The Economist 21.10.2023

[Fri, 20 Oct 2023]
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This week’s covers
The world this week
Politics
Oct 19th 2023
Joe Biden’s trip to Israel to lend support after the terrorist attack by Hamas
was overshadowed by a blast at a hospital in Gaza, which the Palestinians
said killed hundreds of people. America and Israel pointed to intelligence
that suggests the explosion was caused by a missile launched by Islamic
Jihad, another militant group, that misfired, falling in the hospital’s car park.
Hamas and many Arab countries said an Israeli strike was to blame. The
incident triggered outrage in the Arab world, leading Jordan to cancel a
summit between Mr Biden and the leaders of Jordan and Egypt and
Mahmoud Abbas, president of the Palestinian Authority.
The humanitarian situation worsened in Gaza, where about 3,500 people

have been killed, according to the Palestinians, amid Israel’s retaliation for
the Hamas attack. Under mounting international pressure, Israel will allow
food, water and medicine to cross from Egypt to southern Gaza, where the
population has moved to take shelter. King Abdullah of Jordan warned that
the “region is on the brink of falling into the abyss”, but was adamant that
his country and Egypt would not accept refugees.
Israel’s ground troops were poised to enter Gaza. They have been held back
in part because of fears that Hizbullah, a powerful militia based in Lebanon,
will launch a big assault across the border into northern Israel at the moment
when Israeli soldiers are focused on Gaza. Hizbullah is backed by Iran,
which has warned that an “axis” of militias is ready to open “multiple
fronts” against Israel.
The French government put the country on the highest state of alert after an
Islamist extremist stabbed a teacher to death. Soldiers were drafted in to
boost security and all pro-Palestinian demonstrations were banned. In
Brussels a supporter of Islamic State shot dead two Swedish nationals. In
Illinois a six-year-old boy died after being stabbed 26 times by his mother’s
landlord. The mother was wounded. Police say they were targeted because
they were Muslim.
Anti-Semitic incidents and “celebrations” of the attack by Hamas were

reported throughout Europe. London’s police force reported a big rise in
assaults on Jewish targets. Rishi Sunak, the British prime minister, reminded
people that showing support for the terrorist group could be punishable by a
prison sentence.
InPolandthe liberal Civic Coalition and its allies won enough seats at an
election to form a majority in parliament, heralding a big shift in
government. The conservative Law and Justice (PiS) party, a thorn in the
EU’s side since gaining power in 2015, came first but will struggle to rule,
even with the support of a far-right party. It is expected to get the first stab at
forming a government; talks could take weeks. Donald Tusk, the leader of
the Civic Coalition, called on the country’s PiS-allied president to swiftly
start the process.
Ukraine has used long-range ATACMS missiles for the first time, according
to Volodymyr Zelensky, the country’s president. The missiles were
reportedly used to attack Russian bases in east Ukraine, destroying nine
helicopters. America silently provided the missiles to Ukraine, rather than
announcing their deployment, apparently to take the Russians by surprise.
Friends in need
Vladimir Putin visited China, where he tried to gain support for his war on
Ukraine. The Russian president went to a summit held by Xi Jinping, his
Chinese counterpart, on China’s Belt and Road Initiative. European
delegates walked out of one meeting he attended. But not Viktor Orban. The
Hungarian prime minister shook Mr Putin’s hand, the first EU leader to do
so since the start of the war.
Republicans in America’s House of Representatives continued to squabble

over choosing a newspeaker. After spurning Steve Scalise, they were
unenthusiastic about rallying around Jim Jordan.
Voters in Australia decisively rejected a constitutional amendment that

would have created an advisory body for Aboriginal and Torres Strait Island
people. The referendum on the Voice, as it was dubbed, was beaten by 61%
to 39% and failed in all six Australian states. Critics of the proposal said it
would have undermined the principle of legal equality by favouring one
racial group in the constitution.
The centre-right National Party won New Zealand’s general election,

ending the six-year rule of the Labour Party, formerly led by Jacinda Ardern.
Christopher Luxon, the incoming prime minister, will form a coalition with
the ACT party, which is classically liberal. But with a slim majority he may
have to rely on the populist New Zealand First Party for support.
India’s Supreme Court declined to legalise gay marriage, accepting the

government’s argument that only Parliament could decide the status of
marriage in the country.
Pro-democracy campaigners in Indonesia were outraged by the decision of

the Constitutional Court to add an exception to a law that bars people under
the age of 40 from running for president. The court said that people who
have been elected to regional posts can now run, which would allow the 36-
year-old son of the outgoing incumbent, Joko Widodo, to contest February’s
election.
Separatists in Indonesia’s Papua province claimed responsibility for an

attack on a gold mine that killed seven people. The rebels repeated their
warning to non-indigenous Papuans to leave the mountainous region.
Two tourists and their guide were killed in a terrorist attack in Uganda that
the government blamed on the Allied Democratic Forces, which declares
allegiance to Islamic State. The attack was in the Queen Elizabeth National
Park, which is close to the border with Congo.
UN peacekeepers in Mali are struggling to leave the country by the end of

the year, as agreed, because of a rapid deterioration in security that is
preventing it from retrieving equipment. Some 300 blue helmets have been
killed over the course of the ten-year-long mission.
Daniel Noboa was elected as Ecuador’s president. The 35-year-old

businessman is a centrist who has promised to reduce crime, the big issue
during the election. A presidential candidate was assassinated in August. Mr
Noboa’s victory is a rejection of the leftist faction aligned with Rafael
Correa, a disgraced former president.
Representatives from Nicolás Maduro’s autocratic regime in Venezuela and

the opposition met in Barbados, their first meeting in nearly a year. Some
progress was made as the two sides agreed to a timeline for an election in
2024. After the talks America relaxed sanctions on the country’s oil sector.
Don’t try this at home

Pepper X was named as the world’s hottest chilli by Guinness World
Records. The previous record was held by the Carolina Reaper. Both are
grown by Ed Currie (no pun intended), a farmer from South Carolina.
Pepper X rates at nearly 2.7m Scoville Heat Units (a jalapeño is around
3,000 to 8,000). Mr Currie said he was in severe pain with cramps for an
hour after eating a whole one.
This article was downloaded by zlibrary from https://www.economist.com/the-world-
this-week/2023/10/19/politics
The world this week
Business
Oct 19th 2023
Tesla issued a downbeat earnings report. Net profit fell by 44% in the third
quarter, year on year; its operating margin, a closely tracked measure of the
difference between its income and expenses, plunged to 7.6%. The carmaker
also said that although it will start delivering its long-delayed Cybertruck to
customers in November it could take up to 18 months for the vehicle to turn
a profit.
The American government tightened its ban on selling chips to China for use
in artificial intelligence, extending the rules to capture sales of chips that
had previously fallen just outside the ban’s technical parameters. The
clampdown is bad news for Nvidia, which said that the new restrictions
would apply to its H800 AI chip. Chinese tech companies have been rushing
to buy up the modified chip in case of a prohibition. Meanwhile, Nvidia
announced a partnership with Foxconn, a Taiwanese manufacturer, to build
data centres powered by Nvidia’s technology.
The race for dominance in AI was thrown into focus when Baidu announced
that its ERNIE 4 chatbot was now as good as OpenAI’s GPT-4. The Chinese
tech giant showed off ERNIE’s capabilities at an event in Beijing by getting
it to complete tasks, such as writing a martial-arts novel. ERNIE has 45m
users, a fraction of ChatGPT’s 180m, though the American bot was launched
several months earlier.
Microsoft at last completed its takeover of Activision Blizzard, the biggest

ever in the video-game industry, 21 months after it was first announced. The
deal had been resisted by antitrust regulators; Microsoft quickly sealed the
acquisition after Britain’s competition authority approved a revised proposal.
America’s Federal Trade Commission lost its attempt to block the
transaction in court, but it is pressing ahead with its own legal hearing and
may still challenge the deal.
A net 9m new subscribers joined Netflix in the third quarter, the largest
number since the pandemic, which the company attributed in part to its
crackdown on sharing passwords. It also raised its prices. The monthly cost
in America of a premium package, which includes high-res 4K streaming, is
now $22.99.
Injection rejection
Plunging demand for covid vaccines continued to take its toll on drug
companies. Pfizer slashed its forecast of revenue for the year by $9bn and
will book a $5.5bn write-down in the third quarter because of the “lower-
than-expected utilisation” of the shots. The share prices of Pfizer and
BioNTech, which developed a vaccine with Pfizer, have fallen by more than
a third since the start of the year. Moderna’s stock has lost half its value.
Rite Aid, one of America’s biggest pharmacy chains, filed for bankruptcy
protection. The company is struggling to cope with a huge debt pile, falling
revenues and the cost of litigation associated with the opioid crisis. It has
already closed some shops and will shut others. Around 45,000 jobs are at
risk.
China’s GDP was 4.9% larger in the third quarter than in the same period a
year ago, a faster pace of growth than analysts had forecast. September’s
growth in industrial output and retail sales also beat expectations. Officials
downplayed talk of an economic recovery, warning that “the external
environment is becoming more complex.” The property market is very
fragile, as speculation mounts that Country Garden, the country’s biggest
developer, may have defaulted on its dollar debt.
Britain’s annual inflation rate held steady in September, at 6.7%. Food
prices rose at the slowest pace since June 2022. The core rate, which
excludes energy and food, eased to 6.1%. The Bank of England left interest
rates on hold at its most recent meeting, and markets are betting it will do so
again. “Let’s not get carried away,” Andrew Bailey, the bank’s governor, has
said; the fight against inflation is not over.
Net income at Goldman Sachs fell again in the third quarter, the eighth
consecutive quarter of declining profit. The bank made $1.9bn, down by
36% compared with the same period last year. David Solomon, its chief
executive, has reportedly given up his hobby as a DJ, following internal
criticism that it was distracting him from his main job.
By contrast, profit at JPMorgan Chase climbed by 35%, to $13.2bn.

America’s biggest bank was boosted by almost $23bn in revenue from net
interest income, the difference between what a bank earns in interest on its
loans and what it pays out on deposits.
Café culture
A financial analyst lost his claim for dismissal against Citigroup for claiming
a false expense for lunch. The man said he alone had consumed the two
coffees, two sandwiches and two pasta dishes, though it turned out his
partner had joined him. Citi forbids expensing meals for spouses. The
analyst specialises in financial crime.
this-week/2023/10/19/business
The world this week
KAL’s cartoon
Oct 19th 2023
Dig deeper into the subject of this week’s cartoon:
Joe Biden steers a risky course after a Gaza hospital blast

The Arab world thinks differently about this war
Vladimir Putin’s plan to profit from the Israel-Hamas war
KAL’s cartoon appears weekly in The Economist. You can see last week’s
here.
this-week/2023/10/19/kals-cartoon
The world this week
This week’s covers

How we saw the world
Oct 19th 2023
THIS WEEK WE have one cover, on the daunting challenges in Gaza: the
destruction, the obstacles a ground invasion will face and the options for the
territory’s long-term future. The stakes could hardly be higher. After a
devastating blast in a hospital in Gaza, Arab countries rushed to condemn
Israel. Hizbullah, a heavily armed Lebanese militia, is lurching closer to
outright war with Israel. Only America can bring the Middle East back from
the brink.
Leader: The stakes could hardly be higher in the Israel-Gaza conflict
Briefing: As Israel’s invasion of Gaza nears, the obstacles get more daunting
Briefing: Israel’s four unpalatable options for Gaza’s long-term future
Graphic Detail: Mapping Israel’s war in Gaza
this-week/2023/10/19/this-weeks-covers
Leaders
Only America can save Israel and Gaza from greater catastrophe
America’s Republicans cannot agree on a speaker. Good
Poland shows that populists can be beaten
Why America’s banks need more capital
How to make Britain’s health service AI-ready
The Middle East
Only America can save Israel and Gaza from

greater catastrophe
Iran, Russia and China are profiting from the mayhem
Oct 19th 2023
HOW RAPIDLY things fall apart. The deadly blast in Gaza at Ahli Arab
hospital on the evening of October 17th killed many Palestinians who were
taking shelter. Despite strong evidence that their deaths were caused by the
failure of a Palestinian rocket laden with fuel, Arab countries rushed to
condemn Israel. Hizbullah, a heavily armed Lebanese militia, is lurching
closer to outright war with Israel. Bridges built painstakingly between Israel
and its Arab neighbours lie in ruins.
How fragile are the forces trying to hold things together. Fifteen hours after
the blast, President Joe Biden landed in Israel, an old man with the weight of
the world on his shoulders. Mr Biden’s diplomacy is a geopolitical moment.
As well as signalling grief and support for Israel, it brings into focus how
much this crisis matters to the Middle East and to America .
For the past half-century the United States has been the only country willing
and able to bring any kind of order to the region. Regardless of the many
failures of American policy there, including in Iraq and Syria, Mr Biden and
his secretary of state, Antony Blinken, have once again taken up that burden.
Death and disease hang over Gaza. The poison is spreading across the Arab
world. They do not have long.
The imminent danger is on that second front in the north of Israel. The death
toll at Ahli Arab means that Hizbullah and its Iranian sponsors risk losing
face if they fail to avenge lost Palestinian lives. Hizbullah will now also have
strong backing in the Arab world if it attacks. If Israel concludes war is
inevitable, it may strike first. America has tasked two aircraft-carriers with
deterring Hizbullah and Iran from opening a second front. If they defy it, it
should use them for a show of force.
A second danger is of Arab-Israeli relations being put back decades. Amid

Israel’s unprecedented bombing, Arabs remember previous wars in which
Israel hit schools and hospitals. Israel has imposed a total siege of Gaza; its
president has said all Gazans share responsibility. Despite Israel’s excesses,
Arab leaders could have called for calm and for an independent investigation
of the hospital blast. What looks like the mass killing of Palestinians by
Palestinians ought to have redoubled their efforts to safeguard Gaza’s
civilians and spurred them on to create a regional plan for a better
Palestinian future.
Instead, the blast has deepened hatred and grievances. In words that cannot
easily be taken back, Israel’s Arab partners heaped blame upon the Jewish
state. Jordan immediately cancelled a summit between Mr Biden and Arab
leaders that had been the best hope for regional diplomacy. Egypt is more
resolved than ever to keep temporary refugees out of the Sinai, partly for
fear of being seen to abet Israel in what Palestinians worry is a plan to empty
Gaza permanently.
This is a lamentable failure of leadership, with profound regional and global

implications. Most Arab governments loathe Hamas and its backer, Iran.
Countries like the United Arab Emirates and Saudi Arabia need stability and
benefit from good relations with Israel. However, they are so wary of testing
their citizens’ anger with the truth about the rocket’s origin that they have
chosen to sabotage their people’s long-term interests.
For Iran, that looks like victory. For years it has had a strategy of financing,
arming and training proxies like Hamas and Hizbullah. It calculates that
violence and mayhem weaken Israel and discredit Arab governments. If the
sight of America fighting Hizbullah alongside Israel leads to a rupture of Mr
Biden’s relations with the Arab world, an exultant Iran will have built the
foundations for its own regional dominance.
Russia and China are winning, too. There is a perception in the global south
that this complex story is actually a simple one of oppressed Palestinians and
Israeli colonisers. China and Russia will exploit this caricature to argue that
America is revealing its true contempt for brown-skinned people in Gaza
and its hypocrisy over human rights and war crimes—just as they claim it
did by supposedly provoking a war in Ukraine.
What can Mr Biden do? His analysis must start with the need for peace
between the Palestinians and Israelis and a recognition that there can be none
for as long as Hamas governs Gaza—not after it has demonstrated that it
puts Jew-hatred before any other goal. Gaza City is honeycombed by
tunnels. Destroying Hamas’s ability to wage war therefore requires a ground
offensive.
Everything follows from the prosecution of that ground war. The tragedy of
Ahli Arab validates the cynical calculation that Palestinian casualties help
Hamas by undermining support for Israel. The Israeli army needs to be seen
to spare civilians, not least because it needs time to destroy Hamas’s tunnels.
Gaza is on the brink. Poor sanitation threatens epidemic disease. Israel has at
last agreed that some aid can cross into Gaza. Much more will be needed. If
Egypt continues to bar refugees, Israel should go further by creating havens
on its own territory in the Negev, supervised by UN agencies.
It is also vital to spell out what comes after the invasion. Israel needs to
show that its fight is with the terrorists, not the people of Gaza. It should
pledge a new beginning after the war, with a programme of rebuilding and
the promise that it will not strangle Gaza’s economy. It should support a new
Palestinian constitution and new elected leaders. All this would be easier
under a new Israeli government voted in when the war is done.
Even if Mr Biden can persuade Israel to take these steps, that leaves the
hardest question of all. How to provide security in post-Hamas Gaza? Israel
cannot occupy the enclave permanently. That idea was rightly abandoned in
2005. An international commitment is therefore needed. Because it is not
clear who would join this, Mr Biden should start building a coalition now.
The more Israel shows the Arab world that it is serious about protecting
civilians and planning for the day after, the more likely Arab leaders are to
play their part.
This is a tall order. Much can and will go wrong. Ordinary Arabs’ ingrained
anti-Zionism will gnaw at their leaders’ willingness to help. But the
alternative is the decay that feeds scavenger states like Iran and Russia. Mr
Biden is the only leader who can pull things back together. If he fails, and
the security of the Middle East crumbles, it will be a catastrophe for
America, too. ■
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https://www.economist.com/leaders/2023/10/19/the-stakes-could-hardly-be-higher-in-
the-israel-gaza-conflict
Speaking of goat rodeos
America’s Republicans cannot agree on a speaker.

Good
How the GOP could yet, inadvertently, further the national interest
Oct 19th 2023
THE VIEW of the world from the White House end of Pennsylvania Avenue
looks like this: Hamas has attacked Israel, one of America’s closest allies.
The biggest war in Europe since 1945 is raging, and Ukraine needs
American support to prevent it from being swallowed by Vladimir Putin.
Taiwan also needs help. And a government shutdown is looming. Meanwhile
at the other end of Pennsylvania Avenue, the world looks like a lot of men in
suits arguing about who should be in charge of the meeting. House
Republicans have spent two weeks squabbling about who should be speaker.
Congress is paralysed.
It has been a poorly timed piece of self-indulgence. Fortunately, there is a

chance of a reprieve. That could mean a Congress that works slightly better,
at least temporarily, plus a fresh package of military support for Israel and
for Ukraine (and perhaps for Taiwan too). The government may even stay
open.
To recap, on October 3rd Kevin McCarthy, the House speaker, was sacked
by a small faction of Republicans led by Matt Gaetz, an elaborately
coiffured nepo-politician who seemed to be acting out of personal animus.
With Mr McCarthy gone, Steve Scalise, an affable congressman from
Louisiana who has spent a decade climbing the Republican leadership
ladder, tried his luck. He was rejected by the House Republican caucus, too.
Then Jim Jordan, a congressman from Ohio who is known for his dogged
support of Donald Trump’s efforts to overturn the election of 2020 and his
delight in shutting down the government at every opportunity, put himself
forward for the position. This would have been like placing the most unco-
operative member of a team in charge of running it, in the hope that the
result would be less disruption. Mr Jordan was rejected as well. The
Republicans have such a thin majority in the House that once the regicide
has begun, it is hard to end the bloodletting.
While this abdication of responsibility has been under way, the House has
had a temporary speaker, Patrick McHenry of North Carolina. The hitherto
obscure Mr McHenry has yet to receive the memo about his party being the
tribunes of working-class Americans, and has never been seen in public
without a bow-tie on. Yet Mr McHenry may also, by a bizarre sequence of
events, now find himself in a position to change the fate of more than one
country.
Both parties are keen to support Israel. There is also majority support in the
House for continuing to arm Ukraine and fund the American government.
But the Republicans who run the House have long refused to allow bills to
come to a vote unless they enjoy the support of a majority of Republican
lawmakers. So matters of great importance have been left to fester.
One possible (and indeed plausible) solution is that support for Israel is
packaged together with support for Ukraine and Taiwan, some more money
for border security and a bill to keep the government funded until this time
next year.
The principles of good governance suggest these matters should be
considered one by one. The dealmaking required to get them through the
House, however, suggests lumping them together. Given the necessary
authority, Mr McHenry could shepherd such a bill through with support from
Democrats. And, because he does not officially have the job of speaker, he
cannot easily be removed by his own side, as Mr McCarthy was.
Some combination of Republicans and Democrats should grant Mr McHenry

the authority, at least for now, to bring bills to the floor. All it would take is a
simple majority. For pragmatic Republicans who are fed up with being at the
mercy of their party’s least constructive lawmakers, it is an opportunity to
break the logjam. They should take it. Israel, Taiwan and Ukraine need
American help. America needs a Congress that can consider legislation.
Right now it has urgent work to do. ■
https://www.economist.com/leaders/2023/10/19/americas-republicans-cannot-agree-on-a-
speaker-good
At last, good news
Poland shows that populists can be beaten

A victory for the rule of law in the heart of Europe
Oct 17th 2023
LIBERALS DO NOT get much to cheer them up these days, but the news
from Warsaw this week qualifies. Confounding fears that many disenchanted
voters might simply stay at home, Poles turned out in record numbers on
October 15th to vote down the populist-nationalist Law and Justice (PiS)
party that has run the country for the past eight years. They gave what looks
like a solid mandate for government to an opposition alliance headed by
Donald Tusk, a former prime minister and a former head of the European
Council to boot. The alliance won 248 seats in the 460-member Sejm, or
lower house of parliament, and 66 of 100 seats in the Senate, the weaker
upper house.
Following a run of successes for illiberal populists—in Hungary and Italy

last year, and in Turkey in May, not to mention a sharp recent rise in
popularity for Germany’s AfD—the result is a relief. To understand why it is
such good news, consider what would have happened if PiS had managed to
stay on.
Four more years of PiS would have meant three kinds of problems. First, PiS
would have continued its creeping capture of the country’s supposedly
independent institutions, such as the judiciary. It has installed its own hand-
picked judges in senior positions, in particular taking over all 15 slots in
Poland’s Constitutional Tribunal, the country’s most important court since it
can strike down laws it deems unconstitutional, as well as in a council that
vets all lower judges. It has turned state broadcasters into megaphones for
PiS propaganda. It has deployed its people to lead state-run industrial
enterprises, such as Orlen, an oil company, which conveniently slashed the
price of fuel ahead of the election. It has been building a patronage system,
whereby even humble government jobs in towns it controls depend on
supporting, or at least not criticising, the ruling party.
There would, second, have been reason to fear a continuation and perhaps a
deepening of PiS’s illiberal domestic agenda. Its judges have made abortion
illegal except in cases of rape or incest or to protect the life or health of the
mother, and it started rewriting textbooks to make them more “patriotic”.
Third, a re-emboldened PiS would have continued in its combative stance

towards the EU, where it often teams up with Viktor Orban’s government in
Hungary, a populist alliance that was strengthened by the recent return to
power of Robert Fico in Slovakia. The central Europeans have been hostile
to schemes to share responsibility for dealing with illegal migration, and
have backed each other in disputes with Brussels over the rule of law, which
the populists tend to flout. Most alarming, given its hitherto excellent record
of supporting Ukraine, the PiS government has recently started to play
politics with the war, blocking the import of grain from its neighbour in
defiance of EU rules.
Much can still go wrong. The opposition agreed to form a government if it

won, but there is no guarantee that this will proceed smoothly; the alliance
consists of nine parties whose agendas run from radical-left to centre-right.
And as prime minister, Mr Tusk will encounter many obstacles, starting with
the president, Andrzej Duda, who though nominally independent is a PiS
ally. Mr Duda can veto all legislation, and the opposition will not have the
votes to override him. Mr Tusk will also bump up against the PiS-stacked
Constitutional Tribunal; its judges are appointed for nine-year terms. Short
of changing the constitution, there will be no easy way to get rid of them; so
Mr Tusk may find his bills struck down. Winkling out PiS’s judges from
lower courts will be tricky too, and would invite the same criticisms that
liberals used to make of PiS.
Mr Tusk will be able to count on goodwill from Europe, but this is no

panacea. Some €35bn ($37bn) of covid-recovery funds owed to Poland, and
even more from the regular budget, are blocked because of the row over the
rule of law; the European Commission would be happy to unblock it, but
first the Poles must meet the conditions it has laid down. These obstacles are
exactly why creeping authoritarianism, PiS- or Orban-style, is so dangerous.
Turning it around will be hard. But at least a start can now be made. And
opposition parties around Europe and the world can see that populists can be
beaten. ■
https://www.economist.com/leaders/2023/10/17/poland-shows-that-populists-can-be-
beaten
A brush with Basel
Why America’s banks need more capital

Though imperfect, regulators’ plans are necessary to keep the system safe
Oct 19th 2023
AMERICA SPENT more than a decade trying to make its banks safer, only
for several of them to collapse suddenly earlier this year. So it is no surprise
that regulators are trying once again to shore up the system. Their latest
proposals would on average increase by 16% the amount of high-quality
equity capital banks would need to fund their operations, among a litany of
other changes designed to bring America’s rules in line with principles
agreed globally. If the package—dubbed the “Basel 3 endgame”—is
implemented, banks, which have been reporting their profits over the past
week, will have to spend years building up their safety buffers.
Bankers are furious. “What person in what ivory tower thinks that is a
rational thing to do?” asked Jamie Dimon, the boss of JPMorgan Chase, of
one of the rule changes last month. Some of the industry’s complaints about
the details are reasonable. Overall, however, the increased safety brought
about by more capital is worth the costs.
The benefits of the reform are most obvious for the type of bank that has
been vulnerable this year. Silicon Valley Bank (SVB), which had $212bn in
assets, collapsed in March having suffered enormous losses on its bond
portfolio as interest rates rose. As a bank with assets of less than $700bn, it
was exempt from having to mark its bond portfolio to market when
calculating its safety buffer, even if those bonds were categorised as holdings
that may be sold (rather than held until they mature). Only when depositors
fled from SVB, forcing it to sell bonds at a loss, was its capital cushion
revealed to be an accounting fiction. The new proposal lowers the asset
threshold to $100bn, requiring banks of SVB’s size to value accurately at
least some of their bonds. As a result many will have to build up capital,
which should help prevent a repeat of the debacle.
For the biggest banks, the argument is less clear-cut. They did not suffer
during the spring crisis, and instead hoovered up deposits that fled from
smaller institutions. They are considerably better capitalised than they were
a decade ago. And because their depositors remain loyal even if they don’t
pay much interest, higher rates have served mainly to boost their profits by
raising the amount they can charge on loans. In earnings reports released
since October 13th JPMorgan, Bank of America and Citigroup all recorded
rising net interest margins in the third quarter of 2023, fitting a pattern
whereby the larger the bank, the more likely it has been to benefit from
higher interest rates.
Capital also comes with downsides. It is a more expensive means of funding

loans than debt or deposits, and some of those costs get passed on to
borrowers. Some of the new rules might make financial intermediation in
important markets harder. If regulators neglect shadier parts of the financial
system, activity could migrate there to escape their scrutiny. Mr Dimon is
right that some of the new edicts are poorly designed.
Yet the move towards bigger safety buffers is nonetheless desirable. The big
banks did not collapse in the spring, but it is they whose failure would cause
an economic catastrophe—and, probably, land taxpayers with the biggest
bail-out costs. By one estimate the global financial crisis of 2007-09 cost
every American $70,000 in income over their lifetimes. So painful are
banking crashes that studies which attempt to weigh the costs and benefits of
capital often call for a much fatter cushion than would be in place even if the
Basel 3 endgame is implemented.
It is no surprise that bankers object to more capital, which is rather like

being forced to buy insurance against unlikely events. But society as a whole
benefits enormously when that insurance is in place. The strength of
America’s economy means that now is a good time to try to make the system
safer, because building safety buffers is harder than maintaining them.
Even if the proposals are enacted, America’s banking woes are far from over.
The simplest way to build capital is to retain profits rather than pay them out
in dividends. Yet many small banks are enduring a profit squeeze, because
they are having to pay more interest to retain depositors, or now depend on
short-term borrowing at the prevailing high rate of interest. Use of a
supposedly temporary emergency lending programme at the Federal
Reserve, for example, has crept up over the summer. The facility has
outstanding balances of $109bn.
Bond portfolios also continue to shrink in value. By the end of July, banks’
unrealised securities losses were worth $558bn; since then, long-term bonds
have sold off further as investors have bet on interest rates staying higher for
longer, reducing the chance of a reprieve. For many banks the best path to
viability will be to find another institution willing to gobble them up. The
system that emerges will be more concentrated. Regulators are right to seek
to make it less fragile, too. ■
https://www.economist.com/leaders/2023/10/19/why-americas-banks-need-more-capital
Polishing the crown jewels
How to make Britain’s health service AI-ready

The NHS should clean up and open up its data. Patients will benefit
Oct 19th 2023
AT 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 using NHS numbers assigned to every
person in its care. The system enables world-leading studies, like the
RECOVERY trial during the pandemic, which discovered treatments for
covid-19. You might suppose it to be a treasure trove for artificial-
intelligence (AI) developers eager to bring their models to bear on
improving human health. Yet if you put this to a developer they will roll
their eyes and tell you why all is not as rosy as it seems.
That is because the kinds of tabular data that inform clinical trials—who
took which drug, what the outcome was—are not the same as those most
useful for training machine-learning models, such as scans or genomes,
which hold more information about a patient. Much of this sort of NHS data
is a mess, organised in ways which serve doctors treating patients, but not AI
developers hoping to feed it to computers. Making it suitable for those
models is a task with which the NHS has not yet come to grips. It is often
easier for those seeking to organise these richer data to start from scratch, as
with a vast data-collection exercise now under way.
To open up the NHS’s data riches to AI, its managers and political masters
should turn to three principles: cleanliness, comparability and consent.
Cleanliness starts with hosting rich data in cloud-computing environments
where the data are easier for AI developers to wrangle. Hospitals and clinics
also need greater incentives to prepare their datasets for machines. Most of
the NHS’s successful AI projects so far have relied on the drive of dedicated,
intellectually curious doctors who have had to fight the system rather than be
helped by it. Forging stronger links between the NHS and universities—and
giving PhD students easier access to datasets—is another good idea.
A more open approach to licensing intellectual property would also help.

Too often, the NHS demands fees and terms so steep and strict that they
deter developers. It should see the big picture and accept smaller fees, to
incentivise the building of clean datasets. That will mean less money
proportionally for the 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.
Comparability of data is also vital. Though everyone has an NHS number,

scans are often gathered and stored in different ways in different places,
making it harder to create large datasets for machine learning. The NHS is
poised to announce the winner of a contract to link up disparate datasets.
This will help, but more is needed. For example, scans of the same type
should be carried out in ways similar enough to allow AI to detect signals of
health rather than differences in the scanning process.
The final pillar is consent. Though everyone wins if everyone lets their data
be fed to computers, Britons should be allowed to opt out. Politicians must
persuade people of the benefits of vast datasets in which everyone—young
or old, black or white—is represented. They must also reassure them that
their data will be anonymised, and not used to their detriment, for instance
by insurers.
The NHS has no time to waste. The rewards on offer are better, earlier
diagnosis of disease, and a more productive, efficient system. That is sorely
needed when waiting lists are long and funds squeezed. The NHS’s position
as a world leader in data-heavy trials faces a stiff threat from health systems
in other places, which are digitising rapidly. Abu Dhabi, for example, is
considering feeding health-care data into foundation models, and may open
up its trained models to the world. Consumer technology—smartphones,
watches and devices connected to them—is fast improving its capacity to
peer inside the human body. It may one day begin to rival the scanning
capacity of the NHS, usurping it as the easiest and cheapest channel for the
provision of algorithmic health care.
The economy stands to gain, too. NHS data could be the basis of a thriving
export industry, licensing AI tools to health-care systems around the world.
But if it does not clean up its digital act, Britain will become a taker of new
health technology, just as it has become a taker of American digital services
like online search and social media. That would be a missed opportunity, and
the beginning of the end of the data primacy of the NHS. ■
https://www.economist.com/leaders/2023/10/19/how-to-make-britains-health-service-ai-
ready
Letters
Letters to the editor
On life sciences, motorists, invisible spouses, wealth management,
longevity, Nobel prizes, brevity
Letters to the editor

A selection of correspondence
Oct 19th 2023
Letters are welcome via e-mail to letters@economist.com
Unleash the MHRA

The Society of Chemical Industry’s recommendations for the British life-
science industry are broadly welcome, and I hope that some of the more
sensible ones will be adopted by the government to support the industry’s
success in the long run. But nowhere does Sharon Todd, the society’s chief
executive, nor the report, mention one of the most critical and, at least
historically, globally competitive pieces of infrastructure that Britain has to
drive forward innovation (By Invitation, October 7th). That is Britain’s
progressive and responsive Medicines and Healthcare products Regulatory
Agency (MHRA).
Right here and now, the biotech industry in Britain is squealing under the
significant erosion of this crucial organisation’s capacity to engage with
innovators, and in providing essential advice and feedback. This is stifling
progress on world-beating medicinal products and services that could
transform patients’ lives globally, and support a growing British innovation
industry. A startup that can’t get MHRA advice will have an even harder
time raising funds, especially in the present constrained environment.
The government would be well advised to act very, very quickly to address
this serious risk to Britain’s leading status in this industry which, regardless
of Ms Todd’s noble proposals, could be set back by a decade or more.
SIMON GOLDMAN
Cambridge, Cambridgeshire
Road rage
Rishi Sunak is misguided in his attempt to woo irritated British drivers, you
say (“The war on the war on motorists”, October 7th). I am no supporter of
the prime minister but I think he has a point. The ultra-low emission zone,
which charges certain polluting cars to drive in certain areas, made sense in
inner London but the difference is marginal in outer London, and at
significant cost to the less well off, who are more likely to own non-
compliant vehicles. Low-traffic neighbourhoods, where roads are blocked
off or pedestrianised, are popular with residents, but they have aroused
significant ire in places like Oxford, where they simply make it difficult to
get around.
Driving everywhere at 20mph might save a few lives, but why stop there?
Even more lives would be saved by reducing the limit still further, or
banishing cars altogether. Some sort of balance would seem wise. And I
don’t agree that motorists are coddled. They fork out hugely for government
fuel duties and road taxes. Trains, by contrast, are massively subsidised.
JEREMY HICKS
London
‘Er indoors
When it comes to the dominance of invisible spouses, Rebecca, the unseen
character in Daphne du Maurier’s novel, pales against Mrs Mainwaring in
“Dad’s Army” (Back Story, September 23rd).
MARK KNIGHT
Sevenoaks, Kent
Wealth and well-being

The wealth-management industry narrowly defines itself as one of only
protecting capital (“The $100trn prize”, September 9th). My organisation,
which asks people to donate at least 10% of their inheritance to effective
causes within the first five years of inheriting, interacts each day with ultra-
high-net-wealth families around the world. We’ve observed a rising
sentiment of dissatisfaction with wealth managers.
With over $130trn under management it is appalling that there are still gaps
in funding to solve climate change, prevent pandemics and much more. Not
only do banks not recognise this, they actively fund the problem by keeping
dirty industries, like coal, thriving. Clients can easily move their money. If
wealth managers don’t change there is always space for new entrants who
are part of the solution.
SID EFROMOVICH
Co-founder and CEO
Generation Pledge
Millburn, New Jersey
Live longer, in poverty

Successive governments and businesses are failing to plan for demographic
change. We are not prepared for the aged to live to 100, let alone 120
(Technology Quarterly, September 30th). Short-term reactive policymaking
has contributed to workforce shortages, economic stagnation and a health
and care system failing to meet our changing needs.
Future generations may not only be bored—not least if they continue to be

pushed out of the employment market soon after they hit 50—they are also
likely to spend longer living in poverty and with ill health. Innovations in
biotech are one thing, but finding solutions to the financial, health, housing,
transport and leisure needs of our ageing society is the challenge we must
address first.
DAVID SINCLAIR
Chief executive
International Longevity Centre
London
You made no mention of two fictional examples of immortality gone right,
Connor and Duncan MacLeod, the Highlanders. Never-ending life is really
only appropriate for thrifty Scots who will use their time to deal in antiques,
philosophise and occasionally save us mortals from our own mistakes.
KYLE MCCOY
Middleton, Wisconsin
Reward the bestsellers

It seems the goal of the Nobel prize in literature is to reward authors whose
works are not widely read (“Prestigious, lucrative and bonkers”, October
14th). By contrast, the science Nobels are given to scientists whose work
have had a great impact in their field. Charles Dickens would have been
passed over for a Nobel for someone much more esoteric. Today, a writer
like Stephen King, whose work permeates our society in books and also in
movies and television, will never be considered for a Nobel even though he
has shaped American literature and culture.
Having your work actually read by the public should not be a

disqualification. It would be nice if the Nobel prize-givers did not act like an
erudite faculty committee showing off its arcane knowledge and instead took
an author’s impact into consideration.
THAD HALL
Pittsburgh
Brevity is the soul of wit

Johnson (September 30th) reiterated the common advice for effective
writing: keep syntax simple, use short and active sentences, with common
words, be brisk and clear. Yet writing is not only a tool for communication
but an art form that creates possibilities for sophisticated expression. Instead
of complex sonnets, Shakespeare might simply have written “‘I love you”
and “‘Relationship; need to talk.” The English language and all of its users
would be vastly impoverished if he had written so effectively.
PAGE NELSON
Charlottesville, Virginia
Brevity is important in exams, too. I am reminded of an old Oxford essay

question: “Was Hegel a good philosopher? Be brief”. One smug student
wrote, simply, “Yes”.
When the paper came back, the examiner had given it a high mark but
scribbled a comment in the margin: “This was a good, brief answer. But a
better, briefer answer would have been No.”
SAM WILLIAMS
London
https://www.economist.com/letters/2023/10/19/letters-to-the-editor
By Invitation
Naftali Bennett argues that Israel’s future depends on striking fear
into its enemies’ hearts
David Petraeus and Andrew Roberts on Ukraine and the future of
warfare
Amal Clooney and Rupert Skilbeck on why Britain fails to hold
war criminals to account
The Israel-Hamas conflict
Naftali Bennett argues that Israel’s future depends

on striking fear into its enemies’ hearts
Regional foes must be confronted in new ways, says Israel’s former prime
minister
Oct 17th 2023
ISRAEL WAS forever changed on the Shabbat morning of October 7th,

when at dawn thousands of terrorists from Gaza burst through the border,
attacking and slaughtering Israeli communities. Until then, we Israelis
mostly felt that we were a Western society, where people worked in tech,
planned skiing vacations and went on wellness retreats, with few worries.
That all ended on that morning with the chilling realisation that we are living
next to an enemy that burns babies, rapes girls and wipes entire families off
the face of the earth. I served as a soldier and officer in special-forces units,
and as Israel’s defence minister and prime minister. I have seen many things.
Nothing came close to this. We have been forced to witness sights we
haven’t seen since the Holocaust.
The Israeli public is wounded. There isn’t an Israeli who hasn’t lost a friend
or relative. Children of some of my closest friends have been murdered or
died heroically while fighting the terrorists. But at the same time we
rediscovered a strong Israeli spirit—embodied by the kibbutznik who
grappled a terrorist with his bare hands to give time for others to escape
alive, and by mothers turning their homes into emergency clinics, saving
lives. This shouldn’t be the work of civilians, but when we were called upon,
we were there.
This is a stark reminder that the Jewish state was founded 75 years ago so
Jews would no longer be powerless to face their murderers. Which is why
the response now has to be one which will ensure that our enemies never
contemplate such an attack again.
But this isn’t just Israel’s fight. Israel’s fight is the fight of the decent nations
of the world against bestial terrorism. Israel is physically on the fault-line of
an Iranian-led front. Hamas is not the only enemy. It is just one tentacle
spreading from a Tehran-based octopus of terrorism. Other tentacles are
gripping Syria and Lebanon and are trying to grab hold of the Arab nations
in the Gulf. We need to be looking at this foe as a whole and understand that
it must be confronted in new, sophisticated and surprising ways.
The rules have changed.
We will not allow Hamas to hide behind Palestinian civilians while it

murders our civilians. We will never target civilians, as they are not our
enemy, but if civilians in Gaza are killed while being used as human shields,
Hamas will have murdered them as well.
Israel is now receiving the sympathy and support of the world, but as prime
minister I was clear: Israel’s future depends not on pity from the world, but
on fear in the hearts of our enemies.
In the coming days and weeks, perhaps months, we will have no choice but
to launch a war of unprecedented magnitude. All Israelis, right and left,
religious and secular, have cast aside the political arguments—not least over
the government’s judicial reform—which distracted them over the past nine
months, and are fighting in this war. Every reservist military unit I visited
over the past week was over-enlisted.
And while we are grateful for the backing of American power—as well as
for President Joe Biden’s supportive words since the Hamas attack and his
visit to Israel this week—it must be clear that we will be fighting our own
battles. For as long as it takes.
Israel’s priority right now is the de-Hamasisation of Gaza. We can never

allow such a threat to exist on a border ever again. The area must be
demilitarised. Doing so will take time. No one in Israel is under any illusion
that the military operation will be short or easy.
We are fully aware of the impact this will have on the civilian population of
Gaza. Israel is not targeting civilians and will not do so as the operation
unfolds. That is why the Israel Defence Force has warned them and given
them time to leave Gaza City and travel southwards to relative safety.
Although Israel certainly will not supply our enemy, we won’t prevent other
countries from providing water, food and medicine to civilians, provided, of
course, the Red Cross can visit all the Israeli hostages in Hamas’s custody.
This war is a test not only for Israel, but for the world. Those preaching to
Israel about “proportionality” must realise that nothing could be in
proportion to the atrocities which Hamas perpetrated. Israel is not going to
send thousands of men into Gaza to rape, pillage and wantonly murder
families and burn babies in their homes. These have never and will never be
our values.
For millennia Jews have been the victims of pogroms, unrestrained murder
and pillage. We built our amazing Jewish state with a clear promise of
“never again”. It’s up to us now to keep that promise.■
Naftali Bennett was prime minister of Israel from June 2021 to June 2022.
Read more of our By Invitations about Israel and Gaza, as well as other
coverage of the crisis
This article was downloaded by zlibrary from https://www.economist.com/by-
invitation/2023/10/17/naftali-bennett-argues-that-israels-future-depends-on-striking-
fear-into-its-enemies-hearts
How wars are fought
David Petraeus and Andrew Roberts on Ukraine

and the future of warfare
A war between the most advanced armed forces would look very different,
say the ex-general and historian
Oct 17th 2023
THE WAR IN Ukraine contains many features of past conflicts. To what

extent does it also offer clues about the nature of wars to come—particularly
what one involving America, NATO and other great powers might look like?
Some aspects of the Russo-Ukrainian conflict seem more reminiscent of the

conflicts of the last century than of this one. The Donbas, in eastern Ukraine,
features extensive trenches, no-man’s-lands and barbed wire reminiscent of
the first world war; minefields reminiscent of the second; and armoured,
artillery and rocket systems reminiscent of the cold-war era.
The war does, to be sure, feature much state-of-the-art weaponry, from

sophisticated anti-tank and air-defence systems to unmanned air and
maritime systems and modern missiles. It is also being fought in the context
of unprecedented battlefield transparency, given the availability of
commercial satellite imagery, new geolocation capabilities and the ubiquity
of smartphones, internet access, social-media sites and data-aggregation
services. It does not yet, however, include much in the way of sophisticated
long-range unmanned systems, either remotely or algorithmically piloted, of
the type that would undoubtedly feature in any future conflict between the
great powers.
That Ukraine does not foreshadow the future of warfare is also, in part,
because few wars do. The war in Iraq in 2003, for example, was radically
different from the Gulf war of 1990-91, despite being fought in the same
region little more than a decade later and by many of the same combatants.
Similarly, America’s war in Vietnam was dramatically different from the
seemingly formative American experience just a few years earlier in Korea
—although that did not prevent American advisers from seeking to shape
South Vietnam’s forces for a Korea-like conflict rather than for the
counterinsurgency campaign that should have been the focus of the effort.
The development of warfare has never been linear. It evolves in fits and
starts, driven in part by the enthusiasms (or lack thereof) of generals and
political leaders to learn lessons and apply them to the future, and, in part, by
the context, capabilities, limitations and other qualities (including the
willingness to take casualties) of the combatants. Developing technology has
driven the way wars change ever since the invention of gunpowder, notably
with the advent of the machine gun in the 19th century, the tank in the first
world war and the nuclear bombs which ended the second, profoundly
altering the face of battle.
Much of the Pentagon’s thinking about the cold war in the 1970s and 1980s,
and later about the Gulf war, was, for example, inspired by deep study of the
Yom Kippur war between Israel and Arab states in 1973. On the other hand,
the American military’s reaction to its experience in Vietnam was largely to
consign irregular warfare to the ash-heap of history—forcing America’s
armed forces in the post-9/11 era to heed lessons that should have been
learned from what was America’s longest war at that time.
The war in Ukraine has already taught us a lot about legacy weapons and
extraordinarily high munition-consumption rates. On a technical level, the
conflict has revealed much about what kit works and what doesn’t—but not
as much as it might have done, given that the war does not yet feature many
of the cutting-edge capabilities possessed by the great powers.
Ukraine is therefore far from a perfect signpost for a more general war
between the world’s most advanced armed forces. In fact, America and
NATO have still not yet provided Ukraine with the kind of state-of-the-art
systems—such as fifth-generation fighters and cutting-edge drones—that
their forces would immediately deploy in the event of Russian aggression
that triggered the collective self-defence commitment in Article 5 of the
NATO treaty.
Any direct NATO-Russia conflict in the Baltic States or in the Suwalki Gap
near Kaliningrad would undoubtedly involve far more capable intelligence,
surveillance and reconnaissance kit and systems than has been used in
Ukraine (indeed, open-source air tracking shows plenty of those platforms
flying along the country’s western border); much longer-range, larger and
faster munitions; and much more advanced air, sea, ground, subsea, space
and cyberspace weapons systems.
“What can be seen can be hit,” stated a cold-war adage, “and what can be hit
can be killed.” This saying was often repeated even though it was never
followed, owing to limited ability to see and to strike in depth, especially
against moving targets. Given the advances of the past three decades,
however—particularly in the sophistication of surveillance systems,
connected to weapons systems by robust communications networks—this
adage needs to be resurrected and taken seriously.
Today, virtually any significant military platform, from ships and planes to
logistical sites and assemblages of troops, can increasingly be seen in any
theatre of war (though sub-sea systems are still more difficult to detect). It
can thus also be hit, including by sophisticated missiles and swarming
munitions that can overwhelm defences and are extraordinarily precise.
Given this new reality, political and military leaders must use cutting-edge
technology, including AI and robotics, to transform all aspects of their
forces. And, where this fails to deter potential adversaries, weapons systems
must be protected from armadas of relatively inexpensive drones, from
sensor-guided missiles, and in cyber and outer space.
In warfare, necessity is the mother of invention. But rather than Russia

demonstrating the mastery of hybrid warfare that was supposedly
championed by its so-called Gerasimov doctrine, it is Ukraine, despite its
limited resources, that has most impressively demonstrated mastery of all
areas of warfare (though the miles-deep minefields in southern Ukraine are
presently holding up its advances there). In particular, Ukraine proved to be
much more resilient in cyberspace than was expected, undermining Russia’s
reputation as a master of cyber-attack.
Ukraine has been a sobering experience for Vladimir Putin, Russia’s leader.
He and his high command can be in no doubt that achieving their aims
would be far more difficult in any wider war they provoke against NATO.
For all the Ukrainians’ innovation, determination and courage, their struggle
does not precisely represent the future of warfare, though it undoubtedly
provides lessons from the past and offers hints of what is to come. ■
General David Petraeus, US Army (Ret.), commanded the surge in Iraq, US

Central Command and NATO/US forces in Afghanistan, later serving as
director of the CIA. Andrew Roberts is the author of more than 20 books,
including “Churchill: Walking with Destiny”, and a member of the House of
Lords. Their new book is “Conflict: The Evolution of Warfare from 1945 to
Ukraine”.
invitation/2023/10/17/david-petraeus-and-andrew-roberts-on-ukraine-and-the-future-of-
warfare
Prosecuting war crimes
Amal Clooney and Rupert Skilbeck on why

Britain fails to hold war criminals to account
Three reforms are needed to make its international justice efforts more
robust, say the lawyers
Oct 19th 2023
IN THE YEAR and a half since Russia invaded Ukraine, Britain has
repeatedly condemned Vladimir Putin’s illegal act of aggression. It has taken
action at the UN, frozen $23bn in Russian assets, imposed sanctions on
1,550 individuals, referred the conflict to the International Criminal Court
(ICC) and donated £1m ($1.2m) to support its investigation. But what would
the British authorities do if a Russian general who has committed crimes
against humanity in Ukraine showed up at London’s Heathrow airport?
Would he be arrested and put on trial? The answer, unfortunately, is no.
British law recognises a principle known as universal jurisdiction, which

permits the courts of any country to hold trials for a handful of offences—
such as genocide, crimes against humanity and war crimes—that “shock the
conscience of mankind”, no matter where they occur. But legal and practical
challenges have meant that only three people have ever been convicted of
such crimes in Britain, with the last conviction secured almost 20 years ago.
The three successful cases resulted in convictions of individuals accused of

torture in Afghanistan, war crimes in Iraq, and a Nazi who murdered 18
Jews. And they provided meaningful justice to victims. Indeed, since the
ICC does not have jurisdiction over all conflicts, such trials can be the only
way for perpetrators to be held to account. But when it comes to bringing
such cases, Britain lags far behind countries such as Germany and France
that have recently taken war criminals off their streets and put them on trial,
securing convictions of Islamic State fighters for crimes against humanity,
henchmen of Bashar al-Assad, Syria’s dictator, for torture, and Rwandan
fighters for genocide.
Britain has traditionally been at the forefront of international justice efforts,

dating back to the Nuremberg trials, when it played a leading role in
prosecuting Nazi commanders after the Holocaust. It has supported UN-
sponsored courts following conflicts in Yugoslavia, Rwanda, Sierra Leone,
Lebanon and Cambodia. It was a founding member of the ICC. It has a
world-class judicial system, talented investigators and experienced lawyers
who practise before international courts. Its leaders profess a commitment to
justice for war crimes all over the world. So why has it fallen behind other
advanced countries in prosecuting them?
The answer lies in three obstacles, all of them domestic. First, Britain does
not allow prosecutions for most international crimes unless the suspect is a
British national or resident. This keeps Russian generals and Iranian mullahs
out of the reach of the British police. For a long time America had a similar
limitation in its laws, but this was removed last year, allowing its courts to
prosecute any state’s nationals for war crimes if there is evidence that
warrants a trial. When the law was reformed, Merrick Garland, the US
attorney-general, commented that “in the United States of America, there
must be no hiding place for war criminals and no safe haven for those who
commit such atrocities”. Britain should be no different.
The second obstacle is inertia. The British authorities have typically waited
too long to start an investigation and to gather admissible evidence from
witnesses. In the German cases against Islamic State fighters, the
investigation started before specific defendants were identified, and the
testimony of Yazidi women who were captured by the fighters was pivotal.
Similarly, British police should not wait for a suspect to enter Britain before
starting their work, and they should let survivors know how to submit
evidence that can be used in trials against their abusers.
Finally, Britain has traditionally granted “special mission immunity” to

foreign officials visiting the country, without a carve-out for individuals
suspected by police or the ICC of committing international crimes. This get-
out-of-jail-free card should no longer be handed out in a way that
undermines Britain’s international obligations and commitment to the rule of
law.
Britain has assumed a leading role in responding to the war in Ukraine. But
condemnation and financial sanctions are not enough; it must also hold trials
of alleged perpetrators within its borders. Britain showed that such trials
were possible when it arrested General Augusto Pinochet, a former Chilean
president, on charges of torture. But that was 25 years ago. As the world
watches the horrors of war unfold in Ukraine, the Middle East and
elsewhere, now is the time for Britain to live up to its principles and its
history and ensure that, far from being a haven, its shores are hostile territory
for war criminals. ■
Amal Clooney is a barrister at Doughty Street Chambers in London and co-

founder of the Clooney Foundation for Justice. Rupert Skilbeck is a barrister
and director of Redress, a human-rights organisation. (The Economist’s
editor-in-chief, Zanny Minton Beddoes, is on the board of the Clooney
Foundation for Justice.)
invitation/2023/10/19/amal-clooney-and-rupert-skilbeck-on-why-britain-fails-to-hold-
war-criminals-to-account
Briefing
As Israel’s invasion of Gaza nears, the obstacles get more daunting
Mapping the destruction in Gaza
Israel’s four unpalatable options for Gaza’s long-term future
Is Israel acting within the laws of war?
Hamas tunnels under Gaza will be a key battlefield for Israel
No place for a war
As Israel’s invasion of Gaza nears, the obstacles

get more daunting
It must avoid a second front, protect civilians and save hostages while
fighting at close quarters
Oct 19th 2023 | JERUSALEM
FOR THE first time in more than 40 years, the Israeli Defence Forces (IDF)
have called up their entire armoured corps, thought to number more than
1,000 tanks. Fully 360,000 reservists have also been mustered, including a
civil-defence force of 20,000 people. The additional manpower is intended
to bolster the IDF’s full-time personnel, of roughly 170,000. Although some
of these troops are deployed along Israel’s northern border, to ward off a
potential attack from Lebanon by the militants of Hizbullah, more are
massing in the south, near the Gaza Strip. Israel is poised to begin what is
expected to be its biggest military operation since the invasion of Lebanon in
1982. Its leaders have said they are determined to destroy Hamas, the
militant group that controls Gaza, in retaliation for its bloodthirsty rampage
across southern Israel on October 7th.
As The Economist went to press, no assault had materialised. The most
obvious reason for the delay was the brief visit to Israel on October 18th of
Joe Biden, America’s president. His presence was intended both to show
support for Israel and to try to broker some sort of agreement to help
Palestinian civilians trapped in Gaza.
As it happened, just as Mr Biden was boarding Air Force One on October

17th to head to the region, a deadly explosion racked a hospital in Gaza. The
territory’s health ministry said that hundreds of people had been killed.
Hamas blamed bombing by the IDF. Israel said a rocket fired by another
Palestinian militant group, Islamic Jihad, had malfunctioned and fallen on
the hospital compound.
Analysis of images and video footage by independent researchers suggested

that Israel’s explanation was more plausible. The IDF also released tracking
data on rocket launches and intercepted communications among Palestinians
that appeared to bear out its account. Palestinian rockets are built in
makeshift workshops in Gaza to Iranian designs. Mid-air malfunctions are
common: the IDF claims that of over 7,000 rockets fired at Israel since
October 7th, at least 450 have fallen within Gaza. Israel points out that the
images of the explosion’s aftermath show a charred car park at the centre of
the hospital compound, and lots of damage to adjacent buildings, but no
crater or structural devastation of the sort that would be expected from the
munitions it uses in air strikes.
Mr Biden backed Israel’s version of events. American officials cited their

own infra-red satellite data and intercepts as evidence. But the tragedy
nonetheless scotched his hopes of reaching a sweeping deal with Arab
leaders to get aid into Gaza and at least some civilians out, despite Israel’s
blockade of the territory.
Timing is all
Any agreement depends on the acquiescence of Egypt, with which Gaza has
a short border and where deliveries of food and medical equipment are piling
up. But the carnage at the Ahli Arab hospital caused such outrage in the
Arab world that Jordan quickly cancelled a summit where Mr Biden was to
meet Abdel-Fattah al-Sisi, Egypt’s president, and Mahmoud Abbas, the
leader of the Palestinian Authority (PA).
“There is no point in doing anything at this time other than stopping this
war,” said Ayman Safadi, Jordan’s foreign minister. In the end the best Mr
Biden could do was secure an Israeli pledge not to obstruct aid deliveries
and an Egyptian one to let 20 trucks a day into Gaza. He also announced that
America itself would provide $100m in aid to ease the Palestinians’ plight.
The tragedy at the hospital underlined the slow progress of Israel’s effort to
encourage Palestinian civilians to move to the southern part of the Gaza
Strip to escape the brunt of the looming battle. The IDF says that only
600,000 or so of the 1.1m residents of northern Gaza have heeded its call.
By delaying a wide-ranging deal on humanitarian aid or safe zones where
civilians can take shelter, the explosion at Ahli Arab will have set back
efforts to persuade the holdouts. As it is, more Gazans have already been
killed just by Israel’s bombing campaign since October 7th than in any
previous conflict involving the territory. Inevitably, a ground assault will
lead to far more deaths.
Southern Gaza has become extremely overcrowded, with no organised

provision of food or shelter for arrivals from the north. Hamas has told
Gazans to stay put. What is more, Israeli bombing continues in southern
Gaza as well, with reports of refugees from the north being killed in air
strikes. A common refrain among Gazans is that nowhere in the territory is
safe, and that they might as well stay in the relative comfort of their homes.
There are 995 more
Another worry for Israel’s generals is the risk of a war on two fronts. Iran, an
ally of Hamas, was caught by surprise on October 7th, according to people
familiar with the situation. But it has since urged Hizbullah, a big militant
group in Lebanon, to enter the fray. Hizbullah has an arsenal of some
150,000 rockets and missiles, including more accurate ones than Hamas can
deploy, which would severely tax Israel’s missile-defence systems.
The possibility of war with Hizbullah is looking likelier by the day, say
Israeli insiders. Although Hizbullah might prefer not to invite Israeli
retaliation against Lebanon, which is gripped by a dire economic slump, it
ultimately answers to its Iranian paymasters, not ordinary Lebanese. On
October 16th Hossein Amir-Abdollahian, Iran’s foreign minister, made an
ominous warning: “The possibility of pre-emptive action…is expected in the
coming hours,” he told Iranian state television. The same day Israel’s
government issued an unprecedented order to evacuate 28 Israeli villages
within 2km of the border with Lebanon. On October 17th the IDF killed four
people attempting to cross a security fence.
Some ministers and defence officials have suggested that it may be better for
Israel to attack Hizbullah pre-emptively, rather than wait for another surprise
attack, this time from the north. Israel’s war cabinet, which includes both
Binyamin Netanyahu, the prime minister, and various political rivals,
including former generals, seems inclined to wait while sending more troops
to the border.
Israel may also be waiting for more American firepower to arrive in the
region. A flotilla led by an aircraft-carrier is already in the eastern
Mediterranean. Another is en route. These forces are intended to deter Iran,
Hizbullah and other Iran-aligned militias in Iraq, Syria and Yemen from
entering the war, or attacking American interests in the Gulf. The American
ships’ air-defence systems may also be able to provide Israel with additional
warning of missile strikes, if not a degree of protection.
Another potential disruption to Israel’s preparations for war is the West

Bank, the other slice of Palestinian territory, with roughly 2.7m inhabitants.
The 40% of it that Israel does not administer directly are in the hands of the
PA. But Mr Abbas is weak and unpopular. After the tragedy at the Ahli Arab
hospital widespread protests broke out against his government. The IDF’s
fear is not so much of a third front, in the form of a popular uprising against
Israel, so much as chaos that requires the presence of more Israeli troops.
There is also the constant threat of violence between Palestinians and the
almost 700,000 Israeli settlers in the West Bank and the eastern part of
Jerusalem.
A final reason for Israel to delay its offensive was an effort to free at least
some of the Israeli hostages captured on October 7th. The IDF believes that
Hamas, Islamic Jihad and other groups hold 203 of them. Israeli spies have
been trying to gather intelligence about where they are being held.
Discussions disrupted
Quiet talks to secure the release of hostages had been under way. Qatar,
which hosts Hamas’s political leadership and has strong ties to the group,
had been acting as a go-between. But those diplomatic efforts appeared to
collapse on October 17th after the tragedy at the Ahli Arab hospital. Most
Arab states, including those who had previously appeared somewhat
sympathetic to Israel, such as the United Arab Emirates, blamed the IDF for
the disaster, despite Israel’s detailed disavowal of responsibility. That both
makes it much harder for Israel to build diplomatic support for a ground war
and gives it less reason to delay, now that Mr Biden has left the region.
Israeli commanders, at any rate, are getting itchy feet. The IDF began
mustering within hours of the atrocities of October 7th. Its forces have been
largely in place for almost a week.“We really should get going this
weekend,” says a colonel. “You can maintain this level of readiness for two
weeks at the most.”
The invasion, when it comes, will be hard-fought and bloody. Israel’s leaders
have loudly and repeatedly promised to destroy Hamas’s military
capabilities for good and end its 16-year rule. That means a campaign of a
different order from previous incursions into Gaza, in 2009 and 2014, which
aimed merely to diminish Hamas’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 packed apartment blocks. Such
places will limit the invaders’ lines of sight and hamper their
communications, with the tall buildings impeding radio signals. Civilians
could be anywhere, and there will be endless places for Hamas’s fighters to
hide.
What is more, Hamas has built a 500km network of tunnels under Gaza—a
territory only 40km long and 10km wide. The intention was in part to
undercut Israel’s technological advantage in seeing and striking from the air.
Even the most sophisticated drones cannot provide much information about
what is happening underground. Troops entering the tunnels cannot navigate
by GPS or communicate by radio.
Forty years later, militias in Lebanon remain a threat
In its invasion of Gaza in 2014 the IDF struggled to deal with such tunnels.
It has since invested heavily in subterranean warfare, setting up special units
for the task and constructing a simulacrum of Hamas tunnels for training. It
has developed various technical means to hunt for them, including some
modelled on the underground surveys conducted by the oil industry, as well
as methods based on old-fashioned intelligence—looking for spots where
militants’ mobile-phone signals suddenly disappear, for instance. Even so,
finding and demolishing the tunnel network will be the work of months, if
not years, and certainly not a few days.
A second concern is the presence of so many Palestinian civilians.

American-led assaults on cities during the Iraq war and the Iraqi-led,
Western-backed capture of Mosul from Islamic State in 2016-17, were
painstakingly planned and conducted with the benefit of copious
intelligence. Large numbers of civilians died nonetheless—perhaps as many
as 10,000 in the battle for Mosul alone.
In theory, international humanitarian law, which governs the conduct of

armies once they are waging a war, demands that soldiers distinguish
between combatants and military objects on the one hand and civilians and
civilian objects on the other. Targeting those on purpose is always illegal.
But an attack that kills civilians—even lots of them—can be legal if it is
necessary for some military purpose and proportionate “in relation to the
concrete and direct military advantage anticipated”. In other words, Israel
can legally justify the deaths of civilians as long as they are killed in the
crossfire in operations that did not use disproportionate force.
Whatever international law might say, however, as civilian casualties mount,

so will pressure on Israel to withdraw and accept a ceasefire. Its previous
invasions of Gaza, in 2009 and 2014, were quite brief. In both cases, the IDF
remained on the ground for about 18 days. That would not be nearly enough
time to achieve Israel’s stated goals this time around. It took Iraqi troops
nine months of house-to-house combat to subdue Mosul.
That points to perhaps the biggest challenge for Israeli forces in Gaza: not
getting bogged down. America’s invasions of Afghanistan and Iraq after the
terrorist attacks of 9/11 and Israel’s war in Lebanon in 1982 (the last time all
those tanks were deployed) provide cautionary tales.
America’s “global war on terror” started triumphantly. Just two months after
al-Qaeda’s attacks on America in September 2001, American-led forces
were in control of Kabul, the capital of Afghanistan. The Taliban
government was gone. Al-Qaeda was hounded. Its leader, Osama bin Laden,
was tracked to Pakistan and killed in 2011. But the Taliban fought a growing
insurgency. Having lost more than 2,400 military personnel, America left in
2021. The Afghan government collapsed almost immediately and the
Taliban returned to power.
The war in Iraq was inglorious, too, and far bloodier. Once again, American
forces quickly took the capital, Baghdad, in April 2003. President George W.
Bush strutted on the flight deck of the USS Abraham Lincoln, an aircraft-
carrier, under the sign: “Mission Accomplished”. In fact, the country was
about to slip into civil war. American forces captured Saddam Hussein,
Iraq’s dictator, but soon faced bloody insurgencies 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 warnings. In 1982, amid a series of attacks
by the Palestine Liberation Organisation (PLO), the nationalist umbrella
group, gunmen shot and wounded Israel’s ambassador in London. The Israeli
government took the killing as a casus belli to invade Lebanon and
dismantle the PLO, even though it was attributed to militants from a rival,
the Abu Nidal group. Israeli forces besieged the PLO in west Beirut, forcing
its leader, Yasser Arafat, and thousands of fighters, to sail into exile. Israel’s
Christian ally, Bachir Gemayel, was elected Lebanon’s president.
Then it all fell apart. Gemayel was blown up. In sight of Israeli forces, his
Phalangist fighters exacted revenge by killing Palestinians in the Sabra and
Chatila refugee camps. An Israeli commission of inquiry found Ariel
Sharon, Israel’s defence minister, indirectly responsible. Within a year, under
pressure from anti-war protests, Menachem Begin, the prime minister,
announced his resignation.
One effect of the Lebanese imbroglio was that the PLO was replaced by
Hizbullah, a more formidable, Shia militia, which succeeded in pushing
Israel out of Lebanon in 2000. Another impact was on Palestinians within
the Israeli-occupied West Bank and Gaza Strip. Their first intifada, or
“shaking off”, a stone-throwing uprising that started in 1987, set the stage
for the Oslo accords between Israel and the PLO of 1993. Arafat made a
triumphant return to Gaza the following year.
Hamas emerged as the main force of violent rejectionism and did much to
destroy the Oslo accords. It forced Israel out of Gaza in 2005 and won the
Palestinian legislative elections in 2006. The following year it pushed out the
PA.
For Hussein Ibish of the Arab Gulf States Institute, an American think-tank,
the lessons are clear. Terrorist and insurgent groups, he argues, resort to
spectacular violence to provoke an irrational response. “They know that the
harm that they can do to the dominant power is limited,” he says. “They
understand that the harm that the dominant power can do to itself is
infinitely greater.” ■
https://www.economist.com/briefing/2023/10/19/as-israels-invasion-of-gaza-nears-the-
obstacles-get-more-daunting
Israel’s war on Hamas
Mapping the destruction in Gaza

At least 4.3% of the enclave’s buildings appear to have been destroyed
Oct 19th 2023
FOR MOST Gazans the dull boom of an air strike is a familiar sound. The
current barrage—which began after Hamas, a Palestinian militant group,
murdered more than 1,400 Israelis on 7th October—is the beginning of the
fifth war since Israeli troops withdrew from the area in 2005.
But nothing could have prepared the people of Gaza for the scale of
destruction this time around. The Israeli Air Force claims to have dropped
nearly 6,000 bombs on the narrow strip of land in the first week of the war—
more than the yearly rate of American forces in their operation against
Islamic State in 2014-17. Our analysis of satellite images suggests that in
this short space of time at least 4.3% of the enclaves’ buildings have been
destroyed.
To assess the damage caused by the strikes we analysed freely available data
from Sentinel-1, a European satellite. It flies over Gaza at least three times
every 12 days, and creates an image by bouncing microwaves off the Earth’s
surface and measuring the “echo” when they return.
By comparing images taken before the war began with the latest image from
October 12th, we identified areas with dramatic changes in signal, a
hallmark of damage. We verified the method’s accuracy by applying it to
data from the Ukrainian city of Mariupol in the spring of 2022, and
comparing it with human-coded assessments. Our method is not perfect. Not
all damage can be detected from above. As a result, our numbers, if
anything, may be too low.
Our analysis of Gaza revealed that significant areas of its north may have
been damaged or destroyed. The city of Beit Hanoun appears to be the worst
hit. Sources on the ground confirm that the Al-Sousi and Ahmed Yassin
mosques—which our analysis highlighted as damaged—have been levelled.
Overall, our estimates suggest that 11,000 buildings in Gaza are already
damaged or destroyed.
Gaza’s population is particularly vulnerable to air strikes. Around 2.2m

people live in the sliver of land—40km (25 miles) long and 10km wide—
that makes up the strip. All border crossings are closed. In some refugee
camps as many as 400 people live in each 100-metre square. Hundreds of
thousands have already been displaced. By merging our damage map with
fine-grained population data, our analysis suggests at least 92,000 will have
no home to return to when the fighting stops. This is about three times our
number for roughly the same point of the 2021 war.
Israel says the strikes have killed hundreds of terrorists and destroyed Hamas
command centres. The Ministry of Health in Gaza reports around 3,500
Palestinian lives lost, more than in any other Israel-Gaza conflagration. With
bombs still falling, and Israel expected to launch a ground attack, this
number is sure to rise.■
Chart sources: European Commission; European Space Agency;

OpenStreetMap; UN; The Economist
https://www.economist.com/briefing/2023/10/19/mapping-the-destruction-in-gaza
When the shooting stops
Israel’s four unpalatable options for Gaza’s long-

term future
The path to Israel’s preferred outcome is littered with obstacles
Oct 19th 2023 | RAMALLAH
THE PUBLIC statements Joe Biden made during his lightning visit to Israel
on October 18th did not suggest many misgivings about Israel’s impending
invasion of the Gaza Strip. In private, however, the American president’s
advisers hoped to press Israel’s leaders on an urgent question: what should
happen after the war?
Israeli officials say they are focused on toppling Hamas from power, in
retribution for the massacre it committed in southern Israel on October 7th.
“Gaza will no longer be a threat for Israel,” says Eli Cohen, the foreign
minister. “We will not agree that Hamas will have any power in Gaza.” Even
after the risks of fighting in such a densely populated place were illustrated
by a deadly blast on October 17th at Gaza’s Ahli Arab hospital, which Israel
blamed on an errant Palestinian rocket, Israel’s stated war aims have not
changed.
Four-way stop
But Israel’s post-war plans remain uncertain. It has four main options, all
bad ones. First is a prolonged occupation of Gaza, like the one it undertook
from 1967 to 2005. Israeli troops would have to secure the enclave and, in
the absence of a Palestinian government, might have to oversee basic
services as well.
This might please a segment of Israel’s religious right, which still fumes
about the withdrawal in 2005 of all Israeli soldiers and settlers from Gaza as
the abandonment of a sliver of the biblical homeland of the Jews. But no one
else wants to see Gaza reoccupied, given the heavy financial burden and the
likelihood of endless bad press and a steady trickle of casualties. Mr Biden
warned on October 15th that a lasting occupation would be a “big mistake”.
Most Israeli strategists agree.
The second option is to wage a war that decapitates Hamas and then leave
the territory. This is arguably the worst way forward. Some of Hamas’s
leaders and supporters would probably emerge to reconstitute the group.
Even if they did not, some other undesirable force would take its place. The
Middle East has a history of radical groups taking advantage of ungoverned
spaces.
The best outcome, from Israel’s perspective, would be the return of the
Palestinian Authority (PA), which governs parts of the West Bank in co-
ordination with Israel. But that path is littered with obstacles. The first is that
Mahmoud Abbas, the Palestinian president, is loth to do it. “I don’t think
anybody can be that stupid and think he can go back to Gaza on the back of
an Israeli tank,” says Ghassan al-Khatib, a former Palestinian minister.
Even if Mr Abbas were able to take power that way, he may not want to.
Yasser Arafat, the previous president of the PA and longtime figurehead for
Palestinian nationalism, had a fondness for Gaza; he lived there for a time
after being allowed to return to Palestine in 1994. People close to Mr Abbas
say that he, in contrast, views Gaza as a hostile place.
Gaza would almost certainly be hostile to Palestinian police sent to secure it.
The PA employs around 60,000 people in its security services, which have
authority in roughly a third of the West Bank (see map). It cannot control
even that limited area: parts of Jenin and Nablus, cities in the northern West
Bank, are so restive that the PA’s forces dare not patrol them lest they be
attacked. Morale is low. If Palestinian police returned to Gaza, they would
be a target for the remnants of Hamas, Islamic Jihad and other militants.
Hamas and the PA fought a bloody civil war in Gaza after Hamas won
parliamentary elections in 2006. Hamas eventually prevailed and ejected the
PA from the strip in 2007.
Nor is security the only question. After Hamas came to power, Mr Abbas
told bureaucrats in Gaza to stop working. Hamas hired tens of thousands of
supporters to fill the civil service instead, while the PA continued to pay its
workers to sit at home. Keeping that bureaucracy would mean working with
around 40,000 people hired for their ideological loyalty to Hamas;
dismissing it would repeat the mistake of America’s “de-Baathification”
programme in Iraq, which threw legions of angry, unemployed men on the
streets.
A fourth option would be to cobble together some sort of alternate

administration, composed of local notables working closely with Israel and
Egypt. Israel relied on that sort of arrangement until the 1990s, before the PA
began to take over civil functions in the occupied territories.
There has been talk of trying to enlist Muhammad Dahlan, a former PA

security chief who grew up in Gaza, to take the reins after Hamas. But Mr
Dahlan has spent the past decade in Abu Dhabi, the capital of the United
Arab Emirates (UAE). He has fallen out with the PA; in 2016 a Palestinian
court convicted him of corruption. There is also bad blood between him and
families in Gaza: he led the fighting against Hamas in 2007. “I think that’s
an illusion,” says Michael Milstein, a reserve colonel in the Israeli army and
an analyst at the Moshe Dayan Centre, a think-tank in Tel Aviv. “I’m not
even sure he’d want to come back. He’d be worried people would want him
dead.”
The case of Mr Dahlan points to a larger problem. The Palestinians have

been divided for almost two decades. The split is largely their fault: though
Hamas and PA leaders meet every couple of years to pay lip service to
reconciliation, neither party wants to compromise. But the schism has also
been exacerbated by the divide-and-rule policy of Binyamin Netanyahu, the
Israeli prime minister, who thought it a useful tool to stymie the Palestinian
dream of an independent state. “Netanyahu had a flawed strategy of keeping
Hamas alive and kicking,” says Ehud Barak, a former Israeli prime minister.
Both Hamas and the PA rule their statelets as one-party authoritarian

regimes. In 2021 Nizar Banat, a critic of Mr Abbas, was beaten to death by
Palestinian police at his home in Hebron. Those who oppose Hamas in Gaza
risk torture and execution. Most Palestinians choose to keep silent, shunning
politics and focusing on their day-to-day struggles.
The most recent poll from the Palestinian Centre for Policy and Survey
Research (PCPSR) found that 65% of Gazans would vote for Ismail
Haniyeh, the leader of Hamas, in a head-to-head presidential race against Mr
Abbas (who would lose the West Bank as well). Hamas would win 44% of
the vote in Gaza in a parliamentary ballot, whereas Fatah, Mr Abbas’s
faction, would take just 28%.
Between a rock and a crock

At first glance this would suggest enduring support for Hamas. But such
polls offer only a binary choice between militants and incompetents. Fully
80% of Palestinians want Mr Abbas to resign. Hours after the hospital
explosion there were protests in cities across the West Bank, where
demonstrators chanted: “The people demand the downfall of the president.”
He is 87 and has no clear successor. None of his would-be replacements
inspires much enthusiasm.
In a hypothetical race between Mr Haniyeh and Muhammad Shtayyeh, the

PA’s colourless prime minister, the former would win by a 45-point margin
in Gaza and 21 points in the West Bank. Again, this is less a testament to Mr
Haniyeh’s popularity than to Mr Shtayyeh’s lack of it: a poll in 2019, after
his first 100 days in office, found that 53% of Palestinians did not even
know he was the prime minister.
Open-ended questions yield more telling results. When the PCPSR asked
Palestinians to name their preferred successor to Mr Abbas, a plurality said
they did not know. The second most popular answer, in both the West Bank
and Gaza, was Marwan Barghouti, a member of Fatah serving multiple life
sentences in an Israeli prison for orchestrating terrorist attacks in which
Israeli civilians were killed. Several of the other top choices, such as Mr
Dahlan and Khaled Meshal, a former Hamas leader, do not even live in the
Palestinian territories.
Exiles, prisoners—or no one: Palestinian political life is moribund.

Palestinians blame this sorry situation on Israel, arguing that the lack of
meaningful peace talks has deprived the PA of its raison d’être. “I think Mr
Abbas will be the last Palestinian president,” says Mr Khatib. “The whole
idea of the Palestinian Authority is that it’s a transition towards a Palestinian
state. If there’s no political horizon, then the whole PA becomes irrelevant.”
Israelis contend that the PA has undermined itself through rampant graft.
Billions of dollars in foreign aid have been siphoned off over the past three
decades to buy plush villas in Jordan and to pad bank accounts in Europe.
Asked to name the main problems in Palestinian society, more people cite
their own government’s corruption (25%) than Israel’s continued occupation
(19%).
There is blame enough to share. The result, though, is that Fatah is probably
irredeemable in the eyes of most Palestinians, a liberation movement turned
ossified and decadent. In recent years even some Israelis had begun to
wonder if Hamas could become an interlocutor, following the same path
Fatah did decades earlier, from violent militants to pliable bureaucrats.
Not only had Hamas appeared focused on trying to improve Gaza’s

economy, some of its leaders also seemed amenable to a two-state solution.
That would have been a remarkable shift for a group whose charter used to
call for Israel’s destruction. Last year Bassem Naim, a member of the
group’s political leadership in Gaza, told your correspondent that it was
willing to accept “a state on 1967 borders”. Ghazi Hamad, another political
official, said much the same a year earlier.
Such thoughts now seem naive. Mr Milstein was one of the few prominent
Israelis who warned, well before the massacre, that Hamas’s apparent
pragmatism was just a ruse. His view, vindicated by awful events, is now a
near-universal one in Israel. Even if Hamas were willing to take part in
peace talks, an angry, grieving Israeli public would not be a willing partner:
the vast majority of Israelis want to obliterate Hamas, not reward it.
Two other questions will shape Gaza’s future. One is what role Arab states
will play. In private conversations over the past week, several Arab officials
floated the idea of a foreign peacekeeping force for the enclave—but most
quickly added that their country was not eager to participate.
Egypt is not popular in Gaza, both because it has joined Israel in blockading
the territory and because of its prior history as Gaza’s ruler from 1948 to
1967. The UAE would be hesitant to play a big role. “We don’t act solo,”
says an Emirati diplomat. The same is probably true of Saudi Arabia.
Israel would probably veto any role for Qatar, one of the countries with the
most influence in Gaza. For years the emirate has helped stabilise Gaza’s
economy with Israel’s blessing, distributing up to $30m a month in welfare
payments, salaries for civil servants and free fuel. But its support for Hamas
—some of the group’s leaders live there—will now make it suspect. “The
whole strategy of Israel during the last decade was to trust Qatar,” says Mr
Milstein. “One of the lessons we should learn from this war is that we should
not give Qatar any more involvement.”
Although Arab states do not want to secure Gaza, they may be willing to
help rebuild it. After the last big war, in 2014, donors pledged $3.5bn for
reconstruction (though by the end of 2016 they had disbursed just 51% of
that). The bill will be even bigger this time.
The other question is what happens to the PA. Half of Palestinians tell
pollsters it should be dissolved. Doing so would deprive many of them of an
income (the PA is the largest employer in the West Bank) and probably lead
to more violence. But it would also raise the costs of Israel’s occupation and,
perhaps, force Palestine’s long-term future back onto Israel’s political
agenda after two decades in which it was rarely discussed. “It’s the only card
he has left,” says a former confidant of Mr Abbas.
There is no lasting solution for Gaza alone. Despite the long schism,
Palestinians there still see themselves as part of a larger polity. Anyway, the
strip is too small and bereft of natural resources to thrive by itself. Its
economy depends on Israel’s: everything from strawberry farms to furniture
factories relies on exports to its wealthier neighbour. Whoever takes control,
Gaza will be neither stable nor prosperous as an isolated statelet.
The only way to bring enduring quiet to Gaza is through a broader

settlement of the Israeli-Palestinian conflict. If the prospect of a negotiated
solution evaporates completely, warns Mr Khatib, “with it, moderate
leadership will vanish.” Israel can decapitate Hamas. But it is far less clear
that anything better will take its place. ■
https://www.economist.com/briefing/2023/10/19/israels-four-unpalatable-options-for-
gazas-long-term-future
The coming ground invasion
Is Israel acting within the laws of war?

Even lawful evacuations and attacks on Hamas will exact a heavy civilian
toll in Gaza
Oct 14th 2023
MORE THAN 1,900 Palestinians have been killed in Israeli air strikes on
Gaza since October 7th, when Hamas terrorists murdered 1,300 people in
southern Israel. Israeli jets and artillery have been pounding the coastal
enclave. “The scenes out of Gaza will be hard to stomach,” warned a
spokesman for the Israel Defence Forces (IDF) on October 12th. Hamas,
which has deliberately massacred civilians, and whose founding charter
commits it to the destruction of Israel, is undoubtedly guilty of war crimes.
How far can Israel go in response?
Israel’s initial actions have prompted a wave of criticism. B’tselem, an

Israeli human-rights group, has accused Israel of “a criminal policy of
revenge”, arguing that the scale of its air strikes and blockade constitute
“war crimes openly ordered by top Israeli officials”. Médecins Sans
Frontières, a humanitarian organisation, has accused Israel of unlawful
“collective punishment” of Gaza “in the form of total siege, indiscriminate
bombing, and the pending threat of a ground battle.”
In practice, though, international law and the specific rules that govern
warfare—the law of armed conflict (LOAC), also known as international
humanitarian law (IHL)—give Israel considerable latitude to attack Hamas,
according to legal experts. Article 51 of the United Nations charter gives
states the right of self-defence against armed attack, provided that, according
to customary international law, the force they use is necessary and
proportionate. Proportionality does not mean symmetry in the type of
weapons used or the number of casualties caused. It means that the
defending state can use as much force as is needed to address the threat—
and no more.
Drawing that line is a subjective and contentious process. But Israel’s
campaign so far would meet those criteria, argues Aurel Sari, a law professor
at the University of Exeter who lectures to NATO armed forces. The scale of
Hamas’s attack, its demonstrated intent and proven capability means that
invading Gaza or even occupying it temporarily to destroy the group “will be
relatively easy to justify” legally, he says.
Nonetheless, some measures are particularly contentious. Israel, helped by

Egypt, which controls a southern crossing, has maintained a ground, air and
naval blockade of Gaza for years, with only some goods and people
permitted to cross. Sieges and blockades are not in themselves illegal. But on
October 9th Yoav Gallant, Israel’s defence minister, said that would turn into
a “complete siege”, with “no electricity, no food, no fuel, everything is
closed”. Three days later Israel Katz, the energy minister, warned that no
“electrical switch will be turned on, no water hydrant will be opened and no
fuel truck will enter” until Hamas freed hostages.
Israeli officials justify this move on the basis that Hamas diverts civilian
goods for military use. “Clearly” says Amichai Cohen, a law professor at the
Israel Democracy Institute in Jerusalem, “there is some level of supply that
Israel should allow. The question is whether Israel should provide electricity
to areas which are clearly controlled by Hamas, and where Hamas will use
the electricity in order to attack Israel.” Others, such as Tom Dannenbaum, a
law professor at Tufts University in Boston, argue that Mr Gallant’s order
plainly violates a prohibition on starving civilians—even if the goal is to
squeeze Hamas. That may be one reason why, despite Mr Gallant’s
combative rhetoric, Israeli officials are privately working with Egypt to
ensure that some supplies can come in from the south.
A second source of legal dispute is the IDF’s decision, late in the evening of
October 12th, to tell 1.1m civilians living in the northern part of Gaza to
move south. (Hamas called on civilians to ignore the call.) The grave
humanitarian consequences of this decision are not in doubt. Gaza’s
infrastructure is in ruins and there are few places for so many people to go.
But the legal aspects are more complicated.
Lawyers distinguish between temporary evacuation of civilians in warzones,

which can be lawful, and permanent displacement, where the intent is to
prevent them from returning, which is not. However the International
Committee of the Red Cross (ICRC), a humanitarian group, says that the
evacuation instructions, combined with the siege, “are not compatible with
international humanitarian law”. It is also not always safe to move while the
bombardment continues. Video footage verified by the Washington Post
showed a number of people including several children who had been killed,
apparently by an Israeli strike while they were fleeing to the south on Friday.
The question of evacuation is tangled up with the specific conditions of

Gaza, where Hamas is deeply intermingled with the civilian population.
IHL, which governs the conduct of armies once they are waging a war,
demands that soldiers distinguish between combatants and military objects
on the one hand, and civilians and civilian objects on the other. Targeting the
latter on purpose is always illegal. But an attack that kills civilians—even
lots of them—can be legal if it is necessary for some military purpose and
proportional “in relation to the concrete and direct military advantage
anticipated”.
Israel’s targeting is “broadly within the mainstream of contemporary state

practice” and in line with American doctrine, argued Michael Schmitt of the
University of Reading and Lieutenant-Colonel John Merriam, a US Army
Judge Advocate, in papers published after they visited the IDF’s
headquarters and studied its procedures shortly after Operation Protective
Edge, Israel’s 50-day war on Hamas in 2014.
But the same legal principles, even interpreted in broadly the same way, can
result in different and sometimes jarring outcomes because of local
circumstances. Hamas’s large rocket force, capable of striking most of Israel,
means that the anticipated “military advantage” of attacks is seen to be high,
note Mr Schmitt and Lt-Col Merriam. That can justify, in the IDF’s view,
high levels of collateral damage that would appear excessive to an army
whose civilian population did not face a comparable threat—though,
conversely, the effectiveness of the country’s Iron Dome missile-defence
system can have the opposite legal effect. Similarly, Israel’s conscript-heavy
armed forces are casualty averse and sensitive to soldiers being taken
prisoner. That can result in a greater reliance on firepower.
Hamas’s way of war also plays a role in Gaza. “It’s not a regular city,”
argues Avichai Mandelblit, who served as Israel’s chief military advocate
general (MAG) from 2004 to 2011 and attorney-general from 2016 to 2022.
“It’s a military city. There are thousands of legal military targets inside the
neighbourhoods of Gaza. You cannot distinguish them.” Israel’s war aim is
to destroy Hamas. “If you want to do it,” says Mr Mandelblit, “then you
have to destroy Gaza, because everything in Gaza, almost every building
there, is a stronghold of Hamas.” Evacuation of civilians is thus unavoidable,
he says. “There is no other way—the other way is they’re going to be
killed.”
The law nonetheless demands discrimination. Each target must be judged

individually. But the scale of Israel’s bombardment—6,000 bombs dropped
in six days, compared with 2,000 to 5,000 per month across Iraq and Syria
during the American-led air campaign against Islamic State from 2014 to
2019—has given rise to concern that the definition of military targets is
being stretched to breaking-point. “It is very hard to see a legal basis for
many of these strikes,” argues Adil Haque of Rutgers Law School in New
Jersey. “It’s hard to believe that all of these buildings were in active use by
Hamas when they were levelled, or that their military value would outweigh
the foreseeable harm to civilians in or near them.”
Mr Sari says that the IDF, in his experience, is “world-class” in its legal
expertise and professional ethics. “I have a lot of faith in the Israeli military,
lawyers and their system. It is very robust.” Military lawyers are present at
Israeli military headquarters from the brigade-level up to advise on targeting.
“Every target is legally examined,” insists Mr Mandelblit. Legal policy is set
by the MAG and civilian attorney general together, with the latter getting the
last word.
But this system is likely to face its greatest test in the weeks ahead. On
October 10th an Israeli official told a television station: “Gaza will
eventually turn into a city of tents. There will be no buildings.” Daniel
Hagari, an IDF spokesperson, boasted that “hundreds of tons of bombs” had
been dropped on Gaza. Then, he added: “the emphasis is on damage and not
on accuracy.” Neither statement can be squared with the law.
Major acts of terrorism can unmoor even the most professional armed forces.
America engaged in torture after 9/11. American, Australian and British
special forces have all faced allegations of war crimes in Afghanistan and
Iraq. A video published on October 10th appears to show Israeli troops
executing Palestinian gunmen who were on their knees and waving a flag of
surrender. “If you send tens of thousands of conscript soldiers on a revenge
mission into a dense urban area that civilians can’t leave, the results are
entirely predictable,” warns Jack McDonald of the Department of War
Studies at King’s College London.
Restraints that applied in previous military operations may not apply in this
war. Mr Mandelblit gives the example of the IDF’s policy of giving prior
warning for some strikes. Armies are generally obliged to provide warning
of attacks when they can, though not if surprise is essential. “You cannot do
it in such a war,” he says. “It’s more like Lebanon now,” he says, alluding to
Israel’s war with Hizbullah, the militant group, in 2006. “All we can say to
civilians is: look, go away from your cities or your homes, where Hamas is
mixed.” The IDF has already abandoned its earlier practice of “roof
knocks”—the use of smaller bombs a few minutes ahead of larger strikes—
in favour of general warnings to entire neighbourhoods.
Israel’s war has acquired an existential quality. “This time it’s going to be a
war to the end,” says Mr Mandelblit. “It’s either us or them because we
know what they’re going to do to us.” Yet Mr Cohen warns that the law is
not the only consideration in waging war. “The fact that a lot of children in
Gaza, Palestinian children, will die in an attack—even if it’s legal—is
destructive for Israel’s legitimacy around the world.” ■
This article was downloaded by zlibrary from https://www.economist.com/is-israel-
acting-within-the-laws-of-war-in-gaza
Maelstrom in the Middle East

But Israel’s evidence about a hospital strike still carries little weight
Oct 18th 2023 | DUBAI
THE SCENES looped on news channels all night: ambulances, bodies, an

explosion lighting the night sky. Hamas blamed Israel for the blast at Gaza’s
al-Ahli hospital on October 17th. The Gaza health ministry said hundreds of
people were killed. Israel later denied that it was carrying out air strikes in
the area; the explosion, it said, was caused by a misfired rocket launched by
Islamic Jihad, another militant group in Gaza. By the time Israel issued its
denial, though, details had ceased to matter. The catastrophe had sparked
protests in the West Bank and Jordan, and as far away as Tunisia. That was
the maelstrom into which Joe Biden flew when he arrived in Israel on
October 18th for a quick visit.
It is hard to generalise about “the Arab world”, a collection of 450m people

spread across thousands of kilometres and nearly two dozen countries. But it
is safe to say that most Arabs still sympathise with the Palestinian cause.
Their dispossession remains a totemic political issue across the Middle East,
able to mobilise popular anger and protest like little else.
The war between Israel and Hamas, now in its 12th day, has been no
different. Covered around the clock on television, discussed endlessly on
social media, it has sparked an outpouring of support for Palestinians. Still,
compared with past conflicts, like the 50-day war in Gaza in 2014, a few
things look different.
One is geopolitics. Since 2020 four Arab states—Bahrain, Morocco, Sudan

and the United Arab Emirates (UAE)—have established relations with
Israel, which previously had ties with just two (Egypt and Jordan). Saudi
Arabia has been in talks to do the same. That has changed the way some
Arab media outlets cover the conflict.
Al Jazeera, the Qatari broadcaster, has given ample time to Hamas, which is
supported by Qatar. Meanwhile, channels run by Saudi Arabia and the UAE
have tried to walk a tightrope. Though they cover scenes of devastation in
Gaza, they do not book Hamas officials for interviews (Arabic-speaking
Israeli Jews are frequent guests, though). There have been heated debates in
newsrooms over language: where once they might have used the phrase jaish
al-ihtilal (“occupation army”), for example, today they just refer to it as the
Israeli army.
A second difference is fear of a broader conflict. The 2014 war was limited
to the holy land. It may not stay there this time—and that has complicated
the discussion, at least in those countries close to Israel. Take Egypt.
America and several Arab countries are urging it to open Rafah, the sole
border crossing with Gaza not controlled by Israel, to allow civilians to
escape the fighting.
But a broad swath of Egyptian society is adamant that their country should
resist such pressure. “Why did you impose this war on me?” asked Ibrahim
Eissa, a pro-government talk-show host, in a message directed at Hamas.
“You want me to risk 100m Egyptians for your sake?” Other pundits have
made similar remarks. One could dismiss them as mere mouthpieces for the
regime—but their words have been widely echoed by the public.
The discourse is similar in Lebanon, which is four years into one of the
worst economic crises in modern history. Many Lebanese are worried that
Hizbullah, the powerful Shia militia and political party, will open a second
front against Israel, thus dragging their country into another ruinous war like
the one in 2006. “Don’t enter us into this hell,” wrote Dima Sadek, a well-
known journalist who is both deeply supportive of the Palestinians and
deeply critical of Hizbullah.
That points to a third shift: the region is more polarised today. Many Syrians,
in particular, are appalled by the scenes in Gaza, where Israel’s siege warfare
reminds them of the tactics deployed by Bashar al-Assad. But they are
simultaneously loth to cheer for Hamas, a group backed by Iran, which did
so much to destroy their country. And they fume at commentators across the
Arab world who abhor Israeli atrocities but cheered Mr Assad’s. In Lebanon,
too, some people are focused on the wider politics: whatever their views of
Israel, they hope Iran (and thus Hizbullah) will emerge weakened.
In off-the-record conversations over the past 12 days, some Arab officials

have spoken about Hamas and Gaza in the sort of language one would
expect to hear from right-wing Israelis. They harbour no sympathy for an
Islamist group backed by Iran. But they dare not repeat such remarks in
public.
The disconnect between palace and public helps explain why Antony
Blinken, the secretary of state, received a frosty reception on his recent
round of shuttle diplomacy. First it was Muhammad bin Salman, the Saudi
crown prince, who kept Mr Blinken and his entourage waiting hours for a
planned Saturday-night meeting (the prince did not receive them until the
next morning).
It is not unusual for Prince Muhammad, a night owl with an erratic schedule,
to leave guests to cool their heels. That he did it to such a high-profile
visitor, though, was seen as a pointed message. Then, after landing in Cairo,
Mr Blinken was subjected to an unusual public lecture by Abdel-Fattah al-
Sisi, the Egyptian president, who lamented the plight of the Palestinians.
Mr Biden will not even receive that chilly welcome. He had been scheduled
to fly to Jordan after Israel, where he was to meet King Abdullah; Mahmoud
Abbas, the Palestinian president; and Mr Sisi. But Mr Abbas backed out
shortly after the hospital blast, and then Jordan announced that the whole
summit was off. Whatever Mr Biden had hoped to say to Arab leaders, they
are in no mood to hear it.
Yet behind the public posturing lies deep unease. Since October 7th many
analysts have drawn parallels with the Yom Kippur war, the last time Israel
experienced such a calamitous intelligence failure. But there is also a
profound contrast with that moment.
In 1973 Arab states were able to launch a war that seemed, to Israel, an
existential threat. Historians have argued ever since about whether that was
true. But it felt that way at the time—enough so that Moshe Dayan, the
defence minister, is said to have mooted the use of nuclear weapons. Half a
century later, Israel was dragged to war by a militant group, and the region
now faces the prospect of a broader conflict waged by other non-state actors
supported by non-Arab Iran.
As for Arab states, they are nervous onlookers. Najib Mikati, the Lebanese
prime minister, was blunt about the possibility of war in Lebanon: “These
decisions are not in my hands,” he told al-Jadeed, a local television network.
The leaders of Egypt and Jordan fear fallout from the war will destabilise
their own brittle regimes. Gulf states are nervous about antagonising Iran,
lest its proxies lash out at Riyadh or Abu Dhabi. This is not an existential
moment for Israel—but some Arab rulers fear it might be for them. ■
https://www.economist.com/briefing/2023/10/18/the-arab-world-thinks-differently-
about-this-war
Tunnel vision
Hamas tunnels under Gaza will be a key battlefield

for Israel
Underground warfare is terrifying, claustrophobic and slow
Oct 17th 2023
STUDENTS OF URBAN warfare divide the battlefield into four planes.

One is the sky above cities, increasingly thick with drones. Next are the
buildings that extend upwards, offering vantage points and hiding places. A
third is the streetscape: the lattice of roads, alleys and paths that form a city’s
peacetime arteries. It is the fourth—the tunnels lying beneath—that will
present the greatest challenge to the Israel Defence Forces (IDF) when they
begin their invasion of the Gaza Strip in the coming days.
The first smuggling tunnels in the area were built by Bedouin clans on both
sides of the Egypt-Gaza border after 1981, when Israel and Egypt
demarcated the border. The first known tunnel attack from the strip occurred
in 1989. But it was in 2001 that Hamas, the militant group that would later
take over the territory, after Israel withdrew in 2005, began construction of a
remarkable subterranean network. Its initial aim was to smuggle in material
and arms from Egypt. But the tunnels had manifold other uses.
Commanders could hide in them and use them to communicate without

relying on Gaza’s phone network, tapped by Israel. They provided hiding
places for weapons and ammunition. Hamas could use them for ambushes
during Israeli ground wars in Gaza. And they allowed cross-border raids into
Israel for attacks and abductions—such as the kidnapping of Corporal Gilad
Shalit in 2006, a raid that later helped Hamas secure the release of more than
1,000 Palestinian prisoners. Hizbullah, the Lebanese militant group, built
similar tunnels on the Israel-Lebanon border, though most were destroyed in
2018-19.
The military rationale of such tunnels was ultimately to erode Israel’s way of
war. “In 2008”, said a Hamas commander, reflecting on a brief but intense
war over Gaza that winter, “the air strike and air surveillance [by Israel] took
us by surprise…so we made strategic plans to move the battle from the
surface to underground.” By 2014 the group’s tunnelling effort employed
900 full-time staff, with each tunnel taking three months and an average of
$100,000 to build, according to a study by the RAND Corporation, a think-
tank. Hamas raised capital for the tunnels, pitching them as commercial
investment schemes, complete with contracts drafted by lawyers, through
mosques in Gaza. Iran and North Korea are thought to have helped with
construction, supplying money and engineers.
In 2014 the IDF launched Operation Protective Edge, an air and ground war
targeting the tunnels. It destroyed around 32 of them, stretching for 100km
in total, 14 of which penetrated Israeli territory. That was a tiny fraction of
the whole network, which was thought to number 1,300 tunnels extending,
according to Hamas, 500km in all—more than ten times the length of Gaza
itself. A commission of inquiry after the war found that the IDF was
unprepared for the danger presented by the tunnels, despite having warned
the country’s political leadership that they presented one of the five most
serious threats to the state. Israel’s defence minister at the time boasted that
it would take just a few days for the IDF to destroy the tunnels it had
targeted; it took weeks.
Locating tunnels proved extremely difficult. “We were familiar with the
tunnels mainly in theory,” noted General Nadav Padan, who commanded a
division in 2014. “We did not have operational experience.” (General Padan,
since retired in New York, returned to Israel on October 8th to rejoin the
IDF.) The IDF used “geophones”, as well as ground-penetrating radar, which
turn ground vibrations into voltage, and detection of echoes from controlled
explosions, a technique honed in the oil industry. But many tunnels were
discovered thanks to human intelligence—sources inside Gaza—or infantry
patrols that happened to find the entrances. Israeli signals-intelligence units
also looked for occasions when Palestinian phone signals would suddenly
disappear.
Even when a tunnel was found, destroying it was another matter. Israel’s air
force attempted to drop precision bombs along the tunnel’s route, a practice
dubbed “kinetic drilling”, but some failed to detonate at the right depth. The
IDF also used “Emulsa”, a gel-like explosive, but each tunnel required nine
to 11 tonnes of the stuff on average, notes RAND, with ground troops forced
to secure entrances for long periods. Units often had to improvise; some
borrowed trolleys and agricultural equipment from Israeli border villages to
shuttle explosives into Gaza.
In the past, IDF personnel generally sought to avoid fighting in tunnels,

many of which were booby-trapped. The army’s high command barred
troops from entering them unless one end had been blown up or secured; this
order was disregarded only once, in 2014, when an Israeli officer’s body was
snatched into a tunnel in Rafah, Gaza’s southern crossing with Egypt. The
prohibition made sense. In many ways, subterranean warfare epitomises the
trickiest aspects of urban warfare.
Cities involve limited lines of sight, close-quarters battle and poor

communications, with radio signals travelling poorly between tall buildings.
Tunnels exacerbate all those things. Even the most sophisticated drones
cannot see underground. Navigating by GPS is impossible. Radio signals for
communication do not penetrate far.
The experience of British soldiers involved in a recent tunnel exercise in

Leeds, a northern city in England, highlighted the challenges that IDF
soldiers are likely to face. The total darkness made night-vision goggles all
but useless, for instance, since such devices rely on amplifying the faint
ambient light that is present above ground even at night. Disturbing stagnant
water risks releasing toxic gases into the air. The air is colder than above
ground by as much as ten degrees Celsius. “You realise that unless you are
properly drilled, and have spent a long time down there, you’re not moving
fast,” noted one British soldier in the Leeds exercise.
The sound of weapons fire is also amplified in an enclosed space, observes

Joe Vega, the US Army’s top expert on underground warfare. That, he says,
is why larger teams are needed to clear tunnels, “because you have to
continually replace people in and out—they just can’t last.” The effect,
known as overpressure, also causes weapons fire to kick up dust and dirt,
reducing visibility.
The techniques once used to clear tunnels—America used tear gas in

Vietnam; the Soviets a variety of chemical agents in Afghanistan—“would
likely be regarded as unlawful today”, says Daphné Richemond-Barak in
“Underground Warfare”, a book on the topic. (Despite its frequent use
against domestic protesters, tear gas is largely illegal in war.)
The IDF increasingly relies on technology to help. It has remote-controlled

ground robots, for instance, which can look for booby traps or ambushes
lying in wait. “To enter a tunnel after a robot has combed through it…makes
the situation a lot less stressful,” says a soldier from the IDF’s elite Samur
(weasel in Hebrew) tunnelling unit, quoted in a recent study. “It lowers the
tension and the environment becomes much more sterile.” But tech is
unreliable. “More than once a soldier was operating a robot that got stuck
inside a tunnel,” complained another officer. “Now try and go in and retrieve
a robot that is 400 metres inside a tunnel complex. It’s like running 150
metres where each metre is like crossing a desert for a month.”
In the nine years since Operation Protective Edge, the IDF has invested
heavily in tunnel operations; it has introduced new doctrine, techniques and
specialised units. It has constructed its own version of Hamas tunnels for
training. Its Yahalom battalion, an elite combat engineering unit, which
includes Samur, was reorganised, notes Omer Dostri of the Jerusalem
Institute for Strategy & Security, a think-tank, with its size doubled from 400
to 900 personnel and new tunnel reconnaissance units attached to the IDF’s
Gaza division.
It faces a forbidding task. On October 16th Lieutenant-General Herzi Halevi,

the IDF’s chief of staff, promised “to enter Gaza, to go to the places where
Hamas is preparing, acting, planning, launching” and to “attack them
everywhere, every commander, every operative, destroy infrastructure.” In
practice, identifying, clearing and collapsing several hundred kilometres of
underground warrens will be the work of years—not weeks or months. ■
https://www.economist.com/briefing/2023/10/17/hamas-tunnels-under-gaza-will-be-a-key-
battlefield-for-israel
Asia
How remote islands underpin Japan’s maritime power
Social-media influencers are battling to educate young Indians
about sex
India’s Supreme Court refuses to recognise same-sex marriage
Has Australasia lurched right on race?
Australia’s energy transition is in trouble
South Korean chipmakers get a reprieve
India-Pakistan relations are becoming more marginal and worse
Japanese geography
How remote islands underpin Japan’s maritime

power
And why those far-flung outposts face mounting pressures
Oct 19th 2023 | The Ogasawara, Rishiri, Sado and Yonaguni
FROM AFAR, the Japanese archipelago appears to consist of just a few

islands. Zoom in and more come into view, dotting the map like the ink
splatters of a calligraphy brush. Japan has around 14,000 islands, some 400
of which are inhabited. These often-remote abodes, known as ritou, define
the country’s borders. Though small, and sometimes tiny, together they
shape Japan’s identity as an ocean nation and underpin its maritime power.
The ritou are often overlooked. Fewer than 1% of Japan’s 125m people live
outside its five main islands, Honshu, Kyushu, Shikoku, Hokkaido and
Okinawa. Remote islands make up about 2% of Japan’s land mass. Yet they
account for half of the exclusive economic zone (EEZ) which helps Japan
punch above its weight at sea: it is the world’s 62nd-largest country yet has
the sixth-largest marine area (see map). The combined coastlines of the
ritou, 20% of Japan’s total, are longer than the whole of Brazil’s. They are
also storehouses of cultural and biological diversity.
Yet these quietly consequential islands face mounting pressures. On islands

like Sado, off the northern coast of Honshu, or Rishiri, near Hokkaido,
demographic change is hollowing out communities. Climate change
threatens the already fragile supply chains of places like the Ogasawara, a
group of islands halfway to Guam, which rely on ferries to connect them to
the mainland. In the Nansei, the islands that stretch between Taiwan and
Kyushu, residents are making flight plans in case of a war with China.
Remote islands closer to the mainlands have been Japanese for centuries.
Visitors to Sado can find dozens of thatched-roof Noh theatres, a testament
to the influence of Zeami Motokiyo, Noh’s pre-eminent playwright, who was
exiled to the island in the early 15th century. Those farther afield, including
the Nansei, the Ogasawara and the islets around Hokkaido, are relatively
recent additions. Incorporating them played a “crucial role in the Japanese
nation-building process” of the mid-to-late 19th century, says Ishihara Shun
of Meiji Gakuin University in Tokyo. Their strategic value came to the fore
during the second world war, when Iwo To, a speck in the Ogasawara,
became the site of a terrible, legendary battle. (Iwo Jima, its widely known
anglicised name, resulted from a Japanese military mispronunciation.)
After the war, the ritou struggled to keep up as Japan boomed. (The Nansei
and the Ogasawara remained under American occupation for decades.)
Many in Tokyo considered them an encumbrance. But perceptions changed
as international maritime law evolved. In 1982, the United Nations
Convention on the Law of the Sea granted states exclusive rights over
marine resources extending 200 nautical miles (370km) beyond their
territorial waters. That “changed the shape of the nation” and helped Japan
become a “maritime great power”, says Iwashita Akihiro of Hokkaido
University. The ritou conferred it with vast fishing waters and undersea
resources.
Marine riches draw China’s attention. Oil and gas reserves are one reason
that it covets a group of uninhabited islands in the East China Sea that Japan
controls and calls the Senkaku (China claims them and calls them the
Diaoyu). Deposits of rare-earth minerals, perhaps equivalent to hundreds of
years’ worth of global demand, have been discovered in hard-to-extract mud
on the sea floor near Minamitorishima, which belongs to the Ogasawara;
Chinese research ships have been spotted surveying the sea floor nearby. On
distant Chichijima, the main island of the Ogasawara, locals recall with
horror a night in 2014 when hundreds of large Chinese fishing boats
descended on the island to harvest its coral. “The fact that China is
interfering in these areas is a testament to their value,” says Itokazu Kenichi,
the mayor of Yonaguni. China’s threats to nearby Taiwan have also spurred
Japan to reinforce defences on some remote islands in the south-west.
Yet the biggest challenge for most ritou is a severe version of one that much
of Japan faces: shrinking, ageing populations. “They cling to the memory of
their golden age,” says Saito Jun, an author who has visited hundreds of
islands. The population of remote islands shrank by nearly 60% between
1955 and 2010 (excluding those occupied by America). By contrast, Japan’s
overall population began declining only in 2008. On the 300-odd inhabited
ritou not linked to the mainland by bridge, 37% of the population was over
65 years old in 2020, compared with 29% nationally. If they were a
prefecture, it would have been one of the most aged in the country. These
trends worry security-conscious officials. “It’s important that people live
there—it serves to patrol the borders,” says Tsukamoto Kuniyoshi of the
remote-islands department at the infrastructure ministry.
Decades of state-backed investments have sought to make remote-island life

more attractive. Yet health care remains far more precarious even than in
rural areas on the mainland, acknowledges Kosaka Katsuya, a town-hall
official on Rishiri. Locals there must trek to bigger islands to give birth;
helicopters evacuate those who need emergency surgery. Many remote
islands do not have high schools, and some are losing elementary and middle
schools. Complex logistics mean higher prices for consumers. Businesses
struggle with tiny local markets—some 70% of the ritou have fewer than
500 inhabitants.
Many islands hope simply to arrest the slide. On Sado, the population of
49,000 is projected to drop to 19,000 by 2060; the local government’s goal is
to keep the decline to 30,000. Government subsidies aim to encourage
migration to the island. But they are up against powerful social forces that
are pushing young people away. “They hear from their parents and
grandparents that there’s no point in staying, that you should leave, go make
it in Tokyo,” laments Watanabe Kazuya, a local official.
Remoteness is not in and of itself a death sentence. Take the Ogasawara, the
most remote of all the inhabited ritou, accessible only by a ferry that takes
24 hours to travel one way. The population has been stable for years; if
anything, housing is in scarce supply. The internet keeps islanders connected
to modern services; what cannot be found in the small handful of shops can
be ordered from Amazon. Tropical weather, stunning vistas and an open-
minded community attract many newcomers. For many of them, living so far
off the map has its own wonderful appeal. ■
https://www.economist.com/asia/2023/10/19/how-remote-islands-underpin-japans-
maritime-power
India and free love
Social-media influencers are battling to educate

young Indians about sex
Condom sales are rising during the Navratri festival
Oct 19th 2023 | MUMBAI
THIS WEEK marks the start of Navratri, a Hindu festival spanning nine
nights that honours the goddess Durga. In western India, men and women
celebrants will re-enact the fight between good and evil by clanking wooden
sticks and swaying in circles together to loud music. Some go further.
Navratri’s emphasis upon heady mingling between the sexes has long been
associated with free love. The Hindu nationalist government of Gujarat once
attributed a rise in abortions in the state to the festival. Condom sales are
reported to soar ahead of it.
“We stock up a few weeks beforehand and sell 30-40% more than usual
during Navratri”, says Mahendra Kumavat of K&S Pharmacy in the Gujarati
city of Ahmedabad. The growing scale of the festivities, as India gets richer,
is creating opportunities for surreptitious coupling. Reduced family sizes
have meanwhile made parents less able to rely on one of their offspring to
police libidinous teens. Some go so far as to hire detectives instead. “On two
occasions we do great business: one is Valentine’s Day and another is
Navratri”, says Lalit Raval, a former air force officer, who runs a private
detective agency in Gujarat.
Some condom sellers are seizing the opportunity. In 2021 Nykaa, an e-

commerce outfit, slashed prices of condoms and lubes as part of a “Navratri
sale”. A few years earlier Manforce, an Indian condom maker, ran hoardings
featuring a former porn star called Sunny Leone with the slogan, “This
Navratri, play, but with love”. The signs were castigated by Hindu activist
groups and taken down.
India’s rulers are generally averse to talking about sex. Condom

advertisements deemed explicit by the government were subsequently
banished from daytime television across the country. Gujarat, Karnataka,
Madhya Pradesh, Maharashtra and Rajasthan have all banned sex education
in schools—with predictable results. According to a survey published in
2021, 78% of young men had had unprotected sex with their last partner.
The incidence of venereal disease among adolescents is growing.
This is a chronic failing. Social-media influencers such as Tanaya Narendra,

an embryologist with 1.1m followers on Instagram, are at least trying to fill
the gap. “I am an ordinary girl from a small town in Uttar Pradesh. So
people are not intimidated by me,” she explains. A study among teenage
girls in northern India last year found a higher understanding of sex, birth
control and pregnancy among social-media users than non-users. If they
want to play with love this Navratri, they are likelier to do so safely.■

https://www.economist.com/asia/2023/10/19/social-media-influencers-are-battling-to-
educate-young-indians-about-sex
Don’t rely on the courts
India’s Supreme Court refuses to recognise same-

sex marriage
The decision is a devastating setback for equal rights in the country
Oct 19th 2023 | Delhi
THE MOOD in India’s gay community was hopeful on October 17th as the
Supreme Court in Delhi began to deliver its verdict on a raft of petitions
asking it to allow same-sex couples to marry. Yet it soon became clear that
the five judges would not recognise gay unions. Instead they sided with the
government’s view that changing the institution of marriage was a job for
Parliament rather than the court.
The verdict is a bitter setback for gay rights. It is a victory for India’s Hindu-
nationalist government, which considers same-sex marriage an “urban
elitist” idea at odds with Indian culture. It also casts a shadow over the
Supreme Court’s record of advancing personal rights and social progress
despite conservative opposition.
The petitioners argued that marriage was a fundamental right guaranteed by
India’s constitution, which should therefore be available to all. To make it
so, they asked the court to tinker with the Special Marriage Act, which
governs unions between people from different faiths or countries (Indian
personal laws being largely religion-based, with different rules for people of
different faiths). If the act referred to “spouses” rather than husband and
wife, they said, it would cover same-sex couples.
There was reason to think the court would be sympathetic. D. Y.

Chandrachud, the chief justice, is an outspoken advocate of liberal values.
Many of the court’s recent decisions have challenged prevailing conservative
attitudes to sex and relationships in India and expanded rights against fierce
government opposition. In 2014 the court recognised a third gender; in 2018
it decriminalised gay sex. A ruling in 2017 overturned the law that made
adultery a criminal offence, emphasising the sexual autonomy of women
within a marriage.
Mr Chandrachud rejected the government’s censorious depiction of same-

sex marriage and recommended some recognition for same-sex unions in his
minority opinion. Even so, he and the other judges agreed with the
government that it was up to the legislature to make appropriate changes to
the laws that regulate marriage.
That was a cop-out. There will be no law to recognise same-sex marriage

under the ruling Bharatiya Janata Party. Even if the opposition wins the
election in 2024, which is unlikely, it will not be a priority. The court’s
decision precludes most future attempts at legal challenge. ■
https://www.economist.com/asia/2023/10/19/indias-supreme-court-refuses-to-recognise-
same-sex-marriage
No special measures
Has Australasia lurched right on race?

Indigenous relations have taken a beating in votes in both Australia and
New Zealand
Oct 19th 2023 | SYDNEY
INDIGENOUS PEOPLE in Australasia have had a tough month. In a

referendum on October 14th Australian voters rejected their Labor
government’s proposal to establish an indigenous advisory body, or “Voice
to Parliament”. On the same day New Zealanders elected the most
conservative governing coalition since the adoption of proportional
representation in 1993. The new prime minister, Chris Luxon, pledges to
scrap policies designed to boost Maori influence in politics. Have the two
countries moved right on race?
Australians certainly moved against the “Voice”, which was meant to give
Aboriginal people more say in policymaking. Polls last year suggested two-
thirds would approve the necessary constitutional amendments. Yet over
60% voted “no”, rejecting the proposal in every state. Similarly, in
dismissing their Labour government, New Zealanders rejected its schemes to
promote the Maori language and hazy plans to “co-govern” with tribes. The
country’s right-wing minor parties, ACT New Zealand and New Zealand
First, called these “divisive race-based policies”. Both increased their vote.
Results are still coming in, but Mr Luxon’s centre-right National Party may
need both minnows for a majority.
Critics on both sides of the Tasman had the same complaint, that
“indigenous policies risk dividing the nation along racial lines”, notes
Dominic O’Sullivan of Charles Sturt University in New South Wales. These
naysayers (some of them indigenous) objected to special rules for any group.
The opposition campaigns also saw “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 candidates”. Australians
displayed “contempt for us”, said an Aboriginal academic, Marcia Langton,
after the referendum. Decades-long reconciliation efforts are in ruins, she
and other activists say.
Yet many Australians see the verdict differently. It “doesn’t indicate that
Australians are unsympathetic” to Aboriginal people, argues Greg Melleuish
of the University of Wollongong, but that “they did not think this was the
way to solve their problems.” Aussies are always reluctant to change their
constitution; only eight of 45 referendums on doing so have succeeded. And
no-campaigners could cite particular reasons for caution in this case.
Important details of the Voice were unclear, they noted, including the issue
of how its members would be elected and held accountable. Had the
government of Anthony Albanese been more willing to negotiate on such
issues, the centre-right parties might have been persuaded to back it.
The debate is in a sense starker in New Zealand, because it has made far
more progress on relations with indigenous people. It had been almost two
decades since race was a big electoral issue there. In contrast to Australia,
New Zealand’s 19th-century colonists signed a treaty with Maori leaders,
recognising Maori rights. Though they were flouted, this provided a legal
basis, way back in 1970, for New Zealand to investigate and provide redress.
It has reached settlements with almost 90 Maori tribes, or iwi, offering
apologies and compensation of NZ$2.6bn ($1.6bn). The process has had
bipartisan support for decades—yet now faces scrutiny. ACT New Zealand’s
leader, David Seymour, wants a referendum on the extent of its powers. “No
one should be treated differently based on who their ancestors were,” he
says.
The final make-up of New Zealand’s coalition will not emerge until
November. But Mr Luxon is already expected to axe a new Maori Health
Authority, intended to give tribes more power over health policy and close a
seven-year life-expectancy gap. He will also scrap unpopular plans to share
management of water infrastructure with iwi. Whether he might end some of
his predecessor’s more cosmetic measures, such as pushing civil servants to
speak Maori, is unclear—but many Labour supporters would not mind if he
did. “Labour brought the race issue to the forefront because they moved at a
pace that is not in line with the public,” says Sir John Key, a former
conservative prime minister. Much the same happened in Australia. ■
https://www.economist.com/asia/2023/10/19/has-australasia-lurched-right-on-race
Lucky but sooty
Australia’s energy transition is in trouble

The government is suddenly rushing to prop up coal
Oct 19th 2023 | SYDNEY
HUGE OPEN-CUT coal mines carve up the Hunter Valley in New South
Wales. For decades the fuel extracted from them has been hauled by train to
nearby power stations, keeping lights on across south-eastern Australia. But
their turbines are winding down. One ageing coal plant shut in April. Three
others in New South Wales are due to close within a decade. The state is
jettisoning coal so fast it is attempting an “industrial revolution in 15 years”,
said its energy minister, Penny Sharpe.
Australia, the world’s second biggest coal exporter, is finally trying to clean
up its power sector, its biggest source of greenhouse-gas emissions. It still
relies on coal for 57% of electricity generation and emits more from burning
it, per person, than any other G20 country. But its states and centre-left
federal government have set targets to slash emissions to net zero by 2050 or
earlier. The Labor prime minister, Anthony Albanese, aims to get 82% of
electricity from renewables by 2030. That is ambitious—and the transition is
already running into problems.
The most pressing is that Australia has deployed enough cheap renewables
to undercut its ageing coal plants, but not to replace them. Clean power
generation, mostly from wind and solar, has more than doubled in a decade,
to 37% of the total. One in three Aussie households has installed PV panels
on its roof—more, per person, than any other nation. By comparison,
Australia’s coal plants are old, expensive to maintain and power firms are
hastening their closure. Over half the 15 stations on the eastern seaboard are
due to shut by 2035.
That could leave a big generation gap. State governments which share
responsibility for energy with the commonwealth, are stepping in to prop up
ailing coal plants to avert blackouts. On September 5th the Labor
government of New South Wales said it would negotiate to keep its biggest
coal power station, Eraring, open beyond 2025, which is when its owner,
Origin Energy, wants to close it. Victoria, another Labor-held state, is paying
two power companies not to close their stations early.
Australia’s bounteous renewables resources should help it adjust. It is as rich

in sun and wind as fossil fuels. Yet the task is daunting. The federal
government estimates that to meet its targets, Australia must install around
44GW of renewables, plus batteries and reliable sources of power such as
hydro. Meanwhile, investment 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 ministers. Between 2013 and
2022, conservative governments tore up a carbon price scheme created by
Labor and resisted emissions cuts. “The problems we face now are a legacy
of that dysfunction,” argues Kane Thornton of the Clean Energy Council, a
renewables association. Australia still lacks an overarching policy to support
its renewable targets, relying instead on a tangle of state and federal
incentives.
Power lines are another problem. The national grid may need 10,000km of
new cables to link up solar and wind farms. The federal government has
allocated A$20bn ($13bn) in low-cost debt to draw investment. But
Australia’s size makes the project hard and NIMBY-ist farmers are fighting
it. Some protested in tractors at Victoria’s parliament in August, waving
signs saying “don’t fight the hand that feeds you”. Landowners are a “human
toll” in a “reckless race to renewables”, said David Littleproud of the rural
National Party.
The hold-ups leave state governments little choice but to prop up coal plants.
“I don’t think anyone appreciated how difficult this would be,” says Tony
Wood of the Grattan Institute, a think-tank. He argues for a policy to boost
renewables investments, for example by putting a price on carbon emitted
from coal plants, or making retailers buy more clean power. “We need levels
of co-ordination between the states, industry and government that we
haven’t seen since wartime”, he says. Indeed it is hard to match Australia’s
ambitions on the energy transition with its progress. It will not become a
renewables superpower if it cannot keep the lights on. ■
https://www.economist.com/asia/2023/10/19/australias-energy-transition-is-in-trouble
Chipping away
South Korean chipmakers get a reprieve

But the pressure from geopolitical tension and China’s domestic
manufacturing drive will increase
Oct 19th 2023 | SEOUL
IT HAS BEEN an anxious year for Samsung Electronics and SK Hynix,

South Korea’s leading chipmakers. Last October America restricted exports
of advanced chipmaking equipment to China in an attempt to cripple its
ability to procure or produce chips for weapons systems. The South Korean
firms, which rely on China as both a manufacturing base and market,
received a year-long exemption, but fretted about what might happen after it
expires.
On October 9th their minds were put somewhat at ease. South Korea’s
government announced that, thanks to “close co-operation” with America,
the waivers would become indefinite. Yet the unpredictability of the Sino-
American tech war and China’s attempts to bolster domestic manufacturers
mean South Korea’s most important industry may still have to look beyond
China.
Chips made up some 19% of South Korea’s total exports in 2022, more than
any other product. Memory chips, which store information, make up almost
60% of that total, and South Korean companies control about the same
percentage of the global market. Factories in China are key to this
dominance. Samsung manufactures 40% of its NAND chips in the country,
while SK makes 20% of its NAND chips and 40% of its DRAM chips there.
China is a big market for both, accounting for 16% and 44% of their
respective sales in 2021. So the exemption is hugely valuable; it allows the
firms to keep sending spare parts to their factories in China.
Chey Tae-won, the head of SK Group, has said it is “not possible to give up
the Chinese market”. Yet even with the exemption it may be harder to make
chips there. The details of the extended regime are not public, but if they
constrain the use of specific types of equipment it might be difficult for
South Korean companies to upgrade their factories beyond a certain point.
Japanese and Dutch export restrictions on semiconductor technology used by
Samsung and SK Hynix remain in place. And if companies want to receive
tax incentives offered by America’s CHIPS Act, a law designed to encourage
semiconductor manufacturers to set up shop in America, they may be
constrained by limits it puts on the expansion of production in China.
Chinese demand for South Korean chips is also uncertain. China’s sluggish
economic recovery from the pandemic, and the stockpiles of chips that
semiconductor firms have built up as a result, mean South Korean exports of
semiconductors to China are down this year. And China has been pumping
money into its own semiconductor industry. As a result YMTC, China’s
memory-making champion, has survived being cut off from global
chipmaking tool supply chains by American export controls. It is due to
complete a new factory this year, relying on Chinese machine tools instead
of foreign ones. Almost 56% of South Korean semiconductor firms surveyed
by the Bank of Korea in June said unhelpful market conditions, China’s
industrial policy and its advancing chip industry mean export levels are
unlikely to recover.
The unpredictability of the Sino-American tech war creates further risk.

South Korean officials like to say the row highlights the relative closeness of
America and South Korea. It also reveals America’s tendency to design
industrial policy without consulting allies. Its roll-out last August of the
Inflation Reduction Act, which incentivises EV and battery manufacturers to
reroute supply chains away from China and towards America, was a
particular shock to South Korea. If America makes another such move to
hamstring China’s semiconductor development, Samsung and SK could
again face being collateral damage.
For these reasons, both firms will probably try to reduce their dependence on
China as a manufacturing location. Both are already looking to open more
facilities in America and South Korea. Manufacturing costs are higher there
than in China, despite the inducements both countries are offering
chipmakers. That is the new reality chipmakers, and ultimately their
customers, will increasingly face. ■
https://www.economist.com/asia/2023/10/19/south-korean-chipmakers-get-a-reprieve
Banyan
India-Pakistan relations are becoming more

marginal and worse
In cricket and otherwise, India is leaving its old rivalry behind
Oct 19th 2023
IN THE BUILD-UP to India’s World Cup clash with Pakistan in

Ahmedabad on October 14th, Indian news anchors spoke of “the greatest
rivalry”. For once they were not exaggerating. Cricket contests between the
South Asian giants have been their main interaction off the battlefield for
three-quarters of a century. Into them each has poured subcontinental
volumes of love and hate, nationalist chest-beating, aching for peace,
addiction to the fray—and the wholehearted commitment of two great and
fascinatingly contrasting cricket cultures. Even for cricket ignoramuses,
India-Pakistan bouts are an essential window onto South Asian politics and
culture. What, then, to make of the Ahmedabad match, which was attended
by Banyan and ended in an easy Indian victory?
Mostly that the rivalry has become extremely lopsided, in cricket as

otherwise. India’s win was its eighth on the trot over Pakistan in World
Cups. And it was significantly crushing. The contest was held in the recently
opened Narendra Modi Cricket Stadium, the cricket world’s biggest, and
attended by over 100,000 raucously partisan Indian fans. It was an
illustration of the demographic and economic heft powering India’s rise in
cricket and beyond. Pakistan’s players, only a couple of whom had visited
India before, visibly wilted in the arena.
This denotes a big change. In the decades after British India’s bloody
partition, Pakistan outperformed India off and on the field. Its GDP per head
was 50% more than India’s in 1970. Its cricketers, led by dashing fast-
bowlers such as Imran Khan, beat India’s much more often than they lost to
them. But Indians are now much richer than Pakistanis, and their cricketers
among the world’s wealthiest and best, while Pakistan’s are struggling.
Three decades of jihadist violence have made foreign sports teams afraid to
visit Pakistan, giving it near-pariah status. By banning Pakistanis from its
lucrative domestic tournaments, India has compounded the problem. The
team trounced in Ahmedabad had no star approaching the stature of Mr
Khan (a great cricket captain, though an awful prime minister, who is now in
prison).
Pakistan’s relative decline has changed the bilateral relationship.

Contemptuous of its neighbour, and now globally minded, India has
downgraded it. The days of expanded transport links and people-to-people
exchanges, generally for cricket games, are over. Indian diplomats spend
more time on Bangladesh than Pakistan—never mind China and America,
the great powers India increasingly counts itself among. “No one is thinking
about Pakistan,” says an official in Delhi. Save in one regard: India’s fear of
Pakistani terrorism.
That most divisive facet of the relationship has become more dominant as
others, including economic ties and cultural affinity, have fallen away. This
helps explain why polls show Indian public sentiment towards Pakistan
growing more hostile, even as the country fades from view. India’s ruling
Bharatiya Janata Party, which has risen by peddling fear of Muslims, has
encouraged this. Its supporters are the most hostile of all.
All these changes were evident at the match in Ahmedabad—the sixth India-
Pakistan clash your columnist has witnessed on the subcontinent and by far
the most depressing. The first encounters were during an uplifting Indian
tour of Pakistan in 2004, part of a promising peace process. India’s cricketers
and thousands of Indian fans were embraced by Pakistani crowds as long-
lost cousins. By contrast, there were no Pakistani fans in Ahmedabad,
because India had refused to give them visas. And the Indian fans Banyan
spoke with expressed only disdain for their neighbours. Asked what they
knew of Pakistanis, three students from Mumbai said only “terrorism”.
“Everyone hates them,” a middle-aged man, listening in from the row in
front, volunteered. Meanwhile, the crowd screamed abuse at the visiting
players. After one, Mohammad Rizwan, was dismissed, jubilant Indians
chanted a Hindu victory cry, “Jai Shri Ram”, at him.
India-Pakistan cricket has been charged in the past. But never has the
hostility seemed so unidirectional and detached from geopolitical reality.
The security threat to India from Pakistan, though real, is diminished. The
potential benefits of co-operation between the world’s most populous
country and, soon enough, its third-most populous are growing as
environmental and population pressures bite. Yet the prospects of realising
them, in cricket and otherwise, have never looked more remote. Pakistan is
unable and India unwilling. ■
Read more from Bagehot, our columnist on British politics:

Pakistan expels undocumented Afghans. But at what price? (Oct 12th)
M.S. Swaminathan, the man who fed India (Oct 3rd)
Blind optimism is the only bet for Britain’s Tories (Sep 28th)
Also: How the Bagehot column got its name

https://www.economist.com/asia/2023/10/19/india-pakistan-relations-are-becoming-more-
marginal-and-worse
China
Chinese feminists are rebuilding their movement abroad
China is educating engineers around the world
A landslip in Hong Kong fuels resentment of the rich
Xi Jinping wants to be loved by the global south
Women’s rights
Chinese feminists are rebuilding their movement

abroad
Stand-up comedy is one means of resistance
Oct 19th 2023 | New York
TWO CHINESE women sit on the stage of a basement comedy club in

Manhattan. They wear matching blazers and speak highly formal Mandarin,
just like presenters on Chinese state television. But their “news
commentary” is acid. Chinese youths who have recently been making
nuisance phone calls to Japan—in protest at the release of waste water from
the wrecked Fukushima nuclear plant—have shown “commendable spirit”
insists one of the newsreaders, to a guffawing crowd. Despite having “no
jobs or incomes” these nationalistic youngsters have “spent their own money
on long-distance calls”.
The pair are performers at a Chinese feminist stand-up show called

“Nvzizhuyi” (a play on words that can be read either as “Women’s Ideas” or
“Good Ideas”). It is part of a new, irreverent form of diaspora activism led
by young Chinese women. Each month “Nvzizhuyi” invites Chinese
citizens, mostly women, onto the stage in New York to say things that they
could never utter in public back home. Their routines incorporate stories
about coming out to their conservative parents; complaints about sexual
harassment or immigrant hardships; and even accounts of detention and
abuse by Chinese police. Most of their stories are funny. Many are
bittersweet.
These are not good times for Chinese who consider themselves feminists. In
the early 2010s women’s rights activists were able to mount frequent public
protests in China. They occupied men’s toilets and marched through the
streets in red-stained wedding dresses to protest gender inequality and
domestic violence. Activity of this sort ended abruptly in 2015. That year
five prominent feminists were detained just before International Women’s
Day, for planning a campaign against sexual harassment on public transport.
In the aftermath of those arrests, Chinese feminism largely moved online. It

was from the internet that China’s #MeToo movement emerged in 2018.
Women accused prominent professors, businessmen and television
personalities of sexual assault, and in some cases launched lawsuits. But
most of these failed, and accusers were sometimes sued for defamation.
One of the most high-profile #MeToo cases was brought by a woman named
Zhou Xiaoxuan who had accused Zhu Jun, a television presenter, of forcibly
kissing her when she was an intern. Mr Zhu denies the accusation; Chinese
courts dismissed the case in 2021. Ms Zhou and her supporters were
censored online, while nationalists were permitted to spread videos calling
#MeToo a plot to destabilise China. That same year Huang Xueqin, one of
the first Chinese journalists to report on #MeToo cases, was arrested and
charged with “inciting subversion of state power”.
As it cracks down on feminists the Communist Party has also ramped up

promotion of traditional gender roles. Xi Jinping, China’s leader, has called
for a revival of Confucian ideas that encourage women to be good wives and
mothers, and to teach their families to love the country. Since he came to
power, China has restricted access to divorce by implementing a 30-day
mandatory “cooling-off period”, banned effeminate men from appearing on
television, and encouraged regional governments to experiment with
schemes that might prompt people to procreate.
All this has silenced many feminist activists or forced them to flee overseas.
Several of the people who are involved in the New York comedy nights have
seen the sharp end of the party’s paranoia. One of the event’s organisers,
Liang Xiaowen, left China in 2016 but remained active in feminist groups
until 2021, when her WeChat and Weibo accounts were shut down. A state-
run tabloid accused Ms Liang of receiving payments from abroad to help
America foment unrest in China. (China’s propagandists have been doubling
down on their claim that feminism is a tool of “hostile foreign forces”; the
Communist Youth League has called radical feminism a “poisonous online
tumour” that provokes “gender antagonism”.)
Li Maizi, one of the “Feminist Five” detained in the crackdown in 2015,

decided to leave China last year, not long after police came into her
apartment and arrested her flatmate for putting up posters protesting against
draconian covid lockdowns. Ms Li had been under heavy surveillance and
had also lost her social media accounts; she felt voiceless and powerless.
“This was my bottom 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 York, comedy is one
way to rebuild their movement. The stage at the “Nvzizhuyi” open-mic night
in early October was decorated with slogans, including one calling Mr Xi a
“dictator” and “#notmypresident”. The event serves two purposes, says Ms
Liang. She argues that years of choosing to censor oneself online and in
public—as many Chinese are forced to—eventually leads to self-censored
thinking. Participating in stand-up is an antidote, of sorts. And it is important
to hold the events in Chinese, says Ms Liang, because it is the language they
were censored in. It is very easy to be funny when talking about politics, she
adds, because China’s version of it has become so absurd.
The show also aims to encourage more people to get involved in feminist
activism. Momo, in her twenties, says she sought out independent reporting
about the crackdowns on Xinjiang and Hong Kong when she was still living
in China, and also followed many online feminist groups before they were
censored. But only after coming to America as a graduate student in 2021
did she finally meet like-minded Chinese women in person. Momo was
shocked when she attended her first open mic last year and heard someone
on the stage say, “I love to have sex.” She felt a twinge of concern when the
speakers started joking about politics, but also a thrill. Within a few months
she was on stage making her own jokes.
Women’s rights in China have made some progress despite the shrinking
space for organising. In 2022 the government amended a women’s
protection law to add stronger language against sexual harassment and
discrimination at work. A carefully managed consultation on the amendment
drew more than 700,000 comments online, making it one of the most
widely-discussed legal changes in recent years. Reproductive rights have
also grabbed the public’s attention. A woman who sued a hospital for the
right to freeze her eggs—illegal for unmarried women in China—recently
sparked a debate about widening access to in vitro fertilisation.
Women in China will continue to demand better treatment, says Ms Li, even
if they cannot band together in action. The feminist movement will just
become increasingly “decentralised and individualised”, she thinks. “The
government feels very helpless about this: they think there must be an
organiser. But in this era, there is no organiser. There are just individuals
who disagree with you.” Chinese women who object to Mr Xi’s big push for
family values have been showing their displeasure by simply opting out.
Many are delaying or rejecting marriage and childbirth. China had 6.8m
marriages in 2022, roughly half the number in 2013. China’s population
shrank last year for the first time in six decades.
The people who run “Nvzizhuyi” have no delusions that they can transform
Chinese politics from afar. “If you fantasise about some kind of overnight,
earth-shaking change, it’s not really possible,” says Ms Liang. Their goal,
instead, is to “quietly keep some seeds alive” within the space they have
created abroad, she says. One day they may bring those seeds back home. ■
Subscribers can sign up to Drum Tower, our new weekly newsletter, to

understand what the world makes of China—and what China makes of the
world.
https://www.economist.com/china/2023/10/19/chinese-feminists-are-rebuilding-their-
movement-abroad
Training days
China is educating engineers around the world

Its technical schools are less controversial than its Confucius Institutes
Oct 19th 2023
CHINESE OFFICIALS often talk of the Belt and Road Initiative, a global
infrastructure building spree, in hyperbolic terms. On October 17th and 18th
Xi Jinping, China’s leader, hosted a big summit in Beijing to celebrate the
tenth anniversary of what the government likes to call the “project of the
century”. Lately this hype has masked an awkward reality. Since 2020 China
has scaled back the scheme as governments have found it harder to repay
Chinese infrastructure loans.
Yet in recent years one part of the project has stood out as a quiet success.
Since 2016 China has set up some 27 vocational colleges in two dozen
countries, mostly poorer ones. These “Luban Workshops” (named after a
fabled carpenter from the fifth century BC) have trained thousands of
students in fields including artificial intelligence, electric vehicles, railway
operations and robotics. One of the newest workshops opened on September
4th at Meru University of Science and Technology in Kenya.
The purpose is not charity. Luban workshops promote technology and
standards that China wants to export to developing countries. Gear for the
new workshop in Kenya will come from Huawei, a Chinese telecoms giant
America would like to see excluded from its allies’ mobile networks, for fear
its kit could assist Chinese spying. Huawei (which denies America’s
allegations) helped build Kenya’s mobile network and is now working with
its biggest telecoms provider to roll out 5G services.
The workshops also help assuage worries about the Belt and Road.
Participating governments sometimes complain that the companies which
win its infrastructure projects rely too much on labour and supplies from
China. Several Luban workshops now provide training directly related to
Belt and Road projects. One in Djibouti has trained employees of a new rail
line to Ethiopia. That $4bn railway was built and financed by China but
struggled to make a profit after opening in 2018.
The Luban programme has echoes of China’s earlier drive to expand its
influence by opening more than 500 “Confucius Institutes” to teach
Mandarin in universities around the world. Yet so far it has avoided the
controversies that have dogged those institutes, many of which closed after
being accused of promoting propaganda and stifling dissent. This is in part
because the Luban workshops focus on technical skills and in part because
China has spent more time consulting host governments before setting them
up. “Unlike Confucius Institutes, Luban workshops are actually different in
each country, because of the different skills that are demanded by host
countries,” says Niva Yau of the Atlantic Council, an American think-tank.
She sees them as evidence that China is responding to criticism of Belt and
Road without abandoning core goals, such as exporting its technology.
The workshops compete with training that America, Japan and other rich
countries offer countries in the global south. Germany, for example, has
given more than 100 countries guidance on how to copy its famed system of
vocational education. The Luban workshops are unusual, though, in
providing equipment as well as teaching, and in having their own brand.
When the Luban programme began it was led by the local government in
Tianjin, a big city near Beijing that was known for technical training (local
authorities have been encouraged to support and profit from Belt and Road).
The first workshop (pictured) opened in Thailand in 2016; it used equipment
sent by a Tianjin chemical company. For a time Luban workshops cropped
up in rich countries as well as poor ones. Between 2018 and 2020 a
workshop at Crawley College, near London, taught Chinese cuisine; one in
Portugal still offers training in electrical automation and industrial robots.
The programme was not always restricted to Belt and Road participants:
India (a sceptic) has a Luban workshop in Chennai.
More recently, however, the programme appears to have been co-opted by

China’s central government. It has grown to involve training providers and
companies from outside Tianjin, and been linked more explicitly to Mr Xi’s
foreign policy. In 2018 Mr Xi pledged to open ten workshops in Africa; a
dozen have since opened there. In May he promised leaders of Central Asian
countries that China would set up more workshops in their region (the first
opened in Tajikistan last December).
It remains to be seen how long China will subsidise Luban workshops, 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 represent a refreshing example of China’s government
listening to critics—and learning from its mistakes. ■

world.
https://www.economist.com/china/2023/10/19/china-is-educating-engineers-around-the-
world
Property in Hong Kong
A landslip in Hong Kong fuels resentment of the

rich
Grand houses sprawl beyond their plots
Oct 19th 2023 | Hong Kong
THE MILLIONAIRES of Redhill Peninsula, a posh coastal community in

Hong Kong, are a little poorer than they were. Last month a supertyphoon
named Saola brought the city rainfalls heavier than any this century. At
Redhill, a big chunk of sodden earth slipped into the sea. Though the
landslip mostly spared surrounding houses, it exposed basements that had
been dug without permission and that may have contributed to the collapse.
Prompted by journalists, the government began an investigation, which is
still going on. By October 6th it had found a dozen houses in the area that
broke rules in some way.
Hong Kong’s systems of planning often look dysfunctional. One guess is

that as many as one in four properties in the territory have been altered or
extended without the right permissions. Canopies on flat roofs create room
for recreation. External balconies are walled in. And landlords have been
chopping their buildings into ever-smaller, “subdivided” apartments. Ten
years ago a government report said that widespread disregard for planning
rules and building regulations could “cause injuries and fatalities”.
The liberties taken by Hong Kong’s richest residents are often the largest—
and, given the cramped quarters most Hong Kongers put up with, the ones
that most often cause a stir. Gardens and swimming pools sometimes sprawl
beyond a property’s registered boundaries. Three-story extensions go up
without the proper permits. Liber Research Community, an NGO, identifies
some 170 homes in eight rich neighbourhoods that it believes have spread
into more space than they are entitled to. In some cases, it says, the overspill
covers a larger area than the official plot.
The landslip in Redhill has bolstered old complaints about lax and partial
policing of rules. In theory rigging up unauthorised structures or encroaching
on public spaces can land homeowners in jail. But on some occasions
authorities permit them to start paying the government rent for the additional
land, reckons Liber. When property owners are forced to reverse alterations
or retreat from government-owned land, appeals can hold things up for
years.
Hong Kong’s government says it handles things as well as possible, given its
resources. Last year it sent out more than 16,000 orders to rectify “illegal
structures” and brought 3,600-plus prosecutions. Critics say it is meek when
taking on the rich. Activists say the government enforces the laws selectively
and sometimes uses them to hassle people it links with the pro-democracy
movement. Mount Zero, an independent bookshop, was recently told by
government inspectors that its front step was illegally occupying public land.
Things may be coming to a head. China’s leaders worry about Hong Kong’s
cramped housing. They think property prices helped stir up big protests in
2019. Local media, though much cowed since the introduction in 2020 of a
noxious national-security law, increasingly report on violations of planning.
Climate change is increasing the severity of wet and wild weather; this raises
the risk that shoddy extensions or overloaded hillsides will collapse. Right
now Redhill is “under the spotlight”, says Brian Wong of Liber. But he
thinks there are similar risks elsewhere. ■

world.
https://www.economist.com/china/2023/10/19/a-landslip-in-hong-kong-fuels-resentment-
of-the-rich
Chaguan
Xi Jinping wants to be loved by the global south

China presented the Belt and Road Forum as an oasis of peace in a
dangerous world
Oct 19th 2023
“VERY FEW CHINESE” know about the ruthless side of Zheng He, the
Ming-dynasty explorer and eunuch admiral, a scholar once observed to
Chaguan, unexpectedly, over tea in a Beijing courtyard house. Pouring fresh
cups, the scholar—a member of China’s national-security establishment—
warmed to his theme. In China, he explained, Zheng He is seen as a 15th-
century “Santa Claus”, leading his fleet to Africa, Arabia and Asia to hand
out porcelain and silks on behalf of his mighty, far-off emperor. But in such
places as Sri Lanka, Zheng He is remembered as a terror, who punished local
rulers for defying his imperial writ and shipped some of them back to China
as captives. The Chinese public is “blissfully ignorant” about that history,
sighed the scholar, blaming his country’s desire “to be loved”.
Much the same desire suffused the Third Belt and Road Forum, held in
Beijing on October 17th and 18th. The forum commemorated the first ten
years of the Belt and Road Initiative (BRI), a lending and infrastructure
scheme that has seen China build dams, bridges, ports and more on four
continents. In part, the opening speech by Xi Jinping, the Communist Party
chief, was a guide to how the BRI is changing. With China’s growth
slowing, and many existing BRI projects mired in debt, there is less
emphasis now on billion-dollar loans and on pouring concrete, and more on
promoting Chinese standards and technologies, notably in green and digital
infrastructure, and on “small yet smart” grassroots projects. In larger part,
though, Mr Xi’s speech was a call for China to be loved.
Addressing foreign dignitaries in the Great Hall of the People, Mr Xi made a

case for Chinese exceptionalism. He presented his country as a peace-loving
giant, guided by the centuries-old spirit of the Silk Road. In this telling,
China’s Silk Road spirit is not a charitable impulse, but something more
dependable: namely, a pragmatic pursuit of prosperity via mutually
profitable trade. Though Mr Xi did not mention Zheng He by name, his
government’s white paper on the BRI, published on the forum’s eve, cites
the navigator as an inspiration, hailing his seven maritime expeditions that
“boosted trade along the maritime silk routes”.
The admiral’s ghost hung over the speech as Mr Xi repeated one of his
favourite claims about China’s past. “The pioneers of the ancient silk routes
won their place in history not as conquerors with 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 conflicts raging in the Middle East and Ukraine, Mr Xi
contrasted this Chinese focus on trade and development with the selfishness
of world powers that are bent on “ideological confrontation”. He announced
a Global Initiative for Artificial Intelligence Governance. Though 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 history”. He added a rebuke for countries that practise
“economic coercion”. 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 domestic audiences.

Chinese state media offered blanket 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
attended, the Kremlin-friendly Viktor Orban of Hungary.
Mr Putin gave a speech directly after Mr Xi’s. To a striking extent it

reflected his growing dependence on China. As a result of Western sanctions
imposed after his invasion of Ukraine, China is now the largest buyer of
Russian energy, and Chinese exports to Russia have soared. Thanking his
“dear friend” Mr Xi for the invitation to Beijing, Mr Putin played dutiful
cheerleader for the BRI. Sounding at times like his own transport minister,
Mr Putin reeled off lists of BRI-compatible railway lines and logistics
corridors that Russia plans to build. He praised the opening last year of a
bridge across the Amur river between China and Russia, not mentioning that
Russian officials dragged their feet on that project for years before rushing to
finish it once the Ukraine war broke out. Forgetting Russia’s long-standing
wariness of Chinese investment in the Arctic, he invited “interested states”
to take part in the development of a Northern Sea Route opening up as sea
ice retreats.
Putin as a character witness

In interviews with Chinese state media, Mr Putin offered still more praise.
When offering economic opportunities to other countries, Mr Xi’s China
never imposes or enforces its will, he said. This, he averred, makes the BRI
different from policies pushed by countries with a heavy colonial legacy.
Once more, that language echoes Chinese talking points. China’s white
paper casts the BRI’s model of development as a challenge to “the
exploitative colonialism of the past”. It is the spirit of the Belt and Road to
advocate equality, it argues, in contrast to those who push “the superiority of
Western civilisation”.
Attacks on Western arrogance resonate with many developing countries. If

the BRI offers useful technologies, skills or investments, many governments
will take that deal. Some countries support China’s proposals for global
governance, especially if that means fewer questions about their political
systems, or human rights. But those leaders in the Great Hall of the People
are not dupes. For one thing, many remember their history, and how Chinese
naval fleets and armies brought their countries much more than trade over
the centuries. Mr Xi’s China is taken seriously, especially by its neighbours.
Love has nothing to do with it.■
Read more from Chaguan, our columnist on China:

China’s ties with America are warming, a bit (Oct 12th)
China wants to be the leader of the global south (Sep 21st)
Xi Jinping builds a 21st-century police state (Sep 14th)
Also: How the Chaguan column got its name

https://www.economist.com/china/2023/10/19/xi-jinping-wants-to-be-loved-by-the-
global-south
United States
American states wrestle with how to treat severe mental illness
How the Republican civil war in the House could end
Part of Donald Trump’s base thinks he is fighting a spiritual war
Anti-abortion campaigners try to break their losing streak
Americans are discovering the joy of a true pint of beer
One response to school shootings in America: arm the teachers
Joe Biden has shown a steady hand in the Gaza crisis
From tents to hospitals
American states wrestle with how to treat severe

mental illness
California wants to lead the way
Oct 19th 2023 | Oakland
WHEN AISLINN BIRD is not treating patients at her health clinic in

downtown Oakland, she goes to see them where they live: in homeless
encampments. Many of them sleep in tents under train tracks or highway
overpasses. “If a big truck comes by or if the…train goes by, I have to stop
the interview because then I can’t hear my patients,” she says. “It’s hard to
create a therapeutic environment out here.” Dr Bird is part of a growing
group of psychiatrists practising street medicine. Her teams frequent
encampments around Oakland, offering homeless people everything from
regular check-ups to treatment for mental illness and drug addiction.
More than a quarter of homeless Californians recently surveyed by the

University of California in San Francisco said they had been hospitalised for
mental illness. Two-thirds said they were currently struggling with a mental-
health condition, ranging from anxiety to hallucinations. One third of
respondents said they regularly use methamphetamine, which can cause
psychosis akin to schizophrenia. This hazardous combination of drug use,
mental illness and the physical hardship of sleeping rough has increased
homeless deaths in big cities across the country. Some 2,200 homeless
people died in LA County in 2021, an increase of 70% from 2019. The daily
tragedies playing out on America’s streets are also changing the politics of
homelessness in liberal states—and nowhere more than in California.
A slate of reforms signed into law last week in California is meant to tackle
this problem. Standing at a podium that read “Treatment not tents”,
California’s Democratic governor, Gavin Newsom, called the bills “a
paradigm shift” and a message to voters that policymakers 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
mental illness and drug addiction, and an expansion of involuntary
treatment.
First, consider the billions that American states are pouring into facilities to
treat and house mentally ill people. One bill Mr Newsom signed into law
will put a $6.4bn bond measure to help build more than 10,000 treatment
beds and housing units on the ballot for Californians to vote on in March.
When asked what happens if Californians do not go for it, Mr Newsom told
The Economist that he cannot imagine it failing. His message to voters is
“Vote no if you believe in the status quo.” Kathy Hochul, the governor of
New York, set aside $1bn in her 2024 budget for psychiatric hospital beds
and longer-term housing. The Texas legislature allocated some $2bn over the
next two years to build and maintain mental-health hospitals.
It is rare that Texas and California agree. But three things have raised the
profile of mental health among Americans of all stripes: the anxiety and
isolation many felt during the covid-19 pandemic; the destruction opioids
have wrought; and the visible suffering of unsheltered homeless people with
mental illness. The need is also immense. The number of psychiatric beds
per person in America is low compared with much of the OECD, a club
mostly of rich countries. America has less than half as many beds per person
as France.
Mr Newsom describes his overhaul as fulfilling a promise made by then-
governor Ronald Reagan in the 1960s to replace overcrowded, often abusive
state-run institutions with smaller, local facilities. Yet after Reagan, rightly,
closed the asylums and expanded patients’ rights, he failed to fund
community care. When Reagan became president, the country followed
California down this road. But blaming Reagan ignores the nearly 50 years
of inaction since he left Sacramento, the state capital. “The failure of
successive state governments to uphold the community funding promise is
one of the main reasons people are suffering so badly today,” says Darrell
Steinberg, the current mayor of Sacramento and an advocate for reform.
The other striking feature in California is the expansion of involuntary

treatment. Mr Newsom signed a law on October 10th, SB 43, that loosens
the criteria for people to be placed in a mental-health conservatorship, in
which a person appointed by the state directs their care. Its passage follows
the creation last year of CARE Court, a programme that allows health
workers, police and family members to enroll people with psychosis in
court-mandated treatment. Alex Barnard of New York University, who is
tracking state laws that expand forced treatment, finds that reforms are
clustered in coastal Democratic states such as California, Oregon and
Washington that are reckoning with very visible displays of mental illness
among homeless people.
Growing anger from voters helps explain why Democratic politicians in

liberal states are grasping for policies usually associated with law-and-order
Republicans. Civil liberties and disability rights groups are fighting the
political tide. They argue that SB 43 and CARE Court infringe on patients’
freedoms and bodily autonomy. Disability Rights California, a non-profit,
worries that the laws will unfairly target black Californians, who are
disproportionately represented among the state’s homeless population, and
will traumatise people. They have a point. The evidence for the efficacy of
involuntary treatment is mixed.
“They’re simply wrong,” Mr Newsom says of the civil-rights groups. “Look

what’s happening on the streets. It’s night of the living dead in the
Tenderloin in San Francisco...and people are dying.” He suggests that the
extreme libertarianism displayed on the streets is an embarrassing abdication
of state responsibility. To the governor and his allies, these new laws
represent a move towards the centre and a recommitment to a social
contract. To his opponents, they reek of state overreach.
Even while trumpeting the new laws, policymakers stress that involuntary
treatment should remain a last resort. Their hope is that the expansion of
beds makes it more likely that people suffering from mental illness get the
level of care they need, and avoid languishing in jail or hospital for want of a
safe alternative.
The neglect that California showed its most vulnerable when the institutions
were closed is a prime example of good intentions gone wrong. Decades
later, Mr Newsom hopes California can provide America with a model for
how to fix things. He refers to the rest of his term as “the great
implementation”. His focus on beds echoes those who spend the most time
among homeless and mentally ill Californians. When asked what would
make her job easier, Dr Bird laughs. Without any hesitation, she answers:
“More housing.”■
Stay on top of American politics with Checks and Balance, our weekly
subscriber-only newsletter, which examines the state of American democracy
and the issues that matter to voters.
This article was downloaded by zlibrary from https://www.economist.com/united-
states/2023/10/19/american-states-wrestle-with-how-to-treat-severe-mental-illness
Hail McHenry
How the Republican civil war in the House could

end
The outcome could be surprisingly pleasant
Oct 19th 2023 | WASHINGTON, DC
JOHN MCCAIN, the late senator from Arizona, liked to joke that the
approval rating for America’s Congress had fallen so low that legislators
could expect support only from “paid staffers and blood relatives”. McCain’s
old line seemed closer to reality than hyperbole as the House began its third
week without a speaker. Yet, unlikely as it seems, good legislation still has a
chance to pass despite the House Republicans’ dysfunction.
Jim Jordan, a hard-right Ohio congressman, became speaker-designate on

October 13th after Steve Scalise, the number two House Republican, gave
up. But Mr Jordan fell short during a full House vote on October 17th. He
lost even more support in the second round of voting. The top job always
seemed an odd fit for a conservative firebrand like Mr Jordan. A former
Republican speaker once called him a “legislative terrorist”, and after nearly
17 years on Capitol Hill the Ohioan had yet to be the primary sponsor of a
bill that became law.
Perhaps Mr Jordan will find a way. He had not dropped out by the time this
issue was published, though many House Republicans were already looking
elsewhere. Some lawmakers even began weighing a more quixotic measure:
empowering the interim speaker.
Patrick McHenry became speaker pro tempore on October 3rd after being
hand-picked by the recently removed Kevin McCarthy. The ten-term
congressman from North Carolina embraced a limited role in his
unprecedented position and did little more than oversee the election of a new
speaker. But with no end to the Republican impasse in sight and critical
legislative deadlines approaching, talk of expanding Mr McHenry’s power
has grown louder.
To do so, the House would have to pass a simple resolution giving Mr

McHenry more authority. “That would basically just empower McHenry to
be able to do things like bring bills to the floor and conduct some basic
business of the House,” says Molly Reynolds of the Brookings Institution, a
think-tank. This is not a permanent solution and his expanded powers would
almost certainly come with an expiry date. But members in both parties
could find something to like with this short-term fix.
Mr McCarthy lost his job after negotiating a temporary extension of

government funding. Mr McHenry, not long for the job, could oversee the
passage of a long-term funding bill—something the permanent speaker
should then be grateful for, even if he votes against the legislation. Many
Republicans, however, would balk at giving up what they consider one of
their main points of leverage against the White House and Democrat-
controlled Senate.
Strong bipartisan majorities in Congress also support more aid for Israel and
Ukraine, but a growing anti-Ukraine bloc has held up support while
remaining assistance dwindles to dangerously low levels. The White House
reportedly plans to ask Congress for $100bn to fund a mix of security
priorities, including money for Israel and Ukraine, potentially to last until
the 2024 presidential election.
“It’s time to end the Republican civil war, and in order to do that all options
are on the table,” Hakeem Jeffries, leader of the House Democrats, told
Politico. Other Democrats expressed an openness to elevating Mr McHenry
for the purpose of avoiding a shutdown or passing bipartisan legislation.
John Boehner and Newt Gingrich, former Republican speakers, have
endorsed the idea, as have some moderates still in Congress. Dave Joyce,
leader of a centrist faction, said that “by empowering Patrick McHenry as
speaker pro tempore we can take care of our ally Israel until a new speaker is
elected.”
Various procedural gimmicks could slow the process. Mr McHenry, perhaps

fearing a potential primary challenge, might oppose the scheme himself. But,
reckons Matt Glassman of Georgetown University, “if a majority is hellbent
on empowering McHenry, they will be able to do it.” The past month has
been one of surprises, generally unpleasant. Maybe the biggest of all would
be all this chaos ending with some responsible governance, even if it proves
short-lived.■
states/2023/10/19/how-the-republican-civil-war-in-the-house-could-end
End times
Part of Donald Trump’s base thinks he is fighting
a spiritual war
On tour with Michael Flynn, conspiracy mixes with Christian
apocalypticism
Oct 18th 2023 | TRUMP NATIONAL DORAL, MIAMI
IN A HOTEL ballroom owned by Donald Trump, barely an hour into a two-

day conspiracist talkathon, your correspondent lost the plot. It happened
amid calls for the audience to quit being “weak-kneed wussies” and “join
Team Jesus”, and warnings about child traffickers and poisonous vaccines.
What really did it, though, was an invitation to approach the stage to be
healed by a self-styled prophet resembling Ozzy Osbourne.
Later one of Mr Trump’s sons took to the podium. Worship music played;
several hundred hands went up in prayer. Someone blew a shofar, a trumpet
used in Jewish rituals that is popular among some charismatic 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 tickets over the phone—at a recommended price of $250, or
pay what you wish—had offered just two instructions. No masks allowed
and please leave guns in the car.
The event was part of the ReAwaken America tour, a roadshow helmed by
Michael Flynn and born of protests over lockdowns and election “theft”. (Mr
Flynn served as Mr Trump’s first national security 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 mostly obscure speakers get about 15 minutes each to stoke one
menace or another, for 15 hours straight. The tour is a stew of apocalyptic
sermonising, QAnon and election denialism.
The point, if there is one, is to overwhelm—or as Steve Bannon, a banker-

turned-provocateur once described the way that disinformation operates, to
“flood the zone with shit”. A former marketing manager for a hotel chain
who bills herself as a “geopolitical expert” talked of Iranians posing as
Venezuelan asylum-seekers to infiltrate and attack America (“We will be the
next Israel”). Someone pitched precious metals as an alternative to central-
bank digital currencies: the idea being that the government can turn off your
money should you misbehave, so put it in gold or silver. “There are lots of
threats out there—I could talk for three hours!” exclaimed another speaker
as her 15 minutes of blame ran out.
Michael Barkun, a political scientist at Syracuse University, wrote of the

principles underlying conspiracism: nothing happens by accident, nothing is
as it seems, and everything is linked. Connect the dots and a hidden,
malevolent scheme emerges. Such thinking is correlated with feelings of
powerlessness and anxiety. Conspiracy theories are perversely reassuring,
then: events become ordered rather than random. Educated, establishment
types are the dupes. There may be evil at work, but it can be resisted. A
woman on a cigarette break told your correspondent as much: “We know
everything. Every lie known to man was revealed to us already…The
government is a mafia.”
Talk of a spiritual war suffuses such events. That makes sense: those
evangelical Christians who believe in the end-times—when Jesus will return
to Earth, battle the Antichrist and save the faithful—often see the world
through a Manichean lens. Forces of good and demonic evil are constantly
struggling. (A third of evangelicals hold this worldview strongly, according
to surveys by Paul Djupe of Denison University in Ohio.)
The disposition dovetails with and propels lots of conspiracies. That is not
new: in 1991 Pat Robertson, a Baptist televangelist, published “The New
World Order”, a bestseller about how a cabal of elites was bent on creating a
totalitarian government. Apocalyptic tropes figure heavily in QAnon, which
is more popular among white evangelicals than just about any other religious
group.
Politicians long ignored conspiracists. They tended to vote at lower rates:

why participate if you think the game is rigged? In surveys after the 2012
election, Joseph Uscinski of the University of Miami found a self-reported
turnout gap of 23 percentage points between people with low and high
predispositions to conspiracy.
During his campaign Mr Trump legitimised the latter group by suggesting,

among other nonsense, that Barack Obama had been born abroad and that
Hillary Clinton had taken bribes from Russia. In surveys by Mr Uscinski
after the 2016 election, the gap closed. It is not so much that Mr Trump
persuaded lots of people to turn conspiratorial, reckons Adam Enders of the
University of Louisville. Surveys of such thinking are pretty stable over
time. Rather Mr Trump activated existing beliefs and connected them to
politics.
Not that doom-mongering is exciting all the time, even among the most die-
hard conspiracists at the ReAwaken tour. As a pastor read from the Book of
Revelation and described how to identify the coming Antichrist, the crowd
thinned and flagged. Phones came out. Some played Candy Crush, others
shopped online. “Are you all awake?” came a call from the stage. Then more
pleadingly: “Are we doing alright?” ■
and the issues that matter to voters. You can read other articles about the
elections of 2024 and follow along as we track shifts in Joe Biden’s approval
rating.
states/2023/10/18/part-of-donald-trumps-base-thinks-he-is-fighting-a-spiritual-war
Roe, your own way
Anti-abortion campaigners try to break their

losing streak
Ohio’s ballot initiative is the latest test for how to talk about abortion
without scaring voters
Oct 19th 2023 | COLUMBUS, OHIO
NESTLED BETWEEN decorative gourds and halloween ornaments on

suburban Columbus lawns, signs encourage Ohioans to vote to “protect
parents’ rights”. Leaflets declare that mums and dads have “too much to
lose”. Only the flyer’s reverse reveals the threat: not a woke curriculum or
ideas around gender, but abortion.
On November 7th Ohio will become the latest state to vote on adding a right
to an abortion to its state constitution. Currently abortion is accessible up to
around viability—but only while a six-week ban is litigated in the courts. Six
other states have voted on abortion since the Supreme Court overturned Roe
v Wade last year. In each, voters have opted to protect access, including in
conservative states like Kansas and Kentucky. More states are expected to
vote next year, possibly including Arizona, Florida and Missouri. This has
given rise to a cottage industry of pollsters and politicos who travel from
state to state with each ballot initiative. Ohio is the latest testing ground, as
anti-abortion campaigners try to break their losing streak.
Rather than sepia-toned images of newborns, teenagers and parents’ rights

are the focus of the campaign. Anti-abortion advocates argue that language
in the proposed amendment is so broad that it could invalidate Ohio’s law
requiring parents’ permission for underage abortions. That seems a stretch,
but the anti-abortion campaign is trying to activate fears around parental
rights that have electrified school-board meetings across the country.
More familiar anti-abortion arguments get second billing. Adverts with local
mums and unsettling music state that the proposed amendment, which would
return the regime to something like the status quo under Roe, would be too
“extreme for Ohio”. They raise the spectre of late-term abortions, which are
rare but unpopular. The campaign avoids mention of the six-week ban,
which was in place for several weeks last year.
The campaign also claims to have learned lessons from losses in other states.
Its strategists say it began preparing earlier and is trying to build a diverse
coalition, which includes black pastors. “There’s a misrepresentation of the
pro-life community that it’s an old white guy who is telling a woman what to
do,” says Brian Williams, a pastor at a predominantly black church in
Columbus, who is campaigning against the amendment. “That’s not actually
true.”
But perhaps the biggest difference is the strength of the Republican Party in
Ohio. Many state offices are controlled by Republicans who have fought the
abortion amendment. Dave Yost, the attorney-general, has released a legal
analysis of the amendment that echoed many of the campaign talking points.
The Ohio Ballot Board, which has a Republican majority, rewrote the
summary on the ballot to replace the word “fetus” with “unborn child”.
Earlier this year, the state assembly proposed its own referendum which
would have made passing the abortion amendment harder. That vote failed,
buoying abortion-rights advocates.
The popular governor, Mike DeWine, is campaigning against the

amendment. But he has also joined a group of Republicans urging
moderation on abortion. If the amendment fails, he wants to “find a place
where a majority of Ohioans can, in fact, agree.” Still, like Donald Trump,
the former president, who said that a six-week ban “is a terrible thing”, Mr
DeWine has avoided saying what a compromise could look like, or how it
could pass. ■
states/2023/10/19/anti-abortion-campaigners-try-to-break-their-losing-streak
The empire strikes back
Americans are discovering the joy of a true pint of

beer
Call it a “stovepipe” or “19.2oz” if you must
Oct 19th 2023 | CHICAGO
AT THE BARS of the United Centre, a sports arena on the near west side of
Chicago, the default drink available is Modelo, a Mexican lager that in May
became America’s best-selling beer. But a popular alternative is a craft beer
sold in cans from a fridge behind the bar, called “Tropical Beer Hug”.
Adorned with a picture of a cartoon bear wearing sunglasses, the marketing
is memorable. But to your British correspondent, the more striking part is the
size of the cans. Each one contains 19.2 US customary fluid ounces of beer.
That is 568ml in metric measures. But more importantly, it is 20 Imperial
fluid ounces, known in Britain, Ireland and a few other former British
territories as “one pint”.
In the past five years or so, the 19.2oz can of beer has soared in popularity
across America. According to data analysed by Molson Coors, a big brewing
firm, pint cans now make up 92% of craft beers sold in individual cans in
convenience stores, up from less than 10% six years ago. Though most beer
sold in shops is still in 12oz six-packs, and in 16oz measures (an American
“pint”) in bars, the true British pint has crowded out other heftier-sized
brews, at least when it comes to craft beers. Besides convenience stores, the
format is becoming ubiquitous at America’s music festivals, sports events
and other places where customers have to pick up a drink and carry it
around.
Why would Americans be turning to proper pints? T.J. Annerino of Goose

Island, the Chicago-based craft brewery that sells the Tropical Beer Hug,
says that the initial motivation came from convenience stores. But demand
has been “phenomenal”. He speculates that 19.2oz sells because it is large
enough that drinkers do not need to return to the bar (or fridge) too soon,
without being so large as to get warm and stale in one’s hand. Hence the
success at gigs and sports events. Andrew McGuire of Molson Coors argues
that the size is ideal for people who want to try a new beer alongside a
familiar six-pack. Many new canning machines tend to include the size as a
default, which means it is easy for brewers to produce without extra cost.
Beer-industry types generally refuse to admit any direct inspiration from

British measures. “19.2oz cans are widely popular within the United States,
and have been for a while,” sniffs Melody Gregson, at American Canning,
which sells both tins and the machines to fill them. None calls the measure a
pint; some insist on calling it a “stovepipe”. But perhaps they just need to
drink a few. As James Joyce, a novelist, once wrote, “the sacred pint alone
can unbind the tongue.” Chin chin.■
states/2023/10/19/americans-are-discovering-the-joy-of-a-true-pint-of-beer
Algebra and pistols
One response to school shootings in America: arm

the teachers
In Utah, teachers are learning how to properly carry guns into their
classrooms
Oct 15th 2023 | SPANISH FORK, UTAH
NESTLED AMONG golden-coloured earth and desert scrub, the Thistle

Gun Range, an hour’s drive south of Salt Lake City, gives off “wild-west”
vibes. Add the wind softly blowing through thigh-high weeds, the sound of
gunshots ringing through the canyon and six-foot-tall deputies from the Utah
County Sheriff’s department wearing cowboy hats, and it is easy to see why
your correspondent felt immersed in a western. Only this was no rodeo. It
was a live range day for teachers and other school staff learning how to
shoot.
Since 2019 Sheriff Mike Smith of Utah County and his colleagues have
taught teachers how to defend themselves against active shooters. That
includes learning how to safely carry and use a concealed weapon inside
schools. In the state of Utah, school staff can carry a concealed weapon if
they have a permit, but this licensing process is not enough, says Sheriff
Smith. “You don’t actually have to go shoot a gun and show that you can
proficiently hit a target in a classroom setting.” Teachers are also not trained
how to respond to an active shooter or carry a weapon in a school. His class
aims to do that.
Sheriff Smith realised he had a problem several years ago when he and more
than 200 officers responded to an active-shooter situation at a school. It was
a hoax, but he was still disturbed by what he saw. Because of Utah’s law on
carrying concealed weapons in school buildings, some of the teachers that
day were armed. Sheriff Smith says that officers found weapons stored in
desk drawers and inside purses where pupils could easily find them. “They
didn’t have any training, any policies, any procedure in place to govern how
they use that weapon, which I think is a recipe for disaster,” he says. So
when he became sheriff of Utah County a few years after the hoax, he
created the teachers’ academy.
The 20-hour-long course over six sessions provides instruction on much

more than just shooting guns. It covers emergency medical techniques, self
defence, tactical de-escalation, mindfulness and more. Then the shooting
happens. One class is spent in a simulator where the teachers practise
responding to an active-shooter situation. The last day of the course involves
a live range day during which the teachers finally get to shoot their loaded
guns.
Those in the most recent cohort spent the live range day rotating between
four stations over five hours. Most of the time was devoted to perfecting
shooting technique with live rounds on lifeless targets, but one heart-
thumping station looked like a scene from a Jason Statham film. It took
place in a multi-room training facility used to train SWAT teams in many
scenarios, including those involving shooters in schools. The teachers, this
time armed with paintball guns, were stationed inside the rooms. Armed
aggressors, played by officers using blank rounds while dressed in dark
protective gear from head to waist, charged through the halls. With only
seconds to respond, the teachers slammed doors, took 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
trainees minutes before the scenario began. “If someone else steps into your
classroom, well, shoot them too.” The scenario was over in a few seconds,
but many of the teachers were breathless for minutes after. “I’m shaking,”
said Rachel Walker, a testing administrator. “You get a dose of adrenalin!”
It is unlikely that a teacher in a classroom will face an armed intruder, but

every teacher carrying a concealed weapon must be prepared every day to
keep their weapon out of sight and out of pupils’ hands. For women,
carrying a concealed weapon can be tricky. They are usually smaller and
curvier than men, which makes concealing a weapon at the hip harder. They
also tend to wear tighter clothing, sometimes without suitable pockets.
Teachers of younger pupils must be particularly careful, as little children
tend to give waist-level hugs.
Gun manufacturers have started catering to women, says Deputy Beth

Gerber to her trainees, now at their final station for the day. Her friend
carries her gun in a bra holster called the “flashbang”. It nestles the weapon
underneath her ample bosom, she says. To retrieve it, she lifts up her shirt
(flash), then grabs the gun (bang).
With or without proper training, teachers across the country are carrying
guns into schools. About 30 states allow teachers and administrative staff to
carry firearms on school grounds. Sheriff Smith says that teachers leave his
course thinking more critically about this, especially after going through the
practice scenarios and accidentally putting a bullet where one should not
have gone. “I think I would like to get my conceal-carry [permit], but I don’t
think I would take 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 violence is difficult. America is the only

country where people are outnumbered by civilian guns. According to
EdWeek, a news organisation that covers education, there have been 33
school shootings with injuries or fatalities so far this year.
“It’s a sad reality that our teachers have to worry about somebody coming
into their school to kill 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 living that slogan. “These are normal, everyday, average
people. These aren’t ‘gun nuts’,” he says. “They want to do what they can to
keep their kids safe.”■
states/2023/10/15/one-response-to-school-shootings-in-america-arm-the-teachers
Lexington
Joe Biden has shown a steady hand in the Gaza

crisis
But more severe tests are still to come
Oct 18th 2023
JOE BIDEN has a temper. He vents it sometimes on aides when he is

unhappy with their work, and occasionally even on voters who have the
nerve to criticise him. But when it comes to building relationships to achieve
his goals over the long term, whether with a wayward legislator or an
oppositional foreign leader, Mr Biden has long demonstrated unusual
patience and forbearance.
So it was in 2010 when, as Barack Obama’s vice-president, he landed in

Israel only to be blindsided by an announcement from the government of
Binyamin Netanyahu that, contrary to the wishes of the Americans, it
intended to expand Jewish settlements in East Jerusalem. This seemed a
deliberate humiliation, and some of President Obama’s aides thought Mr
Biden should turn around and head home in protest. But Mr Biden had
begun developing a relationship with Mr Netanyahu in the 1980s, when he
arrived in Washington to serve at the Israeli embassy, and the vice-president
had his own ideas of how to manage matters.
Mr Biden issued a statement criticising the move, then put together a joint
working group with Mr Netanyahu to contain the fallout. Then he and his
wife Jill went to dinner with the Netanyahus. According to Mr Netanyahu’s
own grateful account, Mr Biden spoke that night about deeply personal
matters, about how hard it had been to overcome the deaths of his first wife
and their daughter in a car crash. Mr Biden later gave the prime minister a
photograph, scrawling a message on it that might serve as an epigram for
much of the US-Israel relationship: “Bibi, I don’t agree with a damn thing
you say, but I love ya.”
Since Hamas attacked Israel on October 7th, Americans have got the steady
leadership most of them voted for in 2020, and they have been reminded of
the pettiness and volatility they rejected. Donald Trump, who has not
forgiven Mr Netanyahu for congratulating Mr Biden on winning in 2020,
lashed out at the prime minister, while Republicans in the House struggled to
show they could govern themselves, let alone a country. As Republicans
bickered over who would be speaker, their foreign-policy message became
increasingly muddled, if not contradictory—critical of Mr Biden for
endangering America by not helping Israel stand up to the menace of Iran,
yet also critical of Mr Biden for endangering America by helping Europe
stand up to the menace of Russia.
Mr Biden has followed his own playbook. In May 2021, when Hamas
barraged Israel with rockets 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 backfire, he voiced support for
Israeli air strikes, 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 book on the Biden presidency by
Franklin 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 during most of the
Obama years relied on Vice-President Biden to be his point of contact, says
Mr Biden’s connection with Mr Netanyahu is less about chemistry than
history—their own shared past, and Israel’s. Mr Biden “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 benighted leftist fringe
celebrated the massacre of Israeli civilians, and members of the growing
anti-Israel faction of House Democrats began almost immediately calling for
a ceasefire. Mr Biden recognised this would be not just a political
impossibility for Israel, but a strategic and moral one.
Yet while Mr Biden has been forthright that Israel has not just a right but “a
duty” to defend itself, he has also been deft in urging restraint. In a speech
three days after the Hamas assault, he said he and Mr Netanyahu had
discussed “how democracies like Israel and the United States are stronger
and more secure when we act according to the rule of law.” The American
president had not demanded anything, in other words; the two leaders had
instead recommitted themselves to a shared value.
Palestinians have politics, too

Now comes the hard part, of course. Gazans are already suffering and dying
under Israeli siege and bombardment, and a ground invasion will cause far
more agony, as Hamas hopes. (Gazan civilians may be prisoners of Israel,
but they are also hostages of Hamas.) And an invasion will increase the
chance of a wider war. Mr Biden’s judgment and ability to influence Mr
Netanyahu are in for a severe test.
And just as, once this crisis eases, Mr Netanyahu will face a reckoning for
Israel’s failures of intelligence and operations, Mr Biden’s Middle East
policy deserves scrutiny. His decision to ease pressure on Iran and his
attempt at a benign neglect of the Israel-Palestine conflict have ended in
violence, albeit violence that has been a long time coming.
One can draw a line to this war in Gaza from the moment in 2006 when
Condoleezza Rice, then secretary of state, glanced up at the television news
from her elliptical trainer and learned, to her shock, that Hamas had won
elections in Gaza that she had been promoting as spreading democracy in the
Middle East. “I thought, ‘Well, that’s not right,’” Ms Rice later told a
biographer, Elisabeth Bumiller. Four successive American administrations
have paid too little attention to the miseries of Palestinian life and the
realities of Palestinian politics. They have failed to buttress Palestinian
institutions and reform-minded Palestinian leaders. A true friend of Israel
would not make that mistake again. ■
Read more from Lexington, our columnist on American politics:

Joe Biden should admit Republicans are (partly) right about border security
(Oct 12th)
What America should really learn from Dianne Feinstein (Oct 5th)
A Trump Party in the Reagan Library (Sep 28th)
and the issues that matter to voters. You can read other articles about the
elections of 2024 and follow along as we track shifts in Joe Biden’s approval
rating.
states/2023/10/18/joe-biden-has-shown-a-steady-hand-in-the-gaza-crisis
Middle East & Africa
How Liberia and Sierra Leone ended their cycles of violence
After six months of civil war, little remains of Khartoum
How to save the lives of 200,000 women a year
From bullets to ballots
How Liberia and Sierra Leone ended their cycles

of violence
The lessons two African countries offer on ending intractable conflicts
Oct 19th 2023 | DAKAR
THE ELECTION on October 10th in Liberia may have seemed a sleepy

affair. But it was far more remarkable than it appears. Just 20 years ago the
west African country was emerging from two devastating bouts of civil war
in which drug-addled commanders forced child soldiers to kill their parents,
among other atrocities. The war killed perhaps 250,000 people—roughly a
twelfth of the population.
As with every poll since the war, this election took place amid some fears of
violence and a few deadly clashes. Yet on the day the voting was calm,
helped by a pledge by all political parties to ensure a peaceful election. After
a tight race there will be a run-off between the incumbent, George Weah,
once a famous footballer, and Joseph Boakai, a former vice-president.
Though some worry that violence may yet erupt if the result in the next
round is close, it has so far been the fourth generally peaceful and broadly
fair presidential election since the civil war, and the first since UN
peacekeepers left in 2018.
Liberia and neighbouring Sierra Leone, where another bloody civil war
ended in 2002, are poor, troubled countries with ropy democracies. Yet both
are in much better shape than 20 years ago. The level of extreme poverty has
plummeted. Both countries were resilient enough to remain stable through
an Ebola crisis in 2014-16. Since the wars, power has changed hands
peacefully between rival parties once in Liberia and twice in Sierra Leone.
No post-war president in either country has sought to flout constitutional

term limits, as has happened in several other countries in west Africa.
Unusually, neither country has fallen back into war, whereas many other
poor ones—from Cameroon and Congo to Somalia and Sudan—have been
stuck in a “conflict trap” of recurring violence. What can Africa and the
world learn from these two countries?
First, long conflicts rarely end in decisive military victories, so diplomacy

and negotiations are needed. The wars in Liberia and Sierra Leone both
ended in agreements, signed under heavy diplomatic pressure, that tried to
tackle the root causes of the violence. In Sierra Leone, some fighting
resumed after the agreement until a small British military intervention
pushed the rebels towards a version of the deal they had already signed.
Another lesson for peacebuilders is how to disarm combatants. Some

180,000 fighters handed in their guns across the two countries, but unlike in
other conflicts, they were not integrated wholesale into the regular army.
This was sensible, argues a forthcoming book by two experts: Alan Doss,
who was the UN’s top person in post-war Liberia and before that its number
two in Sierra Leone, and David Harris of Bradford University. In Liberia the
army was disbanded. Sierra Leone’s was restructured and downsized. The
senior ranks were depoliticised. Liberia even had a foreigner in charge of its
new armed forces. Now 61% of Liberians say that they trust the army, up
from 46% in 2012, according to Afrobarometer, a pollster.
Much of this was possible thanks to robust support from outsiders. Nigeria,
the regional hegemon, was “hellbent on ending the war”, recalls Gyude
Moore, a former post-war cabinet minister in Liberia. “Even long after the
war ended, Nigeria still remained really, really involved.” America and
Britain also played an important part, ensuring that UN peacekeeping
missions were sent, and pushing through sweeping debt relief and a fourfold
increase in aid per person.
Liberia and Sierra Leone also had internationally respected leaders after the
conflict. President Ellen Johnson Sirleaf in Liberia and President Ahmed
Tejan Kabbah in Sierra Leone won broadly credible elections. Ms Johnson
Sirleaf had worked for the UN and the World Bank, from which her finance
minister was directly seconded. Mr Kabbah was a former UN official.
Because both presidents abided by term limits, they gave their rivals a strong
incentive to stay in politics rather than resume fighting, note the two authors.
Sierra Leone and Liberia also faced up to the atrocities of the wars, at least
to some degree. Both held Truth and Reconciliation Commissions (TRCs),
which heard from both victims and perpetrators. “The TRC is critical,” says
David Sengeh, the chief minister (prime minister) of Sierra Leone. Its
recommendations are a guide “to make sure you don’t go there [back to
conflict].”
Balancing truth, reconciliation and justice is tough. Sierra Leone established

a special court and successfully prosecuted some perpetrators. But some
criticised the cost of $300m. In Liberia Ms Johnson Sirleaf controversially
ignored the TRC’s recommendation to establish a court, partly out of fears it
could rekindle conflict. Yet demands from victims and activists to do so have
since grown louder.
Alas, not all the lessons can be applied elsewhere. Conflict is easier to end
for good when it is not about imposing a particular vision on society, say
Messrs Doss and Harris. In Sierra Leone and Liberia the fight was primarily
about power and resources, though this was often refracted through ethnic
divisions, rather than ideology, religion or secession. This made it easier to
get leaders to do deals. Jihadism in the Sahel and secessionist fighting in
Cameroon do not lend themselves so easily to compromise.
Law and order may simply be easier to sustain in small countries. The
Economic Community of West African States (ECOWAS), a regional club,
could do a lot in Liberia. “It can’t do the same in Mali,” says Mr Moore.
And peace has lasted because people had suffered so grievously that they
said “never again”, argues Mohamed Ibn Chambas, a Ghanaian who was the
head of the executive arm of ECOWAS at the time.
The path from war to an enduring peace is long. In Liberia the last UN
peacekeepers left only after a deployment of 15 years. And obstacles still
abound. Sierra Leone’s election in June sparked controversy after
discrepancies were found between the official count and a parallel sample-
based one conducted by civil-society groups. The opposition has since
boycotted parliament. “They could have gone to court: they didn’t,” retorts
Mr Sengeh. The opposition says the courts are not impartial.
Still, optimism is growing that the crisis will be resolved. Mediators from
ECOWAS, the African Union and the Commonwealth have once again
returned to Sierra Leone. On October 16th they began talks between the rival
parties.
Thus the final lesson is that good things take time and unrelenting effort to
come to fruition. For hungry, hopeful people in countries trying to emerge
from conflict in Africa—and for their foreign helpers who may be distracted
by other crises in places such as Ukraine and the Middle East—that is
perhaps the hardest lesson of all. ■
This article was downloaded by zlibrary from https://www.economist.com/middle-east-
and-africa/2023/10/19/how-liberia-and-sierra-leone-ended-their-cycles-of-violence
Sudan’s agony
After six months of civil war, little remains of

Khartoum
Sudan’s capital has become Africa’s Aleppo
Oct 19th 2023
MOHAMMED HUSSAIN, a merchant, is a refugee in his own city. A few

months after civil war broke out in Khartoum’s streets in April, he tried to
take his sick father to hospital. But the roads were blocked by soldiers from
the Rapid Support Forces (RSF), a rebellious paramilitary group that is
trying to seize control of the country. Unable to get medical help, his father
died. Last month, fighters from the RSF seized Mr Hussain’s home, robbing
him and threatening to kill him. He fled to relatives in another part of the
city. Khartoum, he says, echoes to the sound of gunfire and shelling “every
day and every night”.
The first shots of Sudan’s civil war were fired in Khartoum, where the two
rival warlords had their headquarters. On one side is Sudan’s de facto
president, General Abdel Fattah al-Burhan, who leads the Sudanese Armed
Forces (SAF). On the other is the leader of the RSF, Muhammad Hamdan
Dagalo, better known as Hemedti. Since then the fighting has spread far
beyond the capital’s barracks. In West Darfur, the RSF and allied Arab
militias are waging a genocidal campaign against the Masalit, a black
African ethnic group. Nationwide, some 9,000 civilians have reportedly been
killed, though this is probably a massive underestimate. More than 5.6m
have been driven from their homes.
Though the fighting has spread, Sudan is unusual in the degree to which the
centre of its war is the country’s capital. Ever since British imperialists
founded the modern city on the banks of the Nile, power and wealth in
Sudan have been concentrated in Khartoum. The RSF, whose rank-and-file
are mostly drawn from far-flung and downtrodden regions, are now exacting
their revenge. “The RSF believe they cannot create a state in their own
image unless they violently destroy the old one,” argues Kholood Khair of
Confluence Advisory, a Sudanese think-tank. In recent weeks, RSF fighters
are alleged to have burnt land-registration records and taken over whole
residential neighbourhoods. “Every house is occupied,” says another
Sudanese analyst. “The city is theirs.”
Though the RSF controls most of downtown Khartoum, including districts

that host the presidential palace and other government ministries, the SAF
remains holed up in several well-fortified bases in the city centre. It also
controls the air base at Wadi Saidna, to the north. For months the RSF has
been trying to overrun these redoubts of the army. The SAF has responded
with a combination of air strikes, including by armed drones, and the
occasional raid on residential districts and warehouses used by the RSF, says
Nathaniel Raymond, a conflict monitor at Yale University. Mr Burhan, who
fled from the army headquarters in August, now runs what is becoming a de
facto capital in Port Sudan, on the Red Sea.
Since the civil war began six months ago, more than half the capital’s
population has fled. “Everyone I know has left now,” says Waleed Adam,
who escaped in July after RSF troops raided his apartment. Most of those
who have remained are too old or too infirm to leave. Many are also too
poor. Civilians who try to get out risk being robbed or forced to pay bribes to
go through armed checkpoints. “If you forget your ID card for any reason
the RSF arrest you,” says another recent escapee.
Many parts of the city are, in effect, under siege. Aid agencies can barely
operate and medical care hardly exists. In August an airstrike hit one of the
city’s largest hospitals. “Nowhere is safe,” says Mustafa Moduay, a teacher
who has stayed put.
Many of the capital’s historic landmarks as well its factories have been
ground to dust. “Old Khartoum has been effectively demolished,” says
Magdi el-Gizouli of the Rift Valley Institute, a think-tank. The presidential
palace was hit by an airstrike in May. The iconic Greater Nile Petroleum
Operating Company Tower, one of the capital’s tallest buildings and a
symbol of the regime of the former dictator, Omar al-Bashir, was set alight
last month. Khartoum, says Mr Raymond, faces the fate of Dresden, a
historic German city destroyed by Allied air raids in the second world war.
Whichever side conquers the capital will be left ruling over little more than
ruins. ■
and-africa/2023/10/19/after-six-months-of-civil-war-little-remains-of-khartoum
No miracles required
How to save the lives of 200,000 women a year

Maternal deaths are being prevented, but not quickly enough
Oct 19th 2023 | KENEMA
PREVENTING MATERNAL deaths is not difficult, says Hannah Saidu,

who manages a maternity unit in Sierra Leone, so long as “you have skilled
midwives, and you know what to do”. If that is obvious, it still bears
repeating. About 200,000 women in sub-Saharan Africa die in childbirth
every year, largely from bleeding, hypertensive disorders and infection. The
World Health Organisation estimates that there are 545 deaths in the region
for every 100,000 live births, a rate four times higher than in south Asia and
90 times higher than in western Europe.
The rate in Africa has fallen by a third since 2000, but still has a way to go.
There has been barely any progress in Nigeria, the continent’s most populous
country, where a woman has a 1 in 19 chance of dying in childbirth over her
lifetime. By contrast, mortality has fallen by three-quarters in Angola,
Ethiopia, Mozambique, Rwanda and Sierra Leone (see chart). Those
numbers point to an encouraging truth: countries do not have to wait until
they are rich to start saving women’s lives.
Consider Sierra Leone, which was once, alongside South Sudan, the worst
place in the world to give birth. Health clinics still regularly run short of
drugs. Blood supplies are so limited that patients muster their own donations
from relatives; one doctor describes giving his own blood before operating
on a patient. A woman’s lifetime risk of maternal death is the same as
drawing the joker from a pack of cards.
Even here, there is cause for hope. Successive governments have made
maternal health a priority, training more midwives and monitoring deaths
closely. Since 2010 a donor-backed initiative has made health care free for
pregnant and breast-feeding women. It works imperfectly, and underpaid
staff still ask for a contribution from patients. But the scheme helps explain
why 83% of births now happen in clinics, compared with 50% before fees
were abolished. Mortality, though still high, has dropped below the African
average.
Women in poor countries die because they are slow to seek care, slow to
reach hospital, and slow to be treated. Lives can be saved by spotting
warning signs early. Sierra Leone is having trials for a blood-pressure
monitor, known as CRADLE, which uses a simple traffic-light system. If the
device flashes red, a patient should be referred for emergency treatment.
Mariama Momoh, a midwife and public-health specialist, says it lets workers
with even basic training make fast decisions.
Another innovation, used in several other African countries, is a plastic

drape that is placed beneath the woman during delivery. By noting how
much blood has collected, health workers can quickly assess danger. A
recent trial in Kenya, Nigeria, Tanzania and South Africa combined the use
of a calibrated drape with a bundle of treatments, such as oxytocic drugs and
uterine massage. Severe bleeding was 60% lower in trial hospitals.
Innovation only works when there are robust health systems to support it.
One reason that Nigeria fares so badly is that only half of births there are
attended by skilled staff. In Rwanda, which has a system of community-
based health insurance, almost every birth is. Ethiopia has mobilised a
“health development army” of volunteers to encourage women to attend
health centres. In many countries, the growth of cities is bringing women
closer to hospitals, where they get better care than in rudimentary rural
clinics.
Another way to reduce maternal deaths is to empower women. When they

have control over their fertility, they have fewer babies and at wider
intervals, which reduces the risk of complications. Governments can help by
boosting access to contraceptives. In Senegal improved supply chains led to
fewer shortages of pills and implants in public health centres, notes Gloria
Ikilezi of Exemplars in Global Health, which studies good practice. When
women’s health is a priority they are also more likely to receive treatments
like iron supplements, which reduce the risk of severe bleeding in childbirth.
One recent study estimates that when countries introduce quotas for women
in parliament, maternal mortality falls by 7-12% as reproductive-health
services improve. As important are the conversations that happen around the
cooking stove or the water pump. In Sierra Leone, unwed pregnant teenagers
are often thrown out by their families and are afraid to visit clinics, says
Mangenda Kamara of Lifeline Nehemiah Projects, a grassroots organisation.
She is pioneering a scheme that pairs girls with an older mentor, who
encourages them to go for antenatal check-ups and goes with them to
hospital during labour. More than 250 girls have been mentored; none (in
that small sample) has died.
Cheap innovation, stronger health systems and women’s empowerment are

achievable anywhere. But globally, progress is slowing. There has not been
quite the same focus on maternal mortality as there has been on diseases like
AIDS and malaria, says Rasa Izadnegahdar of the Bill & Melinda Gates
Foundation, a philanthropic outfit. Innovation has therefore spread more
slowly than need be. The UN has a goal of reducing maternal mortality
worldwide to 70 deaths per 100,000 live births by 2030. On current trends
that target will be missed. ■
and-africa/2023/10/19/how-to-save-the-lives-of-200000-women-a-year
The Americas
Can Argentina’s next president fix the economy? Don’t count on it
Bernardo Arévalo is still battling to become Guatemala’s president
Joe Biden lifts sanctions on Venezuela, but not without conditions
The radical option
Can Argentina’s next president fix the economy?

Don’t count on it
Javier Milei still leads the polls. But the country needs more than
dollarisation
Oct 19th 2023 | Buenos Aires
THERE ARE four types of countries in the world: developed, undeveloped,

Japan and Argentina. Decades after the Nobel-prize-winning economist
Simon Kuznets is said to have coined this phrase in the 1970s, Argentina
still stands out for its exceptional record for high annual inflation, which
currently stands at a massive 138%. Could that be about to change? On
October 22nd Argentines will vote in a presidential election. For the first
time in decades, two of the three leading candidates are offering free-market
solutions to the country’s many problems.
Those two candidates are Javier Milei, a libertarian who is leading the polls,
and Patricia Bullrich, a centre-right former security minister who is the
candidate for Together for Change, the main centre-right coalition (see chart
1). Mr Milei, who wields a chainsaw to symbolise his approach to the state,
has promised to slash public spending by 15% of GDP (it is currently around
40% of GDP), scrap most taxes, privatise state-owned companies and swap
the local currency, the peso, for the dollar. His coalition, Freedom Advances,
was created only in 2021. Ms Bullrich also wants to balance the budget by
cutting spending, beef up central-bank independence and have a dual-
currency system in which both the dollar and the peso would be accepted.
The third candidate is Sergio Massa, the country’s current economy minister,
who, though part of a left-wing Peronist administration, is considered more
centrist and has good relations with the IMF. If on October 22nd no
candidate obtains either 45% of the vote or 40% with a ten-percentage-point
lead over the runner-up, a run-off will ensue in November.
Argentina’s decline has been gradual and mostly self-inflicted. A century

ago it had a GDP per person higher than that of Germany, Italy or France.
Millions of European migrants flocked to work on its fertile lands. “Riche
comme un Argentin” became a colloquialism to describe obscene wealth by a
landowning aristocracy. Today the phrase is a joke. Germany’s GDP per
person is now quadruple Argentina’s. Neighbouring Chile’s is almost a third
higher.
According to the World Bank between 1950 and 2016, the country
experienced 14 recessions, defined as one or more consecutive years of
negative growth (it has since had another two). Over this period, for every
two years of growth, Argentina has had one year of recession, a record more
typical of war-torn oil states (see chart 2). Recessions not only happen
frequently, but are deep. In an average slump, Argentina’s GDP contracts
3.5% per year. The result is that it is almost impossible to maintain economic
growth. According to Martín Rapetti of Equilibria, a consultancy in Buenos
Aires, Argentina’s real GDP per person was roughly the same in 2020 as it
was in 1974.
Argentina has defaulted nine times on its sovereign debt since it became
independent in 1816, including three times since 2000. This has led it to be
shut out of international capital markets. Administrations have either forced
the central bank to print money to finance the deficit, or taken out debt with
multilateral lenders to keep spending going. Since 1956, when it joined the
IMF, Argentina has been involved in 22 bail-out programmes. It now owes
the fund $43bn.
The country’s economic problems have mostly been caused by its politics.
Since 1930 Argentina has had six military coups, which have impeded the
regular functioning of the courts and the legislature. Even in democracy,
institutions have been undermined. Populist presidents have fired central-
bank chiefs at will and expropriated dozens of private companies. Between
2007 and 2014, when a particularly left-wing strand of Peronism was in
power, the government published bogus inflation statistics and fined
economists who divulged their own estimates, which were often more than
double the official one.
The current Peronist government has created or increased at least 27 taxes,

often by decree. At least seven new exchange rates have been invented under
this administration. In the run-up to the election, Mr Massa abolished
income taxes for 99% of registered workers, increased wages for public
employees and handed out a bonus in pesos worth $100 (converted at the
official exchange rate) for pensioners.
Populism has contaminated trade, too. Successive Peronist administrations

have cut the country off from international commerce in order to protect
workers and keep domestic prices down. Trade as a percentage of GDP is
just 33%, among the world’s lowest (it is 84% in Mexico and 64% in Chile).
Such governments have also bashed the country’s main export sector,
agriculture, as an oligarchy, and sought to hobble it by imposing export
restrictions on farm produce. Exports of soya, the country’s main product,
are taxed at 33%.
All of this means that most Argentines prefer to do things off the books.
Banks, which in the past have effectively confiscated savings under
government orders, are avoided. Domestic credit to the private sector is only
11% of GDP, compared with 83% in Chile. Nobody trusts the local currency.
Though the country has had five different currencies in as many decades,
Argentines have long preferred to save in greenbacks. They are thought to
hold at least $250bn in offshore accounts or under the mattress, the
equivalent of more than a third of GDP.
Unsurprisingly, confidence in government is at a 20-year low. Corruption is

rampant. In December the powerful vice-president, Cristina Fernández de
Kirchner, who was president between 2007 and 2015, was sentenced to six
years in jail for defrauding the state of $1bn (she denies wrongdoing and has
appealed against the decision). In September, Martín Insaurralde, the chief of
staff for the governor of Buenos Aires province, the country’s most populous
state, was tagged in photos taken by an escort of the two of them on a yacht.
He and his ex-wife are being investigated on suspicion that they evaded
taxes and laundered up to $100m into property, which they deny.
More than half the population is estimated to get some form of government
welfare. Many of these handouts are inefficient. A programme introduced in
2020 which aims to bring casual workers into the formal market reaches
almost 1.3m people—yet only around 15,000, or 1.2% of recipients, have so
far found formal jobs. According to the Inter-American Development Bank,
administrative inefficiencies mean that Argentina’s government loses an
amount worth over 7% of GDP a year because of leaks in welfare transfers,
wasteful public procurement and waste in employee remuneration. This is
more than any other country in Latin America.
Though inefficient, these welfare payments continue because they are

essential to the way politics functions. Middlemen known as punteros, who
are in charge of distributing social handouts, also make sure their recipients
vote for the right party. In September one puntero was arrested in Buenos
Aires province while he was withdrawing money with 48 different debit
cards that belonged to local legislators. Police suspect he was acting on
behalf of politicians to buy votes. Argentina’s federal structure also
encourages clientelism, as presidents jockey for the support of the country’s
23 powerful governors.
Such potential skulduggery has benefited Mr Milei, who gained fame by
railing against politicians as a “caste” who steal from hard-working folk. His
team is mostly made up of political novices, though some are well-regarded
economists.
The rise of the libertarian has raised hopes among some analysts. Ramiro
Blazquez of BancTrust, an investment bank which focuses on Latin
American debt, thinks that the fact that two of the leading candidates are
proposing free-market policies is a good sign. He points out that, last time
Argentina went through a similar economic crisis in 1989, which included
hyperinflation, it ushered in a liberal government that managed to turn the
country’s fortunes around for a decade. Today, talk of cutting public
spending is not turning off voters but attracting new ones. “The political
rhetoric has changed, people’s expectations have changed,” says Fernando
Marull, a consultant in Buenos Aires.
Mr Marull also notes that certain sectors—such as mining, oil and gas and
tech—are booming. The country has one of the world’s biggest reserves of
lithium. Rystad Energy, a consultancy, estimates that oil output in Argentina
will more than double to 1m barrels per day by 2030. Even in dollar terms
the local stock market has risen by almost 75% over the last year.
Get the chainsaw!

Yet positive headwinds may not be enough to save Argentina. “Argentina’s
principal problem is political,” says Mr Rapetti. An addiction to charismatic
leaders who co-opt state institutions rather than build political consensus has
made it impossible to implement good policies and maintain them over time.
Other countries in Latin America have managed to stabilise their economies
by creating independent central banks, targeting inflation and getting their
fiscal accounts in order. All this led to stable currencies. It is unlikely that a
similar combination of policies could be implemented quickly in Argentina,
because of years of distortions and handouts. Painful economic policies are
also likely to lead to massive protests.
In the presidential primaries for this election, candidates who advocated

broad coalitions as the basis for macroeconomic stabilisation fared badly.
Instead, voters plumped for Mr Milei, whose radical dollarisation proposal
could be a quick fix for inflation, but will not solve the country’s underlying
decay. Mr Milei’s party is not expected to get a majority in Congress. That
could result in legislative gridlock. Optimists believe that if the economic
crisis gets bad enough, politicians from other parties would eventually line
up behind him. Given Argentina’s track record, voters should not hold their
breath. ■
This article was downloaded by zlibrary from https://www.economist.com/the-
americas/2023/10/19/can-argentinas-next-president-fix-the-economy-dont-count-on-it
Democratic display
Bernardo Arévalo is still battling to become

Guatemala’s president
The anti-corruption campaigner has faced a series of hurdles
Oct 19th 2023 | Guatemala City
MORE THAN two weeks after protests began outside a drab government
building in the capital of Guatemala, hundreds of demonstrators are still in
place. Amid flags and the noise of vuvuzelas, the crowd camped outside the
public prosecutor’s office in Guatemala City calls for the resignation of a list
of officials, starting with María Consuelo Porras, the public prosecutor. They
are not alone. Since October 2nd hundreds of Guatemalans have been
blocking roads across the country, protesting against those who appear to be
undermining democracy in the Central American country.
Ms Porras, who has been put under sanctions by the United States for
corruption (which she denies), is at the forefront of a select group trying to
stop the transfer of presidential power to Bernardo Arévalo. Since his
landslide win in elections in August, on an anti-corruption platform, Mr
Arévalo has become a symbol of hope in a country and region where
democratic backsliding has become the norm.
Initially “the pact of the corrupt”, as Guatemalans refer to a small elite

drawn from the ranks of the political, military and judicial spheres, claimed,
without evidence, that the elections were fraudulent and forced the ballot
boxes to be reopened. The result stayed the same. Then they tried to suggest
that Semilla (Seed), Mr Arévalo’s party, was fraudulently formed and should
be dissolved. That case is continuing.
Most reckon these attempts to stop Mr Arévalo from being sworn in on

January 14th will fail. Although some Guatemalans are fed up with the
roadblocks, the peaceful protests are putting pressure on the elite, as are
many foreign governments. Keeping Mr Arévalo from power would risk a
widespread uprising. “The most sacred thing in a democratic country is the
vote,” says Alida Vicente, a lawyer and elected member of an indigenous
administration in Palín, in the south, who travelled to the capital to join the
protest.
On October 16th Guatemala’s interior minister resigned, after a group of 50

people wielding guns, wooden planks and stones killed a protester while
trying to disperse a protest. Many businesspeople are supporting Mr
Arévalo, either because they are keen to be close to those in power or for
fear of American sanctions if they do otherwise. The courts are divided.
While the case against Semilla continues, on October 14th an appeals court
quashed the conviction of José Rubén Zamora, a prominent investigative
journalist who was sentenced in June to six years on trumped-up charges of
money-laundering. (But it also ordered a retrial.)
The continuous challenges are hurting Semilla. Formed by a group of urban

academics, the party ran its first round on $20,000. It did not even have
money to do internal polling. The party has no experience of holding power.
It will hold only 23 of 160 seats in Congress.
Still, Mr Arévalo should be able to make his mark. Alejandro Giammattei,

the outgoing president, has strengthened the powers of the presidency.
“Guatemala’s public administration is so bad that even using a few executive
powers he could drastically improve it,” reckons Daniel Haering Keenan of
the Universidad Francisco Marroquín in Guatemala City. And the battle for
Mr Arévalo has sparked a desire to protect democracy more generally. As
Esteban Toc Tzay, an indigenous leader who was at the protests, put it: “This
is the feeling of the Guatemalan people.” ■
americas/2023/10/19/bernardo-arevalo-is-still-battling-to-become-guatemalas-president
Blowout
Joe Biden lifts sanctions on Venezuela, but not

without conditions
Nicolás Maduro’s government will have to hold its side of the bargain
Oct 19th 2023 | Caracas
NICOLÁS MADURO, Venezuela’s autocratic president, has managed to

stay in power by undermining his country’s democratic politics. So few held
out much hope when, on October 17th, members of his government and the
opposition jetted to Barbados to strike a deal in order to set out how free and
fair presidential elections could be held in 2024.
Such cynicism seemed well founded. The deal, which was overseen by
Norway’s government, was entitled a “partial agreement”. It initially
appeared to be underwhelming, albeit with some concessions. The document
finally cleared the path for the opposition to hold its primary elections,
scheduled for October 22nd. The opposition will be allowed to choose its
candidate “according to its internal rules.” An approximate date was agreed
for presidential elections. These will be held in the second half of 2024.
Just getting Mr Maduro to agree to these small democratic steps had taken
months of mostly secret negotiations. The day after the deal was signed it
finally emerged just how he was cajoled. On October 18th, President Joe
Biden’s administration announced that, with immediate effect, it would lift
most of the restrictions placed on Venezuela’s energy, gold and financial
sectors. The state oil company Petróleos de Venezuela SA (PDVSA), which
has been under sanctions since 2019, will be able to sell oil to whoever it
chooses, with the exception of Russia. Some Venezuelan bonds can be
traded by American entities again.
The turnaround represents a significant financial boost for Mr Maduro’s

government, particularly the change of rules for PDVSA. For the last four
years it has been bypassing sanctions by selling oil on the black market, for
as much as a 40% discount. “I think this could almost double Maduro’s
revenues from oil: he will be receiving a much lower discount, and exporting
more,” says Francisco Monaldi, at Rice University in Houston, Texas. Mr
Maduro was certainly jubilant when he appeared on state television. “It is a
world consensus that sanctions against Venezuela be lifted,” he gushed.
But the wily dictator has more to do if he really wants to come in from the
cold. Antony Blinken, America’s secretary of state, said that the Biden
administration has given Mr Maduro only until the end of November to start
releasing political prisoners and any “wrongfully detained” Americans. On
October 19th five Venezuelans—journalists and politicians who had been
imprisoned for years—were set free.
Another, more difficult, request for the regime to comply with involves the
opposition primary election, on October 22nd. The clear favourite to win is
Maria Corina Machado, a conservative. She has already been banned from
holding office. Mr Blinken made clear that, also by the end of November, Mr
Maduro’s government must “define a specific timeline and process for the
expedited reinstatement of all candidates”. He warned that “failure to abide
by the terms of this arrangement will lead the United States to reverse steps
we have taken”. Mr Maduro has a poor track record of keeping his part of a
bargain. Now he is about to be tested. ■
americas/2023/10/19/joe-biden-lifts-sanctions-on-venezuela-but-not-without-conditions
Europe
Poland gives pro-European liberals a big win
How a 31-year-old hopes to fix Ukraine’s state-owned defence
giant
Alexei Navalny’s lawyers are arrested
Marine Le Pen poses a greater threat than Giorgia Meloni
Paris and Berlin compromise on reform of the electricity market
The EU’s response to the crisis in Israel exposes its limits
Tusk’s triumph
Poland gives pro-European liberals a big win

But the road back to the rule of law will long and hard
Oct 15th 2023 | WARSAW
THE POLLS closed at 9pm on October 15th, but those still queueing were
allowed to cast their votes, so at one polling station near Wroclaw balloting
continued until almost 3am. A pizzeria delivered 300 free pies to those
standing outside. “Better to wait four hours than four years,” a voter there
told Gazeta Wyborcza, a newspaper. Many had worried that the vicious
campaign would discourage voters from showing up. Instead turnout reached
74%, Poland’s highest rate ever—higher even than in the election in 1989
that brought an end to communism.
Indeed, this election may have been Poland’s most important since 1989.
Rule-of-law advocates said it was the last chance to stop the country’s right-
wing populist government from seizing control of the courts, filling the state
with apparatchiks and wrecking Poland’s standing in the EU. The voters
gave the opposition a surprisingly decisive victory. That augurs a change of
direction for Poland and a big setback for Europe’s hard right.
The Law and Justice (PiS) party, in power since 2015, came first. But it took
just 35.4% of the vote, down from 43.6% in 2019. The main opposition
alliance, the centrist Civic Coalition (KO), got 30.7%. Another centrist
outfit, Third Way, drew 14.4%, well above expectations. Lewica (The Left),
an alliance of leftists and social democrats, managed 8.6%. The hard-right
Confederation party won 7.2%. That gave KO, Third Way and Lewica,
which promised to govern together, a majority of 248 out of 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 takeover of state institutions. “Poland won,
democracy won,” declared Donald Tusk, the former prime minister and ex-
president of the European Council who leads KO. He will almost certainly
return to office.
PiS deployed the state media and state-owned companies, both stuffed with
cronies, to blitz the country with propaganda. That gave it a “clear
advantage”, according to a report by the Organisation for Security and Co-
operation in Europe, a watchdog. But it was not enough. The post-election
rally at PiS’s headquarters in Warsaw was a shadow of those in earlier years.
Its leader, Jaroslaw Kaczynski, grimly acknowledged it might not be able to
form a coalition. Days later the party still seemed to be in denial. “Evil has
temporarily won,” said Marek Suski, a PiS MP. Another, Ryszard Terlecki,
warned that his fraction would not be “an easy, gentle and pliant opposition”.
When PiS swept to power in 2015, it was Mr Tusk’s party that was seen as
corrupt and out of touch. By contrast, PiS had its ear to the ground. It wooed
Poles with generous child benefits and infrastructure investments, especially
in the country’s poorer east. But the party’s obsession with control of state
institutions and its constant infighting gradually left it sealed inside its own
media bubble. Its vicious electoral campaign, which blasted Mr Tusk for his
partly German ancestry and Brussels connections, appealed only to its core
voters. PiS also attacked Confederation, its only potential coalition partner.
Many Confederation supporters switched to Third Way, according to Marcin
Palade, a pollster—thus aiding the opposition.
By contrast, the opposition’s broad spread of parties drew in new voters. So
did clever tactics. Lukasz Litewka, a new MP for the Left, was given the
lowest position on his party’s regional list, but won nearly twice as many
votes as the party leader after he used his electoral posters to advertise dogs
up for adoption at a local shelter. Social-media campaigns helped raise
turnout among those aged 18-29 to a remarkable 69%, according to an exit
poll by Ipsos, up from 46% in 2019. PiS came last among these voters. The
opposition’s upbeat campaign in the final weeks went down well with voters
tired of polarisation.
It may be some time before Mr Tusk gets to form a coalition. The president,
Andrzej Duda, comes from PiS, and may give that party a (futile) first shot.
That could delay the transition until mid-December. Negotiations will not be
easy: the opposition’s three groupings are made up of nine sharply different
parties. After the election Wladyslaw Kosiniak-Kamysz, who leads an
agrarian party within Third Way, said he opposes including “ideological
issues” (such as liberalising abortion) in the coalition agreement. Anna
Maria Zukowska, a Left MP, said that in that case “farmer issues” would be
treated similarly.
Once it forms a government, the opposition has pledged to undo PiS’s efforts
to turn Poland into a copy of Viktor Orban’s Hungary. This will be hard.
Returning independence to the state media and state-owned companies will
require removing the cronies whom PiS has installed, which could
degenerate into its own form of cronyism. Re-establishing an independent
judiciary will mean undoing PiS’s politicisation of the body that nominates
judges. That will need legislation, which could be vetoed by Mr Duda or
blocked by the PiS-controlled constitutional tribunal.
Mr Tusk has promised to unlock €35bn ($37bn) in post-covid aid that the
European Union has withheld over PiS’s meddling with the courts. Poles
who expect Mr Tusk’s years in Brussels to smooth the way may be
disappointed. Meeting some EU conditions will be easy, but one crucial
reform has been blocked by the constitutional court. The European
Commission will try to stick to its requirements, to refute the charge PiS
always made: that its cut-off of Poland is about politics, not the rule of law.
“It’s not that just because they have a different prime minister, we will say
all the problems are gone,” says a commission official. Still, the promise of a
firmly pro-EU prime minister in Warsaw is a sea change for Poland—and for
Europe. ■
This article was updated on October 17th to add final vote shares
https://www.economist.com/europe/2023/10/15/poland-gives-pro-european-liberals-a-big-
win
From corruption to production
How a 31-year-old hopes to fix Ukraine’s state-

owned defence giant
It won’t be easy, but nothing in Ukraine is
Oct 19th 2023 | KYIV
IN MARCH UKRAINE abruptly rebooted its defence-industry team.

Oleksandr Kamyshin, a hyperactive manager with a reformist pedigree, was
appointed to head a beefed-up strategic-industries ministry. He has
previously turned around the railways and has the confidence of the
president’s inner circle. Still more surprising is the recent appointment of
Herman Smetanin, a little-known 31-year-old, to run the state defence
consortium popularly known as Ukroboronprom. He is to sort out the
sprawling, inefficient and notoriously corrupt company—in wartime.
Mr Smetanin, a design engineer who rose from the shop floor to the
director’s office, is on one level uniquely qualified for the unenviable job. At
the start of the war in February 2022 he was to be found in his native
Kharkiv, 35km from the Russian border, as the director of its famed but
faded tank factory. He lived in the factory through the terrifying first weeks,
as bombs fell through its roofs, while a group of key workers continued
production in breaks between the shelling. Every defence contract was
eventually fulfilled. “If the mortars or artillery were landing near, you’d wait
half an hour before starting again,” he recalls.
But there are questions about the possibility, and even the desirability, of
turning around an umbrella organisation built on corruption and favour from
its very early days. When the Soviet Union broke up in 1991, Ukraine
inherited one of the world’s largest military complexes: shipbuilding, tanks,
aviation, missiles. Over the next two years Ukraine created three agencies
that, with the help of poor and corrupt officers, siphoned off whatever they
could on the black markets. Ukraine stopped making ammunition. Factories
stood idle. The most advanced products were refashioned for the export
market.
In 1996, with the government close to bankruptcy, the three agencies were
taken over by a new enterprise with close connections to Russia’s security
services. (The two countries’ defence industries were then closely
integrated.) A successor structure came into existence in 2010. The new
company, Ukroboronprom, was supposed to be about synergy, but in reality
it was about personal enrichment. “Ukroboronprom was dead at birth,” says
a source who worked in the company at the time.
When war came in 2014, and full-scale invasion in 2022, Ukroboronprom

mobilised but struggled. There were notable successes, though. Perhaps half
a dozen of what were over a hundred operating units were still able to
produce competitive products. The Pavlohrad chemical plant, for instance,
delivered gunpowder, a commodity most in demand in any war. The Luch
Design Bureau in Kyiv produced Stugna anti-tank guided missiles that
helped stop Russia’s march on Kyiv, and the Neptune cruise missiles that
famously sank Russia’s Black Sea flagship, the Moskva.
But it has been private enterprise, independent of state-owned

Ukroboronprom, that has set the pace in this war. Strike drones, the new
addition to a conflict that otherwise often resembles the first world war, are
almost all produced privately. The new drone entrepreneurs believe it is they
who now represent the new face of Ukrainian defence innovation. “I see it as
my mission to resurrect previous glories,” says Vitaliy Kolesnichenko, the
director of AirLogix, a Kyiv-based drone developer.
Making Ukroboronprom exciting, well paid but less loss-making is one of

the conundrums facing Mr Smetanin. He says his focus is on keeping things
simple: increasing production, restructuring the business and tackling
corruption. There is already progress on the first, he reports. Shell
production is up by anything between 100% to 1,000% in the few months he
has been in charge, depending on the precise type. Weapon production in
every category is increasing, despite constant Russian attacks. Reform of the
governing structure will introduce new subholding clusters of companies,
which will be organised around specialisation: armoured vehicles, aviation,
shipbuilding and so on. The 34 of 66 units still organised as state companies
will soon be turned into limited-liability companies or joint-stock companies
with supervisory boards. Appointments of factory directors, a major source
of corruption in the past, will henceforth be done by an independent
commission.
A candid ministerial insider suggests that public-private partnership may be

the only hope for Ukroboronprom and its team of young reformers. “Can
you turn around 60-odd underfunded, corrupt factories? I don’t think so. But
can you use them as platforms for private development? Maybe.” A high-
level government source agrees that Mr Smetanin will find the job of
rescuing Ukraine’s slumbering defence giant hard going. “Logically, he has
no hope. But we do live in a country called Ukraine, so he does have a
chance.” ■
Read more of our recent coverage of the Ukraine crisis.

https://www.economist.com/europe/2023/10/19/how-a-31-year-old-hopes-to-fix-ukraines-
state-owned-defence-giant
Legal vacuum
Alexei Navalny’s lawyers are arrested

Vladimir Putin’s latest act of persecution
Oct 19th 2023
ALEXEI NAVALNY, Russia’s best-known opposition leader, has been in

captivity for more than 1,000 days, and in solitary confinement for 224 of
them. He was denied medical treatment when ill, has been refused visits by
his family for more than a year and is not allowed to make telephone calls.
Yet Mr Navalny, ever stoical, has described his imprisonment not as
martyrdom, but as a nuisance and a challenge that needs to be overcome.
The challenges continue to mount. In August Mr Navalny was sentenced to

an additional 19 years in prison for “extremism” on top of the eleven-and-a-
half years he was already serving for “fraud”. But even then he continued to
communicate with his supporters and to haunt Vladimir Putin, whose thugs
tried to poison him in 2020 and then subjected him to torturous conditions in
jail when he returned to Russia the following year after being treated in
Germany. Mr Navalny’s rare appearances in courts (mostly via video link)
have turned into political speeches, and visits by his lawyers have kept him
in touch with the outside world. “His voice from behind bars sounded
unbearably loud for Putin,” Leonid Volkov, Mr Navalny’s chief of staff,
wrote on X (formerly Twitter) from Vilnius, Lithuania’s capital.
So Mr Putin decided to turn down the volume, and to deprive Mr Navalny of

his last channel of communication. On October 13th three of Mr Navalny’s
lawyers—Vadim Kobzev, Alexei Liptser (pictured) and Igor Sergunin—were
arrested and accused of “participation in an extremist community”; that is, of
passing Mr Navalny’s words to the outside world. Olga Mikhailova, another
of his lawyers, had left the country by the time her offices were raided.
Mr Navalny learned the news from a journalist during one of his appeal
hearings. “I don’t understand what’s going on. My lawyer is not here. All the
other lawyers are not here. Nobody is allowed to visit me. I am isolated and
cut off from any information,” he told the judge. Even the radio in his cell
has been turned off, he said, to plunge him into complete silence. Shortly
after that, news came that Mr Navalny’s fifth lawyer, who was supposed to
attend the appeal hearing, had fled the country.
The practice of jailing not only dissidents but also their lawyers has been
tried and tested in Belarus, but is relatively new in Russia. Some 200
Russian defence lawyers have signed a petition denouncing the climate of
fear in which they operate, and calling for a strike. Two volunteers have now
come forward to help Mr Navalny.
Having no legal representation and no contact with the outside world makes
Mr Navalny especially vulnerable, as he has been awaiting a transfer to one
of Russia’s toughest prisons for a year. (“I feel like a tired rock star on the
verge of depression. I’ve reached the top of the charts and there’s nothing
more to strive for,” he joked when he heard of his transfer order.)
All this is part of the Kremlin’s preparation for next March’s presidential
election, which is sure to be farcical. Mr Putin will aim to demonstrate total
political control and to keep his opponents demoralised. A few hours after
losing his lawyers, Mr Navalny somehow managed to convey that by
January 15th he will produce his strategy for how best to tackle Mr Putin’s
election, though it is not clear how he will now be able to communicate it.
“Prison exists only in your mind,” Mr Navalny wrote in one of his early
posts. If so, he remains the freest man in Russia. ■
https://www.economist.com/europe/2023/10/19/alexei-navalnys-lawyers-are-arrested
Europe’s populists
Marine Le Pen poses a greater threat than Giorgia

Meloni
At least to the European Union and the transatlantic alliance
Oct 19th 2023 | PARIS
WHEN GIORGIA MELONI took over as Italy’s prime minister in October

2022, Europe’s liberals trembled. Her party, the Brothers of Italy, has roots
in post-war neo-fascism, and her electoral pitch, promising a clampdown on
illegal immigration, promised uncompromisingly hard-right politics. A year
on, the pragmatic Ms Meloni has not turned out to be the disruptive force
some feared. Which makes centrists in neighbouring France worry that this
could help Marine Le Pen.
France is not due to hold a presidential vote until 2027. But Ms Le Pen has
twice made it to the run-off, each time to be beaten by Emmanuel Macron.
The constitution forbids him from standing for a third consecutive term.
Already, between 2017 and 2022, Ms Le Pen increased her run-off vote from
34% to 41%. Under France’s centralised presidency, the possibility of a Le
Pen victory raises particular concern.
Ms Meloni and Ms Le Pen share more than hard-right rhetoric. Like Ms
Meloni, Ms Le Pen has tried to distance her party, now called National Rally
(RN), from the thuggish discourse of its former self: in her case, the National
Front. Unsavoury characters still move in her circle. But Ms Le Pen has
promoted the more respectable-looking among them, notably Jordan
Bardella, a 28-year-old Euro-deputy who now runs her party. She has also
ditched some of the party’s most Eurosceptic positions, including a past
promise to take France out of the euro, which proved unpopular.
Ms Le Pen has worked hard to normalise the party too. Her suit-wearing
deputies heckle far less than do members of the other main parliamentary
opposition bloc, NUPES, a left-wing alliance. The party wants to show that
it is not there just to rant and block, but is ready—like Ms Meloni in Rome
—to govern.
The chief reason to think that Ms Le Pen poses a far greater threat is
geopolitical. Ms Meloni is no friend of Russia’s Vladimir Putin. Ms Le Pen’s
party, by contrast, took a €9m loan from a Kremlin-linked bank (which it has
just paid back). During her presidential campaign in 2022 Ms Le Pen briefly
used a photo of her next to Mr Putin in a flyer, published before he sent the
tanks into Ukraine. Although she denounced the invasion, at a parliamentary
hearing in May this year Ms Le Pen continued to defend the referendum held
in Crimea after Russia annexed the Ukrainian territory in 2014.
Moreover, in office Ms Meloni has been a firm backer of NATO, and of

arming Ukraine. Ms Le Pen, on the other hand, not only wants to pull France
out of NATO’s integrated military command. She has also argued against the
alliance’s expansion even to Sweden and Finland, let alone Ukraine. She
thinks “Russian paranoia” about NATO on its borders should be “taken into
account”, lifting an argument straight from the Moscow script, and has
criticised France for sending heavy weaponry to Ukraine. Ms Meloni, says
an RN official disapprovingly, is “very Atlanticist”.
Ms Meloni has so far played by EU rules, but Ms Le Pen still vows to

overturn them. Her scheme is to lean on like-minded governments—in
Hungary and Slovakia, though not for much longer in Poland—to transform
the EU from within into an “alliance of nations”. She wants to hold a
referendum to amend the French constitution in order to entrench its
“superiority” over EU law. And she vows to reduce France’s contribution to
the EU budget. If others do not co-operate, insists Jean-Philippe Tanguy, an
RN deputy who helped run Ms Le Pen’s presidential campaign, “we would
force their hand”, for instance by refusing to pay. Anything of the sort would
begin to pull the EU apart.
Such is the talk. Whether a French president could enact such changes is
another matter. Even were Ms Le Pen to win the presidency, her party would
not by itself secure a parliamentary majority. Any constitutional change has
to be approved either by referendum or by a three-fifths majority in a joint
sitting of both houses. Parliament also has to approve any nomination to the
Constitutional Council.
A good measure of Ms Le Pen’s distance from Ms Meloni is the fact that her
real ally in Italy is not the prime minister but Matteo Salvini, a more populist
member of the ruling coalition. On September 17th Ms Le Pen was guest of
honour at his party’s annual jamboree in Lombardy, a stronghold. Launching
her party’s campaign for next June’s elections to the European Parliament
there, she vowed to “put Europe back in its place”. Polls suggest the RN will
beat Mr Macron’s centrists into second place.
It could be that, as Ms Meloni runs into domestic difficulty, particularly over

economic management, this will rub off on Ms Le Pen too. On immigration,
argues Dominique Reynié, head of Fondapol, a think-tank, “Meloni
demonstrates the impotence of populists.” The number of migrants arriving
in Italy has surged on her watch. For now, though, Ms Meloni is also
showing that the populist right can run a big European country. That is
enough to make French centrists shudder. ■
https://www.economist.com/europe/2023/10/19/marine-le-pen-poses-a-greater-threat-
than-giorgia-meloni
High tension
Paris and Berlin compromise on reform of the

electricity market
But the row isn’t over yet
Oct 19th 2023 | BERLIN
WHEN EMMANUEL MACRON and Olaf Scholz met for a couple of days
of talks along with their top ministers in Hamburg earlier this month, the
French president and the German chancellor tried to present a united front.
They munched Fischbrötchen (fish sandwiches) with their wives and took a
tour of Hamburg harbour. The two-day meeting was meant to reset the most
important bilateral relationship within the EU, one that had become
increasingly troubled owing to a host of acrimonious disagreements on
defence, EU budget rules and energy policies.
The visit seemed to go well. The tandem even made progress on perhaps the
most tricky dossier, a reform of the EU electricity market that is meant to
ease the burden of price spikes for European households and businesses and
to bolster Europe’s competitiveness against America and China. Yet behind
the scenes France and Germany continued to argue. That went on until the
very day of a meeting of EU energy ministers on October 17th. And even
though they managed to strike a compromise, there is plenty of bad blood.
Paris sees the deal as a French victory; the Germans insist that their views
largely prevailed.
The core of the row is over how EU members can subsidise their industries
in the face of the hefty increases in energy prices that followed Russia’s
invasion of Ukraine. France wants to extend to all its 56 nuclear power
plants instruments called “contracts for difference” (CfD). These are
guarantees issued by the government that oblige it to stump up for the
difference if market prices turn out lower than an agreed “strike price”, but
let it pocket the extra if the market price is higher. Berlin wants CfDs to be
an incentive for investment in renewable energy that should be applied only
to new plants. It worries that their use for France’s nuclear fleet will deter
investment in renewables.
The compromise struck in the small hours of October 18th says that
governments can apply CfDs to investments aimed at “substantially”
upgrading existing plants to increase their capacity or to prolong their
lifetime. But any revenue gleaned must not distort competition and trade in
the internal market. It should therefore go to consumers, and to industry only
under tight restrictions.
“This was absolutely not a German crusade against nuclear energy,” says
Sven Giegold, a state secretary at Germany’s economy ministry. Germany’s
opposition to the French proposal was simply to ensure a level playing field.
By extending CfDs to its entire nuclear fleet, France hoped that a low strike
price fixed with EDF, the state-owned electricity firm, would allow the
government to pocket the extra revenue from high market prices that it could
then pass back to industry. This would give French industry an unfair
advantage.
The compromise will still need to go through the EU parliament. Moreover,

lots of the detail is unresolved. The mutual irritation is unlikely to subside in
the coming months. “Both countries are increasingly committed to an energy
strategy that is viewed by the other as doomed to fail,” writes Shahin Vallée
of the German Council on Foreign Relations. France will continue to double
down on nuclear energy; Germany instead is betting the country’s energy
future on its renewables. ■
https://www.economist.com/europe/2023/10/19/paris-and-berlin-compromise-on-reform-of-
the-electricity-market
Charlemagne
The EU’s response to the crisis in Israel exposes its

limits
Whose foreign policy is it anyway?
Oct 19th 2023
NOTHING SCREAMS “great power” like an aircraft-carrier. And so on

October 10th Thierry Breton, the European commissioner hailing from
France, raised the idea of the EU availing itself of such a seafaring airbase.
Alas, even before the merits of a floating jet-launcher for a bloc with neither
navy nor air force could be considered, the EU’s geopolitical ambitions fared
as poorly as a plane lurching off the deck and into the drink. In the days
around Mr Breton’s flight of fancy, a fumbled response to the terrorist
attacks in Israel on October 7th left Europe looking muddled. A union that
had found its foreign-policy voice over Ukraine has rediscovered its
penchant for cacophony. A bout of chaotic diplomacy and internal
squabbling has set back the cause of a “geopolitical EU” to match China and
America.
Europe’s response to the crisis started off badly and got steadily worse.
Beyond the usual lighting-up of buildings in the colours of whichever
country is mourning its dead, the first reaction of note to come out of Europe
was the announcement that the EU would suspend all development aid to
Palestinians—a serious move, considering the bloc is their largest donor. The
policy was reversed the very same day amid rising concerns in national
capitals about the living conditions of innocent Gazans caught up in the
fighting. Later in the week, on October 13th, the commission’s boss, Ursula
von der Leyen, travelled to Israel. The message she delivered there was
dutifully sympathetic. But national capitals fumed that she had failed to
emphasise their concern that any response from the Israeli side needs to keep
within the boundaries of international law. Government after government
briefed that she was speaking not for the EU, merely for herself. As the
furore mounted, Mrs von der Leyen’s team speedily announced that the EU’s
humanitarian aid to Gaza was to be tripled.
The war in Ukraine had given the EU a measure of geopolitical swagger. In

the face of war, the club had found new means to be relevant, for example by
paying for arms to be sent to hit back at Russian invaders. That kind of
unified resolve now looks like a one-off. Attempts at forging a coherent
response to a crisis just beyond its shores have been caught up in bickering
between national capitals and even between different EU institutions in
Brussels. Far from projecting power to the outside world, European
politicians have instead looked 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 relationship between
her and Charles Michel, who as European Council president chairs meetings
of EU leaders, used to be the stuff of the Brussels cocktail circuit. Now it
looks as if it made the bloc even more impotent than it might otherwise have
been.
The episode is damaging for Mrs von der Leyen, who since the war in
Ukraine had been the face of a more forceful, geopolitical Europe. Her
influence—and that of the EU—seemed to extend beyond Ukraine. A speech
she gave in March calling for a “de-risking” rather than a “decoupling” of
economic relations with China had set a new tone in the relationship there;
she has worked closely with America, too. New buzz phrases like “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 lacking. Some countries in
Europe, notably Mrs von 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 impending humanitarian disaster. Many simply felt the dispute was
beyond the paygrade of the EU’s central institutions. Ukraine united the
continent: European leaders jointly visited Kyiv after the city beat back
Russian attackers last year. This latest crisis divides it. This week the
German chancellor, Olaf Scholz, travelled to Israel alone. France’s
Emmanuel Macron is considering a later trip.
Mrs von der Leyen might have sensed that conflict in the Middle East was
always going to be uniquely polarising. Israel is both close enough for
Europe to care about—its scientists benefit from EU funding schemes,
Israeli football teams play in European competitions and its crooners
participate in the Eurovision Song Contest—yet too remote for a
conflagration there to feel directly threatening. Every EU country has its
own relationship with the region, coloured by their Muslim and Jewish
populations. Most fear a spillover of the violence onto their own streets.
Anti-Semitic incidents in Europe have flared since the Hamas strike; France
and Belgium have both endured terrorist attacks. Others fret that a regional
conflagration could result in a new wave of migration to Europe, as
happened after wars in Syria and Afghanistan.
Eyeless in Gaza
Divided or otherwise, it is unlikely Europe would have had much sway on
Israel’s response to being attacked. But its impotence is starting to look
serial. The EU for years painted itself as a mediator in a territorial dispute
pitting Azerbaijan against Armenia, yet could do little but meekly protest
when Azerbaijan turfed tens of thousands of Armenians out of a disputed
enclave last month. A deal with Tunisia to help cut migration across the
Mediterranean has floundered: Tunisia returned €60m ($63m) the EU had
paid it to seal the agreement. Even closer to home, disorder reigns as Kosovo
and Serbia keep tussling despite entreaties from Brussels.
The EU’s fans hoped that its impressive response to Russia’s invasion of
Ukraine had exorcised a set of demons which have long haunted it: that it is
a construct perfectly adept at standardising phone chargers and making
farmers rich, but one that scarcely matters when it comes to high politics. A
fortnight of disunion has made the EU look as plodding as ever: a club that
does not shape geopolitics so much as endure its effects. ■
Read more from Charlemagne, our columnist on European politics:

How rugby became a darling of Europe’s chauvinist right (Oct 12th)
Europe is stuck in a need-hate relationship with migrants (Oct 4th)
The definition of Europe has always been both inspiring and incoherent (Sep
27th)
Also: How the Charlemagne column got its name

https://www.economist.com/europe/2023/10/19/the-eus-response-to-the-crisis-in-israel-
exposes-its-limits
Britain
The world’s largest health-research study is under way in Britain
Britain’s NHS is trying once again to collate patients’ data
Scottish independence has become a long game
Despite Brexit and the government, British manufacturing is doing
well
The rise of English viticulture
Britain’s national parks are not protecting nature
How rationing became the fashion under the Tories
Sickness service to health service
The world’s largest health-research study is under

way in Britain
It is aimed at saving Britons—and the NHS
Oct 18th 2023 | Watford
VOLUNTEER NUMBER ONE rolled up his sleeve on July 12th last year.
Volunteer two put out an arm to give blood the same day. Volunteer 100
stepped onto the scales on August 3rd. A tape measure was slipped around
the waist of volunteer 1,000 on September 30th. Then things sped up:
volunteer 100,000 gave blood this March. The roll is now growing so fast—
by thousands every day—that putting a precise number in print is pointless:
by the time you read this it will be out of date. By the end of this year this
research study—called Our Future Health—will be Britain’s largest of its
kind. By the end of next year, the world’s.
Across Britain, the study is unfurling. In Liverpool and in London, in

Manchester and Grimsby and Oxford, in dreary supermarket car parks,
mobile vans are drawing up, cubicle curtains being drawn back and queues
forming. The plan is to recruit 5m people—almost as many as there are in
Norway—and get them weighed, measured, quizzed, genotyped,
phenotyped. Then to put the data to work to see who gets sick, with what,
and when, and why—and if intervening early can help. The aim is simple.
To save them—and the NHS. Because as Sir John Bell, regius professor of
medicine at Oxford University and the study’s chair, says, the NHS is “not
sustainable in its current form”.
The NHShas two main problems. The first is that it works badly. The second
is that it works well. Its failings—waiting lists, queuing ambulances, costs
invariably labelled “spiralling”—are well known. Its successes are harder to
see—but are there in those same lists, queues and costs. For all exist, in part,
because the NHS is keeping many alive who would, without it, be dead. But
not being dead is not the same as being healthily alive: an average Briton
may reach only 60 or so in good fettle (see chart. As Raghib Ali, the chief
medical officer of Our Future Health (and its volunteer number one), says:
“What we have…is not really a National Health Service but a national
sickness service.”
It was never meant to be like this. When in 1943 Winston Churchill

promised Britain a health service “from the cradle to the grave” no one
dreamt that Britons would spend so long with one foot in that grave, or cost
so much as they stood there. On the contrary: it was thought that the NHS
would get cheaper over time as Britons—laid in their cradles by NHS
midwives, fortified by NHS vaccinations—would gaze through their newly
issued NHS spectacles to a bright, healthy future. The NHS’s very existence,
wrote William Beveridge, its architect, would lead to “a reduction in the
number of cases requiring it”. It was, one politician later said, “a
miscalculation of sublime dimensions”.
In its first year the NHS promptly ran twice over budget, not helped by those
NHS specs, of which twice as many pairs (8m) were handed out as had been
expected. Aneurin Bevan, the father of the NHS, grumbled that “cascades of
medicine [are] pouring down British throats—and they’re not even bringing
the bottles back.” It has not got cheaper: the budget for NHS England is
£169bn ($205bn) this year. Its prognosis is “hopeless, actually”, says Sir
John. People tend to use the verb “collapse” to describe the end of the NHS.
It will not. It will do something worse: it will ebb. Those who can afford to
leave, will. Those who can’t will stay and queue and suffer. “Our NHS” will,
almost imperceptibly, become “Their NHS”. And Bevan’s dream will be
lost.
To save it Britain must do no less than “pivot the way we deliver health
care”, says Sir John. The NHS must stop mainly treating people who are
manifestly very sick and get them when they still, ostensibly, seem well.
Which is why, on a rainy Friday afternoon, Dr Ali, slight, clever, softly
spoken, is standing in an unprepossessing Tesco car park in Watford outside
a yellow van. On it is the Our Future Health logo—and the NHS one. (The
study is a public-private partnership: one-third of its £239m budget is funded
by government, two-thirds by life-sciences companies.) Inside, people wait
as a fine drizzle falls.
The unprepossessing air of this study—all those car parks—is not accidental.
The life-expectancy gap between Britain’s richest and poorest local
authorities is ten years. Yet the gap in expectancy of life without ill health is
20. And those at the bottom of such ranges tend not to volunteer for medical
studies. Dr Ali is obsessed by ensuring that they do. Which is why those
yellow vans are drawing up in the car parks of Tesco, Asda, Lidl and
Morrisons. “Not Waitrose.” Medical trials don’t need more Waitrose
shoppers.
As the rain falls, Dr Ali welcomes volunteers in. The NHS’s size is its great
weakness—it is unwieldy and all but impossible to reform—but also its
strength. The RECOVERY trial, which found that a cheap steroid cut covid
deaths by a third, yielded a result within 100 days. Sir Martin Landray, a
professor of epidemiology at Oxford who ran RECOVERY and now runs
Protas, a not-for-profit founded to improve clinical trials tackling common
conditions, says that in its breadth (almost 70m people) and length of
coverage (from cradle to grave) the NHS is “almost unique…The
opportunities are really enormous.”
Our Future Health is trying to make the most of them. Each volunteer will
generate hundreds of data points for researchers immediately; billions when
their genomes are sequenced. That data will be married to their NHS data;
AI will be used to crunch the lot. Then the work will begin: volunteers will
(if they wish) be told what conditions they are at risk of and, for certain
conditions (some cancers, diabetes, heart disease) be put on NHS pathways,
for more tests and, if necessary, treatment.
It will not be perfect: inevitably there will be false positives and consequent
anxiety. It remains to be seen whether the NHS—a cantankerous,
intransigent 75-year-old patient—will accept its medicine. Dr Ali is
optimistic: “It’s quite hard to see how the study could fail.” And in Watford
and in Grimsby and in Manchester, volunteers queue, and roll up their
sleeves. Some to help the NHS. Some to help themselves. Some to help
both. Because we are all in this together. For now. ■
For more expert analysis of the biggest stories in Britain, sign up to Blighty,
our weekly subscriber-only newsletter.
https://www.economist.com/britain/2023/10/18/the-worlds-largest-health-research-
study-is-under-way-in-britain
Joining up the bots
Britain’s NHS is trying once again to collate

patients’ data
The project is imperfect and controversial, but the technology is needed
Oct 18th 2023
BEING IN HOSPITAL is rarely fun. But some things in the National Health
Service (NHS) contrive to add to patients’ pains. When IT systems cannot
talk to each other, the sick must drive themselves dizzy repeating their
medical histories in every new interaction. Without good systems to manage
data, operating rooms often lie empty despite endless demand. Such snafus
are not only maddening, but harmful. Each delay to treatment compounds
backlogs exacerbated by strikes and the covid-19 pandemic, pushing the
NHS waiting list in England to a record 7.75m cases.
Such inefficiencies are not inevitable. Many can be reduced by stitching

together disparate datasets across the NHS, as an upcoming project, the
Federated Data Platform, or FDP, should do. Its boring name belies big
ambitions. In pilots using similar software doctors have diagnosed cancer
patients quicker when their scans, prescriptions and appointments are
collated in one place. When one hospital trust combined data to monitor
barriers to discharges, the number of long stays fell by over a third.
Opportunities go far beyond helping doctors see more patients. Artificial
intelligence trained on large datasets spots patterns human eyes never could.
The covid-19 response proved the benefits of joining up data. With the help
of Palantir Technologies, an American firm, real-time insights gleaned from
combined datasets enabled officials to dispatch ventilators and personal
protective equipment to where they were most needed, and to design
vaccination campaigns targeting the most vulnerable. Because software
engineers were linking data rather than building a central repository, data
stores could be built and refined more quickly. This marked a departure from
previous clunky, costly, failed NHS data projects.
The FDP was intended to be the latest iteration of covid-era ingenuity.

Instead it appears to be running on the same old scripts. Poor communication
meant that until recently some NHS trusts’ own data chiefs were unsure of
what the FDP was meant to do. As pressures have mounted on front-line
services, “digital transformation” has again been deprioritised. Hospitals still
spend £234m ($285m) a year on storing paper records, according to the
Times Health Commission.
The procurement process has also raised the antennae of privacy activists.
They would always have twitched at the front-runner for the £480m
contract: Palantir, which has combined data for the CIA. (Comments by the
firm’s co-founder, Peter Thiel, likening Britons’ affection for the NHS to
Stockholm syndrome, only add to activists’ misgivings.) To the suspicious,
the fact that the firm initially handled the NHS’s covid analytics for a mere
£1 has the feel of a stitch-up. Since data will be used for direct patient care
in the FDP, people cannot opt out of sharing it. Though it will be
anonymised, this risks eroding trust in what the NHS does with data.
No surprise then that the winner of the contract, due to be revealed in

September, is yet to be announced. But even if the FDP does goes ahead,
after myriad delays, some wonder if it will ultimately prove obsolete. The
contract lasts seven years, which risks locking the NHS into the software.
The FDP is likely to be outpaced by projects that share data beyond the
NHS, and can adapt more nimbly to innovation.
That doesn’t mean it shouldn’t go ahead. Trusts will still be free to pursue
their own plans. But for the NHS’s laggards the project should be the start,
not the end, of joining up data. In these difficult times, the NHS needs all the
help it can get.■
https://www.economist.com/britain/2023/10/18/britains-nhs-is-trying-once-again-to-
collate-patients-data
Nevereverendum
Scottish independence has become a long game

Where does that leave the SNP?
Oct 17th 2023 | ABERDEEN
IN JUNE 2022 Nicola Sturgeon, then first minister of Scotland and leader of
the Scottish National Party (SNP), proposed that the country would hold a
second independence referendum on October 19th 2023. (Scots voted
against secession in 2014.) Since then much has gone wrong for Ms
Sturgeon, the SNP and the dream of independence that is the party’s raison
d’être. At its annual conference in Aberdeen this week, far from looking to
the sunlit uplands of secession, members seemed to be gathered under
lowering clouds.
The SNP’s run of disasters began last November, when Britain’s Supreme
Court ruled that Scotland could not hold another referendum without
Westminster’s say-so. In February Ms Sturgeon, a charismatic champion of
independence, resigned. Four months later she was briefly arrested in a
police inquiry into the SNP’s finances. That contributed to electoral
catastrophe on October 5th, when the party lost a by-election in Rutherglen
and Hamilton West, near Glasgow, to Labour. Days later an SNP MP
defected to the Conservatives.
The daunting task of claiming convincingly that the party was getting on top
of all this fell to Humza Yousaf, who succeeded Ms Sturgeon in March. In
his first conference speech as leader Mr Yousaf said that rather than “feeling
sorry for ourselves” the SNP would “roll up our sleeves and work harder
than ever before for the people of Scotland”. The most powerful passage
alluded to a dreadful personal crisis: several members of his wife’s family
are trapped in Gaza, which is under bombardment by Israel. Some delegates
said his statesmanlike conduct in recent days had won him new respect from
them.
Yet the conference chiefly underlined Mr Yousaf’s myriad difficulties. The

biggest concerns independence. In November, after the Supreme Court
scotched Ms Sturgeon’s latest referendum plan, she said the general election
due by January 2025 would be a “de facto referendum” (it can be no such
thing). On October 15th the SNP agreed instead that if the party won a
majority of Scotland’s 57 Westminster seats it would have a mandate to
begin negotiations on another referendum.
This new strategy is meant to be a show of strength: the SNP has long told
nationalists that its electoral success will force a referendum. In fact it is an
admission of weakness. Polls suggest the party is heading for heavy losses. It
has 43 seats at Westminster, out of Scotland’s current 59, but after Labour’s
big win in Rutherglen, it is expected to lose between 20 and 40.
Its ploy would not work anyway. Sir Keir Starmer, Labour’s leader and
Britain’s probable next prime minister, has said he won’t back another
referendum. Although support for independence among Scottish voters
remains steady, at a bit below 50%, it has never enjoyed the clear majority
that might persuade Westminster to give Scotland another shot at
sovereignty.
Mr Yousaf said this week he hoped that dealing with the “process” side of
independence would allow him to convince more Scots of its benefits. He is
linking the issue to the cost-of-living crisis (which some consider Labour to
have campaigned on more effectively in Rutherglen) by railing against the
“Westminster cost-of-living crisis”. But arguments about governance are
weakened by the SNP’s own record. Its school performance lags behind
England’s; its health service has long waiting lists too. Voters give low
ratings for both.
The conference, meanwhile, offered a reminder of divisions in the party that

surfaced during the leadership election and appear to have worsened since.
Several prominent nationalists skipped the gathering altogether, including
Kate Forbes, Mr Yousaf’s main rival in that contest, and Fergus Ewing, a
long-serving MSP who was briefly suspended in September after various
rebellions.
Some say Mr Yousaf, having inherited a party in all sorts of muddles, needs
time to prove himself. He was not helped by Ms Sturgeon’s appearance at
the conference on October 16th. She was quickly surrounded by adoring
fans. It was a rare moment of drama in an otherwise leaden show. ■
For more on Britons’ voting intentions, see our poll tracker, updated daily.
https://www.economist.com/britain/2023/10/17/scottish-independence-has-become-a-long-
game
Food for thought
Despite Brexit and the government, British

manufacturing is doing well
But food and drug firms have fared better than carmakers
Oct 19th 2023
IN A RECENT survey of the British public, respondents were asked where

they believed the country ranked in the global manufacturing league table.
The median answer, 43rd, was a little wide of the mark. The latest
comparable data, for 2021, make Britain the world’s eighth-biggest
manufacturer, up one place from 2020 and (better still) overtaking France.
You might have supposed the past decade to have been hard for British
factories. The Brexit referendum in 2016 begat four years of uncertainty,
followed by a trade deal that introduced friction to a formerly near-
frictionless border. The covid-19 pandemic ruptured global supply chains.
Then a spike in energy prices pushed up costs in what remains an energy-
hungry sector.
Yet British manufacturing has been remarkably successful. According to the
OECD, a club mostly of rich economies, its productivity growth comfortably
outstripped that of any other G7 country in the 14 years after the onset of the
financial crisis in 2007 (see chart). Gross value added (a measure of output)
per manufacturing employee rose by 37.3% between 2007 and 2021, against
an average of 12.1% among Britain’s peers.
This wasn’t done just by shedding employees. After a long decline in the
1980s, 1990s and 2000s manufacturing employment has been stable since
2008, at around 2.6m. “We stopped deindustrialising as a country 15 years
ago,” says one boss. “Just no one seemed to notice.” Though net job losses
have stopped, manufacturing’s share of all jobs has shrunk from 8.9% in
2008 to 7.1%, a far cry from its peak of almost one in three in the 1960s. For
those who do remain, higher productivity has translated into higher pay. It
averages £36,488 ($44,500) a year, 9.2% higher than the whole-economy
average.
Yet averages obscure as much as they reveal. Just as the service sector
encompasses everything from management consulting to cleaning offices,
British manufacturing ranges from the making of ultra-high-tech cutting-
edge scientific instruments to the production of pre-packaged sandwiches.
And that partially explains why warnings that Brexit would sound the death
knell for the country’s manufacturers turned out to be inaccurate.
For some industries with complex cross-European supply chains, such as

carmaking, Britain’s decision to leave both the European Union’s single
market and its customs union have presented serious difficulties. The
government has deemed it necessary to open its chequebook for a generous
programme of subsidies to support future production. However, for many
other parts of the sector the effects of Brexit have been contained.
The food industry is the single largest component of British manufacturing,

accounting for almost one-quarter of total output, even if politicians and
television reporters generally prefer hard hats to hairnets when going on a
factory visit. Much of it has always relied on domestic labour, suppliers and
sales, so that although Brexit made both recruitment and exports of fresh
produce trickier, it has not derailed the majority of firms. Some have even
managed to increase their domestic market share at the expense of EU
imports. Meanwhile at the top of the value chain, in areas such as aerospace
and pharmaceuticals, companies have tended to have the pricing power to
overcome the added burdens of new trade frictions.
Even if the fallout did prove manageable for most of the sector, bosses still
grumble about the uncertainty that followed the vote in 2016. The head of
one mid-sized firm argues that the real risk was never that most
manufacturers would simply shut up shop but that future investment would
go elsewhere. “It’s still too early to say if that will happen,” he warns.
Many manufacturers believe that the successes of recent years have come
about despite rather than because of government policy. There is more to
that grumble than Brexit. For firms with long investment cycles, policy
stability is essential, yet the government has pursued six different industrial
strategies in the past decade, making even medium-term planning arduous.
Industrialists met the axing in 2021 of the Industrial Strategy Council, which
brought together policymakers and bosses, with disbelief. They regard the
recent watering-down of the government’s net-zero targets for 2050 and the
scrapping of a high-speed railway from Birmingham to Manchester as
emblematic.
The long decline of British manufacturing was accompanied by much

gnashing of teeth. Its quiet success, by contrast, has been little noticed. And
manufacturers, not ministers, can claim the credit. ■
https://www.economist.com/britain/2023/10/19/despite-brexit-and-the-government-
british-manufacturing-is-doing-well
Garden of England
The rise of English viticulture

A land rush for vineyards
Oct 19th 2023
CLIMATE CHANGE does not offer consolations. But it can produce

winners as well as losers. With parts of England and Wales as hot as the
Champagne region of France was in the 1980s, the sparkling-wine industry
is already bubbling. Longer sunny periods will make it easier for British
vintners to make still wines as well as award-winning cuvée blancs.
A recent study from the University of East Anglia and the London School of
Economics finds that climate change is also expanding the area in England
and Wales suitable for making wine. Most vineyards now are in south-east
England but more land as far north as the east Midlands could come into use.
Alistair Nesbitt, the study’s lead author and a consultant at Vinescapes
Limited, says that by 2040 higher temperatures may also allow winemakers
to grow more disease-resistant varieties of grapes.
As a result, a mini land rush is under way. According to Strutt & Parker, a
consultancy, Britain has over 900 vineyards, up by 80% in the past five years
and triple the number 20 years ago. Essex, Sussex and Kent are of most
interest to vintners. This summer Jackson Family Wines, an American firm,
became the first big maker of still wines to invest in England; it plans to
acquire around 26 hectares in the Crouch Valley in Essex. London Clay, a
bluish-grey sediment found in high concentrations in the county, is ideal for
bold reds.
Nick Watson of Strutt & Parker says that in the past year inquiries about
buying established vineyards have tripled and that prices have increased by
£1,000 ($1,200) per acre, or £2,500 per hectare. Land suitable for viticulture
now sells for £40,000-50,000 per hectare (roughly £15,000-20,000 more
than basic farmland).
Such prices pale next to those in famed wine regions abroad: in Bordeaux
land can fetch over £1.6m a hectare. The disparity has little to do with the
quality of the soil and much to do with a region’s reputation: “Sussex”
doesn’t yet have the same ring as “Bourgogne”. But Ned Awty, the interim
CEO of WineGB, a trade body, says that as the climate warms he expects
still-wine production to rise. He thinks in a decade or so, it will be warm
enough in Britain to ripen Merlot.
Other aspects of climate change are less welcome for winemakers. A year of
heavy rain or severe drought could destroy entire crops. Still wine is at
especial risk. John Atkinson, chief winemaker at Danbury Ridge vineyards
in Essex, says that unlike sparkling wines, which provide winemakers with
some wiggle room to adjust taste by adding sugars, nailing a good bottle of
still Pinot Noir all comes down to the soil, the weather and the barrel.
“Growing grapes in this country is a bit like playing cricket,” he says,
“There are so many ways to be out.”■
Correction (October 19th 2023): An earlier version of this article misstated

prices of land for viticulture. We got our arithmetic wrong. Sorry.
https://www.economist.com/britain/2023/10/19/the-rise-of-english-viticulture
Park life
Britain’s national parks are not protecting nature

Why is Dartmoor in such a bad way?
Oct 16th 2023
UNTIL 2019 Derek Gow farmed 121 hectares of Dartmoor, in Devon, with
1,500 breeding sheep and 120 cows. But he abandoned traditional
agriculture after the last of the curlews, a type of bird, vanished. “In the end,
you just begin to realise that everything you’re doing is wrong,” says the
farmer-turned-conservationist. He has since “rewilded”, emptying his fields
and restocking them with much smaller numbers of cattle, pigs, water
buffalo and wild horses—as well as reintroducing species ranging from
Eurasian beavers to wildcats.
Dartmoor is one of 15 national parks in Britain. To the untrained eye it looks

like one of the country’s finest wild spaces: 954 square kilometres of rugged,
sweeping moorland punctuated by tors. A third of it is protected as either a
site of special scientific interest (SSSI), meaning it is of special biological or
geological interest, or a special area of conservation (SAC), meaning its
biodiversity is of international importance by European Union standards.
But much of Dartmoor is in a bad way. Breeding populations of golden
plover, red grouse and ring ouzels—magnificent “mountain blackbirds” that
migrate from north-west Africa and seek out the most remote areas of upland
Britain—are on the brink of extinction or gone. Some 91% of its SSSIs are
in an “unfavourable condition”. Only 6.6% of its SAC, which covers around
a quarter of the park, is in a “favourable” condition. The problem is not
unique to Dartmoor: nearly 75% of SSSIs in English national parks are in an
“unfavourable condition”, compared with 61% of SSSIs across England as a
whole.
The culprit, in Dartmoor at least, is easy to identify. Over 90% of the park is
farmed. In the late 19th century hardy sheep from Scotland were introduced
that could be grazed year round, as opposed to only in the summer. The
number of sheep in the park rose from 44,000 in 1952 to some 145,000 in
the early 2000s. The landscape was nibbled into submission. Agri-
environmental subsidies were agreed on between Natural England, the
government’s environment watchdog, and local farmers in 2012 and 2013.
They were designed to restore peat bogs and heather moorland through
specified stocking rates and grazing calendars. But some agreements were
inadequate; others were ignored.
The fact that some farmers were able to disregard the agreements points to
three fundamental flaws with the stewardship of the national parks. The first
concerns Natural England’s mandate. National parks have a statutory
purpose to “conserve and enhance natural beauty, wildlife and cultural
heritage”. But as the government’s own independent report stated in 2019,
“conserve and enhance” does not “reflect the reality that much of our
biodiversity is badly damaged; simply sustaining what we have is not nearly
good enough.”
A proposed amendment to the Levelling Up and Regeneration Bill, which

would have given national parks a beefed-up statutory purpose, was
withdrawn in July after the government argued that national parks were
sufficiently protected. The government’s Environmental Improvement Plan
sets out an aim of restoring 75% of SSSIs to favourable condition by 2042,
but it is not legally binding.
The second flaw is that budget cuts have hampered Natural England’s
monitoring capacity. It has an average of just one staff member to assess the
condition of every 73 protected sites, according to calculations by the ENDS
Report, an environmental magazine. Almost two-thirds of the area covered
by SSSIs in England hasn’t been assessed in the past ten years, according to
research by Wild Justice, a campaign group. Funding for national parks has
fallen by 40% in inflation-adjusted terms over the past decade, although in
March the government promised an extra £4.4m ($5.3m)—around 10% of
the overall annual budget—across ten parks, including Dartmoor. If Natural
England had properly monitored Dartmoor’s protected areas over the past
decade, the moor might not be in such a state.
The third flaw is that farmers on the moor, and elsewhere, do not have
sufficient incentives to overhaul their practices. The government is phasing
in new farming subsidies that focus on environmental “public goods”, but
they have not come in as quickly as EU subsidies have been withdrawn. Phil
Stocker, chairman of the National Sheep Association, argues that moorlands
have been particularly neglected by the proposed schemes. Most of the
payment rates are based on income forgone; in upland and moorland areas—
such as Dartmoor, where incomes are lower because of challenging
conditions such as poor soil and heavy rain—the payments are lower. Some
farmers were told they had to reapply to schemes in September, sowing
confusion.
Matters are now coming to a head. This summer Natural England told some
sheep farmers on Dartmoor that they would have to reduce grazing levels in
order to continue receiving subsidies, sparking a backlash from the National
Farmers Union. The government has announced an independent review into
Natural England’s management of protected sites on Dartmoor. Campaigners
are hopeful that it will boost Natural England’s powers. In contrast, some
farmers want to see the body’s remit and leadership overhauled. Mr Gow has
other, higher goals: “What I want to do is give the earth the chance to heal
itself and for other life to form in the land I own, so there can be voles living
out in the fields…there can be skylarks singing.” ■
https://www.economist.com/britain/2023/10/16/britains-national-parks-are-not-
protecting-nature
Bagehot
How rationing became the fashion under the

Tories
When queues, cajoling and ministerial diktat trump need
Oct 19th 2023
WHEN WANDSWORTH PRISON opened in south-west London in 1851,

its Victorian architects thought it was fit for 1,000 inmates. Today it hosts
1,600. The conditions are worse than Dickensian: cells designed for one in
the 19th century now house two, or more. Vermin are rife. A recent report
labelled the prison “overcrowded” and “squalid”.
Wandsworth is the norm rather than the exception. A prison estate with a
capacity of 88,782—even allowing for Wandsworth-style overcrowding—
holds 88,225. Judges, realising they had nowhere to send rogues, delayed
sentencing. On October 16th the Conservative government reversed-
engineered a solution: letting criminals out early and sending fewer of them
to jail.
For a party elected to hang ’em and flog ’em, or at least lock ’em up, this is a
remarkable shift. Prisons are overcrowded in part because Conservative
politicians have demanded longer sentences. At the same time, the
government refused to build enough new prisons. The 20,000 extra places
promised by the mid-2020s will not arrive until 2030 at the earliest. And so
the government finds itself rationing prison places instead.
Such rationing is in vogue. Prisons are simply the most absurd example of a
tactic increasingly deployed by the government. From health care to welfare
via heat-pump subsidies and planning, erratic rationing has become the
norm. Politicians are not willing to increase taxes enough to cover the real
costs of the services voters demand. Nor are voters willing to pay them. And
neither side is willing to forgo the dream of comprehensive services on the
cheap. The results are shortages, which can be managed only by queues,
unpredictable rationing and ministerial diktat.
It is a familiar problem. Janos Kornai, a Hungarian economist, examined

how Soviet economies failed to supply enough of the things people wanted.
When things running out was the “normal state for the system, not an
unusual event” it was a “shortage economy”. In Britain, mercifully,
capitalism thrives in the private sector. Supermarket shelves are full and a
brand new BMW is yours, if you can afford it. When it comes to government
services it is another story. Shortages reign. Where the Russians built a
shortage economy, the Tories have created a shortage state.
When Rishi Sunak cancelled the Manchester leg of HS2, a £100bn ($120bn)
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
pressure is heaped on roads. Since politicians fear pricing roads properly to
manage demand, expect more traffic jams. Ultimately, government policy is
for people to travel less.
Sometimes rationing makes for subtle savings. Cutting benefits for, say,
children with special needs would be cruel and unpopular. Making them hard
to get attracts less attention. Professional email-slingers may not be daunted
by a 39-page application to unlock four figures’ worth of benefits; others
may struggle without help. Often, what looks like government generosity is
in fact more rationing. Amid a glut of green measures, Mr Sunak increased
the subsidy for installing a heat pump to £7,500 from £5,000. At the same
time, the government did not increase funding for the programme. Fewer
people will benefit.
The effects of rationing are most pernicious in housing. A discretionary

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 Centre for Cities, a think-tank.
In 2020, the Conservatives promised to loosen the system. Backbench MPs
scuppered it; the minister responsible was ejected. Strict rationing remains
even where the government has tried to remove it.
Where some rationing is supposed to happen, such as in health care,

shortages have reached new highs. In the National Health Service in
England, waiting lists stand at nearly 8m cases, in a country of 56m people.
Those in the queue are the lucky ones. Each morning across Britain, patients
are forced to call a GP at 8am on the dot if they want an appointment. In
2005, Sir Tony Blair was berated on the BBC’s “Question Time” by angry
guests annoyed because GPs only offered appointments inconveniently soon.
Now, only inconsistent rationing—and grumpy receptionists—keep acute
care from being overwhelmed.
Completely irrational
When Kornai explained his theory to an audience of Maoists in Kolkata in
1975, they reacted with horror. Better to suffer shortage than iniquity, ran
their logic. Voters in Kenilworth have similar instincts. Allowing the market
to police access to services makes Britons feel icky. Charging to see a GP is
politically forbidden: eight in ten voters oppose the idea. Whenever road-
pricing is mentioned, critics are quick to label it a “poll tax on wheels”. The
Tories are allergic to the high taxes required for a European-sized state but
no longer have the cojones to support market-based solutions. Rationing is
the miserable compromise.
Forcing Britons to queue, cajole receptionists or go without the services they

are owed is no way to run a country. The fix for Britain is the same as it was
for the eastern bloc. “The lasting solution to misery lies in reforming
production, not distribution,” wrote Kornai. “Rationing systems that spread
misery equally may assuage feelings of injustice for a while, but they will
not solve anything.” Britain’s public services must become more efficient.
Making them so will not be cheap, but it beats the alternatives. Britons must
either pay more for those services, expect less or face up to a future of erratic
provision, in which stamina, persistence and luck trump need—and people
who would otherwise be in HMP Wandsworth are wandering in the streets. ■
Read more from Bagehot, our columnist on British politics:

The rise of Britain’s new nanny state (Oct 10th)
Is Britain’s Labour Party a bunch of Tories, naifs or liars? (Oct 5th)
Blind optimism is the only bet for Britain’s Tories (Sep 28th)
Also: How the Bagehot column got its name

https://www.economist.com/britain/2023/10/19/how-rationing-became-the-fashion-under-
the-tories
Business
Are America’s allies the holes in its export-control fence?
How big is the role of luck in career success?
Meet India’s mega-wealthy
Canon tries to break ASML’s grip on chipmaking tools
Why big oil is beefing up its trading arms
Are America’s CEOs overpaid?
Control shift
Are America’s allies the holes in its export-control

fence?
The goals, resources and reach of anti-Chinese technology sanctions vary
widely
Oct 16th 2023 | Singapore and Taipei
Editor’s note (October 17th): This piece has been updated for the extension
of American export controls on advanced chips.
AMERICA MAKES no bones about wanting to stop China, its autocratic

rival for geopolitical supremacy, from getting hold of advanced technology.
On October 17th American officials extended restrictions on sales to the
country of advanced microchips used in training artificial-intelligence (AI)
models. This is the latest set of export controls designed to prevent cutting-
edge tech that America helped create, meaning most of it these days, from
making its way to the Chinese mainland. It also seeks to close a loophole,
which allowed Chinese firms’ foreign subsidiaries to procure chips that their
parents were barred from purchasing.
The loophole is almost certainly not the last one that will need closing. Just
this month America itself created room for a few more. Last year it imposed
sweeping restrictions that cut off people and firms in China from many
advanced technologies of American origin, including types of cutting-edge
chips, the software to design them and the tools to manufacture them. On
October 9th it granted two South Korean chipmakers, Samsung and SK
Hynix, indefinite waivers to install equipment that falls under these
restrictions in their factories in China. Four days later TSMC, Taiwan’s
chipmaking champion, also received a dispensation. The carve-outs were
secured (and announced) by governments in Seoul and Taipei, which are
keen to protect their domestic firms’ vast commercial interests in China.
They also shine a light on the knotty nature of the American-led global
export-control regime.
American sanctions’ global pretensions depend on the co-operation of allies.

In principle, democratic governments in Asia and Europe are similarly wary
of China, and are devising their own export controls. In practice, their
policies are not always aligned with Uncle Sam’s. The result could be a
mesh of rules that, once in place, would impose costs on technology
companies without doing much to bolster national security in the way that
the regimes’ architects envisioned.
This is not the first time that the democratic world has attempted to stem the
flow of technology to undemocratic adversaries. After the second world war
17 countries, led by America, established the Co-ordinating Committee for
Multilateral Export Controls to limit exports of strategic resources and
technologies to the Communist bloc. The body was disbanded in 1994, once
the Soviet threat was no more.
America’s efforts to co-ordinate some of its anti-Chinese restrictions have so

far been much more piecemeal. The closest President Joe Biden’s
administration has come to co-ordination is an opaque agreement sealed in
January with Japan and the Netherlands. This was important to America
because Dutch and Japanese companies, such as ASML and Tokyo Electron,
respectively, are the sole manufacturers of sophisticated chipmaking tools
without which it is almost impossible to produce the most advanced
semiconductors. In July Japan’s government introduced rules limiting the
exports of advanced chip technology. Its Dutch counterpart followed suit in
September.
Look closer, though, and the nuts and bolts of the three countries’ export
controls vary considerably. The Bureau of Industry and Security (BIS),
America’s export-control agency, publishes an “entity list” of thousands of
companies, including plenty of Chinese ones, that are barred from being sold
certain types of technology. Japan has no such public entity list. Instead, it
has announced a list of 23 specific types of product which require an export
licence. The Japanese government has assiduously avoided mentioning
China specifically, for fear of sparking the ire of a big trading partner. The
Netherlands’ controls, too, are “country-neutral” and applied to a handful of
products.
Various national regimes diverge in other meaningful ways. American allies

in Europe and Asia have not sought to copy the extensive, extraterritorial
reach of American sanctions. As a result, Asian and European companies
that wish to continue selling technology to Chinese customers can in theory
establish subsidiaries in places without strict export controls (at least as long
as these firms do not rely on American inputs).
The situation in Europe is complicated further by the division of

responsibilities between national governments and the European Union. For
now individual EU members retain discretion over export controls related to
their national security. But given the bloc’s single market in goods, which
lets technology flow across borders unimpeded, Eurocrats in Brussels want a
greater say.
On October 3rd the European Commission presented a list of areas deemed

critical to the bloc’s economic security. It would like the ability to impose
EU-wide export controls in these areas, which include advanced chips,
quantum computing and artificial intelligence. It is unclear how long it will
take the 27 EU members to reach the consensus required to grant the
commission such powers—if it can be reached at all.
Things get blurrier still when it comes to enforcing the rules. In most
countries the bureaucratic capacity to police export-control regimes is
limited. America’s BIS, widely considered to be better endowed than similar
agencies in other countries, has fewer than 600 employees and an annual
budget of just over $200m—a modest figure given the outfit’s global remit.
Its Asian and European counterparts must make do with far less.
The relevant agencies often lack the expertise to assess exporters’ requests
for a licence to sell products abroad. That requires an understanding of how
a particular piece of equipment could be used. It is almost impossible to tell
how such equipment will actually be employed once it arrives in China. This
year the BIS set aside a relatively piddling sum of $6m for inspections to be
conducted abroad—and little if any of this is likely to be spent on the
Chinese mainland, where American inspectors are not exactly welcomed
with open arms. Many of the BIS’s poorer cousins in other countries depend
wholly on the exporting businesses themselves to determine the actual end-
use of their products, something the companies cannot know for sure either.
The result is a mishmash of opaque rules and fitful enforcement actions.

Manufacturers of sensitive technologies are left guessing about what
business they can and cannot do with Chinese firms. Four Taiwanese firms
—Cica-Huntek Chemical Technology Taiwan, L&K Engineering, Topco
Scientific and United Integrated Services—recently found themselves under
investigation by Taiwan’s government after reports surfaced that they were
involved in building a new network of chip factories in China. The four
companies all deny that they have broken any sanctions.
Lack of co-ordination may also explain why the system is not keeping high
tech out of China as intended. In South Korea, SK Hynix is looking into how
some of its older memory chips ended up in the latest smartphone made by
Huawei. SK Hynix denies doing business with the Chinese telecoms giant.
The Huawei smartphone in question, the Mate 60 Pro, also sported advanced
microprocessors furnished by SMIC, China’s biggest chip manufacturer.
Both Huawei and SMIC feature on the BIS’s entity list and were thought
incapable of such chipmaking feats. Export comptrollers in America and its
allies are still trying to work out how exactly the two companies pulled them
off. This is unlikely to be the last China-related surprise they have to contend
with. ■
For more expert analysis of the biggest stories in economics, finance and
markets, sign up to Money Talks, our weekly subscriber-only newsletter.
https://www.economist.com/business/2023/10/16/are-americas-allies-the-holes-in-its-
export-control-fence
Bartleby
How big is the role of luck in career success?

Lubar: lucky beyond all recognition
Oct 19th 2023
LUCK PLAYS a big and often unacknowledged part in career success,

starting in the womb. Warren Buffett has talked of winning the “ovarian
lottery” by being born in America when he was, and being wired in a way
that pays off in a market economy. Good looks are associated with higher
pay and a greater chance of being called to interview in hiring processes.
Your experience of discrimination will reflect your circumstances of birth.
The early way-stations in a career are often marked by chance: a particularly

encouraging boss, say, or an assignment that leads you off in an unexpected
but defining direction. Luck can affect the pathways of the most rational-
minded professions. A paper published in 2022 by Qi Ge of Vassar College
and Stephen Wu of Hamilton College found that economists with harder-to-
pronounce names, including within ethnic groups, were less likely to be
placed into academic jobs or get tenure-track positions.
Names can work against economists in other ways. Another study, by Liran
Einav of Stanford University and Leeat Yariv, now of Princeton University,
found that faculty with earlier surname initials were more likely to receive
tenure at top departments, an effect they put down to the fact that authors of
economics papers tend to be listed alphabetically.
Performing well can be due to luck, not talent. In financial markets, asset
managers who shine in one period often lose their lustre in the next. The rise
of passive investing reflects the fact that few stockpickers are able
persistently to outperform the overall market. The history of the oil industry
is shot through with stories of unexpected discoveries. A recent paper by
Alexei Milkov and William Navidi of the Colorado School of Mines found
that 90% of industry practitioners believe that luck affects the outcome of
exploration projects. The authors’ analysis of 50 years of drilling on the
Norwegian Continental Shelf concluded that the differences in success rates
between individual firms were random.
There is a long-running debate about whether luck affects executives’ pay. A

recent paper by Martina Andreani and Lakshmanan Shivakumar of London
Business School and Atif Ellahie of the University of Utah suggests that it
does. The academics looked at the impact of a big corporate-tax cut in
America in 2017, an event which resulted in large one-off tax gains and
losses for firms that were based on past transactions and that could not be
attributed to managers’ skills. They found that larger windfall gains led to
higher pay for CEOs of less scrutinised firms; tax losses did not seem to
affect their earnings. Lucky things.
Just as some people blindly believe that merit determines success, so it is

possible to get too hung up on the role of chance. CEOs may well be
rewarded for luck but slogging to the top of companies involves talent and
hard work. Although some have argued that entrepreneurs are simply people
fortunate enough to have a large appetite for risk, skill does matter. A paper
from 2006 by Paul Gompers of Harvard University and his co-authors
showed that founders of one successful company have a higher chance of
succeeding in their next venture than entrepreneurs who previously failed.
Better technology and greater expertise reduce the role of chance; the
average success rates in oil exploration, for example, have gone up over
time.
But if luck does play a more important role in outcomes than is often
acknowledged, what does that mean? For individuals, it suggests you should
increase the chances that chance will work in your favour. Partners at Y
Combinator, a startup accelerator, encourage founders to apply to their
programmes by talking about increasing the “surface area of luck”: putting
yourself in situations where you may be rejected is a way of giving luck
more opportunity to strike.
An awareness of the role that luck plays ought to affect the behaviour of
managers, too. Portfolio thinking reduces the role of luck: Messrs Milkov
and Navidi make the point that the probability of striking it lucky in oil
exploration goes up if firms complete numerous independent wells. If luck
can mean a bad decision has a good result, or vice versa, managers should
learn to assess the success of an initiative on the basis of process as well as
outcome.
And if the difference between skill and luck becomes discernible over time,
then reward people on consistency of performance, not one-off highs. Mr
Buffett might have had a slice of luck at the outset, but a lifetime of
investing success suggests he has maximised it.■
Read more from Bartleby, our columnist on management and work:

Trialling the two-day workweek (Oct 12th)
How to make hot-desking work (Oct 5th)
What if Hollywood blockbusters were remade as workplace dramas? (Sep
28th)
Also: How the Bartleby column got its name

https://www.economist.com/business/2023/10/19/how-big-is-the-role-of-luck-in-career-
success
Thrivers in India
Meet India’s mega-wealthy

The ranks of the ultra-rich are swelling
Oct 19th 2023 | Mumbai
INDIAN PLUTOCRACY can seem set in stone. The top two spots in the
annual rich list compiled by Hurun, which tracks such things, invariably go
to the Ambani and Adani clans. This year is no different. Mukesh Ambani
came in first, with a fortune of $98bn. He displaced Gautam Adani, a rival
industrialist and last year’s winner, whose riches clocked in at $58bn. Peer
lower down the ranking, though, and the story is one of change.
First, the ranks of India’s ultra-wealthy are growing. Hurun’s lastest list
identifies 1,319 fortunes of $120m or more (its benchmark for inclusion).
That is 216 more than last year. The main sources of affluence are not what
you might consider the traditional routes to riches, such as industry, finance
and information technology. Instead they are consumer goods, materials and
health care. Alkem Laboratories, a maker of generic drugs, helped elevate 11
people onto the list, the most of any company. Asian Paints lifted ten, Tube
Investments of India, which expanded from producing bicycle parts to
various other components, eight, and Pidilite Industries, a maker of
adhesives, seven.
The demography and geography of Indian wealth is broadening, too. The 20-
year-old founder of Zepto, a delivery firm, makes an appearance, as does, for
the first time, the 94-year-old founder of Precision Wires India, a maker of
electrical cabling. Most of India’s rich still hail from Mumbai (328), Delhi
(199) and Bangalore (100), India’s commercial, political and tech capitals,
respectively. But 21 other cities made the cut this year, bringing the total
number of places plutocrats call home to 95.
And although plenty of rich Indians are still based abroad, most of the new
money is at home. Most of it is also the product of the real economy rather
than of financial engineering. Only one private-equity baron made the list—
Manish Kejriwal, founder of Kedaara Capital, and his family is worth
$360m. The biggest rewards in India still accrue to the builders rather than to
the moneymen. ■
To stay on top of the biggest stories in business and technology, sign up to

the Bottom Line, our weekly subscriber-only newsletter.
https://www.economist.com/business/2023/10/19/meet-indias-mega-wealthy
Lithography lessons
Canon tries to break ASML’s grip on chipmaking

tools
Good luck with that
Oct 19th 2023
PURVEYORS OF CHIPMAKING tools seldom attract attention. Yet many

investors’ heads turned on October 13th, when Canon unveiled a new piece
of kit. It is easy to see why. The Japanese company, which makes optical
equipment, claims that its “nanoimprint” lithography machine can 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 further into ASML’s business by
eventually cranking out two-nanometre chips.
The possibility of breaking ASML’s stranglehold on the supply chain for

cutting-edge chips is intriguing. The firm has long enjoyed the biggest
monopoly in the concentrated semiconductor industry. The world’s three
biggest chip manufacturers—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 lasers to etch electrical blueprints onto
circular silicon discs. Canon’s alternative, by contrast, directly stamps chip
designs on such wafers using a patterned mould. In theory, this allows it to
make more detailed patterns. And because it involves fewer steps and avoids
the need for expensive lasers 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 nanoimprint news.
In practice, Canon has its work cut out. Dylan Patel of SemiAnalysis, a
semiconductor-research firm, points out that nanoimprint lithography is
prone to defects because of the precision required to align wafers and
moulds. The technique is also not yet effective in dealing with complex chip
designs, including for processors used in artificial-intelligence models, that
involve many layers of chemical deposits. Mr Patel predicts that Canon’s
tool will be used for making parts of memory chips, which have fewer
layers, rather than for advanced “logic” chips, which process information
rather than store it.
Even if Canon can overcome all these technical hurdles, chipmakers may be
loth to replace their EUV kit with its machines. Chip fabrication plants (fabs
for short) are highly standardised in order to minimise the share of chips that
turn out faulty. Since ASML has long been the only game in town for
cutting-edge chips, that standardisation means that fabs are being designed
around its machines, which are the size of a double-decker bus. The fabs that
chipmakers are currently busy putting up around the world will not suddenly
switch to nanoimprint lithography. It may take five years for Canon’s tools
to be used in mass production, thinks Gaurav Gupta of Gartner, a research
firm, and only once they have proved themselves.
One place where Canon could make headway more quickly is China. Since
2019 Chinese companies have been prevented by America’s export controls
from buying ASML’s EUV machines, since they all rely on bits and bobs of
American origin. It has also struggled to develop lithography machines of its
own. The current American restrictions do not, however, explicitly cover
nanoimprint technology. That leaves Canon free to sell it to customers across
the Sea of Japan—at least for the time being and perhaps for longer. It is
unclear whether the Japanese firm’s machines include enough American
know-how to ever fall under America’s anti-Chinese strictures. Probably no
necks craned more at Canon’s announcement than those of national-security
hawks in Washington and Beijing. ■

https://www.economist.com/business/2023/10/19/canon-tries-to-break-asmls-grip-on-
chipmaking-tools
Spread bets
Why big oil is beefing up its trading arms

A volatile world makes for choppy markets, and choppy markets make for
rich profits
Oct 19th 2023
IN THE 1950S the oil market was in the gift of the “Seven Sisters”. These
giant Western firms controlled 85% of global crude reserves, as well as the
entire production process, from the well to the pump. They fixed prices and
divvied up markets between themselves. Trading oil outside of the clan was
virtually impossible. By the 1970s that dominance was cracked wide open.
Arab oil embargoes, nationalisation of oil production in the Persian Gulf and
the arrival of buccaneering trading houses such as Glencore, Vitol and
Trafigura saw the Sisters lose their sway. By 1979, the independent traders
were responsible for trading two-fifths of the world’s oil.
The world is in turmoil again—and not only because the conflict between
Israel and Hamas is at risk of escalating dangerously. Russia’s war in
Ukraine, geopolitical tensions between the West and China, and fitful global
efforts to arrest climate change are all injecting volatility into oil markets
(see chart 1). Gross profits of commodity traders, which thrive in uncertain
times, increased 60% in 2022, to $115bn, according to Oliver Wyman, a
consultancy. Yet this time it is not the upstarts that have been muscling in. It
is the descendants of the Seven Sisters and their fellow oil giants, which see
trading as an ever-bigger part of their future.
The companies do not like to talk about this part of their business. Their
traders’ profits are hidden away in other parts of the organisation. Chief
executives bat away prying questions. Opening the books, they say, risks
giving away too much information to competitors. But conversations with
analysts and industry insiders paint a picture of large and sophisticated
operations—and ones that are growing, both in size and in sophistication.
In February ExxonMobil, America’s mightiest supermajor, which abandoned

large-scale trading two decades ago, announced it was giving it another go.
The Gulf countries’ state-run oil giants are game, too: Saudi Aramco, Abu
Dhabi National Oil Company and QatarEnergy are expanding their trading
desks in a bid to keep up with the supermajors. But it is Europe’s oil giants
whose trading ambitions are the most vaulting.
BP, Shell and TotalEnergies have been silently expanding their trading desks
since the early 2000s, says Jorge Léon of Rystad Energy, a consultancy. In
the first half of 2023 trading generated a combined $20bn of gross profit for
the three companies, estimates Bernstein, a research firm. That was two-
thirds more than in the same period in 2019 (see chart 2), and one-fifth of
their total gross earnings, up from one-seventh four years ago. Oliver
Wyman estimates that the headcount of traders at the world’s largest private-
sector oil firms swelled by 46% between 2016 and 2022. Most of that is
attributable to Europe’s big three. Each of these traders also generates one
and a half times more profit than seven years ago.
Today BP employs 3,000 traders worldwide. Shell’s traders are also thought
to number thousands and TotalEnergies’ perhaps 800. That is almost
certainly more than the (equally coy) independent traders such as Trafigura
and Vitol, whose head counts are, respectively, estimated at around 1,200
and 450 (judging by the disclosed number of employees who are
shareholders in the firms). It is probably no coincidence that BP’s head of
trading, Carol Howle, is a frontrunner for the British company’s top job,
recently vacated by Bernard Looney.
The supermajors’ trading desks are likely to stay busy for a while, because
the world’s energy markets look unlikely to calm down. As Saad Rahim of
Trafigura puts it, “We are moving away from a world of commodity cycles
to a world of commodity spikes.” And such a world is the trader’s dream.
One reason for the heightened volatility is intensifying geopolitical strife.

The conflict between Israel and the Palestinians is just the latest example.
Another is the war in Ukraine. When last year Russia stopped pumping its
gas west after the EU imposed sanctions on it in the wake of its aggression,
demand for liquefied natural gas (LNG) rocketed. The European
supermajors’ trading arms were among those rushing to fill the gap, making
a fortune in the process. They raked in a combined $15bn from trading LNG
last year, accounting for around two-fifths of their trading profits, according
to Bernstein.
This could be just the beginning. A recent report from McKinsey, a

consultancy, models a scenario in which regional trade blocs for
hydrocarbons emerge. Russian fuel would flow east to China, India and
Turkey rather than west to Europe. At the same time, China is trying to prise
the Gulf’s powerful producers away from America and its allies. All that is
creating vast arbitrage opportunities for traders.
Another reason to expect persistent volatility is climate change. A

combination of increasing temperatures, rising sea levels and extreme
weather will disrupt supply of fossil fuels with greater regularity. In 2021 a
cold snap in Texas knocked out close to 40% of oil production in America
for about two weeks. Around 30% of oil and gas reserves around the world
are at a “high risk” of similar climate disruption, according to Verisk
Maplecroft, a risk consultancy.
Then there is the energy transition, which is meant to avert even worse
climate extremes. In the long run, a greener energy system will in all
likelihood be less volatile than today’s fossil-fuel-based one. It will be more
distributed and thus less concentrated in the hands of a few producers in
unstable parts of the world. But the path from now to a climate-friendlier
future is riven with uncertainty.
Some governments and activist shareholders are pressing oil companies,

especially in Europe, to reduce their fossil-fuel wagers. Rystad Energy
reckons that partly as a result, global investment in oil and gas production
will reach $540bn this year, down by 35% from its peak in 2014. Demand
for oil, meanwhile, continues to rise. “That creates stress in the system,” says
Roland Rechtsteiner of McKinsey.
Future traders
This presents opportunities for traders, and not just in oil. Mr Rechtsteiner
notes that heavy investment in renewables without a simultaneous increase
in transmission capacity also causes bottlenecks. In Britain, Italy and Spain
more than 150-gigawatts’-worth of wind and solar power, equivalent to 83%
of the three countries’ total existing renewables capacity, cannot come online
because their grids cannot handle it, says BloombergNEF, a research firm.
Traders cannot build grids, but they can help ease gridlock by helping
channel resources to their most profitable use.
Europe’s three oil supermajors are already dealing in electric power and
carbon credits, as well as a lot more gas, which as the least grubby of fossil
fuels is considered essential to the energy transition. Last year they had
twice as many traders transacting such things than they did in 2016. Ernst
Frankl of Oliver Wyman estimates that gross profits they generated rose
from $6bn to $30bn over that period. Other green commodities may come
next. David Knipe, a former head of trading at BP now at Bain, a
consultancy, expects some of the majors to start trading lithium, a metal used
in battery-making. If the hydrogen economy takes off, as many oil giants
hope, that will offer another thing not just to produce, but also to buy and
sell. ■

https://www.economist.com/business/2023/10/19/why-big-oil-is-beefing-up-its-trading-
arms
Schumpeter
Are America’s CEOs overpaid?

Unions are taking aim at the soaring compensation of bosses
Oct 17th 2023
“WE’RE FED up with falling behind,” declared Shawn Fain, the boss of
America’s United Auto Workers (UAW), last month after the union began a
campaign of intermittent strikes at Ford, General Motors (GM) and
Stellantis, America’s “big three” carmakers. A month in, the two sides are
still at loggerheads. Jim Farley, Ford’s chief executive, has argued that the
36% pay rise over four years demanded by the striking workers would
cripple his business. The UAW has countered that the average pay of the big
three’s CEOs is 40% higher than it was in 2019, compared with 6% for the
union’s members, which is well below inflation. Last year Mr Farley raked
in $21m in pay, Carlos Tavares, his counterpart at Stellantis, $25m and Mary
Barra of GM, $29m. The average full-time UAW member made less than
$60,000. (Exor, the biggest shareholder in Stellantis, part-owns The
Economist’s parent company.)
America’s bosses are certainly well compensated. After languishing in the
2000s, median pay for CEOs of big companies in the S&P 500 index has
climbed by 18% over the past decade, adjusting for inflation, twice the rise
in the median full-time wage in America. The typical S&P 500 boss earned
more than $14m last year, according to figures from MyLogIQ, a data
provider. That is around 250 times as much as the average worker. It is also
more than bosses earn in Britain (where chiefs of FTSE 100 firms took home
just shy of $5m), let alone in France and Germany (where CEOs are paid
still less). Some American corporate chieftains rake in many times that. In
2022 Sundar Pichai of Alphabet, a tech titan, received a $218m stock award,
following a similar-sized bounty in 2019. In 2021 David Zaslav of Warner
Bros Discovery, a media giant, received stock options worth an estimated
$203m (subject to hitting certain performance hurdles).
Investors, for their part, do not seem overly bothered. Last year only 4% of
S&P 500 companies failed to win majority support in (non-binding) “say on
pay” votes, according to Meridian, an executive-compensation adviser. As
Lucian Bebchuk of Harvard Law School explains, America’s big
institutional investors pay little attention to the market-wide level of
compensation, focusing instead on what share of a CEO’s pay is tied to the
firm’s performance, and on how much they earn relative to other bosses.
American CEOs’ pay is “so stratospheric we have become numb to it”, says
Amy Borrus of the Council of Institutional Investors, which represents
pension funds and other asset managers. Ordinary Americans, though, are
furious. A survey in 2019 by David Larcker 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 benchmark 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 pocketed $100m for acting in “Top Gun:
Maverick”. Such celebrities do not seem obviously worthier than bosses
steering colossal corporations responsible for many billions of dollars of
capital and tens or even hundreds of thousands of jobs.
And bosses’ pay looks like 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
market value. Investors seem to believe a good boss is worth many times
that. On October 12th Dollar General, an American discount retailer,
announced its previous boss would return to the helm after lacklustre results
under his successor. Its share price jumped by 9% the next day. As
companies have grown bigger—the average S&P 500 firm last year
generated more than twice the revenues it did in 1990, after inflation—and
more global, the CEO’s job has also become harder, argues Steven Kaplan of
the University of Chicago Booth School of Business.
Judging by the European experience, paying bosses less is not obviously a

good idea. The earnings gap between American and European bosses is
partly the result of less competition for executives in Europe, which has
fewer big firms. It also reflects a more egalitarian attitude to pay that has not
translated into better performance. Europe’s firms exhibit lower sales
growth, profitability and shareholder returns, and its workers are less
productive. All that contributes to the continent’s sluggish economic growth.
Earlier this year Julia Hoggett, head of the London Stock Exchange, warned
that Britain’s companies risked being hamstrung by their inability to attract
executive talent. Last year Laxman Narasimhan quadrupled his pay by
abandoning the top job at Reckitt Benckiser, a London-listed consumer-
goods company, to run Starbucks, an American coffee chain. In Japan, where
CEO pay is even lower than in Europe, companies like Toyota have started
beefing up compensation packages with stock-based incentives.
Greed is good. Right?

All this sounds like a compelling argument in favour of letting American
CEOs off the hook for their rich rewards. In practice, though, shareholders
should watch for two things. For one, the American market for CEOs is far
from perfectly efficient. Many bosses loom large over their boardrooms, and
may cow notionally independent remuneration committees. Two in five S&P
500 CEOs also chair their boards. A recent survey of American company
directors by PwC, a consultancy, showed that one in two thought executives
were overpaid. Any reservations they may harbour, and express in the
comfort of an anonymous survey, dissipate when confronted with a flesh-
and-blood chairman.
A more immediate concern is that paying vast sums to bosses when times
are tough for common folk can have unwanted consequences, if it
emboldens employees to make demands that their companies cannot afford.
This risks happening in Detroit, which must compete globally with lower-
cost carmakers. The free market for CEOs, in other words, is also subject to
political economy. ■
Read more from Schumpeter, our columnist on global business:

Weight-loss drugs are no match for the might of big food (Oct 12th)
So long iPhone. Generative AI needs a new device (Oct 5th)
Customer service is getting worse—and so are customers (Sep 28th)
Also: If you want to write directly to Schumpeter, email him at

schumpeter@economist.com. And here is an explanation of how the
Schumpeter column got its name.
https://www.economist.com/business/2023/10/17/are-americas-ceos-overpaid
Finance & economics
Israel turns to financial weapons as well as military ones
China’s economy may be growing faster, but big problems remain
China’s banks may be loaded up with hidden bad loans
Will Binance come over to the light side?
Why it is time to retire Dr Copper
How free-market economics reshaped legal systems the world over
Do Amazon and Google lock out competition?
War by other means
Israel turns to financial weapons as well as

military ones
It is going after Hamas on all fronts
Oct 19th 2023 | Istanbul
IN LESS THAN a fortnight, some 3,500 Gazans have been killed, 12,000
injured and more than a million displaced—on whose behalf America and
the UN are attempting to open a passage into Egypt. Entire neighbourhoods
in the strip have been bombed to dust. Cut off from food, water and medical
supplies, the UN warned on October 16th that Gaza’s 2.3m people were on
“the verge of an abyss”. Since Israel’s strikes began, war has drained nearly
every source of economic life from the territory.
For the better part of two decades, Gaza has relied on support from
international donors for its financial survival. On October 18th Binyamin
Netanyahu, Israel’s prime minister, said that his country would allow a
modest amount of food and medicine across Egypt’s border into the territory,
which would be the first supplies let in since Hamas launched its brutal
attack against Israel on October 7th. Israel’s allies, including America, are
pushing for more to be admitted. Yet at the same time, Israel wants to
suffocate Hamas by any means possible, which requires using economic as
well as military weapons.
Averting a humanitarian catastrophe is made all the more difficult by the

miserable pre-war state of the Palestinian economy. Israel, Gaza and the
West Bank share a single market, governed by a deal that the UN brokered in
1994. The idea behind the agreement was that Palestinians would work in
Israel and that Israeli capital would flood into Gaza and the West Bank,
where rich returns were waiting. In reality, Israeli restrictions remained in
place and the Palestinian economy still depends on handouts. On the eve of
the war, the average Israeli was 15 times richer than the average Palestinian.
Only a third of West Bankers have access to a sewage system; some 10%
manage without a water supply. West Bankers have been allowed to work in
low-skilled jobs in Israel, but have been subject to tight restrictions on their
movement.
In Gaza, things have been even worse. Growth in GDP per person in the
West Bank averaged 2.8% a year from 2007 to 2022. The average Gazan
became poorer during the same period, with the local economy shrinking by
2.5% a year. The territory has operated under a near total blockade from
Israel since Hamas took power in 2007. Until recently, it was supplied with
electricity by Israel, but received only a third of the amount it sought. Each
of the three wars fought between the two sides—in 2008, 2014 and 2021—
cost Gaza the equivalent of at least a year of GDP.
If there is nothing for an economy to generate, it is not just growth that
suffers. Unemployment is rife. More than half of the Gazan adult population
were living below the IMF’s poverty line in 2021. There are few ways to
make money. One way used to be dealing imports and exports through
tunnels under Gaza’s southern border, but Egypt cleared out most after a
bust-up with Hamas in 2014. Another way is to rebuild what war destroys.
One of Gaza’s main businesses is construction, which grew by 20% last year.
It will presumably grow by more once this round of war ends.
Others cobble together incomes from a range of outside sources. Some

70,000 Gazans remain on the payroll of the Palestinian Authority (PA), even
though its officials who run the West Bank were kicked out of Gaza by
Hamas in 2007, and none of them actually goes to work. Qatar deposits cash
—some $10m a month—into the bank accounts of thousands more locals.
The PA pays Gaza’s electricity bills, which Israel subtracts from the tax it
collects on behalf of the PA in the West Bank. The UN educates 300,000
Gazan children; a network of hospitals it runs with charities provides the
territory with basic health care.
The strip’s assets

Another organisation on which Gazans depend is Hamas, whose
administrative branch runs the strip’s government. Since it took power,
Hamas has expanded the public payroll from roughly 20,000 to 50,000 civil
servants. Last year its spending contributed 0.8% to GDP growth, compared
with 0.3% from all household and business spending. As charities run so
many of the strip’s schools and hospitals, and the PA keeps the lights on,
Hamas is able to spend lavishly elsewhere.
It finances its spending with an adroit tax system. Though Gaza gets no
imports from Israel, it does get them from Egypt, from which trade had
recently increased, and the West Bank. Hamas taxes food and fuel crossing
the Egyptian border; picks up 16.5% of the value of products from baby food
to jeans; charges three shekels ($0.75) per kilo of fish caught by fishermen;
and levies income tax. Altogether economists reckon that Hamas may take in
somewhere in the region of 1.5bn shekels a year.
Other sources of finance are already in Israel’s sights. Gaza’s various
Islamist groups receive maybe $100m a year from Iran, according to
America’s best guess. Hamas also receives individual donations from the
Gulf and the West, some of which are furtively transferred across borders
using cryptocurrencies. Israel and its allies have already come down hard on
these sources of finance where possible, freezing accounts in Istanbul and
London.
Will aid to Gaza end up strengthening the position of Hamas? In the past,
Israel has been wary of multilateral organisations working in the strip. Other
governments have found that links between charities and Hamas are rare,
however. In Gaza, few believe rumours that Hamas taxes aid. So grim is the
situation that “a few bits of fuel getting lost is worth it”, argues the boss of a
think-tank in Gaza.
Israeli policymakers also face dilemmas in the West Bank. Just a few
thousand Gazans work in Israel; in contrast, a quarter of the West Bank’s
labour force works over the border or in Jewish settlements. Israel does
allow exports and imports through the West Bank—the duties on which
make up around two-thirds of the PA’s budget. These taxes are collected by
Israel and occasionally held up for months at a time before being transferred.
Some Israeli officials reportedly want to cut such payments, either to redirect
money towards Gazan reconstruction or in the hopes of stopping payments
to Gazan families. Other Israeli officials insist that the PA needs more, not
less, funding in order to keep a fragile peace.
In some ways, the choices facing Israeli politicians are exaggerated versions
of ones that they have faced in the past. When Israel wanted to contain
Hamas, it made no sense to help the group collect taxes. Now that Israel
wants to destroy Hamas, it makes no sense in military terms to allow
supplies into Gaza. Yet if it restricts the flow of supplies even more harshly,
a humanitarian disaster will ensue. On October 17th Gaza’s health ministry
begged for generators. Without them, it said, hospitals were about to shut
down. ■
This article was downloaded by zlibrary from https://www.economist.com/finance-and-
economics/2023/10/19/israel-turns-to-financial-weapons-as-well-as-military-ones
Peak disappointment
China’s economy may be growing faster, but big

problems remain
None is more unnerving than the threat of deflation
Oct 18th 2023 | Hong Kong
CHINA’S EMERGENCE from its covid-19 controls was meant to be the

biggest economic event of the year. Instead, the reopening has turned into
one of the biggest disappointments. In a recent survey by Bank of America,
fund managers in Asia expressed their “fatigue and frustration” with China’s
weak growth and the lack of a concerted government response.
On the face of it, economic data released on October 18th should cheer them
up. The figures showed that China’s economy grew by 4.9% in the third
quarter, compared with a year earlier—faster than expected. And its growth
compared with the previous quarter was stronger still: 5.3% at an annualised
rate. The economy should now have little trouble meeting the government’s
growth target of “around 5%” for this year. UBS, a bank, raised its forecast
for 2023 from 4.8% to 5.2%.
The source of the growth was also encouraging. Consumption contributed
almost 95% of it, noted Sheng Laiyun of China’s National Bureau of
Statistics. There are signs that the country’s beleaguered households may be
coming out of their shells. Demand for longer-term loans is growing; the
saving rate, adjusted for the season, fell below 30% of disposable income for
the first time since the pandemic, according to Yi Xiong of Deutsche Bank.
One reason for this may be improvements in the job market. Urban
unemployment fell to 5% in September from 5.2% in the previous month
and the average workweek lengthened. Household debt burdens have also
eased a little. Chinese policymakers have instructed banks to cut the interest
rate on outstanding mortgages in line with the lower rates available for new
ones. On October 13th the central bank announced 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 100bn yuan of spending power
a year.
But the good news for households was not matched by good news for
houses. The property market remains dangerously weak. The amount of
residential floor space sold by property developers in September was 21%
below that sold last year. Increasingly, China’s developers must actually
finish buildings before they can sell them. Completed buildings accounted
for almost a quarter of sales in September, compared with less than 13% in
2021.
The threat of deflation lingers, too. China’s annual nominal growth, which
includes inflation, was 3.5% in the third quarter, lower than the real,
inflation-adjusted figure. This suggests that prices of goods and services fell
by almost 1.4%, the second drop in a row (see chart 1), which makes the
current period China’s worst deflationary spell since 2009.
Thus fatigue and frustration should not give way to complacency. At the
IMF’s annual meeting, Pierre-Olivier Gourinchas, the fund’s chief
economist, called for “forceful action” from China’s government to
restructure struggling property developers, contain financial dangers and
redeploy fiscal measures to help households.
The government has taken some steps. It has allowed a growing number of
local governments to issue “refinancing bonds”, which will help clear late
payments to suppliers and replace the more expensive debt owed by local-
government financing vehicles. The authorities seem keen to prevent any of
these vehicles from defaulting.
But preserving financial stability is not the same as reviving growth. The
government’s efforts to stimulate demand have so far been both piecemeal
and grudging. Its fear of doing too much seems to outweigh its fear of doing
too little. With the official growth target in sight, policymakers may now be
tempted to wait and see how the recovery evolves before pursuing further
stimulus. In the face of a hostile America and turbulent geopolitics, it
appears keen to keep its fiscal powder dry.
Still, it is hard to see how deflation strengthens China’s position. The IMF
now thinks that China’s prices, as measured by its GDP deflator, will fall this
year compared with last. Combined with the yuan’s weakness, GDP could
shrink in dollar terms. Indeed, China’s economy will gain little ground on
America’s in the next five years, according to the fund (see chart 2).
The contrast with the IMF’s April forecast is stark. In the space of six
months, the fund has shorn off more than $15trn, in today’s dollars, from
China’s cumulative GDP for the years from 2023 to 2028. Few economies
can match China’s scale. And that includes the scale of its disappointments.
■
economics/2023/10/18/chinas-economy-may-be-growing-faster-but-big-problems-remain
Nasty headache
China’s banks may be loaded up with hidden bad

loans
The industry’s covid-era hangover could be about to intensify
Oct 15th 2023 | Shanghai
WHEN JINZHOU BANK, in north-eastern China, showed signs of distress

at the start of the year, state media suggested that a billionaire named Li
Hejun might be to blame. Mr Li, a solar-panel tycoon, was once China’s
richest man. His firm was known to have tight links to the bank. And it was
not long after word spread that he had been arrested that Jinzhou Bank
suspended trading in its shares and told investors it would restructure its
operations.
Oddly, the bank’s finances look to have been in good shape. The firm’s
overall bad-debt level was low in the first half of 2022, the last period for
which detailed information is available. Although one concerning figure
sticks out—more than 50% of its personal-business loans had become non-
performing—this type of loan comprised just 1% of its total. Small- and
micro-enterprise loans, which make up about half of the bank’s loan book,
appeared normal, with only 3% having gone sour.
But was this the whole story? In theory, there is no meaningful distinction
between personal-business loans and small- and micro-enterprise loans, says
Jason Bedford, a veteran banking analyst. The two types are used in similar
ways and should offer similar risk. In practice, though, there is a crucial
difference: small- and micro-enterprise loans remain covered by a covid-era
moratorium allowing banks to avoid recognising bad debts. Thus it is
possible that a large portion of Jinzhou’s lending book is unrecognised bad
debt. The bank has said almost nothing about its condition since earlier this
year.
If hidden bad debts such as these lurk at Jinzhou Bank, they may lurk
elsewhere, too. This is worrying, for Chinese finance is already in a mess.
Local governments are struggling to repay lenders at least 65trn yuan ($9trn)
in off-balance-sheet debts. Many of the country’s big property developers
have already defaulted on offshore bonds and owe trillions of yuan-worth of
unbuilt homes to local residents. China’s largest wealth-management firms
have started to default on payments owed to investors. Given that the type of
hidden debts possibly on Jinzhou’s balance-sheet have so far received little
attention, the bank’s troubles ought to come as a warning.
Problems with loans to the smallest firms began with covid-19. As China
shut down, the central bank put a moratorium on the repayment of loans for
small- and micro-enterprises until June 2020 in order to halt a wave of
defaults. After less than three months, officials estimated that 700bn yuan in
payments had been deferred. The moratorium has been extended several
times since then, with officials citing the continued impact of covid. No
estimate for the total amount of unpaid loans exists and banks will not be
required to disclose them publicly until next year.
The moratorium has also coincided with another state initiative. In order to
stimulate the economy, the central government has leant on banks to extend
loans to the smallest firms, and to do so at the lowest possible interest rates.
Although such policies have been attempted for years, banks have been
resistant, preferring to lend to the large, often state-owned companies with
which they have relationships already. This time the policy has worked,
however. A crackdown on the banking industry, culminating in the arrest of
the president of one of China’s largest commercial banks last year, has made
bosses more willing to follow official edicts.
As a result, at the beginning of the year about 28% of all loans in China had
been given to small- and micro-enterprises, up from 24% at the end of 2019.
Many of these loans represent simply the renewal of older, unpaid debts. It is
well known that small firms struggled during the pandemic. Despite this,
there has hardly been an uptick in non-performing loans, notes Alicia Garcia
Herrero of Natixis, a bank.
Another result has been what some view as a catastrophic mispricing of

assets. Small firms are usually judged to pose the greatest risks, but loans to
small- and micro-enterprises have nevertheless been provided at rock-bottom
interest rates. Banks have offered them at an average of 4% annual interest,
down from 6% or so in 2019. To make matters worse, a recent surge in long-
term deposits, which are remunerated at higher rates, means banks’ margins
have been squeezed even tighter.
Only a few lenders have hinted at the amount of loans they have deferred.
Minsheng Bank, one of China’s largest, said in its mid-term report last year
that it had provided 212bn yuan in renewed loans and deferred payments in
the previous six months, equivalent to 9% or so of its entire corporate loan
book. Since then, it has declined to make similar disclosures. The central
bank is providing funds to banks, which can be used to support specific parts
of the economy. In a recent report it said 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 gamble: that a period of forgiveness will
allow struggling companies to get back on their feet after a shock. The initial
decision may have saved tens of thousands of firms and even a few banks
from going under. Now the fate of the pile of debt—however big it may be
—depends on China’s economic fortunes over the coming months. Although
the purchasing-managers’ index for manufacturers shows that the outlook
for large companies has improved slightly, the one for small and medium-
sized companies has continued to contract. The economic hangover from the
covid era has lingered. It could now be about to intensify. ■
economics/2023/10/15/chinas-banks-may-be-loaded-up-with-hidden-bad-loans
Crypto’s future
Will Binance come over to the light side?

With FTX crushed, CZ must decide whether to go along with regulation
Oct 19th 2023 | Zallaq
“THE LUKE SKYWALKER and the Darth Vader of crypto.” That is how
Michael Lewis, author of “Going Infinite”, a recent book about the rise and
fall of Sam Bankman-Fried, founder of FTX, a now-bankrupt crypto
exchange, is supposed to have described the intense rivalry between his
subject and Changpeng Zhao (pictured), the boss of Binance, a rival firm.
Until Mr Bankman-Fried’s exchange collapsed with an $8bn hole in its

balance-sheet, the analogy seemed apt. The two men controlled the two
largest crypto exchanges in the world. Both were known by acronyms:
“SBF” and “CZ”. Young, talented and seemingly in favour of playing nice
with regulators, SBF was something of a wunderkind, and CZ was his
shadowy foil. Keen to avoid being pinned down by national laws, his
exchange was based “nowhere”. Binance had long been under investigation
for possible money-laundering and criminal-sanctions violations by
America’s justice department. CZ had invested in FTX before the two turned
on each other. Then SBF publicly goaded CZ about his legal problems, and a
tweet by CZ probably helped set off the run on FTX.
Now, with FTX out of the picture and SBF on trial, charged with various
kinds of fraud, which he denies, CZ looks a lot like the last man standing in
crypto. Binance utterly dominates crypto trading (see chart). A whopping
40-50% of it by volume takes place on the platform. The big question, which
CZ discussed in an interview with The Economist in Bahrain on October
11th, is how Binance will now evolve.
For as long as crypto exchanges have existed, financial laws have been ill-
suited to them. Given the nature of the assets that are traded, they are in
effect hybrids of exchanges, brokers and settlement firms. If crypto
exchanges were largely unregulated that was at least partly because few laws
had been written to govern them.
But, in the wake of FTX’s collapse, the situation is starting to change.

Legislators and regulators around the world are rushing to pen new laws or
crack down on the industry. This has two big implications for exchanges.
First, regulators want to make sure that they are not mishandling or
improperly using customer funds, as FTX did. Second, they want to ensure
that exchanges are not facilitating financial crimes.
CZ insists that customers can trust his exchange. “There are so many ways”
Binance is structured differently to FTX, he says. The firm has met heavy
redemption requests from clients, including in choppy markets. He points
out that the Securities and Exchange Commission (SEC), America’s
financial regulator, spent a long time investigating Binance for this kind of
misconduct. The regulator could provide “zero evidence” that Binance was
commingling user funds, says CZ, “which actually helps us to prove that we
don’t do it.” Other complaints by the SEC, including that the company
issued securities without a licence, are still to be heard in court.
Yet it is the second requirement that might turn out to be trickier for
Binance. In December Reuters, a news service, reported that prosecutors at
America’s justice department were split on whether or not to charge the firm
with money-laundering or sanctions violations. According to Bloomberg,
another news service, Binance withdrew its application to become a licensed
exchange in Singapore in 2021, where it was based at the time, in part owing
to its inability to comply with strict anti-money laundering rules. The SEC
quotes evidence from a former employee, who admitted that the company
thought it was an “unlicensed securities exchange” and “did not want to be
regulated, ever”.
CZ dismisses this as “private chat by an ex-employee”, and adds it “was not
the right thing by far”. He notes that Binance is “the most licensed crypto
firm in the world”, with permission to operate in 18 countries across Asia,
Europe and the Middle East (its American arm operates in 44 states).
Binance now appears to be playing nice with various authorities. A
spokesperson confirms that in recent days it has frozen “the small number of
accounts” soliciting donations in support of Hamas, to comply with
international sanctions laws.
The test for the firm now will be in Europe. America is cracking down on
crypto, and is unlikely to pass new laws soon. By contrast, European
legislators have written a “Markets in Crypto-Assets” or “MiCA”
framework, which entered into force in June. Exchanges can keep operating
under existing licences until 2026, unless refused under MiCA, which will
require strong policies against money-laundering and terrorist financing. CZ
says that, in addition to such policies, a full licence means that authorities
look at “your wallet infrastructure, your security, your customer support
policies, your refund policy. They look at your whole business.”
A crypto exchange can no longer argue that it cannot comply with national
rules because they do not exist. Failing to meet Europe’s standards would
reveal that Binance does not want, or is unable, to follow even clear laws. In
“Star Wars”, Yoda warns Luke Skywalker that it is easier to amass or wield
power by turning to the Dark Side. It is harder to operate in the light. ■
economics/2023/10/19/will-binance-come-over-to-the-light-side
Buttonwood
Why it is time to retire Dr Copper

The red metal no longer tells investors much about the global economy
Oct 19th 2023
DOCTORS ARE famously reluctant to hang up their stethoscopes. But a

time comes in the career of every medic when their skills fade, and a gentle
push is the best thing for them—and their patients. The same applies for the
metaphorical physicians of the financial world, whose ability to diagnose the
market’s health changes over time. Now the end may be nigh for the most
illustrious of all such physicians: Dr Copper.
Copper, a metal crucial to the construction of all manner of fittings, pipes

and wires, has earned its nickname on Wall Street owing to its role as a
bellwether for the health of global industry. A surge in copper prices is taken
as an early sign of an economic upswing; a big drop is a portent of recession,
or at the very least a manufacturing downturn.
So what is going on at the moment? Manufacturing looks peaky. Global

industrial output is up by just 0.5% year on year, well below the average of
2.6% over the past two decades, and the rich world is in an industrial
recession. A wobble of a similar scale in 2015 sent copper prices plunging
by about a quarter. Yet so far this year they are down by only 6%. Futures
maturing in 2025 are flat, and those maturing in 2026 are up a bit.
The breakdown in the usual rules of thumb is most striking in China, which
consumes over half of the world’s annual copper supply. Its stricken housing
market might have led you to think the metal was doomed. After all,
investment in property, once a key driver of copper demand, is down by 9%
year on year. Curiously, though, Chinese demand for the metal is up by
around 10% this year.
The explanation for this lies in the radical shifts that are under way in the
energy system. China will install around 150 gigawatts (GW) of copper-
intensive solar-energy capacity this year, according to Goldman Sachs, a
bank, almost double the amount it installed last year. And methods for
storing energy require the metal, too. Pumped-storage hydropower is one
example. This involves moving water from one reservoir to another, either to
hoard excess energy from wind and solar power or to release it. China
already has 30% of the world’s hydropower-storage capacity, at 50GW.
Another 89GW of capacity is being built, which will require vast amounts of
copper.
Other countries are also spending big on the green transition, and putting in
place legislation that will increase appetite for the metal. S&P Global, a
financial-data firm, suggests that demand for refined copper will almost
double by 2035, to 49m tonnes. Batteries, energy transmission, solar cells,
transport—all need the metal. An electric car contains over 50 kilograms of
the stuff, more than twice the amount used in a conventional vehicle. Across
the world new rules, intended to reduce emissions, will steer consumers
towards electric vehicles and away from their copper-light predecessors. In
Europe sales of new petrol-powered cars will be banned from 2035.
The squeeze on supplies will therefore be historic, meaning that sky-high

copper prices will no longer be indicative of optimism on the part of
industrial machinery-makers, construction firms, electronics manufacturers
and the like. Instead, rising demand for copper will increasingly reflect a
desire among politicians for more environmentally friendly energy, and
sometimes also a reduced dependence on imports.
In normal times, building an electrical network from scratch would at least

be a signal of greater economic activity to come. However, the energy
transition is intended to replace existing activity, rather than add to it. In the
case of energy infrastructure, China’s new solar investment this year can
generate 150 gigawatt-hours of energy when working at full pelt, which is
equivalent to almost 90,000 barrels of oil per hour. That is energy which
China now does not need to purchase from overseas producers. The result
may well be good for the planet, but it will not have much effect on
aggregate economic activity.
With so much of the growth in demand for copper locked in, and proceeding
in large part according to legal diktat, the metal’s price will over time say
less and less about the state of the global economy, and more and more about
the state of the energy transition. Copper prices will still be worth watching,
then, albeit for different reasons. Investors wanting a hint about the state of
the global economy will be replaced by policymakers wanting a sense of
how their green policies are faring. Dr Copper’s retirement may be a sad
moment, but it is not the end of the story. ■
Read more from Buttonwood, our columnist on financial markets:

Investors should treat analysis of bond yields with caution (Oct 12th)
Why investors cannot escape China exposure (Oct 5th)
Investors’ enthusiasm for Japanese stocks has gone overboard (Sep 28th)
Also: How the Buttonwood column got its name

economics/2023/10/19/why-it-is-time-to-retire-dr-copper
Not so civil anymore
How free-market economics reshaped legal

systems the world over
Friedrich Hayek’s followers promised growth. They may have
overpromised
Oct 19th 2023
THE LEGAL system that operates in the United Arab Emirates (UAE)—like
that in many countries across the Gulf—is a blend of French civil and
Islamic Sharia law. But this summer Dubai announced that it was exploring
the introduction of English common law to 26 free-trade zones. These are
jurisdictions that are exempt from local taxes and customs duties, and have
their own independent legal systems and courts. The region is increasingly
dotted by such common-law islands, reflecting the belief that the
Anglosphere’s legal tradition is better for business.
Such an idea can be traced back to Friedrich Hayek. Fifty years ago this
month, the Nobel-prize-winning economist and philosopher published the
first volume of his magnum opus, “Law, Legislation and Liberty”. In it, he
argued that the common-law approach is more amenable to freedom than its
civil-law counterpart. Later, in the 1990s, Hayek’s ideas inspired the “legal-
origins theory”, which made both an empirical and theoretical case that
common law is better for the economy. The theory has been as influential as
it has been controversial, leading to sweeping reforms in civil-law countries
around the world.
The common-law tradition emerged in England. Under its strictures, the

judiciary is bound by precedent: principles established by judges in previous
cases are binding for future ones. This establishes case law on an equal
footing with legislation. In contrast, the civil-law tradition traces back to the
Code Napoléon, a legal system that was set up in France under Napoleon
Bonaparte, which restricted both the independence and the discretion of the
judiciary, subordinating it to the legislature.
England’s approach was transplanted across the globe by the British empire
and underpins the legal systems of 80 or so countries, including America.
The Code Napoléon was transplanted across Europe by French occupations
during the Napoleonic Wars and was introduced around the world by the
French empire. China, Japan, South Korea and Taiwan all based their
modern legal systems on Germany’s approach, which is also based on civil
law. In total, civil-law traditions underpin the legal systems of about 150
countries today, including around 30 mixed systems.
Hayek argued that common law is a better basis for a legal system than civil
law for similar reasons that markets are a better foundation for an economy
than central planning. A decentralised judiciary has access to “local
knowledge”—the subtleties and idiosyncrasies of actual legal cases—that a
centralised legislature does not. This is analogous to the way in which the
butcher, the brewer and the baker are better placed to know what goods to
produce, in what quantities and at what market price than a collection of
well-meaning bureaucrats. A legal system based on judicial precedent allows
judges to adapt the body of law to real-world circumstances.
Common sense
The arguments put forward by Hayek mostly concerned the law’s ability to
protect individual liberty, but they apply to its ability to promote economic
growth, too. Twenty-five years ago, in a landmark study in the Journal of
Political Economy, Andrei Shleifer, Rafael La Porta and Florencio Lopez-
de-Silanes, then at Harvard University, as well as Robert Vishny of the
University of Chicago, used data from 49 countries to show that investors’
rights are better protected in common-law countries. The paper gave
credence to Hayek’s ideas and set off a flurry of research into the
relationship between legal origins and the economy.
In three subsequent papers, Simeon Djankov, a World Bank economist,

working with Messrs Shleifer, La Porta and Lopez-de-Silanes, used data
from more than 100 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 consistently
less onerous and contract enforcement consistently more efficient in
common-law jurisdictions,” says Mr Shleifer. The difference was sharpest in
the barriers facing entrepreneurs. The number of forms to fill out and
business days needed to process an application, and the cost of
administrative fees, were all higher under civil-law jurisdictions. In 2001
Paul Mahoney of the University of Virginia analysed data from across the
world and found that, in the three decades to 1992, GDP per person had
grown 0.7 percentage points a year slower in civil-law countries than in their
common-law counterparts.
These findings were influential, particularly at multilateral institutions. The

World Bank’s Ease of Doing Business Index was shaped by the legal-origins
theory. Indeed, Mr Djankov jointly founded and ran the initiative from 2003.
In the decade and a half to 2020, more than 400 studies using data from the
index were published. Leaders including France’s Emmanuel Macron,
Germany’s Angela Merkel and Japan’s Abe Shinzo made rising up the
rankings a goal. The result was a wave of reform in civil-law countries,
which tended to rank lower. As Mr Djankov notes, there was “a dramatic
international convergence in rules and regulation to the common-law
standard”.
Has this produced a surge in economic growth? Perhaps not. More recent
studies have splashed cold water on the legal-origins theory, says Holger
Spamann of Harvard University. Ones that control for a wider array of
confounding factors have found that a country’s legal tradition does have an
effect on its economic prospects, but one that is not nearly as strong as the
original studies implied. Moreover, some economists argue that legal
traditions act as a proxy, indirectly capturing the impact of entirely different
inheritances, such as those relating to colonial legacies or cultural attitudes.
Under this reading, moving from a civil-law approach to a common-law one
is unlikely to be worth the significant hassle for places like Dubai.
Yet such a switch may nevertheless have been worth it in an earlier era,
albeit for the wrong reasons. Before it was discontinued in 2021, when
World Bank staff were alleged to have fiddled data partly in response to
pressure from China, the Ease of Doing Business Index made civil-law
countries seem like a less attractive destination for foreign investors. For a
time, then, the legal-origins theory may have become self-fulfilling—leading
to faster economic growth simply because it was supposed to lead to faster
economic growth. ■
economics/2023/10/19/how-free-market-economics-reshaped-legal-systems-the-world-over
Free exchange
Do Amazon and Google lock out competition?

How to assess the trustbusters’ case
Oct 19th 2023
ANTI-MONOPOLY CASES have been known to reshape corporate

America. In 1984 AT&T’s telephone network was found to have excluded
competing firms. The company was controversially broken up in a move that
ultimately led to a boom in innovation among its rivals. Meanwhile, a case
against Microsoft in 1998 may have kept the door open for Google’s
subsequent rise. Microsoft had bundled together its Internet Explorer
browser with its Windows operating system, and made other browsers more
difficult to install. Some business historians think the case, by stopping this
practice, made life easier for new browsers. It may also have distracted
Microsoft from developing its own search engine.
Today, two big cases could redefine the limits of monopolies in the internet
age. On September 12th America’s Department of Justice (DoJ) began its
court battle against Google over the firm’s deals to obtain default status on
phones and browsers. On September 26th the Federal Trade Commission
(FTC), chaired by Lina Khan, sued Amazon for allegedly penalising third-
party sellers that offered lower prices on other sites, among other harmful
practices. In both cases, the government thinks the tech giants are so
dominant that their attempts to preserve market power are suspect. This
raises a question: what counts as anticompetitive?
Historically, practices that might be ignored for a startup have not been
tolerated in a dominant firm. John Rockefeller’s Standard Oil was broken up
in 1911, in part for striking deals with railroads that made it impossible for
other oil firms to compete. Antitrust historians still debate the extent to
which these deals were abusive—after all, Standard Oil benefited from
economies of scale and bulk orders commonly receive discounts. But its size
and bargaining power led to scrutiny. Before the firm’s break-up, it had
cornered 90% of oil refineries. Microsoft’s bundling was found to be
problematic because it had over 90% of the market for operating systems on
personal computers. In both cases, the courts believed that dominant firms
had made life too difficult for newcomers.
Today’s cases have echoes of those past. Start with Google. It pays more
than $10bn to Apple and other companies to be the default search engine on
their platforms. The DoJ argues this creates a barrier to entry for
competitors. Because having lots of data lets a search engine show users
more tailored advertisements, a dominant 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 University of

Chicago thinks 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 downranking products or removing them from
the “Buy Box”, which allows instant 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 advertising. Sellers say that it is next
to impossible to qualify for the Buy 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 Amazon now collects a larger share of sales on its marketplace as
fees than it did a decade ago. In a competitive market, Amazon’s cost hikes
and restrictions on pricing more cheaply elsewhere would cause sellers to
leave the platform. And in fact, some large retailers, like Nike, have done so.
But Amazon’s market share in e-commerce has grown (it currently stands at
40-50% in America), suggesting most sellers feel that the platform is too
important to quit.
Amazon denies all this. As with Google, there is a chance that the case
becomes a debate about how dominant the firm really is (Amazon argues
that it is dwarfed by the multitude of brick-and-mortar stores). American
retail is efficient and broadly consumer-friendly—hardly the sign of an
industry in need of repair. Amazon also says that if a seller can offer a lower
price on another platform, it should do so on its site, too. One can imagine a
seller thinking that Amazon Prime customers are rich and price insensitive,
and therefore charging more on Amazon than other platforms.
Ready for a remedy

But if that is the case, Amazon has plenty of options available, says Fiona
Scott Morton, formerly of the DoJ. Imagine, for example, that Amazon
thinks that the seller of a particular item is charging too much. It is free to
prioritise other sellers of that item in its search results. If it cannot find any
on its platform, it can recruit one from outside. If it still cannot find one, then
perhaps Amazon is simply an expensive platform on which to do business.
In this final case, a possible solution is a so-called behavioural remedy, in

which Amazon is made to stop penalising sellers that offer lower prices
elsewhere. In Europe, where Amazon has also faced scrutiny, the company
has made several concessions, including treating all sellers the same when
granting access to the much sought-after Buy Box. Ms Khan of the FTC has
said she does not like remedies that only target the behaviour of companies,
since they are at best short-term fixes when set against more drastic
measures, like breaking them up. Sometimes, however, nothing more is
needed than a slap on the wrist. ■
Read more from Free exchange, our column on economics:

To beat populists, sensible policymakers must up their game (Oct 12th)
To understand America’s job market, look beyond unemployed workers (Oct
5th)
Why the state should not promote marriage (Sep 28th)
economics/2023/10/19/do-amazon-and-google-lock-out-competition
Science & technology
AI could help unearth a trove of lost classical texts
What a Serbian cave tells you about the weather 2,500 years ago
It’s not just Paris. Bedbugs are resurgent everywhere
How to predict the outcome of a coin toss
Unrolled at last
AI could help unearth a trove of lost classical texts

Computers could let archaeologists read hundreds of burnt scrolls from a
Roman library
Oct 18th 2023
THE OBJECT known as P.Herc.Paris.3 resembles a dark grey lump of

charcoal, about the size and shape of a banana. That explains its nickname:
Banana Boy. It is in fact a papyrus scroll, found in the ruins of a villa in the
Roman town of Herculaneum, in Campania. Along with hundreds of other
scrolls in the villa’s library, it was carbonised when scorching gases engulfed
the town during the same eruption of Mount Vesuvius, in 79AD, that also
buried the nearby town of Pompeii.
Although the scrolls survived, their charring means that unrolling them is
almost impossible. Now, nearly 2,000 years later, words from inside Banana
Boy have been revealed for the first time, after volunteers competing in a
prize challenge used X-rays and artificial intelligence to do the unrolling
virtually.
The first word to be found, announced on October 12th, was “porphyras”,
which means “purple” in ancient Greek (see picture below). It was
uncovered by Luke Farritor, a computer-science student at the University of
Nebraska-Lincoln, earning him a $40,000 prize. Mr Farritor built on work by
Casey Handmer, a former NASA physicist, whose examination of X-ray
images of Banana Boy’s charred layers identified a characteristic “crackle
pattern” indicating the presence of ink.
Scroll up
The same word was later found by Youssef Nader, a robotics student at the
Free University of Berlin. (Dr Handmer and Mr Nader both received
$10,000 prizes.) Mr Nader has since produced an image from the scroll
showing four columns of text, side by side. For classicists, this is heady
stuff. The villa in question is thought to have belonged to Lucius Calpurnius
Piso, the father-in-law of Julius Caesar. The ability to read its well-stocked
library could significantly expand the number of texts that have survived
from antiquity. Already there is excited speculation about forgotten plays,
new works of philosophy—or even lost Homeric poems.
Purple prose
Efforts to read the scrolls began in the 1750s, when the villa was
rediscovered. Attempts to unpick them with knives caused them to
disintegrate. Recognising their fragility, Antonio Piaggio, a conservator from
the Vatican, built a machine in 1754 to unroll them slowly, using weights on
strings. Even then, the unrolled scrolls fell to pieces. And the resulting
fragments were almost impossible to read: charcoal-based ink is hard to see
against the shiny black of charred papyrus. But the few characters that could
be read revealed some scrolls to be philosophical works written in ancient
Greek.
A quarter of a millennium later, in 1999, scientists from Brigham Young

University illuminated some of those fragments with infrared light. That
created a strong contrast between papyrus and ink, making the writing more
legible. Multi-spectral imaging in 2008, combining many wavelengths of
light, was even better, revealing previously unreadable words. Many
fragments turned out to belong to texts written by a Greek philosopher called
Philodemus of Gadara. Until then, they had been known only from mentions
in other works. (Cicero, though, was a fan of his poetry.)
Around 500 scrolls remain unopened. Given the damage it does, physical
unrolling is no longer attempted. Instead the focus has shifted towards
finding ways to unwrap them virtually, by using 3D scans of the rolled-up
scrolls to produce a series of legible 2D images. The pioneer of this
approach is W. Brent Seales, a computer scientist at the University of
Kentucky. In 2009 he arranged for Banana Boy, and another scroll known as
Fat Bastard, to be scanned in a computerised tomography (CT) X-ray
machine, of the sort usually used for medical scans. This produced detailed
images of their internal structures for the first time. But the ink within the
scrolls could not be made out.
In 2015 Dr Seales analysed a different carbonised scroll found in 1970 at

En-Gedi, near the Dead Sea in Israel. It had been written using a metal-rich
ink, which stood out strongly in X-ray images. (The text turned out to be the
Book of Leviticus.) This confirmed that, in the right circumstances, digitally
unrolling a carbonised scroll and reading the contents could indeed be done.
The next step was to combine the existing approaches into a new one. In
2019 Dr Seales arranged for Banana Boy, Fat Bastard and four fragments of
other scrolls to be scanned at high resolution using the Diamond Light
Source in Britain, a particle accelerator that can produce much more
powerful X-ray light than a CT scanner. He then paired infrared images of
the fragments, in which the ink can be readily seen, with X-ray scans of the
same fragments in which it cannot.
Earlier this year Stephen Parsons, a graduate student working 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 ink
in the X-ray ones. By applying the resulting model to X-ray images from the
rolled-up scrolls it would be possible to reveal their contents. At this point,
deciphering the scrolls had, in theory, been reduced to a very complex
software problem. But that software still needed to be improved and scaled
up.
Enter Nat Friedman, a technology executive and investor with an interest in

ancient Rome. Mr Friedman offered to help fund Dr Seales’s work. Over a
whisky, they decided that the best way to accelerate things was to organise a
contest, with prizes handed out for completing various tasks. Mr Friedman
and Daniel Gross, another entrepreneur, launched the Vesuvius Challenge in
March, with a prize fund of $250,000. Other tech-industry donors soon
increased that to over $1m. To get the ball rolling, an initial challenge was
posted on Kaggle, a website that hosts data-science contests, to improve the
ink-detection model developed by Dr Parsons.
More than 1,200 teams entered. Many competed in subsequent challenges to

improve the tools for ink detection and “segmentation”, as the process of
transforming the 3D scans into 2D images of the scroll’s surface is known.
Scrutinising segmented images from Banana Boy, Dr Handmer realised that
the crackle pattern signified the presence of ink. Mr Farritor used this
finding to fine-tune a machine-learning model to find more crackles, then
used those crackles to further optimise his model, until eventually it revealed
legible words.
Mr Nader used a different approach, starting with “unsupervised pretraining”

on the segmented images, asking a machine-learning system to find
whatever patterns it could, with no external hints. He tweaked the resulting
model using the winning entries from the Kaggle ink-detection challenge.
After seeing Mr Farritor’s early results, he applied this model to the same
segment of Banana Boy, and found what appeared to be some letters. He
then iterated, repeatedly refining his model using the found letters. Slowly
but surely its ability to find more letters increased. All the results were
assessed by papyrologists before the prizes were awarded.
Multae manus onus levius reddunt

No less important than the technology is the way the effort has been
organised. It is, in effect, the application of the open-source software-
development method, Mr Friedman’s area of expertise, to an archaeological
puzzle. “It’s a unique collaboration between tech founders and academics to
bring the past into the present using the tools of the future,” he says. Dr
Seales reckons the spur of competition means the equivalent of ten years’
worth of research has been done in the past three months.
An active community of volunteers is now applying the new tools to the two
scanned scrolls. Mr Friedman thinks there is a 75% chance that someone
will claim the grand prize of $700,000, for identifying four separate passages
of at least 140 characters, by the end of the year. “It’s a race now,” he says.
“We will be reading entire books next year.”
Being able to read Banana Boy would indeed just be the beginning. Only a
small fraction of Greek and Roman literature has survived into modern
times. But if the hundreds of other scrolls recovered from the villa could be
scanned and read using the same tools, it would dramatically expand the
number of texts from antiquity. Dr Seales says he hopes the Herculaneum
scrolls will contain “a completely new, previously unknown text”. Mr
Friedman is hoping for one of the lost Homeric epic poems in particular.
Even more important, all this might in turn revive interest in excavating the
villa more fully, says Mr Friedman. The existing scrolls were recovered from
a single corner of what scholars believe is a much larger library spread
across several floors. If so, it might contain thousands of scrolls in Greek
and Latin.
One reason that classical texts are so scarce is that the papyrus upon which
they were written does not survive well in Europe’s temperate, rainy climate.
So it is a delicious irony, notes Dr Seales, that the carbonisation of the
scrolls, which makes them so difficult to read, is also what preserved them
for posterity—and that fragments of scrolls that disintegrated when they
were unrolled physically would eventually provide the key to unrolling the
rest of them virtually. ■
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This article was downloaded by zlibrary from https://www.economist.com/science-and-
technology/2023/10/18/ai-could-help-unearth-a-trove-of-lost-classical-texts
The weather underground
What a Serbian cave tells you about the weather

2,500 years ago
Like ice cores, stalagmites preserve a long record of the climate
Oct 18th 2023
IF YOU 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 snake around the Earth from west to east, several
miles above the surface. The meanderings of the northern polar 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, scientists suspect that the flow of the jet
streams is being affected by climate change. Data from the past century and
a half suggest that the northern jet stream has become stronger over that
time. But a century is not all that long in climatic terms, and it is not entirely
clear whether the strengthening is a natural phenomenon.
In a paper published in Geology, Miaofa Li at Fujian Normal University and
Slobodan Markovic at University of Novi Sad, in Serbia, shed new light on
that question. Climate scientists routinely examine ancient air trapped in
polar ice to glean insights into the state of the climate hundreds or even
thousands of years ago. The researchers point out that something very
similar can be accomplished by looking at the chemical makeup of rock
formations in a pair of Serbian caves.
As with many caves, the floors of both Cerjanska Cave and Prekonoska
Cave, both in Serbia’s south-east, are dotted with thin spires of rock called
stalagmites. These are formed, very slowly, by water as it drips down from
the rock above. Each droplet carries dissolved minerals. If water drips onto
the same spot over many years, a stalagmite gradually forms as the minerals
are deposited. Crucially, analysing the minerals from which the stalagmite is
made can reveal information about the water that made it.
The researchers were interested in Serbia specifically because of how its

location affects its weather. The sort of rain the country gets depends on the
strength of the northern polar jet stream. When it is blowing strongly, it
tends to blow in clouds that formed over the Atlantic Ocean. When it is
weak, clouds tend to drift in from the Mediterranean instead.
Those two bodies of water have unique chemical signatures. Water from the
Mediterranean has more of a rare isotope of oxygen known as oxygen-18, in
which that element’s eight protons are joined by ten neutrons instead of the
usual eight. Water from the Atlantic has less. By examining the proportions
of that isotope in the stalagmite’s layers, the researchers hoped to be able to
detect when Serbia had been exposed to more Atlantic storms or more
Mediterranean ones, and thus what the jet stream had been doing.
Drs Li and Markovic and their colleagues examined two stalagmites, one
380mm specimen from Cerjanska and one 238mm one from Prekonoska.
Using traces of two other elements, uranium and thorium, they were able to
date both stalagmites. The one from Cerjanska grew between 434BC and
1913, while the one from Prekonoska Cave was formed between 798BC and
404. They then analysed 581 samples of an oxygen-containing mineral
called calcium carbonate.
The researchers conclude that the North Atlantic jet stream seems to be
stronger today than it has been at any time during the past 2,500 years. And
their confidence in their method was boosted when they were able to see in
the rocks the signatures of climatic events known to have happened from
other sources, such as the Roman Warm Period, which lasted between
300BC and 200, and the Dark Ages Cold Period, which ran from roughly
300 to 700. Intriguingly, the data suggest the jet stream was stronger during
cooler periods and weaker during warmer ones—the opposite of the trend
being seen today.
Why the modern jet stream appears to be doing the opposite is not yet clear.
The researchers raise as one possibility the atmospheric influence of
something called the North Atlantic Warming Hole. This is a persistent blob
of unusually cool water that stretches from the Hudson Strait in northern
Canada almost as far as the western coast of Ireland. It is thought to be
caused by the melting of Greenland’s ice sheets and the weakening of the
great oceanic conveyor belts that transport warmer water from the tropics
into the higher northern latitudes. Perhaps more data, gleaned from other
stalagmites in other caves, might help unravel the mystery. ■

technology/2023/10/18/what-a-serbian-cave-tells-you-about-the-weather-2500-years-ago
Sleep tight!
It’s not just Paris. Bedbugs are resurgent

everywhere
Like bacteria, the insects are becoming resistant to the chemicals used to
kill them
Oct 17th 2023
TO ERNEST HEMINGWAY, Paris was a movable feast. To a bedbug, so

are Parisians. In videos on social media, the seats of the city’s metro are seen
swarming with bedbugs, tiny insects no bigger than an apple pip, which feed
on human blood.
The health risk from bedbugs is minor: itchy bites and a small risk of
allergies and secondary infections. As the present panic suggests, the bigger
impact tends to be psychological, says Clive Boase, an entomologist and
pest-control consultant. Mosquitoes, leeches and other parasites are
unpleasant, but do not colonise your home. If a traveller brings bedbugs back
from their holidays, they can start an infestation that can be very difficult to
shift.
Schadenfreude among the non-French is unwise. The story is not so much
one of bad hygiene and dirty trains as it is another cautionary tale of
globalisation, climate change and evolutionary biology. Warm cities provide
ideal environments for bedbugs. Cheap travel helps them spread. And after
decades of widespread use, the chemical insecticides used to kill them are
losing their power.
Bedbugs are resurgent everywhere. A decade ago New York went through a
similar panic to Paris’s today. Figures from Switzerland’s Pest Advisory
Service, which maintains one of the few long-term datasets about the insects,
show that in the decade to 2005, bedbug complaints in Zurich numbered
around 20 a year. A decade later, they had sextupled (see chart). Numbers
fell during covid-19 lockdowns, but they 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 parasites that prey on bats, with
which humans shared caves, and on birds, which may have nested in early
thatched roofs. In evolutionary terms, that makes bedbugs a comparatively
recent affliction. That may explain the one bit of good news about them.
Mosquitoes spread malaria, dengue fever and yellow fever. But no human
pathogen is known to use bedbugs as a vector—perhaps because there has
not been time for one to evolve the ability.
The insects thrive in warm environments with plenty of dark places to hide.
Cities, and crowded blocks of flats, are ideal. The bugs shelter in the
crannies of furniture, in mattress seams or in cracks in walls, coming out to
feed at night. Warm, centrally heated homes accelerate their life-cycles,
making the problem worse—as does a warming climate.
The introduction and widespread use of insecticides such as DDT in the

aftermath of the second world war came close to eliminating the bugs from
most rich-world houses. But that chemical assault exerted a powerful
evolutionary pressure on the insects to develop resistance to the poisons. Just
as bacteria have evolved resistance to many of the antibiotics once used to
kill them, modern bedbugs are almost invulnerable to at least some
insecticides.
That growing resistance has been boosted by a depleting arsenal of

chemicals to hurl against them. Fumigants such as hydrogen cyanide,
sulphur dioxide and DDT itself are now regarded in most places as too toxic
to use. Pyrethroids, which are the active ingredients in many commercially
available insecticide sprays, are safer, but become less effective every year.
Exterminators are therefore turning to other avenues of attack. Diatomaceous
earth, a white silicate powder, can kill the bugs by desiccating them.
Polymer sprays can trap them; certain oils can block the pores through which
they breathe. Temperatures above 45°C are also fatal. Some pest-control
firms therefore offer to heat-treat affected furniture in insulated tents, or
even to roast entire rooms. But such treatments are expensive.
New insecticides, to which the bugs lack resistance, could probably be

invented. But for now at least, says Mr Boase, the market does not exist to
justify much corporate research. And since the bugs do not spread diseases,
public-health bodies have more pressing priorities. If bedbugs continue to
spread, though, those incentives could start to shift. ■

technology/2023/10/17/its-not-just-paris-bedbugs-are-resurgent-everywhere
News you can use
How to predict the outcome of a coin toss

Coins are fair. Their tossers, less so
Oct 15th 2023
LEGEND HOLDS that the city of Portland, Oregon, was nearly called
Boston. A coin toss in 1845 between Francis Pettygrove, who hailed from a
different Portland, in Maine, and Asa Lovejoy, from Boston (the one in
Massachusetts) eventually decided the matter. But things might have turned
out differently, per Frantisek Bartos, a graduate student at the University of
Amsterdam, if people were not such wobbly tossers.
Mr Bartos was interested in a prediction made by Persi Diaconis, Susan

Holmes and Richard Montgomery, a group of American mathematicians. In
2007 the trio analysed the physics of a flipping coin and noticed something
intriguing. Besides sending it somersaulting end-over-end, most people
impart a slight rotation to a coin. That causes the axis about which the coin is
flipping to drift while it is in the air, a phenomenon called precession.
After crunching the numbers, the physicists concluded that a coin thrown by
a human should exhibit a subtle but persistent bias. There was about a 51%
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 thrower’s hand, in other words, it would be
slightly more likely to land heads-up too. Or at least, that was the prediction.
Enter Mr Bartos, and his admirable dedication to empiricism. He convinced

48 volunteers to perform 350,707 coin tosses, using everything from an
Indian two-rupee piece to a Swiss two-franc coin. His data confirmed what
the physics had predicted. The coins landed same-side up 50.8% of the time.
The statistics revealed that the coins themselves showed no particular bias.
The determining factor was indeed humans’ apparent inability to throw
straight. Mr Bartos was not the first person to collect statistics on coin
tosses. But he is the first to have done so on a scale large enough to detect
the bias. (A previous effort of 40,000 tosses, conducted by two students at
the University of California, Berkeley, lacked the statistical power to
confirm the theory.)
A 50.8% chance is only very slightly different from perfect fairness. But Mr
Bartos points out that it is bigger than the advantage enjoyed by a casino in
most varieties of blackjack. And in some situations it may matter. In 2019
Sue Cudilla became mayor of Araceli, a town in the Philippines, on the toss
of a coin after the election had been declared a dead heat. Even more
importantly, a coin toss can determine who bowls or bats first in cricket.
Professional athletes spend thousands of dollars and hours of training in
search of marginal gains. Perhaps they should look to the loose change in the
umpire’s pocket.■

technology/2023/10/15/how-to-predict-the-outcome-of-a-coin-toss
Culture
How to cancel “cancel culture”
Why films have become so ridiculously long
David Beckham’s guide to celebrity
Where to look to find enlightenment
“Here We Are” and the question of what to do with unfinished art
The Israel-Palestine conflict: a reading list
Ill liberals
How to cancel “cancel culture”

Two new books examine the brokenness of wokeness
Oct 19th 2023
The Identity Trap: A Story of Ideas and Power in Our Time. By Yascha
Mounk. Penguin; 416 pages; $32. Allen Lane; £25.
The Cancelling of the American Mind: How Cancel Culture
Undermines Trust, Destroys Institutions, and Threatens Us All. By Greg
Lukianoff and Rikki Schlott. Simon & Schuster; 464 pages; $29.99. Allen
Lane; £25
YASCHA MOUNK’S book contains several jolting stories, which

encapsulate the extreme thinking of some on the American left. When covid-
19 vaccines became available, most countries dispensed them first to health
workers and the elderly (who are much more vulnerable to the disease than
young people). Yet America’s Centres for Disease Control and Prevention
urged states to offer priority to 87m “essential workers”, which included
package-delivery drivers and film crews. Its rationale was “racial equity”,
because old people were more likely to be white, even though such a policy
would probably cause thousands more deaths.
In another story, an African-American mother tried to get her seven-year-old

into a class at school. The principal said no: “That’s not the black class.”
This was not a scene from the Jim Crow South of the 1950s, but from
present-day America, where a growing number of “progressive” schools
group children by race and teach them to think of themselves as “racial
beings”, all in the name of “antiracism”.
Mr Mounk, a political scientist at Johns Hopkins University, is a man of the

left. (“Barack Obama is the American politician I most admire.”) He grew
up believing that “humans matter equally irrespective of the group to which
they belong.” His book, “The Identity Trap”, explains why many on the left
abandoned “universalism”. He summarises the “woke” left’s logic as
follows: “to ensure that each ethnic, religious or sexual community enjoys a
proportionate share of income and wealth…both private actors and public
institutions must make the way they treat people depend on the groups to
which they belong.”
Most of the people who espouse this view aspire to improve the world, and
many of the injustices they rail against are real. But the policies they
advocate “are likely to create a society…of warring tribes rather than co-
operating compatriots”. The word “liberal” has long been used in America to
mean “left-wing”, but many on the left now reject basic liberal notions such
as universal values and free speech. Across the English-speaking world and
beyond, they have become intolerant of those who do not accept their dogma
or their identity politics.
Dismissing “wokeness” as just well-meaning millennials pushing for social

justice is therefore a mistake, Mr Mounk argues. Not enough people
understand that the far left is “moving beyond—or outright discarding—the
traditional rules and norms of democracies”. He has long been concerned
about the authoritarian right but says it is reasonably well understood
(democracy-deniers and all), whereas the intellectual history of the
authoritarian left is “oddly unexplored territory”.
How did views that are unpopular with the general public become so
influential? In Mr Mounk’s telling, it starts with group psychology. When
like-minded people debate political or moral questions, their conclusions
become “more radical than the beliefs of their individual members”, he
writes. This tendency is compounded when the group feels under threat, as
progressives did during Donald Trump’s presidency. Dissent is suddenly
seen as betrayal: hence the fury unleashed on anybody who violates the
group’s unwritten and shifting norms. More than three out of five Americans
now say they avoid airing their political views for fear of suffering adverse
consequences; only a quarter of college students say they are comfortable
discussing controversial topics with their peers.
Students who imbibed what Mr Mounk rather clunkily calls “the identity
synthesis” on campus went on “a short march through the institutions” after
they graduated. Since about 2010 they have carried their new ideology into
the workplace and, thanks to the power of social media to create hurricanes
of outrage, intimidated bosses like no previous generation. Young activists-
cum-employees pushed the American Civil Liberties Union to scrap its iron
commitment to free speech and risk-averse corporate managers to sign off
on some counter-productive “diversity, equity and inclusion” training. A
slide in a presentation at Coca-Cola, for example, exhorted employees to
“try to be less white”.
Far from solving the real injustices that persist, this way of thinking and
talking threatens to exacerbate them. And instead of bracing the country to
withstand Mr Trump’s influence, it helps him, as Middle America leans right
in response to the far left’s excesses. Mr Mounk’s answer is a return to
classical liberalism: a rediscovery of universal values and neutral rules,
allowing people to make common cause with others of different beliefs and
origins. People should live up to the ideals on which liberal democracy is
based rather than abandoning them because they are so difficult to achieve,
he says.
While Mr Mounk’s message is global, Greg Lukianoff and Rikki Schlott

focus on America. “The Cancelling of the American Mind” is a cri de coeur
for both sides to reclaim “free-speech culture”. (The authors work for the
Foundation for Individual Rights and Expression, a free-speech group.)
When two sides cannot even agree on facts, “it undermines faith in all of the
institutions we rely on to understand the world,” they write.
Mr Lukianoff and Ms Schlott offer a critique of the left, pointing out how
cancel culture has eroded academic freedom at universities. But they are
equally critical of the right. They note that some of Florida’s new education
laws (including one that bans certain subjects from being taught) are
“without question unconstitutional”.
Both books are bold, timely and buttressed by data. They also offer plausible
remedies. The far right can be defeated only by the right and the far left by
the left. So left-of-centre people who can see what is happening should
speak up but not vilify those who disagree. (Political disagreement is not
moral failure, Mr Mounk reminds readers.) People should appeal to the
reasonable majority, he argues, since most people are neither “woke” nor
Trumpist. They should not let their indignation turn them into reactionaries.
The advice from Mr Lukianoff and Ms Schlott is more personal: raise kids
who are not cancellers. Teach them that life is not a battle between wholly
good and bad people. Not every “harm” that someone, somewhere calls out
is really harmful. Educating children about differences, rather than coddling
and insulating them, is essential.
“The Cancelling of the American Mind” advises companies to foster an

intellectually diverse workforce. Bosses should make clear that a
commitment to free speech is a condition of employment. And universities
should scrap political litmus tests for tenure and get back to teaching
students how to debate ideas.
The post-liberal right and post-liberal left are much closer to each other than
many people realise. Both are intolerant; both prioritise the power of the
state over individual liberty. They “see each other as mortal enemies”, but
“feed on each other”, Mr Mounk warns. That is why “everyone who cares
about the survival of free societies should vow to fight both.” ■
For more on the latest books, films, TV shows, albums and controversies,
sign up to Plot Twist, our weekly subscriber-only newsletter
https://www.economist.com/culture/2023/10/19/how-to-cancel-cancel-culture
Movie marathons
Why films have become so ridiculously long

Popular films are nearly 50% longer today than in the 1930s
Oct 14th 2023
WANT TO KNOW what is coming soon to a cinema near you? Probably not
an hour-and-a-half-long movie, as in the old days. This year audiences have
endured the longest instalments yet in the “Indiana Jones”, “John Wick” and
“Mission: Impossible” franchises. “Oppenheimer”, Christopher Nolan’s
three-hour blockbuster, required 11 miles (18km) of film stock for IMAX
showings.
On October 20th comes “Killers of the Flower Moon” (pictured), a grisly

western from the director Martin Scorsese. At nearly three and a half hours,
its length is nearly double that of the average film last year. Even movie
buffs struggle to concentrate for that long. During the premiere at the Cannes
Film Festival in May, some viewers dozed off. Afterwards there was a mad
dash (and long queue) for the toilets. When did watching a film become such
a slog?
The Economist analysed over 100,000 feature films released internationally
since the 1930s, the start of Hollywood’s golden age, using data from IMDb,
a movie database. The average length of productions has crept up by around
24%, from one hour and 21 minutes in the 1930s to one hour and 47 minutes
in 2022 (see chart). Blockbusters are the worst offenders. For the ten most-
popular titles (measured by how many reviewers rated the films on IMDb)
average lengths stretched to around two and a half hours in 2022, nearly
50% higher than in the 1930s.
Film-makers began churning out protracted pictures in the early 1960s.
Cinema was booming and auteurs wanted to distinguish their art from
television. Epics graced the silver screen, including “Lawrence of Arabia”
(1962), which surpassed the three-and-a-half hour mark, and “Cleopatra”
(1963), which originally exceeded four hours but was later cut down. Back
then, audiences enjoyed an intermission while the projectionist prepared the
reels for the next act. Runtimes of popular films ebbed and flowed over
subsequent decades (and stretched long in some countries, such as India,
known for its Bollywood sagas). But they have ballooned since 2018.
Franchises are one driver of this trend. Studios want to squeeze the most out
of their costly intellectual property, but they are competing with streaming
platforms for eyeballs. The hope is that a spectacular, drawn-out “event”
movie will tempt audiences away from the small screen and into cinemas.
This approach has often paid off: “Avengers: Endgame” (2019), Marvel’s
three-hour superhero extravaganza, was the highest-grossing film in 2019.
Last year long franchise movies made up most of the highest-grossing films
in America.
Anything that lures people off their couches to see a film in theatres is good
news for cinemas. But protracted runtimes also pose a “fundamental
problem”, complains Clare Binns, managing director of Picturehouse, a
British cinema group and film distributor. Long movies can mean forgoing
two showings per night, which hurts ticket sales and profits.
Another explanation for longer films has to do with directors’ growing clout.
Who would dare tell the likes of Mr Nolan to trim his masterpieces?
Streamers, which do not have to worry as much about concision because
viewers can pause whenever they like, may lure big names with deep
pockets and promises of creative freedom. “Killers of the Flower Moon” will
debut on AppleTV+ after its theatrical run. Netflix funded and released Mr
Scorsese’s equally long “The Irishman” in 2019, a film that would have
benefited from a decisive editor, Irish or otherwise. ■
https://www.economist.com/culture/2023/10/14/why-films-have-become-so-ridiculously-
long
Back Story
David Beckham’s guide to celebrity

As a new series on Netflix shows, it takes more than just a pretty face
Oct 12th 2023
IN 2004 THIS columnist visited a school near Basra in southern Iraq. The
affable boys seemed to know four words of English. Two were obscenities.
The other two were “David Beckham”.
Not long before, recounts “Beckham”, a new documentary series, the Sun
newspaper claimed to have found the only person on the planet who hadn’t
heard of Mr Beckham: a shepherd in Chad. The four-part series on Netflix is
a portal to the flighty years around the turn of the millennium when the
footballer was in his sporting pomp. Watch closely and it is also, for the
ambitious, a handy how-to guide to becoming a celebrity and ultimately a
global brand.
It helps to be extremely good-looking. With his dirty-blond mop and impish

smile, Mr Beckham had a boy-next-door charm when he hit TV screens in
the mid-1990s. Kath Phipps, a long-serving receptionist at Manchester
United, his first club, remembers all the knickers that were sent to him (“It’s
not nice, is it, sending underwear to a boy?”). After that, as in a time-lapse
photo, the sculpted sex symbol emerges. The tattoos spread across his torso,
up his neck and down his arms; the haircuts become jazzier, the stubble
better designed.
To bank it like Beckham, next find a beautiful and famous spouse with an
equal yen for exposure. “It puts the heat factor way up,” Anna Wintour, the
boss of Vogue, says on camera of Mr Beckham’s romance with Victoria
Adams—also known as Posh Spice—who nicknamed him Golden Balls.
“They were the new Charles and Diana,” says his friend and former team-
mate Gary Neville, a perceptive description of a couple who, like the ill-
starred royals, were both lionised and lacerated by the media.
But looks and a canny marriage are nothing without a plan that you make
early and stick to. It is striking how quickly and clearly Mr Beckham saw his
path from midfield to endorsements, fashion and beyond. “He wanted to be
more than a football player,” says Mr Neville, and soon he was, hobnobbing
with Tom Cruise and Beyoncé. The usual retirement gigs of coaching and
punditry were not for him. Like many British stars he strove to crack
America, on and off the field.
First he conquered Spain, where in 2003 Florentino Pérez, president of Real

Madrid, welcomed him as “a symbol of post-modernity”. That suggests his
success is an artefact of image and marketing; yet it also rests on old-
fashioned qualities that are disappointingly hard to simulate.
One is the talent that made his profile marketable. George Best, a
Manchester United winger of another generation, reputedly said that Mr
Beckham couldn’t kick with his left foot, head the ball or tackle, but “apart
from that he’s all right.” With his right foot, however, he struck corners and
free-kicks, and launched passes and crosses, with magical whip and
accuracy. In boyhood matches you see his technique develop: the distinctive
diagonal body shape, windmilling arm and touchingly bow-legged gait.
The most old-fashioned virtue of all—hard work—turns out to be grindingly

important. A pushy father is useful in this regard. “Left foot, right foot, over
and over and over again,” David recalls of Ted Beckham’s drills. If a corner
went astray, “he’d kill me.” This tough love, he says, helped him cope with
the abuse that followed his sending-off at the World Cup of 1998. (An island
of discretion in a sea of self-publicity, Ms Phipps, the receptionist, declines
to discuss the bullets that arrived in the post.) Sandra, his mum, thinks Ted
was too tough but seems steely herself, deadpanning about her personal “hit
list”.
Fisher Stevens, the director, was in the cast of “Succession”. There are
echoes of that show in the trilling music and home-video footage of David
doing keepie-uppies in the garden. Along with access to the family archive
Mr Stevens secured big-name interviewees but few revelations, besides
details of Mr Beckham’s domestic neat-freakery and his love of beekeeping.
A tragic note sounds in his split with Sir Alex Ferguson, the coach who was
his mentor until the Golden Balls glitz came between them.
And on the main take-home lesson of hard work, “Beckham” misses a trick.
The series opens on the career-defining day in 1996 when Mr Beckham, then
21, scored a goal from the halfway line. “I looked up, and I thought, ‘Why
not?’” he says, leaving the impression that a shot seen around the world was
an act of instinctive genius. In “The Class of ’92”, a previous documentary,
his pal told it differently. “He practised that in training”, said Mr Neville,
“every single day.”■
Read more from Back Story, our column on culture:

“Cat Person”, an internet-breaking short story, is back as a film (Oct 5th)
Donald Trump and the dramatic power of not turning up (Sep 21st)
Lots of people mourn when famous writers and musicians die. Why? (Sep
3rd)
Also: How the Back Story column got its name.

https://www.economist.com/culture/2023/10/12/david-beckhams-guide-to-celebrity
Spirituality
Where to look to find enlightenment

A new book looks at India’s role in sating spiritual searches
Oct 19th 2023
The Nirvana Express: How the Search for Enlightenment went West. By
Mick Brown. Hurst; 400 pages; $34.95 and £25
FOR DECADES India has mostly run a current-account deficit, unable to

export as much as the country imports to meet its needs. But in the
accounting books of the heavens, India is a net exporter, on par with the
Levant as a font of great religions. Hinduism, Buddhism, Sikhism and
Jainism sprang from its sacred geography. God has repeatedly lured spiritual
seekers to the subcontinent—from Xuanzang (a seventh-century Chinese
monk who journeyed to India in search of Buddhist texts) to Timothy Leary
(an American champion of LSD). Leary memorably described Varanasi,
Hinduism’s most sacred place, as the “the site of a non-stop hippie festival
for the last 5,000 years”.
Those seeking to join the piety party first ventured from Asia, then from
Europe (and especially Britain) during the colonial era and later, after India’s
independence in 1947, from America. Indian swamis and gurus energetically
promoted their teachings to new converts. It is these Western enthusiasts and
their Indian idols who are the subject of “The Nirvana Express”, an
enlightening new book by Mick Brown, a British music journalist with a
sideline writing about Asian religion.
The first notable Western figures to take an interest in Indian religions were
not exactly long-haired, pot-smoking hippies. Sir Edwin Arnold was an
Oxford-educated editor of the Daily Telegraph who spoke 19 languages and
wrote memoirs, poetry and history in his spare time. In 1879 he published
“The Light of Asia”, a 5,300-line narrative poem about the teachings and
life of Buddha. The book went on to sell over 1m copies and ignited the first
sparks of popular interest in India’s religions in the West. In 1885 Arnold
published “The Song Celestial”, a translation of the Bhagavad Gita;
Mahatma Gandhi credited it with introducing him to his own religion’s most
sacred text. The two men would go on to become friends.
Arnold’s Indian analogue was Swami Vivekananda, a Hindu philosopher

who electrified the first gathering of the World’s Parliament of Religions in
1893 with his speeches preaching Hinduism’s message of universal
acceptance. Arguing that “we Hindus must believe that we are the teachers
of the world,” he founded spiritual centres in the West and acquired a
devoted female following.
Fantastic stories—packed with unlikely figures, strange twists of fate and

even the occasional act of mind-reading—bring readers of “Nirvana
Express” on an enjoyable journey. Some of the colourful characters include
Paul Brunton, whose bestselling “A Search in Secret India”, a travelogue-
cum-spiritual-handbook published in 1934 (and still in print), would
establish his reputation as a sort-of guru figure himself and Meher Baba, an
actual guru obsessed with movies in general and Greta Garbo in particular.
All are worthy of their own books. It is to Mr Brown’s credit that he never
stoops to mockery or even gentle irony, despite what must have been
considerable temptation.
“Nirvana Express” also tracks renewed Western interest in Indian
spiritualism, which started with the beatniks in the 1950s, peaked with the
Beatles arriving in the Himalayas to meditate with Maharishi Mahesh Yogi
(pictured) and ended with the dissolution of the Rajneesh Ashram in Oregon.
(This was the subject of “Wild Wild Country” on Netflix, which dramatises
the short-lived but tumultuous commune better known for violence, group
sex and attempts to poison the local population than for spirituality.)
The collapse of Rajneesh Ashram, writes Mr Brown, “marked the final

pangs of the Western dream of India as the repository of esoteric wisdom
and the promise 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 naked babas is now better known as an economic giant, a rising
geopolitical power and an originator of modern technology.
Yet India’s own conception of itself as an ancient land with spiritual riches to
offer humanity has never faded. For evidence, look only to the title that
Narendra Modi, the prime minister, bestows on his country, and by
extension, himself: vishwaguru, or world teacher. India has never been short
of men who believe themselves chosen by God to lead the world. ■
https://www.economist.com/culture/2023/10/19/where-to-look-to-find-enlightenment
When the music stops
“Here We Are” and the question of what to do

with unfinished art
Stephen Sondheim’s last work is a rollicking musical—for the act that he
probably wrote
Oct 19th 2023
NON-FINITO art can be arresting. Think of a delicate sculpture protruding

from a monolith or a swathe of bare canvas in an otherwise detailed painting.
Such artworks give the viewer pause. Did the creator intend the effect or
simply stop halfway through?
“Here We Are” is one such puzzle. Stephen Sondheim, an American

composer, had been working on the musical on and off for years alongside
David Ives, a playwright, and Joe Mantello, a director. In the weeks before
his death in 2021, Sondheim gave a production the go-ahead. But then he
said that it was not finished and had no idea when it would be.
The work will have its premiere on October 22nd at The Shed in New York.
The producers say that it is “very much the complete show” that Sondheim
“envisioned, created and sanctioned”. But those who have seen the musical
may wonder whether that is the case. It is peculiar and unlike previous
works, such as “Into the Woods”.
Inspired by two surrealist films by Luis Buñuel, “Here We Are” has a typical
Sondheimian premise: a group of friends riven with tensions (sexual and
otherwise) has met up. In the first act, they cannot find somewhere to eat and
wander from restaurant to restaurant. At a recent preview it was dreamlike,
filled with the kind of complex harmonies, witticisms and internal rhymes
that Sondheim is known for.
Then, in the second act, the tone shifts. The group finally has a meal but then
is trapped in the room. The music stops; the characters struggle to sing.
Sondheim seems to have left at the intermission. Mr Mantello has said that
he came up with the idea, based on the films but that Sondheim agreed with
his assessment that “the absence of music was the score.”
History is littered with left-behind works-in-progress. Geoffrey Chaucer’s

pilgrims never made it to their shrine. Gustav Klimt died in 1918 before he
could finish “The Bride”, so some figures have the Austrian artist’s signature
look and others are outlines. In neither case does it matter much. The stories
in “The Canterbury Tales” stand alone. The gaps left by Klimt can be filled
in by the imagination.
Some find the lack of closure unsatisfying, however, and attempt to finish a
piece on an artist’s behalf. Mozart died partway through writing a requiem; it
was completed first by a pupil and later by musicologists. (The results have
divided listeners.) Artificial intelligence is also being used to fill the silence.
When Beethoven died, his Tenth Symphony was just a collection of
sketches. A team from Rutgers University trained an AI model on the
maestro’s work and extrapolated a composition.
Financial incentives can push unfinished work to be released without the

necessary caveats. Before Harper Lee died in 2016, “Go Set a Watchman”,
an early draft of “To Kill a Mockingbird”, was initially passed off as a
discrete novel. Others suggest that artists would rather partial or abandoned
pieces stay private. Yet perhaps it is worse for the art never to be seen. Jane
Austen’s “Sanditon” collected dust until 1925, more than a century after her
death. Although it stops in the middle of a chapter, betrothals still to be
secured, the novel contains some of Austen’s sharpest lines.
What about “Here We Are”? Strange though it is, fans may still be pleased to
hear it. The first act, at least, proves that Sondheim’s strengths remained
potent. He was a master of wordplay, ambition and emotional complexity to
the end. ■
Clarification (October 19th 2023): An earlier version of this article

attributed a quote to the press team at The Shed. It was, in fact, from the
producers of “Here We Are”. Sorry.
https://www.economist.com/culture/2023/10/19/here-we-are-and-the-question-of-what-to-
do-with-unfinished-art
War in the Middle East
The Israel-Palestine conflict: a reading list

Six books that shed light on a century of violence
Oct 18th 2023
A Peace to End All Peace: The Fall of the Ottoman Empire and the
Creation of the Modern Middle East. By David Fromkin. Holt, Henry &
Company; 688 pages; $26
Tensions in the Middle East are a political inheritance of the dissolution of

the Ottoman empire after the first world war and the piecemeal settlements
of 1922. This landmark book, published in 1989 and named as a finalist for
the Pulitzer prize, provides a sweeping account of the period between 1914
and 1922, ranging from the Mediterranean to Afghanistan. It astutely traces
the Allies’ motivations for carving up the Arab world and shows why the
West’s imperial vision was doomed to fail.
Enemies and Neighbours: Arabs and Jews in Palestine and Israel, 1917-
2017. By Ian Black. Atlantic Monthly Press; 608 pages; $30. Allen Lane;
£25
When, exactly, the Israel-Palestine conflict began is hard to say. Many
consider November 2nd 1917 to be the starting-point: that is the date of the
Balfour Declaration, when the British government vowed to use its “best
endeavours” to create a “national home” for the Jewish people in Palestine, a
territory it would take from the Ottomans. This balanced book, praised by
Palestinian and Israeli historians alike, offers a tour of the past century of
conflict.
The Iron Cage: The Story of the Palestinian Struggle for Statehood. By
Rashid Khalidi. Beacon Press; 288 pages; $19.95. Oneworld Publications;
£34.99
An eminent Palestinian-American historian explains why Palestinians failed

to achieve an independent state. The book is resonant with personal history
and lays out the barriers that obstructed Palestinians’ aspirations. It counts
the poor decision-making of certain Palestinian leaders among its
explanations, too.
Hamas: The Islamic Resistance Movement. By Beverley Milton-Edwards

and Stephen Farrell. Wiley; 340 pages; $36.95. Polity Press; £24.99
The militant organisation that rules the Gaza Strip first emerged in 1987
during the first Palestinian intifada (“shaking off”, or uprising). In its first
charter Hamas styled itself as the “Islamic Resistance Movement” and
declared Israel illegitimate. In 2006 Hamas became the first Islamist
movement to ascend to power in the Middle East by winning an election.
The authors interviewed hundreds of people over three decades, including
the group’s leaders, fighters, opponents and victims. This book explains the
inception of the “largest, most influential and most deadly Islamist
organisation” and how it became entrenched in Gaza.
The Rise of the Israeli Right: From Odessa to Hebron. By Colin Shindler.
Cambridge University Press; 440 pages; $38.99 and £29.99
The right first came to power in Israel nearly five decades ago, but its
current government may be the most right-wing in the country’s 75-year
history. This richly detailed book analyses with clarity and insight the
political and philosophical ideas that drive the right. The author, who is a
professor at Cambridge, studies important thinkers and figures such as Ze’ev
Jabotinsky (the founder of the Zionist Right) and Binyamin Netanyahu
(Israel’s prime minister).
It’s Easier to Reach Heaven than the End of the Street: A Jerusalem
Memoir. By Emma Williams. Olive Branch Press; 412 pages; $16.
Bloomsbury; £8.99
In 2000 the author, a British doctor, accompanied her husband, a UN

official, and three small children to Israel. A month later the second
Palestinian intifada erupted. This moving memoir—which spans three years
—documents the events she witnessed. She gave birth to a fourth child in a
hospital in Bethlehem, which was shelled by the Israeli army. A Palestinian
suicide-bomber blew himself up near her children’s school, with his head
landing at the foot of their teacher.
The Economist’s journalists have also written books about the conflict.
Anton La Guardia, our diplomatic editor, is the author of “Holy Land,
Unholy War: Israelis and Palestinians”. Gregg Carlstrom, our Middle East
correspondent, wrote “How Long Will Israel Survive?: The Threat From
Within”. Anshel Pfeffer, our Israel correspondent, is the author of “Bibi: The
Turbulent Life and Times of Benjamin Netanyahu”. ■
https://www.economist.com/culture/2023/10/18/the-israel-palestine-conflict-a-reading-
list
Economic & financial indicators
Economic data, commodities and markets
Indicators
Economic data, commodities and markets

Oct 19th 2023
This article was downloaded by zlibrary from https://www.economist.com/economic-and-
financial-indicators/2023/10/19/economic-data-commodities-and-markets
What is Palestinian Islamic Jihad?
How China’s Belt and Road Initiative is changing
What is Palestinian Islamic Jihad?

Israel blames the group for a deadly explosion at a hospital in Gaza
Oct 18th 2023
ON THE EVENING of October 17th a blast struck al-Ahli hospital in Gaza

City. Thousands of civilians had been sheltering there, alongside the sick.
Palestinian officials say that hundreds died. Hamas, the militant group that
runs Gaza, and several Arab countries blamed Israel. Israel’s army, citing
drone footage as evidence, said that the explosion was caused by a
malfunctioning rocket fired by Palestinian Islamic Jihad (PIJ), another
militant group. PIJ, which operates in the West Bank and Gaza, denied the
allegation. On October 18th, on a visit to Israel, President Joe Biden also
blamed “the other team”, backing up Israel’s account. What is PIJ and what
threat does it pose in this conflict?
The group was founded by Fathi Shaqaqi, a Palestinian doctor, and Abd al-
Aziz Awda, a Muslim preacher born in Jabalia refugee camp in northern
Gaza. The pair were students in Egypt in the 1970s, where they were
members of the Muslim Brotherhood, the world’s oldest Islamist group. Mr
Awda and Shaqaqi advocated violent resistance against the Israeli
occupation of Gaza and the West Bank. Inspired by the Islamic revolution in
Iran in 1979, they hoped to establish an Islamic state on the territory of the
British mandate of Palestine, part of which became the state of Israel after
1948. They thought the Muslim Brotherhood was insufficiently committed
to the cause, and began recruiting for their own militant alternative. After
returning to Gaza in 1981 they spent several years building support. The
group claimed responsibility for several attacks on Israeli soldiers in Gaza in
the early 1980s, at least half a decade before Hamas carried out its first
attack.
Throughout the 1980s PIJ was a loose network of military cells, with only a
few hundred members in total. In 1988 Israeli authorities deported Dr
Shaqaqi to Lebanon, where he was later joined by other PIJ deportees. While
in exile these fighters formed ties with Iran and Hizbullah, an Iran-backed
militia in Lebanon. PIJ members began participating in Hizbullah’s training
camps. The group founded the al-Quds Brigades, a more structured military
operation than it had had before. Seeking to undermine peace talks between
the Palestinian Authority and Israel, it carried out a series of suicide attacks
in Israel. The most serious, in 1995, killed 21 Israeli soldiers and one
civilian.
Despite their ideological similarities, PIJ has remained at arm’s length from
Hamas. During the first Intifada, or “shaking off”, an uprising against Israeli
rule that ended in 1993, the two groups collaborated on several operations
but never formally joined forces. Hamas won an election in Gaza in 2006
and, after failing to strike a power-sharing deal with Fatah, its rival, fought a
brief war for sole control of the strip in 2007. PIJ limits itself to armed
conflict. It has never participated in elections and, unlike Hamas, has
provided little support to Gazans.
PIJ’s influence declined in the 1990s, after Israel jailed many of its fighters
in the West Bank. But many were released around 2000 and PIJ’s military
capacities have since grown, assisted by arms supplies from Iran. In 2014,
PIJ fired more than 100 rockets from Gaza at Israel. It is the second-largest
of around a dozen armed groups in Gaza, after Hamas. Its presence in the
West Bank has grown recently, particularly in Jenin, a city in the north. In
2022 several brigades linked to PIJ carried out a series of shootings on
Israeli military checkpoints.
PIJ has played a large role in the violence that began when Hamas invaded
Israel on October 7th this year. PIJ fighters are thought to have joined the
attack, in which more than 1,300 people died. The group later claimed to be
holding 30 Israeli hostages in Gaza; Hamas is thought to be holding around
200. PIJ has since claimed responsibility for several rocket and mortar
attacks on Israel. Israel is preparing for a ground invasion to “destroy
Hamas”. PIJ will be in its sights, too. ■
This article was downloaded by zlibrary from https://www.economist.com/the-economist-
explains/2023/10/18/what-is-palestinian-islamic-jihad
How China’s Belt and Road Initiative is changing

The many motivations behind Xi Jinping’s key foreign policy
Oct 17th 2023
ON OCTOBER 17TH officials from at least 90 countries are expected to

arrive in Beijing for a two-day diplomatic festival. The occasion is a summit
organised by Xi Jinping, China’s president, to celebrate the tenth anniversary
of the Belt and Road Initiative (BRI), his most ambitious foreign-policy
programme. It involves China financing billions of dollars of investment in
roads, railways and other infrastructure across Eurasia and Africa. China
claims the BRI has created 420,000 jobs and lifted 40m people out of
poverty. But many in the West think its real purpose is to construct a
Chinese-led world order in which unsavoury regimes can thrive. The guest
list for this week’s summit resembles a gallery of rogues. Vladimir Putin,
Russia’s president, will play a starring role. Various other strongmen have
confirmed their attendance. Even the Taliban are sending a delegation. Does
China’s BRI bankroll international development or cement autocracy?
Launched in 2013 as “one belt, one road”, the BRI quickly became a clear
expression of Mr Xi’s determination to break with Deng Xiaoping’s dictum
to “hide our capabilities and bide our time; never try to take the lead”. It
seeks to make Eurasia (dominated by China) an economic and trading area
to rival the transatlantic one (dominated by America). By investing in
infrastructure, Mr Xi hoped to create new markets for Chinese companies,
such as high-speed rail firms, and to export some of his country’s vast excess
capacity in cement, steel and other metals. By investing in volatile countries
in Central Asia, he sought to create a more stable neighbourhood for China’s
own restive western regions of Xinjiang and Tibet. And by encouraging
more Chinese projects around the South China Sea, the initiative aimed to
bolster China’s claims in that area (the “road” in “belt and road” refers to sea
lanes).
In many ways, the BRI’s first decade has been a startling success. More than
150 countries have signed up to the scheme, including 18 of the EU’s 27
members. That helped make China the developing world’s largest creditor,
boosting its diplomatic and geopolitical clout. It has also brought concrete
benefits to many developing countries, where roads and railways would
otherwise have gone unbuilt.
Yet the BRI’s progress has slowed. During the programme’s early years,
China lent recklessly to poor countries without proper assessments of risk.
Many of those loans have now gone bad, forcing Beijing to become more
cautious. China’s foreign lending has been falling since 2016. Mr Xi says it
will now focus on “small but beautiful” investments—a marked change of
tone for a programme he once hailed as the “project of the century”.
Domestic disillusion partly explains the shift: China’s faltering economy has
made lavish spending abroad less popular among ordinary citizens. Other
countries have also grown more wary of cosying up to China as its global
rivalry with America heats up. The EU has tightened rules around foreign
investments in critical infrastructure, citing national-security concerns. Italy,
the only G7 member to join the BRI, is expected to withdraw.
The BRI may be slowing its march and moderating its aims. But it remains a
crucial part of Mr Xi’s long-term goal of rallying the global south around
China’s democracy-free model of development. A decade ago, Western
countries were slow to recognise the project’s significance. They are now
scrambling to provide alternatives. Plans for a transport corridor connecting
India with the Middle East and Europe were unveiled at last month’s G20
summit in Delhi. America has promised to ramp up lending to developing
countries via the World Bank. China’s BRI has encountered some bumps in
the road. Yet it had already changed the world’s direction of travel.■
This article was downloaded by zlibrary from https://www.economist.com/the-economist-
explains/2023/10/17/how-chinas-belt-and-road-initiative-is-changing
Obituary
Ofir Libstein had extraordinary dreams for his small patch
Life on the edge
Ofir Libstein had extraordinary dreams for his

small patch
The mayor of Shara HaNegev was killed in the Hamas attacks on October
7th, aged 50
Oct 19th 2023
WHENEVER HE WALKED round his patch of the northern Negev, Ofir

Libstein fairly buzzed with ideas. Sha’ar HaNegev was not large, just 180
square kilometres, three kilometres from the Gaza Strip, with around 6,000
people living in ten kibbutzim and one communal farm. But he had power,
as mayor, to make it work as well as possible. Sorting out the traffic on the
main road, for example, by replacing the multiple intersections with
roundabouts. Encouraging his Facebook followers to eat at local restaurants,
like Julie’s amazing Chinese in his own kibbutz, Kfar Aza, that were still
struggling after covid. And putting all available buildings to new use.
Whenever he saw a disused mess hall, a deserted factory, even an old
cowshed, he wanted to fill them with entrepreneurs working on exciting
things.
He was an entrepreneur himself, starting young. When his uncle ran the
kiosk in Kfar Neter he opened a branch at school. When his father did
wheelchair repairs for the nursing home where his mother worked, he went
into a motorised wheelchair business with him. From there he moved, with
relatives, into office equipment, then into online coaching, then into agritech,
the mainstay of Sha’ar HaNegev. The Libstein pot was always bubbling and,
almost always, successfully.
His most popular idea, though, was to leverage flowers. In 2007 he and his
wife Vered founded the Darom Adom (“Red South”) festival to celebrate the
anemones which, for a brief few weeks in early spring, spread scarlet
through the woods and fields. This wonder drew in visitors from far and
wide, but he had noticed that there was nothing, besides marvelling, for them
to do. So he introduced country lodging, walking trails, bike tours, jugglers
and acrobats, craft fairs and farmers’ markets, more every year. The festival
bloomed and boomed. His Facebook page showed him lying among
anemones, smiling broadly in appreciation.
He founded the festival largely to prove that life in Sha’ar HaNegev, though
so near Gaza, was not all Hamas and shooting. It was a hard case to make.
Hamas rockets 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 devices to kites and balloons and sent them floating across,
where he watched with sick horror as trees, crops and gardens exploded in
flames. In May 2021 rockets fell on Sha’ar HaNegev for 11 straight days.
Despite the fact that everyone in Kfar Aza had steel-and-concrete 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 local 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 Facebook 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 network 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 networked and
hatched their ideas.
He also looked abroad for help. The Californian city of San Diego twinned
itself with Sha’ar HaNegev, and the Jewish Federation there provided seed
money for a tech incubator; the Jewish National Fund in Australia helped
with 14 fortified kindergartens 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 keeping the land of Israel.
As a kibbutznik, 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 kibbutz-builders had been. Besides, his dreams
for the region went far beyond mere defensive hunkering down. His vision
was “spatial”: if there was 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 their families. He set out to provide them.
It was hard to deal directly with Palestinians, since the border was almost
entirely sealed. But in partnership with the Israeli city of Sderot, which lay
less than a kilometre from the fence, he planned an industrial zone called
Arazim around the Erez crossing. This could draw up to 10,000 Gazans to
work in Israel every day. There would also be a training hub for them,
education programmes and a medical centre. He envisaged so many Gazans
with a stake in Arazim that they would never think to attack it, or allow
Hamas to. That, in his view, was how Israel could properly protect itself.
Even he admitted that this was quite a stretch, but the residents of Sha’ar
HaNegev did not seem to object. In the regional election for mayor in 2018
—when his rival had been Israel’s first female brigade commander,
promising more security—he, known mostly for anemones, won with almost
70% of the vote.
That margin, and his ten-year term, inspired him. He could do a lot in all that
time. Already, for example, he had incorporated the poorly treated Bedouin
into his anemone festival, and was chairman of a museum where their
culture was celebrated. Perhaps Palestinians could become involved in
Sha’ar HaNegev in the same way, once the two sides had learned to respect
each other. Perhaps the share of life there that was paradise could rise to
100%.
But the factories of Arazim were not yet built when, early in the morning on
October 7th, swarms of Hamas terrorists broke through the border fence.
The residents of Kfar Aza had already been warned by text not to go outside,
but he disobeyed his own order, answering fire with fire. He rushed out to
defend both his kibbutz and his dreams—including those lovely, leveraged
anemones that dyed the dry ground red. ■
Editor’s note (October 19th 2023): A few hours after this obituary was
published, Mr Libstein’s son Nitzan was also confirmed to have been killed.
https://www.economist.com/obituary/2023/10/19/ofir-libstein-had-extraordinary-dreams-
for-his-small-patch

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[Fri, 20 Oct 2023]

The world this week

The humanitarian situation worsened in Gaza, where about 3,500 people

Anti-Semitic incidents and “celebrations” of the attack by Hamas were

Republicans in America’s House of Representatives continued to squabble

Voters in Australia decisively rejected a constitutional amendment that

The centre-right National Party won New Zealand’s general election,

India’s Supreme Court declined to legalise gay marriage, accepting the

Pro-democracy campaigners in Indonesia were outraged by the decision of

Separatists in Indonesia’s Papua province claimed responsibility for an

UN peacekeepers in Mali are struggling to leave the country by the end of

Daniel Noboa was elected as Ecuador’s president. The 35-year-old

Representatives from Nicolás Maduro’s autocratic regime in Venezuela and

Don’t try this at home

Microsoft at last completed its takeover of Activision Blizzard, the biggest

By contrast, profit at JPMorgan Chase climbed by 35%, to $13.2bn.

Dig deeper into the subject of this week’s cartoon:

Joe Biden steers a risky course after a Gaza hospital blast

This week’s covers

Only America can save Israel and Gaza from

A second danger is of Arab-Israeli relations being put back decades. Amid

This is a lamentable failure of leadership, with profound regional and global

America’s Republicans cannot agree on a speaker.

It has been a poorly timed piece of self-indulgence. Fortunately, there is a

Some combination of Republicans and Democrats should grant Mr McHenry

Poland shows that populists can be beaten

Following a run of successes for illiberal populists—in Hungary and Italy

Third, a re-emboldened PiS would have continued in its combative stance

Much can still go wrong. The opposition agreed to form a government if it

Mr Tusk will be able to count on goodwill from Europe, but this is no

Why America’s banks need more capital

Capital also comes with downsides. It is a more expensive means of funding

It is no surprise that bankers object to more capital, which is rather like

How to make Britain’s health service AI-ready

AT THE HEART of Britain’s publicly funded health-care system lies a

A more open approach to licensing intellectual property would also help.

Comparability of data is also vital. Though everyone has an NHS number,

Letters to the editor

Letters are welcome via e-mail to letters@economist.com

Unleash the MHRA

Wealth and well-being

Live longer, in poverty

Future generations may not only be bored—not least if they continue to be

Reward the bestsellers

Having your work actually read by the public should not be a

Brevity is the soul of wit

Brevity is important in exams, too. I am reminded of an old Oxford essay

Naftali Bennett argues that Israel’s future depends

ISRAEL WAS forever changed on the Shabbat morning of October 7th,

The rules have changed.

We will not allow Hamas to hide behind Palestinian civilians while it

Israel’s priority right now is the de-Hamasisation of Gaza. We can never

David Petraeus and Andrew Roberts on Ukraine

THE WAR IN Ukraine contains many features of past conflicts. To what

Some aspects of the Russo-Ukrainian conflict seem more reminiscent of the

The war does, to be sure, feature much state-of-the-art weaponry, from

In warfare, necessity is the mother of invention. But rather than Russia

General David Petraeus, US Army (Ret.), commanded the surge in Iraq, US

Amal Clooney and Rupert Skilbeck on why

British law recognises a principle known as universal jurisdiction, which