Strait in change and evolutionary biology. Warm ►►
70 Science & technology The Economist October 21st 2023

► cities provide ideal environments for bed­ invulnerable to at least some insecticides. pores through which they breathe. Tem­
°
bugs. Cheap travel helps them spread. And That growing resistance has been peratures above 45 C are also fatal. Some
after decades of widespread use, the chem­ boosted by a depleting arsenal of chemi­ pest-control firms therefore offer to heat­
ical insecticides used to l<ill them are los­ cals to hurl against them. Fumigants such treat affected furniture in insulated tents,
ing their power. as hydrogen cyanide, sulphur dioxide and or even to roast entire rooms. But such
Bedbugs are resurgent everywhere. A DDT itself are now regarded in most places treatments are expensive.
decade ago New Yorl< went through a simi­ as too toxic to use. P)rrethroids, which are New insecticides, to which the bugs
lar panic to Paris's today. Figures from the active ingredients in many commer­ lacl< resistance, could probably be invent­
Switzerland's Pest Advisory Service, which cially available insecticide sprays, are saf­ ed. But for now at least, says Mr Boase, the
maintains one of the few long-term data­ er, but become less effective every year. marl<et does not exist to justify much cor­
sets about the insects, show that in the de­ Exterminators are therefore turning to porate research. And since the bugs do not
cade to 2005, bedbug complaints in Zurich other avenues of attacl<. Diatomaceous spread diseases, public-health bodies have
numbered around 20 a year. A decade later, earth, a white silicate powder, can l<ill the more pressing priorities. If bedbugs con­
they had sextupled (see chart). Numbers bugs by desiccating them. Polymer sprays tinue to spread, though, those incentives
fell during covid-19 locl<downs, but they can trap them; certain oils can blocl< the could start to shift. ■
have risen since. "There won't be a city
without bedbugs," says Mr Boase.
Humans probably acquired bedbugs
with their first addresses. DNA analysis
suggests that the pests are descended from
How to predict a coin toss
parasites that prey on bats, with which hu­
mans shared caves, and on birds, which
Coins are fair. Their tossers, less so
may have nested in early thatched roofs. In
evolutionary terms, that mal<es bedbugs a
comparatively recent affliction. That may
explain the one bit of good news about
LcoinOregon,
EGEND HOLDS that the city of Portland,
was nearly called Boston. A
toss in 1845 between Francis Petty­
them. Mosquitoes spread malaria, dengue grove, who hailed from a different Por­
fever and yellow fever. But no human tland, in Maine, and Asa Lovejoy, from
pathogen is l<nown to use bedbugs as a vec­ Boston (the one in Massachusetts) even­
tor-perhaps because there has not been tually decided the matter. But things
time for one to evolve the ability. might have turned out differently, per
The insects thrive in warm environ­ Frantisel< Bartos, a graduate student at
ments with plenty of darl< places to hide. the University of Amsterdam, if people
Cities, and crowded blocl<s of flats, are ide­ were not such wobbly tossers.
al. The bugs shelter in the crannies of fur­ Mr Bartos was interested in a predic­
niture, in mattress seams or in cracl<s in tion made by Persi Diaconis, Susan
walls, coming out to feed at night. Warm, Holmes and Richard Montgomery, a
centrally heated homes accelerate their group of American mathematicians. In
life-cycles, mal<ing the problem worse-as 2007 the trio analysed the physics of a
does a warming climate. flipping coin and noticed something
The introduction and widespread use intriguing. Besides sending it somer­ We'll take any advantage we can get
of insecticides such as DDT in the after­ saulting end-over-end, most people
math of the second world war came close impart a slight rotation to a coin. That mans' apparent inability to throw
to eliminating the bugs from most rich­ causes the axis about which the coin is straight. Mr Bartos was not the first
world houses. But that chemical assault ex­ flipping to drift while it is in the air, a person to collect statistics on coin tosses.
erted a powerful evolutionary pressure on phenomenon called precession. But he is the first to have done so on a
the insects to develop resistance to the poi­ After crunching the numbers, the scale large enough to detect the bias. (A
sons. Just as bacteria have evolved resis­ physicists concluded that a coin thrown previous effort of 40,000 tosses, con­
tance to many of the antibiotics once used by a human should exhibit a subtle but ducted by two students at the University
to l<ill them, modern bedbugs are almost persistent bias. There was about a 51% of California, Berl<eley, lacl<ed the statis­

-
Sleepless nights
chance that a coin would land the same
way up as it had been prior to being
thrown. If it was heads-up in the throw­
tical power to confirm the theory.)
A 50.8% chance is only very slightly
different from perfect fairness. But Mr
Zurich, complaints about bedbugs er's hand, in other words, it would be Bartos points out that it is bigger than the
175 slightly more lil<ely to land heads-up too. advantage enjoyed by a casino in most
Or at least, that was the prediction. varieties of blacl<jacl<. And in some situa­
150 Enter Mr Bartos, and his admirable tions it may matter. In 2019 Sue Cudilla
125 dedication to empiricism. He convinced became mayor of Araceli, a town in the
48 volunteers to perform 350,707 coin Philippines, on the toss of a coin after the
100
tosses, using everything from an Indian election had been declared a dead heat.
75 two-rupee piece to a Swiss two-franc Even more importantly, a coin toss can
50
coin. His data confirmed what the phys­ determine who bowls or bats first in
ics had predicted. The coins landed cricl<et. Professional athletes spend
25 same-side up 50.8% of the time. thousands of dollars and hours of train­
0 The statistics revealed that the coins ing in search of marginal gains. Perhaps
1994 2000 05 10 15 22 themselves showed no particular bias. they should lool< to the loose change in
Source: Health and Environment Department, City of Zurich
The determining factor was indeed hu- the umpire's pocl<et.
 Culture The Economist October 21st 2023 71

Political intolerance ("Baracl< Obama is the American politician

Ill liberals
I most admire." ) He grew up believing that
"humans matter equally irrespective of the
group to which they belong." His bool<,
"The Identity Trap", explains why many on
the left abandoned "universalism". He
summarises the '·wol<e" left's logic as fol­
lows: "to ensure that each ethnic, religious
or sexual community enjoys a proportion­
Two new bool,s examine how to cancel ucancel culture"
ate share of income and wealth... both priv­
In another story, an African-American ate actors and public institutions must
The Identity Trap. By Yascha Mounk. mother tried to get her seven-year-old into mal<e the way they treat people depend on
Penguin; 416 pages; $32. Allen Lane; £25. a class at school. The principal said no: tl1e groups to which they belong."
The Cancelling of the American Mind. By "That's not the blacl< class." This was not a Most of the people who espouse this
Greg Lukianoff and Rikki Schlott. Sitnon & scene from the Jim Crow South of the view aspire to improve the world, and
Schuster; 464 pages; $29.99. Allen Lane; £25 1950s, but from present-day America, many of the injustices they rail against are
where a growing number of "progressive" real. But the policies they advocate "are

Y ASCHA MOUNI<'s bool< contains several

jolting stories, which encapsulate the
extreme thinl<ing of some on the American
schools group children by race and teach
them to thinl< of themselves as "racial be­
ings", all in the name of "antiracism".
lil<ely to create a society... of warring tribes
rather than co-operating compatriots". The
word "liberal" has long been used in
left. When covid-19 vaccines became avail­ Mr Mounl<, a political scientist at Johns America to mean "left-wing", but many on
able, most countries dispensed them first Hopl<ins University, is a man of the left. the left now reject basic liberal notions
to health worl<ers and the elderly (who are such as universal values and free
much more vulnerable to the disease than speech. Across the English-speal<ing world
young people). Yet America's Centres for ➔ Also in this section and beyond, they have become intolerant
Disease Control and Prevention urged of those who do not accept their dogma or
72 Why films are getting longer
states to offer priority to 87m "essential their identity politics.
worl<ers", which included pacl<age-deliv­ 73 Back Story: David Beckham's secret Dismissing "wol<eness" as just well­
ery drivers and film crews. Its rationale meaning millennials pushing for social
74 Seeking enlightenment in India
was "racial equity", because old people justice is therefore a mistal<e, Mr Mounl<
were more lil<ely to be white, even though 74 What to do with unfinished art argues. Not enough people understand
such a policy would probably cause thou­ that the far left is "moving beyond-or out­
75 Books about Israel and Palestine
sands more deaths. right discarding-the traditional rules and ►►
72 Culture The Economist October 21st 2023

► norms of democracies". He has long been Mr Lul<ianoff and Ms Schlott offer a cri­ not cancellers. Teach them that life is not a
concerned about the authoritarian right tique of the left, pointing out how cancel battle between wholly good and bad peo­
but says it is reasonably well understood culture has eroded academic freedom at ple. Not every "harm" that someone, some­
(democracy-deniers and all), whereas the universities. But they are equally critical of where calls out is really harmful. Educat­
intellectual history of the authoritarian the right. They note that some of Florida's ing children about differences, rather than
left is "oddly unexplored territory". new education laws (including one that coddling and insulating them, is essential.
How did views that are unpopular with bans certain subjects from being taught) "The Cancelling of the American Mind"
the general public become so influential? are "without question unconstitutional". advises companies to foster an intellec­
In Mr Mounl<'s telling, it starts with group Both bool<s are bold, timely and but­ tually diverse worl<force. Bosses should
psychology. When lil<e-minded people de­ tressed by data. The)r also offer plausible mal<e clear that a commitment to free
bate political or moral questions, their remedies. The far right can be defeated speech is a condition of employment. And
conclusions become "more radical than only by the right and the far left by the left. universities should scrap political litmus
the beliefs of their individual members", So left-of-centre people who can see what tests for tenure and get bacl< to teaching
he writes. This tendency is compounded is happening should speal< up but not vilify students how to debate ideas.
when the group feels under threat, as pro­ those who disagree. (Political disagree­ The post-liberal right and post-liberal
gressives did during Donald Trump's presi­ ment is not moral failure, Mr Mounl< re­ left are mucl1 closer to each other than
dency. Dissent is suddenly seen as betray­ minds readers.) People should appeal to many people realise. Both are intolerant;
al: hence the fury unleashed on anybody the reasonable majority, he argues, since both prioritise the power of the state over
who violates the group's unwritten and most people are neither "wol<e" nor individual liberty. They "see each other as
shifting norms. More than three out of five Trumpist. They should not let their indig­ mortal enemies", but "feed on each other",
Americans now say they avoid airing their nation turn them into reactionaries. Mr Mounl< warns. That is why "everyone
political views for fear of suffering adverse The advice from Mr Lul<ianoff and Ms who cares about the survival of free societ­
consequences; only a quarter of college Schlott is more personal: raise l<ids who are ies should vow to fight both." ■
students say they are comfortable discuss­
ing controversial topics with their peers.
Students who imbibed what Mr Mounl< Film lengths

Movie marathons
rather clunl<ily calls "the identity synthe­
sis" on campus went on "a short march
through the institutions" after they gradu­
ated. Since about 2010 they have carried
their new ideology into the worl<place and,
thanl<s to the power of social media to
create hurricanes of outrage, intimidated
bosses lil<e no previous generation. Young Why are new films so long?
activists-cum-employees pushed the
American Civil Liberties Union to scrap its
iron commitment to free speech and risl<­
averse corporate managers to sign off on
W ANT TO I<NOW what is coming soon to
a cinema near you? Probably not an
hour-and-a-half-long movie, as in the old
director Martin Scorsese. At nearly three
and a half hours, its length is nearly double
that of the average film last year. Even mov­
some counter-productive "diversity, equ­ days. This year audiences have endured the ie buffs struggle to concentrate for that
ity and inclusion" training. A slide in a pre­ longest instalments yet in the "Indiana long. During the premiere at the Cannes
sentation at Coca-Cola, for example, ex­ Jones", "John Wicl<" and "Mission: Impos­ Film Festival in May, some viewers dozed
horted employees to "try to be less white". sible" franchises. "Oppenheimer", Christo­ off. Afterwards there was a mad dash (and
Far from solving the real injustices that pher Nolan's three-hour blocl<buster, re­ long queue) for the toilets. When did
persist, this way of thinl<ing and tall<ing quired 11 miles (18l<m) of film stocl< for watching a film become such a slog?
threatens to exacerbate them. And instead IMAX showings. The Economist analysed over 100,000
of bracing the country to withstand Mr On October 20th comes "Killers of the feature films released internationally
Trump's influence, it helps him, as Middle Flower Moon", a grisly western from the since the 1930s, the start of Hollywood's
America leans right in response to tl1e far
left's excesses. Mr Mounl<'s answer is a re­
turn to classical liberalism: a rediscovery
-
The long tale
golden age, using data from IMDb, a movie
database. The average length of produc­
tions has crept up by around 24%, from
of universal values and neutral rules, al­ Film runtime, hours* one hour and 21 minutes in the 1930s to one
lowing people to mal<e common cause Killers of the hour and 47 minutes in 2022 (see chart).
with others of different beliefs and origins. Most popular filmst Flower Moon Blocl<busters are the worst offenders. For
'a 3.5
People should live up to the ideals on the ten most-popular titles (measured by
which liberal democracy is based rather Avengers: Endgame how many reviewers rated the films on
'--a 3.0
than abandoning them because they are so J IMDb) average lengths stretched to around
difficult to achieve, he says. Oppenheimer two and a half hours in 2022, nearly 50%
2.5
While Mr Mounl<'s message is global, Trend for most
higher than in the 1930s.
Greg Lul<ianoff and Ril<l<i Schlott focus on popular filmst Film-mal<ers began churning out pro­
2.0
America. "The Cancelling of the American tracted pictures in the early 1960s. Cinema
Mind" is a cri de coeur for both sides to was booming and auteurs wanted to dis­
1.5
reclaim "free-speech culture". (The authors tinguish their art from television. Epics
worl< for the Foundation for Individual Trend for all films graced the silver screen, including "Law­
Rights and Expression, a free-speech rence of Arabia" (1962), which surpassed
group.) When two sides cannot even agree 1930 50 70 90 2010 23 the three-and-a-half hour marl<, and "Cleo­
on facts, "it undermines faith in all of the *Excluding films less than 40 minutes in length or with fewer than patra" (1963), which originally exceeded
100 ratings tTop ten in each year by number of IMDb ratings
institutions we rely on to understand the Sources: IMDb; The Economist
four hours but was later cut down. Bacl<
world," they write. then, audiences enjoyed an intermission ►►
 The Economist October 21st 2023 Culture 73

David Becl<ham's guide to celebrity

Modern fame requires more than just a pretty face

N 2004 THIS columnist visited a school nothing without a plan that you mal<e accuracy. In boyhood matches you see
Iboysnearseemed
Basra in southern Iraq. The affable
to l<now four words of
early and sticl< to. It is stril<ing how quicl<­
ly and clearly Mr Becl<ham saw his path
his technique develop: the distinctive
diagonal body shape, windmilling arm
English. Two were obscenities. The other from midfield to endorsements, fashion and touchingly bow-legged gait.
two were "David Becl<ham". and beyond. "He wanted to be more than a The most old-fashioned virtue of
Not long before, recounts "Becl<ham", football player," says Mr Neville, and soon all-hard worl<-turns out to be grinding­
a new documentary series, the Sun news­ he was, hobnobbing with Tom Cruise and ly important. A pushy father is useful in
paper claimed to have found the only Beyonce. The usual retirement gigs of this regard. "Left foot, right foot, over
person on the planet who hadn't heard of coaching and punditry were not for him. and over and over again," David recalls of
Mr Becl<ham: a shepherd in Chad. The Lil<e many British stars he strove to cracl< Ted Becl<ham's drills. If a corner went
four-part series on Netflix is a portal to America, on and off the field. astray, "he'd l<ill me." This tough love, he
the flighty years around the turn of the First he conquered Spain, where in says, helped him cope with the abuse
millennium when the footballer was in 2003 Florentino Perez, president of Real that followed his sending-off at the
his sporting pomp. Watch closely and it Madrid, welcomed him as "a symbol of World Cup of 1998. (An island of dis­
is also, for the ambitious, a handy how-to post-modernity". That suggests his suc­ cretion in a sea of self-publicity, Ms
guide to becoming a celebrity and ulti­ cess is an artefact of image and marl<eting; Phipps, the receptionist, declines to
mately a global brand. yet it also rests on old-fashioned qualities discuss the bullets that arrived in the
It helps to be extremely good-lool<ing. that are disappointingly hard to simulate. post. ) Sandra, his mum, thinl<s Ted was
With his dirty-blond mop and impish One is the talent that made his profile too tough but seems steely herself, dead­
smile, Mr Becl<ham had a boy-next-door marl<etable. George Best, a Manchester panning about her personal "hit list".
charm when he hit TV screens in the United winger of another generation, Fisher Stevens, the director, was in
mid-199os. Kath Phipps, a long-serving reputedly said that Mr Becl<ham couldn't the cast of "Succession". There are echoes
receptionist at Manchester United, his l<icl< with his left foot, head the ball or of that show in the trilling music and
first club, remembers all the l<nicl<ers tacl<le, but "apart from that he's all right." home-video footage of David doing
that were sent to him ("It's not nice, is it, With his right foot, however, he strucl< l<eepie-uppies in the garden. Along with
sending underwear to a boy?" ). After corners and free-l<icl<s, and launched access to the family archive Mr Stevens
that, as in a time- lapse photo, the sculpt­ passes and crosses, with magical whip and secured big-name interviewees but few
ed sex symbol emerges. The tattoos revelations, besides details of Mr Becl<­
spread across his torso, up his necl< and ham's domestic neat-freal<ery and his
down his arms; the haircuts become love of beel<eeping. A tragic note sounds
jazzier, the stubble better designed. in his split with Sir Alex Ferguson, the
To banl< it lil<e Becl<ham, next find a coach who was his mentor until the
beautiful and famous spouse with an Golden Balls glitz came between them.
equal yen for exposure. "It puts the heat And on the main tal<e-home lesson of
factor way up," Anna Wintour, the boss of hard worl<, "Becl<ham" misses a tricl<.
Vogue, says on camera of Mr Becl<ham's The series opens on the career-defining
romance with Victoria Adams-also day in 1996 when Mr Becl<ham, then 21,
l<nown as Posh Spice-who nicl<named scored a goal from the halfway line. "I
him Golden Balls. "They were the new lool<ed up, and I thought, 'Why not?"' he
Charles and Diana," says his friend and says, leaving the impression that a shot
former team-mate Gary Neville, a percep­ seen around the world was an act of
tive description of a couple who, lil<e the instinctive genius. In "The Class of ' 92", a
ill-starred royals, were both lionised and previous documentary, his pal told it
lacerated by the media. differently. "He practised that in train­
But lool<s and a canny marriage are ing", said Mr Neville, "every single day."

► while the projectionist prepared the reels "Avengers: Endgame", Marvel's three-hour Another explanation for longer films
for the next act. Runtimes of popular films superhero spree, was the highest-grossing has to do with directors' growing clout.
ebbed and flowed over subsequent decades film in 2019. Last year long franchise mov­ Who would dare tell the lil<es of Mr Nolan
(and stretched long in some countries, ies made up most of the highest-grossing to trim his masterpieces? Streamers, which
such as India, l<nown for its Bollywood sa­ films in America. do not have to worry as much about conci­
gas). But they have ballooned since 2018. Anything that lures people off their sion because viewers can pause whenever
Franchises are one driver of this trend. couches to see a film in theatres is good they lil<e, may lure big names with deep
Studios want to squeeze the most out of news for cinemas. But protracted runtimes pocl<ets and promises of creative freedom.
their costly intellectual property, but they also pose a "fundamental problem", com­ "Killers of the Flower Moon" will debut on
are competing with streaming platforms plains Clare Binns, managing director of Apple TV+ after its theatrical run. Netflix
for eyeballs. They hope that a spectacular, Picturehouse, a British cinema group and funded and released Mr Scorsese's equally
drawn-out "event" movie will tempt audi­ film distributor. Long movies can mean long "The Irishman" in 2019, a film that
ences away from the small screen and into forgoing two showings per night, which would have benefited from a decisive edi­
cinemas. This approach has often paid off: hurts ticl<et sales and profits. tor, Irish or otherwise. ■
74 Culture The Economist October 21st 2023

with movies in general and Greta Garbo in

particular. All are worthy of their own
bool<s. It is to Mr Brown's credit that he
never stoops to mocl<ery or even gentle
irony, despite what must have been con­
siderable temptation.
"Nirvana Express" also tracl<s renewed
Western interest in Indian spiritualism,
which started with the beatnil<s in the
1950s, peal<ed with the Beatles arriving in
the Himalayas to meditate with Maharishi
Mahesh Yogi (pictured) and ended with the
dissolution of the Rajneesh Ashram in Ore­
gon. (This was the subject of "Wild Wild
Country" on Netflix, which dramatises the
short-lived but tumultuous commune bet­
ter l<nown for violence, group sex and at­
tempts to poison the local population than
for spirituality.)
The collapse of Rajneesh Ashram,
writes Mr Brown, "marl<ed the final pangs
of the Western dream of India as the repos­
Spirituality itory of esoteric wisdom and the promise

Yogi where
of enlightenment". It is true that the image
of India in the West has changed in recent
years, and a country once associated with
poverty and nal<ed babas is now better
l<nown as an economic giant, a rising geo­
political power and an originator of mod­
ern technology.
Yet India's own conception of itself as
Why seel<ers of enlightenment head for India
an ancient land with spiritual riches to of­
Edwin Arnold was an Oxford-educated fer humanity has never faded. For evi­
The Nirvana Express. By Mick Brown. editor of the Daily Telegraph who spol<e 19 dence, lool< only to the title that Narendra
Hurst; 400 pages; $34.95 and £25 languages and wrote memoirs, poetry and Modi, the prime minister, bestows on his

F OR DECADES India has mostly run a cur­

rent-account deficit, unable to export as
history in his spare time. In 1879 he pub­
lished "The Light of Asia", a 5,300-line nar­
rative poem about the teachings and life of
country, and by extension, himself: vish­
waguru, or world teacher. India has never
been short of men who believe themselves
much as the country imports to meet its Buddha. The bool< went on to sell over 1m chosen by God to lead the world. ■
needs. But in the accounting bool<s of the copies and ignited the first sparl<s of popu­
heavens, India is a net exporter, on par lar interest in India's religions in the West.
with the Levant as a font of great religions. In 1885 Arnold published "The Song Celes­ Unfinished art

(Sort of) by
Hinduism, Buddhism, Sil<hism and Jain­ tial", a translation of the Bhagavad Gita;
ism sprang from its sacred geography. God Mahatma Gandhi credited it with intro­

Sondheim
has repeatedly lured spiritual seel<ers to ducing him to his O\\'n religion's most sa­
the subcontinent-from Xuanzang (a sev­ cred text. The two men would go on to be­
enth-century Chinese monl< who jour­ come friends.
neyed to India in search of Buddhist texts) Arnold's Indian analogue was Swami
to Timothy Leary (an American champion Vivel<ananda, a Hindu philosopher who
After artists die, should their worl<
of LSD). Leary memorably described Vara­ electrified the first gathering of the World's
be completed?
nasi, Hinduism's most sacred place, as the Parliament of Religions in 1893 with his
"the site of a non-stop hippie festival for
the last 5,000 years".
Those seel<ing to join the piety party
speeches preaching Hinduism's message
of universal acceptance. Arguing that "we
Hindus must believe that we are the teach­
N ON-FIN ITO art can be arresting. Thinl<
of a delicate sculpture protruding
from a monolith or a swathe of bare canvas
first ventured from Asia, then from Europe ers of the world," he founded spiritual cen­ in an otherwise detailed painting. Such
(and especially Britain) during the colonial tres in the West and acquired a devoted artworl<s give the viewer pause. Did the
era and later, after India's independence in female following. creator intend the effect or simply stop
1947, from America. Indian swamis and gu­ Fantastic stories-pacl<ed with unlil<ely halfway through?
rus energetically promoted their teachings figures, strange twists of fate and even the "Here We Are" is one such puzzle. Ste­
to new converts. It is these Western enthu­ occasional act of mind-reading-bring phen Sondheim, an American composer,
siasts and their Indian idols who are the readers of "Nirvana Express" on an enjoy­ had been worl<ing on the musical on and
subject of "The Nirvana Express", an en­ able journey. Some of the colourful charac­ off for years alongside David Ives, a play­
lightening new bool< by Micl< Brown, a Brit­ ters include Paul Brunton, whose bestsell­ wright, and Joe Mantella, a director. In the
ish music journalist with a sideline writing ing "A Search in Secret India", a travelogue­ weel<s before his death in 2021, Sondheim
about Asian religion. cum-spiritual-handbool< published in 1934 gave a production the go-ahead. But then
The first notable Western figures to tal<e (and still in print), would establish his he said that it was not finished and had no
an interest in Indian religions were not ex­ reputation as a sort-of guru figure himself idea when it would be.
actly long-haired, pot-smol<ing hippies. Sir and Meher Baba, an actual guru obsessed The worl< will have its premiere on Oc- ►►
 The Economist October 21st 2023 Culture 75

► tober 22nd in New Yorl<. The press team at achieve an independent state. The bool< is
the Shed says that it is "very much the com­ resonant with personal history and lays
plete show" that Sondheim "envisioned, out the barriers that obstructed Palestin­
created and sanctioned". But those who ians' aspirations. It counts the poor deci­
have seen the musical may wonder wheth­ sion-mal<ing of certain Palestinian leaders
er that is the case. It is peculiar and unlil<e among its explanations, too.
previous worl<s, such as "Into the Woods".
Inspired by two surrealist films by Luis Hamas. By Beverley Milton-Edwards and
Bufiuel, "Here We Are" has a typical Sond­ Stephen Farrell. Wiley; 340 pages;$36.95.
heimian premise: a group of friends riven Polity Press; £24.99
with tensions (sexual and otherwise) has The militant organisation that rules the
met up. In the first act, they cannot find Gaza Strip first emerged in 1987 during the
somewhere to eat and wander from restau­ first Palestinian intifada ("shal<ing off", or
rant to restaurant. At a recent preview it uprising). In its first charter Hamas styled
was dreamlil<e, filled with the l<ind of com­ itself as the "Islamic Resistance Move­
plex harmonies, witticisms and internal ment" and declared Israel illegitimate. In
rhymes that Sondheim is l<nown for. 2006 Hamas became the first Islamist
Then, in the second act, the tone shifts. movement to ascend to power in the
The group finally has a meal but then is Middle East by winning an election. The
trapped in the room. The music stops; the authors interviewed hundreds of people
characters struggle to sing. Sondheim over three decades, including the group's
seems to have left at the intermission. Mr leaders, fighters, opponents and victims.
Mantella has said that he came up with the The lsrael-Palestine conflict This bool< explains the inception of the

Written in blood
idea, based on the films but that Sondheim "largest, most influential and most deadly
agreed with his assessment that "the ab­ Islamist organisation" and how it became
sence of music was the score." entrenched in Gaza.
History is littered with left-behind
worl<s-in-progress. Geoffrey Chaucer's pil­ The Rise of the Israeli Right. By Colin
grims never made it to their shrine. Gustav Shindler. Cambridge University Press; 440
Klimt died in 1918 before he could finish Six boolcs that shed light on a century pages;$38.99 and £29.99
"The Bride", so some figures have the Aus­ of violence in the Middle East The right first came to power in Israel
trian artist's signature lool< and others are nearly five decades ago, but its current
outlines. In neither case does it matter government may be the most right-wing
much. The stories in "The Canterbury A Peace to End All Peace. By David From­ in the country's 75-year history. This richly
Tales" stand alone. The gaps left by Klimt l<in. Holt, Henry & Company; 688 pages;$26 detailed bool< analyses with clarity and
can be filled in by the imagination. Tensions in the Middle East are a political insight the political and philosophical
Some find the lacl< of closure unsatisfy­ inheritance of the dissolution of the Otto­ ideas that drive the right. The author, who
ing, however, and attempt to finish a piece man empire after the first world war and is a professor at Cambridge, studies im­
on an artist's behalf. Mozart died partway the piecemeal settlements of 1922. This portant thinl<ers and figures such as Ze'ev
through writing a requiem; it was complet­ landmarl< bool<, published in 1989 and Jabotinsl<y (the founder of the Zionist
ed first by a pupil and later by musicolo­ named as a finalist for the Pulitzer prize, Right) and Binyamin Netanyahu (Israel's
gists. (The results have divided listeners.) provides a sweeping account of the period prime minister).
Artificial intelligence is also being used to between 1914 and 1922, ranging from the
fill the silence. When Beethoven died, his Mediterranean to Afghanistan. It astutely It's Easier to Reach Heaven than the
Tenth Symphony was just a collection of traces the Allies' motivations for carving End of the Street. By Emma Williams.
sl<etches. A team from Rutgers University up the Arab world and shows why the Olive Branch Press; 412 pages; $16. Blooms­
trained an AI model on the maestro's worl< West's imperial vision was doomed to fail. bury; £8.99
and extrapolated a composition. In 2000 the author, a British doctor, ac­
Financial incentives can push unfin­ Enemies and Neighbours. By Ian Blacl<. companied her husband, a UN official, and
ished worl< to be released without the nec­ Atlantic Monthly Press; 608 pages;$30. three small children to Israel. A month
essary caveats. Before Harper Lee died in Allen Lane; £25 later the second Palestinian intifada erupt­
2016, "Go Set a Watchman", an early draft of When, exactly, the Israel-Palestine conflict ed. This moving memoir-which spans
"To Kill a Mocl<ingbird", was initially began is hard to say. 1\1any consider No­ three years-documents the events she
passed off as a discrete novel. Others sug­ vember 2nd 1917 to be the starting-point: witnessed. She gave birth to a fourth child
gest that artists would rather partial or that is the date of the Balfour Declaration, in a hospital in Bethlehem, which was
abandoned pieces stay private. Yet perhaps when the British government vowed to shelled by the Israeli army. A Palestinian
it is worse for the art never to be seen. Jane use its "best endeavours" to create a "na­ suicide-bomber blew himself up near her
Austen's "Sanditon" collected dust until tional home" for the Jewish people in children's school, with his head landing at
1925, more than a century after her death. Palestine, a territory it would tal<e from the foot of their teacher.
Although it stops in the middle of a chap­ the Ottomans. This balanced bool<, praised
ter, betrothals still to be secured, the novel by Palestinian and Israeli historians alil<e, The Economist's journalists have also
contains some of Austen's sharpest lines. offers a tour of the past century of conflict. written bool<s about the conflict. Anton La
What about "Here We Are"? Strange Guardia, our diplomatic editor, is the
though it is, fans may still be pleased to The Iron Cage. By Rashid Khalidi. Beacon author of "Holy Land, Unholy War". Gregg
hear it. The first act, at least, proves that Press;288 pages;$19.95. Oneworld Publica­ Carlstrom, our Middle East correspon­
Sondheim's strengths remained potent. He tions; £34.99 dent, wrote "How Long Will Israel Sur­
was a master of wordplay, ambition and An eminent Palestinian-American histori­ vive?". Anshel Pfeffer, our Israel corre­
emotional complexity to the end. ■ an explains why Palestinians failed to spondent, is the author of "Bibi". ■
16 Courses

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Economic & financial indicators The Economist October 21st 2023 77

Economic data

Gross domestic product Consumer prices Unemployment Current-account Budget Interest rates Currency units
% change on year ago % change on year ago rate balance balance 10-yr gov't bonds change on per$ % change
latest quarter* 2023t latest 2023t % % of GDP, 2023t % of GDP, 2023t latest,% year ago, bp Oct 18th on year ago
United States 2.4 02 2.1 2.0 3.7 Sep 4.1 3.8 Sep -2.9 -5.7 4.9 90.0
China 4.9 03 5.3 5.2 nil Sep 0.7 5.0 Sep:!:§ 1.8 -3.2 2.6 §§ 13.0 7.31 -1.5
Japan 1.6 02 4.8 2.0 3.1 Aug 2.9 2.7 Aug 2.9 -5.2 0.8 55.0 150 -0.5
Britain 0.6 02 0.8 0.4 6.7 Sep 6.8 4.3 Juntt -2.5 -3.9 4.5 7.0 0.82 7.3
Canada 1.1 02 -0.2 1.1 3.8 Sep 4.1 5.5 Sep -0.4 -1.4 4.1 75.0 1.37 0.7
Euro area 0.5 02 0.5 0.7 4.3 Sep 5.6 6.4 Aug 2.2 -3.4 2.9 63.0 0.95 7.4
Austria -1.3 02 -3.0* -0.2 5.7 Sep 7.9 5.3 Aug 2.4 -2.4 3.6 56.0 0.95 7.4
Belgium 0.9 02 0.6 1.0 0.7 Sep 2.6 5.5 Aug -0.7 -4.6 3.6 59.0 0.95 7.4
France 1.0 02 2.1 0.8 5.7 Sep 5.7 7.3 Aug -1.1 -5.0 3.4 47.0 0.95 7.4
Germany -0.1 02 0.1 -0.3 4.3 Sep 6.1 3.0 Aug 5.2 -2.4 2.9 63.0 0.95 7.4
Greece 2.9 02 5.1 2.4 2.4 Sep 3.8 10.9 Aug -6.3 -2.1 4.5 -55.0 0.95 7.4
Italy 0.3 02 -1.5 0.9 5.6 Sep 6.3 7.3 Aug 1.0 -5.3 5.0 37.0 0.95 7.4
Netherlands -0.2 02 -0.9 0.2 -0.3 Sep 4.5 3.6 Aug 8.2 -1.9 3.3 68.0 0.95 7.4
Spain 2.2 02 2.1 2.4 3.3 Sep 3.4 11.5 Aug 1.6 -4.1 3.9 52.0 0.95 7.4
Czech Republic -1.1 02 -0.1 nil 6.9 Sep 10.4 2.6 Aug* -1.1 -3.8 4.8 -101 23.4 6.3
Denmark 0.6 02 -1.4 2.0 0.9 Sep 4.0 2.9 Aug 10.5 1.5 3.2 51.0 7.08 6.6
Norway 0.7 02 0.1 1.4 3.3 Sep 5.8 3.5 Jul** 17.1 10.8 1.4 76.0 11.1 -4.5
Poland -0.6 02 -8.5 -0.1 8.2 Sep 11.4 5.0 Aug§ 0.7 -4.8 5.8 -240 4.22 14.9
Russia 4.9 02 na -0.5 6.0 Sep 6.5 3.0 Aug§ 1.8 -3.8 12.3 214 97.5 -36.1
Sweden -0.8 02 -3.3 -0.6 6.5 Sep 6.0 7.7 Aug§ 4.1 -0.3 3.1 92.0 11.0 0.7
Switzerland 0.5 02 0.1 0.8 1.7 Sep 2.2 2.1 Sep 6.8 -0.7 1.1 -21.0 0.90 10.0
Turkey 3.8 02 14.6 3.1 61.5 Sep 53.1 9.2 Aug§ -4.4 -5.0 26.3 1,603 28.0 -33.7
Australia 2.1 02 1.4 1.6 6.0 02 5.6 3.6 Sep 1.7 0.3 4.6 72.0 1.58 0.6
Hong Kong 1.5 02 -5.2 2.9 1.7 Aug 1.9 2.8 Aug** 8.4 -1.7 4.4 52.0 7.83 0.3
India 7.8 02 11.0 6.5 5.0 Sep 5.7 8.1 Apr -1.3 -5.9 7.3 -8.0 83.3 -1.1
Indonesia 5.2 02 na 5.0 2.3 Sep 3.8 5.5 01§ 0.7 -2.4 6.8 -59.0 15,730 -1.7
Malaysia 2.9 02 na 4.0 2.0 Aug 2.7 3.4 Aug§ 1.8 -5.0 4.1 -33.0 4.74 -0.4
Pakistan 1.7 2023'" na 1.7 31.4 Sep 32.2 6.3 2021 -1.7 -7.7 16.0 ttt 322 280 -21.5
Philippines 4.3 02 -3.6 4.1 6.1 Sep 5.7 4.8 03§ -4.6 -7.0 6.6 -57.0 56.7 3.6
Singapore 0.7 03 4.0 1.0 4.0 Aug 4.7 1.9 02 18.9 -0.7 3.4 -17.0 1.37 3.6
South Korea 0.9 02 2.5 1.3 3.7 Sep 3.3 2.3 Sep§ 1.9 -2.7 4.3 2.0 1,350 5.4
Taiwan 1.4 02 5.6 0.8 2.9 Sep 2.2 3.4 Aug 12.5 -0.4 1.3 -49.0 32.3 -1.0
T hailand 1.8 02 0.7 2.8 0.3 Sep 1.6 1.0 Aug§ 1.1 -2.7 2.8 -37.0 36.3 5.0
Arg entina -4.9 02 -10.9 -2.8 138 Sep 129.9 6.2 02§ -2.8 -4.2 na na 350 -56.3
Bra zil 3.4 02 3.7 3.1 5.2 Sep 4.7 7.8 Aug§+i -1.8 -7.6 11.7 -11.0 5.07 3.9
Chile -1.1 02 -1.2 -0.2 5.1 Sep 7.5 9.0 Aug§** -4.3 -3.0 6.5 3.0 938 3.8
Colombia 0.3 02 -4.1 1.6 11.0 Sep 11.5 9.3 Aug§ -4.0 -4.2 11.7 -240 4,237 11.8
Mexico 3.6 02 3.4 3.2 4.5 Sep 5.5 2.7 Aug -1.8 -3.8 10.0 1 3.0 18.3 9.4
Peru -0.5 02 1.5 0.1 5.0 Sep 6.5 6.3 Sep§ -1.3 -2.9 7.5 -124 3.86 3.1
E gypt 3.9 01 na 4.0 37.9 Sep 36.8 7.0 02§ -2.6 -6.7 na na 30.9 -36.4
Israel 3.4 02 3.1 3.1 3.8 Sep 4.4 3.2 Sep 4.5 -2.0 4.3 90.0 4.03 -12.7
Saudi Arabia 8.7 2022 na 0.1 1.7 Sep 2.3 4.9 02 3.0 -0.8 na na 3.75 0.3
South Africa 1.6 02 2.4 0.5 5.5 Sep 5.7 32.6 02§ -1.8 -5.7 10.8 2.0 19.1 -5.0
Source: Haver Analytics. *% change on previous quarter, annual rate. tThe Economist Intelligence Unit estimate/forecast. §Not seasonally adjusted. *New series. **Year ending June. ttLatest 3 months. **3-month moving
average. §§S-year yield. tttDollar-denominated bonds. Note: Euro area consumer prices are harmonised.

Markets Commodities
% change on: % change on:
The Economist commodity-price index
Index one Dec 30th index one Dec 30th % change on
In local currency Oct 18th week 2022 Oct 18th week 2022 2015=100 Oct 10th Oct 17th* month year
United States S&P 500 4,314.6 -1.4 12.4 Pakistan KSE 49,406.2 1.9 22.2 Dollar Index
United States NAScomp 13,314.3 -2.5 27.2 Singapore STI 3,136.6 -1.8 -3.5 All Items 141.7 144.1 -2.8 -0.1
China Shanghai Comp 3,058.7 -0.7 -1.0 South Korea KOSPI 2,462.6 0.5 10.1 Food 125.6 128.2 -2.9 -7.4
China Shenzhen Comp 1,856.1 -2.7 -6.0 Taiwan TWI 16,440.9 -1.4 16.3 Industrials
Japan Nikkei 225 32,042.3 0.3 22.8 Thailand SET 1,437.9 -1.2 -13.8 All 156.7 159.0 -2.8 6.1
Japan Topix 2,295.3 -0.5 21.3 Argentina MERV 798,907.3 11.5 295.3 Non-food a griculturals 114.0 115.4 1.7 -17.8
Britain FTSE 100 7,588.0 -0.4 1.8 Brazil BVSP* 114,059.6 -2.6 3.9 Metals 169.3 171.9 -3.6 12.7
Canada S&P TSX 19,450.7 -1.1 0.3 Mexico IPC 49,274.8 -2.1 1.7
Sterling Index
Euro area EURO STOXX 50 4,105.9 -2.3 8.2 Egypt EGX 30 22,117.4 12.5 51.5
All items 176.4 180.6 -1.1 -7.2
France CAC 40 6,966.0 -2.3 7.6 Israel TA-125 1,713.4 -1.9 -4.9
Germany DAX* 15,094.9 -2.4 8.4 Saudi Arabia Tadawul 10,714.1 1.3 1.6 Euro Index
ltaly FTSE/M I B 28,135.8 -1.0 18.7 South Africa JSE AS 71,968.7 -2.5 -1.5 All items 148.3 151.1 -1.8 -7.0
Netherlands AEX 729.6 -1.1 5.9 World, dev'd MSCI 2,851.9 -1.6 9.6 Gold
Spain IBEX 35 9,212.7 -1.6 12.0 Emerging markets MSCI 943.1 -1.4 -1.4 $ per oz 1,858.3 1,926.2 -0.4 16.6
Poland WIG 70,474.8 5.1 22.6
Brent
Russia RTS, $ terms 1,051.2 4.6 8.3
$ per barrel 87.7 90.3 -4.5 0.1
Switzerland SMI 10,675.4 -3.3 -0.5 US corporate bonds, spread over Treasuries
Turkey 81ST 7,842.7 -5.9 42.4 Dec 30th Sources: Bloomberg; CME Group; Cotlook; Refinitiv Datastream;
Australia All Ord. 7,265.7 -0.2 0.6 Basis points latest 2022 Fastmarkets; FT; ICCO; ICO; ISO; Live Rice Index; LME; NZ Wool
Services; Thompson Lloyd & Ewart; Urner Barry; WSJ. *Provisional.
Hong Kong Hang Seng 17,732.5 -0.9 -10.4 Investment grade 134 154
India BSE 65,877.0 -0.9 8.3 High-yield 448 502
Indonesia IDX 6,927.9 -0.1 1 .1 Sources: Refinitiv Datastream; Standard & Poor's Global Fixed Income For more countries and additional data, visit
Malaysia KLSE 1,446.5 0.7 -3.3 Research. *Total return index. economist.com/economic-and-financial-indicators
10
Obituary Ofir Libstein The Economist October 21st 2023

Negev, though so near Gaza, was not all Hamas and shooting. It
was a hard case to mal<e. Hamas rocl<ets hit the Iron Dome right
overhead, and pieces fell everywhere; the ground around was full
of improvised bombs. In 2018, youths in Gaza tied incendiary de­
vices to l<ites and balloons and sent them floating across, where he
watched with sicl< horror as trees, crops and gardens exploded in
flames. In May 2021 rocl<ets fell on Sha'ar HaNegev for 11 straight
days. Despite the fact that everyone in Kfar Aza had steel-and-con­
crete safe-rooms in their houses, in 2022 he sent the mothers and
children away to the north. A study had found that most of the lo­
cal children had post-traumatic stress.
Yet he insisted those scary times were rare. That was just life on
the edge: 5% hell, but 95% paradise. His main Facebool< picture
showed a view of lush, rolling, improbably green hills dotted with
trees. In those fields grew wheat, barley, vines, melons, avocados,
cotton, almonds and olives. The desert soil was watered with a
huge networl< of irrigation pipes. And that was not all that grew
there. Increasingly he was pinning his hopes on tech startups, and
in the five years he had been mayor 40 companies had arrived in
his new enterprise zone. Among the single-storey white houses,
shaded with palms and lively with children (including four boys
of his own), there were now glass-walled offices in which go­
ahead tech types networl<ed and hatched their ideas.
He also lool<ed abroad for help. The Californian city of San Die­
go twinned itself with Sha'ar HaNegev, and the Jewish Federation
there provided seed money for a tech incubator; the Jewish Na­

Life on the edge

tional Fund in Australia helped with 14 fortified l<indergartens and
an ··innovation Campus". Since 2013 the region's population had
doubled. That spelled better protection, through sheer numbers,
of the western border. He was l<eeping the land of Israel.
As a l<ibbutznil<, living in Kfar Aza or Kfar Neter for most of his
life, his devotion to Israel was total. But he was less a Zionist than a
socialist and communitarian, as the first l<ibbutz-builders had
Ofir Libstein, mayor of Sha'ar HaNegev, was l<illed in the
been. Besides, his dreams for the region went far beyond mere de­
Barnas attacl<s on October 7th, aged 50
fensive hunl<ering down. His vision was "spatial": if there was

W HENEVER HE WALI<ED round his patch of the northern Ne­

gev, Ofir Libstein fairly buzzed with ideas. Sha'ar HaNegev
was not large, just 180 square l<ilometres, three l<ilometres from
good in a place, it should benefit the whole diverse human mosaic
there. Prosperity had to involve everyone. He was sure that most
Gazans wanted what Israelis did: peace, well-paid jobs, care for
the Gaza Strip, with around 6,000 people living in ten l<ibbutzim their families. He set out to provide them.
and one communal farm. But he had power, as mayor, to mal<e it It was hard to deal directly with Palestinians, since the border
worl< as well as possible. Sorting out the traffic on the main road, was almost entirely sealed. But in partnership with the Israeli city
for example, by replacing the multiple intersections with round­ of Sderot, which lay less than a l<ilometre from the fence, he
abouts. Encouraging his Facebool< followers to eat at local restau­ planned an industrial zone called Arazim around the Erez cross­
rants, lil<e Julie's amazing Chinese in his own l<ibbutz, Kfar Aza, ing. This could draw up to 10,000 Gazans to worl< in Israel every
that were still struggling after covid. And putting all available day. There would also be a training hub for them, education pro­
buildings to new use. Whenever he saw a disused mess hall, a de­ grammes and a medical centre. He envisaged so manyGazans with
serted factory, even an old cowsl1ed, he wanted to fill them with a stal<e in Arazim that they would never thinl< to attacl< it, or allow
entrepreneurs worl<ing on exciting things. Hamas to. That, in his view, was how Israel could properly protect
He was an entrepreneur himself, starting young. When his un­ itself. Even he admitted that this was quite a stretch, but the resi­
cle ran the l<iosl< in Kfar N eter he opened a branch at school. When dents of Sha'ar HaNegev did not seem to object. In the regional
his father did wheelchair repairs for the nursing home where his election for mayor in 2018-when his rival had been Israel's first
mother worl<ed, he went into a motorised wheelchair business female brigade commander, promising more security-he, l<nown
with him . From there he moved, with relatives, into office equip­ mostly for anemones, won with almost 70% of the vote.
ment, then into online coaching, then into agritech, the mainstay That margin, and his ten-year term, inspired him. He could do
of Sha'ar HaNegev. The Libstein pot was always bubbling and, al­ a lot in all that time. Already, for example, he had incorporated the
most always, successfully. poorly treated Bedouin into his anemone festival, and was chair­
His most popular idea, though, was to leverage flowers. In 2007 man of a museum where their culture was celebrated. Perhaps Pal­
he and his wife Vered founded the Darom Adorn ("Red South") fes­ estinians could become involved in Sha'ar HaNegev in the same
tival to celebrate the anemones which, for a brief few weel<s in ear­ way, once the two sides had learned to respect each other. Perhaps
ly spring, spread scarlet through the woods and fields. This won­ the share of life there that was paradise could rise to 100%.
der drew in visitors from far and wide, but he had noticed that But the factories of Arazim were not yet built when, early in the
there was nothing, besides marvelling, for them to do. So he intro­ morning on October 7th, swarms of Hamas terrorists brol<e
duced country lodging, wall<ing trails, bil<e tours, jugglers and ac­ through the border fence. The residents of Kfar Aza had already
robats, craft fairs and farmers' marl<ets, more every year. The festi­ been warned by text not to go outside, but he disobeyed his own
val bloomed and boomed. His Facebool< page showed him lying order, answering fire with fire. He rushed out to defend both his
among anemones, smiling broadly in appreciation. l<ibbutz and his dreams-including those lovely, leveraged anem­
He founded the festival largely to prove that life in Sha'ar Ha- ones that dyed the dry ground red.•
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