What’s gone wrong in Wales?

America’s gambling frenzy

Turmoil in South Korea
Tariffs: how would China retaliate?
DECEMBER 7th–13th 2024

France steps into the unknown

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 The Economist December 7th 2024 5

Contents

The world this week Britain

7 A summary of political 21 The woes of Wales
and business news 22 Assisted dying
23 Whitehall reform
Leaders 23 EV targets and troubles
9 France 24 Festive Fortnum’s
Into the unknown
25 MPs’ media earnings
10 Gambling in America
26 Bagehot Blind state
Bettors’ frenzy
11 South Korea
A rejected coup attempt Europe
11 Hunter Biden 27 France unravels
The pardoner’s tale 28 Notre Dame reborn
On the cover 12 Government spending 29 Sweden’s bling-grabbers
France has no budget and no A NASA parable 29 Spain’s hard-right youth
government: leader, page 9.
Michel Barnier’s downfall 30 Ukraine’s killer drones
Letters 31 Charlemagne Trump and
accelerates the unravelling of the
French centre, page 27. The 14 On Northvolt, veterans’ Meloni
country is not alone in its fiscal benefits, iodine, Somalia,
woes, page 65 farm villains
United States
What’s gone wrong in Wales? 33 Defending the SecDef
Briefing
Welsh people are right to think 34 Brian Thompson’s murder
15 America’s gambling
their government has mismanaged
boom 35 Trans kids and SCOTUS
public services, page 21 35 The FDA and food
What are the odds?
America’s gambling frenzy 36 News avoidance
The boom in betting should be 37 Mules and fools
celebrated, not feared: leader, 38 Lexington Kash Patel
page 10. Legal and technological and the FBI
changes are spurring a betting
bonanza: briefing, page 15.
Nothing can stop China’s The Americas
gamblers, page 69. How gambling 39 Peace in Colombia
became ubiquitous, page 66 40 Canada’s nuclear waste
41 Brazilian football
Turmoil in South Korea Yoon Suk
Yeol’s attempt to impose martial
law failed. But grave tests still
remain: leader, page 11. A rash,
unexpected move by the president
tests democracy, page 47 Banyan Exemplar or Middle East & Africa
warning? Australia wants 42 A rebel rout in Syria
Tariffs: how would China to lead the big tech
retaliate? The plans to fight back crackdown, page 50 43 A shaky truce in Lebanon
against Donald Trump, page 63. 44 Elections in Ghana...
How painful will tariffs be for 45 ...and in Namibia
America Inc? Page 57 46 India in Africa

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6 The Economist December 7th 2024

Contents

Asia Finance & economics

47 Chaos in Seoul 63 China’s tariff revenge
48 Bushra Khan’s march 64 Debanking complaints
49 Bhopal, 40 years on 65 French fiscal woes
50 Banyan Social media 66 Rouble worries
in Australia 66 Sports-betting
69 Xi v gamblers
70 Buttonwood The hidden
China cost of Chinese lending
51 Corruption in the PLA 71 Free exchange Cronyism
52 Holding back the desert
53 Women in film Science & technology
72 California’s space cadets
74 Elon Musk’s rocket rivals
75 Help for the paralysed
International 75 Early American diets
54 An African pope?
56 The Telegram Georgia’s
protests
Culture
76 Food and the internet
77 Botanists v Nazis
78 The best video games
of 2024
Business
78 “Conclave”
57 Trump’s terrifying tariffs
79 The word of the year
58 Intel’s boss gets the boot
80 Back Story A festive gift
59 Russian business guide
60 Children and social media
60 Brussels v big tech Economic & financial indicators
61 Bartleby How to inspire 81 Statistics on 42 economies
62 Schumpeter Europe’s
corporate stars
Obituary
82 John Kinsel, Navajo code-talker

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 The Economist December 7th 2024 7

The world this week Politics

with Fine Gael; the two parties Tensions increased between a Republican district switching
have been in an alliance since Bangladesh and India over the to the Democrats. The new
2020. Negotiations over form- alleged mistreatment of Hindu House of Representatives will
ing a government are expected minorities in Muslim-majority now have 220 Republicans and
to last a month, with Micheál Bangladesh. Indian protesters 215 Democrats when it con-
Martin, Fianna Fáil’s leader, vandalised the Bangladeshi venes in the new year.
tipped to be prime minister. consulate in Agartala, a city on
the border, which prompted Joe Biden was roundly
British MPs voted by 330 to 275 anti-India demonstrations in criticised, including from
in favour of legalising assisted Bangladesh. within the Democratic Party,
dying for terminally ill patients for pardoning his son, Hunter,
in England and Wales who The death toll from sectarian for various convictions, in-
In France the National Assem- have no more than six months fighting between Shia and cluding tax evasion. The presi-
bly voted out the centrist gov- to live. The vote was for the Sunni Muslims in Pakistan’s dent had previously said he
ernment led by Michel Barnier, crucial second reading of the north-west rose to at least 133. would not issue a pardon. His
who was appointed prime bill in the House of Commons. The government is attempting decision diminishes the Demo-
minister by Emmanuel Macron, Some MPs who voted “yes” to maintain a ceasefire. crats’ efforts to take the high
the president, in September have suggested they could ground against Donald Trump,
following an inconclusive switch to “no” if the concerns who will issue some weighty
parliamentary election in July. they raised about safeguards pardons of his own when he
Marine Le Pen’s hard-right are not tackled before the bill’s enters office in January.
National Rally joined forces final reading.
with parties on the left to oust Part of Mr Biden’s motivation
Mr Barnier after he forced his Glad to be out of Washington for the pardon may have been
budget through parliament Joe Biden visited Angola, the Mr Trump’s nomination of
without a vote. The last time first trip to sub-Saharan Africa Kash Patel as director of the
the assembly voted a govern- by an American president since FBI. Mr Patel is a firm believer
ment out of office was 1962. 2015 and the first by any to in the deep-state conspiracy.
Angola, which has recently He has called for America’s
The Pentagon announced that moved closer to America after national-security establish-
it was sending more weapons years of dependency on China. South Korea’s National ment to be overhauled and for
to Ukraine using a “drawdown” In a speech in Luanda, the Assembly took steps to officials who are biased against
facility that allows it to transfer capital, he talked about slavery, impeach Yoon Suk Yeol, after Mr Trump to be purged.
arms from American stock- calling it “our nation’s original the conservative president
piles. The weapons include sin”, and claimed that America rocked the country by ordering Keeping it in the family
drones and anti-tank missiles. was “all in on Africa” regarding martial law. Resorting to mea- In other controversial appoint-
Meanwhile, Ukraine’s foreign investment on the continent. sures not used since the mil- ments Mr Trump chose
minister said that “the only real itary dictatorship that ended in Massad Boulos, the father-in-
security guarantee for Ukraine” At least 56 people, many of the 1980s, Mr Yoon accused law of his daughter Tiffany, to
is full membership of NATO, them children, were killed in a politicians in the parliament, be a senior adviser on the Mid-
pointing out that past agree- crush at a football stadium in which is controlled by the dle East and Charles Kushner,
ments on his country’s security Guinea as they tried to escape left-wing opposition, of col- the father-in-law of his daugh-
had turned out to be useless. from police firing tear gas to laborating with North Korea. ter Ivanka, to be ambassador to
stop violence during a match. As armed soldiers stormed the France. In his first term as
The crisis in Georgia intensi- Local groups put the death toll assembly building, protesters president Mr Trump pardoned
fied, as the pro-Russian prime at 135, with 50 still missing. took to the streets calling for Mr Kushner for tax evasion.
minister, Irakli Kobakhidze, They blamed the deaths on Mr Yoon to be arrested. He
insisted that the pro-democ- Guinea’s military junta, which soon withdrew his order. Amer- Justin Trudeau, Canada’s
racy president, Salome Zourab- organised the tournament. ica urged South Korea to re- prime minister, visited Mr
ichvili, leave office. Opposition solve its issues “democratically Trump at his Mar-a-Lago resi-
demonstrations were held over After years of stalemate rebels and constitutionally”. dence in Florida following the
consecutive nights after the in Syria swept into Aleppo, president-elect’s threat to
Georgian Dream government taking control of the city. The A court in Vietnam confirmed impose stiff tariffs on Canada
said it would suspend acces- rebels were led by Hayat Tahrir the death sentence given to and Mexico. Mr Trudeau has
sion talks with the EU. Police al-Sham, a jihadist group for- Truong My Lan, a property little choice but to soothe Mr
fired tear-gas and water cannon merly aligned with al-Qaeda. developer, for embezzling Trump, as Canada sends over
at the protesters and detained Their offensive was supported $12bn from a bank. But the 75% of its exports to the United
opposition leaders. Mr Kobak- by the Turkish-backed Syrian court said Ms Lan could avoid States. To allay Mr Trump’s
hidze warned that the opposi- National Army. The rebels’ execution if she repaid 75% of concerns about fentanyl and
tion’s attempted “revolution” leaders assured Aleppo’s re- the funds. She is scrambling to illegal migration coming across
was over. maining Christians and other raise the cash. their border, Mr Trudeau has
minorities that they had noth- mustered more helicopters,
Fianna Fáil took the most seats ing to fear, though there are A month after America’s gener- drones and Mounties to stop
in Ireland’s general election. It many Islamist militants among al election, California at last the illicit flows. Mr Trump said
will govern in a new coalition the ranks of HTS fighters. finished counting its vote, with their meeting was productive.

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 8 The Economist December 7th 2024

The world this week Business

Donald Trump nominated loss in its most recent quarter insurers, was shot dead outside Uniqlo from Chinese users of
Paul Atkins to run the Securi- related to write-downs and a hotel in Manhattan ahead of social media under hashtags
ties and Exchange Commis- restructuring costs. It was an investor event. Mr Thomp- such as “I support Xinjiang
sion. Mr Atkins has criticised recently booted off the Dow son appears to have been cotton.”
the current head of the SEC, Jones Industrial Average. targeted by his murderer.
Gary Gensler, for cracking Let’s do it again at Christmas
down on crypto exchanges and BlackRock undertook another Joachim Nagel, the president
has championed crypto- big acquisition, agreeing to buy of Germany’s Bundesbank,
currencies. Bitcoin surged HPS Investment Partners in a added his support to calls to
above $100,000 for the first transaction worth about $12bn. ease the country’s constitu-
time. Mr Trump also picked HPS has $148bn in assets under tional debt brake, which con-
Gail Slater to run the Justice management and is one of the stricts government borrowing.
Department’s antitrust divi- big Wall Street players dealing With the German economy
sion, vowing to continue its in private credit, which has stagnant and not projected to
crackdown on big tech firms. boomed as companies tap grow much next year, Mr Nagel
markets for loans from firms said a little fiscal headroom
The unexpected resignation of that are not banks. was needed to boost infrastruc-
Carlos Tavares as chief exec- ture and defence spending.
utive of Stellantis shocked the The poor man A record number of travellers
carmaking industry. The owner A judge in Delaware rejected Carlsberg struck a deal to sell passed through America’s
of the Chrysler and Fiat vehicle Tesla’s latest attempt to push its business in Russia to local airports over the Thanksgiving
manufacturers has experienced through 2018’s pay package for investors. In 2022 the Danish period, according to statistics
a sharp drop in sales and profit, Elon Musk. The judge threw brewer said it intended sell the from the Transportation Secu-
but Mr Tavares was expected to out the package of stock assets and leave the country, rity Administration. The TSA
stay on until the end of his options in January, worth but the Russian government screened 3.1m passengers on
contract in 2026. No reason around $56bn at the time, seized the business in July 2023. December 1st, the busiest day
was given for his departure describing it as “an unfathom- “Considering the circum- of travel, up from just over 3m
with immediate effect, but able sum” that was not good for stances, we believe it is the best on July 7th, which had held the
reports suggested tensions had shareholders. In June, 72% of achievable outcome,” Carlsb- previous record. Cheaper air
arisen in the company over the shareholders in the carmaker erg said in a statement. fares are one reason why the
cost-cutting strategy being approved the package, but the TSA has notched up its ten
driven by Mr Tavares. judge found that Tesla had “no Uniqlo became the latest busiest days ever in 2024.
procedural ground” to reverse international clothing retailer Around 126m Americans vis-
Underlining the malaise in the her decision. “Absolute corrup- to fall foul of Chinese sensitiv- ited bricks-and-mortar shops
car industry, General Motors tion,” fumed Mr Musk on X. ities after its boss said it did not over Thanksgiving, according
said in a regulatory filing that it use cotton from Xinjiang, a to the National Retail Feder-
would book $5bn in charges Brian Thompson, the chief region where ethnic Uyghurs ation, up by 5m from last year,
reflecting the restructuring and executive of UnitedHealthcare, are suppressed. His comments while the number of online
reduced value of its joint ven- one of America’s biggest health prompted calls for a boycott of shoppers fell by 10m, to 124m.
tures in China. GM’s market
share in the country has de-
clined sharply in recent years.

The union representing Volks-

wagen employees in Germany
said that almost 100,000 work-
ers had taken part in a day of
industrial action. The union is
threatening to cause more
extensive disruption as it con-
tinues to negotiate with man-
agement over the carmaker’s
restructuring plans, including
the first-ever closure of some of
its factories in Germany.

Stellantis was not the only big

company to see its chief exec-
utive depart abruptly this week.
Intel announced that Pat
Gelsinger had left the firm. It
appointed two interim CEOs
while it searches for someone
to fill the position. The chip-
maker reported a $16.6bn net

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 The Economist December 7th 2024 Leaders 9

Into the unknown

France has no budget and no government

N DECEMBER 7TH, 50 heads of state and government will will not be passed. Economic growth would make all that easi-
O take their places to celebrate the reopening of Notre
Dame, Paris’s 12th-century Gothic cathedral, gutted by fire five
er, but France is growing by barely 1% a year—not too bad for
the euro zone, but not nearly enough to make a dent in the
years ago but now restored with astonishing speed and loving budgetary problem. France’s debt stock is an alarming 110% of
skill. Donald Trump will be there (Joe Biden, only the second GDP. Northern Europeans used to mock the PIGS—Portugal,
Catholic president of America, sadly will not) to witness Italy, Greece and Spain—for their profligate ways. France has
France at its best. It has pulled off, on time and to budget, a now turned porcine, while the PIGS have largely reformed.
feat of craftsmanship and renewal that surely no other country So far, the financial markets have remained calm. French
could have managed. sovereign-debt yields have ticked up a little, but the govern-
Yet that same magnificent France is also mired in a deep ment can still borrow for less than a percentage point more
political crisis (see Europe section). The government was than Germany’s can. Contrast that with the spreads of over ten
sacked by parliament on December 4th. Its prime minister, Mi- percentage points that Greece faced during the euro-zone cri-
chel Barnier, had tried to force through his budget for 2025 two sis. The declaration by Mario Draghi in 2012 that the European
days earlier, but met the brutal reality of life without a majority Central Bank stood ready to do “whatever it takes” to defend
and became the shortest-serving prime minister of the Fifth the euro remains in force today.
Republic. In a grubby political compact Marine Le Pen, boss of Yet Mr Draghi’s promise is merely a reprieve from the
the hard-right National Rally (RN) party, joined forces with a chronic problems of France and Europe, not a solution.
left-wing alliance dominated by a former Trotskyite, Jean-Luc Europe’s economies are not growing fast enough to finance
Mélenchon, to squeeze the life out of France’s centrists. the demands upon them. The euro zone is projected to grow
France’s plight holds lessons. The country’s traditional par- by just 0.8% in 2024. Mr Trump is threatening tariffs on all im-
ties of centre-left and centre-right have fragmented. In its re- ports into America of 10% or perhaps 20%, with a lot more for
cent presidential elections, half of voters have opted for ex- countries he particularly dislikes, such as China, which might
tremists in the first round. President after president has failed lead to a spate of dumping into Europe.
to get the budget under control. An ageing Across the continent the demands on gov-
population and growing threats to national se- ernment spending are increasing. Defence is a
curity mean that the fiscal burden will grow. good example. France, like Germany, only just
The country’s crass and obstructive political meets the spending target set in 2014 of 2% of
discourse only accelerates the drift to the ex- GDP, and that is plainly not enough in a world
tremes—and thereby makes solutions harder. where Vladimir Putin menaces his neighbours.
In one way or another, much of Europe is At the same time, Mr Trump rightly complains
caught in the same wretched trap. that European members of NATO are free rid-
The result, in France at least, is gridlock. ers on America’s far greater defence budget.
With no party or alliance close to a majority in the National Either because Mr Trump demands it or because he starts to
Assembly, the country now faces the prospect of a series of withdraw from NATO, European countries will need to find a
short-lived minority governments that will struggle to accom- lot more money to spend on security.
plish anything. Because the president, Emmanuel Macron, Unfortunately, Europe’s governing politicians are unable to
called his ill-judged snap election only six months ago, France generate a consensus on how to pay for existing and future de-
cannot call a fresh election until July next year—and even then, mands. Across Europe, political fragmentation is leading to
there is no guarantee that any party or coalition will win a ma- unstable governments, either because it creates scrappy co-
jority. Although a government shutdown should at least be alitions, as in Germany or the Netherlands, or minority govern-
avoided, because this year’s budget can probably be rolled over ments like France’s or Spain’s. Their weakness infects the EU
into next year, the situation precludes any reform. as a whole because, without leadership from France and Ger-
The underlying problem is that most French voters are un- many, nothing ambitious can happen in Brussels.
willing to face economic reality. Like other ageing European
countries facing competition from America and Asia, France is The threat ahead
spending unsustainably. This year its budget deficit is forecast In the past, voters’ discontent would have led to a healthy
to exceed 6% of GDP. Mr Barnier, at Mr Macron’s behest, was change of government. However, France is also a stark warn-
trying to fix that. His package of €40bn ($42bn) in spending ing of where the politics of disappointment leads today. When
cuts and €20bn in tax rises would have brought the shortfall voters have tired of centrist coalitions or weak minority gov-
down, though only by a percentage point or so. Even that was ernments, the only other choice before them is the political ex-
too much for the irresponsible right and left, which would tremes. There is a real possibility of an RN-led government in
rather chase power by fanning popular discontent. France next year, or even a Le Pen presidency in 2027 when the
It is hard to see how this can be resolved. Until voters redis- next election must be called. If Mr Macron stuns France by de-
cover the merits of frugality, they will go on voting for the fan- ciding that his presidency has become so unbearable that he
tasies peddled by the extremes. Sensible, ie painful, budgets resigns, it might come even sooner. ■

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 10 Leaders The Economist December 7th 2024

Betting

America’s gambling frenzy

The boom in betting should be celebrated, not feared

CRAZE FOR betting is sweeping over America. This year all bets come good. Even as online-gambling revenues have
A Americans are on track to wager nearly $150bn on sports,
having bet a paltry $7bn in 2018. Another $80bn is being wa-
soared by 40% year on year in America, they are growing by
double digits in places as varied as the Philippines and Poland.
gered in online casinos; in the few weeks when election gam- Considering gambling’s seedy, unsavoury reputation, it is
bling was legal before the presidential vote, hundreds of mil- tempting to write all this off as unhealthy and dangerous. And
lions of dollars were placed on the outcome. Even physical ca- it is true that, for some, gambling is a ruinous addiction. How-
sinos are spreading. Soon the island of Manhattan could have ever, whereas state lotteries are disproportionally played by
its own casino towering over Times Square. the poor, the new forms of gambling are less regressive. Sports
As our Briefing this week explains, the revolution has been punters are mostly relatively well-off young men. According to
unleashed by the overturning of bans, the rise of always-avail- one survey 44% of them earn more than $100,000 a year, com-
able betting apps and a booming economy. It is turning gam- pared with 28% of full-time workers.
bling into a mammoth business. Americans may wager as And sports-betting is a far cry from sitting at a machine,
much as $630bn online by the end of the decade, quadrupling alone, feeding quarters into a slot. It is often a communal activ-
gambling companies’ revenues from sports-betting and virtual ity. Unlike roulette, a game of luck in which everyone under-
casinos. Earlier this year the market capitalisation of Flutter, a stands that the house always wins, it can be a skill. Other vices
company that owns online betting platforms including Fan- that America enjoys and taxes, like alcohol, are responsible for
Duel, the biggest sports-betting site in America, overtook the more catastrophic harm.
biggest behemoth in physical casinos, Las Vegas Sands. Gam- It is also true that America has a habit of rushing into liber-
bling is changing the nature of sports, too, invigorating fans alisation before it has put enough guardrails in place. Just look
and enlivening broadcasting. Last year ESPN, the sports net- at Oregon’s experiment in drug decriminalisation, which led to
work owned by Disney, launched its own betting app. a worrying spike in overdose deaths, because the framework
What to make of this upsurge? One view is that it is a worry- and funding for addiction treatment had not yet been estab-
ing sign. Many people see gambling as a vice that ensnares the lished. However, the lesson from other countries is not to ban
poor. For them, taking a punt is an indicator of gambling altogether, but to regulate its harms.
economic immiseration, and the loosening of Some countries place restrictions on how ac-
prohibitions is a mistake that must be correct- counts must be funded (via bank account, not
ed as soon as possible. In fact, much about to- credit card) and on when and how gambling
day’s gambling boom should be celebrated as companies can advertise.
an expansion of people’s freedom to lead their The gambling industry itself could do more
lives as they choose. to quell fears about its practices. Its approach
In part America’s boom reflects the fact to customer selection means that good players
that it is catching up with the rest of the world. are quickly identified and their stakes limited
For decades Uncle Sam confined gambling to casinos, which to a few dollars or even pennies. Being more open about that
themselves were restricted to Las Vegas, tribal reservations or practice, or even relying on it less, would do a lot to dispel fears
riverboats. America’s attitudes to sex, drugs, alcohol and gam- that the odds are stacked against the player.
bling are shaped by its puritanical past. In many states, liquor However, trying to shut gambling down again would prob-
cannot be sold before church wraps up on Sunday. Hollywood ably leave America worse off. In China the Communist Party
long followed a morality code, which barred depictions of ille- has long waged war on all forms of gambling outside Macau
gal drugs or “licentious” nudity and warned film-makers not to and Hong Kong, but today it is struggling more than ever to
make criminals appear sympathetic. suppress the industry (see Finance & economics section).
But court rulings in recent years have paved the way for Criminalising gambling would deprive tens of millions of peo-
states to legalise and regulate gambling. Many of them, thirsty ple of entertainment and drive the most compulsive bettors
for new revenue streams, have flocked to gambling as a money- underground, where they would be more vulnerable to abuse.
spinner. In 2018 sports-betting was legal only in Nevada. Now
it is permitted, with some restrictions, in 38 states. By contrast, All aflutter
sports-betting has long been legal in Australia, Canada and The boom in betting is worth celebrating. One reason is that
much of Europe and South America. It has been legal in Brit- gambling in casinos becomes more popular in a strong econ-
ain since the 1960s. omy—unlike participation in state lotteries, long tolerated in
Another reason for the boom is technology. The ability to America, which tends to rise in downturns.
bet using your smartphone, and from the stadium or comfort The more important reason, however, is that the boom is a
of your own sofa, has boosted bookmakers and online casinos consequence of people’s enjoyment. In surveys 40% of Amer-
everywhere. Through apps, bookies can offer punters count- icans say they bet on sports—and the share would be higher
less types of bet, from play-by-play wagers, to how many fouls still if all states legalised it. Freedom is not only measured by
a team will commit or yards a player will gain. These can be speech and political liberty, but also by the ability to spend
combined and bundled up into “parlays”, which pay out only if your money as you wish. ■

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 The Economist December 7th 2024 Leaders 11

South Korea

A coup attempt, roundly rejected

Yoon Suk Yeol’s attempt to impose martial law failed. But grave tests still remain

S WITH MANY attempted coups, it started late at night. trimmed his budget by $3bn, or 0.16% of GDP. Such things are
A Around 10pm on December 3rd Yoon Suk Yeol, the conser-
vative president of South Korea, suddenly declared martial
normal in a democracy, but Mr Yoon claimed that the National
Assembly had “become a monster”. He even implied that its
law: banning all political parties and severely curbing media members were collaborating with North Korean “communist
freedom. Soldiers were deployed to the parliament building forces”. He provided no evidence for this slur.
and riot police lined the roads. But six hours later, after opposi- Mr Yoon should resign immediately. He has proved himself
tion politicians had barricaded themselves inside parliament unfit for any office, let alone the presidency of South Korea.
and thousands of courageous protesters had taken to the Rich, free and a key member of the global coalition of demo-
streets, he abruptly reversed course. cracies, it is a treaty ally with America, a supporter of Ukraine
That a liberal democracy should suffer so brazen a coup at- and a nation that has stood firm against communist aggression
tempt is as disgraceful as it is shocking. The good news is that since the 1950s. It is also creative and innovative in fields as va-
South Koreans swiftly and firmly rejected it. The furious ried as artificial intelligence and pop music. It is alarming that
crowds in Seoul insisted that Mr Yoon had no the president of a country that stands as an ex-
right to take away their freedoms, confronting ample of a successful democratic transition
soldiers who seemed visibly uncomfortable would flirt with reverting to autocracy.
with what they had been ordered to do. Law- If Mr Yoon does not step down, the im-
makers voted unanimously against the impo- peachment proceedings against him that have
sition of martial law. Even Mr Yoon’s own par- already started should press ahead. Securing
ty stoutly refused to back him. In short, the the necessary two-thirds majority would re-
checks and balances held, at least for now. quire only eight members of his own People’s
The bad news is that the story is not over. Power Party (PPP) to vote against him. They
South Korea is a youngish democracy that was under military should do so in large numbers, even if it puts the opposition in
rule until the 1980s and it has taken a beating. Mr Yoon is still charge. Their spines ought to be stiffened by cabinet resigna-
president. What happens in the next few weeks is of impor- tions and mass demonstrations. Besides, Mr Yoon’s ties to the
tance both to South Korea and the politics of East Asia, where PPP are recent and shallow.
America and China vie for influence (see Asia section). Even if Mr Yoon is ejected, it will be too soon to relax. South
Mr Yoon’s motives are still not known. He was losing his Korea’s institutions have proved resilient. But politics remains
grip and beset by scandals, including one involving his wife polarised and bitter, in a world where that often saps the spirit
being filmed accepting a luxury handbag as a gift. His approv- of democracy. In addition, South Korea’s next chapter may be
al ratings fell to around 20% last month, down from around difficult. Mr Yoon, for all his dire faults, was pro-American. A
50% when he took office in 2022. His agenda was being president from the DP would lean more towards China than he
blocked by the opposition, led by the Democratic Party (DP), did, and may take a less robust view of North Korea. Expect
which won legislative elections in the spring and had just further twists and turns in this terrifying K-drama. ■

Hunter Biden

Wessex and the White House

Joe Biden abused a medieval power to pardon his son

NE QUESTION facing the framers of America’s constitu- pardons can advance “the public welfare”. This one harms it.
O tion was how to check the judges. Part of their answer was
the presidential pardon. If it seems a bit medieval to let one
Mr Biden broke his word. Asked in June about a pardon for
Hunter, the president replied: “I said I’d abide by the jury deci-
man dispense (and dispense with) justice, that is because it is. sion, and I will do that. And I will not pardon him.” If the harm
In British law the “prerogative of mercy” can be traced back to from this were just to Mr Biden’s reputation, it might be con-
the reign of King Ine of Wessex in the seventh century. tained. Other presidents have pardoned people close to them:
In pardoning his son Hunter for convictions on tax and gun Jimmy Carter pardoned his brother, Bill Clinton his half-broth-
charges, Joe Biden has abused it. The Supreme Court has de- er, Donald Trump his daughter’s father-in-law (and has just ap-
scribed the pardon as “an act of grace”; and which loving fa- pointed him ambassador to France).
ther, having lost one child in a car crash and another to cancer, More damaging, Mr Biden’s pardon also blurs a crucial dis-
could resist sparing his addiction-prone son prison time and, tinction Democrats make between themselves and their MAGA
possibly, further prosecutions? opponents. Several cited Mr Biden’s refusal to interfere in the
Yet Mr Biden is the president. The court has also said that Department of Justice’s (DoJ) investigation into his son as evi- ⏩

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 12 Leaders The Economist December 7th 2024

▸ dence that, unlike Donald Trump, whose respect for the rule of conviction from an independent jury.
law and norms like DoJ independence was selective, their party The pardon thereby confirms the cynicism many Ameri-
acted on principle. That argument now seems hollow. cans feel about their politicians and institutions. In his speech
When President Trump pardons those convicted over the to the Democratic National Convention, Barack Obama
attack on the Capitol on January 6th 2021, as is likely, what warned Americans that Republicans will “tell you that govern-
principle will Democrats appeal to? DoJ independence is a rel- ment is corrupt; that sacrifice and generosity are for suckers;
atively new convention, developed in the aftermath of Water- and that since the game is rigged, it’s OK to take what you want
gate. The Biden administration paid some respect to this prin- and look after your own”. With this pardon, Mr Biden applies
ciple. But through an independent counsel, it brought federal one set of rules to himself and his family members and another
cases against Mr Trump which had the effect, for those sympa- to the people he serves. At best he has sacrificed his legacy to
thetic to him, of appearing to politicise justice. Mr Trump does his love for his son; at worst he has endorsed the view that the
not bother with such niceties. His picks to run the DoJ and its system is too rotten for principled gestures to count any more.
constituent bits seem chosen largely for their willingness to One of the many disappointments about Mr Biden is that
act according to his will. They will now be harder to stop. he talked as if Mr Trump was a threat to the republic, yet never
“The charges…came about only after several of my political acted as if he truly believed it. When his own party’s voters
opponents in Congress instigated them to attack me and op- were worried that he was too old to run, he stayed stubbornly
pose my election,” Mr Biden wrote in the preamble to the par- in the race. He warned about Mr Trump abusing the machin-
don. Sound familiar? The prosecution may indeed have been ery of justice, then pardoned his son—but so far none of the
selective and flimsy, but it was conducted by an independent other people who might be pursued by a vindictive DoJ. It is an
special counsel in front of an independent judge, and won a ignominious coda. Unfortunately, it is also a prelude. ■

Government spending

Heavy lift
NASA’s Moon programme is an obvious target for Elon Musk’s axe. But DOGE will struggle to cut it to size

HEY SAY you should do something you love. Jared Isaac- Budgeted at $383m, for completion in 2023, the current cost
T man, a tech billionaire nominated on December 4th as Do-
nald Trump’s choice to run NASA, is so keen on space that he
estimate is $2.7bn, to be ready six years late.
Old NASA hands admit Artemis is a mess. But it has proved
has spent hundreds of millions of dollars of his own money to impossible to kill, or even modify, despite the fact that the
go there not once, but twice. state of the art has left it further and further behind. When in
But Mr Isaacman did not go into space using a NASA rocket. 2019 Jim Bridenstine, then NASA’s boss, floated the idea that
Instead he bought propulsion and spaceships from SpaceX, a the Falcon Heavy might be able to get astronauts to the Moon
private firm whose cheap, reusable launchers have revolution- sooner than the SLS, he nearly lost his job.
ised the space business. Those experiences seem likely to in- He was dressed down by Richard Shelby, then a senator
fluence how Mr Isaacman would run NASA. from Alabama, home to the NASA centre that manages the SLS.
SpaceX’s owner Elon Musk, to whom Mr Isaacman is close, For although NASA is a space agency, it is also a well-engi-
is one of the two bosses of the new Department of Govern- neered machine for distributing pork. When NASA was found-
ment Efficiency (DOGE), a presidential advi- ed in 1958 it established centres across Amer-
sory commission tasked with cutting wasteful ica, cannily recruiting a phalanx of congres-
government spending. Everyone likes cutting sional bodyguards who would be keen to pre-
government waste in theory and NASA offers serve high-paying jobs in their constituencies.
plenty of targets. Yet, as both Mr Isaacson and These days, as Mr Shelby demonstrated, it is
Mr Musk are likely to discover, it is cutting the bodyguards who run the show.
waste in practice that is hard. Mr Isaacson and Mr Musk certainly have
To see why consider Artemis, the late-run- the experience and the zeal to whip Artemis
ning, $93bn-and-counting programme to re- into shape. Unfortunately, it is far from clear
turn astronauts to the Moon. It is organised around the giant whether that will be enough to overcome Congress, which ex-
Space Launch System (SLS) rocket, which is built from upcy- ercises control over NASA’s budget and which looks on deliver-
cled Space Shuttle parts, ostensibly to save money. Yet NASA’s ing goodies to constituents as a higher purpose.
inspector-general reckons the first four flights will cost $4.1bn And while Mr Isaacson and Mr Musk are well-suited to the
each—perhaps 20 times the price of one of SpaceX’s Falcon task in some ways, in others the two friends are the worst peo-
Heavy rockets. ple to take an axe to NASA. As the owner of SpaceX, the only
Artemis is also saddled with a pointless, make-work space plausible alternative, Mr Musk stands to benefit from cancel-
station near the Moon, the Lunar Gateway. The crew capsule, ling the SLS. No matter how justified, it will be impossible to
Orion, has absorbed over $25bn in funding over 20 years yet avoid accusations of self-dealing. That will give DOGE’s foes
still does not function: a problem with its heat shield seems even more ammunition. Do not bet against Mr Trump eventu-
certain to cause delays. Even the relatively simple job of build- ally writing the whole thing off as too much trouble—and Ar-
ing a mobile tower to hold the SLS upright has been a disaster. temis plodding on with its lumbering journey into space. ■

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C001
 14 The Economist December 7th 2024

LETTERS ARE WELCOME AND SHOULD BE ADDRESSED TO THE EDITOR AT:

Letters THE ECONOMIST, THE ADELPHI BUILDING, 1-11 JOHN ADAM STREET, LONDON WC2N 6HT
EMAIL: LETTERS@ECONOMIST.COM. MORE LETTERS AVAILABLE AT: ECONOMIST.COM/LETTERS

Northvolt’s restructuring clean-energy innovation. The by too much handball. Somalia responds
“Lessons from the failure of restructuring underscores our There is a wink, wink, nod, The headline to your article on
Northvolt” (November 30th) resilience, positioning North- nod conspiracy within the an election in Somaliland was
highlighted the company’s volt as a beacon for European medical branches of the mil- misleading, presenting its
challenges but missed a crucial industry and a vital driver of itary that would be very diffi- claim to statehood as
point. Northvolt continues its the green transition. cult to root out. Well-meaning inevitable (“The world’s next
mission, even as it navigates a TOM JOHNSTONE disability decisions and out- country?”, November 16th).
restructuring process. This is Interim chairman right fraud make this third-rail This undermines Somalia’s
not a retreat but a recalibration, Northvolt issue pretty much unfixable. internationally recognised
a necessary step to advance Stockholm NAME WITHHELD sovereignty. And the framing of
Northvolt’s mission with a BY REQUEST your article was provocative. It
different capital structure, but Veterans’ benefits Prescott, Arizona is worth noting that interna-
with the same ambition. Your article characterising tional observers covered only
Northvolt’s trajectory disability benefits for Amer- The importance of iodine four of Somaliland’s 24
underscores the risks inherent ican veterans as “absurd” As you explained, iodine defi- districts, and the entire eastern
in pioneering industrial trans- struck a painful chord (“The ciency causes inadequate region abstained from
formation. Battery cells are not price of patriotism”, November production of thyroid hor- participation in the election,
commodities and their produc- 30th). I served for 21 years and mone, which is needed for facts that were omitted from
tion is one of the most complex feel compelled to respond. normal migration of neurons the piece.
challenges in modern engi- These benefits weren’t handed and brain development during You selectively amplified
neering. Europe is behind and out as gifts. They were earned fetal and early postnatal life narratives favouring Somali-
shouldn’t accept that 40% of through sacrifice and suffering. (“Worth its salt”, November land’s claims and ignored
the electric-vehicle value chain Each disability payment you 9th). Low thyroid hormone Somalia’s legal position and the
goes elsewhere. Northvolt took label as “absurd” represents a during these early periods perspectives of clan groups,
this challenge head-on and is real person coping with lasting causes brain damage. To avoid such as those in the Khatumo
now delivering to customers. injuries, whether visible or such damage, salt has been and Awdal regions, who have
Although the company has yet invisible. Many veterans strug- iodised in many countries, actively opposed secession.
to fully scale its breakthroughs, gle daily with post-traumatic though the use of iodised salt is Furthermore, citing J. Peter
it is Europe’s leading home- stress disorder, traumatic brain somewhat sporadic. Pham on Somaliland’s
grown battery manufacturer. injuries and physical disabil- In Britain we found a signif- secession without providing
For the sake of competitive- ities that fundamentally altered icant association between low a counter-argument under-
ness, strategic autonomy and their lives. iodine status in pregnant mined your credibility and
green transition, Europe The real absurdity lies in the mothers and their children’s violated the principles of bal-
requires such bold ventures. suggestion that caring for brain development. Children ance and fairness.
You pointed out that a those who served their nation whose mothers were iodine Additionally, the article
reliance on government sup- in war is a matter of fiscal con- deficient in pregnancy (67% of didn't mention the critical
port can create a false sense of venience rather than moral those surveyed) had an approx- context regarding Somalia’s
security. This falls wide of the obligation. If your intent was to imately 60% greater risk of territorial integrity, which is
mark, as Northvolt has relied highlight waste or inefficiency, being in the bottom quarter of enshrined in international law,
less on public funding than then there are countless other scores for IQ and reading abil- including the United Nations
most competitors. However, places in government (and ity at 8- to 9-years old. The Charter. This omission creates
we are grateful for our strategic even the Pentagon) to look at more severe the level of iodine a distorted narrative that im-
partnerships with the EU and without vilifying veterans who deficiency in the mother, the plicitly endorses a divisive and
with the German and Canadian gave so much and asked so worse the effects on verbal IQ contentious position, jeop-
governments. Big industrial little in return. and reading comprehension. ardising the peace and stability
transitions rarely succeed DANIEL SHIRES Your report showing that of the Horn of Africa.
without collaboration between Pinehurst, North Carolina iodine deficiency may once DAUD AWEIS JAMA
governments and private again be on the rise in America Minister of information,
investors. Government support Your article was good as far as it should raise alarm bells, as culture and tourism
beyond solely funding is goes. When my father retired should the fact that only 40% of Government of Somalia
crucial in complex industrial- from a military career, the European countries have man- Mogadishu
isations like these. doctor at his exit physical datory salt-iodisation policies.
Northvolt’s journey reflects actually pushed him to accept British pregnant women are Down on the farm
the challenge of transitioning full disability. My father felt required to take folic acid each Bagehot’s list of farmer villains
to a sustainable future. Our insulted and refused, even day. Given the near-absence of in children’s books (November
Chapter 11 filing is not merely a though he had contracted iodised salt in Britain and the 9th) omitted one such baddy
response to challenges but a tuberculosis on active duty and move away from dairy milk who surely ranks high in the
proactive measure to embark had residual problems. When I (which has been iodised since pantheon of this dubious com-
on new operational and left the armed forces after my the 1930s) to plant-based milks, pany. Beatrix Potter’s immortal
financial partnerships. Based two-year obligation, I was also those folic-acid tablets should character, Mr McGregor, who
on the strong foundation of the encouraged to accept partial also contain iodine. tenaciously but vainly hunted
resources, relationships and disability even though I was MARGARET RAYMAN Peter Rabbit. His wife baked
expertise accumulated over healthy. I have friends who are Professor emeritus Peter’s father in a pie.
years of effort, Northvolt con- on full disability, one from University of Surrey JACKSON GILMAN-FORLINI
tinues to pursue its vision for knees that have been wrecked Guildford Baltimore

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 The Economist December 7th 2024 15

Briefing America’s gambling boom

industry euphemistically calls itself, is
booming across the country. Some 40% of
Americans say they wager on sport—a
business that was illegal in every state but
Nevada until 2018. The amount punters
bet on sport on apps such as FanDuel and
DraftKings was a mere $7bn that year; this
year it should reach almost $150bn. That
will generate around $14bn in revenue for
the companies concerned. Online casinos,
which bring in around half the revenue
that sports-betting does, are growing al-
most as quickly. And in October it became
possible to bet on election outcomes,
which led to a surge in wagers before
America voted on November 5th.

Betting on betting
To hear the industry tell it, this is only the
beginning. The leading provider of online
sports-betting and online casinos esti-
mates that by 2030 online gambling will
generate some $60bn-70bn in revenue
each year, three or four times today’s haul.
Then there is the conventional casino busi-
ness, which generates around $85bn in an-
nual revenue, but would see that number
jump if New York and other states mulling
new licences, such as Texas, went ahead
and issued them.
More esoteric forms of speculation, al-
though not technically gambling in most
regulators’ eyes, are growing equally fast.
Day-traders are loading up on futures and
options that expire in hours, as a way to bet
on how a share-price will move in the very
short term. Most such contracts earn little
or no return, but some yield ten or 100
times the initial outlay. By the same token,
much of the enthusiasm for certain crypto-
currencies can seem like a high-octane
What are the odds? game of chance. Tot all of this activity up—
betting in physical and online casinos, on
sport and on elections—and Americans
are on track to wager $700bn in 2024, up
from $400bn five years ago. In addition,
NEW YORK they are probably betting several hundred
Legal and technological changes are spurring a betting bonanza billion dollars more each year on short-
term equity moves.
EW YORKERS who wished to gamble operate a casino in or near the Big Apple. Several different forces have fuelled
N used to be limited to a series of pecu-
liar options: a lottery run by the state, raf-
Jay-Z, a rapper, is teaming up with Cae-
sars Entertainment, a big casino chain, to
this explosion. Legal changes, whether de-
manded by courts or ordained by legisla-
fles run by charities, casinos run by Native promote a mooted complex in Times tures, have been instrumental in opening
Americans, slot machines run by race- Square. Wynn Resorts, which runs casinos up new markets. But so has technology,
tracks, horse-betting run by local govern- in Boston, Las Vegas and Macau and is with mobile phones, geolocation and peer-
ments—or a trip outside the state to a building one in the United Arab Emirates, to-peer betting allowing an array of new
more permissive spot such as Atlantic City, is proposing a ritzy development by Penn gambling formats that simply would not
New Jersey. In recent years, however, it is Station, with a school, a park and low-in- have been possible in the past. The new
New York that has become more permis- come housing thrown in to appeal to the formats, in turn, have attracted younger,
sive. The state’s first ordinary, commercial civic-minded. Steve Cohen, the owner of wealthier gamblers. These new punters
casinos started opening in 2016, although the New York Mets, a baseball team, wants have different habits from the gamblers of
none in the area around New York City. In to build an $8bn gambling mecca next to the past: activities like betting in online ca-
2022 it became legal to bet on sporting their stadium in Queens. New Yorkers sinos and crypto-trading tend to increase
events online. Next year or the year after should soon be free to bet with abandon. when the economy is doing well, unlike
the state is due to issue three licences to It is not just New York: “gaming”, as the lotteries, which attract more custom when ⏩

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 16 Briefing America’s gambling boom The Economist December 7th 2024

▸ times are tough. Perhaps as a result, the its legalisation in a referendum in Novem-
gambling boom is not upending as many Punters' progress 1 ber, but the margin was so narrow—50.1%
lives as you might expect, although there is United States, availability of sports betting in favour—that a recount may be coming.)
some evidence of harm. Operational since Only on Despite the punters’ obvious enthusi-
State governments all across America, 2018* 2024 tribal land asm, it was not initially clear how profit-
at any rate, seem to believe the benefits able online sports-betting would be. When
outweigh the costs. On May 14th 2018 the AK ME it first got going in America in 2018 the
Supreme Court, at New Jersey’s behest, WI VT NH hold percentage—the share of the total
threw out the law that limited gambling on amount wagered that companies keep in
WA ID MT ND MN IL MI NY MA
sport to Nevada. “I sometimes will tell revenue—was a miserly 5% or so. Table
people that one day that will be a company OR NV WY SD IA IN OH PA NJ CT RI games in casinos tend to yield a healthier
holiday, because it was such an important CA UT CO NE MO† KY WV VA MD DE 15-20%, slot machines around 9%. More-
day in the history of our firm,” says Peter over, the big sports-betting firms’ revenue
AZ NM KS AR TN NC SC DC
Jackson, the boss of Flutter, which owns a was quickly ploughed back into advertis-
vast portfolio of betting sites, including OK LA MS AL GA ing and promotions, which often take the
Paddy Power and Betfair as well as Fan- HI TX FL form of free wagers. Over Thanksgiving
Duel, the biggest online sports-betting FanDuel was offering a free $150 to bet if a
*Or earlier †Legal but not operational
service in America. Over the six years since Source: American Gaming Association
customer deposited $5, wagered it and
the ruling 38 states plus the District of Co- won. And before the election FanDuel and
lumbia have legalised sports-betting (see DraftKings together spent more than
chart 1). For a change that must be enacted risk, higher-reward (and higher-margin- $40m trying to persuade Missourians to le-
state by state, and in some places approved for-the-bookmaker) compound bet. They galise sports-betting. Until recently nei-
by referendum, that is a blistering pace. are priced by bookmakers using sophisti- ther firm was profitable.
In a sense, America is simply shedding cated models, which allow gamblers to But the economics are improving. The
an old aversion to gambling. Early Puritan dream up any combination of events they hold percentage has climbed steadily,
settlers in New England banned posses- like—that the Kansas City Chiefs (an probably helped by enthusiasm for long-
sion of cards or dice, even at home. A sec- American football team) will win their next shot parlays, to around 10-11%. Flutter
ond wave of restrictions dates to cam- game by more than ten points, for exam- turned a profit for the first time last year. It
paigns for “temperance” in the early 1900s. ple, and that Patrick Mahomes, their star paid a paltry $158m to buy a 58% stake in
There has been slow, piecemeal liberalisa- quarterback, will throw passes totalling at FanDuel back in 2018 before spending a
tion since, starting with horse-racing and least 300 yards in length and that Travis heftier $4.1bn to increase its stake to 95%
lotteries in many states. For a long time Kelce, their tight end, will catch passes to- in 2020. Both sums now look like pocket
Nevada was the only state to allow casinos. talling at least 100 yards in length. These change, however. FanDuel commands a
A Supreme Court ruling in 1987 paved the bets pay out only if all the predicted events 53% market share in online sports-betting
way for gambling on Native American res- occur, and therefore have long odds. The in America. Flutter should earn about $7bn
ervations. Some states also allow casinos popular parlay bets on FanDuel and in revenue from the business in 2024. Its
on boats. The result is a bizarre hotch- DraftKings pay 25- or 30-to-1. market capitalisation has soared, even as
potch and lots of pent-up demand. Technology also allows betting to occur conventional gambling firms have stalled
as a sporting event takes place. A decade (see chart 2). It is now the most valuable
Odds and mods ago punters, where sports-betting was le- gaming company in the world.
But it is technology, as much as liberal gal, would have to visit a betting shop to
state legislators, that has propelled gam- make a wager before watching the game A major wager
bling’s expansion. After all, online sports- from home or a pub. Now they can bet at There is more to come. Just as states have
betting and other digital forms of gam- any time. The odds update with every play. embraced sports-betting, a few have also
bling are growing in many markets around Fans love this. On the opening day of the legalised online versions of casino gam-
the world (see Finance section). “I think American football season this year betting bling—poker, blackjack, slot machines and
what has really changed, over the last 20 or apps detected nearly 21,000 attempts to so on. iGaming, as it is known, is legal only
30 years, is the impact that technology has wager online from a stadium in Missouri, in Connecticut, Delaware, Michigan, New
had,” says Mr Jackson. “The Betfair ex- even though sports-betting was still illegal Jersey, Pennsylvania, Rhode Island and
change that started more than 20 years ago in the state. (Voters in Missouri approved West Virginia. Because location software
was one of the first peer-to-peer platforms on phones is so accurate, use of iGaming
that let people bet against each other with- apps really is restricted to these states. Yet
out having a bookmaker sat there in be- Raising the stakes 2 even this small slice of America’s gamblers
tween them. When people can pull their Market capitalisation, $bn generated around $6bn in revenue for
cell phones out and access the product 60 gaming firms in the first nine months of
there now, it gives them a lot more choice 2024, roughly 60% of the sum generated by
than they ever would have had going down Las Vegas Sands 50 sports-betting firms. Should more states
to a local bookmaker.” legalise such gambling, the business will
40
Sports fans tend to want to bet on their presumably grow accordingly. It is easier to
team, and popular teams tend to be the fa- 30 make money from, since there is no chance
vourites and therefore offer miserly odds. a well-informed gambler can outfox the
But such bets, with their meagre returns, 20 house. It also lends itself to more frequent
do not carry the same excitement as a long Flutter Entertainment betting, since spins of a roulette wheel take
10
shot. A type of bet called a “parlay” in up much less time than sports matches.
America and an “accumulator” in Britain 0 Sports-betting and iGaming already ac-
gives sports-betting firms a way round this count for nearly a third of all gambling rev-
2020 21 22 23 24
problem. These give customers the ability enue in America, a proportion that is grow-
Source: LSEG Workspace
to combine a series of wagers in a higher- ing fast (see chart 3 on next page). ⏩

C003
C001
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C001
 The Economist December 7th 2024 Briefing America’s gambling boom 19

▸ Another potential area of growth is pio of the University of Southern Califor-

elections betting. It is still a rounding error Cyber attack 3 nia looks at things like credit scores and
in comparison with conventional gaming United States, online gambling revenue bankruptcy. They find a small but negative
or sports-betting—but that is because it effect on credit scores (these drop by
% of total gambling revenue $bn
was severely restricted until October, about 0.3% after legalisation). They also
30 6
when a federal judge struck down a near- find a substantial increase—a 25% jump—
total ban put in place by the Commodity in the probability that a household goes
Futures Trading Commission (CFTC). Kal- bankrupt. To be clear, these risks are very
20 iGaming 4
shi, the platform that brought the suit small to begin with, but an increase of that
against the CFTC, ended up handling magnitude would suggest an additional
$500m in wagers on this year’s election, of 10 2
30,000 bankruptcies a year across the
which $300m were placed in the week of states that have legalised online sports-
the election itself. betting. A third paper finds an uptick in in-
Perhaps the best proof of Americans’ Sports betting cidents of domestic violence in states with
0 0
growing taste for risk is the boom in short- sports-betting.
2018 19 20 21 22 23 24
dated options. These derivatives work a bit As bad as that may sound, many state
Source: American Gaming Association
like lottery tickets. A trader pays a “premi- governments have long tolerated such neg-
um” to secure a contract that will become ative consequences for the sake of the ex-
valuable only under certain circumstances: growth is harmless, however. Because of tra revenue gambling can bring. State lot-
for instance, if shares in Nvidia, a chipmak- the way legalisation has occurred—state teries, for instance, tend to be played much
ing firm (currently trading at around $145), by state—it is relatively easy for econo- more regularly by lower-income house-
rise above $150 in a week. The notional ex- mists to measure what the impact has holds than rich ones. And the state tends
posure to the stock might be $10,000, or 70 been, by comparing what happened to to keep around 30% of the money spent on
shares. If Nvidia’s shares rise to $160, the households in states that have legalised tickets, which is a much higher hold per-
trader gets to buy 70 at $150, and can pock- with the fortunes of households in nearby centage than those of sports-betting
et the difference (a handsome $700). On states that have not. A paper by Scott Baker firms—making state lotteries a much
that notional $10,000 investment such an of Northwestern University and col- worse deal for the gamblers. Yet 45 of the
option might only cost $60. leagues finds that after sports-betting is le- 50 states operate such lotteries.
Early in 2020 the retail share of such de- galised households that gamble tend to The most important consideration for
rivatives leapt from around a third of total spend around $720 a year on it. state governments tends to be how much
options contracts to more than 40%. The money ends up in state coffers. That de-
share rose again in early 2021, to almost A chancing blow pends on the specifics of each state’s laws.
50%, as retail punters, who shared stock Perhaps because those who bet on sports So far the sums raised tend to be small rela-
tips and investment “porn” (large gains or tend to be wealthier than the norm, sports- tive to state budgets, but meaningful none-
losses) on social media, ganged together to betting seems to crowd out investing, rath- theless, especially in places where the pan-
buy options or shares in a firm called Gam- er than consumption of other things, such demic hit tax collections hardest, such as
eStop—pushing its price up 30-fold in a as entertainment (money spent on that ac- New York. Its revenues are projected to fall
matter of weeks. tually rises in conjunction with sports-bet- 2% short of expenditure over the next three
Nate Silver, a political modeller and for- ting). The authors find that for every $1 wa- years. When it legalised sports-betting it
mer professional poker player, considers gered, households that bet on sports con- imposed the highest tax take of any state,
short-dated options a form of gambling. tribute a little under $1 less to their invest- at 51% of gaming revenue. Although
While writing a book on risk-taking he was ment accounts. (Only a small slice of these sports-betting started in the state only in
contacted by Runbo Li, a prolific trader in investments are via crypto platforms or 2022, it is currently contributing about
them. Mr Li, who has a master's degree in brokerages that offer short-dated options.) 0.4% of state revenues, not a sum legisla-
economics and has worked in data science, Credit-card debt tended to rise in betting tors would want to forgo, given the state’s
began using options to invest in the stock- households. And these effects were stron- fiscal straits.
market in 2017. He won big on his first gest in households that were already under In fact, the budget shortfall is likely to
trade—an option to buy Nvidia shares— financial strain. encourage New York’s politicians to dou-
and began investing huge sums. He has A second paper by Brett Hollenbeck of ble down, as it were. They will probably en-
since lost around $1m on such trades. “It UCLA and Poet Larsen and Davide Proser- courage state officials to issue the prom-
could easily have been something else like ised casino licences promptly, rather than
sports gambling,” Mr Li told Mr Silver. “But letting the selection process drag on indef-
for me, it was easier to rationalise trading initely. The gambling industry has won ov-
options because it has that guise of invest- er local unions: one recently renamed itself
ing.” It is “the perception that options trad- the “Hotel and Gaming Workers Associa-
ing is a skilled activity”, writes Mr Silver, tion”. Local businesspeople are keen, too.
that makes it “hard to quit”. “In business, everyone likes a new taxpayer
That raises the question of how harmful who isn’t them,” says Kathy Wylde, boss of
all this new gambling is. Encouragingly, the Partnership for New York, a business
the types of gambling that are growing in association. There is still opposition, chief-
popularity are pro-cyclical, meaning that ly from NIMBYs of various sorts rather than
people indulge in them more when the anti-poverty campaigners. But Ms Wylde
economy is doing well. Given how strong thinks the licences will be issued, at the lat-
the economy has been in recent years, the est, towards the end of 2025 or early in
growth of gambling may simply reflect 2026, ahead of the next round of state elec-
how prosperous Americans are feeling, tions. So will Manhattan soon boast its
rather than hint at a deep social malaise. own casino? “I wouldn’t bet against it,” she
That does not mean this gambling’s says, “There is a lot of money at stake.” ■

C003
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C001
 The Economist December 7th 2024 21

Britain

Wales shoulder-shrugging,” marvels Luke Sibieta,

who studies education at the Institute for
Red mist Fiscal Studies, a think-tank.
It is hard to know how teenagers in
Wales are faring in other exams, as its cur-
riculum and grading systems are distinct.
But they are not impressing admissions of-
CARDIFF ficers. In 2023, 30% of Welsh 18-year-olds
Welsh people are right to think their government has mismanaged public services were accepted to university, compared
with 37% of English 18-year-olds. The gap
HEREVER YOU stand in the Caer- at all levels, and argued that the party had is widening (see chart on next page).
W philly Miners Centre, somebody will
ask you to move. The grand building, ac-
messed up so badly that it could not be
trusted with national power. The argument
As the young fall behind in school, the
old wait for medical procedures. In June
quired by pitmen in the early 20th century failed to land. But the Tories’ observation the Office for National Statistics estimat-
for use as a hospital, now hosts a busy pro- about Wales was correct. ed that the number of “open patient path-
gramme of toddler groups, social clubs, ex- In 2022 Welsh 16-year-olds scored ways” (not exactly the same as the number
ercise sessions and Welsh-language class- worse than their peers in England, North- of waiting patients) was equivalent to 22%
es. It keeps alive a tradition of working- ern Ireland or Scotland in tests of reading of the Welsh population. In England the
class self-help and self-improvement, and maths set by the OECD, a club of most- ratio was 13%. The Opinions and Lifestyle
which is stronger in the Welsh Valleys than ly rich countries. Wales also fell behind the Survey shows that a larger share of people
almost anywhere else in Britain. international averages. Few alarm bells are waiting in Wales than in any English
Yet the conversation, among women rang in Cardiff as a result. “The perfor- region, including the poor north-east.
who have finished a tai-chi class, is about mance was so low, and the reaction was so One consequence is the zeal for private
private health care. Jill, a retired secretary, medical treatment seen in the Caerphilly
has shelled out for one operation after the Miners Centre. The Private Healthcare In-
→ ALSO IN THIS SECTION
NHS cancelled on her five times. She is now formation Network, a non-profit outfit, es-
thinking about paying for a cataract proce- 22 Will assisted dying survive? timates that 7,900 people were admitted to
dure. She knows half a dozen others who private clinics and hospitals in Wales in
have decided to do the same. If you need to 23 Whitehall reform the first quarter of this year, almost twice
drive, you have no choice, she explains. 23 EV targets and troubles as many as five years earlier. Wales is
Public services are in a sorry state all ov- unique in the United Kingdom in that
er Britain. They are worst in Wales. Before 24 Festive Fortnum’s most people who receive private medical
the general election in July, Conservative 25 MPs’ media earnings treatment pay for it themselves. Elsewhere
politicians pointed to the country of 3.2m it is usually covered by health insurance.
people, where Labour dominates politics 26 Bagehot: Blind state Other parts of the state seem to be ⏩

C003
 22 Britain The Economist December 7th 2024

▸ functioning little better. Robert Jones of can’t make head nor tail of it,” says Mr Si- er this year the Welsh Election Study
Cardiff University calculates that 159 out bieta, an expert on these matters. The found that 87% of people think the health
of every 100,000 Welsh people were in pri- Welsh NHS has not subjected hospitals to service is worse than five years ago and
son in 2023, many of them in English cells. targets as stringent as those in England, 54% think the education system is worse.
That is higher than the imprisonment rate and has been less keen on using private More blame the Welsh government for
of English people (140 per 100,000); in- providers. Health spending has been less those failings than the British government
deed, it is the highest rate in western protected from cuts. (by contrast, they tend to condemn West-
Europe. Why this should be is a puzzle. Sometimes incomplete devolution minster for declines in law and order and in
Wales has a slightly lower rate of recorded seems to be the problem. Richard Wyn the standard of living).
crime than England. Jones of Cardiff University thinks that is In 2026 Wales will elect a new Parlia-
It does not help that Wales is poor, with true of criminal justice, where Wales re- ment. Labour seems likely to face a strong
a GDP per head about one-quarter lower mains bound to the English legal system challenge from Plaid Cymru, a nationalist
than the United Kingdom as a whole. but has acquired control over matters like party, and Reform UK, a radical-right par-
Westminster’s formulae for spreading drug rehabilitation. The result is a compli- ty. If it is pushed into second place, it will
money around treat the country less gener- cated pattern of responsibilities with no- snap a remarkable record, since Labour has
ously than Northern Ireland or Scotland. body truly in charge. come first in every nationwide election in
But money cannot explain everything. In Welsh people are becoming more will- Wales since 1922. And it would lead to a
the most recent OECD test of reading abil- ing to assign blame locally, however. Earli- cheery conclusion: failure has a price. ■
ity, the average Welsh pupil fared worse
than the poorest quarter of English pupils.
“We’re poorer in Wales, but even if you ad- Assisted dying

What next?
just for that, we’re underperforming,” says
Tom Giffard, the Welsh Conservatives’
education spokesman.
A more likely explanation for Wales’s
dismal performance is policy. The country
voted narrowly for a devolved assembly in
There are still plenty of chances to kill the bill
1997, and its government has gradually ac-
quired more power. It has pursued ostenta-
tiously distinctive policies, putting what a DEBATE THAT had shown the best of fore voting for it again. “A change in 28
former first minister, Rhodri Morgan, once
called “clear red water” between Wales and
A Westminster, passionate and
thoughtful, ended in a fittingly respect-
minds and the bill fails,” he notes.
Though the government has so far
the rest of Britain. ful manner. There were no loud cheers remained neutral on assisted dying, it
Some of those policies are popular or when, on November 29th, the speaker of will almost certainly have to play a more
clever. Wales does not charge for medical the House of Commons announced that active role to give Ms Leadbeater’s bill
prescriptions, and it funds social care for MPs had voted in favour of legalising sufficient parliamentary time. It will also
old people more generously than England. assisted dying in England and Wales. have to begin the work to ensure that any
It was the first country in Britain to charge Not only would any celebrations have future law can be implemented. One big
for plastic bags. A new default speed limit been insensitive, they would also have consideration will be how to engage with
of 20mph in built-up areas, though hugely been premature. The bill, put forward by the Welsh government, after the Senedd
unpopular with drivers, could catch on a Labour backbencher, Kim Leadbeater, voted to reject a similar motion in Octo-
elsewhere. But the Welsh government’s must pass through many more stages ber (health care is devolved in Wales).
policies on public services have failed. before it can become law. Much work will also be needed to pre-
Schools remain under local-authority It will now move to the committee pare the English National Health Ser-
control, in contrast to England where stage, where it will be reviewed by a vice and the courts.
many have become independent acade- group of MPs with divergent views. Then there is the issue of palliative
mies. Whereas schools east of Offa’s Dyke These MPs can propose amendments; care: some MPs worry that its poor state
churn out data, Welsh ones generate little unusually for a private member’s bill, the could make assisted dying a necessity
for public consumption. What data are committee will also be able to gather its rather than a choice. A new independent
available are almost incomprehensible. “I own evidence. The bill will then advance commission is to recommend how to
to the report stage, in which all MPs can improve end-of-life care. But ultimately
debate and vote on amendments. At a the problem will be for Wes Streeting,
Underwhelming third reading of the bill, opponents the health secretary, to fix.
18-year-olds entering higher education, % could still put forward an amendment to For all the government’s neutrality,
40 defeat it. If it continues to be voted the prime minister, Sir Keir Starmer,
through, it will have to navigate a similar voted in favour of the bill. He may yet
England process in the House of Lords before the have moments when he wishes that it
35
end of this session of Parliament (or risk had not passed. Assisted dying will suck
having to start all over again). up time and energy in 2025 (though a law
30 Whatever happens next, a majority of would realistically come into effect no
Wales
55 at second reading is almost certain to earlier than 2027). And given that 234
25 diminish rather than grow. “I spoke to Labour MPs backed the bill and 147
MPs that hadn’t made their minds up opposed it, including Mr Streeting, the
20 minutes before the vote was called,” says issue is plainly one that divides his party.
Chris Webb, a Labour MP. Mr Webb Set against these considerations is an-
supports the bill in principle, but still other. This reform may prove to be his
2006 10 15 20 23
wants to be reassured by the detail be- government’s greatest legacy.
Sources: Education Policy Institute; UCAS

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 The Economist December 7th 2024 Britain 23

Whitehall reform Thomas of the Institute for Government, a The ZEV mandate
think-tank. In a recent speech to Parlia-
Two men, ment Lord Turnbull lamented how Sir Keir Electric dreams
has followed a recent trend in filling his
one system Downing Street with politically appointed
special advisers, tipping the balance from
the permanent institutions.
A vulnerable civil service It leaves Sir Chris with a near impossi- Britain’s electric-car roll-out
gets a new head ble job. He must be Sir Keir’s trusted right- is hitting speed bumps
hand man and keeper of secrets; among
IMON CASE sounded more than ready the cabinet secretary’s tasks are oversight HE fiNAL months of 2024 should have
S for retirement as he gave his valedictory
speech on December 3rd. The cabinet sec-
of the intelligence agencies and liaison
with Buckingham Palace. But he must also
T been a landmark moment for Britain’s
car industry. For the first time electric vehi-
retary, Britain’s most senior unelected offi- be the leader of the 500,000-strong civil cles (EVs) consistently made up more than
cial, was dressed for a shooting weekend, service, which is both demoralised and in one in five new cars sold. In 2019 that figure
in a green tweed check suit, and leaned on need of radical reform. Mr Case’s critics was closer to one in 50. Instead, the mood
a cane—the result of a health condition say he was too inexperienced and too has been soured by a row with the govern-
that, he has revealed, has unjustly forced chummy with Boris Johnson, his first ment. A new zero-emission vehicle (ZEV)
his exit from government at the age of 45. prime minister, to properly lead his embat- mandate is kicking in, which requires at
In four years he had served through a pan- tled colleagues. “The barons around the ta- least 22% of each carmaker’s sales in 2024
demic, an economic crisis, four prime min- ble, the departmental permanent secretar- to be EVs. That will rise to 28% in 2025, and
isters and two monarchs; at times, he felt ies, were less inclined than they might have again each year until 2030, when the gov-
that “the weight of some of the world” was been to accept his authority as a given,” ernment wants to end the sale of petrol
on his shoulders. He sounded stung by the said Sir David Lidington, a former Conser- and diesel vehicles entirely.
cynicism that greeted those who gave vative minister. The trouble is, quite a few companies
themselves to public service. He read pas- Sir Chris’s stature as a civil-service lifer look set to miss that target. Nissan, Ford
sages of Teddy Roosevelt’s ode to “the should help, says one Whitehall veteran, and Renault are all well behind, according
man in the arena”. “It is not the critic who who calls him “the doyen of the permanent to estimates from New Automotive, a con-
counts, not the man who points out how secretaries”. He has kept a low profile, but sultancy. Hyundai should just scrape by;
the strong man stumbles.” a public inquiry into the handling of co- BMW and Mercedes are ahead. So is Tesla,
Sir Chris Wormald, his successor, will vid-19, expected to run for two more years, as it sells only EVs, as do EV-focused Chi-
take office on December 16th. In recent de- has the potential to produce plenty of dan- nese brands like BYD and Great Wall.
cades cabinet secretaries have tended to gerous moments. People who worked with Breaching the mandate would be pretty
be either Treasury wallahs (such as Jeremy him under the last administration describe painful. Under the current rules, each in-
Heywood, Gus O’Donnell and Andrew a shrewd strategist. “He literally sits in his ternal-combustion engine (ICE) car sold
Turnbull), securocrats (such as Mr Case office and thinks,” says one wonk, “often over the limit would leave its manufacturer
and Mark Sedwill) or both (such as Robert bouncing a rugby ball in his hand as he on the hook for a £15,000 fine. Some car-
Armstrong). Sir Chris breaks the mould in does.” He has managed the friction be- makers have started selling fewer petrol
coming from a big spending department; tween ministers and officials by taking cars in response. Stellantis, which owns the
he has spent eight years running the health time to understand what makes them tick, Fiat and Vauxhall brands, among others
department, and four years at education. and ferreting out smarter ways to execute (and whose biggest shareholder part-owns
That may be a deficiency, given that the what they want. “He is an absolute demo- The Economist’s parent company), even
job advert had called for a knowledge of crat,” says one former colleague. “He wants partly blamed the mandate for its recent
geopolitics (and cabinet secretaries who politicians to make the decisions.” ■ decision to close a factory in Luton,
know the Treasury’s ways are better at though that is probably a stretch.
standing up to it). But Sir Chris’s elevation Companies do have some room for
reflects the priority of the prime minister, manoeuvre. Selling lower-emission ICE
Sir Keir Starmer, of turning public services cars can pull down the mandate. Taking
round before the next election: bedpans that into account, New Automotive reck-
beat battleships. Sir Chris will need to ons the effective requirement for the in-
“drive delivery” and oversee the “complete dustry in 2024 is closer to 18%. Carmakers
rewiring of the British state”, Sir Keir said. can also buy credits from firms which have
That includes a plan to break down the in- exceeded their own target, though making
ternal silos of Whitehall that inhibit sensi- legacy European carmakers hand cash to
ble policymaking. Sir Keir was due to set nimbler Chinese rivals might be embar-
out headline targets for public-service per- rassing for the government. Still, the indus-
formance in a speech on December 5th. try as a whole will probably sell more EVs
A lot is riding on it—not just for Sir than the mandate requires in 2024, so am-
Keir’s future, but that of Britain’s civil ser- ple credits should be available.
vice, which enjoys a permanent tenure of All this has left the industry under-
employment in exchange for loyally exe- standably grumpy. Nor is it an especially
cuting the elected government’s agenda. good look for a government that claims to
Faith in this 170-year-old model fell among be determined to raise economic growth.
some Conservative ministers, who charac- Jonathan Reynolds, the business secretary,
terised the machine as ineffective and par- has promised a “fast track” consultation on
tisan. If the civil service is deemed unable easing the rules but insists that shifting the
to deliver by Labour ministers too, then its end-date beyond 2030 is off the table.
position will be precarious, says Alex Enter the delivery man The mandate’s core problem is that, ⏩

C003
 24 Britain The Economist December 7th 2024

Who's charging ahead 2 Retail therapy

Electric vehicles, % of new car market
Selected countries, Jan-Sep 2024 Tidings of joy
0 20 40 60 80 100
Norway
Sweden
Denmark Fortnum & Mason serves up some festive fun
Finland
Netherlands
RITISH RETAILERS are short on way, a branding agency which has ad-
Belgium
Portugal
Switzerland
B festive cheer. Consumer confidence
remains weak ahead of Christmas. But
vised the firm for a decade. Fortnum’s is
hardly aimed at the frugal: its priciest
Britain behind the illuminated façade at Fort- wicker hampers retail for £6,000, and it
France num & Mason, an upmarket department will provide Christmas puddings for the
Austria store, the show goes on. Dancing pine royal household. But with the price of an
Ireland cones adorn its atrium. Shelves are item averaging £12, it caters to a broad
Germany stacked with seasonal treats from mince range of shoppers. “You might not be
Spain Battery pies to cognac butter and sparkling tea. able to afford a Chanel dress or a Her-
Italy Plug-in hybrid “People are looking for a bit of joy,” says mès scarf, but you can buy a jar of Fort-
Sources: Schmidt Automotive Research; Tom Athron, Fortnum’s CEO. num’s jam for £5.95,” says Mr Athron.
National Trade Associations
From BHS to Debenhams, a tough Supply chains are newer terrain for
environment has wiped out four-fifths of the 317-year-old brand. Online orders
▸ though it has successfully nudged carmak- British department-store chains in eight have grown to over a third of its sales, up
ers to make EVs more widely available, it years. The recent budget dealt the latest from a tenth before the pandemic. Fort-
has not also ensured there will be enough blow. Changes to national-insurance num’s has doubled its warehouse capac-
punters willing to buy them. Sufficient de- contributions and a jump in the “nation- ity in Britain and opened a new facility in
mand has been slow to materialise. al living wage” will raise Fortnum’s costs Belgium in the past year. It plans to
Why? Britons see two main barriers to by about £3m ($3.8m), equivalent to expand in America. But back on Picca-
buying EVs. The first is cost, the top reason two-fifths of its pre-tax profits last year. dilly, its physical store attracts crowds.
cited in a survey by YouGov of those consi- Fortnum’s is faring better than most. Behind its famed-glass vitrines, two
dering a non-EV car: 54% said it was a hur- One reason is its focus on food, sales of squirrels kiss under mistletoe.
dle. EVs are generally still more expensive which have largely remained offline.
than equivalent ICE cars. But prices have Fancy department stores with big appar-
fallen rapidly and should come down el businesses such as Harvey Nichols
steeply as technology improves. New mod- and Liberty have struggled with the rise
els due out in 2025, like the new electric in online shopping. But Fortnum’s own-
Renault 5 or offerings from Leapmotor In- label biscuits, Scotch eggs and other
ternational, a Stellantis-led Chinese joint edible indulgences still draw people in.
venture, will already be a notch cheaper. In-store experiences have driven
EVs also have much lower running costs: traffic. Fortnum’s has replaced its mens-
electricity is cheaper per kilometre than wear section with a food hub hosting
petrol. For many drivers, that pulls the total cooking demonstrations, supper clubs
cost of EVs below ICE cars. and a gin distillery—a redesign aimed at
Some in the industry are keen on domestic shoppers, who account for 70%
household EV subsidies to shimmy along of sales. “We want to devote some space
this process. That would boost demand. to pure theatre…something you can’t
After Germany rolled back its subsidies at experience online,” says Mr Athron.
the end of 2023, EVs lost seven percentage Fewer Chinese tourists and the loss of
points of market share. But subsidies VAT-free shopping for overseas visitors
would be expensive and, given how quickly have not hurt much. Footfall at the flag-
prices are falling, probably unnecessary. ship Piccadilly store is a fifth higher than
As ever-lower prices reduce the cost before the pandemic.
concern, that leaves a second worry: inade- Portraying Fortnum’s as an accessible
quate charging infrastructure, flagged by brand has also helped. “Luxury is not a
44% of YouGov’s respondents. But Fiona word we use,” says Jono Holt of Other- Light entertainment
Howarth of Octopus Electric Vehicles
points out that the ZEV mandate has done
a decent job of driving private investment chargers on streets and motorways will be pushed the target out to 2035. Britain’s new
in charging infrastructure by guaranteeing vital as the roll-out continues. Public Labour government thinks 2030 is viable,
that there will be enough EVs on the road charging projects could easily get gummed but plans to maintain some flexibility
to justify buildout costs. Britain now has up waiting for planning permission or grid around hybrid cars. Compared with Euro-
almost one charger per electric car. connections. The government will need to pean peers, Britain’s EV roll-out is near the
Maintaining adequate charging will get watch closely, and step in as necessary. middle of the pack (see chart). The clearest
tougher, though. EVs are a much easier sell Successive governments have seesawed sign that 2030 is worth shooting for is that
for people with driveways who can charge over whether ending the sale of ICE cars by some countries are already not far off.
with power from their homes. Making sure 2030 is realistic. The goal was initially set Nearly 90% of new cars sold in Norway
that there is also an adequate network of out by Boris Johnson, but Rishi Sunak this year were electric. ■

C003
 The Economist December 7th 2024 Britain 25

MPs’ second jobs to the Lords. Since he was elected Mr Far-

Moonlighting members
age has earned £39,000 for three days’
work producing videos for Cameo, a perso-
nalised-video service.
The disclosures also shed light on how
the media landscape has changed. Exclud-
ing the pay for star columnists like Mr
Parliament may soon restrict MPs’ earnings from media gigs. How lucrative are these Johnson, the average pay per article at a na-
activities, and who makes the most money? We unscramble the data tional newspaper has fallen from £750 in
2010-14 to £550 over the past five years.
ETTING PAID for eating camel’s penis £5 a word) for writing a weekly column in Speeches pay £1,900 per hour on average,
G and sheep’s vagina on television may
be an unnatural activity for an MP, but it
the Telegraph when he was a backbencher.
Before David Lammy became foreign sec-
compared with a mere £225 for an hour of
print journalism and £160 for radio.
was lucrative work for Matt Hancock. The retary he was paid £180,000 for presenting Britain’s lower chamber is not unusual.
former health secretary, who represented a radio show between 2019 and 2024. Nigel All other G7 countries allow its elected rep-
West Suffolk in the House of Commons Farage, the new MP for Clacton, has taken resentatives to have second jobs (as long as
for 14 years until May, pocketed £320,000 home £95,000 for 36 hours’ work since July, they are declared). But Simon Weschle, a
($400,000) for appearing on “I’m a Celebri- hosting the 7pm slot on GB News. professor of political science at the Univer-
ty…Get Me Out of Here” in 2022. Second sity of North Carolina at Chapel Hill, finds
jobs reward some MPs handsomely. Do The media-gig economy that MPs in Britain are about eight times
they serve their constituents’ interests? We have split income from media work more likely than politicians in other coun-
That is the question Parliament’s Mod- and speeches into five categories. The tries to moonlight in the media, perhaps
ernisation Committee seeks to answer over most lucrative is speeches (£16.5m, includ- because so many MPs are former hacks.
the coming months. Chaired by Lucy Pow- ing Mr Johnson’s £276,130 for remarks at Sir Keir Starmer, the prime minister, has
ell, the leader of the House, it will explore the Council of Insurance Agents & Brokers said that restoring trust in politics is the
what “media appearances, journalism and in Colorado Springs in October 2022), fol- “great test of our era”. The Modernisation
speeches furnish to the public, versus the lowed by books (£5.8m), print journalism Committee may follow the lead of Ameri-
potential conflicts of interest”. A new anal- (£2.0m), TV appearances (£1.8m) and ca’s Congress, which limits second in-
ysis by The Economist of MPs’ financial dis- £500,000 for other channels such as radio. comes to 15% of salaries (a cap that would
closures between 2010 and 2024, finds that It is a minority pursuit: of the 1,369 MPs have affected some 200 MPs in 2010-24).
they spent a collective total of 50,000 that have served in the Commons between But base salaries in the House of Repre-
hours and earned £27m doing such jobs. 2010 and 2024, only 412 have earned any in- sentatives are 50% higher than in the Com-
For years MPs were encouraged to take come from media jobs and, of those, 253 mons, whose members periodically com-
on other work. In 1995 a parliamentary earned less than £5,000. plain that their £91,000 a year is too low.
committee set up in response to a “cash for The biggest ten earners—among them Public opinion is clear: 68% of respon-
questions” scandal concluded that a cham- four former prime ministers—account for dents to a YouGov poll in August said that
ber full of exclusively full-time MPs “would some £17m, or 63%, of the total media MPs should have second jobs only in ex-
not serve the best interests of democracy”. earnings (see right-hand chart). The minis- ceptional circumstances, if at all. The
But another scandal in 2009—about parlia- terial code prevents ministers from doing weight of outside interests has skewed
mentary expenses—meant that for the any paid media work, but it does not stop heavily to Conservative MPs in recent
past 15 years MPs have had to provide de- them once they return to the backbenches. years, notes Hannah White of the Institute
tails about their finances, including remu- Mr Johnson earned £4.3m from speeches for Government, a think-tank. For Labour,
neration from second jobs and total hours in the nine months between being ousted therefore, “as well as fulfilling its manifes-
worked. The messy data remained largely from Downing Street and standing down to pledge, restricting the earnings of MPs
inaccessible for analysis. We have cleaned as an MP. Theresa May, another former who may be critical of the government on
it up using code and artificial intelligence. prime minister, earned £3.9m in her five right-wing media outlets may have some
The numbers are striking. MPs have years as a backbencher before her ascent political attraction too.” ■
raked in £65m across all kinds of second
jobs over the past 15 years. In addition to
the £27m from media gigs and speeches A nice sideline for some
(see left-hand chart), they have earned Britain, Members of Parliament, media* earnings, £m
£38m from practising law, medicine or
consulting. Although paid lobbying is pro-
By party Top ten MPs, 2010-24
hibited under the MPs’ code of conduct, its 6
restrictions on second jobs are open to ↓ Party 0 1 2 3 4 5 6
Conservative
some interpretation. Owen Paterson, a 5 Boris Johnson
Labour
Tory MP from 1997 to 2021, was found to Theresa May
Other 4
have breached the code by receiving a Gordon Brown
£100,000 salary for lobbying, in “an egre- 3 Kenneth Clarke
gious case of paid advocacy”. Ms Powell Nadine Dorries Speeches
closed two potential loopholes in October 2 Alistair Darling Books
to further restrict which jobs are permit- George Osborne TV appearances
ted. But should media appearances and 1
Liz Truss Journalism and
speeches continue to be allowed? other activities
0 Matt Hancock
Although Mr Hancock’s TV foray was
2010 12 14 16 18 20 22 24 Alan Johnson
unorthodox, media moonlighting is noth-
ing new. Boris Johnson, a former prime *Books, broadcast and print journalism, speeches and other media activities
Sources: House of Commons, Register of Members’ Financial Interests; membersinterests.org.uk; OpenAI; The Economist
minister, earned £275,000 a year (roughly

C003
 26 Britain The Economist December 7th 2024

BAGEHOT
Blind state

How to cope when a government can no longer see

ing someone from charge to court to prison to probation. Justice is

meant to be blind, but not to her own conduct.
Crime, immigration and benefits are not the only fraught polit-
ical debate fought in the statistical gloom. Rows about how to care
for the elderly are shaped by the image of grannies forced to sell
their houses to pay for a care home. It is the main political obstacle
of arguably Britain’s biggest public-policy failure. How many pen-
sioners are forced into this unhappy situation? No one knows.
Rather than trying to learn what it can, the state sometimes de-
liberately compounds its ignorance. Patients can opt out of their
medical data being used for research and planning, making the
National Health Service harder to improve. Since the option to opt
out was introduced, almost 4m patients have done so. Likewise,
the future of the census, which has run since 1841, is in doubt. It is
old-fashioned, instantly outdated and, at a cost of just shy of £1bn,
expensive. Yet it is still useful. Scrapping it is the equivalent of re-
sponding to failing eyesight by gouging out an eye.
Simple solutions exist. The state could invest in better specta-
cles. In a system that adores false economies, skimping on the sta-
tistics agency is the worst value. Political prioritisation would
help. Data-flows between the Home Office and the Ministry of
Justice fall off the agenda if officials have to spend their days won-
RITAIN IS A bit bigger than it thought. In 2023 net migration dering if it is legal to stick a prisoner in a van and drive him round
B stood at 906,000 people, rather more than the 740,000 previ-
ously estimated, according to the Office for National Statistics. It
the M25 due to a lack of cells.
What would help more is a shift in attitude. If the state can
is equivalent to discovering an extra Slough. New numbers for compel people to sit in a stale room for hours to decide if someone
2022 also arrived. At first the ONS thought net migration stood at is a thief, it can force people to fill in a form. There is no good rea-
606,000. Now it reckons the figure was 872,000, a difference son to pander to the paranoid when it comes to health data. No
roughly the size of Stoke-on-Trent, a small English city. such opt-out exists for education data, points out Tim Leunig, a
If statistics enable the state to see, then the British government researcher at Nesta, also a think-tank. To put it bluntly: the state is
is increasingly short-sighted. Fundamental questions, such as how always allowed to know about the thick, so why not the sick?
many people arrive each year, are now tricky to answer. How many A naive idea that more data inevitably lead to better gover-
people are in work? The answer is fuzzy. Just how big is the back- nance should also be abandoned. It is too easy for a government to
log of court cases? The Ministry of Justice will not say, because it be sidetracked by what it can see. Britain now has excellent data
does not know. Britain is a blind state. when it comes to sewage spills (of which there were 464,056 in
This causes all sorts of problems. The Labour Force Survey, 2023). Every year brings a new high not because nefarious water
once a gold standard of data collection, now struggles to provide companies suddenly decided to pump effluent into waterways but
basic figures. At one point the Resolution Foundation, an eco- because new laws introduced stricter monitoring. The result? Brit-
nomic think-tank, reckoned the ONS had underestimated the ish politics is now obsessed with crap, with 1,700 mentions of
number of workers by almost 1m since 2019. Even after the ONS re- “sewage” in Hansard over the past four years.
jigged its tally on December 3rd, the discrepancy is still perhaps
500,000, Resolution reckons. Things are so bad that Andrew Bai- Inside the nonopticon
ley, the governor of the Bank of England, makes jokes about the Humility would help above all. Though accurate data are harder to
inaccuracy of Britain’s job-market stats in after-dinner speeches— come by, analysis of available statistics has never been easier. The
akin to a pilot bursting out of the cockpit mid-flight and asking to result is often junk. Grand narratives rest on shaky numbers. Why
borrow a compass, with a chuckle. did Britain, alone among rich Western countries, suffer a boom in
Sometimes the sums in question are vast. When the Depart- economic inactivity? Everyone had an answer. For the right, the
ment for Work and Pensions put out a new survey on household culprit was a soft-touch welfare state; for the left, it was a broken
income in the spring, it was missing about £40bn ($51bn) of bene- health service. Few alighted on the most plausible explanation:
fit income, roughly 1.5% of GDP or 13% of all welfare spending. that it was a statistical artefact of increasingly dodgy data, rather
This makes things like calculating the rate of child poverty much than a moral crisis that confirmed political preconceptions.
harder. Labour MPs want this line to go down. Yet it has little idea A scepticism about statistics once so ingrained it became a cli-
where the line is to begin with. ché (“lies, damned lies and statistics”) has been replaced by arro-
Even small numbers are hard to count. Britain has a backlog of gant credulity just as British data sources have developed serious
court cases. How big no one quite knows: the Ministry of Justice flaws. Instead, smug sayings such as “the plural of anecdote is not
has not published any data on it since March. In the summer, con- data” abound, as if “data” are anything other than anecdotes, piled
cerned about reliability, it held back the numbers (which means high and categorised. Immaculate analysis is impossible when the
the numbers it did publish are probably wrong, says the Institute state is blind. All that is left is for the state to be curious about
for Government, another think-tank). And there is no way of track- what it does not know and humble about what it thinks it does. ■

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 The Economist December 7th 2024 27

Europe

The French government falls moderate left, in an attempt to split the

left-wing alliance. Whoever takes over,
Thread by thread however, the underlying problem remains:
a deadlocked lower house split into three
blocs and a chronic inability to forge cross-
party compromise. Fresh legislative elec-
tions cannot be called until next July.
PARIS It is all a long way from the great hope
Michel Barnier’s downfall accelerates the unravelling of the French centre the Macronist centre once represented.
When Americans first put Donald Trump
MMANUEL MACRON, France’s presi- effort Mr Barnier ceded ground to the RN in the White House, Mr Macron was trans-
E dent, had barely landed from Saudi
Arabia when he lost another prime minis-
and its friends, who hold 140 seats in the
577-seat lower house. To no avail. “The
forming soggy centrism into a powerful
pro-European post-partisan platform.
ter, his third this year. In a no-confidence country is going through a profound cri- Twice he kept Ms Le Pen from the presi-
vote on December 4th, an unholy alliance sis,” lamented Mr Barnier before the vote. dency. Borrowing ideas from left and right,
of the left and Marine Le Pen’s hard-right Mr Macron seems to want to appoint a Mr Macron built the centre into a force for
National Rally (RN) brought down Michel successor swiftly. A new team, or the old consensus and stable government.
Barnier, a conservative with whom Mr one, could use special measures to roll over Thread by thread, this achievement is
Macron has shared power since Septem- this year’s budget provisions, without in- unravelling. In 2022 Mr Macron lost his
ber, by a total of 331 deputies, 43 more than flation adjustments, into 2025. Various vet- parliamentary majority. In July, at the snap
was needed. The vote followed Mr Bar- eran centrists or conservatives could be election he rashly called, it shrivelled fur-
nier’s use of a special provision to force his stop-gap options. Some centrists are push- ther. The shrinking centre represents both
budget through parliament. It marks the ing the president to name a figure from the a political threat for France and Europe,
first time deputies have toppled a govern- and a personal drama for Mr Macron. The
ment since 1962. With Mr Barnier, the bud- constitution bars him from standing for a
get falls too, plunging France into yet more → ALSO IN THIS SECTION third consecutive term in 2027. The courts
political instability. Mr Macron’s great cen- may yet ban Ms Le Pen from standing for
trist project is unravelling fast. 28 Notre Dame reborn public office for five years, in a case over
At the head of a minority coalition, Mr 29 Sweden’s bling-grabbers the misuse of public funds to be judged in
Barnier failed despite his best efforts to se- March. If not, though, she is the candidate
cure broader support. He had drawn up 29 Spain’s hard-right youth French voters told one pollster they most
€60bn ($63bn) of tax increases and budget 30 Ukraine’s killer drones want as their next president. On re-elec-
cuts, designed to shrink the deficit from tion in 2022, says an aide, Mr Macron told
6.1% of GDP this year to 5% next. In a final 31 Charlemagne: Trump and Meloni his team: “We’ve got to get to work, be- ⏩

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 28 Europe The Economist December 7th 2024

▸ cause I don’t want to hand the keys to Ma- sues—Europe, climate change, technolo- Mr Trump’s re-election underlines a
rine Le Pen.” If the centre cannot sort itself gy—moderates from left and right are clos- third condition: the need to understand
out, his greatest worry could be his legacy. er to each other than to their sides’ ex- and respect those who vote for populists.
The unravelling, or détricotage, of Mr tremes. A post-partisan movement, he The complex policy trade-offs that shape
Macron’s power at home has been abrupt. argued, could forge a different majority centrist politics do not lend themselves to
The president still runs defence and for- and “unblock” France. Once in office, how- simple messages. Nor, as Mr Macron has
eign affairs. But under Mr Barnier domes- ever, Mr Macron bequeathed less a party learned, is it enough to create more jobs,
tic policymaking swung firmly to the than a “residual fan club”, says an insider. lure investors or keep inflation low if peo-
prime minister. Shared advisers were Now in charge, Mr Attal “understands that ple do not feel you are fighting for them.
scrapped. Several presidential aides quit. he needs to build an army, not just operate Post-partisan centrism may survive. “It
Mr Barnier’s team was relieved to find that a small commando”, says a fellow deputy. remains 100% pertinent,” argues Mr Le
the president “interfered less than we ex- But he inherits few activists or members. Maire: “The left-right divide is totally inef-
pected”. For Mr Macron, whose appetite The party neither produces serious policy ficient in dealing with the big challenges of
for detail extends to texting ministers at all papers nor organises many conferences or our day.” Or it could turn out to be a paren-
hours, it was “an enormous change”, says debates. It is not too late to “renew its soft- thesis, replaced by the party system it over-
an aide. “Do you have any idea how he felt ware”, argues Clément Beaune, a former threw, or far worse. This week’s drama is a
having no say on the budget? It was a minister and senior party figure. But indi- sobering reminder of the centre’s fragility
nightmare,” says a former minister. vidual ambitions and structural weakness and its eroding capacity to bring about the
Power-sharing has had two other conse- will make collective work difficult. stability that France needs. ■
quences. First, it reinforced Mr Macron’s
isolation. Defenders of his decision to dis-
solve parliament became scarce; would-be Notre Dame

Resurrection
successors, ever more outspoken. Edouard
Philippe, who served as his first prime min-
ister, accused the president of “killing” his
previous parliamentary bloc. Gabriel Attal,
an ex-prime minister, has taken over Re- PARIS
naissance, the party his mentor founded.
Five years after the fire, the gloriously restored cathedral reopens
In November Mr Macron’s popularity sank
to 23%. “Let’s just say he’s not living his
best moment,” says a centrist friend. F THIS MONUMENT is one day the odds, France has stuck to the five-
Second, it rearmed parliament, creating
a “triangular power relationship”, notes
“I finished,” wrote Robert de Thorigny,
a 12th-century Norman monk, of Notre
year timetable set by President Emman-
uel Macron. The result is breathtaking.
Roland Lescure, a centrist deputy and ex- Dame, “no other will ever compare.” The Gone are centuries of darkened grime.
minister. The prime minister’s ousting is gothic cathedral touches people, both Instead the interior is luminous, the
the starkest evidence yet of parliament’s the spiritual and the secular, in unusually blanched stonework of vaults and pillars
new clout, and Ms Le Pen the greatest ben- powerful ways. It is a place of worship, a as it would have appeared in medieval
eficiary, although she may hesitate before testament to human ingenuity and a times; the pigment of the restored 19th-
trying it again. The RN leader is treading a symbol of resilience. When on April 15th century chapel wall paintings, bright.
fine line between a desire to acquire re- 2019 flames engulfed its timbered roof The restoration scrupulously respects
spectability and a need to flex her muscles and toppled its spire, the shock and the cathedral’s original design and con-
to please her base. “She doesn’t want to be sorrow were global. struction techniques. Sculptors and
the architect of chaos,” says an RN deputy. On December 7th the archbishop of stonemasons worked with chisels and
All this has spread a sense of dismay Paris, Laurent Ulrich, will ceremonially brushes to restore gargoyles and chime-
among Macronist centrists. Rival figures reopen the rebuilt Notre Dame. Against ras. Craftsmen used hand-forged axes to
are nonetheless trying to work out how to hew oak logs into square beams. Wood-
protect the endangered centre, keep Ms Le en dowel pegs hold the roof trusses
Pen from office—and promote their own together without metal pieces. The result
careers. At the very least, the centre needs is a showcase for French craftsmanship.
to do three things: rally around a single The cathedral belongs to the French
post-Macron candidate, renew its stock of secular state, and a public body oversaw
ideas, and find a way to speak to voters its rebuilding. Yet it did so with almost
turned off by what they see as the arro- no public contribution, thanks to nearly
gance of la macronie. If it can’t do this, €900m ($950m) raised from corporate
comments one long-standing member of and individual donations, many of them
the tribe, “the centre could die.” small sums, from France and abroad.
On the first task, there is no shortage of Traditionalists will doubtless bristle
aspirants. Besides Mr Philippe, the 35-year- at the modern furnishings. Modernists
old Mr Attal and Bruno Le Maire, a former will regret the lack of a bold contempo-
finance minister, may fancy their chances. rary architectural statement. Purists will
Broadening out, half a dozen other hope- say it has been “over-restored”. But the
fuls lurk among moderate Socialists and quality and craftsmanship are hard to
centre-right Republicans. If the centre fault. As Philippe Jost, who runs the
does not watch out, overcrowding could project, told The Economist earlier this
hand a run-off place instead to the hard- year: “We are restoring a cathedral that
left Jean-Luc Mélenchon. is 860 years old so that it can last for at
In shorter supply are ideas. Mr Mac- Vaulting ambitions, realised least another 860 years.”
ron’s central insight was that on big is-

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 The Economist December 7th 2024 Europe 29

Crime-fighting in Sweden arms can be surrendered to the police People’s Party (PP). Vox does much better

Bling-grabbers
without criminal charges, bringing in with voters under 45 than with older ones;
thousands of illegal guns. for the PP the reverse is true.
Critics of the luxury law say it disre- Vox’s appeal to young people mixes
gards the presumption of innocence and populist economics with cultural provoca-
that its guidelines for searches are vague. tion. In a recent post on the Instagram
Other countries, including Britain, allow page of its youth division, Santiago Abas-
Swedish police can now seize seizure of property through “unexplained cal, the party’s leader, said the country
unexplained luxury goods wealth orders”, but these are usually used needs mas muros y menos moros—“more
to take yachts or flats from big-time crimi- walls and fewer Moors”, an insulting refer-
HE AIM, says Erik Nord, head of a team nals or oligarchs. American police have ence to North African immigrants. At the
T of detectives in Gothenburg, Sweden’s
second-largest city, is “to get a grip on the
been excoriated for abusing a similar pro-
cedure, known as civil asset forfeiture. The
anti-abortion summit, the party’s general
secretary, Ignacio Garriga, accused oppo-
situation”. Police are certainly getting a Swedish law requires court approval to nents of favouring “substitution policies
grip on something. In the week after No- keep the goodies, and advocates say it is instead of promoting birth rates”, echoing
vember 8th, when a law came into force al- needed to stop gangs’ efforts to recruit conspiracy theories that elites are trying to
lowing them to detain people flaunting os- people under 15, the age of criminal re- replace Europeans with immigrants.
tentatious luxury goods, the Gothenburg sponsibility. Whether it will help bring The party’s appeal to youth is also root-
polisen made 30 arrests. One woman ar- down the rate of shootings is doubtful. ■ ed in economic frustration. Where older
rived at the airport wearing a Rolex watch generations associated Spain’s transition
and carrying 1.5m kronor ($137,000) in to democracy with a higher standard of liv-
cash. She picked a bad week. Spanish politics ing, newer ones feel duped, says Oriol Bar-

Where Vox is pop

The new law allows police to seize ex- tomeus of the Autonomous University of
pensive goods even from people who are Barcelona. Youth unemployment is the
not under investigation for a crime, if they highest in the European Union: 26.5% as of
cannot prove they acquired them lawfully. September, almost double the average in
Police could arrest a teenager sporting a the EU. Home ownership among those un-
gold watch, or someone driving a Porsche CORDOBA der 35 has fallen from nearly 70% to 32% in
whom they know is on the dole, and confis- The anti-immigrant Vox party is the past decade. Over 70% of those with
cate their swag. The idea is to undermine winning over young Spaniards jobs live with their parents.
gang leaders who recruit youngsters by Young people who vote for Vox are of-
dangling such wares. EDRO SÁNCHEZ, Spain’s socialist ten looking for any alternative, says Anton-
Politicians have been hyping the new
measure. At a press conference introduc-
P prime minister, likes to boast of “femi-
nist Spain”. But at the Transatlantic Sum-
io Jesús, a 19-year-old in Cordoba. They
have grown cynical towards mainstream
ing it, Ulf Kristersson, the Swedish prime mit for Freedom and the Culture of Life, politics. Antonio Jesús’s friend Leonor did
minister, called it the biggest reform since held on December 2nd in the halls of the not vote in last year’s general election: “I
the Swedish criminal code was introduced country’s senate, a different Spain was on don’t think that any party, either on the left
in 1965. A week after it came into force, po- view. Representatives of the hard-right or the right, represents me.”
lice around the country had seized goods Vox party denounced abortion and railed That anti-establishment mood is buoy-
worth 10m kronor. against a “culture of death”. The gathering ing other political entrepreneurs as well. In
The impulse behind it is a sense of was not all greybeards. Vox is making a fair the European Parliament elections in June,
helplessness over a long-term rise in viol- bid to appeal to Spain’s youth, not despite Luis “Alvise” Pérez Fernández, a far-right
ent crime. Ten years ago Sweden, with 10m its traditionalism but because of it. influencer, raked in over 800,000 votes for
people, had one of the lowest rates of gun Vox first won a big share of the vote in The Party Is Over (SALF), a party he had
violence and murder in Europe. It now has 2019. Since then its support has stayed founded only 40 days before the vote. His
one of the highest, averaging a shooting a above 10% in each election. A notable re- campaign relied mainly on TikTok, Insta-
day. In 2022, 62 people were shot dead; last cent trend is its strength among young gram and podcasts. Viewers “want to hear
year it was 53. people. Polls this autumn put its support something different”, says Isaac Parejo, a
There is no consensus on the main among 18-30-year-olds between 16% and YouTuber known to his 411,000 followers as
cause of this surge in violence, says Sven 20%, roughly even with the centre-right InfoVlogger. Mr Parejo says his audience is
Granath, a criminologist at Stockholm being radicalised not by his videos, in
University. Gangs have mushroomed. The which he rages against Muslims, wokery
Oresund bridge between Denmark and Steady on the right and the LGBT agenda, but by the realities
Sweden, which opened in 2000, made ille- Spain, general election voting intention of Spaniards’ everyday lives.
gal firearms and drugs easier to transfer. Selected parties, % Vox has yet to score the sort of victory
Other proposed factors include the coun- 40 won by hard-right parties in countries like
try’s widening income gap, the disman- Hungary, Italy and the Netherlands. Its
tling of welfare institutions, high immigra- PSOE
30
share of the vote fell from 15.1% in the 2019
tion rates and poor integration. election to 12.4% in last year’s election. But
Law enforcement was slow to respond PP the party’s gains among young voters are
at first, hampered by lenient penalties for 20 striking. In a country ruled for decades by
Podemos*
gun crimes and strict data-protection laws. Sumar the right-wing dictator Francisco Franco,
Vox
That is slowly changing. Since 2023 a new 10 some older moderate Spaniards find its ap-
law has made it easier to tap suspects’ Ciudadanos peal hard to understand. “If they had lived
phones, helping to improve the low clear- Más País
0 just a small period of the dictatorship,”
ance rate for murders. The government has says Ángela Reyes Gutierrez, a 64-year-old
2020 21 22 23 24
also declared several time-limited weap- from the small town of Dos Torres, “they
Source: CIS *Prior to January 2024 includes United Left (IU)
ons amnesties, during which illegal fire- wouldn’t be voting that way”. ■

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 30 Europe The Economist December 7th 2024

Ukraine’s drones piloting skills,” says Mr Meier.

Death from above

The result is that Ukraine has become
the furnace of a new kind of software-de-
fined warfare. Helsing is selling Ukraine
4,000 HF-1 strike drones, which it says will
have the same 5kg payload as the Russian
Lancet and perhaps triple the range (up to
KYIV 100km), but at a lower price (the Lancet
Ukraine is using cheap AI-guided drones to deadly effect costs around $30,000). Auterion plans to
field tens of thousands of drones powered
HUNDRED METRES above a white La- veillance drones in the air, according to by its software by early next year, with each
A da saloon, the drone locks onto its tar-
get. AI takes over and swoops for its kill.
Tochnyi, a research group.
The biggest change is that electronic
unit (a chip pre-loaded with software)
about the cost of an Android smartphone.
The Lada is spared at the last moment. warfare has consumed the battlefield. That In both cases the drones are made in
The mission is a test conducted in a field started with jamming GPS signals from sat- Ukraine. One advantage is scale. Aute-
outside Kyiv; but the technology is already ellites, which caused American precision- rion’s largest partner in Ukraine, one of
being deployed by Ukrainian units on the guided weapons to fail at alarming rates. It many, churns out 300,000 drones per year.
front line. “It’s the best feeling to see your has extended to the link between pilot and Although recent Chinese sanctions have
drone enter a tiny opening in an enemy drone. By the beginning of this year, says threatened to disrupt the supply chain, Mr
trench,” says Denys, an engineer at The Gundbert Scherf, the co-founder and CEO Meier says alternatives from Taiwan are
Fourth Law, the Ukrainian firm which of Helsing, a German military AI firm, jam- now available. “We’re sitting on top of a
makes these autonomous drones. ming was “pervasive”. Dronemakers face a consumer and automotive electronic sup-
Once a cheap answer to Russia’s artil- dilemma: if they rely on common frequen- ply chain—tens of thousands are nothing
lery dominance, Ukrainian first-person- cies, the parts are easy to source but jam- for these industries.”
view (FPV) drones are now a force in their ming is worse; rare frequencies are Mr Meier reckons fewer than a tenth of
own right. They are used on a huge scale, jammed less, but require more obscure drones are AI-guided at present. But that
with 2m projected to be produced this hardware. The solution is to avoid jam- number is rising. Ukraine’s innovation cy-
year. Russian drones are ubiquitous too: ming altogether by relying on AI to guide cles are relentless, with feedback loops
Ukraine now observes 1,000 in every 24- the drone in the final stages. down to a few days. The FPV drones’ sim-
hour period, says an insider. Some sections Rudimentary object-recognition soft- plicity can also act as a hindrance: it makes
of the front lines are practically no-go ar- ware has been in use, on both sides, for ov- them easy to replicate. One manufacturer
eas for humans. Ukrainian sources say er a year. But it is getting better. Lorenz says Russian reverse engineering can be as
drones are now responsible for a majority Meier of Auterion, a Switzerland-based quick as three weeks, but encryption can
of battlefield losses, overtaking artillery. firm, says that between spring and summer protect the software from copying.
Drones are carrying more explosives his firm’s software, known as Skynode, Yaroslav Azhnyuk, the founder of The
and flying farther per dollar, says Andrey doubled the range at which a drone could Fourth Law, says his “autonomy module” is
Liscovich of the Ukraine Defence Fund, engage a target, from 500 metres to 1km or around $50 to $100 per unit for Ukrainian
which crowd-sources non-lethal aid. At the so. He says improvements in image resolu- customers buying thousands of units.
beginning of 2023 FPVs could fly 10km or tion have since increased that. Some Western firms “charge one to two or-
so, notes Yaroslav Filimonov, the CEO of Battlefield data suggest that the hit rate ders of magnitude more for systems with
Kvertus, a Ukrainian firm which makes an- for these AI-guided drones is above 80%, similar or weaker capabilities,” he claims.
ti-drone gear. Now flights of 30km are rou- higher than that of manually piloted Ukraine is still ahead of Russia—just
tine. They are more diverse, too. Large drones. As important, the training burden ahead in airframes, but perhaps by three
“bomber” drones scatter 10kg landmines declines dramatically. “We can train an op- months in software for autonomy.
on Russian roads. FPV “interceptor” drones erator within 30 minutes and the quality of Finance remains a huge problem. The
have taken out more than 850 Russian sur- the engagement doesn’t depend on their state is buying more, but voluntary foun-
dations still provide at least a third of all
drones used by the army. Western compa-
nies have yet to fully commit to Ukraine’s
burgeoning industry. Mr Azhnyuk com-
plains that his other tech business—Pet-
cube, a remote-controlled system for pet
owners using mechanical treat-givers—re-
ceived more foreign investment than the
entire Ukrainian drone sector in 2023.
The tech entrepreneur rejects talk of
military automation as dystopian: “Using
AI to accurately target is far more ethical
than lobbing missiles and artillery.” Ulti-
mately, a human still makes the final call
on any engagement, says Mr Scherf. But
Western and Ukrainian companies are
working on deep-strike drones whose AI
systems will be able to hunt for targets far
from the human operator. Mr Azhnyuk
hopes to have a prototype of a fully auto-
mated system, from launch to strike, built
Float like a butterfly, sting like a bazooka by early next year. ■

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 The Economist December 7th 2024 Europe 31

CHARLEMAGNE
Europe’s Trump card

Will Giorgia Meloni turn out to be the linchpin of the transatlantic relationship?

Trump’s first term and will host him in Paris to unveil the renovat-
ed Notre Dame cathedral on December 7th.) But that group is in
precarious shape. Mr Macron presides over the most chaotic polit-
ical scene outside the Korean peninsula; Germany’s Olaf Scholz
will probably be ousted in February; Poland faces divided govern-
ment, at least until presidential elections in spring. Only the EU’s
institutions have stable leadership. But Mr Trump views the
bloc—the apotheosis of globalist norm-setting—with contempt.
The second group of Trump hopefuls are his ideological
chums. Viktor Orban, the Hungarian prime minister, has cultivat-
ed ties with the MAGA movement (he promises to Make Europe
Great Again, details also to be confirmed) and publicly backed the
once-and-future president’s candidacy. Alongside others who
share his autocratic bent, such as Robert Fico of Slovakia, he has
swept aside checks and balances in ways Mr Trump can only as-
pire to. But for that very reason Mr Orban would make for a wob-
bly liaison between the EU and America: influential as he might be
in Trumpian circles, he is not trusted by anyone in Europe. If he is
a bridge from the MAGA right, it is a bridge to nowhere.
Ms Meloni in contrast finds herself with a foot in both camps.
She hails from the hard right, and can bash migrants and “woke”
types with as much aplomb as anyone at a Trump or Orban rally.
ENERATIONS OF ITALIANS have flocked to America in search Beyond her ties to Mr Musk, for years she was cosy with Steve
G of opportunity and enchantment. One recent arrival to New
York, albeit only for a short trip in September, looked like she had
Bannon, a MAGA ideologue (though he has since denounced her as
a turncoat pro-globalist, and his allies now dub her “phoney Mel-
hit upon both. Giorgia Meloni, the Italian prime minister, found oni”). In power since 2022 and not facing elections for another
herself feted in unique style at a glitzy ceremony on the sidelines three years, Ms Meloni has adroitly managed to stay in the EU
of the annual United Nations confab in Manhattan. Bestowing an mainstream. Unlike others in her political camp, she has support-
award upon her was none other than Elon Musk, a peddler of elec- ed Ukraine to the hilt. Far from picking fights with Brussels, she
tric cars, rockets and political influence. The world’s richest man has gone out of her way to appear a constructive partner.
declared Ms Meloni “someone who is even more beautiful on the Mr Trump is likely to have his share of gripes with Italy, which
inside than she is on the outside”, among other compliments. Re- does two things he considers reprehensible. The first is to ship too
ciprocal flattery ensued: Mr Musk is a “precious genius”, apparent- many posh loafers (among other things) America’s way; Italy is the
ly. Pictures of the two staring deep into each other’s eyes soon had EU’s second-biggest goods exporter to America after Germany,
tongues wagging. It fell to the entrepreneur’s mother to pour cold and buys comparatively little from there. The second is to scrimp
water on the rumours: Musk mère had been accompanying her son on defence. Italy spends a mere 1.5% of GDP on its armed forces,
and could attest he had returned to his hotel alone that night. well short of the 2% target agreed a decade ago by NATO allies.
Ms Meloni is back in Europe now, while Mr Musk can at times
be found at Mar-a-Lago, the Floridian lair from which Donald Divide and rue
Trump is preparing his return to the White House. His second Ms Meloni faces a balancing act: how to benefit from her proxim-
term is the cause of much anxiety in Europe, a place that depends ity to Mr Trump without alienating existing EU allies. In the past,
on America for its defence (through NATO, but also by ensuring being on good terms with both Europe and America was compat-
the flow of weapons to Ukraine) and flogs it lots of cars, handbags ible. Soon it may not be. “The meaning of what being a good
and other European trinkets. Awkwardly for Europe, Mr Trump transatlanticist is could change fast,” says Lorenzo Castellani at
says he wants to end the war in Ukraine “within one day” (pesky LUISS University in Rome. On Ukraine, Ms Meloni may find her-
details to be confirmed), thinks of NATO as a ploy to bilk America self having to choose between Mr Trump’s “plan” and one fa-
and loudly promises to throttle imports by means of tariffs. Des- voured in European capitals. Mr Trump has tried divide-and-rule
perate for a “Trump-whisperer” to soften the blow, Europeans are on the EU in the past, for example on trade. It may prove tempting
scouring their ranks for someone to rein in the mercurial presi- for Italy to align with the new establishment in Washington if, in
dent, should such a thing even be possible. Ms Meloni has per- return, Parmesan cheese would face lower tariffs than, say, Gouda.
haps the most credible claim. But getting closer to America could Ms Meloni’s Italy could end up as a sort of swing vote, a large
jeopardise more important relationships with her EU peers. EU country with the ability to sway the bloc in line with Mr
Two groups of Europeans are jostling for Mr Trump’s affec- Trump’s world-view. But only up to a point. “Giorgia Meloni has a
tions. The first is the continent’s old guard—the leaders of France, lot to lose picking fights with Brussels,” notes Riccardo Alcaro of
Germany and Poland, as well as grandees of the European Union the Institute for International Affairs, a think-tank in Rome. Italy
and NATO—who have traditionally handled the European end of has high debts and tepid economic prospects, and it benefits from
the transatlantic relationship. Though they may privately loathe EU funds as well as implicit guarantees on its borrowings. Ms Mel-
Mr Trump, all think they have an “in” with him. (France’s Emman- oni may have a new friend in Washington, but she will need to stay
uel Macron, for instance, was already in office for part of Mr on good terms with her old ones closer to home. ■

C003
 OUR DOCTORS
SAVE LIVES.
SO CAN
YOUR WILL.
The lives we save
start with the gifts
you leave
DR RACHAEL CRAVEN and capacity to conduct multiple surgeries at intensive care for the junior doctors at the
MSF ANAESTHETIST the same time. But in a conflict zone such as
Yemen, you don’t have those resources.
hospital, most of whom hadn’t been able to
finish their training because of the conflict.
“When you are working as a The aftermath of an explosion is generally We focus a lot of attention on training and
doctor in a conflict zone, one chaos. There are no ambulances, there is little mentoring local staff. It’s a way for us to stand
of the things you learn is how communication from the scene, and the first in solidarity with the people we work with and
to manage a mass casualty people to arrive at hospital are often the least to invest in their – and their country’s – future.
incident. This is when a large number of badly injured, as they’ve managed to walk or It’s work that will continue to save lives long
severely wounded people who have been get a passer-by to help them. after MSF has left.
caught up in an explosion, a shooting or a I’ve seen people at their best, coming
bomb blast all arrive at your hospital within PREPARING FOR THE FUTURE together to provide lifesaving care. Each
a short period of time. When I was working Whether I was in Syria or Libya or Yemen, if emergency is different, but we’re always
at MSF’s hospital in the Yemeni city of Aden, one or two people came in with blast injuries, committed to delivering care to those who
we had to treat upwards of 50 people in the in the back of my mind I always expected that need it. That is our legacy, but it is not
aftermath of one explosion. more were on the way and that they would ours alone.
In a situation like that, you can’t just probably be in worse shape. One in six of our lifesaving projects is
rush into the single operating theatre with In Yemen, we worked as a team to triage funded by people leaving gifts in their wills.
the first wounded people who arrive – you the wounded and we ensured that those We can’t do what we do without you.”
need to triage the injured first to decide who who went into theatre first were the most THANK YOU
most needs surgery. badly injured.
If I was working in the UK, ambulance crews Sharing that knowledge with the teams you
Above: A man carries a wounded child into the
would carry out pre-hospital triage and I work with is central to the way MSF operates. MSF-run clinic at Rafah Indonesian Field Hospital
would be confident that we had the resources I was in Yemen to provide teaching in in Gaza, 27 December 2023. Photograph MSF

Leave a legacy and help save lives

Search ‘MSF Wills’, email legacies@london.msf.org or call 0207 404 6600
103682

Charity Registration number 1026588

C001
 The Economist December 7th 2024 33

United States

The presidential transition til very recently, forgoing the usual process
of having nominees vetted by the FBI.
Pete-ering out Republican senators were discomfited
by it, too, but seemed as if they could have
been mollified. They had already handed
Mr Trump the embarrassment of one
nomination setback. Matt Gaetz, a former
WASHINGTON, DC congressman from Florida chosen to be at-
A steady stream of scandal may capsize another of Donald Trump’s nominees torney-general, withdrew from contention
after it became clear his own improprieties
HE LAST time the Senate formally re- The first warning signs for Mr Hegseth would make him impossible to confirm.
T jected a president’s cabinet nominee
came in 1989 when John Tower, George
emerged shortly after Mr Trump an-
nounced his nomination. It came to light
The Republican senators, who are keenly
aware of whom their voters would choose
H.W. Bush’s nominee for defence secre- that in 2017 a woman alleged to police that in a conflict between themselves and Mr
tary, was denied because of his boozing Mr Hegseth had sexually assaulted her in a Trump, did not especially want to anger
and womanising. Time may be linear but hotel room in California. Mr Hegseth later the president-elect any further.
politics is cyclical. The next entry in this paid a settlement in a confidential agree- Unfortunately, the bad news continued
ledger could well be Pete Hegseth, Donald ment; he has denied all wrongdoing. Still, to come in. On November 29th the New
Trump’s choice for defence secretary, be- the news was an unwelcome revelation for York Times reported the contents of an
cause of his boozing and womanising. Mr Trump’s transition team, who were, un- email that his own mother had sent him
Although afflicted with similar vices, amid divorce proceedings with his second
the two men differ in their qualifications: wife (Mr Hegseth had fathered a child out
→ ALSO IN THIS SECTION
Mr Tower was a former senator rebuked by of wedlock with his current spouse). “You
his former colleagues; Mr Hegseth was, 34 Brian Thompson’s murder are an abuser of women—that is the ugly
until recently, a Fox News anchor with no truth and I have no respect for any man
government experience (though he is a 35 Trans kids and SCOTUS that belittles, lies, cheats, sleeps around,
decorated veteran of the wars in Afghani- 35 The FDA and food and uses women for his own power and
stan and Iraq). Republican senators, who ego,” she wrote. In a clean-up television in-
will control the chamber by a margin of 53- 36 News avoidance terview, she pleaded for senators to con-
47, are very much minded to give Mr 37 Mules and fools firm her son, saying she had written the
Trump the cabinet he wants. But they seem message in anger and haste.
unwilling to overlook grievous flaws. 38 Lexington: Kash Patel and the FBI Then on December 1st, the New Yorker ⏩

C003
 34 United States The Economist December 7th 2024

▸ published an investigative article docu- In cold blood The gun seemed to jam as he fired on Mr
menting, among other things, allegations Thompson, but the shooter cleared the
of alcohol abuse that wrecked Mr Heg- A Manhattan chamber and continued to fire. He fled
seth’s leadership of two non-profits “dedi- through an alley, hopped on an electric bi-
cated to supporting veterans”. On Decem- murder mystery cycle, rode the short distance to Central
ber 3rd Vanity Fair alleged that Mr Hegseth Park, and disappeared.
had billed hotel rooms used for his affair NEW YORK Jillian Snider of John Jay College of
with his future second wife to his first A gunman killed a top executive of Criminal Justice, a retired police officer,
wife’s credit card. On the same day NBC UnitedHealthcare in a “targeted attack” reckons the killer may have had advanced
news published a story relying on anony- firearms training. “It’s not the easiest thing
mous sources in Fox News who said that T WAS STILL dark at 6:40am on Decem- to unjam a gun…and then let off rounds in
they worried about Mr Hegseth’s drinking
and smelled alcohol on him as recently as a
Ialone
ber 4th when Brian Thompson walked
from his hotel to the Hilton in Man-
succession,” Ms Snider says.
Mr Thompson had been the target of
month ago. The Trump transition opera- hattan’s midtown. A resident of Minnesota “some threats,” his wife, Paulette, told NBC
tion has dismissed this reporting as false. and the chief executive of UnitedHealth- News. The reason was “basically, I don’t
Already there are signs that Republican care, one of America’s biggest health insur- know, a lack of coverage?” she said. About
senators are contemplating defection. ers, Mr Thompson was in town for his 26m Americans lack health insurance, and
Lindsey Graham, a senator from South company’s annual Investors Day. Just as he many who have coverage struggle none-
Carolina and a close ally of Mr Trump’s, arrived at the Hilton, a masked gunman theless with the costs of care; medical debt
called the reporting “disturbing” and said approached from behind and shot him sev- is a leading cause of personal bankruptcy
that defending the nomination was “going eral times. He was pronounced dead at a in America. Relatedly, healthcare workers
to be difficult”. Only four dissenting Re- nearby hospital. Jessica Tisch, the city’s and executives receive more threats than
publican senators would be sufficient to police commissioner, called the killing “a employees in almost every other industry,
torpedo Mr Hegseth’s bid. And despite his brazen, targeted attack” that “does not ap- according to one security expert. Whether
public pronouncements of support, Mr pear to be a random act of violence.” the holes in the country’s healthcare safety
Trump’s own patience may wear thin as The murderer escaped and, as The net had anything to do with the attack on
even more stories are published. Economist went to press, police had yet to Mr Thompson is mere speculation, how-
Should Mr Hegseth make it to confir- make an arrest or announce a possible mo- ever. Whatever the shooter’s motive, says
mation hearings (he has vowed to fight on tive. The attack stunned investors gath- Rafael Mangual of the Manhattan Insti-
and told Republican senators that he ered in a conference hall at the Hilton to tute, a New York think-tank, the killing is a
would not drink on the job), they would be hear about UnitedHealthcare’s strategy reminder “there is little anyone can do to
a circus. Not only would his personal life and performance. It shocked and baffled stop a determined offender from carrying
be raked over; his previously expressed New Yorkers, too. New York has the lowest out violence...even in New York City.”
views on military matters would also be murder rate of any big American city. The A graduate of the University of Iowa,
subject to strict scrutiny. murder took place in a part of midtown full Mr Thompson was a 20-year employee of
Take his recent comments on the of workers and tourists, in an area that is UnitedHealthcare, the insurance arm of
“Shawn Ryan Show”, a podcast, a week be- surveilled by cameras and drones and well- UnitedHealth, a publicly traded firm with
fore he received Mr Trump’s nod. He ar- served by beat-walking police. a market cap of $560bn. As he rose through
gued that the American military had been The shooter displayed skills. He “was the ranks, Mr Thompson ran the firm’s gov-
intentionally enfeebled by its embrace of lying in wait”, according to police, near a ernment and Medicare programmes be-
DEI (diversity, equity and inclusion) initia- side-entrance to the hotel. In surveillance fore his appointment as chief executive in
tives (“by ideologues who want to bring a footage the assailant is seen holding a gun 2021. “Brian was a highly respected col-
meritocracy to heel”); that women were with both hands, striking a professional league and friend to all who worked with
unfit for combat roles (“I’m surprised there stance, according to one security expert. him,” UnitedHealth Group said in a state-
hasn’t been blowback on that already…be- ment. A senior executive at the company
cause I’m straight up just saying that we described him as “an incredible leader”.
should not have women in combat roles”); Assassins targeting big companies are a
and that investigations of war crimes hin- rarity in the Big Apple. Suspected anar-
dered American troops (“these are rules chists bombed JP Morgan’s Wall Street
written by dudes in cloakrooms in Europe headquarters in 1920. One George Metes-
after World War I because they thought ky, who evidently became aggrieved after
they could fight polite wars in the future”). he was injured on the job while working for
Mr Hegseth is a polished communica- Con Edison, a utility, planted at least 33
tor. But he may still find himself squirming pipe bombs around the city between 1940
at a televised senatorial skewering. “He’s and 1956. CNN evacuated its Manhattan of-
just got to go through the vetting process fices in 2018 after the discovery of a mail
and withstand what I’m sure is going to be bomb addressed to former CIA director
a very interesting murder board in the Sen- John Brennan, an on-air commentator.
ate Armed Services Committee,” Senator The security practices of America’s
Thom Tillis told reporters. That was be- chief executives vary widely. Some travel
fore all the subsequent scandals broke. with bodyguards, others tote their own
Though Mr Trump is inclined to dis- luggage and move about unprotected, as
miss the mainstream media, all this has Mr Thompson did on the morning of the
had an effect. Both Politico and the Wall 4th. One security expert said he was asked
Street Journal have reported that the presi- earlier this week via text, “Why do CEOs
dent-elect is considering nominating Flor- need bodyguards?” Today, he received a
ida’s governor, Ron DeSantis, as defence text from that person saying, “Okay,
secretary instead. ■ Wanted scratch that.” ■

C003
 The Economist December 7th 2024 United States 35

Transgender rights legislation was designed to “protect mi- Eating

A restrictive GRAS negligence

nors from risky, unproven medical inter-
ventions” and bars treatments “for some

majority
medical purposes” but not others. “That is
not sex discrimination”, he said, so height-
ened scrutiny does not apply.
WASHINGTON, DC Ordinarily, conservative justices dis-
The Supreme Court is likely to uphold dain looking abroad for legal inspiration. The FDA does not know what chemicals
a medical ban affecting trans youth But Justice Alito, in particular, noted in- are added to foods
creasing scepticism toward paediatric

ItheNedright
2020 JUSTICE NEIL GORSUCH delight-
progressives and infuriated many on
when he wrote, for a 6-3 majority,
transitioning in Finland, Sweden and the
United Kingdom. He pointed to the Cass
Review (a report on the UK’s services for
T HE IDEA that American children are
being poisoned by the food industry,
with the blessing of regulators, sounds like
that Title VII of the Civil Rights Act of children diagnosed with gender dysphoria classic conspiracy theory. But when that is
1964 barred discrimination against gay, led by Hilary Cass, a retired paediatrician), the stated belief of the man who may soon
lesbian and transgender employees. That which Justice Alito said found no “high- become America’s secretary of health, it is
ruling, Bostock v Clayton County, so quality evidence” showing that the treat- sensible to ask whether there is something
alarmed Josh Hawley, Missouri’s junior ments’ benefits outweigh the risks. to it. Robert F. Kennedy junior, Donald
senator, that he rose on the Senate floor to Ms Prelogar acknowledged the “debate Trump’s choice for the job, wants to get rid
warn against the “end of the conservative happening here and abroad” about such of the entire nutrition division of the Food
legal movement....as we know it”. treatments and “how to identify the ado- and Drug Administration, which he has ac-
Four years on, battles over transgender lescents for whom it would be helpful” but cused of allowing toxic chemicals in
rights in America have expanded. Fights noted that none of these countries—in foods. On that he may, or may not, have a
over access to public bathrooms, trans contrast to Tennessee—has “outright point. The real story is that nobody knows.
people playing on women’s sports teams banned this care”. And she offered an ex- Mr Kennedy’s ire has to do with the
and medical care for trans minors have ani- ample of an approach that would not of- hands-off way in which the FDA regulates
mated elections and courtrooms alike. The fend the constitution. West Virginia, she food additives such as artificial flavours,
most significant change in the public poli- said, has adopted “a set of guardrails that colours and preservatives. It allows food
cy landscape is the adoption of laws ban- are far more precisely tailored” to address companies themselves to decide whether
ning certain medical treatments for trans- concerns around care, including mental such chemicals are safe, and whether they
gender minors. In 2020 there were no such health screening, needing two doctors to want to notify the FDA about them at all.
laws; today they are found in 26 states. Un- diagnose gender dysphoria and permitting They are not required to list all ingredients
ited States v Skrmetti, which the Supreme treatment only when “medically necessary on food labels. For example, a chemical
Court heard on December 4th, concerns to guard against the risk of self-harm”. concocted in the lab may appear on a pack
one such law in Tennessee. But several justices resisted sending of biscuits as “flavouring”.
Skrmetti asks whether Tennessee’s re- Skrmetti back to the lower court with in- Behind this is a loophole in the food-
strictions on medical treatment for trans structions to analyse it anew with height- safety law from 1958 that put the FDA in
minors violate the equal-protection clause ened scrutiny. This path would require “de- charge of vetting food ingredients. A sensi-
of the 14th amendment. The law’s chal- terminations by lay judges regarding com- ble exemption from full FDA assessment
lengers—three children and their parents, plicated medical issues”, Justice Alito said. was carved out for things like vinegar and
along with the federal government—say Chief Justice Roberts, who joined the ma- spices, which were put in a category called
denying puberty blockers and hormone jority in Bostock, worried that judges may “generally recognised as safe” (GRAS). In
therapy to trans youth, while allowing not be suited to conduct this scrutiny, as the decades that followed, the number of
them for others, amounts to unconstitu- they would be picking sides in the face of chemicals concocted to make foods ⏩
tional discrimination. “medical nuances”. He told Chase Stran-
After two and a half hours of argument, gio, the lawyer representing the Tennessee
the court’s three liberal justices—Ketanji children (and the first openly transgender
Brown Jackson, Elena Kagan and Sonia So- person to argue at the Supreme Court),
tomayor—seemed to side with the chal- that trans healthcare is an area “where we
lengers. Four of the court’s six conservative are extraordinarily bereft of expertise”.
justices—Samuel Alito, Brett Kavanaugh, The most neutral-sounding jurist dur-
Clarence Thomas and the chief, John Rob- ing the hearing was Justice Barrett. She in-
erts—looked to be on Tennessee’s side. quired about several alternative pathways
Justice Amy Coney Barrett’s questions sug- should the plaintiffs fail—as they seem
gested an open mind, leaning toward Ten- destined to do—in Skrmetti. Parental
nessee, while the author of the last win for rights to control their children’s medical
transgender plaintiffs, Justice Gorsuch, care, she noted, is a possible approach for a
was the only member of the court to re- future challenge.
main silent throughout the hearing. Whether or not healthcare bans return
The Biden administration’s solicitor to the court, prospects are good for more
general, Elizabeth Prelogar, told the justic- quandaries about public policies toward
es that Tennessee’s law discriminated on transgender Americans to reach the justic-
the basis of sex and should be analysed un- es—and soon. About half the states bar
der a “heightened scrutiny” standard—the athletes from competing with those of the
rigorous evaluation that courts must apply opposite sex, and Idaho and West Virgin-
when the government treats women and ia’s bans have been stymied by lower
men differently. But Matthew Rice, Ten- courts. Both states are petitioning the Su-
nessee’s solicitor general, said the state’s preme Court to step in. ■ Unknown isle

C003
 36 United States The Economist December 7th 2024

▸ crunchier, tastier and longer-lasting shot lobby groups are trying their luck at the Trump’s gleeful bullying of the main-
up—along with waiting times for review by state level. A bill they have proposed at stream media. At a rally in November he
the FDA. Food companies began to sneak New York’s state legislature would require said that any would-be assassin would
some novel ingredients through the GRAS food companies to disclose their safety as- have to shoot at him through the press pen,
loophole, helped by vague rules. sessments of chemicals in foods sold there. “and I don’t mind that so much”. He has
To resolve the backlog, the FDA did not As a result some could choose to replace mounted flimsy lawsuits against the New
get funding to hire more staff. Instead, in certain chemicals with safer ones, says Jen- York Times and CBS, calling for the latter’s
1997, it increased the GRAS loophole to the sen Jose from the Centre for Science in the broadcast licence to be revoked. His con-
size of the Hoover dam, changing the rules Public Interest. Big brands would sell these tinued focus on “failing” legacy media re-
so food companies no longer had to tell the reformulated products nationwide, he flects his own viewing habits, which ap-
FDA about ingredients they deemed safe. says, because it is impractical for them to pear to include as much cable TV as ever.
In 2014 the FDA’s deputy chief in charge make different versions. But the news consumption of the rest of
of foods, Michael Taylor, admitted the ob- The bill, its proponents argue, is the the country has changed radically. The
vious: “We simply do not have the infor- most important reform to the food chem- “Trump bump” of 2016 has become a
mation to vouch for the safety of many of ical review process in decades. If it suc- slump: television viewership on election
these chemicals.” According to a tally by ceeds, everyone would have access to a night this year was 25% down on 2020 and
the Environmental Working Group, a con- complete list of chemicals that are staples 40% down on 2016, according to Nielsen,
sumer advocacy group, between 2000 and of America’s diet—including the FDA. ■ which measures such things. Media com-
2021 the FDA received only ten applications panies can see the writing on the wall: on
for full safety assessment of new food ad- November 20th Comcast announced that
ditives. At the same time, about 750 new Donald Trump and the media it would spin off its cable-TV business.
chemicals entered the food supply with Some viewers are avoiding the news,
GRAS notices to the FDA. The muted out of weariness or mistrust. But the news
The lax rules have led to greater use of is also avoiding them. Streaming plat-
food chemicals in America than elsewhere. megaphone forms, which now account for a bigger
The FDA’s registry has nearly 4,000 sub- share of TV viewing than either broadcast
stances. Experts estimate that there are or cable, don’t do current affairs. Netflix, in
also more than 1,000 that the FDA does not The next president will find it harder the words of its founder, is “not in the
know about. By comparison, the EU food- to dominate America’s conversation truth-to-power business”. Apple TV+ part-
safety agency has approved about 400 ad- ed ways last year with Jon Stewart, a liberal
ditives. It is also reassessing those ap- ONALD TRUMP’S first term in office satirist, after his output became uncom-
proved before 2009, to take into account
new data on their safety.
D was a bracing experience for report-
ers, whom the president spent much of his
fortable. Warner Bros Discovery canned its
CNN+ streaming platform after 30 days.
America’s food industry maintains that time castigating. But it was a happier per- A drought of news in mainstream me-
self-regulation is keeping foods safe. Acute iod for their bosses, who enjoyed a “Trump dia may not concern Mr Trump. But the
toxic reactions to additives are, indeed, bump” in ratings and subscriptions. The online landscape has also fractured, with
rare. But such incidents have shown that second Trump term promises to be differ- the emergence of TikTok (whose chances
some ingredients lack even a basic safety ent. Old-school television viewership has of survival have edged up on Mr Trump’s
assessment. In 2022 nearly 400 people collapsed as audiences flip to entertain- election) and the president-elect’s own
were taken ill and 133 were hospitalised ment-focused streaming. At the same time Truth Social. “It’s not enough to just go to
(some with permanent organ damage) the social-media landscape, which Mr Twitter [now X]. You’re going to have to
after consuming foods containing a pro- Trump once dominated with his Twitter figure out who are the types of voters
tein called tara flour. The FDA took two megaphone, has fragmented. As political you’re trying to attract, and where are they
years to conclude that publicly available news is squeezed out of both old and new in the information ecosystem,” says Joshua
studies of the ingredient showed it was un- media, it is becoming harder to control Tucker of New York University’s Centre for
safe, an episode that also showed how America’s conversation. Social Media and Politics. Reaching them
slowly the wheels of its bureaucracy turn. One thing that has not changed is Mr has been made harder still by the fact that
Health experts worry that some addi- social networks have cooled on news—
tives may be causing cancer or other “not at all worth the scrutiny, negativity
chronic diseases. Americans get most of All the news that’s fit to tweet (let’s be honest), or integrity risks”, as In-
their daily calories from so-called ultra- United States, July 15th-August 4th 2024 stagram’s boss put it last year. In Canada,
processed foods that are packed with Facebook and Instagram have blocked
them. Nearly 9,000 foods sold in America news links altogether. Elon Musk’s re-
News influencers* % who identify as leaning…
contain Red 3 dye, which is banned in the branded X is less news-centric than the old
EU in food and in cosmetics in America ov- Left 21 Other/not clear 51 Right 27 Twitter, with a TikTok-esque “for you” tab
er concerns that it is carcinogenic. Potassi- that appears to prioritise entertainment.
um bromate, which plumps up bread, is Search engines are putting further bar-
also banned in the EU for the same reason Adults who regularly get news riers between readers and news. AI-po-
but can be found in nearly 600 foods in from news influencers*, % wered results on Google summarise an-
America. Studies in France, using food la- 0 10 20 30 40 swers rather than simply providing a list of
bels and information on what people eat, Aged 18-29 links. The combination of news being
have found links between other common 30-49
downgraded by social-media algorithms
additives and cancer—the sort of data that and buried in search results is hurting
50-64
help EU regulators decide what to ban some sites that thrived in Mr Trump’s first
when they reassess the safety of previously 65 and over term. Breitbart’s traffic is down. Infowars, a
approved additives. *Individuals who regularly post about current events and conspiracy mill, has become a target for ac-
Tired from fruitless lobbying for civic issues on social media and have at least 100,000 followers quisition by the Onion, a satirical site (it is
Source: Pew-Knight Initiative
change at federal level, consumer-safety not always easy to tell the difference). ⏩

C003
 The Economist December 7th 2024 United States 37

▸ As conventional sources of news de- Podcasters and YouTubers may seem to

cline, audiences appear to be worse in- give the powerful an easy ride, with a New media

Category swap
formed. A study by Pew during the 2020 chummy style that has made them popular
campaign found that those who got their with CEOs as well as politicians (Mark
news mainly from cable TV were twice as Zuckerberg, a punchbag for mainstream
likely to be politically well-informed as journalists, has sat for long interviews with
those who got it from social media; those podcasters such as Mr Fridman). But their ATLANTA
who stayed informed from news sites were political leanings are less predictable than
“2,000 Mules” was a work of fiction
nearly three times as clued up. In the same of those older media. A study by Pew of
year Mr Tucker and colleagues found that “news influencers” with more than 100,000
Facebook users whose newsfeed was algo- followers found that self-described conser- NE YEAR into Joe Biden’s presi-
rithmically sorted saw 13% less political
content than those who followed the old-
vatives slightly outnumber liberals, but
that around half identify with neither left
O dency all the lawsuits were failing.
The red-capped Trumpworld was
fashioned chronological feed. nor right. Independent-mindedness is part desperate for hard evidence of what
As reaching audiences via the old chan- of many influencers’ brand: Mr Rogan, they knew in their hearts to be true:
nels becomes harder, catching people who eventually endorsed Mr Trump, last that the 2020 election was stolen.
while they are being entertained is the new time backed Bernie Sanders. Enter Dinesh D’Souza, a conserva-
name of the game. During this year’s cam- Mainstream media are also cutting par- tive storyteller who Donald Trump
paign Mr Trump sat for 16 hours of inter- tisan ties. Whereas in 2008 only eight of pardoned for campaign-finance crimes.
views with podcasters and YouTubers, ac- America’s 100 highest-circulation newspa- In 2022 he published “2,000 Mules”, a
cording to a tally by “Colin & Samir”, a pers declined to endorse a presidential film that matched mobile-phone data
podcast. (Kamala Harris, his opponent, candidate, this year around three-quarters to surveillance footage compiled by
did only three hours’ worth.) Most of the kept shtum, according to Joshua Benton of True the Vote, a Texas group, to alleg-
shows, such as those hosted by Joe Rogan, Harvard’s Nieman Journalism Lab. Some edly show that leftist cabals had paid
Logan Paul and Lex Fridman, were not po- proprietors were no doubt shaken by Mr “mules” to stuff ballot boxes in swing
litical or news-focused but general-interest Trump’s threats (titles that backed Hillary states. In one clip a man steps out of a
programmes, followed by a young, male Clinton in states that Mr Trump went on to white SUV to deposit a stack of enve-
audience that is otherwise hard to reach. win were most likely to cease further en- lopes into a dropbox in an Atlanta
Although they are better at digesting dorsements, Mr Benton found). But a new suburb. “What you are seeing is a
news than breaking it, such shows do seem breed of startup digital news organisa- crime,” Mr D’Souza explains in a voice-
to encourage listeners to dig deeper into tions, such as Axios and Politico, are also over. “These are fraudulent votes.”
the ideas they hear about. Two-thirds of dispensing with opinion journalism. Opin- The film tied all the dubious claims
Americans under 30 have consumed a ion articles travel farthest when they are of home-grown election-deniers across
book, a film or music because it was rec- most extreme, threatening to “overshadow America into a neat bow—to tremen-
ommended on a podcast, according to and swallow your brand”, says Ben Smith, dous effect. According to Salem Media,
Pew. Since Spotify, the biggest music and editor of Semafor, one such outfit. “We the distributor, it grossed $10m from
podcast streamer, began including audio- think the thing readers are looking for 1m views in the first fortnight, making
books in its subscription last year, demand right now isn’t having their mind changed, it, they say, “the most successful politi-
has soared: digital audio sales this year are but more modestly to be oriented amid cal documentary in a decade”. Donald
27% higher than last, according to the As- this flood of facts and arguments.” Trump touted it as “irrefutable proof”
sociation of American Publishers. Book- That flood may rise higher than ever in that he was the race’s real victor, de-
sellers report growing interest in non-fic- the next four years. But controlling it is no spite the fact that his own Justice De-
tion “self-improvement” titles of the sort longer within the power of one platform— partment had declared otherwise.
that young men devour. or of one man. ■ But two-and-a-half years on Mr
D’Souza has quietly rolled back the
claims and apologised to the man in
the van, who was found by the Georgia
Bureau of Investigations to be legally
dropping off ballots for his family
members. On December 1st he wrote
that he had “recently learned” that the
video was not tied to the tracking data,
discrediting the film’s core claim. He
blamed True the Vote for misleading
him. True the Vote retorted that it had
“no editorial control” over which clips
were “used for dramatic effect”.
The admission marks the final
unravelling of the weary stop-the-steal
movement. “He was the biggest name
holdout,” says Mike Hassinger, a
spokesperson for Georgia’s secretary of
state. But the diehards who may have
been bothered that their gospel has
turned out to be fiction have little
reason to fret: the man who did most to
spread it will soon be president again.
Fragmenter-in-chief

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 38 United States The Economist December 7th 2024

LEXINGTON
King Donald’s Wizard

Kash Patel wants to reform the FBI, but his list of political enemies would be a scary place to start

terference. But his findings did not discredit the investigation, as

he claims, or blow open “the biggest political conspiracy in Amer-
ican history”. From the staff of the House Intelligence Committee,
Mr Patel moved to the national security staff at the White House,
he reports, after Mr Trump was told “I had saved his presidency”.
Mr Patel’s zeal for Mr Trump is profound (one senses a child-
like joy as he uses “one of President Trump’s famous Sharpies that
he gave me personally”), but, wherever he served, he picked up
critics. “Over my dead body” was the reaction of Bill Barr, then at-
torney-general, when he discovered in 2020 that Mr Trump want-
ed to appoint Mr Patel as deputy director of the FBI.
To Mr Patel such critics are among the “incestuous, power-
hungry, unelected oligarchs in Washington who hate us”. He in-
cludes Mr Barr among dozens of other “members of the executive
branch Deep State” in an appendix to “Gangsters”. Mr Patel also
lists the FBI director, Christopher Wray. Mr Trump appointed him,
but now wants him gone before his ten-year term ends in 2027 be-
cause his agents, the former president feels, spent too much time
investigating him rather than his opponents. Mr Patel sees the
Deep State as a conspiracy reaching far beyond those he names,
beyond even the state itself, to implicate “the Democrat Party, the
media, Big Tech, and all the major power centres of America”. In a
HEN WORD reached the president that the FBI, without in- speech to a conservative conference in February, wearing a green
W forming him, had warned members of Congress that a for-
eign nation was meddling in American politics, he blew his stack.
scarf emblazoned “Fight with Kash” that is among the merchan-
dise he sells under the logo K$H, he called the mainstream media
He had already lost trust in the director of the bureau, who he now “the most powerful enemy that the United States has ever seen”.
also concluded had kept him in the dark in hope of catching him Mr Patel sees a one-to-one correspondence between critics of
accepting illegal foreign help. “That bastard was trying to sting Mr Trump and members of the Deep State. The desire he has ex-
us!” he exclaimed. pressed to investigate them is sure to be a topic of the Senate hear-
The country was China, the president was Bill Clinton and the ings to confirm him as America’s next Distinguished Discoverer.
FBI director was Louis Freeh. But you could substitute Russia, Do- So are some episodes of his government service, including one in
nald Trump and James Comey and arrive at a similar episode in which, according to Mark Esper, Mr Trump’s former secretary of
the century-old saga, by turns tragic and comic, of manipulation, defence, Mr Patel appears to have supplied false information that
suspicion and outright enmity between America’s presidents and almost upended a hostage-rescue operation in West Africa. Mr
its national law-enforcement agency. The bureau was created in Patel blames Mr Esper, and he appears in the appendix.
an act of deception, when President Teddy Roosevelt’s Justice De- Mr Patel, who is 44, lacks experience in running a giant organi-
partment circumvented bipartisan opposition in Congress, and it sation. But his background in government, including as a federal
has never shaken the habit. prosecutor, is conventional for an FBI director. He also spent years
Of course, to suggest Mr Trump’s skirmishes with the FBI fit a as a public defender, which seems to have sensitised him to the
familiar storyline is to challenge the essence of Mr Trump’s over- rights of the accused, a welcome attribute in an FBI chief.
wrought politics: that he is history’s singular actor, its greatest vic-
tim and greatest hero. Fortunately for Mr Trump, he has found Watching the detectives
someone who shares that grandiose vision. He now wants this per- Mr Patel’s views of FBI reform should also occupy the Senate con-
son, Kash Patel, to run the FBI. firmation hearings. He may be right that the headquarters build-
In “The Plot Against the King,” a picture book by Mr Patel, ap- ing, the ugliest in Washington, is overstaffed, though his proposal
parently meant for children who do not overhear enough Fox to empty it and turn it into a museum of the Deep State would
News at home, Kash the Distinguished Discoverer is a wizard probably undercut the FBI’s effectiveness. He is surely correct in
“known far and wide as the one person who could discover any- arguing that Congress should more actively oversee the bureau.
thing about anything”. Hillary Queenton has lost on Choosing For all the Democratic piety now about the FBI’s indepen-
Day to the merchant Donald, but a shifty knight claims to have a dence, a tension has always existed between that and its degree of
paper in a steel box showing the Russionians helped him cheat democratic accountability, between its powers to protect Ameri-
after drinking cherry ginger ale with him in the Swirly Tower Tav- cans’ safety and the scope that provides to abuse their freedom. As
ern in Russionia. Lexington is not making this up—for that you John Harris concludes in “The Survivor”, his biography of Mr Clin-
can thank Mr Patel and the Steele dossier, the gossip-packed bit of ton, the president probably should have fired Mr Freeh despite the
Democratic opposition research that fanned suspicions of collu- political storm that would have ensued. Their mutual contempt
sion between Mr Trump and Russia in the 2016 campaign. contributed to the breakdown in intelligence-sharing that the 9/11
Mr Patel’s book for grown-ups, “Government Gangsters”, is as commission later found to have enabled al-Qaeda’s attacks. It is
vainglorious. As an investigator for House Republicans, Mr Patel just too bad, as usual, that Mr Trump should be the first president,
did expose FBI corner-cutting in the investigation into Russian in- in a long time, to take the need for change so seriously. ■

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 The Economist December 7th 2024 39

The Americas

Conflict in Colombia paign trail. The prospect of negotiations

Total peace
gave Ms Basto “sweet hope” of seeing her
son again, she says.
Alas, Mr Petro’s paz total is foundering.
Start with the ELN rebels. The government
agreed to a ceasefire in August 2023 and
began talks. But little had been achieved
BOGOTÁ by the time the agreement expired a year
Gustavo Petro’s plan to negotiate with all armed groups at once is failing later. In September the ELN killed two sol-
diers. Mr Petro suspended the talks. The
NTHONY COLMENARES would pick up of Colombia (FARC), then the biggest rebel government tried to restart negotiations,
A some nappies for his newborn and be
home soon, he told his mother in San Cris-
group, and scooped up the Nobel peace
prize. That seemed, surely, to be the end of
but on November 21st another ELN attack
killed five more soldiers. The results of the
tóbal, a city in Venezuela. That was on July the fighting. Yet dozens of armed groups ELN talks will be “very small, very poor,”
17th 2019. He did not return. “We started live on, and new ones have emerged. says Carlos Velandia, a former ELN negoti-
calling, calling, calling,” his mother, Zenai- In 2022 Gustavo Petro, a former guerril- ator who now advises the government.
da Basto, recalls tearfully. No reply. Police la, was elected president on a promise of Mr Petro also agreed to a ceasefire with
tracked his phone; the last ping was from paz total, total peace. The idea was to enter the Central General Command (EMC), a
near the Colombian border. She says they negotiations with almost every armed group of dissident FARC fighters. But in
concluded that he had been snatched by group at once, including criminal gangs, March it was suspended in much of the
the National Liberation Army (ELN), a not just with political groups. That way no country. Most of the group abandoned the
6,000-strong Marxist-Leninist rebel group single group would feel reluctant to disarm talks. Another ceasefire, with the Clan del
with a history of kidnappings. Ms Basto for fear that those that did not would seize Golfo, a 9,000-strong criminal outfit that
believes her son may be alive, held as a their assets or kill them. “Three months controls the lucrative migration route to-
forced worker. into my presidency, the ELN will be fin- wards the United States via the Darién
The ELN is one of dozens of armed ished,” Mr Petro promised on the cam- Gap between Colombia and Panama, col-
groups that have been locked in six de- lapsed in March 2023. The government is
cades of conflict in Colombia which have trying to resuscitate those talks, too.
→ ALSO IN THIS SECTION
left some 450,000 people dead. Almost ex- It also pursued ceasefires with urban
actly eight years ago Juan Manuel Santos, 40 Nuclear waste in Canada gangs in three cities. They have already
then the president, struck a historic peace collapsed in two. In one of those, Quibdó,
deal with the Revolutionary Armed Forces 41 Brazilian football gangs now circulate kill lists of women al- ⏩

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 40 The Americas The Economist December 7th 2024

▸ legedly linked to rival gangsters. Jorge Ace- that, outside the ceasefires, the army has
vedo, the mayor of Cúcuta, a city on the carried out more operations than ever. But Nuclear waste in Canada

X marks the spot

Venezuelan border, warns that urban it is precisely the many attempted cease-
ceasefires can lead to a “false peace”, in fires that have taken the pressure off armed
which gangs expand anyway but do their groups. Often the operations that are con-
killing outside the city. Iván Cepeda, a sen- ducted are not co-ordinated with peace ne-
ator and architect of paz total, waves away gotiators, making them less effective at
Canada decides at last where
any worries: “Peace processes in Colombia building up pressure for a settlement.
to store its nuclear waste
are always full of difficulties.” The government may also overestimate
The impact on security has been mixed armed groups’ interest in peace, when
(see chart). The murder rate fell slightly there is money to be made through con- T TOOK 14 years to find a spot on the
last year, probably in part thanks to the
temporary ceasefires. But kidnappings are
flict. Even nominally political groups, such
as the ELN, are deeply involved in criminal
Iencircles
barren saucer of ancient rock that
Hudson Bay, but on Novem-
up, and threats and extortions have soared activities like cocaine- and people-traffick- ber 28th Canada’s nuclear waste was at
since Mr Petro took office. Worse, armed ing. No group will be allowed to keep run- last given a home. The Nuclear Waste
groups seem to have used the ceasefires to ning drugs in a peace deal, but the state Management Organisation (NWMO), a
expand. The government has lost control has nothing to offer that is similarly lucra- non-profit organisation established by
of territory, admits Iván Velásquez, the de- tive. That conundrum will exist for as long Canada’s nuclear-power companies,
fence minister. Armed groups now have a as cocaine remains illegal. announced that it had selected a site
foothold in almost half the country. They Some groups, like the Clan del Golfo, between Wabigoon Lake Ojibway
operate in areas in which some 8.4m Co- are designated criminal, not political. That Nation (WLON) and the town of Ig-
lombians live, an increase of 70% from presents another problem: the government nace, Ontario, to host a “deep geologi-
2021. Clashes between rival groups are up lacks a legal basis for dealing with them. cal repository”: a cavern drilled out of
40% on Mr Petro’s watch. The number of Last year it tried to pass a law to let gang the rock, 500 metres underground,
fighters in the main groups leapt last year leaders get reduced sentences and keep where Canada’s spent nuclear fuel will
and cultivation of coca-leaf, the raw ingre- some assets if they turned themselves in. It be stored in perpetuity.
dient for cocaine, hit a two-decade high. sank in Congress. The public does not like Only a few countries are making
All of this augurs badly. cutting deals with violent men, especially serious efforts to build permanent
What is going wrong? One problem is when their only agenda is greed. storage for spent nuclear fuel. Finland
that the government lacks credibility. Al- None of this means that negotiating is is furthest ahead; it is set to put the
most 70% of the stipulations in the peace a mistake. “The policy of mano dura [iron first canisters of waste underground in
agreement with the FARC have not been fist] and the war on drugs has resoundingly 2025 or 2026. Canada is two decades
fully implemented. The previous presi- failed,” points out Mr Cepeda. Conflicts of- behind. It is not expected to put any
dent, Iván Duque, deserves much blame ten end through talks. But not all negotia- waste into the repository before 2040.
for that, but Mr Petro has been sluggish, tions further the cause of peace. The man- But eventually the millions of bundles
too. Armed groups will not lay down their ner in which they are pursued matters. of spent nuclear fuel that Canada has
weapons in return for promises when gov- Mr Petro’s paz total is running out of accumulated will be nestled deep
ernments do not tend to keep their word. time. Presidential elections are due in 18 underground. It will be Canada’s first
The government also failed to take months and he cannot stand again. Total permanent storage site for the waste
charge in many areas that used to be con- peace is not popular; some two-thirds of from nuclear-power plants, which will
trolled by the FARC. New men with guns Colombians say it is going badly. Mr Pe- be radioactive for hundreds of thou-
took over instead. More than 400 former tro’s successor may well ditch it. To avoid sands of years.
FARC members have been killed since 2016 that he needs big wins, fast. Sadly for him, The selection process began with
to settle old scores or for refusing to join for Colombians and for Ms Basto that the NWMO asking towns and cities to
the new rebel groups. A stronger disincen- looks unlikely. ■ put themselves forward as potential
tive for disarming is hard to imagine. “We sites. The payoff was investment and
are not going to be so stupid, so idiotic as the promise of good jobs. After an
the FARC who gave up their weapons,” say Not so peaceful examination of the terrain, including
ELN fighters, according to a well-placed Colombia, ’000 seismic tests and borehole drilling, and
source in an ELN-controlled area. a long process of community engage-
The approach also lacked muscle. Dur- 1. Peace accords signed 2. Iván Duque becomes ment, Ignace and WLON got the nod.
president 3. Gustavo Petro becomes president
ing the negotiations with the FARC the re- As the selection process honed in
bels stopped attacking, but the army con- on Ignace, bright yellow placards
Homicides Extortions
tinued operations until just before the final 1 2 3 15 15 started popping up across the sur-
deal was signed. Without that kind of mil- 10 10
rounding region, emblazoned with
itary pressure there is little incentive to “Say no to nuclear waste”. Opposition
5 5
compromise. “Nowadays the carrot is very was fuelled by fear of disaster, mi-
0 0
big and the stick very small,” admits Mr Ve- nuscule though the chances of that are.
landia, the former ELN negotiator. 2010 15 20 24* 2010 15 20 24* But in the end, for a small town with
Pushed on whether the ceasefires were few other prospects, the pros of the
a mistake, Daniela Gómez, the deputy Kidnappings Threats† C$30bn ($22bn) repository outweighed
minister of defence, says “the search for 0.4 90 the cons. Ignace held a referendum on
peace is never a mistake.” That ignores 60 the matter this summer. Three-quarters
trade-offs inherent in even the most effec- 0.2
30 voted in favour. The chief of WLON,
tive ceasefires: they can build trust and re- 0 0 Clayton Wetelainen, calls the cavern
duce violence, but if they let armed groups one of the “most important responsi-
2010 15 20 24* 2010 15 20 24*
expand, they reduce the likelihood of bilities of our time”.
Source: SIEDCO *Forecast †Reported to police
peace in the longer run. Ms Gómez says

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 The Economist December 7th 2024 The Americas 41

Brazilian football SAFs cannot solve every problem. In 2022

Moneyball
an American investment group called 777
Partners bought Vasco da Gama, one of
Brazil’s biggest teams. The group went
bankrupt in October and is being investi-
gated in the United States for fraud. “SAFs
are not a magic wand—you need good go-
BUENOS AIRES vernance,” says José Francisco Manssur,
A new, private model has helped Brazil’s football clubs become dominant co-author of the SAF law.
Others think there is more to Brazil’s
N NOVEMBER 30TH 70,000 football The rewards are sweet. Mr Textor re- dominance than SAFs and gambling mon-
O fans piled into La Monumental stadi-
um in Buenos Aires. They came to cheer on
ceived a $23m cheque for the Libertadores
victory, but winning also qualifies Botafo-
ey. Irlan Simões of the University of the
State of Rio de Janeiro notes that Colom-
two Brazilian teams, Atlético Mineiro and go to take part in FIFA’s Club World Cup bia and Chile adopted SAF-like models be-
Botafogo, in the final of the Copa Liberta- next year. The prize pot is gigantic. He fore Brazil, but that their teams remain
dores, South America’s premier football wants to take Eagle Football Holdings middling. He says Brazil’s rise was inevita-
tournament. The match was ferocious. In public and expects to raise at least $1bn. ble. The country’s large population means
the first minute Gregore da Silva, a Botafo- Even the losers are optimistic. “We a bigger market for tickets, merchandise
go midfielder, got a red card for sticking have everything in Brazil to become like and broadcasting rights. In 2016 Conme-
his studs into an opponent’s face, leaving the [Premier League],” says Daniel Vorca- bol, which organises the Libertadores, al-
his team with ten men. Seconds before the ro, the president of Banco Master, a Brazil- lowed more teams to compete in qualify-
end of extra time Botafogo’s Júnior Santos ian bank, who co-owns Atlético Mineiro. ing rounds, which benefited Brazil simply
sliced through three Atlético players to “We have the passion, the talent, the fan because it has more clubs.
whip the ball into the goal, sealing a 3-1 vic- base and the potential for growth.” Four of
tory for his team. Brazil’s “Big Twelve” teams have become More money, fewer problems
The match was historic for several rea- SAFs since 2021. More are expected to fol- Yet the money clearly helps. “The associa-
sons. It was the first Libertadores trophy low as the success stories pile up. In 2021 tion model is not fit for purpose,” says Mr
for Botafogo, perennial underdogs. It was Ronaldo, a famed Brazilian striker, bought Manssur, because clubs today have mil-
the sixth Libertadores win in a row for a Cruzeiro, a team with eye-watering debts lions of fans and need money to buy the
Brazilian team, the longest streak by any that had slipped into the second division, best players. He thinks Brazil’s SAFs could
country. And both finalists were “football for $70m. He sold it in April for $100m, become a model for others in the region.
PLCs” (SAFs by their Portuguese acronym), after bringing it back into the first division. That is a risky thought for a Brazilian. No
a new type of public limited company. Bo- Brazilian football has also reaped finan- country would benefit more from an injec-
tafogo’s is the most spectacular success cial gains from sports betting, which was tion of capital than Brazil’s footballing
story since Brazil allowed football clubs, legalised in 2018. The country’s Central nemesis, Argentina. The country produces
which had historically been structured as Bank reckons that Brazilians spent more a disproportionate number of the world’s
non-profit associations, to incorporate in than $3bn per month this year on bets best players, but its domestic teams are a
2021. It will not be the last. Thanks to the through PIX, a digital payments system it shambles. After the Libertadores final Ar-
rise of SAFs and sports betting, Brazilian runs (including other payment forms, the gentina’s president, Javier Milei, posted on
football is awash with money. Its clubs are real value is much higher). This enthusiasm X: “Shall we talk about SAFs?” The coun-
becoming more competitive, making Bra- for gambling has worried the government, try’s football association has fiercely resist-
zil the most exciting market for investors which passed a law in 2023 forcing betting ed such efforts. Perhaps the shame of
in the beautiful game. firms to obtain licences. watching Brazilian teams dominate on
Botafogo’s arc is legendary, and illus- Despite the euphoria around them, their home turf will sway it. ■
trates the forces in play across Brazilian
football. In the 1960s and 1970s the club
was a factory for the world’s best football-
ers. It has supplied more players to Brazil’s
national team than any other club. But for
the past 40 years it has been in a tailspin. It
last won an international cup title in 1993.
Between 2000 and 2020 it was relegated
from Brazil’s first division three times. Its
finances sank with it. By 2020 it had debts
of over 1bn reais ($170m), and annual rev-
enues of just 151m reais.
Along came John Textor, an American
businessman. His firm, Eagle Football
Holdings, owns stakes in Crystal Palace in
England and Olympique Lyonnais in
France. He bought Botafogo in 2022 for
some $66m. The team’s debts have been
cut in half. This year he paid record sums
for Luiz Henrique, a rightwinger, and
Thiago Almada, an attacking midfielder.
“We Botafogo fans have John Textor on
earth and God in heaven,” beams Isaias
Lieberbaum, a 70-year-old fan. Fame and glory

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 42 The Economist December 7th 2024

Middle East & Africa

War in Syria Democratic Forces (SDF), a mainly Kurdish

militia (backed by America) that controls
Closing in on Bashar al-Assad much of the north-east. HTS has told the
group’s leaders that it has no quarrel with
them, only with the Assad regime, and has
offered them safe passage. The SNA has
not been so benevolent: its Turkish back-
DUBAI ers consider the SDF a terrorist group be-
A rebel rout leaves the Syrian leader at his most vulnerable in a decade cause of its ties to Kurdish separatists in
Turkey. There have been reports of clashes
OT EVEN the Syrian rebels themselves made good use of drones, both for surveil- between the SNA and the SDF.
N thought they would be so successful.
When they began a surprise offensive in
lance and combat, and deployed special-
forces units ahead of their main thrust.
Residents of Aleppo are nervous, both
that the regime will fight to retake the city
northern Syria on November 27th, they Fleeing Syrian troops left behind tanks, ar- and about the prospect of HTS rule. Abu
found Bashar al-Assad’s regime in disarray. tillery and other kit, which the rebels will Muhammad al-Jolani, the group’s leader,
His troops fled. Within days the insur- no doubt put to use. has tried to reassure Christians and other
gents had captured Aleppo, Syria’s second If HTS captures Hama, its next goal will minorities that they have nothing to fear.
city. The advance has since slowed around be Homs, 50km farther south. A victory His fighters distributed sweets outside
the city of Hama, 120km to the south—but there would sever the main road linking churches and unfurled the Syrian opposi-
it has not stopped (see map on next page). Damascus to the coast, the heartland of Mr tion flag on Aleppo’s ancient citadel rather
For the first time in a decade, Mr Assad’s Assad’s Alawite sect. That would make it than an Islamic banner. On December 1st
rule looks vulnerable. extremely difficult for the regime to de- the Orthodox church in Aleppo celebrated
Two rebel groups are leading the push. fend and resupply the capital. mass as usual. Not everyone is convinced:
One is Hayat Tahrir al-Sham (HTS), which At the same time, rebels are also con- even if Mr Jolani is sincere about his break
emerged from al-Qaeda’s Syrian affiliate. solidating their control around Aleppo. from jihadism, some of his allies are not.
It cut ties with the jihadist group in 2017 This has led to tension with the Syrian Another fear is that HTS will turn out to
and has since set up a provisional govern- be little better than Mr Assad’s regime. The
ment in rebel-held Idlib province in north- group has become increasingly authoritar-
→ ALSO IN THIS SECTION
west Syria. The other faction, the Syrian ian in recent years, jailing and torturing
National Army (SNA), is a Turkish proxy. 43 A shaky truce in Lebanon hundreds of critics. Corruption is a grow-
As The Economist went to press, the re- ing problem. There have been protests in
bels seemed to be enveloping Hama, fight- 44 Ghana loses its sheen Idlib over unemployment and high taxes.
ing for control of villages to its north-west 45 A long election in Namibia The SNA is far worse: many Syrians regard
and north-east. They are far better trained it as a collection of thugs and criminals.
than the rebels of a decade ago: they have 46 India Inc in Africa All this is a reminder of just how mad- ⏩

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 The Economist December 7th 2024 Middle East & Africa 43

▸ deningly complex the Syrian conflict has economy has collapsed: unemployment is
become—and that is before you get to for- high, inflation higher. The army is full of
eign powers. Mr Assad was thought to be young men press-ganged into long service
in Moscow when the rebel offensive began, for low pay. Mr Assad might find loyalists
returning to Damascus over the weekend. willing to fight for their own villages, espe-
On December 1st Abbas Araghchi, the Ira- cially in Alawite areas. But his army is too
nian foreign minister, paid him a visit. The demoralised to do much more than that.
Syrian president is pleading with Russia He may hope that a deal will save him.
and Iran, his two closest allies, to help him The front lines in Syria had been largely
push back the rebel offensive. frozen since 2020 because of an agreement
Over the past week Russian jets have between Russia and Turkey. Though the
bombed Idlib and Aleppo. But Russia’s latter has supported both HTS and the
ability to help is limited. It leases a naval SNA, it is probably edgy about the idea of a
base in the coastal city of Tartus and keeps rebel march on Damascus. Recep Tayyip
a detachment of warplanes at nearby Erdogan, the Turkish president, instead
Khmeimim airbase. Small contingents of seeks a deal with the Syrian dictator to
Russian troops across the country have send back millions of Syrian refugees and
tried to train the Syrian army into a more establish a buffer zone that will push the
professional force (the rout in Aleppo sug- SDF away from the border.
gests those efforts have gone poorly). For months Mr Erdogan has tried to ne-
But Russia’s presence in Syria has gotiate such an agreement, only to be re-
shrunk since its invasion of Ukraine in buffed: Mr Assad does not make conces-
2022. Even at its peak, its role was that of a sions to anyone. (Indeed, his stubbornness Surveying the damage
force multiplier: helping the regime plan has even irritated Vladimir Putin.) Now,
military operations and offering air sup- though, his position is far weaker. The fall lah began firing rockets to support the
port, surveillance, logistics and intelli- of Aleppo gives Turkey a larger buffer zone bloody attack a day earlier on Israel by Ha-
gence. It preferred to leave most of the than it could have imagined. Mr Erdogan mas, more than 4,000 Lebanese and 127 Is-
ground fighting to others. may hope this will let him dictate terms— raelis have been killed in the conflict. (Isra-
Iran supplied much of the cannon fod- and that Mr Assad, desperate to save what el claims three-quarters of the Lebanese
der, but it too has been diminished. Hiz- remains of his rump state, will have no victims were members of Hizbullah. Leba-
bullah, the Lebanese Shia militia it sup- choice but to accept them. ■ non says the toll includes nearly 800 wom-
ports, has been battered by a year of war en and more than 300 children.) Some
with Israel. It cannot deploy thousands of 70,000 Israelis and around 1.3m Lebanese
fighters to help Mr Assad as it did a decade Israel and Lebanon have been forced to flee their homes. In

A fragile ceasefire
ago. Iran itself has endured a year of Israeli Lebanon, entire villages have been de-
strikes on its military infrastructure in Syr- stroyed in the south. Scores of neighbour-
ia. It is also under pressure in eastern Syria, hoods have been levelled. Israel says it has
where the SDF, with American support, is targeted its attacks on Hizbullah head-
battling Iranian-backed militias for control quarters and weapons stores hidden be-
of villages near Deir ez-Zor. BEIRUT AND JERUSALEM neath civilian buildings.
A few weeks ago, Mr Assad might have As people return to their homes near the Over the next couple of months, Hiz-
felt confident. Most Arab states had re- border, the truce remains shaky bullah is supposed to withdraw from all its
stored diplomatic ties with him; some were positions in southern Lebanon, as Israeli
even lobbying America to lift sanctions on N THE OUTSKIRTS of Tyre in south- troops leave Lebanese territory, creating
his regime. Russia thought it could con-
vince Donald Trump to withdraw Ameri-
O ern Lebanon wailing mothers dressed
in black gathered the bodies of their sons,
the conditions for repairing some of the
damage. Yet the truce is already shaky.
can troops from eastern Syria. which they had been unable to bury for Over the past week both sides have
The precipitous reversal was predict- weeks. In a village nearby, one man came committed numerous violations of the ac-
able. Mr Assad’s regime has been hollowed home to find his dog had been shot dead; cord. On December 2nd Hizbullah fired
out by years of war and corruption. Syria’s in another, a woman discovered piles of ex- two rockets at an Israeli position on a long-
crement in her bed. Others found that after disputed section of the border. In re-
months of Israeli bombing and ground op- sponse, the Israel Defence Forces (IDF)
TURKEY Turkish erations by Israeli troops they no longer carried out air strikes against what it
Turkishtroops/rebels
troops/rebels
had homes to go to. On the other side of claims were “launchers and terrorist infra-
the border in Israel, most people’s homes structure”. The IDF has also fired at Leba-
Aleppo Kurdish forces were still standing. But thousands had nese trying to return to their homes in the
Idlib been damaged by rockets fired by Hizbul- south, claiming that they were Hizbullah
Rebels Advances* Deir ez-Zor
Islamic State lah, the Iran-backed Shia militia that had members in breach of the agreement.
Hama presence dominated southern Lebanon. For now, both parties have an interest in
SYRIA Israeli and Lebanese civilians who live sticking to the deal. Israel has achieved its
LEBANON Euphrates near the border between the two countries objectives in Lebanon. It has killed most of
Rebels have begun to return home after a ceasefire Hizbullah’s leadership, including Hassan
Damascus on November 27th ended nearly 14 months Nasrallah, its veteran leader, and de-
ISRAEL
IRAQ of war between Israel and Hizbullah. Yet stroyed most of the group’s guided-missile
JORDAN
even as those who return survey the devas- arsenal, as well as its military infrastruc-
tation, it remains far from clear that they ture close to Israel’s northern border. The
Areas of control, Dec 4th 2024 will not have to leave again soon. ceasefire aims to ensure that Hizbullah
100 km
Source: Liveuamap *Since Nov 27th
Since October 8th 2023, when Hizbul- will be kept well away from the border. ⏩

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 44 Middle East & Africa The Economist December 7th 2024

▸ Agreeing to the ceasefire was a bid by Africa votes (1)

Losing its sheen

Hizbullah to hang on to what remains of
its military power and political authority in
Lebanon. The drubbing it has received in
the past few months has not just battered
the group but has also eroded the regional
standing of Iran, its main sponsor. ACCRA

That, in turn, has weakened Iran’s main An election exposes cracks in Ghana’s image as a beacon
client, the regime of Bashar al-Assad in of economic and political stability
neighbouring Syria (see previous article).
Iran’s worry that it is overstretched in the HANA HAS long been a trailblazer in It went some way towards stabilising
region may have spurred it to press Hizbul-
lah to accept the ceasefire, even though
G African politics. One of the first coun-
tries on the continent to win its indepen-
the economy, with the debt-to-GDP ratio
falling from 92.7% in 2022 to a still eye-wa-
Hizbullah used to maintain that it should dence, in 1957, the west African country led tering 82.5% today. But it wiped out a
depend on Israel stopping its war in Gaza. the way in ditching dictatorship for de- chunk of Ghanaians’ savings and pension
The deal may still collapse. It is based mocracy in the 1990s. Since then, it has pots. This angered the middle class, which
on UN resolution 1701, which ended the been an example of relative political and had put its money into government-
previous war between Israel and Hizbullah economic stability in a highly unstable en- backed investments it had considered safe.
in 2006 and mandated that Hizbullah vironment. It has taken a big part in re- Adding to the pain, the cedi weakened
withdraw its forces to the area north of the gional diplomacy and has proved a reliable against the dollar for most of Mr Akufo-
Litani river. Both the Lebanese army and ally for America and Europe, even as many Addo’s tenure, compounding economic
the UN peacekeeping force in south Leba- of its neighbours have turned against their pressure on a country that depends on im-
non known as UNIFIL failed miserably to erstwhile Western backers. ports for consumer goods. Inflation, which
enforce Hizbullah’s withdrawal at the time. Yet as Ghanaians go to the polls to elect hit 23% in November, continues to rise. “It
The countries guaranteeing the latest a new president and parliament on De- sometimes feels very difficult to go on in
ceasefire are not about to send troops of cember 7th, this hopeful legacy is being life,” says Vicky, a 25-year-old saleswoman.
their own to enforce it, so it is unclear what threatened by economic strife, democratic The economic malaise is a big problem
will stop Hizbullah from re-establishing its backsliding and instability elsewhere in for Mahamudu Bawumia, the ruling Na-
presence in the south. the region. The dissatisfaction of Ghana’s tional Patriotic Party’s presidential candi-
European diplomats are scrambling to 34m people with their economy and de- date. As Mr Akufo-Addo’s vice-president
funnel cash and equipment to the Leba- mocracy matters far beyond its borders. and the boss of his economic management
nese army to bolster it for the task. Though The election is happening in the wake team, Mr Bawumia has found it tricky to
they acknowledge that the army chief, of what is likely to be remembered as the shrug off responsibility for the crisis.
General Joseph Aoun, wants to enforce the worst economic crisis in the country’s Meanwhile, John Mahama, the candi-
ceasefire, many remain sceptical that his democratic history. The government of date for the opposition National Demo-
army is up to the task. Israeli officers sus- Nana Akufo-Addo, the president, was cratic Congress, who was president be-
pect they may eventually have to return. elected with a mandate to bring the econ- tween 2012 and 2016 and is on the ballot for
They are banking on Hizbullah and its Ira- omy back from the brink. But it has proved the fourth time, is trying to sell his experi-
nian backers not wanting to provoke an- a huge disappointment, borrowing heavily ence as a basis for a fresh start. “My focus
other round of fighting. and presiding over a debt default in 2022. is to come and reset Ghana,” he says. “We
For now, the Shia group may be content The ensuing IMF bailout (Ghana’s 17th) en- have the experience of pulling our country
to lay low. Though its ability to launch at- tailed a restructuring not just of external li- out of adversity.” Yet he lost the election in
tacks has been diminished, it retains some abilities but also, painfully and unusually, 2016 amid blackouts, inflation and a col-
of its hold over the Lebanese state. In Bei- of domestic debt. lapsing currency. The excessive borrowing ⏩
rut’s southern suburbs, some of its suppor-
ters held a night-time vigil at the site where
Mr Nasrallah was assassinated by a bar-
rage of Israeli bunker-buster bombs in late
September. At his upcoming public funer-
al, the movement’s surviving leaders are
likely to proclaim victory for evicting the
Israelis from Lebanon.
However, many Lebanese, while glad to
see the back of the IDF, have had enough
of suffering the consequences of Hizbul-
lah’s wars, which have inflicted much more
damage on Lebanon than on Israel. In Bint
Jbeil, a town in the south, some were griev-
ously offended by a Hizbullah lawmaker’s
assertion that the 4,000 Lebanese deaths
were a price worth paying.
Yet some worry that the hit to Hizbul-
lah’s reputation caused by its hammering
by Israel may leave the group with a point
to prove. Says one Lebanese opposition
politician: “What I fear now is that they
will do something to reassert their author-
ity—a show of force is what scares me.” ■ A weighty campaign

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 The Economist December 7th 2024 Middle East & Africa 45

▸ that led to Ghana’s recent default began Her victory, however, has been sorely
during his time in office. marred by the failings of the electoral com-
Neither candidate has a convincing mission. The IPC called the voting exten-
plan for reviving the economy, though both sion illegal and criticised it for reopening
will be bound by the IMF deal, reducing only some polling stations, without ex-
their room for manoeuvre. Voters sound plaining how they were selected. There
unimpressed by both men. “I don’t trust were reports that SWAPO had been bring-
them—they’re all liars,” says Anthony, a 48- ing its supporters by bus to the polling sta-
year-old who sells bags in a market in Ac- tions that had reopened. The IPC is refus-
cra, the capital. Even so, the current gov- ing to recognise the results and says it will
ernment’s poor record, a global trend “pursue justice through the courts”. On
against incumbents and Ghana’s history of December 3rd, when the result was de-
tight elections is said to be giving Mr Ma- clared, opposition parties led by the IPC
hama the edge against Mr Bawumia. boycotted the announcement.
As results stand, Ms Nandi-Ndaitwah
Grumpiness all around faces an uphill task. SWAPO lost 12 seats in
Mr Mahama may also be hoping to capital- the parliament, putting it well below the
ise on voters’ concerns about Mr Akufo- two-thirds-threshold needed to pass legis-
Addo’s increasingly authoritarian tenden- lation. So she will have to cosy up to oppo-
cies. The outgoing president’s cabinet sition parties, themselves a fractured
once contained more than 120 ministers group. In the previous two general elec-
and deputies, making it the most bloated tions SWAPO’s tally had already dropped
in Ghana’s history. He made his cousins from 87% to 65%. This time it got just 53%.
cabinet ministers, appointed partisans to Africa votes (2) Namibians are frustrated by falling liv-

SWAPO hangs on
the electoral commission and curbed the ing standards and rising corruption. Many
freedom of the local press, which he has of the country’s 3m-odd people are short
barely talked to since 2021. Copying his of basic housing. Two-thirds of urbanites
boss, Mr Bawumia declined to be inter- live in shanty towns. Unemployment is
viewed by The Economist. stubbornly high. From next year the daily
These shortcomings have increased minimum wage for farm workers will be
discontent. A recent survey by Afrobarom- A tired old liberation party ten Namibian dollars (55 American cents).
eter, a continental pollster, found that 95% stays in power The SWAPO government has been
of Ghanaians consider the presidency cor- increasingly blamed for the poverty. Na-
rupt; 74% said corruption had risen this INES STRETCHED around the block, mibia is the second-most unequal country
year; and 82% of citizens think the country
is heading in the wrong direction. Yet rath-
L motionless, as voters stood for hours in
the searing heat of a Namibian summer,
in the world, just ahead of neighbouring
South Africa, according to World Bank
er than look to the opposition, voters ap- waiting for ballot papers. On November numbers from 2022. Of the 1.4m Namib-
pear cynical about politicians in general, 27th, long after voting had begun in the ians registered to vote, more than half were
though an independent candidate popular country’s presidential and parliamentary born after independence, so many felt no
with young urbanites may get enough elections, over a third still lacked election residual gratitude to SWAPO for winning it
votes to force a run-off. “Ghana has be- materials. Thousands went home without from South Africa. In the run-up to the
come a corrupt country without apology,” casting their vote. Then the electoral com- elections an air of expectation was height-
says a 27-year-old woman who is not plan- mission announced it would extend voting ened by the defeat or decline of time-worn
ning to vote. Some worry that the people’s in some polling stations for three more ruling parties in neighbouring Botswana
contempt for the institutions of democracy days. Voters returned, multiple times. “It’s and South Africa that were deemed to have
could threaten a peaceful transition, par- like you are a mad person,” one frustrated succumbed to corruption over too many
ticularly if the result is close. Whoever los- citizen told local media. years in office.
es is likely to cry foul. Finally, six days later, Netumbo Nandi- SWAPO has likewise been dogged by al-
All this is bad news not just for Ghana, Ndaitwah, known as NNN, was declared legations of corruption. The so-called
but for west Africa as a whole. In recent president, with 58% of the vote. As leader Fishrot scandal, which was exposed in 2019
months jihadist violence in the Sahel has of SWAPO, the party that has ruled Namib- and is still dragging on, brought a clutch of
continued to spill over into neighbouring ia since independence in 1990, she held off SWAPO ministers to court and prison, re-
states. A Ghana-led initiative to prevent a challenge by Panduleni Itula, a 67-year- vealing a web of bribery and chicanery in
this is widely considered a failure and is old dentist, lawyer and former SWAPO the fishing industry, a big chunk of Namib-
unlikely to be revived if Ghana is grappling youth campaigner, who spent 33 years in ia’s economy. According to Afrobarometer,
with domestic turmoil after the election. Britain before coming back home in 2013. a continental pollster, two-thirds of Na-
Burkina Faso, Mali and Niger, all ruled by With 15 candidates competing, he got 26% mibians believe corruption has risen in the
military juntas, are planning to pull out of of the vote as head of the Independent Pa- past year. New oil finds and plans to har-
the Economic Community of West African triots for Change (IPC). ness Namibia’s wind and solar energy to
States, which would cripple one of the only In February this year, President Hage create green hydrogen have yet to benefit
forums for regional co-operation. Strong Geingob, a SWAPO stalwart, died in office. ordinary Namibians. Oil reserves being
leadership from Ghana, as well as Nigeria, He was replaced by an interim president, tapped by TotalEnergies and Shell are not
will be needed to coax them back in. who then handed the presidential candida- expected to begin flowing until 2030.
Whoever wins on December 7th must cy to the 72-year-old NNN, Namibia’s vice- So it is surprising, to say the least, that
dampen discontent at home and strength- president. Educated in the Soviet Union Ms Nandi-Ndaitwah beat the dentist by so
en Ghana’s role as a source of stability in and Britain, she is married to a former head wide a margin. In any event, she will start
the region. Otherwise, he will risk squan- of Namibia’s armed forces. She will be Na- her presidency under a cloud of doubt and
dering the country’s political legacy. ■ mibia’s first female head of state. has a hard task ahead. ■

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 46 Middle East & Africa The Economist December 7th 2024

India Inc in Africa as politically innocuous. Indian firms were

widely praised for hiring locals and, on the
The perils of mixing business and politics whole, avoided the sort of corruption or
environmental scandals which can make
companies politically toxic in Africa. Un-
like Chinese ones, they were considered
independent of the Indian state. Mr Modi’s
NAIROBI government had worked to improve tran-
Adani’s troubles in Kenya undermine Narendra Modi’s ambitions for Africa sparency in schemes previously plagued by
graft allegations, such as India’s flagship
HE TWO deals, worth some $2.5bn, vent and exploit Cold War rivalries. Many subsidised credit programme.
T were meant to boost Kenya’s creaking
infrastructure. Yet the country’s MPs
members of India’s diaspora of around 3m
people do business across the continent.
Yet the Adani episode is a reminder that
India Inc remains far from spotless. And
roared with delight on November 21st as Under Mr Modi, who has been in power Mr Modi’s close ties to Mr Adani may
William Ruto, the president, told them his since 2014, India has sought to intensify its throw doubt on the sincerity of his govern-
government would not lease Kenya’s main links with Africa. Between 2018 and 2022 ment’s commitment to fight corruption. It
international airport to the Adani Group, Indian investment in the continent ex- may also revive interest in the shortcom-
an Indian conglomerate, and would cancel ceeded $26bn, bringing it to more than five ings of other Indian firms. Last year Ve-
a separate agreement with an Adani com- times the amount over the previous five danta Resources, owned by an Indian bil-
pany to build new transmission lines. After years. India today is the second-biggest bi- lionaire, Anil Agarwal, agreed to a $1bn set-
months of controversy over the allegedly lateral creditor to Africa after China. With tlement with Zambia’s government in or-
unfavourable terms of the deals, the deci- a total trading volume of $83bn in 2024, it der to reclaim copper mines it had been
sion was clinched when American prose- is now also Africa’s third-largest trading accused of leaving idle. Earlier this year
cutors filed charges against Gautam Ada- partner after China and the EU. Kenya’s government threatened to close
ni, the group’s boss, for conspiring to bribe Beyond advancing its economic inter- Africa’s largest soda-ash factory, owned by
Indian officials (he denies the charges). ests, India’s push into Africa is part of its Tata Chemicals, over a tax dispute.
The episode does not just cast doubt on bid to claim leadership of the global south
Adani’s investments in Kenya and across amid rivalry with China. India has ramped Beware of the big boys
Africa. It also has implications for other up its diplomatic presence, opening new With Adani gone, Africans may also re-
big Indian companies operating on the embassies and dispatching ministers and member that the performance of big Indi-
continent, and for the geopolitical ambi- business delegations. In November Mr an firms on the continent has often been
tions of Narendra Modi, India’s prime min- Modi visited Nigeria, while Droupadi Mur- underwhelming. Take the Tata Group, per-
ister, who has close ties with Mr Adani. mu, India’s president, toured Algeria, Mau- haps India’s most venerable conglomerate.
India’s connection with Africa is long- ritania and Malawi. It first arrived in Africa in the 1970s and in
standing. Indian traders first began sailing Adani, the corporate face of Mr Modi’s 2013 announced a major new drive for Afri-
their ships along the Swahili coast centu- India, has played a big role in this push for can markets. But in recent years it has sold
ries ago. An Indian architect designed sev- influence. The group recently signed a off some of its African operations and
eral of Ethiopia’s imperial landmarks. Ken- contract to operate a big shipping terminal abandoned big mining projects in Mada-
ya’s British colonial-era railway was built in Tanzania, where it is touting a $900m gascar and Côte d’Ivoire.
by indentured Indian labourers. A sense of project for electricity power lines. It is eye- That points to a further challenge: com-
camaraderie that grew from all being for- ing deals in Egypt, Morocco and Zambia. petition from China. For Kenya and other
mer colonies brought India and many Afri- Now Adani looks like a liability. Before African countries, the appeal of Adani lay
can countries together in the “Non- Mr Adani’s troubles in Kenya, most big In- in its ability to build the huge infrastruc-
Aligned Movement” that sought to circum- dian investments in Africa had been seen ture that Africa sorely needs, without some
of the risks associated with Chinese inves-
tors. But beyond Adani, Indian firms in key
sectors such as construction struggle to
match their state-backed Chinese rivals.
“India just doesn’t have the resources to do
such big projects as China,” says Barnaby
Dye of King’s College London. The num-
ber of infrastructure contracts awarded to
Indian companies has fallen, according to
the African Development Bank. Indian
construction firms complain their govern-
ment does too little to help them.
The future of Indian investment in Afri-
ca may instead lie beyond large infrastruc-
ture and politically connected conglomer-
ates. Ashish Patel of Aavishkaar Capital, a
Kenya-based investor, describes India
Inc’s strength as being “physical asset
light, intellectual capital heavy”. Examples
include tech companies and digital public-
infrastructure innovations. Smaller firms
will probably continue to blaze India’s
path with little support from the state,
Fighting the big man whether or not bigger rivals join them. ■

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 The Economist December 7th 2024 47

Asia

South Korean politics in the know, including the defence minis-

ter. Mr Yoon’s own administration was left
Coup d’not flat-footed. “It was a huge surprise to most
of the staff here, and the cabinet members
as well,” says a source in the presidential
office. American officials received no ad-
vance warning from their treaty ally, which
SEOUL AND WASHINGTON, DC hosts nearly 30,000 American troops.
A rash, unexpected move by President Yoon Suk Yeol tests democracy The counter-reaction came swiftly.
Thousands of protesters took to the streets
ECEMBER 3RD began as an uneventful Democratic Party (DP), had “become a chanting “Arrest him!” The mood was one
D day in Seoul, South Korea’s capital.
Many went to sleep soundly that evening.
monster” that threatens democracy. He
implied that they collaborated with North
of outrage mixed with utter shock. “It feels
like Yoon just got drunk and suddenly an-
By the next morning, the country’s presi- Korean “communist forces”. nounced this late at night,” quipped one
dent, Yoon Suk Yeol, had declared martial Although successive constitutions have protester. “Is this reality?” asked another.
law, attempted to forcibly take control of weakened the presidency and given more Currency markets shuddered, sending Ko-
the National Assembly—and then abrupt- authority to parliament, South Korea’s sys- rea’s won down by as much as 3% against
ly reversed course. This extraordinary turn tem remains one in which the president the dollar. The Bank of Korea called an
of events has thrust his country into chaos, wields tremendous power, including over emergency meeting.
called the future of his presidency into the security services. Following Mr Yoon’s Political opposition to Mr Yoon mobil-
question and tested the strength of South statement, armed forces were deployed in ised throughout the night. The DP called
Korean democracy. Seoul and riot police lined the roads. the president’s declaration “essentially a
The wild night began with an unexpect- The decision was taken by the presi- coup”. Han Dong-hoon, the head of Mr
ed address by Mr Yoon at 10.30pm local dent and a small cabal around him. Fewer Yoon’s own People’s Power Party (PPP)
time, announcing the imminent imposi- than ten people are believed to have been came out against the move. As heavily
tion of martial law. The decree banned all armed troops stormed the parliament, the
political activities and limited media free- 190 lawmakers who had barricaded them-
dom. It was the first use of such emergency → ALSO IN THIS SECTION selves inside the chamber, a majority of the
powers since the country’s military dicta- 300-strong body, voted unanimously to re-
torship fell in the late 1980s. Providing no 48 Bushra Khan marches on Islamabad voke the president’s decree just two hours
evidence for his claims, Mr Yoon alleged 49 Bhopal, 40 years on after it took effect. The armed forces be-
that the National Assembly, which is con- gan to leave shortly afterwards.
trolled by his political opponents in the 50 Banyan: Australia targets social media Just after 4am Mr Yoon made a second ⏩

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 48 Asia The Economist December 7th 2024

▸ televised address, announcing that he Pakistani politics

Plenty of room to fall
Spousal support
would respect the National Assembly’s
will and lift his martial-law order. Troops South Korea, president Yoon Suk Yeol
returned to their bases. As dawn broke, Mr approval rating*, %
Han called for the defence minister’s resig- 80
nation and apologised to the public for the Disapprove
“disastrous situation”. Businesses and 60
ISLAMABAD

schools opened as usual. By the afternoon, Bushra Khan has launched her political
opposition parties had submitted a motion career. Not everyone is pleased
to impeach Mr Yoon, with a vote expected 40
on December 6th or 7th. As the sun set T WAS BILLED as a “do or die” protest.
again, hundreds gathered for a candlelight
protest at the National Assembly.
Approve 20 IImran
On November 26th Bushra Khan, wife of
Khan, a jailed former Pakistani
Mr Yoon, a conservative former prose- 0 prime minister, rode into the capital, Is-
cutor, took office in 2022 after narrowly de- lamabad, on a shipping container, vowing
2022 23 24
feating Lee Jae-myung, the DP’s leader. In to set her husband free. “I will be the last
Source: National polls *Excludes undecided/no answer
office he has proved divisive: alienating woman to leave here and I will not leave
not only his opponents but many who had without [him],” Mrs Khan (pictured) told
initially supported him. Scandals have also America, steadied a troubled relationship thousands of cheering supporters. By mid-
marred his image, in particular allegations with Japan, and provided indirect support night her triumphant entry had collapsed
surrounding his wife, who was caught on for Ukraine by backfilling American stocks into chaos. Police and paramilitaries viol-
video accepting a luxury handbag as a gift. of ammunition. He has also taken a hawk- ently cleared the city centre. Mrs Khan de-
His approval ratings slid to around 20% ish approach towards North Korea, which camped to Khyber Pakhtunkhwa, a prov-
last month (see chart). has entered into a new security pact with ince in the north. She has not been heard of
The DP swept general elections to re- Russia and sent troops there. By contrast or seen in public since the protest.
take control of parliament earlier this year. the DP tends to be sceptical of Japan, due What transpired on the night of the
Mr Yoon refused to attend its opening ses- to grievances over its colonial-era atroc- protest is hotly disputed. Mr Khan’s party,
sion on September 2nd, the first time a ities, and to favour engagement with North Pakistan Tehreek-e-Insaf (PTI), alleges a
president has done so since democratisa- Korea; it has opposed calls to provide di- “massacre”, claiming at least 12 protesters
tion. Last week parliament voted to trim rect military aid to Ukraine. were killed. The government denies any-
Mr Yoon’s budget for next year. The sordid episode also speaks vol- one was killed by security forces, blaming
Mr Yoon may have thought he could umes about the state of South Korean de- instead PTI “trained miscreants” for insti-
outmanoeuvre his opponents. Yet his move mocracy. On the one hand, if Mr Yoon does gating violence. Four security people died
went far beyond the bounds of normal pol- indeed back down and is replaced through during the protest.
itics, evoking instead the tactics of Park a constitutional process, the system will But what is not in dispute is that Mrs
Chung-hee, a military dictator who ruled have survived an enormous test. The short- Khan’s turn in the harsh spotlight of Paki-
the country in the 1960s and 1970s. “He’s lived nature of the martial-law declaration stani politics has upset the PTI. The party
used the nuclear bomb,” says Victor Cha of demonstrates the strength of present-day has long railed against dynasties in poli-
the Centre for Strategic and International Korean democracy, says Shin Gi-wook of tics, especially the Sharifs of the Pakistan
Studies, an American think-tank. Stanford University. By contrast, the last Muslim League-Nawaz (which leads the
By setting it off, Mr Yoon has almost time martial law was declared, in 1979, it government) and the Bhuttos of the Paki-
certainly sealed his own downfall. “The started eight more years of autocratic rule, stan Peoples Party (which is a government
only thing that is certain is that President including a massacre of protesters in ally). “The bigger debacle was not the end
Yoon will not be able to finish out his Gwangju in 1980. of the protest but Bushra’s active entry into ⏩
term,” says Ha Sang-eung of Sogang Uni- But the fact that Mr Yoon turned to
versity in Seoul. If Mr Yoon does not resign such an extreme measure points to a deep-
himself, impeachment requires a two- er malaise. Political polarisation has be-
thirds majority vote in parliament and then come entrenched. Misbehaviour by politi-
a trial by the constitutional court. (Mr cal leaders, followed by aggressive crimi-
Yoon’s party controls 108 seats, so just nal proceedings against them, is all too
eight would need to defect.) common. The threshold for prosecutions
The process could drag out for months, is now so low that political accountability
leaving an interim president in charge and has become a cycle of “political bloodlet-
the political system in limbo. The turbu- ting”, laments Christopher Green of the In-
lence will spook investors, who already ternational Crisis Group, a think-tank.
place an elevated risk premium on South Earlier this year Mr Lee, the DP leader,
Korean assets. The Korean Confederation was himself convicted on charges of lying
of Trade Unions and transit workers have to investigators about a bribery case, call-
promised to strike until Mr Yoon steps ing into question his ability to run for pres-
down. Whenever new elections are held, ident again. (He denies the charges and
the DP candidate will probably win. plans to appeal.) Park Geun-hye was im-
The foreign-policy implications of this peached as president in 2016 and sen-
would be vast—and come at a sensitive tenced on corruption charges; her prede-
time, as Donald Trump prepares to take of- cessor, Lee Myung-bak, was also convicted
fice in America and North Korea takes an of bribery after leaving office. The latest fi-
ever more hostile stance towards the asco could become an opportunity for the
South. During his tenure, Mr Yoon has country to reflect and regroup—or it could
deepened his country’s alliance with fuel further division and enmity. ■ Keeping on trucking

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 The Economist December 7th 2024 Asia 49

▸ PTI politics,” says Kamran Khan, founder The Bhopal gas leak sidiary were sentenced to two years in pri-
of Nukta, a digital-media outlet (and no re- son and fined around $2,000 each for their
lation of the Imran Khans). An unending role in the disaster. Their appeals against
Opposition to Bushra Khan has been the verdict are still under way and none of
sharp and swift. Party leaders blame her for nightmare them has spent a day in jail.
pushing towards D-Chowk, the political In 2001 Dow Chemical, a large chemical
heart of Islamabad, instead of hunkering company, bought Union Carbide. Between
down outside the capital for negotiations Suffering from the Bhopal disaster 2004 and 2023 a court in India issued sever-
with the government, as the leadership in India continues, 40 years on al summonses on Dow to attend the crimi-
preferred. In the immediate aftermath of nal proceedings. It was only in May 2023
Mrs Khan’s first political foray, the PTI’s HORTLY BEFORE midnight on Decem- that America’s Department of Justice
secretary-general briefly resigned and a
key ally quit party committees.
S ber 2nd 1984 methyl isocyanate (MIC), a
highly poisonous gas, began leaking from
served a summons to Dow. When the firm
appeared in a court in Bhopal, it argued
Mrs Khan has largely stayed in the a storage tank at a pesticide factory in the that the court lacked jurisdiction over an
background since her marriage in 2018. A Indian city of Bhopal. During the night, 27 American company and disavowed any re-
self-styled faith healer, she has been the tonnes of the gas spread through the city, sponsibility for Union Carbide’s Indian
subject of lurid gossip accusing her of choking residents in their sleep. By dawn, subsidiary.
practising witchcraft. But a nine-month Bhopal’s streets were strewn with corpses, Compensation for the victims has been
stint in jail on corruption charges, which mostly those of residents of the slums sur- paltry. In 1989 the Indian government and
she denies, appears to have pushed her rounding the factory, which was owned by Union Carbide settled for $470m, a frac-
into politics after her release on bail in Oc- Union Carbide, an American company. tion of the $3.3bn India had sought, with-
tober from the same prison her husband The number of deaths is disputed. Accord- out consulting the victims. This figure was
has been held in since 2023. “In this re- ing to Amnesty International, a human- based on the claim that only 3,000 people
gion... family gets pushed to the front, rights group, up to 10,000 people died had died and that few more than 100,000
fights the hardest,” says Maryam Riaz Wat- within three days of the accident, and an- suffered permanent disabilities. Most sur-
too, Mrs Khan’s sister. other 12,000 perished later. Over half a mil- vivors received little more than $500; fam-
Amid the PTI finger-pointing, Shehbaz lion people still live with injuries. ilies of the dead got $2,000. Activists allege
Sharif, the prime minister, has pounced. A Neither Union Carbide nor its employ- that government agencies downplayed the
slew of new charges has been filed against ees have faced any consequences for their number of fatalities and the extent of the
Mr Khan, his wife and party members. Mr role in the disaster. Survivors and families injuries to make the overall damage bill fit
Sharif has called the PTI a party of “sabo- of the dead are fighting for compensation. the amount offered by Union Carbide.
teurs and anarchists”, reviving talk of ban- Worse, the toxic effects of the gas contin- Surviving victims suffer from a host of
ning it. A federal anti-riot force is to be set ue to poison successive generations. chronic and debilitating illnesses, includ-
up to deter future PTI protests. (Ms Khan’s India’s notoriously sluggish courts have ing respiratory problems, eye diseases and
march was the fourth big PTI protest this been especially slow in this case. Warren weakened immune systems. Miscarriage
year, the third in two months.) The govern- Anderson, the chairman of Union Carbide, rates quadrupled in the aftermath of the
ment puts the cost of standoffs and shut- was arrested during his visit to the site disaster. One study found that the inci-
downs because of such protests at an im- shortly after the accident but was released dence of cancer among people exposed to
plausible $680m a day. But it is the govern- on the same day, reportedly under pressure the gas was eight times higher than in the
ment’s own heavy-handed response— from the American government. Anderson, unexposed population. A study by the In-
which includes closing motorways, switch- who died in 2014, never returned to India dian Council of Medical Research found
ing off mobile networks, and throttling the to face investigation or trial. In 2010, after that women exposed to MIC, as well as
internet—that drives the economic hit. decades of legal proceedings, seven Indian their daughters, are seven times more like-
The battle is also escalating online. The employees of Union Carbide’s Indian sub- ly to have children with birth defects than ⏩
government has blocked X, formerly Twit-
ter, since February. A national firewall, to
ramp up online surveillance and censor-
ship, is being set up with Chinese technol-
ogy at an estimated one-off cost of
$70m-100m. In November the powerful ar-
my chief, General Asim Munir, demanded
stricter rules for social media, calling “false
and misleading information” online a “sig-
nificant challenge”. General Munir has also
tightened his grip on office. Last month
parliament increased the tenure of military
chiefs from three years to five, abolishing
the retirement age of 64. General Munir is
now in place until November 2027, when
he will be eligible for another five years.
“Both sides are fuming right now, but
dialogue is the only way forward,” says Mu-
hammad Ali Saif, who is negotiating on be-
half of the PTI with military representa-
tives. Mr Khan has other ideas. On Decem-
ber 4th he called on the PTI to “prepare for
the next phase of our struggle for libera-
tion from the mafia”. ■ Their children’s children

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 50 Asia The Economist December 7th 2024

▸ women with no history of exposure. The abandoned plant. Rachna Dhingra, an ac- that is because many victims belong to
damage is also more far-reaching than pre- tivist who works with survivors, says that lower castes or to the Muslim minority and
viously believed. There is evidence that the 150,000 people still live in the area because are therefore considered expendable.
gas caused harm up to 100km from the housing there is cheap. The Indian authorities appear to have
site—far beyond the 4.5km radius original- The victims of Bhopal continue to press learned one lesson from the catastrophe:
ly identified by public-health officials. for fair compensation and access to health in 2010, keen to woo foreign companies for
The site of the accident remains toxic care and clean water. They also want Dow energy investments in the country, the
but is still populated. Union Carbide did or the government to clean up the soil and central government passed a bill that
not complete its clean-up of the surround- groundwater contaminated by the acci- capped foreign firms’ liability for nuclear
ing area, and in 1998 the site was handed to dent and its aftermath. But successive gov- accidents at $180m. For the victims of Bho-
the state government. Thousands of ernments, both local and at the national pal, however, there does not seem to be a
tonnes of toxic waste remain buried in the level, have done little. Ms Dhingra says limit to their suffering. ■

BANYAN
Exemplar, or warning?
Australia wants to lead the big tech crackdown

F THE 31 bills rushed through Aus- sweeping bans, arguing that teenagers ones—are overwhelmingly in favour.
O tralia’s Senate on November 29th,
one drew attention. An amendment to
nowadays build their communities online.
Far from protecting the vulnerable, they
Polling suggests that over three-quarters
of them back the ban. For once, the two
the country’s Online Safety Act will ban say prohibition could isolate them further. big parties are united. The conservative
under-16s from social media from next Plus, the “ban does nothing to make the Liberals also backed the bill. When it
year. Under the law, platforms that fail to social-media platforms safer,” writes comes to getting tough on big tech, all
take “reasonable steps” to verify the age Lorraine Finlay, Australia’s human-rights sides like to see Australia as a leader. It is
of users can be fined up to A$50m commissioner, and Anne Hollonds, its “a jurisdiction that like-minded govern-
($32m). “The whole world is watching,” children’s commissioner. Mr Albanese’s ments look to for guidance”, says the
crowed Anthony Albanese, the centre- government also plans to legislate a “digi- government’s memorandum for the bill.
left Labor prime minister, as the column tal duty of care”, which would require On this front, its biggest export has
inches multiplied. platforms to prevent harm to users. not been successful. In 2021 a conserva-
Underlying the ban is a complex Then there are technical challenges tive Australian government created a
debate about whether social media, and (see Business section). It is unclear how “news media bargaining code”, which
the screen time that goes along with it, is many companies the law might apply to. required Google and Meta to pay news
harmful. Mr Albanese’s government YouTube is exempt, on the basis that companies when search results or social-
believes that it is so bad for adolescent parents felt it was educational. Gaming media feeds linked to their articles. The
health that it should be treated no differ- platforms are also out. To ensure that two giants forked out $130m in the sub-
ently from smoking—a habit on which Australians are not forced to upload their sequent year. Others rushed to follow
Australia also led the crackdown. “I’ve IDs, social-media groups will have to offer Australia. But in Canada, which passed a
met parents who have had to bury their other age-verification options, such as similar law in 2023, the approach has
children as a result of the impact that facial recognition. Either way, some worry backfired. Meta blocked news links
social media has had,” he said. “The about how much data Australians of all instead of paying up, crippling some
harm that is being done to young people ages will have to hand over. “And kids are sites that relied on Facebook for traffic
now is established,” claims Peter Mal- just going to steal their parents’ IDs and and distribution. The company now
inauskas, the Labor premier of South create fake accounts anyway,” says Grace. threatens to take similar measures in
Australia, who started the campaign. Yet Australians—at least, the adult Australia, where it has refused to renew
The reality is more complicated. its handouts.
Young people are spending increasing What makes Australia a testbed for
hours on smartphones and social media. such policies? Many of its politicians
Alongside this, many report a decline in care deeply about the harms caused by
their mental health. It could be that big tech, and rightly so. But another
those two phenomena are connected: explanation may come from its old
their reported wellbeing began to slide media. It is dominated by Rupert Mur-
as screentime rose. However there is not doch’s News Corp, which controls about
yet much proof of a causal link. “The two-thirds of the country’s newspaper
evidence isn’t there to show that social circulation. The company campaigned in
media is doing more harm than good,” favour of both the bargaining code and
argues Axel Bruns, a researcher at the the ban. Since its efforts to “extract rent”
Queensland University of Technology. from tech giants are ailing, “it is looking
And social media are not just cesspits for new ways to claw back lost ground,”
of bullies and groomers. “It’s the only says Suelette Dreyfus, a technology
way I keep in contact with my friends,” researcher at the University of Mel-
says Grace, a 14-year-old in Sydney. bourne. Australia’s latest crackdown may
Many child-welfare advocates oppose prove as vexed as its last.

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 The Economist December 7th 2024 51

China

China’s armed forces and Guam during a tour of the Pacific.

Mr Xi has long resorted to purges to
Bribes and brass consolidate his grip on the People’s Libera-
tion Army (PLA), and other levers of power,
promising to go after all ranks—“tigers and
flies” alike. Admiral Miao is a tiger, one of
only six members of the Central Military
WASHINGTON, DC Commission (CMC), China’s supreme mil-
Military turmoil raises fresh doubts about China’s ability to invade Taiwan itary body, headed by Mr Xi himself.
The admiral may not be quite as large a
INCE TAKING power in 2012, Xi Jinping der scrutiny. Defence-industry figures also beast as Generals Xu Caihou and Guo Bo-
S has worked to purge corruption from
the ranks of China’s armed forces. The
seem to have disappeared.
The turmoil in China’s high command
xiong, both former vice-chairmen of the
CMC, who were arrested for bribery in 2014
country’s ability to fight and win wars de- reinforces a belief among several senior and 2015. The former died of cancer; the
pends on this effort, he has said. But even American officials that China will not be latter was sentenced to life in prison. But
Mr Xi’s protégés, appointed to restore or- ready to invade Taiwan in this decade, as Admiral Miao’s suspected wrongdoing
der, seem to be part of the rot. The latest some had feared. That is not to say that may be felt more keenly by Mr Xi.
sign came on November 28th, when the China will stop using military force to co- The admiral rose through the ranks in
defence ministry announced that Admiral erce and intimidate neighbours. On No- Fujian province where Mr Xi also served.
Miao Hua, one of China’s most senior offi- vember 29th it sent a nuclear-capable Under Mr Xi’s leadership, his ascent in-
cers (pictured, in white), had been sus- H-6N bomber for the first time on a joint cluded an unusual move from the army to
pended pending investigation for “serious patrol with Russian aircraft over the Sea of serve as the navy’s political commissar in
violations of discipline”, often a euphe- Japan. Later this week it may launch anoth- 2014, a promotion to admiral in 2015 and el-
mism for corruption. Ostracism or impris- er large military exercise around Taiwan, in evation to the CMC in 2017, taking charge
onment will probably follow. a show of displeasure at America’s deci- of the Political Work Department. This is
The news came just after reports that sion to allow the self-governing island’s the Communist Party’s ideological-en-
Admiral Dong Jun, the defence minister (a president, Lai Ching-te, to stop in Hawaii forcement arm. It oversees military person-
more junior position in China), was also nel, promotions and the political commis-
under investigation. The ministry denied sars who shadow operational commanders
→ ALSO IN THIS SECTION
the claim as “sheer fabrication” and later in most units, ensuring the party’s “abso-
noted that Admiral Dong had met foreign 52 Holding back the desert lute leadership” over the armed forces.
officials in Shanghai on December 5th. Ru- Those associated with Admiral Miao
mours suggest other senior officers are un- 53 Women in film will, inevitably, come under scrutiny. That ⏩

C003
 52 China The Economist December 7th 2024

▸ may explain the rumours surrounding Ad- deepening military alliances in Asia. Above could help solve the problem, by acting as
miral Dong. If he is removed he would be- all, China’s economic woes and social dis- windbreaks and anchoring the ground in
come the third successive defence minis- content mean that Mr Xi is turning inward place with their roots. For decades they
ter—and yet another Xi appointee—to be and wants stability abroad. have been planting a ring of vegetation
disgraced. The purge of Mr Xi’s favourites “The period of greatest danger has round the desert’s edge that is 3,000km
may suggest he is poor at choosing officers probably been pushed out for several years long and over 1km wide in places. This year
(though able to admit to mistakes). Or it as Xi Jinping addresses the loyalty in his hundreds of thousands of workers were
may be a sign that corruption is so endem- military and the corruption problems,” mobilised to finish the last stretch. On No-
ic that no senior officer is unblemished. says Bonnie Glaser of the German Mar- vember 28th the final section of trees was
The cause of Admiral Miao’s downfall shall Fund, a think-tank in Washington. planted in Yutian county, on the southern
may never be revealed. PLA-watchers pro- Such views are not universally shared, side of the Taklamakan. The desert is now
pose different interpretations. A narrow in or out of government, not least because “locked shut”, say officials.
one, offered by Lonnie Henley of the For- Donald Trump’s return to power raises un- The Taklamakan project is just one part
eign Policy Research Institute in America, certainty about America’s alliances. Mr Er- of a scheme dating back to the 1970s. At
is that given his position Admiral Miao ickson notes that past corruption scandals that time China was losing about 1,500
may have been caught in a “pay to play” have not stopped China’s relentless mili- square kilometres of land to deserts each
scheme, where officers bribe superiors to tary growth. “Politicised corruption inves- year thanks to deforestation and overgraz-
obtain promotion. A broader thesis, set out tigations impact and impose costs on Chi- ing of grasslands. So in 1978 officials start-
by Andrew Erickson and Christopher Shar- na’s military to the extent that some dirty ed to plant trees in arid areas across north-
man of the US Naval War College, is that laundry occasionally emerges—but are ern China (see map). Collectively, these
the anti-corruption campaign has moved fundamentally a speed bump, not a show- desert-taming projects were named the
from the PLA’s rocket force to the navy. If stopper,” he says. “Xi has his foot firmly on Three North Shelterbelt Programme. It is
so, two of the most important components the accelerator and a full tank of gas.” ■ due to be completed by 2050, when it will
of the PLA’s modernisation have become have formed an “unbreakable green Great
engulfed in scandal, after last year’s purge Wall”, according to government plans.
of several rocket-force commanders. Afforestation China boasts that the scheme has alrea-
Corruption, says Mr Erickson, “is not a dy been a great success and highlights its
bug, it’s an enduring feature of a system in Trees to the rescue technological prowess. According to offi-
which the Communist Party is inherently cial data, tree cover in arid areas of north-
above the law”. The PLA’s expansion has ern China has increased from 5% to 14%
created many opportunities for bribe-tak- since the project began. These new trees
ing. In the past Mr Xi has blamed its fail- BEIJING have protected 23m hectares of agricultur-
ings on Westernised thinking and a lack of Will China’s “green Great Wall” save it al land from desert sands, say officials.
combat experience, but he may not have from encroaching deserts? And the green wall may have even turned
appreciated how far the rot had spread. the sands back a fraction. A decade ago
Mr Henley admits it is difficult to as- N ANCIENT TIMES the shifting sands of 27.2% of China’s total land area was desert.
sess whether dishonesty merely raises the
cost of running the PLA or causes more
Inorth-western
the Taklamakan, a desert in China’s
Xinjiang region, swallowed
Now that proportion has fallen to 26.8%.
But not all this progress is thanks to the
lasting damage by saddling it with under- up entire cities. Today they still cause trou- green wall. A big reason China’s deserts are
qualified officers and shoddy kit. Bloom- ble. On the edges of the desert, sand can no longer expanding is that northern Chi-
berg, a news agency, reported in January smother crops, bury houses and block na is seeing more rain, say researchers at
on American intelligence assessments roads. Strong winds can also carry it thou- the Northwest Institute of Eco-Environ-
about Chinese missiles being filled with sands of miles away to choke the inhabit- ment and Resources, a state-backed think-
water and silos being fitted with doors that ants of Beijing and other cites in the east. tank. Human efforts, such as planting
did not open properly. In September satel- Officials have long hoped that trees trees, have accounted for only about half ⏩
lite imagery suggested a new submarine
had sunk while under construction. 500 km
China aims to become a “world-class” RUSSIA
military power by 2049. But Mr Xi has or-
dered the PLA to be ready to invade Taiwan
KAZAKHSTAN
by 2027, says the CIA. American military of-
ficials have long worried about a “window The Three North
of vulnerability” in the second half of this Shelterbelt Programme
decade, before new American bombers, MONGOLIA
subs and other weapons enter into service
in substantial numbers in the 2030s. Xinjiang
Gobi desert
In recent weeks, however, senior Amer- Taklamakan N. KOREA
ican military and government officials, desert Beijing
Gansu
speaking in off-the-record forums, have Inner Mongolia
sounded sanguine. They suggest the dis- S. KOREA
Yutian county
ruption in the PLA’s upper ranks is evi-
dence that Mr Xi does not yet have confi- CHINA
dence in its ability to take Taiwan quickly
and at acceptable cost. Other recent fac-
tors may give him pause, too. Among them
are Russia’s failure to swiftly overrun Uk- Climatic zones Hyper-arid Arid Semi-arid Dry-subhumid Humid
raine, Taiwan’s shift to a more defensive Sources: “Global aridity index and potential evapotranspiration database - version 3”, by R.J. Zomer and A. Trabucco (CMCC), 2022;
“Vegetation restoration in Northern China: a contrasted picture”, by Wang et al., Land Degradation & Development, 2020
asymmetric military policy and America’s
 The Economist December 7th 2024 China 53

Feminist films

Rewriting the script

BEIJING

Chinese women are making themselves heard on the big screen

HE HIGHEST-GROSSING Chinese ko Ueno, a popular feminist author from

T film in the last week of November
was not an action flick or sci-fi thriller,
Japan. Most viewers, though, have found
this to be amusing.
two genres that often top the country’s It is interesting that the film was
box office. It was “Her Story”, a comedy- given the green light by government
drama that follows a single mother, censors. Official narratives emphasise
called Tiemei, and her eccentric new women’s traditional roles in society.
neighbour, Xiaoye, in Shanghai. Togeth- Communist Party leaders have cracked
er the two women face various challeng- down on feminist activism, seeing it as a
es, such as raising nine-year-old Molly, front for anti-party dissent. But while the
navigating old and new romances, and characters in “Her Story” are fluent in
handling online harassment. The low- feminist rhetoric, none calls for activism
A line in the sand budget film, by turns hilarious and heart- or protests in a way that might frighten
rending, has far exceeded expectations, officials. And though censors may not
▸ the reduction in the size of deserts over the taking in more than 440m yuan ($61m). have liked Tiemei being divorced, they
past two decades, the researchers estimat- “Her Story” is the second feature film were probably pleased to see her raising
ed. (Others studies have found that affor- written and directed by Shao Yihui. Her a child. The state is desperate to stem
estation had even less of an effect.) script has resonated with young Chinese China’s falling birth rate.
Critics also question how sustainable women, who are pleased by its focus on Studios, for their part, are studying
the green wall is. For decades local officials female experiences and problems related how “Her Story” became a box-office
rushed to plant trees in order to hit targets to their sex. The hard and often thank- success. One screenwriter notes the
set by the government. Many were unsuit- less work of motherhood is a theme. The environment. Patriotic epics and rags-to-
ed to the arid climates of northern China, protagonists also dispel taboos about riches tales seem out of touch with how
so they failed to sprout or quickly died. menstruation. One criticises male fanta- ordinary Chinese are feeling. Many
Others were packed in too densely, drain- sies based on pornography. “The mood young people are unemployed and frus-
ing the region’s groundwater reserves and is never ruined by politeness,” says Tie- trated—and want to watch films that
making desertification more likely. mei to a potential partner. reflect their angst. Then there is the fact
Some of the people meant to benefit Some online commenters (mostly that women make up an increasing share
from the green wall have been alienated by male) have criticised the film for belit- of the cinema-going public. They have
it. Farmers grumble that they are forbid- tling men or portraying them in a stereo- accounted for 58% of ticket sales this
den to plant cash crops on land set aside typical fashion. Tiemei’s ex-husband and year, up from 51% in 2018. Those aged 25
for the project. In 2017 farmers in Gansu her new lover jockey for her affection by to 29 make up the largest cohort, accord-
province were accused of felling trees and acting out a clumsy form of feminism. ing to Alibaba Pictures, a studio. That a
planting vineyards in their place. They bang on about the patriarchy and film about young women is a hit
Chinese officials seem to be learning structural oppression, and refer to Shizu- shouldn’t have been such a surprise.
from their mistakes. Over the past few
years they have been creating the wall in a
more sophisticated way, planting different
types of trees, shrubs and grasses, depend-
ing on local ecosystems. They have also let
farmers plant more profitable trees, such
as those bearing dates and walnuts.
Lately China’s leader, Xi Jinping, has
been more sombre when discussing the
challenges facing the green-wall project.
After a spike in the number of sandstorms
affecting Beijing last year, which spurred
debate over the effectiveness of afforesta-
tion, Mr Xi met officials in Inner Mongolia,
a region of northern China prone to deser-
tification. Beating back the desert would
be “arduous and uncertain”, he told them,
akin to “rolling a stone up a hill”. ■

Chaguan, our China column, has been

suspended. Our goal is to reinstate it when A movie with meaning
we have a new columnist resident in Beijing.

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 54 The Economist December 7th 2024

International

The Vatican and the global south As an Argentine, Francis is the first

A pope of colour?
non-European to head the church since
741AD, when a Syrian, Gregory III, ended
his reign. Now that the church has broken
a mould that had remained intact for al-
most 13 centuries, there is inevitably spec-
ROME ulation that his successor might be from
Africa and Asia are the regions where the Catholic church is growing fastest. Africa or Asia. Peter Turkson, a Ghanaian,
Could they also provide the next head of the church? was widely tipped for the papacy at the last
conclave, but his star has since dimmed.

IsellsNencircle
THE SHADOW of the giant pillars that
St Peter’s Square, Nancy Samai
visitors tickets to the Vatican Muse-
that, until quite recently, heavily favoured
the rich world, particularly Italy. At the last
conclave in 2013, Europeans and North
The two continents accounted for 31%
of a global Catholic population of almost
1.4bn at the end of 2022, according to the
ums. A Roman Catholic, Ms Samai arrived Americans cast 64% of the votes. In an Vatican. But these figures understate the
in Italy 22 years ago after fleeing the civil election held immediately after the consis- continents’ importance because they do
war in her native Sierra Leone. As she tory, they would have 52%. not include China, where there are perhaps
works, she can see the very window from The pope now carries out most of his an additional 12m Catholics.
which Pope Francis greets pilgrims on a duties from a wheelchair. But that is be- Moreover, they record the number of
Sunday. Like many of them, she wonders cause of a dodgy right knee, not a life- baptised Catholics thought to be alive but
whether one day the face that emerges threatening disease. In September Francis take no account of those who have since
from that window might be black. “If embarked on his longest-ever foreign trip, abandoned their faith: in Europe and
America can have Barack Obama as its flying more than 30,000km to visit Indone- North America, which nominally contain a
president, then surely the next pope can be sia, Papua New Guinea, East Timor and further 27% of the worldwide flock, secu-
African,” she says. “That’s my dream. Singapore. Still, at 87, the punishing de- larisation and disillusion with clerical-
That’s what I’m praying for.” mands of the pontificate must weigh abuse scandals have prompted large num-
Similar thoughts may occur to the 21 increasingly heavily and, as time goes by, bers of Catholics to abandon their faith or
prelates whom Pope Francis will appoint the temptation to hand over to a younger, their allegiance to Rome. The same is
as cardinals on December 8th. Those still fitter man will surely grow. increasingly true in South and Central
below the age of 80 when he dies or retires America, which accounts for 41% of the to-
will be eligible to take part in the conclave, tal. It is, however, not true for Africa, the
the assembly at which the next pope will → ALSO IN THIS SECTION continent where the Catholic flock is
be chosen. Francis has used his power of growing fastest: between 2013 and 2022, it
nomination to alter a geographical balance 56 The Telegram: Georgia’s protests grew by 22% (see chart). Over the same per- ⏩

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 The Economist December 7th 2024 International 55

▸ iod the number of Catholics in Asia (ex- introduced by the reforming Second Vati- tors fall into that category. But there is an
cluding China) increased by 13%. can Council in the 1960s was to make exception: Cristóbal López Romero, a jo-
There is, of course, no scientific meth- priests and bishops say mass facing their vial, bearded Spaniard and member of the
od for gauging the intensity of collective congregations. But in 2016 Cardinal Sarah Salesian order who is the archbishop of
faith. But a couple of rough-and-ready told them they should revert to the earlier Rabat in Morocco. Like Francis, a second-
yardsticks suggest that Africa is also where practice of facing away. Six days later, he generation son of Italian immigrants, Car-
belief is most fervent. The first is levels of was reprimanded by the pope and the Vat- dinal López Romero, a white cardinal with
observance. In 2023 researchers at George- ican issued a statement claiming his words an African archdiocese, has the advantage
town University in Washington looked at had been “incorrectly interpreted”. of strong links with both the poorer and
attendance at mass in 36 countries. The second rebellion was more broad- the richer worlds. He lived for more than
Though only two African ones were in- based and forced Francis into a mortifying 20 years in Latin America.
cluded, they were ranked first and second: U-turn. Last year, the Vatican’s chief theo-
94% of Catholics in Nigeria and 76% in logian published a document authorising Pope for the best
Kenya said they went to mass at least once the blessing of same-sex couples, so long A final consideration is that although the
a week. A second yardstick, at least for as it was not done as part of a liturgical rit- cardinal-electors do not always vote for pa-
men, is the number studying for the priest- ual, let alone a gay marriage. The docu- pal candidates from their own neighbour-
hood. The Vatican’s figures show that over ment caused an uproar in Africa. The head hood, Africa’s representation in the next
the ten years to the end of 2022, that num- of the continent’s bishops, Cardinal Frido- conclave will not reflect the importance of
ber dropped on every continent except Af- lin Ambongo Besungu of Congo, flew to Africa. The continent’s Catholics account
rica, where it rose by 24%. The Bigard Me- Rome and browbeat Francis into endors- for a fifth of the total. Yet, after the consis-
morial Seminary at Enugu in Nigeria is ing an opt-out for Africa. It was a rare, if tory, Africa will have only 18 cardinal-elec-
thought to be the world’s largest training not unprecedented, declaration that one tors able to cast 13% of the votes. In sharp
school for Catholic priests, with more than area of the notionally universal church did contrast, Asia, which has barely half as
700 seminarians. not have to follow the Vatican’s guidance many Catholics, will soon have 18% of the
Other powerful arguments also on a specific issue. clout. Largely because of Francis’s ap-
strengthen the case for an African pontiff. A further reason for doubting that the pointments, it is likely to have a bigger say
But formidable obstacles rise up, too. The next pope will come from Africa stems in who becomes the next pope than even
first, usually discussed sotto voce, is “safe- from Francis’s policy of choosing cardinals Latin America. “It is as if he were pointing
guarding”, a term that those in and around from unlikely places, often in countries us in that direction,” said a Vatican official.
the Vatican prefer over “sexual abuse”. It is where other faiths are dominant, to show Until recently, the bookmakers’ favour-
feared that the scandals that have already that no part of his church is forgotten. He ite was Luis Antonio Tagle, a much-liked
rocked the church to its core in Europe, has conferred the scarlet biretta, the four- cardinal from the Philippines who headed
North America and parts of South and pointed headgear of cardinals, on the bish- the Vatican department responsible for
Central America could start to erupt in Af- ops of Ulaanbaatar in Mongolia, Ekwulo- most of the poor. But his chances suffered
rica during the next papacy. bia in Nigeria, Huehuetenango in Guate- in 2022, when Francis removed him as
That is not the only such risk. On a con- mala, Tonga and Stockholm. president of the Catholic church’s global
tinent where a man without a woman often “The result is that at the next conclave charity, Caritas Internationalis, along with
courts social disapproval, some priests very few of the cardinals will know each the organisation’s entire leadership. The
take a female partner early in their careers other—or who to vote for,” says Andrea Ga- Vatican cited failures of “management and
and sometimes father children, only to dis- gliarducci, an independent Vatican ana- procedures, seriously prejudicing team
pense with both partner and offspring if lyst. One cardinal they all know is Pietro spirit and staff morale”.
promoted. A pontiff who was discovered Parolin, the Vatican’s most senior official. Asia, like Africa, is a growth area for the
after his elevation to have followed that In November bookmakers gave him the Catholic church. In Georgetown Universi-
path would cause immense embarrass- best odds for succeeding Francis. But ty’s ranking of attendance at mass, Leba-
ment to the church. many regard Cardinal Parolin with more non (69%) and the Philippines (56%)
The other factors all have to do with the fear than affection, and the unique charac- placed third and fourth. Although the
character and composition of the next con- ter of the next conclave could also mean number of Asian candidates for the priest-
clave. After the forthcoming consistory, that a little-known cardinal with a magnet- hood fell by 9% from 2013 to 2022, this was
there will be 140 so-called cardinal-elec- ic personality could emerge as a serious less than the dizzying 31% drop in Europe.
tors. Of these, all but 30 will have been ap- candidate. Few of Africa’s cardinal-elec- So could a surprise emerge from the
pointed by the ruling pontiff, who has east? A name sometimes mentioned is that
mostly favoured men with a similarly of Cardinal Lazarus You Heung-Sik from
broad-minded outlook to his own. The Af- Believers South Korea, who heads the Vatican’s de-
rican cardinals may simply be too forceful- Catholic population, 2013-22, % change partment for the clergy. Like many Asian
ly conservative for them, though some Catholics, he was baptised late, at 16. Said
-5 0 5 10 15 20 25
would doubtless appeal to the more tradi- to be theologically mainstream, but active
tionalist cardinals in America’s deeply di- Africa 272 in denouncing social injustice and political
vided Catholic church. Back in the 1990s, authoritarianism, Cardinal You has a pro-
Pope Saint John Paul II complained pri- Oceania 11 file not unlike that of the late pope, Saint
vately that African prelates were too reti- John Paul II, who stood for a Catholicism
cent in their dealings with him. Francis is with few ifs or buts. Kim Whanyung, a Ko-
Asia 154
unlikely to share that view: two of the most rean writer on religion, says the cardinal
blatant challenges to his authority have has all the characteristics of the inhabit-
come from African cardinals. Americas 666 ants of his native region of Chungcheong:
Robert Sarah of Guinea, whom Francis “They are kind and respectful, and faced
put in charge of the Vatican department Europe 2022, m 286 with controversies they often do not reveal
that polices liturgy, hurled down the first what they are thinking.” These would be
Source: The Vatican
gauntlet. One of the most visible changes useful attributes for any pope. ■

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 56 International The Economist December 7th 2024

THE TELEGRAM
How fear of Putin helps and harms European democracy

Will the West betray or save pro-democratic protesters in Georgia?

cold, unhappy sort of peace, purchased by appeasing Russia’s

wrath. Its election posters contrasted handsome images of Geor-
gia with wrecked buildings in Ukraine. Its leaders accused opposi-
tion candidates and Western governments of forming a joint
“Global War Party”, bent on an otherwise avoidable conflict.
As Georgian streets fill with angry protesters, it is not because
citizens have strong views on the optimal pace of their country’s
EU-accession negotiations, counsels Shota Utiashvili, a scholar of
international relations in Tbilisi and former official in a pro-West-
ern government. Rather, when the country’s prime minister an-
nounced a suspension of talks with EU authorities, Georgians
heard a threat to “stifle democracy at home”. In today’s Georgia, as
in two other EU-candidate countries from the Soviet bloc, Moldo-
va and Ukraine, “Europe” stands for democratic values, the rule of
law and membership of a collective West. The alternative is a
grimmer path towards autocracy and Russian domination, the
sort endured in such satellite states as Belarus. Mr Utiashvili de-
tects little love for Russia among the Georgian public. But even if
most would prefer a European future, stoking panic about war can
be effective. Georgian Dream’s propaganda line is that no outside
power will protect the country, he explains, so that unless the cur-
rent government remains in power, “the Russians will come”.
IGHT AFTER night, a contest between fear and hope is play- To counter the Russian bogeyman, the West’s best weapon is
N ing out on the streets of Georgia’s capital, Tbilisi. Defying
club-wielding riot police, protesters have gathered each evening
hope—and credible assurances that Georgia, a country of 3.7m
surrounded by such unstable neighbours as Armenia, Azerbaijan
since November 28th to demand that their government resumes and Russia, has real prospects of joining the EU, and one day pos-
its frozen bid to join the European Union and holds fresh, un- sibly NATO. Therein lies a dilemma. Inside the EU, popular sup-
rigged elections. This being real life rather than a morality tale, it port for further enlargement is fragile. America has just elected a
cannot be ruled out that fear will win. NATO-sceptic president. In the specific case of Georgia, EU lead-
If brutish local police were Georgia’s only threat, pro-European ers and many European governments say they must hold its rulers
protesters might be on solid ground. Speaking to your columnist to account for possible abuses during the elections in October, as
from Tbilisi, demonstrators described a city in a febrile, daring well as for a slew of recent, anti-democratic laws. Yet imposing
mood since the ruling Georgian Dream party, controlled by a ty- harsh sanctions on Georgia risks pushing it into Russia’s arms.
coon who made billions in Russia, announced that it would sus- During earlier waves of enlargement in 2004 and 2007, when
pend the country’s campaign to join the EU until late 2028. the EU took in 12 new countries, most of them from the former so-
Tens of thousands of Georgians were still gathering nightly in cialist bloc, the promise of membership offered a potent incentive
front of their parliament and other seats of power as The Econo- for reforms. Posted to Brussels from 2005 to 2010, your columnist
mist went to press. Many waved Georgian flags and the blue and reported on corruption scandals and environmental disasters that
gold EU standard. Some held banners reading “Georgia is were tackled because new and aspiring members had to comply
Europe”. Women have shown particular courage, says Ana Toklik- with EU standards. (A visit to a leaky, Soviet-era Czech uranium
ishvili, a democracy activist, noting how they have tried to per- mine lingers in the memory.)
suade masked riot police to side with the people.
As the night goes on, the streets become emptier and more Openness is still the West’s superpower
dangerous. Fireworks are fired at police and the windows of par- The flipside of that record of success involves the potential costs
liament are smashed. As dawn nears, police squads grab demon- of failure. EU governments have a horror of admitting new mem-
strators, sending some to hospital with neck injuries and smashed bers whose legal systems or regulations fall short of the bloc’s
faces. Local journalists have been singled out for beatings, some- shared standards. If NATO ever extends guarantees that are not
times as cameras are rolling. Another demonstrator would like to sincere, the whole alliance will be weakened. Moreover, both insti-
see fresh elections, but is ready to fight for a revolution. Calling tutions have little ability to punish members that slide back into
Georgia’s rulers weaker than the strongmen who govern Russia, autocracy after they have entered the club.
Belarus or other former Soviet republics, he growls: “I do not think Despair is premature. Russia’s invasion of Ukraine has revital-
that they are as tough as other dictators.” ised support for enlargement among many EU and NATO leaders,
Alas, this is not only a domestic struggle. Georgia’s increas- reports a Western official. True, some standards may need loosen-
ingly autocratic government has a more potent source of terror to ing if new members are to join either institution soon. Coalitions
draw on—the supposed threat from Russia, their country’s neigh- of EU or NATO members may have to challenge Russian aggres-
bour, former overlord and frequent invader, albeit an over- sion, if consensus is impossible. Still, enlargement is back as a
stretched one just now. Following a strategy used by other popu- strategic asset, though Tbilisi’s protesters might be shocked if
lists in fragile democracies in Russia’s near-abroad, Georgian they knew how long their road to the West will be. Fear of Russia
Dream campaigned as a defender of peace: even though it is a imperils Georgian democracy. It might be its best hope, too. ■

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 The Economist December 7th 2024 57

Business

American business tories in Mexico. Around three-fifths of

Duties call
America’s imported aluminium and a quar-
ter of its imported steel come from Cana-
da, with large volumes of steel also coming
from Mexico. According to Citigroup, a
bank, Mr Trump’s tariffs would raise the
price of steel for American manufacturers
by 15-20%.
How painful will Donald Trump’s tariffs be for America Inc? Among the hardest hit by the suggested
tariffs would be American carmakers.
N THE WEEKS after Donald Trump’s Mexico and Canada was then thrown into General Motors, for example, imports over
Icompanies
sweeping election victory, American
sought to reassure investors
question by subsequent posts in which he
described “wonderful” and “productive”
half of the pickup trucks it sells in America
from Mexico and Canada. About a tenth of
that they were amply prepared for a new meetings, respectively, with the leaders of the value of parts for cars produced in
round of tariffs. Some, like Stanley Black & the two countries. America also comes from the two coun-
Decker, a toolmaker, highlighted efforts to That has not been comforting. If Mr tries. According to Nomura, a Japanese
shift their supply chains away from China. Trump were to slap tariffs on America’s bank, the tariffs threatened by Mr Trump
Others, like Lowe’s, a home-improvement northern and southern neighbours, the im- would wipe away four-fifths of the operat-
retailer, pointed to processes they have put pact on American companies would be ing profit of General Motors next year.
in place to deal with tariffs after Mr devastating. Businesses from Mattel, the Foreign carmakers, such as Toyota, would
Trump’s first term, during which levies maker of Barbie dolls, to Whirlpool, a also be hit.
were imposed on various goods, mostly home-appliance manufacturer, have fac- Companies can respond to tariffs in
from China, ranging from furniture to three ways. The first is to stockpile goods.
washing machines. Microsoft, Dell and HP are among the
→ ALSO IN THIS SECTION
Yet the coming disruption may be more American tech companies that are rushing
widespread and less predictable than 58 Intel’s boss gets the boot to import as many electronic components
many American businesses expect. On as possible before the new administration
November 25th the president-elect ann- 59 Russian business in trouble takes office in January. Yet there are limits
ounced on Truth Social, his social-media 60 Banning social media for kids to that strategy. Stockpiles may be deplet-
megaphone, that he would impose a 25% ed well before tariffs are lifted. And hold-
tariff on all products flowing from Mexico 60 Brussels v big tech ing inventory requires warehouses and ties
and Canada and raise the rate on goods 61 Bartleby: How to inspire up cash. Many big companies already ex-
from China by 10%. Mr Trump’s intention panded their inventories in the wake of the
to follow through with his threat against 62 Schumpeter: Europe’s corporate stars supply-chain mayhem of the pandemic, ⏩

C003
 58 Business The Economist December 7th 2024

▸ and may have limited appetite to increase Intel

them further, particularly as higher interest Rerouted 1
rates raise the cost of doing so. According United States, manufactured-goods imports Yielding
to JPMorgan Chase, another bank, the av- by country of origin, % of total
erage ratio of working capital to sales 100
among America’s 1,500 most valuable list-
ed companies last year was higher than at 80
Other
any point in the past decade except 2020. The boss of America’s chipmaking
Canada
The second option for companies is to 60 champion makes an abrupt exit
pass tariffs on to customers by raising pric-
40
es. Several firms, including Stanley Black & Mexico HEN PAT GELSINGER took over as
Decker and Walmart, America’s biggest
retailer by sales, have already indicated
Other low-cost Asia 20
W Intel’s chief executive in 2021 he
seemed to possess the same impatient
that they may do so. Again, however, there China 0 mindset as his mentor, Andy Grove, a
are limits. The excess savings Americans former boss of the chipmaker famous for
2018 19 20 21 22 23
built up during the pandemic have been declaring that “Only the paranoid survive.”
Source: Kearney
whittled away by inflation and there are Barely a month into the job, Mr Gelsinger
signs the country’s jobs market is cooling. unveiled a plan to restructure the business
The delinquency rate on credit cards is at factory construction in America was and advance through five generations of
its highest in a decade. $172bn in the first nine months of this year, production technology within four years.
The third, and most difficult, response twice as much as in the same period in Nearly four years on, however, it is Intel’s
is to rewire supply chains. New suppliers, 2019, adjusting for inflation. A self-suffi- investors who have grown impatient. On
once found, have to be tested and negotiat- ciency index compiled by Kearney, calcu- December 2nd Intel announced that Mr
ed with, a process that can take years. lated as America’s manufacturing output Gelsinger would be retiring. The fact that
Many American companies have already (minus exports) as a ratio of imports (mi- his departure is effective immediately,
begun diversifying their supply chains nus re-exports), has been ticking upwards with a permanent successor yet to be app-
away from China. According to Kearney, a since 2021, having fallen over the previous ointed, suggests it was hardly voluntary. It
consultancy, China’s share of America’s eight years (see chart 2). For many compa- leaves both Intel and the incoming Trump
manufactured-goods imports fell from nies, though, making stuff in America will administration in an awkward spot.
24% in 2018 to 15% last year. Meanwhile, remain prohibitively expensive. Mr Gelsinger’s exit comes after the
the share from other low-cost Asian coun- chipmaker posted a $16.6bn loss in its
tries and Mexico, respectively, rose from Terrifying tariffs quarterly results last month, the biggest in
13% to 18% and from 14% to 16% (see chart The coming wave of tariffs may thus prove its history. In August the company sus-
1). An analysis by Fernando Leibovici and even more painful for American businesses pended its dividend for the first time since
Jason Dunn of the Federal Reserve Bank of than the previous one. According to res- 1992 and said it would lay off more than
St Louis shows that the fall in China’s earch by Carlyle Burd of North Carolina 15% of its roughly 130,000 employees.
share of imports has been biggest in indus- State University, American companies that Since Mr Gelsinger took over as Intel’s
tries where America has been most depen- were exposed to tariffs levied on Chinese boss its share price has fallen by three-
dent on its rival, including communica- imports by Mr Trump during his first term fifths; the PHLX semiconductor index, an
tions and information technology. saw their operating profit as a share of industry benchmark, has risen by half over
Yet shifting production away from Chi- assets shrink by 5.4 percentage points, that period (see chart on next page).
na may not be enough. The Biden adminis- compared with those that were not. Some In fairness, Mr Gelsinger was dealt a
tration, which kept many of Mr Trump’s were hit harder. Last month the chief difficult hand. Intel had once been synony-
original tariffs and added some of its own, financial officer of Stanley Black & Decker mous with advanced semiconductor tech-
has clamped down on Chinese goods said that the first-term tariffs initially cost nology, and when Mr Gelsinger took over it
entering America via circuitous routes. In the company around $300m annually, still dominated the market for chips that
July it imposed a “melt and pour” rule on equivalent to a quarter of its net profit in run data centres and PCs. But it had missed
Mexican steel, which requires that the 2017, and continue to cost it around $100m the boom in smartphones and was ill-pre-
metal be produced in the country to avoid a year. Bosses will be watching Mr Trump’s pared for the one that would soon come in
tariffs. It may become increasingly diffi- Truth Social account closely. ■ artificial intelligence (AI). Following a ser-
cult to source from Chinese companies ies of technical setbacks, it had also fallen
that have set up factories abroad, includ- behind TSMC, a Taiwanese chipmaker, in
ing makers of everything from televisions Try it on my own 2 the production of cutting-edge chips. Mr
to seatbelts. On November 29th the federal United States, manufacturing Gelsinger’s response was to split the
government imposed anti-dumping duties self-sufficiency index* design and manufacturing sides of the
on solar panels produced in South-East 3.0 business, allowing the former to choose
Asia by Jinko Solar and Trina Solar, two ↑ More self-sufficient
the best foundries for its needs while free-
Chinese companies, among others. 2.8 ing the latter to serve other chip designers.
Mr Trump’s protectionist ire is directed The strategy has fallen apart spectacu-
2.6
not just at China, but at all countries with larly. To turn Mr Gelsinger’s foundry vision
which America has a trade deficit. As a 2.4 into reality, Intel is splurging $100bn on
result, companies that have shifted their production sites across four American
supply chains to Mexico, Vietnam or other 2.2 states—just as its profits are evaporating.
low-cost countries may be in for a bruising. Its core business of central processing
Some may decide that the only safe option 2013 15 17 19 21 23 units has slowed as AMD, a long-time rival,
is to bring production back home. That is *Manufacturing output (minus exports) as a ratio has nabbed customers, and it has failed to
already happening in a few industries, of manufactured imports (minus re-exports) gain traction with its Gaudi AI chips.
Source: Kearney
including semiconductors. Spending on To make up the funding shortfall, Intel ⏩

C003
 The Economist December 7th 2024 Business 59

▸ has turned to private-equity firms as well tive of Rostec, a state-owned arms-maker,

as America’s government, which on No- Pat on his back warned in October, “If we continue to
vember 26th announced that it would Share prices, February 15th 2021=100 work like this, then almost the majority of
award the company nearly $8bn in subsi- 200 our enterprises will go bankrupt.” Mr
dies under the CHIPS Act. To make it easier Pat Gelsinger Chemezov, a former KGB colleague of
becomes Intel CEO
to raise money from outside investors, the Vladimir Putin, Russia’s president, noted
company said in September that it would 150 that advance payments for goods typically
PHLX semiconductor index
turn its foundry business into an indepen- cover only 40% of their cost, which means
dent entity with its own board and finan- 100 that companies like his either need to
cial statements, but stopped short of a full borrow to make up the difference or delay
separation. Mr Gelsinger’s successor may payment to their suppliers for months. A
have to be more radical. Qualcomm, a 50 growing number are choosing the latter.
designer of smartphone chips, flirted with Intel The Russian Union of Industrialists and
acquiring the company but is said to have 0 Entrepreneurs, another business associa-
abandoned the idea, deterred, perhaps, by tion, has noted an increase in complaints
2021 22 23 24
Intel’s size and complexity. about late payments in its quarterly survey
Source: LSEG Workspace
The incoming Trump administration of companies, which it attributes to the
will have a role to play in the next stage of cost of working-capital loans.
the saga. Vivek Ramaswamy, who will lead sure with Taiwan’s dominance in chipmak- Russian businesses are grappling with
a new Department of Government Effi- ing and accused it of “stealing” America’s rising prices too, particularly of imports. A
ciency alongside Elon Musk, criticised the semiconductor industry. He now faces a survey of manufacturers conducted by S&P
Biden administration’s decision to grant choice between rescuing Intel from its Global, a data provider, indicated that the
the subsidy to Intel before it leaves office. mess, or relying on TSMC, which is build- rate of inflation for inputs accelerated for
Mr Trump has called the CHIPS Act ing three advanced production facilities in the third consecutive month in November.
“wasteful”. Yet he has also voiced displea- America, to bring chipmaking home. ■ Manufacturers also complained of length-
ening lead times for components and diffi-
culties finding workers. The unemploy-
Russian business ment rate is just 2.3%, as the military and
defence industry gobble up labour.
Under siege The squeeze will worsen in the months
ahead. “In 2022 and 2023 the Kremlin had
enough roubles to continue financing the
war and subsidising businesses,” says
Andrei Yakovlev of the Davis Centre for
Russian and Eurasian studies at Harvard
Companies back home are beginning to bear the cost of war University. But since the summer, he says,
it has been clear that the Kremlin can no
OR MORE than two years most Russian crippled by soaring rates. Russian Rail- longer do both. The government is now
F businesses carried on unscathed by the
war in Ukraine. A surge in defence spend-
ways, a state-owned enterprise that is the
country’s largest employer, is among the
looking to raise taxes. Next year it will
increase the levy on company profits from
ing and subsidised loans for consumers companies that are planning to cut their 20% to 25%. With the economy expected to
and firms propped up spending at home, investments next year as a result. The weaken, Janis Kluge of the German Insti-
even as sanctions curtailed access to Union of Shopping Centres, a business tute for International and Security Affairs,
foreign markets and inflation jumped. association, is said to have asked the gov- a think-tank in Berlin, predicts a wave of
Western companies from Volkswagen, a ernment for support in the form of cheaper corporate bankruptcies.
German carmaker, to Shell, a Dutch oil loans as well as help with payment defer- The war is also damaging business in
giant, sold their Russian operations to rals and debt restructuring. Without these other ways. Venture-capital investment has
local enterprises. After an initial tumble, measures, it has warned that 200 shopping dropped and tech companies have
the MOEX, an index of Russian stocks, centres risk bankruptcy. struggled as talented workers have fled.
steadily recovered (see chart). As Sergei Chemezov, the chief execu- Russian firms have found it difficult to
Lately, however, things have taken a keep up with advances in artificial intelli-
turn for the worse. The MOEX has fallen by gence (AI) because they cannot get hold of
almost a third over the past six months. Moscow mewls the semiconductors developed by Nvidia,
Corporate bankruptcies are up. To combat MOEX Russia Index, September 1997=100 America’s AI chip champion. Innovation
inflation, Russia’s central bank has raised 4,500 will slow as a result.
its main interest rate to 21%, sending Russia launches
invasion of Ukraine
borrowing costs rocketing. Fresh Ameri- 4,000 All the president’s businessmen
can sanctions have tanked the rouble and Alexandra Prokopenko of the Carnegie
3,500
raised the cost of imports (see Finance & Russia Eurasia Centre, another think-tank
economics section). Labour shortages are 3,000 in Berlin, says that the nature of doing
worsening. A difficult winter lies ahead. business in Russia is changing too. She
Borrowing costs are the most pressing 2,500 likens it to the chaos that followed the coll-
concern for bosses. Around two-fifths of apse of the Soviet Union. Property rights
2,000
the debt held by Russian companies at the are being eroded, and the approval of Mr
beginning of 2022 was on a floating-rate 1,500 Putin and his allies has become para-
basis, a share that has since risen above mount. Even if they are suffering, few boss-
2021 22 23 24
half, according to figures from Russia’s es may be brave enough to speak out
Source: Moscow Exchange
central bank. That has left many firms against the war. ■

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 60 Business The Economist December 7th 2024

Tech regulation (1) TikTok will fall under its ban but that You- Tech regulation (2)
Tube will be exempt, for its “significant”
Tech v teens educational content. Video games are also Digital divides
off the hook, though they have become
increasingly social as children use plat-
forms like Roblox to chat as well as play.
Another question is who should carry
Australia plans to ban social out the checks. Australia is placing the bur- Will the new European
media for under-16s. Can it? den on the social-media platforms: “You Commission ease up on big tech?
create the risk, you’ve got to deal with it,”
E’VE GOT your back,” Australia’s says Mr Allen. Meta and others say the ILICON VALLEY and the European
“W prime minister, Anthony Albanese,
told parents on November 29th, a day after
checks should instead be done by operat-
ing systems or app stores, making it
S Commission, the EU’s executive arm,
have a strained relationship. Regulators in
pushing through some of the world’s strict- Apple’s and Google’s problem. That would Brussels blame American tech giants for
est limits on screentime. One year from allow users to have their phone vouch for everything from the struggles of European
now, under-16s will be banned from using their age anonymously, rather than hand startups to teenage depression. American
social media, in a move intended to protect over mugshots or IDs to every social net- tech firms whinge that they are targeted by
them from harm. Teenagers groaned. work, gambling app or porn site they visit. jealous Europeans. Now, after years of ac-
Parents discreetly high-fived. Policymakers For now, governments seem wary of mak- rimony, a détente is possible. On Decem-
around the world took notes. ing Apple and Google create global ID ber 1st a new commission took office.
Most social-media platforms are no- registries of their billions of users. The previous commission policed
tionally off-limits for under-13s, a cut-off Age limits will hit some social plat- America’s tech giants in various ways. It
that was widely adopted after America forms harder than others. The cost of per- blocked takeovers it saw as anti-competi-
passed COPPA, a law to protect children’s forming checks will be more burdensome tive, such as Amazon’s attempt to buy iRo-
online privacy, in 1998. But the rules are for startups than incumbents (Yoti quotes bot, a maker of robo-vacuums. And it intro-
widely ignored and feebly enforced. Brit- between three and 31 cents per check, duced a thicket of new laws, including the
ain’s communications regulator, Ofcom, depending on volume). And whereas only Digital Services Act (DSA), to regulate so-
reports that 22% of the country’s social- about 5% of Facebook’s users in America cial media, the Digital Markets Act (DMA),
media users aged between eight and 17 are under 18, at Snapchat the figure is 19% to keep tech firms from competing unfair-
have an account with an adult’s date of (see chart). Young users at least are not es- ly, and the Artificial Intelligence Act, to
birth. TikTok (minimum age: 13) is used by pecially valuable to advertisers: ads aimed govern the use of the emerging technolo-
half of British eight- to 11-year-olds. at under-16s probably make up a “low sin- gy. Rule-breakers can be hit with fines
Parents and politicians long turned a gle-digit percentage” of spending, esti- which, in the case of the DMA, can reach a
blind eye. But amid concern that social mates Brian Wieser of Madison and Wall, tenth or more of the firm’s global revenue.
media harms mental health, governments an ad consultancy. Meta has not shown ad- The new commission may do more of
are getting tougher. European countries vertisements to under-18s in the EU for the same. Henna Virkkunen, a Finn, has
including France, Germany and Italy re- more than a year, amid a legal dispute; its been put in charge of tech. People in her
quire younger teens to get parents’ permis- bottom line has hardly been dented. team say they expect continuity, though
sion before signing up. Various American No one yet knows the extent to which the emphasis may shift from writing new
states have passed laws limiting teens’ keeping teens off social media will reduce laws to enforcing existing ones. Reining in
access to social media, though many have their interest as adults. But apps like Tik- big tech still seems popular with voters.
hit legal obstacles. Australia, cheered on by Tok, which is already threatened with an Yet changing circumstances may re-
its domestic press, is the first country to outright ban in America, could be disad- quire a new approach. One difference is
enact a blanket ban (see Asia section). vantaged if they are banned for teenagers that economic growth is back in focus.
The first problem it must solve is en- while direct rivals such as YouTube are let Last year Ursula von der Leyen, the
forcement. Younger teenagers lack the off. The big winners from a social-media commission’s returning president, asked
driving licences and credit cards that often crackdown may be alternative types of Mario Draghi, a former head of the Euro-
serve as proof of age, so many companies screentime, such as gaming—at least so pean Central Bank, to write a report on the
use machine learning to estimate age via long as the enthusiasm for banning chil- continent’s waning competitiveness. The
selfie. Five years ago such models were dren’s online pursuits goes no further. ■ resulting tome pointed to Europe’s weak-
accurate to within about three years, says ness in tech as a cause of its woes. Some
Tony Allen of the Age Check Certification recommendations that could also benefit
Scheme, an auditor that is working with Are you kidding? American tech giants, including cutting
the Australian government. Today they can United States, social-media users, % red tape and boosting access to cloud in-
guess to within about a year, he says, better 2024 forecast frastructure for Europe’s startups, were
than most humans. 12 18 25 35 45 55 65
mentioned in the instructions Mrs von der
That still means errors at the margin, Age, years Leyen issued to the new commissioners.
especially for people with dark skin, who Even more important is the re-election
tend to be underrepresented in training 0 20 40 60 80 100 of Donald Trump, which may limit how
data. Yoti, which checks ages for Meta on Facebook much the commission can beat up Ameri-
products including Facebook Dating, YouTube can tech firms. The Biden administration
reports an average error of about a year for X
shared Eurocrats’ wariness of Silicon Val-
light-skinned 13- to 17-year-olds, and a year ley giants. That afforded a “wonderful”
and a half for dark-skinned teens. Instagram level of co-operation, as one EU official
Technical challenges aside, how broad TikTok puts it, making it easier for the bloc to hit
should crackdowns on social media be? Snapchat tech firms with fines and probes. Doing
The category spans everything from video that under Mr Trump will be tougher, and
Source: eMarketer
to messaging. Australia has suggested that may incur retaliation. In October Tim ⏩

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 The Economist December 7th 2024 Business 61

▸ Cook, Apple’s boss, reportedly called Mr media site run by Elon Musk, now a buddy attached,” he warned.
Trump and complained about EU fines, to of the president-elect. X allegedly failed to There is reason, then, for Silicon Valley
which Mr Trump responded that he would comply with a number of DSA rules, such to hope for a reprieve from Brussels. But
not let Europe “take advantage of our com- as providing data access for researchers. A plenty of uncertainty remains. Some inside
panies”. During his first term Mr Trump decision will probably be made in the new big tech worry that Europe might try to tilt
was quick to propose tariffs on French year and could result in a fine of up to 6% the playing-field in favour of local firms.
goods, from handbags to champagne, in of the firm’s global revenue. In September Others suspect that the EU is only paying
response to a proposed new tax on digital J.D. Vance, the incoming vice-president, lip service to a pro-growth agenda. The
services, before a truce was agreed. seemed to suggest that America should new commission may end up being kinder
Mr Trump could prove even more com- withdraw support for NATO in retaliation to America’s tech giants. But bosses are not
bative this time. One flashpoint will be the for European action against X. “American breaking out the champagne just yet—
commission’s investigation into X, a social- [military] power comes with certain strings even if it is, for now, still tariff-free. ■

BARTLEBY
How to inspire people
The answer is not another video of Steve Jobs

OTIVATIONAL QUOTES. Videos of were given something more generic. Hong Kong and other co-authors. In this
M Steve Jobs saying absolutely any-
thing. Clips of a baby elephant being
Mr Galinsky also points to the power of
counterfactual thinking to inspire a sense
study some Swiss citizens who had
newly registered with a government
rescued from a river. You do not have to of meaning. In research he conducted with employment agency were asked to un-
scroll for long on LinkedIn, a networking Laura Kray of the University of California, dertake a 10- to 15-minute exercise in
site ostensibly for people at work, to find Berkeley and other co-authors, partici- which they reflected on values that
“inspirational” content. There may be pants were asked to reflect on important mattered to them. They were three times
people who need only to read “We can- events in their lives, such as their choice of more likely to find a job than those who
not become what we want by remaining college. Some were also asked to think did not do the exercise.
what we are” written in a nice font to feel about how things would have turned out if A forthcoming paper, by Nava Ashraf
amped up on a Monday morning. But this event had not taken place. This group and Oriana Bandiera of the London
there will be just as many who want to attributed greater meaning to the event in School of Economics and Virginia Minni
snigger or vomit. For bosses interested in question, whether because they concluded and Luigi Zingales of the University of
how to motivate the people around fate had played a part in it or because it Chicago, finds that this kind of interven-
them, there are better options than forced them to think through its conse- tion can have dramatic effects in a busi-
searching for quotes by Paulo Coelho. quences more explicitly. This type of ness setting. A subset of almost 3,000
At some level, advice on how to counterfactual thinking can also be used employees at a consumer-goods firm
inspire employees is silly. It’s usually to strengthen employees’ ties to firms: were randomly assigned to take part in a
either blindingly obvious—be good at prompting people to imagine a world in workshop that helped participants to
your job, be passionate about the work, which their company does not exist seems reflect on pivotal moments in their lives,
make the people on your teams feel to increase a sense of attachment. to articulate what mattered to them and
valued—or jarringly inauthentic. But Perhaps the most striking idea in Mr to think about how their current jobs
much more practical insights can be Galinsky’s book is that, instead of bosses matched their own sense of purpose.
found in a forthcoming book called motivating people from above, individuals The academics found that taking part
“Inspire”, by Adam Galinsky, an academ- can do it for themselves. One example is a in this exercise substantially increased
ic at Columbia Business School. piece of research he conducted with Julian the probability of exits from the firm,
Take, for example, the importance of Pfrombeck from the Chinese University of particularly among lower performers;
vivid imagery as a way of bringing an increased internal job transfers; and
organisation’s purpose to life. Lots of improved the performance of those who
firms use a succession of tediously stayed in their jobs. A heightened sense
abstract words to convey their goal: of what is meaningful to individuals
“change”, “innovate”, “connect” and so provides the best explanation for these
on. The result is less a mission than a outcomes. Those whose jobs do not
mood board. Mr Galinsky cites an inspire them decide to leave or move;
experiment by Andrew Carton of the those who find that their purpose and
University of Pennsylvania and his co- their job are in sync put in more effort.
authors that showed the effect of more Once they accounted for the productiv-
concrete language. In it, teams were ity of employees who replaced the leav-
asked to design toys and given a vision ers, the overall impact of this experiment
statement to guide their behaviour. on the firm’s performance was positive.
Teams who were handed a statement Managers play a huge role in motivat-
with more visual language—to create ing their people. But inspiration can be
toys that “…make wide-eyed kids laugh bottom-up as well as top-down. Don’t
and proud parents smile”—produced just tell your team what Jobs said. Ask
more engaging toys than teams who why their jobs matter to them.

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 62 Business The Economist December 7th 2024

SCHUMPETER
Old world, new tricks

Not all European business is a profitless wasteland

In specific areas of commerce, Europeans outmatch even those

self-satisfied Americans, sometimes handily. Europe’s drugmak-
ers are collectively worth more than American ones and boast
twice the return on capital. Novo Nordisk of Denmark launched
Ozempic before Eli Lilly began selling its weight-loss drug.
Europe lacks an Nvidia, but the $3.5trn AI-chip designer would
not get far without ASML, a Dutch firm whose machines etch
Nvidia’s blueprints onto silicon. Ryanair and other European
airlines fly rings around American carriers in terms of profitabili-
ty. And nobody does posh better than the French (think LVMH)
and Italians (Ferrari, also controlled by Exor).
European exporters may also benefit from the strengthening
dollar, boosted by Donald Trump’s promise to shift America’s
already hot economy into overdrive—at least until the president-
elect keeps his promise to wallop foreign goods with heavy tariffs.
According to Jim Reid of Deutsche Bank, if the greenback
strengthened by another 10% against the euro, this would lift the
earnings for the 50 largest European companies by 3%.
Other areas of European outperformance are less obvious. The
continent’s smaller listed firms, for example, do considerably
better than their counterparts across the pond. A typical European
company in each of the four bottom deciles, by market value, of
ALK TO EUROPEAN bosses about their continent and the re- the broader STOXX Total Market index, which covers some 1,900
T sponses are as varied as the languages they speak. Katastrophe,
bark the Germans. The Italians wave their hands in exasperation.
firms, has roughly double the return on capital of its opposite
number in America’s Russell 3000. A similar pattern persists when
The French offer a resigned Gallic shrug. The British change the businesses are ranked by revenue. America Inc’s bright-burning
subject to the weather (which isn’t exactly fabulous, either). With corporate stars outshine European rivals and then some. But their
governments collapsing centre-left (in Germany last month) and gravitational pull may also be sucking in so much financial and
centre-right (in France on December 4th), plus war raging in next- human capital that little is left for anyone else. True to egalitarian
door Ukraine, chaos is the political watchword. form, that is not so in Europe.
European business can seem just as dysfunctional. In the past An alternative way to look for winners among European com-
couple of weeks it has been a tale of bankruptcy (of Northvolt, a panies is to ask what factors might shorten the odds of success.
would-be battery champion), labour unrest (at Volkswagen, the Consider how much a business spends on research and develop-
continent’s biggest carmaker, where nearly 100,000 workers ment (R&D). In Europe, the keenest fifth of R&D spenders, a
downed tools on December 3rd) and CEO defenestration (at Stell- group that devotes at least 12.5% of sales to that end and includes
antis, a rival whose biggest shareholder, Exor, part-owns The Econ- those pharma giants and ASML, outperform less enthusiastic ones
omist’s parent company). This week an activist investor ratcheted when it comes to return on capital. No such regularity is evident in
up pressure on Rio Tinto, the world’s second-most-valuable America, perhaps because corporate R&D budgets there are gen-
miner, to follow its bigger rival, BHP, in ditching its dual listing in erally higher relative to revenue to begin with.
London and settling for good in Australia. Or take capital expenditure. In America, it is those firms that
Add a dearth of success stories in artificial intelligence (AI) and are stingiest with capex that tend to do best (the country’s spend-
no wonder Europe’s chief executives are in a dour mood, made thrift tech giants are again the exception). In Europe, by contrast,
dourer by smug American counterparts whose companies, on it is a good bet to eye companies that neither scrimp nor splurge
average, sell more, turn fatter profits and are valued more richly by on fixed assets, which is to say they invest between 2% and 7% of
markets. The entire STOXX 600 index of large European enterpris- sales. This judicious category contains many of Europe’s industri-
es is worth a third less than America’s “magnificent seven” tech- al champions, such as Siemens and BAE Systems.
nology giants. Shares of firms in the S&P 500, its transatlantic
equivalent, trade at 23 times future earnings, far above the 14 or so In search of lost dimes
eked out by STOXX constituents. European companies have two other things going for them. Many
Even excluding the AI-fuelled trillion-dollar outliers, investors have patient shareholders, whose interests are aligned with busi-
regard American businesses as more promising than European nesses’ long-term success. For 237 of Europe’s 500 most valuable
ones. The price-to-earnings ratio of the 493 firms in the S&P 500 listed firms, at least 10% of stock is not freely traded (not counting
that are not Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia or state-controlled enterprises). Plenty of those stakes are in the
Tesla is comfortably higher than for the STOXX 600. As a Spanish hands of founders or, this being the old continent, their descen-
CEO might put it, ¿Qué diablos? dants. For America’s top 500 the equivalent figure is 90.
These jarring disparities in aggregates and averages are real The other advantage is low expectations. Frothy American val-
and troubling. However, they may conceal as much as they illumi- uations may tumble, especially if AI fails to boost productivity in
nate. Closer inspection reveals pockets of European corporate line with investors’ hopes. Sagging European ones could improve
strength, some more surprising than others. merely by reverting to the mean. Bon courage! ■

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 The Economist December 7th 2024 63

Finance & economics

Tariff retribution should not become bargaining chips. Then

With a vengeance
on December 1st Chinese tax rebates on
aluminium and copper came to an end;
ones for batteries and photovoltaic pro-
ducts fell from 13% to 9%. This is a big
shift. Over the past year China has rejected
claims it is exporting batteries and solar
SHANGHAI products at artificially low prices. As Mar-
How China plans to fight back against Donald Trump tin Lynge Rasmussen of Exante Data, a re-
search firm, notes, cuts to rebates are the
HO IS HUOHUADE LUTENIKE? jing Winter Olympics. Jamieson Greer, the first time officials seem to have sought to
W Howard Lutnick, the billionaire
nominee to lead America’s Commerce De-
new trade representative, was an architect
of Mr Trump’s first trade war with China.
lessen the force of such accusations.
At the same time, Chinese officials
partment, is not well known in China. But In the face of such hawkishness, Chi- want to increase trade with the rest of the
he may end up shaping American trade nese officials have kept quiet. But their for- world. The Ministry of Commerce has said
policy. Since Donald Trump announced mula for trade talks is starting to emerge. that it will boost export credit and insur-
his pick, Chinese investors have scrambled Xi Jinping, China’s leader, laid down “red ance, and support logistics services. The
for information. More than anything, they lines” in a recent meeting with President ministry wants to expand the number of
want to know if Mr Lutenike will slap Mr Joe Biden. The gist was that Communist countries that can get short-term business
Trump’s proposed 60% tariffs on all Chi- Party rule and China’s claim on Taiwan visas. And it has promised to help compa-
nese imports. Such efforts have only nies respond to “unreasonable foreign-
gained urgency in the past fortnight. The trade restrictions” as they arise.
president-elect has threatened an addi- → ALSO IN THIS SECTION The Biden administration recently an-
tional tariff on Chinese goods on his first nounced tariffs on solar panels from sever-
day in office, while the sitting president 64 MAGA types bemoan debanking al South-East Asian countries, with the aim
has ratcheted up export controls. 65 European fiscal woes of stopping Chinese firms from re-routing
Other nominees are better understood. exports through third countries. Mr Trump
Marco Rubio, presumptive secretary of 66 Russia’s plunging currency may expand these as firms look for loop-
state, has tried to force Chinese firms to 66 The sports-betting boom holes. Many have, for example, set up fac-
delist from American stock exchanges and tories in Indonesia and Laos, two countries
was hit by sanctions in response to ones he 69 China’s lust for gambling that are not covered by the latest policies.
helped put on Chinese officials as a sena- 70 Buttonwood: Chinese lending To help small businesses sell goods over-
tor. Mike Waltz, Mr Trump’s choice for na- seas via e-commerce platforms, Chinese
tional security adviser, boycotted the Bei- 71 Free exchange: Crony economics local governments have established service ⏩

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 64 Finance & economics The Economist December 7th 2024

▸ centres. Shanghai is setting up a “Silk other items they can stop exporting with-
Road e-commerce pilot zone” to boost Shrugging off sanctions ? out rocking domestic industries. Some
trade with Central Asia. China, goods-trade surplus, $bn antibody precursors, which pharmaceuti-
Such tariff workarounds mean that 900 cal firms use, come exclusively from China
America’s existing measures have not and could make good candidates.
stopped China from increasing exports. Rest of world 750 Individual companies may find them-
Since the start of Mr Trump’s trade war in United States selves part of the conflict. Last month Chi-
600
2018, China’s trade surplus has more than na employed a new tool, the Anti-Foreign
doubled to $820bn (or 6% of GDP). Its sur- 450 Sanctions law, to cut off Skydio, America’s
plus with America remains at $340bn, largest dronemaker, from Chinese batter-
about the same as in 2018. If Mr Trump is 300 ies. The law could be used to deny dozens
willing to strike a deal, involving limited of American firms Chinese-made compo-
150
increases in tariffs, his measures might re- nents. American companies in China
duce annual Chinese GDP growth by just 0 could also be hit. In October an industry
0.4 percentage points between 2027 and body called for a probe into Intel, an Amer-
2012 14 16 18 20 22 23
2029, according to Oxford Economics, a ican tech firm, because of alleged security
Source: National Bureau of Statistics
research firm. CF40 Research, a think-tank vulnerabilities in its chips.
in Beijing, estimates that “moderate” ta- China’s commerce ministry recently
riffs of 10-20% would slow China’s year-on- China are still in the midst of a tech war used its “unreliable entities” list to probe
year export growth to 1.5% next year, down that was started by Mr Trump, amplified PVH, the American owner of brands such
from 2.2% if no tariffs were imposed. Mr by Mr Biden and shows no sign of stop- as Tommy Hilfiger, because it has com-
Trump’s promised 60% tariff rise could ping. Mr Biden has attempted to cut off plied with America’s Uyghur Forced La-
shrink exports by 6.5% next year, which China from inputs needed for advanced bour Prevention Act, which requires com-
would have a devastating effect. tech, such as AI chips. At the start of the panies to refrain from using cotton grown
What about retaliation? In the first month, hundreds of Chinese firms were in Xinjiang. The original bill was spon-
phase of the trade war, China responded to added to the Department of Commerce’s sored by Mr Rubio. With him as secretary
tariffs by hitting American imports with entities list, restricting American dealings of state, it is easy to see the potential for
similar penalties. The strategy was ineffec- with them. In October the Treasury enact- many more clashes and possibly even a to-
tive as America is less reliant on Chinese ed a broad investment-control regime that tal disregard for China’s red lines. Mr Xi is
demand than the other way round. Some will stop most American investments in prepared to talk trade with Mr Trump.
expect China to allow its currency to deval- Chinese AI, semiconductors and quantum Anything beyond that risks very quickly
ue against the dollar. Although doing so computing. The Biden administration is spiralling out of control. ■
would make its goods cheaper, big drops in also thought to be drafting a definition of
the yuan risk spurring capital flight. which types of AI chips firms can sell to
China. Mr Trump could tighten it. American finance
Trade worriers Chinese firms may also soon be hit with
Instead, Chinese trade experts hope the sanctions from the Office of Foreign As- Pepped up
government will focus on domestic poli- sets Control (OFAC), which, unlike the De-
cies to counteract American pressure. Lian partment of Commerce’s entities list, re-
Ping, an influential economist, has advised stricts the ability to use dollars. The impo-
that it seeks to boost wages and consumer sition of OFAC sanctions on a Chinese
demand in order to steel itself against bank would lead to a freeze in dollar tran-
American economic attacks, which might sactions with other banks, and probably to MAGA types have a point on debanking
be part of the plan. Ministers have prom- its collapse. These have so far been used
ised stimulus to improve glum consumer sparingly, but the nominations of Messrs HAT DO BARRON TRUMP, son of the
sentiment. Bankers in Shanghai quip that
they were cheering on a Trump victory in
Rubio and Waltz suggest that such mea-
sures could become more common, says a
W president-elect; some Islamic chari-
ties in Britain; and America’s legal canna-
hope of extra government spending. former American trade official. bis industry have in common? This is not a
There is more to the president-elect’s China’s ability to dodge attacks is limit- set-up for a bad joke. Rather, all have been
China policy than tariffs. America and ed. Officials have pushed tens of billions of at the sharp end of a rise in “debanking”,
dollars into the semiconductor industry in having lost or been refused access to the
an attempt to make China self-sufficient. services of commercial lenders.
Dollarisation ? Although this has shown progress, espe- In a recent memoir, Melania Trump
SWIFT payments by currency, % of total value cially in chipmaking machines, the country says that she and her son suffered this fate
still does not make the most powerful after the January 6th insurrection. Marc
Chinese yuan Japanese yen
chips, and sources less than 15% of its chips Andreessen, a venture capitalist and sup-
50
domestically. China is also reliant on the porter of Donald Trump, complains that
US dollar dollar-based financial system. Yuan trans- dozens of tech and cryptocurrency execu-
40
actions have risen in the past two years, tives have been debanked in recent years.
30 but most still use SWIFT, a messaging net- He argues that such decisions represent
Euro work susceptible to American influence. political discrimination. Mr Trump’s return
20 Mr Xi is already showing willingness to to the White House on January 20th is like-
hit back. On December 3rd, a day after the ly to lead to conflict between the new ad-
British pound 10
Biden administration issued new chip re- ministration, regulators at home and
0 strictions, China barred exports to Ameri- abroad, and the lenders they oversee.
ca of minerals needed for high-tech gear A low tolerance among bankers for
2012 14 16 18 20 22 24*
24
and weapons, including gallium and ger- risk—whether commercial, legal or reputa-
Sources: SWIFT; Bloomberg *To October
manium. Chinese regulators may identify tional—often lies behind the decision to ⏩

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 The Economist December 7th 2024 Finance & economics 65

▸ refuse service. In turn, this low tolerance is European economics pectations. Goldman Sachs has cut its
produced by an alphabet soup of regulato- growth forecast to just 0.7% next year. If
ry acronyms. Know-your-customer (KYC) Maladie chronique the bank’s analysts are correct, interest
standards require banks to monitor client payments will be even more painful and
identities as part of their anti-money-laun- debt higher still relative to GDP.
dering (AML) measures and efforts to France has not been the only big spend-
counter the financing of terrorism (CFT). er. Even countries usually renowned for
Guidance comes from the Financial Action their fiscal hawkishness, including Austria,
Task Force (FATF), an international anti- France is not alone in its fiscal woes Germany and the Netherlands, have expe-
money-laundering body. The task force rienced widening deficits in recent years.
prods banks to monitor politically exposed HEN THINGS got tough, European The covid-19 pandemic and the energy cri-
persons (PEPs), a nebulous category of
people judged to have some link to the
W finance ministers used to sigh and
say that at least they were not Greek. To-
sis that followed Russia’s invasion of Uk-
raine got things going. Indeed, in 2022 gov-
functions of the government, since these day, some would struggle to make such a ernments spent more supporting their
individuals and their families may pose comment. On December 2nd the yield on economies than after the global financial
greater risk of corruption and embezzle- Greek bonds fell below that on French crisis of 2007-09, notes Sander Tordoir of
ment. At first, banks were asked only to fo- ones, indicating investors thought it safer the Centre for European Reform, a think-
cus on foreign PEPs. But in 2012 the FATF to lend to Greece than France. The yield on tank. Later, with memories of the euro cri-
added domestic political figures to the list. French bonds is now 0.8 percentage points sis fading, politicians spent big in an at-
Banks are fearful of enforcement ac- above German bunds, the euro zone’s tempt to reduce burgeoning support for
tion, making compliance a booming indus- benchmark, which is the widest gap since populist parties, at the same time as in-
try. According to the Bank Policy Institute, the near-collapse of the euro in 2012. On creasing expenditure on the green transi-
an industry group, the number of full-time December 4th the French government tion and their armed forces.
American bank employees dedicated to crumbled in a row over spending. All countries have now submitted fis-
compliance rose by 62% between 2016 and Will European finance ministers soon cal-consolidation plans to the European
2023, three times as fast as overall hiring. sigh and say that at least they are not Commission. The French one is ambitious,
Bosses now report that they spend 42% of French? The EU’s second-biggest economy aiming to cut the deficit by 0.5 percentage
their time on compliance issues, up from faces severe problems. The first is the gov- points of GDP a year, enough to stabilise
24% seven years earlier. By one estimate, ernment’s fiscal deficit. At over 6% of GDP, the debt level. At the moment, however,
the industry globally spends more than this year’s figure will end up much higher such a plan looks politically impossible.
$200bn on compliance each year. In this than the government had predicted and in- And the French government is not the only
context, overzealous debanking is inevita- dependent forecasters had expected. one coming to terms with its budgetary
ble. Even if it is not motivated by political Worse still, the IMF expects the deficit to constraints. Germany’s recently collapsed,
animus, the critics have a point. stay at this level—well above the 3% maxi- too, because of spending disputes. Italy
Some other complaints are more du- mum mandated by the European Commis- will feel the strain in the next few years.
bious. Crypto is a target less because of the sion—until the end of the decade. Jean-François Robin of Natixis, a bank,
politics of its executives and more because Wide deficits add to France’s debt level, expects French spreads over German
it is rife with money-laundering and finan- which is forecast to reach 115% of GDP next bunds to come down over the next year,
cial crime. Last year digital-asset compa- year, about 17 percentage points higher before spiking again ahead of parliamenta-
nies made up almost 70% of the $6.6bn in than in 2018. By 2029 it will have reached ry elections that are likely to be held in the
global anti-money-laundering fines cata- 124% of GDP, according to the IMF. Spend- summer. The respite does not reflect the
logued by Fenergo, a financial-software ing on interest payments is thus expected country’s economic outlook, but rather the
firm, in large part because of a $4.3bn fine to rise from 1.9% of GDP to 2.9%. And that fact that France benefits from being at the
levied on Binance, an exchange. is based on healthy economic-growth ex- core of the euro zone, along with Germany.
What might Mr Trump do? Towards the Historically, this position has meant that
end of his first term, the Office of the France could borrow at close-to-German
Comptroller of the Currency proposed a interest rates, while running much more
rule to prevent banks with over $100bn in expansionary fiscal policy, notes Davide
assets from discriminating against cus- Oneglia of TS Lombard, a consultancy.
tomers owing to unquantifiable risks. This Now it is preventing the country’s borrow-
was nixed by the Biden administration, but ing costs from really soaring.
could be revived. Republican states have Whether markets continue to offer
since continued in the same vein: Florida such concessions depends on how politi-
and Tennessee have banned banks from cally unstable France becomes. There is no
denying service based on political affili- immediate threat of a financial crisis,
ation or a customer’s line of business. banks remain strong and the European
Such a change would be a headache for Central Bank (ECB) has made clear that it
lenders. Greg Baer of the Bank Policy Insti- stands behind member countries’ debt,
tute described the rule as “hastily con- even if it has not said so explicitly. But un-
ceived and poorly constructed” when it less France manages to show commitment
was first proposed. Compliance chiefs are to actually cutting its deficit, the ECB will
aware that a subsequent administration struggle to step in and buy French bonds.
could reimpose the sort of regulations that Should French spreads continue to widen,
lead to debanking. From their point of the bank’s policymakers will be put in an
view, why bother with such a change if it awkward political position. They may need
will just be reversed? Others, reasonably, to prepare for more awkwardness, since
contend that preventing political discrim- France is just one of many countries strug-
ination is worth a bit of hassle. ■ Au revoir gling to make ends meet. ■

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 66 Finance & economics The Economist December 7th 2024

wrong. Indeed, the latest fall in the rou- Betting trends (1)
ble’s value makes the job of Russia’s cen-
tral bank much tougher. Wartime spend- Hitting the jackpot
ing has used up spare capacity in the econ-
omy, pushing unemployment to just 2.3%.
The government’s latest budget, unveiled
in September, will raise defence and secu-
rity spending by 25% next year, to 8% of
Russia’s GDP, a post-cold-war high. Annual Why sports gambling is now ubiquitous
inflation is running at more than 8%.
In this context, a weaker rouble is a INCE AMERICAN states started to legal-
doubled-edged sword. A lower level
against the dollar raises the rouble value of
S ise sports betting in 2018, the industry’s
explosive growth and omnipresent adver-
oil exports, helping plug the government’s tisements have drawn widespread atten-
deficit. Yet it also pushes up the price of tion. But although America was one of the
imports—something that matters for both last big economies to allow legal wagering,
consumers and the war effort. Analysts similar trends are evident elsewhere. In
note that Russian imports of consumer most markets around the world, online
goods usually rise as Christmas approach- betting, mostly on sports, is replacing tra-
es. Moreover, China has become Russia’s ditional “land-based” forms of gambling,
most important trading partner in recent of which sports are a small component. As
years, providing over a third of all imports, a consequence, what was once a niche pas-
as well as high-tech inputs crucial for the time is entering the global mainstream.
Putin’s problems armed forces. The rouble has fallen by 4% H2 Gambling Capital, a consultancy,
against the yuan in the past month. has estimated annual spending (ie, punt-
Troubled With high inflation and fears over the ers’ losses) for each type and method of
currency, Russia’s central bank has already betting for some 100 countries since 2003,
lifted interest rates to 21%. Traders now ex- “repatriating” stakes placed via offshore
pect them to end the year at 25%, up from websites to customers’ suspected home
expectations of 23% before the rouble’s re- countries. Worldwide, traditional casinos
Russia’s increasingly weak currency is cent slide. So far, the Russian government and their online equivalents remain the
bad news for its war effort has shielded consumers and companies largest sector, accounting for $209bn. Lot-
from higher rates via subsidised-borrow- teries come next at $154bn, followed by
T FIRST GLANCE, it did not look that ing schemes. But with public finances un- sports at $130bn and gaming or slot ma-
A different from other sanctions. On No-
vember 21st America’s Treasury Depart-
der pressure, support has recently been
scaled back. Mortgage volumes were de-
chines outside casinos at $87bn.
Measured in constant 2024 dollars, the
ment imposed new restrictions on more clining and firms warning of investment industry has grown modestly from $545bn
than four dozen Russian banks, including delays even before the latest sanctions. In in 2017—just before mass American sports
Gazprombank, the financial arm of the November Elvira Nabiullina, governor of betting began—to $593bn this year. Yet
giant state gas firm. The bank, the largest the central bank, acknowledged monetary these placid top-line numbers hide vast
in Russia not subject to American sanc- policy had reached a “tipping point” and upheaval. In net terms, all of the gains have
tions, had been excluded from previous that growth in corporate lending would come from sports, excluding horse racing,
packages to allow some central and east- now fall, constraining demand. which rose from $45bn to $99bn.
ern European countries to continue paying A declining currency and ballooning The covid-19 pandemic shut physical
for imports of Russian gas. After Decem- budget deficit has led to talk of a hard casinos, as well as shops selling lottery
ber 20th, when the measures take full ef- landing in 2025. After two years of strong tickets and clubs, restaurants and gaming
fect, European buyers of Russian gas will growth, which confounded analysts’ pre- parlours home to slot machines. Tourist
be forced to find workarounds involving ei- dictions, Russia’s pace of expansion will destinations, such as Macau and Las Ve-
ther third-party banks or currencies other slow. The economic bill for the war is at gas, have mostly recovered, but the same is
than the dollar, which will take time. last coming due. It could be big. ■ not true of casinos elsewhere. And China
America’s announcement came at a bad has not re-authorised video gaming termi-
moment for the Russian economy, mean- nals, which were widespread before the
ing that foreign-exchange markets were Out of gas pandemic struck. In current dollars, land-
quick to respond. The prospect of new re- Russian roubles per dollar, 2024, inverted scale based revenues have dropped from $479bn
strictions on access to hard currency sent 80 in 2019 to $431bn this year.
the rouble down by 11% against the dollar Meanwhile, people locked up at home
to a low of 115 on November 27th, before 85 flocked to online gambling, then a relative
the central bank inspired a modest rally by 90 novelty in most of Europe. Italy and France
using its reserves to buy roubles. Even after first allowed such betting in 2010, and
95
this rally, the rouble is still down by 6% Spain in 2011. Germany did not establish
against the dollar over the past month and 100 clear rules until 2021. Unlike in America,
by over 15% in the year so far. The govern- 105
where legal providers of “daily fantasy
ment is putting a brave face on the news. sports” could easily shift their customers
Speaking in Kazakhstan on November 110 to betting, European markets had to build
28th, Vladimir Putin told reporters that 115 customer bases from scratch. Global digi-
“there are certainly no grounds for panic.” tal revenues then surged during covid,
J F M A M J J A S O N D
For foreign-exchange traders, such de- from $82bn (in current dollars) in 2019 to
Source: LSEG Workspace
nials are usually a sign that something is $162bn today. Even markets where online ⏩

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 The Economist December 7th 2024 Finance & economics 69

▸ betting had long been legal, such as Hong ting is still expanding in the Americas—Ar- line betting will end in addiction, a fate
Kong, have seen the practice explode. gentine provinces have been legalising it akin to being “possessed by demons”.
Many casinos offer sports gambling since 2019, and Brazil will follow suit next Yet China’s love of wagering endures. In
and sports-betting shops are common in month—but politicians elsewhere are Macau, the world’s casino capital, it is an
some big markets, but such wagers ac- moving in the opposite direction. economic necessity. Gambling provides
count for just 8% of land-based revenues. States in Australia, which spends an im- 85% of state inflows and employs one in
In contrast, sports already made up 34% of pressive 1.2% of its GDP on gambling, the five workers. The former Portuguese colo-
online betting before the pandemic. As a most of any big economy, are looking at re- ny, on China’s south coast, raked in $35bn
result, the growth of digital betting at forms. Victoria is targeting “pokies” (slot in gaming revenue in 2019, about three
physical venues’ expense has caused the or video-poker machines). It will require times the amount in Las Vegas.
share of total revenues coming from non- players to use cards pre-loaded with cash Chinese officials have had some impact
equestrian sports to rise from 10% to 17%. and limits on how much they are willing to on trade in Macau, with revenues dropping
America represents just a quarter of the lose. Spain has banned some forms of by a fifth over the past five years. They wor-
worldwide increase in sports betting since gambling advertising, and Britain has lim- ry that the tables are being used to move
2017. Europe, led by countries where such ited the maximum bet on an online slot- capital out of China and launder ill-gotten
betting was legalised only recently, has machine spin to £5 ($6). Just as America gains. Regulators have tightened capital
swollen by even more, accounting for al- got around to legalising sports betting controls and clamped down on “junket”
most a third of the growth. The mainland eventually, it would be no surprise if the operators that help big spenders bypass
Chinese “sports lottery”, which requires country soon seeks to restrict the burgeon- foreign-exchange limits. Recently, they
participants to get a series of bets right, ac- ing industry’s excesses as well. Gambling have been looking for punters taking cash
counts for a sixth. And Japanese wagers on should be enjoyed responsibly, after all. ■ into the territory by foot over the border.
various types of racing, including horses All this has pushed high rollers to use un-
and motorboats, have risen to just under a derground money-changers. Police busted
tenth, helping offset a decline in pachinko, Betting trends (2) 252 people in August for an illicit foreign-

Not even Xi
the country’s version of slot machines. exchange trade worth 3bn yuan ($410m).
Whereas the American market stands out Chinese authorities also used tightened
for “same-game parlays”, in which punters travel restrictions during the covid-19 pan-
can win extravagant payouts by predicting demic to force a change. Gamblers, mostly
before a match that numerous events will middle-aged men who often visit Macau,
all occur, Asian and European gamblers had their exit permits rejected, while more
tend to opt for live “micro-betting”—se- SINGAPORE desirable clientele, such as young women
quential wagers on individual games in Nothing can stop China’s gamblers and families, were allowed in greater num-
tennis, or corner kicks in football. bers, says Ben Lee of iGamiX, a consultan-
H2’s forecasts suggest the transition VERLOOKING THE ocean atop Singa- cy. Some of the effects of this change are
from in-person to virtual gambling will
continue for the rest of this decade, though
O pore’s glitzy Marina Bay Sands casino,
the Chinese Communist Party is out of
lasting: today’s high rollers have smaller
buy-ins (in the tens, rather than hundreds,
the firm expects that online revenues will sight but, for at least a few patrons, prob- of millions of Hong Kong dollars).
climb faster for casino games than for ably not out of mind. Earlier this year the Despite all of this, Macau still seems
sports. The biggest obstacle to further Chinese embassy in the city-state sought like a sure bet. Its economy is forecast to
growth is probably regulatory. Sports bet- to “solemnly remind” its citizens that gam- grow this year by 11%, more than double
bling while abroad, even in lawfully operat- the pace of China’s. Some 3.7m trips were
ed casinos, remains illegal. “Keep yourself made to the territory in August, the most
'appy days clean” and report fellow Chinese caught ever. MGM China, one of Macau’s largest
having a flutter, diplomats instructed. casino operators, reported a 46% increase
World, spending on gambling, $bn, 2024 prices The warning was part of China’s long- in revenue from tables and slot machines
running, and now intensifying, crackdown in the first nine months of this year,
Sports and Gaming and slots Lotteries
horse racing on gambling at home and abroad. Over the against the same period last year. Monthly
600
past five years Xi Jinping, the country’s rul- gaming revenue for the territory as a whole
Online er, has squeezed betting syndicates on the beat expectations, rising to $2bn in No-
400
mainland and increased pressure on offi- vember, or four-fifths of its level in 2019.
Land-
based 200 cials in Macau to reduce their dependence Macau’s speedy recovery is just one
on casino income. So far, party cadres do sign that Chinese gamblers remain keen to
0 not have much to show for their efforts. roll the dice. Casinos are also popping up
2017 18 19 20 21 22 23 24* When they suppress demand in one place, across South-East Asia, especially in Cam-
it tends to emerge in another. China’s gam- bodia and the Philippines, as budget-savvy
bling industry, much of it pushed online travellers look for alternatives to Australia
Spending on sports gambling†, and offshore, is resurgent. and Singapore. In Sihanoukville, on Cam-
change 2017-24*, $bn Betting has been banned on the main- bodia’s coast, there are at least 100 casinos
0 3 6 9 12 15 18 land since 1949, when the communists and dozens more currently under con-
United States took power. Mr Xi’s predecessors saw the struction. Promoters are busy wooing visi-
Mainland China practice as both bourgeois corruption and tors with a popular Chinese variation of
Japan feudal vice. China’s president instigated poker known as “bull bull”.
Australia
his own campaign to break up gambling China’s government would prefer its
rings. He wants to “purify the social atmo- risk-loving citizens buy scratch cards from
Italy
sphere” and spread “civilised rural cus- the state lottery, which operates as a mo-
Britain
toms”. Some state-owned firms have made nopoly. Many are doing just that, only in
*Estimate †Incl. estimated spending on offshore online sites staff sign a pledge to abstain from gam- addition to in-person gambling. During
Source: H2 Gambling Capital mag dled at m obilism . org
bling. The navy has warned sailors that on- the first ten months of this year, those keen ⏩

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 70 Finance & economics The Economist December 7th 2024

▸ to try their luck spent 513bn yuan on such pect to have surged since then. Chinese na’s supreme court instructed the rest of
cards, which represents an 8% increase police made dozens of arrests earlier this the country’s judiciary to pay particular at-
from the same period last year. year in response to illegal gambling on the tention to the “growing issue of overseas
Illicit online gambling also appears to Euro 2024 football tournament. The Minis- casinos and online gambling” and to “con-
be on the rise. Mr Xi’s crackdown has try of Public Security claims to have dis- tinue imposing harsh penalties”, according
pushed syndicates offshore to South-East rupted about 4,300 illicit betting websites to state media. On October 11th party func-
Asia, from where baccarat tables are since 2021. In October authorities in tionaries met in Ningbo, a southern city, to
streamed for the pleasure of mainland Chongqing broke up an online gambling review their progress and announce a new
gamblers. A UN report estimates that illicit syndicate that was alone responsible for phase in a campaign to squash low-level
online gambling was responsible for 10bn yuan in annual outflows. betting in rural villages. They have a tough
$145bn of Chinese capital outflows in Mr Xi’s campaign against gambling task. As is now abundantly clear, China’s
2020—a figure that industry insiders ex- shows no signs of letting up. In July Chi- gamblers refuse to fold. ■

BUTTONWOOD
Strings attached
How the bond market punishes governments that borrow from China

ENDING FROM China posed a dilem- China to emerging-market countries, this by studying the yields on individual
L ma to leaders in cash-strapped poor
countries. In the 2010s, as the Belt and
which were made between 2007 and 2022,
they conclude that borrowing from China
emerging markets’ government bonds
before and after announcements of
Road Initiative (BRI) got going, China is not just costly in itself. It also makes Chinese loans to those governments.
began to invest vast sums in overseas borrowing from others more expensive. Compared with an index of 56 similar
infrastructure. All told, throughout the If that seems unsurprising, consider countries, the average borrower saw its
initiative’s first decade, officials dis- the ways in which new borrowing could bond yield rise by 0.05 percentage points
bursed hundreds of billions of dollars to lower the cost of other debt. As Bob Hope, following the announcement. The rise
150-odd countries. They helped build a comedian, once quipped, a bank is a was larger for loans to provide liquidity,
pipelines, ports, railways and much else, place that will lend you money if you can or to support a budget, and smaller for
aiming to expand the country’s influence prove you do not need it. The sovereign- those intended to finance projects such
over trade. But emerging-market officials bond market might function similarly, and as new infrastructure. Intriguingly, bor-
and Western foreign-policy hawks a new loan could be just the proof a gov- rowing costs rose even if the announce-
feared something darker was going on: ernment needs. It can clearly still get ment concerned an old loan rather than
that the initiative was deliberately sad- access to credit, making it less likely to run a recently disbursed one.
dling poor countries with too much debt. out of cash and default. A new lender— Do bondholders object to all new
Once they inevitably defaulted, China China rather than, say, the bond market or borrowing, or just that from China? To
would seize assets and enjoy not just a multilateral outfit—also shows that the answer this, the authors repeated their
influence over trade, but a chokehold. borrower has several sources of funding, study, but using announcements of loans
Fortunately, such fears now seem making it safer still. What is more, loans from the World Bank instead. After
overblown. China’s loan book has grown used to fund profitable infrastructure these they found no significant increase
to doorstopper-size, and the country has projects, for instance, might make a coun- in yields. They also looked at loans
become low- and middle-income coun- try more productive and therefore better co-funded by China and other lenders.
tries’ largest bilateral creditor. Many of able to repay all its debt. Whereas those solely from China raised
their governments have had difficulty As it turns out, only some of this logic yields, those involving other lenders
with repayments over the years. Yet no prevails when countries borrow from lowered them. All this suggests that the
wave of land grabs has followed. Instead, China. Ms Liu and Ms Mosley discovered bond market views Chinese lending in
Chinese lenders have almost always particular as riskier than other sorts.
given them longer to cough up. As a Ms Mosley muses that the secrecy
consequence, cash-strapped govern- shrouding Chinese loans could be to
ments might feel much more tempted blame, with other lenders fearing “some
than they once would have been to turn iceberg of Chinese debt hidden beneath
to China as their lender of last resort. the surface”. It does not help that China
Two things should give them pause is notoriously unwilling to co-operate
for thought. The first is the amount by with other lenders when debt must be
which their debts have ballooned since restructured. Rather than being caused
the BRI began. Nominal interest pay- by fears of nefariousness, though, Ms
ments by the 78 countries eligible for the Mosley suggests a simpler reason for the
World Bank’s cheapest development bearish signal sent by Chinese loans. “I
loans quadrupled between 2012 and think they are not necessarily doing their
2022, to an all-time high of $24bn. The commercial due diligence,” she says,
second is a new paper by Qi Liu and “because the loan is for political reasons
Layna Mosley of Harvard and Princeton instead.” If a new lender seems uncon-
universities, respectively. Having ana- cerned about being paid back, do not be
lysed 139 announcements of loans from surprised by the old ones taking fright.

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 The Economist December 7th 2024 Finance & economics 71

FREE EXCHANGE
Everyone has their price

Cronyism is a problem. But it is not always an economic one

Yet for all the theory, evidence of aggregate harm can be diffi-
cult to spot. Asia’s crony-capitalist economies were among the
world’s fastest-growing in the 1970s and 1980s. Research by Ray-
mond Fisman of Boston University finds that the share prices of
Indonesian firms received a boost when one of the sons of Presi-
dent Suharto—who stole tens of billions of dollars—sat on their
board, owing to the potential for corruption. At the same time, Su-
harto was known as “the father of development”, because of the
average annual growth of 6.5% he oversaw during his three-decade
reign. Although corrupt countries are generally poorer than less
corrupt ones, it is unclear whether corruption causes poverty or
both are indicators of a deeper pathology. Some economists even
wonder if corruption “greases the wheels”: maybe those permits
would never have been forthcoming without bribes.
Yuen Yuen Ang, a political scientist at Johns Hopkins Universi-
ty, has pointed out that all rich countries developed with flawed
institutions. Cronyism and rapid industrialisation existed side-by-
side in America’s gilded age, which ran from the late 1870s to the
late 1890s, as they do in China today. In both places, “corruption
evolved away from thuggery and theft,” becoming what Ms Ang
terms “access money”, or payments to cultivate political ties.
These are then often formalised and legalised, such as via cam-
HEN ECONOMISTS explain the financial crisis that hit the paign finance. Instead of being incentivised to slow down eco-
W “tiger economies” of Indonesia, Malaysia and South Korea,
among others, in 1997, some reach for the term “crony capitalism”.
nomic growth and accept payments to speed it up again, elites are
incentivised to allow growth for fellow members of the club.
A cosy relationship between governments and firms distorted Recent research finds limited evidence that cronyism helps a
markets. The ensuing currency crises can be blamed on close ties country’s economy grow. But although it does not grease the
between businesses, banks and politicians, rather than on panicky wheels, it does not seem to be a disaster, either. Indeed, part of the
investors. Companies took excessive risks, safe in the knowledge reason it is difficult to discover a connection between cronyism
that economic institutions were designed for their benefit. It was and economic growth is because governments do not restrict mar-
because of this rot that everything came tumbling down. kets just to favour their friends. They also frequently intervene in
Today people worry that America is in for a spell of cronyism. the name of public health, the environment and other worthy pur-
After Donald Trump’s first term as president, Anne Krueger, an poses. As Bruce Yandle of Clemson University has pointed out,
economist who coined the term “rent-seeking” 50 years ago, wrote both Baptists and bootleggers supported the prohibition of alco-
that “Crony capitalism has taken root, and will...need to be weed- hol. What detractors called crony capitalism in Asia, supporters
ed out.” Now, as Mr Trump prepares to raise tariffs, “You’re going often labelled as industrial policy.
to find the halls of Washington really filled with special-interest
groups and lobbyists,” Ken Griffin, founder of Citadel, a hedge Rent-seeking by another name
fund, has warned. Markets appear to agree that personal connec- Intention might matter in a court of law, but economics is more
tions to the new occupants of the White House are extremely concerned with outcomes. Following Mr Trump’s recent election
valuable. The share prices of firms that have links with prominent victory, the prices of American solar stocks fell as investors gam-
supporters of Mr Trump, such as Elon Musk, a businessman, and bled on an end to the Biden administration’s environmental sub-
Peter Thiel, a venture capitalist, have shot up. On December 3rd sidies. Although the purpose of such payments was to build do-
PublicSquare, an online marketplace, announced that Donald mestic manufacturing capacity, rather than personal gain, the ef-
Trump Jr, the president-elect’s son, would join its board—prompt- fect was similar: favoured companies gained an advantage over
ing the firm’s share price to more than double. their competitors, while the potential profits from aggressive lob-
Trade wars, which Mr Trump will stoke, certainly provide op- bying rose. In this view, cronyism may be bad, but it is no worse
portunities for cronyism. Ms Krueger first examined “the political than poorly designed industrial policy.
economy of the rent-seeking society”, as a paper in 1974 was titled, Should Americans therefore relax about what may be to come?
by looking at decisions by the Indian and Turkish governments to Not quite. East Asia’s success did feature plenty of industrial poli-
provide import licences to specific companies. These policies did cy, as well as straightforward corruption, but companies that were
not just distort the market, they also forced firms to waste resourc- protected at home were at least exposed to cut-throat competition
es by competing for such licences. A vicious circle then ensued: abroad. American industrial policy, which increasingly seeks to
the public understood that profits were earned unjustly and thus protect domestic companies from Chinese competition, faces no
demanded additional intervention to address the unfairness, cre- such market discipline. Mixing generous subsidies or steep tariffs
ating more opportunities for rent-seeking. Other economists later with preferences for court favourites may have a more insidious ef-
pointed out that rent-seeking could also be expected to reduce in- fect on America’s economy than plain-old inefficient government
novation, as having to manoeuvre through a thicket of permits spending would have done. And the full cost to American democ-
would dissuade new firms from entering the market. racy, of course, may be greater still. ■

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 72 The Economist December 7th 2024

Science & technology

The New Space industry (I) more reliably profitable) businesses of

building and servicing satellites. Spin is
A field of dreams there too, in abundance. But, like Mr Musk
himself, those involved are true believers—
space cadets who see the world beyond
Earth as something not just to be explored,
LOS ANGELES COUNTY AND ORANGE COUNTY but conquered.
Elon Musk may have deserted them. But the space cadets Geographically, AstroForge is in Hun-
of southern California remain full of vim and vigour tington Beach, where Saturn V Moon rock-
ets’ third stages were assembled. But con-
ALLING A fiRM SpinLaunch in an in- rockets can loft nearly 23 tonnes. But small ceptually it is out of this world. Its purpose
C dustry where the first part of that
name is a way of life might seem a hostage
can be beautiful. The Electron launch vehi-
cles made by Rocket Lab, one of Spin-
is to extract platinum and five related pre-
cious metals (iridium, palladium, rutheni-
to fortune. But, though the company is no Launch’s neighbours, have only slightly um, rhodium and osmium) from asteroids.
slouch at PR, “spin” here refers to how its larger loads—320kg. Rocket Lab is the only Most asteroids are rocky bodies of little
cargoes will be dispatched from Earth’s New Space firm so far, bar SpaceX, to make interest to miners. A few, though, were
surface—by an armature rotating inside a money by launching things into orbit. once parts of the cores of planets that got
vacuum chamber (pictured above) rather The Angeleno New Space cluster is, smashed up by collisions during the solar
than on a rocket. After an hour’s steady ac- however, about more than just launchers. It system’s wild youth. These objects are
celeration, the projectile will be fired out of is a back-to-the-future kind of place, where made mostly of alloys of iron and nickel.
the chamber at 2.2km a second. Only when fantasies from the Space Age’s heroic early But they also contain useful amounts of
it is around 62km up will a small motor ig- days are becoming real. Mining asteroids. the six platinum-group elements. Mining
nite to carry it the rest of the way into orbit. Orbital manufacturing. Private space sta- them is an old idea, and Matt Gialich and
SpinLaunch, in Long Beach, is part of a tions. Moon buggies. Exploring Mars. All Jose Acain, the founders of AstroForge,
cluster of “New Space” firms in and around are there, alongside the more humdrum (if think they can make it happen.
Los Angeles. They are heirs to a century- They are already tracking suitable tar-
old aerospace tradition, rebooted in 2002 gets, and have flown a mission to test their
when Elon Musk, a then-little-known en- → ALSO IN THIS SECTION technology in space. The plan is to land ro-
trepreneur, rented a warehouse in El Se- botic probes on their quarry, evaporate the
gundo for a startup called SpaceX. The 74 Elon Musk’s rocket rivals alloy by applying intense heat to it, and
200kg payloads that SpinLaunch will han- 75 Help for the paralysed then stream the vapour past a magnet to
dle are minuscule compared with those winnow the non-magnetic platinum-group
now launched by SpaceX, whose Falcon 9 75 Early American diets atoms from the magnetic iron and nickel ⏩

C003
 The Economist December 7th 2024 Science & technology 73

▸ ones. That done, probes will return to Astrolab, founded in Hawthorne by Jaret
Earth bearing modest quantities of bullion Matthews, also ex-SpaceX, has just the
(about $60m-worth per mission, at current thing. FLEX (Flexible Logistics & Explora-
prices) that will nevertheless make share- tion) is designed to carry two passengers
holders rich. on trips of up to 70km across the lunar sur-
Another dream being revived is zero- face. A prototype already exists and Astro-
gravity manufacturing, based on the fact lab is one of three firms contracted to de-
that some materials solidify differently in velop surface transport for NASA’s return-
orbit from the way they do on the ground. to-the-Moon Artemis programme.
Jason Dunn runs Outpost Space, in Santa
Monica. He is interested in ZBLAN, a mix- A new life in the off-world colonies
ture of the fluorides of zirconium, barium, And then there is Mars. Mr Musk once said
lanthanum, aluminium and sodium (chem- he hoped “to die on Mars, but not on im-
ical symbol, Na). Optical fibres made of pact”. He is only 53, so that day, one hopes,
this should in theory be superior to the is some way off. But the race by private
conventional sort, for ZBLAN is clearer and firms to land there is now in earnest.
transmits a wider range of frequencies. In 2023 Mr Musk suggested SpaceX,
That advantage, though, is countered by now based in Texas, might manage it with
the stuff’s tendency, when drawn into fi- an uncrewed craft in three or four years’
bres, to crystallise rather than becoming a time. Tom Mueller, Mr Musk’s first hire at
glass. This ruins its properties. SpaceX back in 2002, hopes to beat him.
But that does not happen in orbit. Out- Mr Mueller’s company, Impulse Space, in
post Space is, therefore, developing a de- Home, sweet home? Redondo Beach, makes small rockets that
vice called Carryall which can take a robot move satellites around in space. It has
factory into space and return it to Earth us- SpaceXer, to make it happen. The result, teamed up with Relativity Space, an aspir-
ing a folding heat shield and a paraglider. Vast Space, is also in Long Beach. Haven-1, ing launch firm founded in Long Beach
That factory will be able to turn a five- its first product, will be a cylinder 10.4 me- (see next article). The plan is for Relativity
tonne load of ZBLAN into fibres. tres long and 4.4 metres in diameter, with to provide the launcher and Impulse the
Will Bruey is interested in medicines wing-like solar panels, a docking port at cruise stage, entry capsule and lander for a
rather than materials. Having once worked one end for arrivals and departures, and a Mars trip. Departure is scheduled for
for SpaceX, he founded Varda Space In- window at the other for sanity and musing 2026—an ambitious target since Relativity
dustries, in El Segundo, in 2021. His plan is on the human condition from orbit. has not yet had a successful launch.
to improve certain drugs by crystallising Though only the well-heeled need ap- As it was in the early Space Age, Mars
their ingredients in orbit. Crystal struc- ply, check-in should soon be possible. The thus remains the dream of dreams—the
tures often vary in solubility, dissolution plan is to launch towards the end of 2025— one place beyond Earth where people
rate and stability, which all affect their bio- just in time to wow the judges of NASA’s might plausibly live. Mr Mueller talks of a
availability. Sometimes, those with the Commercial Low-Earth-Orbit Destina- settlement there of a million souls. Mr
best properties are easier to make in space tions programme, who will shortly there- Musk has made a similar suggestion. The
than on Earth. In 2023, using a re-entry ve- after pick a replacement for the Interna- obstacles would be formidable, even to the
hicle designed by Rocket Lab, Varda tested tional Space Station when it is deorbited less ambitious goal of setting up a nursing
the trick with ritonavir, an anti-HIV drug. It sometime after 2030. home for retired billionaires. But formid-
plans another launch next year. Even orbiting Earth, however, may able is not insurmountable. As for the new
Mr Bruey seems content, for now, to seem a bit parochial. Roving around the settlement’s name, Los Nuevos Angeles
stick to manufacturing. Mr Dunn, however, Moon has more kudos. For this, Venturi has a nice ring to it. ■
has broader ambitions—for Carryall, as its
name suggests, can do more than carry fac-
tories. Its maximum payload is a hefty ten
tonnes. This is of particular interest to
armed forces, for it may let them store
pieces of kit in orbit until the order comes
to deliver them to some otherwise-inacces-
sible part of the world. America’s air force
is paying for the first four launches of a
smaller test version, Ferryall.
Carryall and Ferryall (capacity, 100kg)
may also help keep space tidy without pol-
luting the atmosphere. De-orbiting upe-
rannuated satellites (as regulations already
require) will soon, Mr Dunn reckons, mean
ten tonnes a day of hardware is burning up
on re-entry. This, he thinks, will generate
so much toxic dust that such fiery de-orbit-
ings will no longer be tolerated. Outpost
will be ready to provide non-fiery ones.
Asteroid mining, tick. Factories in
space, tick. Want to stay on a private space
station? Jed McCaleb, a billionaire entre-
preneur, has hired Max Haot, another ex- Perfect for a romantic break

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 74 Science & technology The Economist December 7th 2024

The New Space industry (II) pendent firms are therefore still paddling,

Rockets galore
though admittedly only at the shallow end
of the market.
Rocket Lab’s Electron launchers (see
previous article) have been lifting small (up
to 320kg) loads into bespoke orbits since
2018. Now the firm, based in Long Beach,
LONG BEACH California, plans one called Neutron, with
Can anyone realistically challenge SpaceX’s launch supremacy? a capacity of 13 tonnes and a scheduled
first launch in the middle of next year. It is
LON MUSK’S appointment as Donald also getting into the space-science market
E Trump’s waste-cutter-in-chief involves
at least one glaring conflict of interest. A
Little and large with a pair of Mars-bound satellites built
for the University of California, Berkeley
Selected carrier rockets, 2024 Metres
paradigm example of waste, which would 120
which it hopes will be launched next year.
be near the top of any cutter’s hit list, is the Hot on its heels is Firefly Aerospace,
Space Launch System (SLS), a rocket de- 100 based near Austin, Texas, which had the
signed to carry 95-tonne payloads into or- first fully successful launch of its Alpha
80
bit to support America’s plan to return as- rocket (capacity just over a tonne) in 2023
tronauts to the Moon. Adjusted for infla- 60 and is planning a larger device (capacity 16
tion, it has so far cost more than $30bn— tonnes) in collaboration with Northrop
and has been launched just once. More- 40 Grumman. Firefly is interested in space
over, it has an obvious and much cheaper 20 science, too. Its Blue Ghost lunar lander,
commercial rival in the form of Starship, a due for launch next year on a SpaceX vehi-
vehicle with a greater capacity and which, 0 cle, will carry customers’ instruments and
unlike the SLS, is reusable. Starship was de- Payload to low-Earth orbit, tonnes experiments to the Moon’s surface.
veloped by SpaceX. But, as the world 0.3 1 8 27 23 45 95 150
Northrop Grumman operates on its
knows, SpaceX’s boss is Mr Musk. own recognisance as well. Its Antares sys-
Vulcan New
How this will play out remains to be Alpha Centaur Glenn Starship tem can lift eight tonnes and its smaller of-
seen. Indeed, the future of NASA in its en- Electron Antares Falcon 9 SLS
fering, Pegasus, 450kg. It also offers the de-
tirety is in jeopardy if Mr Musk means lightfully dubbed Minotaur, which, as the
Source: Press reports
what he says about the size of his proposed name suggests, is cobbled together out of
cuts ($2trn from a federal budget of $7trn). parts from other rockets—namely motors
That organisation, which has little to show achieve the turn around times, planned for from decommissioned Minutemen inter-
for a $25bn annual budget, is surely ripe for Starships, remains to be seen. continental ballistic missiles and body-
the slaughterhouse. Success for New Glenn would help as- work from Pegasus.
Yet, though it would look bad if Mr suage American officialdom’s understand- Those are the successes. In rocketry,
Musk killed it, the SLS is not and never able nervousness that any firm, however however, failure is certainly an option. In
could be a true competitor for Starship. cosy its relationship with the president, 2023 Relativity Space, a neighbour of
Moon missions aside, whether it lives or should have an armlock on the important Rocket Lab in Long Beach, tried unsuc-
dies makes no practical difference to his business of launch—a nervousness implic- cessfully to reach orbit with a rocket called
armlock on America’s space-launch indus- it in the name, Assured Access to Space, of Terran 1 that was made largely by 3D print-
try. SpaceX’s actual main challenger at the a large bit of America’s Space Force that is ing. It hopes to have another go in 2026
moment is Blue Origin, a firm founded by involved in procurement. There is also a with a modified version, Terran R, which
Jeff Bezos in 2000, 18 months before Spa- second back-up of sorts, though not a very relies less on that novel manufacturing
ceX’s formation in 2002. convincing one, in the form of the United technique. ABL Space Systems in El Segun-
Launch Alliance’s (ULA’s) Vulcan Centaur. do, to the north-west of Long Beach, like-
Blue streak? The ULA is a joint venture between wise failed in 2023 and has scaled back its
Blue Origin has not yet enjoyed SpaceX’s Lockheed Martin and Boeing that repre- ambitions from being an all-comers com-
stellar success. Its current product, New sents the last vestiges of the old way of do- mercial service to focusing on missile de-
Shepard, is a toy. (It cannot reach orbit. It ing space flight—with big, disposable fence. And Astra Space, of Alameda, Cali-
merely carries rich tourists above the Kar- rockets and relaxed launch schedules. Vul- fornia, has undergone several corporate re-
man line, 100km up, which is the official can Centaur lifts 27 tonnes, making it a incarnations in the wake of failed launch-
boundary of outer space.) But that will theoretical competitor of Falcon 9. But it es. It is currently pinning its hopes on what
soon change. The firm is now conducting has seen only one lift-off since its maiden it calls Rocket 4, which has attracted the
pre-launch tests on New Glenn, a rocket flight in January. And it will not be reus- interest of the Defence Innovation Unit, a
both reusable and orbital. If all goes well, a able. Moreover, it depends on Blue Origin part of the Pentagon.
prototype will lift off from a specially built for its first-stage engines—the BE-4 motors
pad at Cape Canaveral sometime in the which that firm developed to launch New Destruction testing
next few weeks. Glenn. Indeed, there has been talk in the If you have money, of course, launch fail-
New Glenn actually will be a challenger past that Blue Origin might simply buy the ures provide a learning opportunity. They
to SpaceX. It will carry 45 tonnes into orbit. ULA, though what it would do with such a are, indeed, part of SpaceX’s business
That is still less than the 150 tonnes a Star- legacy asset is unclear. model, as its approach to developing Star-
ship will manage, but more than the 23 A duopoly (or even a duopoly-plus), ship has shown. But even that mighty firm
tonnes of a Falcon 9. And it will be enough though better than a monopoly, is still un- came close to death when its first three at-
for Mr Bezos to get busy assembling Pro- ideal. As Winston Churchill said of fuel tempts to send a rocket into orbit, between
ject Kuiper, his proposed satellite-internet supplies to Britain’s navy, “safety and cer- 2006 and 2008, went wrong. Another fail-
constellation. Whether New Glenns will tainty…lie in variety and variety alone”. A ure would have killed it. But the fourth go
be produced in the sort of quantities, and number of smaller and less billionaire-de- worked—and the rest is history. ■

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 The Economist December 7th 2024 Science & technology 75

Neuroscience stimulating neurons with electric currents. with both patients reporting an urge to
Switching to DBS required a second round
Brainpower
walk when the current was switched on.
of testing, this time on rats. (Rats have After three months of rehabilitation,
slightly bigger brains than mice, says Dr both reported big improvements in walk-
Courtine, which makes the delicate job of ing, as assessed by tests of how far they
placing the electrodes a bit easier.) could travel in a set time, and by the sub-
As hoped, zapping neurons in the jective difficulty they experienced. Before
Stimulating the right bits of the brain brains of injured rats over the course of the operation, one of them had hoped to
can help the paralysed to walk again several weeks helped them, too, to regain walk without braces; the other to climb
the ability to walk. The improvements per- and descend a staircase unaided. Both
HE SPINAL CORD is the control cable sisted even when the current was turned achieved their goals.
T that connects the brain to the rest of
the body. If it is severed, people lose the
off, with analysis of their spinal cords
showing an increased density of neuronal
Success in two people will not, by itself,
be enough to make DBS generally available.
ability to move their body below the site of wiring below the site of their injuries. The next step, says Dr Courtine, is to in-
the injury. But if it is only partly cut, the The final step was to try it in people. vestigate whether brain stimulation might
brain can sometimes adapt to the damage. The researchers recruited two volunteers boost the power of an existing, similar
Some people who are paralysed by a spi- who had suffered spinal injuries and then treatment—stimulation of the spinal cord
nal-cord injury can gradually regain at relearned how to walk with assistance. The itself. The first person to get that sort of
least a limited ability to walk. electrodes were implanted in them while double-ended treatment, he says, is sched-
Exactly which bits of the brain are in- they were conscious. This helped the doc- uled to have electrodes implanted within
volved in this adaptation is not clear. But, tors ensure they were in the right place, the next three months. ■
in a paper just published in Nature Medi-
cine, a group of researchers led by Jocelyne
Bloch of Lausanne University Hospital Neolithic cuisine

Oh no! Not mammoth again!

and Grégoire Courtine at the Swiss Federal
Institute of Technology in Lausanne shed
some light. In doing so, they demonstrate
that stimulation of the right bits of the
brain can produce dramatic—and seem-
ingly permanent—improvements in the
Lots of hunting. Not much gathering. The diet of early Americans
ability of patients to walk again.
“We already knew that [changes in] the
brain were key to regaining walking after a AT UP YOUR greens!” That in-
spinal-cord injury,” says Dr Courtine. “But
we didn’t know which regions were the
“E junction will be familiar to many
readers from their childhood. But it
most important.” To find out, the research- would not, it transpires, have been heard
ers built detailed maps of the brains of a much in Clovis households.
dozen mice whose spinal cords had been The Clovis people are an enigma.
partially severed. They lived in North America some
By examining some brains shortly after 13,000 years ago and their characteristic
the injury, and others later, as their animal fluted, double-faced stone spear-tips
owners were regaining the ability to walk, have turned up at more than 1,500 sites.
the researchers were led to a set of neurons However, only three skeletons of Clovis
in the lateral hypothalamus (LH; a part of individuals have so far been unearthed.
the brain buried deep towards the bottom The spear-tips, and butchered bones,
of the organ) as the likely culprit. That was leave no doubt that they were hunters,
unexpected, says Dr Bloch, for the LH is and that mammoth was sometimes on
best known for being involved with hun- the menu. But how important it was, and
ger, thirst and other involuntary functions how much the “gathering” component of
of the nervous system. hunting and gathering mattered, have Stocking up the larder
To check they were on the right track, only now become clear.
the researchers turned to a technique As they report in Science Advances, Dr Chatters and his team knew from
called optogenetics. This involves modify- James Chatters of McMaster University other evidence the relevant ratios in
ing living cells so that they express light- in Ontario, Canada and his colleagues likely prey species (deer, bison, small
sensitive proteins called channelrhodop- have looked in detail at one of the Clovis mammals and mammoths) and also that
sins. These act as switches, allowing cellu- skeletons, that of an 18-month-old boy the mammoth signal is distinctive. Com-
lar activity to be controlled with bursts of from a site in Montana. Their quarry paring the options with the ratios in the
illumination. Sure enough, artificially stim- were what are known as stable-isotope boy, the mammoth signal shone out,
ulating the activity of neurons in the LH ratios of carbon and nitrogen extracted suggesting he (and more particularly his
improved the ability of injured animals to from bone collagen, a protein. These mother, for he would still have been a
walk. In some cases, it was even able to elements each have two non-radioactive suckling when he died) ate lots of big-
make the mice jump. (ie, stable) isotopes, the ratios of which game meat, especially mammoth. Con-
Optogenetics is not generally approved in living tissue vary between types of trariwise, the contribution of plants was
for use in humans. But an alternative meth- organism partly for reasons buried deep trivial. The idea of early Americans living
od of stimulating neurons, deep-brain in the laws of thermodynamics, and on a diet of mammoth steaks and no
stimulation (DBS), is. Rather than modify- partly (in the case of animals) as a result veggies sounds like a cliché. But in this
ing cells to respond to light, this involves of the ratios found in the food they eat. case it seems to be true.
inserting fine electrodes into the brain and

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 76 The Economist December 7th 2024

Culture

The internet and food Everyone has to eat, and cooking is a com-

Bytes of bites
mon hobby. Video is also an efficient me-
dium for instruction—more precise, in
many ways, than the written word. Amer-
icans who recently cooked turkeys for
Thanksgiving can testify that “golden
brown” to one cook may look underdone to
another and even burnt to a third.
Social media and the internet are changing how people cook and relate to food People who learned to cook in kitchens
or through books may scoff at the spread
IRST THEY came for the eggs. Then the camera and field live comments from view- of online-cooking videos. But chefs have
F feta cheese, caviar, cottage cheese and
cucumbers. In some countries, these ingre-
ers, started in South Korea but have spread
to the West and are now popular globally.
long embraced technology to instruct,
share their culinary visions and build their
dients even sold out: Iceland experienced a The internet has propelled people with- careers. In the early 19th century Marie-
shortage of cucumbers, and feta briefly out notable restaurants or cookbooks to Antoine Carême, a Parisian chef who
vanished from grocery-store shelves. The chef stardom. For example, around 21m cooked for leaders such as Tsar Alexander I
reason for the raids? Aficionados of online people subscribe to the YouTube channel of Russia, wrote a series of beautifully
cooking were eager to recreate viral videos of Nick DiGiovanni, a 28-year-old, Har- illustrated cookbooks that simplified reci-
in which each of these ingredients starred. vard-educated food personality, about the pes and helped codify French cuisine.
Few topics are as appetising to netizens same number as subscribe to that of Gor- In the 1960s-70s Julia Child used televi-
as cooking, especially over the holidays. don Ramsay, a famous British chef. sion and helped popularise mass-market
Food is the fourth-most popular subject on The fact that social media have caused cookbooks, demystifying French food for
the internet (trailing only films, music and interest in food to rise as fast as home- those cooking at home. She both recog-
phones), up from 17th place in 2009, ac- baked bread should not come as a surprise. nised and stirred up a market: cooking was
cording to GWI, a consumer-research firm. becoming a leisure activity rather than a
No other subject’s rank has risen by more chore and “foreign food” something to
in the past 15 years, except sport (though it → ALSO IN THIS SECTION create at home rather than scorn.
remains less popular than food). Successful online food personalities
The abundance of online-food content 77 Botanists v Nazis “recognise and make a real effort to meet
not only causes occasional ingredient 78 The best video games of 2024 the specific needs of their viewers”, ex-
shortages when a video goes viral. It is also plains Madeline Buxton, culture and
making cooking more social. TikTok vid- 78 “Conclave”: a papal whodunnit trends manager at YouTube. Some viewers
eos starring chow attract tens of millions 79 The word of the year want to be entertained; others want to
of viewers. Mukbang (eating broadcast) learn, travel or eat vicariously through
videos, in which people gorge in front of a 80 Back Story: A festive gift guide people more adventurous than they are. ⏩

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 The Economist December 7th 2024 Culture 77

▸ Online chefs and food boosters sell a life-

style: you are what you eat, how you eat Sacrifice in the name of science
and what you watch about eating.
Unlike cookbooks and cooking shows Seeds of change
on TV, barriers to entry for online-cooking
videos are low. Creators who think they
have a winning idea do not need to
persuade agents, editors and network ex-
ecutives; they can shoot a video them-
selves on their phone and see if people like
it. Niches, therefore, abound. The Forbidden Garden. By Simon Parkin. dilemma: safeguard the seed bank for
Some online-food content is “straight- Scribner; 384 pages; $30. Published in the future or use it to save themselves
forward, recipe-driven, what you probably Britain as “The Forbidden Garden of and others from starvation?
would expect to see in a traditional TV Leningrad”; Sceptre; £25 “The Forbidden Garden” is the story
cooking show”, says Ms Buxton. Other vid- of the seed bank’s staff, who chose not to
eos walk viewers through native cuisines, OR NEARLY 900 days in 1941-44, Nazi eat the collection. As botanists, they
showing how to hand-pull Chinese noo-
dles or grill Turkish kebabs. University stu-
F forces blockaded Leningrad, modern-
day St Petersburg, trying to starve the
grasped the potential of the seeds to
engineer high-yielding and disease-
dents on tight budgets can learn to make city into submission. When food ran out, resistant crops to feed future gener-
better instant ramen, whereas skilled people ate cotton husks, leather belts ations. Their abstention was not without
cooks who want to impress their friends and even their pets. Reports of cannibal- consequences: 19 staff starved to death.
can replicate Popeyes’ wildly popular ism spread. Nearly a third of the pop- Whereas today huge gene banks,
chicken sandwich from scratch. ulation—some 750,000 civilians—died. such as the Svalbard Global Seed Vault
Some YouTube channels bridge the gap Yet in the centre of the city, in a for- in Norway, store copies of the world’s
between entertainment and instruction. mer palace, the All Union Institute of crops in case of catastrophe, such initia-
Many more people will watch Andrew Rea, Plant Breeding, the world’s first seed tives used to seem eccentric. The plant
whose channel specialises in food from bank, housed 250,000 plants from five library was the brainchild of Nikolai
films and TV, make the tortilla-chip som- continents. This collection, if planted, Vavilov, a renowned botanist (pictured).
brero from “Despicable Me 2” than will try could have fed “every citizen within His international fame and network of
to cook it themselves. “Village cooking” Leningrad, and the Soviet Union and luminaries drew the attention of Soviet
videos, which show people in remote areas elsewhere besides”, writes Simon Parkin, authorities, who arrested him in 1940
preparing food, are popular in Pakistan a British journalist. Botanists faced a and accused him of treason and, per-
and India, perhaps as sources of wistful versely, plotting to harm agriculture.
escapism and nostalgia among urbanites. Vavilov died in the gulag in 1943.
(Actually copying village cooking would The Soviets did not value Vavilov’s
require space for a giant bonfire and sever- work, but the Nazis did. They thought
al skinned and dressed chunks of mutton.) his collection could be used to create
German supercrops. In a twist, Heinz
What’s the recipe for success? Brücher, a botanist and senior SS officer,
Established media companies have got in launched a covert mission to seize
on the act, too. They have cooked up on- Vavilov’s seeds. Mr Parkin describes how
line videos that take viewers around the the Nazis looted remote seed-breeding
world to show how Uzbek chefs cook stations and established a rival seed
350kg of rice pilaf, for instance, or where bank in an Austrian castle. After the war
cab drivers in New York like to eat (unpre- Brücher fled, and the seeds he had stolen
tentious South Asian restaurants on the were lost.
east side of Manhattan). But efforts to protect Vavilov’s col-
But the internet is mostly full of shorter lection were not in vain: over the past 70
content. It predominates on TikTok and its years seeds saved during the siege have
imitators, such as YouTube Shorts and In- been used to create varieties of wheat
stagram Reels. Whereas adventurous Tik- that are superior in quality and yield.
Tokers have tried their hand at coulibiac The sacrifice of the Russian botanists
and other complex recipes, approachable Vavilov, who cultivated the idea has stocked the world’s breadbasket.
food tends to perform best: one reason rec-
ipes for baked-feta pasta and cucumber
salad went viral is that it is easy to melt $50,000 on a single video. He earns money This points to an important aspect of
cheese and slice cucumbers. It also helps from advertising revenue on YouTube, and online food culture: fun. Julia Child cer-
to be visually attractive: viral videos tend to he is doubtless helped by his good looks tainly mastered the art of French cooking,
show off the texture and crunch of food. and regular-guy appeal. Recent videos and people who followed her recipes may
Sometimes creators are surprised by have featured him trying Japanese fast have enjoyed themselves, but she most be-
which of their videos take off. Mr DiGio- foods (Burger King’s “Great White” lieved in the haute part of haute cuisine.
vanni recalls his first popular video, which cheeseburger, with a horrific amount of Reverence does poorly in the democra-
showed him making a chocolate bar from mayonnaise, was a hit) and rare foods (wa- tised world of online content, where train-
whole cacao pods; it was “poorly shot: the ter collected from Amazonian “air rivers”, ing, pedigree and even experience matter
lighting was messed up; it was over- which appeared to taste a lot like water). less than likeability, production value and
exposed”. But it has attracted almost 14m Much as other food creators do, he shows whether a video makes you want to pick up
views. Today, Mr DiGiovanni employs half viewers things they would not otherwise a skillet and start cooking. Now can you
a dozen people and can spend more than see, and he has a good time doing it. please pass the feta? ■

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 78 Culture The Economist December 7th 2024

The papacy

Cardinals’ sin

“Conclave” offers a perfect trinity:

deception, death and (a little) sex

O SANE MAN would want the

“N papacy,” a cardinal tells Cardinal
Thomas Lawrence (Ralph Fiennes) at the
start of “Conclave”, a new film. Perhaps
that is why so many popes have been so
mad. There was Pope Urban VI, who
grumbled when a cardinal he had ordered
to be tortured did not scream loudly
enough. And Benedict IX, who not only
committed rape, murder and bestiality but
who also, rather naughtily, sold the papacy.
And who could forget Innocent VIII, who,
despite that promising name, allegedly
The best games of 2024 drank the blood of young boys?
The trick of electing the universal shep-
In another world herd is, then, to select the cardinal with the
least sin. This can take time, as Cardinal
Lawrence—in charge of the gathering to
choose a new pope, called a conclave—dis-
covers. The election in the film lasts for
days. Still, it could be worse: in the 13th
Retro formats and characters provided hours of entertainment this year century it took two years and nine months.
The cardinals were eventually both shut in
“Animal Well” is a tale of conspiracy; a good memory and and starved out: locked in their palazzo,
This game has the look and feel of a title note-taking help you succeed. they were rationed to two meals a day if
from the 1990s, but its simple appearance they did not decide by the third day, just
belies a world of exploration. Players are “Manor Lords” bread, water and wine after the seventh.
drawn into an underground labyrinth full Players are in charge of a medieval The starvation rations have gone. The
of secrets waiting to be unlocked. settlement and must stave off invaders locking-in cum clave (with a key) remains.
and starvation. A taste of wielding power Each papal conclave becomes a locked-
“Astro Bot” in Europe’s Middle Ages. room mystery of biblical proportions; less
Released to coincide with the 30th a whodunnit than a whodunwhat? The
anniversary of the original PlayStation “One Btn Bosses” magnificent new film from Edward Berger,
console, this is a nostalgic tribute and Like a classic arcade game of the early a German director, makes the most of this.
joyful caper in which players travel 1980s, this is a tricksy tale of cat and Like an ecclesiastical Agatha Christie, Car-
through imaginatively conceived levels. mouse. Gamers must use a single button dinal Lawrence—a papal Miss Marple—
to shoot enemies while avoiding a storm investigates each cardinal’s sin over the
“Dragon’s Dogma II” of projectiles. course of this two-hour film. Naturally, this
The year’s best dark-fantasy role-playing mystery begins with a corpse (the previous
game is set in a complex world of “Princess Peach: Showtime!” pope), and it offers a line-up of pleasingly
dangerous monsters, helpful allies and Formerly a damsel in distress, Peach stars sinister suspects (the cardinals who jostle
warring empires. as a multitalented heroine. Aimed at to replace him).
youngsters, but it will charm all ages. These include the smooth Canadian
“F1 Manager 2024” Cardinal Tremblay (John Lithgow); Cardi-
In this iteration of the sports-management “Senua’s Saga: Hellblade II” nal Adeyemi (Lucian Msamati), angling to
simulation, players take complete control The sequel to the acclaimed game of 2017 be first African pope, and the liberal Cardi-
of Red Bull, Ferrari or Mercedes and build begins with Senua, the heroine, escaping nal Bellini (Stanley Tucci). The holiest of
a racing organisation from top to bottom. from a Norse slave ship. On her quest to holy men would look like a villain in a scar-
free her kin, she experiences let cardinal’s skullcap and cassock; Mr
“Like a Dragon: Infinite Wealth” hallucinations and physical danger. Tucci (better known for having served the
A combat game featuring a likeable cast of other side in “The Devil Wears Prada”)
rogues. It follows a retired Japanese “Thank Goodness You’re Here!” looks even worse than that. The fun comes
mobster who, seeking his best friend’s Set in the north of England, this game has from watching as each is undone by his
mother, is drawn into the underworld. the feel of an interactive sitcom. The sins, which are—as you might expect—the
player walks the streets, encountering cardinal ones: pride, wrath, envy and lust.
“Lorelei and the Laser Eyes” weird locals. It is crammed with jokes and And, as always with whodunnits, the
Set in a vast hotel, this game presents pokes gentle fun at the absurdities of setting is glorious. Tradition usually de-
players with a tangled series of puzzles. It modern life. ■ mands a country house; “Conclave” must ⏩

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 The Economist December 7th 2024 Culture 79

▸ instead make do with God’s. This is a de- Word of the year democracy, aristocracy, gerontocracy,
parture, but it works, since God has good theocracy and plutocracy, as well as
decorators: conclaves were first held in the The word to sum meritocracy (a modern coinage for which
Sistine Chapel in 1492. It is beneath Mi- Alan Fox, a British sociologist, married a
chelangelo’s “Last Judgment” that Cardi- up a “-cracy” year Latin root with a Greek one in 1956). The
nal Lawrence passes his. Oxford English Dictionary is also full of
This is a visually sumptuous film—at rarer species such as ochlocracy (rule by
times, like the chapel itself, almost too the mob), gynaecocracy (rule by women)
sumptuous. Minimalism was never Michel- “Kakistocracy” has a pretty good ring and thalassocracy (mastery of the seas).
angelo’s strong suit: in the 16th century Two other “-cracy” words seem appro-
one priest sniffed that the sinewy naked OME YEARS it is hard to identify the priate in this election year. One is theatro-
bodies of the artist’s frescoes were better
suited to “a tavern”. This film, too, verges
S main event, much less sum it up in a
word. This is not the problem in 2024; the
cracy, or rule by theatre-goers. This sounds
as if it might refer to dominance by the me-
on the over-luscious: a scene in which return of Donald Trump to the White dia elites writing for the culture sections of
flames curl around a papal ballot paper is House after a four-year absence is conse- newspapers. But the word has its origins in
almost perfume-ad pretty. quential not only for the world’s most po- Plato, who described people skilled in fan-
Silence saves it. “Conclave” is based on werful country but also for its neighbours ning the emotions of the crowd at a theatre
the book of the same name by Robert Har- and everywhere else. Which word can cap- into a powerful political force. This might,
ris, a British writer. Mr Harris’s books are ture the mix of surprise, excitement and in hindsight, have been a good word of the
commonly called “thrillers”, but they tend trepidation people feel as the MAGA move- year for 2016, when a former reality-TV star
to eschew the commoner traits of that ment returns to power? with a talent for working the crowd was
genre: most notably, thrills. This one is no First, a counterfactual. Had Kamala first elected president.
different. Almost nothing happens here— Harris won, The Economist would have had After Mr Trump was re-elected on No-
but it happens beautifully. And under- a different shortlist for its annual “word of vember 5th, the world watched anxiously
statedly. This film is swathed in silence. the year”. Her campaign was described as as he began filling top jobs. Some picks,
The Catholic church has—for good and one of “vibes”, rather than policy. Her ap- such as the sensible Susie Wiles for chief
ill—always understood the power of si- peal to the young was captured in “brat” of staff and Marco Rubio, a long-serving
lence, and so does “Conclave”. Like the lit- (youth slang for “a little messy and likes to senator, for secretary of state, were quali-
urgy, it wields it to build drama: when party”); it was Charli XCX, a British pop fied and competent. But a flurry of nomi-
someone drops a tray, you jump. star, who offered Ms Harris that compli- nations in the week ending November 15th
Mr Fiennes is perfect for the role: his is ment. But Ms Harris did not win, and so led to a spike in people looking up another
a career that has also been steeped in quiet. “brat” is unlikely to go down in history ex- “-cracy” word on Google.
In “The English Patient” he smouldered si- cept as the answer to a trivia question. Matt Gaetz, accused of sex and drug
lently; in “The Dig” he dug silently; here For the year’s defining word, it helps to crimes and the subject of a congressional
he doubts silently. Mr Harris’s book de- look back—a long way. English has a host ethics investigation, was nominated to be
mands this taciturnity. Its epigraph comes of political terms derived from Greek, the country’s highest law-enforcement of-
from the writings of Paul VI, who became because it got a lot of its political thinking ficer. Robert F. Kennedy junior, a man with
pope in 1963. “I was solitary before,” he from the likes of Plato and Aristotle. So if crackpot views on vaccines, was to be sec-
wrote, but now his solitude was “complete you go through the lexicon (itself Greek), retary of health. Tulsi Gabbard, a conspir-
and awesome”. Like “a statue on a plinth— a few roots abound. Arche (ruler), for ex- acy theorist with nice things to say about
that is how I live now”. ample, is found in monarchy, oligarchy the despots of Syria and Russia, was to run
This, then, is a film about the papacy— and anarchy (the rule of one, the few and America’s intelligence services. And Pete
but it is also about humanity. Popes and none, respectively). Hegseth, a Fox News host sporting tattoos
cardinals are God’s servants on Earth. Greek has another root for “rule”, kratia, associated with the far right (and who had
They are also, as Mr Berger observed, “just which is even more common. It features in been accused of sexual assault) was ⏩
blokes going to work”. When Cardinal
Lawrence peers into the dead pope’s ward-
robe, he finds papal robes in plastic
suit covers.
It is about being separated from hu-
manity, too. These are men who officiate
and pontificate over the lives of 1.4bn peo-
ple, but they lead lives that are utterly
alien: in their cardinals’ uniforms they look
like superannuated schoolboys. They are
buttressed by the Vatican’s women: here
you see the nuns toiling: cooking, serving,
tidying up the messes—physical and meta-
phorical—left by their brethren. One of the
best scenes comes when Sister Agnes (Isa-
bella Rossellini) squares up to Cardinal
Lawrence. She loses—just. Even Ms Ros-
sellini’s mother-superior stare cannot over-
come 2,000 years of ecclesiastical power.
Nonetheless, this film about the world’s
most powerful patriarchy is a quietly femi-
nist one. What are the sins of “our fathers”?
Ask the mothers. They probably know. ■

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 80 Culture The Economist December 7th 2024

▸ tapped as defence secretary. time on November 21st, when Mr Gaetz This time, though, he has chosen his peo-
So the word everyone was Googling announced that he would withdraw from ple for their loyalty above all. And many of
was kakistocracy: the rule of the worst. consideration for attorney-general, sug- his supporters are delighted, seeing in his
The first root, kakos, is found in few others gesting that he was seen as the worst of the appointments a wrecking crew to pull
in English. “Kakistocracy” is not found in worst. The term was particularly popular in down a deep state they loathe.
ancient sources; it seems to have been Democratic strongholds such as Oregon, Kakistocracy has the crisp, hard sounds
coined in English as an intentional ant- Massachusetts and Minnesota. of glass breaking. Whether that is a good
onym to aristocracy, originally “rule by the Much remains to be seen about Mr or bad thing depends on whether you think
best”. Having spiked on Google Trends the Trump’s new kratia. Last time round he the glass had it coming. But kakistocracy’s
day after Mr Trump’s election, kakisto- seemed to fire more officials than most snappy encapsulation of the fears of half
cracy jumped a second time in the wake of presidents have trips on Air Force One. of America and much of the world makes it
these nominations. Searches surged a third (Many then became outspoken critics.) our word of the year. ■

BACK STORY
Buyer beware
A guide to festive gift-giving from stage, page and screen

HE MAN who has everything is only low-key name-day celebration for Irina, dertone. He makes a boorish pass at her
T the start of your worries. What about
the uncle with obnoxious views and the
one of Chekhov’s “Three Sisters”. In some
productions the over-the-top gift is a hint
and winds up “stranded at the drive-in”.
Thoughtlessness is as much a no-no
teenage niece you scarcely know? Sug- that Chebutykin, who was in love with the as disproportionality. At Kendall Roy’s
gestions for what to get people for sisters’ dead mother, is secretly Irina’s 40th-birthday party in “Succession”, his
Christmas abound, but, collectively, father. In “Emma”, the pianoforte that girlfriend Naomi, herself an heiress,
classic stories provide one of the best Frank Churchill anonymously gives Jane gives him a flashy watch. The moment is
guides to gifts. An overarching lesson is Fairfax sets off cruel rumours about her even more awkward than when Kendall’s
that a present is not just an object but a love life. In Jane Austen’s world, the piano brother Roman accidentally buys the
statement—about you, the recipient and is as much a mark of Churchill’s vulgarity wrong Scottish football team for their
your feelings towards them. Another is as the time he spends on his haircuts. plutocrat father. Naomi’s offering isn’t
that gifts are a chance to express hostil- Before splashing the cash, remember even engraved; Kendall is appalled. “I
ity as well as affection. that every gift comes with an obligation. don’t want to be a dick,” he sneers, being
Presents are often the continuation of That may simply be to say “thank you” for a dick, “but I have a watch.”
warfare by other means, used to placate the bath salts and pretend you like them. The scene is a concise parable of
foes and rivals as much as to hearten But often it is more than that. If the recipi- gift-giving. Surrounded by snazzily
friends, especially in ancient literature ent is unable to reciprocate, a present may wrapped boxes, this man who has every-
and myth. In the “Iliad”, Agamemnon be an unpayable debt. thing is interested only in a home-made
mollifies the wrathful Achilles with Or it can be an unwelcome claim to tribute from his children. He is not
treasure, horses and slave girls. Gifts can intimacy. This is particularly true when alone: many of the most cherished gifts
even be exchanged during combat itself: the gift is from a sleazy man to a woman in fiction are modest. Winnie-the-Pooh
Ajax and Hector maul each other “like he is pursuing. “Take back your mink,” and Piglet bestow on Eeyore an empty
hungry lions”, writes Homer, then break sings Miss Adelaide in “Guys & Dolls”, honey jar and a burst balloon. Eeyore is
off to swap keepsakes instead of blows. “Take back your pearls/What made you delighted. Before he penetrates Willy
A gift to your estranged relative could think/That I was one of those girls?” In Wonka’s factory, Charlie Bucket is given
offer them a festive truce. Alternatively, “Grease”, too, Danny’s gift of his high- a single chocolate bar which he ekes out
it could be a way to show them how little school ring to Sandy has an erotic un- deliriously for a month.
you think of them. In stories, as in life, buying gifts can
That is the message of the tennis be a joy or a minefield, receiving them a
balls sent by the French dauphin to the blessing or a burden. They can convey a
hero of Shakespeare’s “Henry V”, one of surrender or assert supremacy. They
the worst-judged gifts in literature. Irked could sweeten your family Christmas or
by this mocking allusion to the revels of embitter it. To judge by books and films,
his youth, the English king promptly if you aim to spread good cheer, personal
invades France. Or recall the toothpick tends to trump pricey.
and single tissue that the dismal Durs- Don’t get too personal, though. Im-
leys give their put-upon lodger Harry buing a trinket with weighty meaning
Potter in J.K. Rowling’s books. If in- makes it and you hostages to fortune—or
sulting an in-law is your aim, and they to the machinations of your enemies. For
have young children, try inflicting a Othello, the strawberry-spotted hand-
remote-control car, with which their kerchief that he gives Desdemona is a
offspring will smash up the furniture. symbol of devotion. Misplaced, it is
Lavish gifts can cause trouble as turned by Iago into proof of her imagin-
much as stingy ones. Chebutykin, a ary infidelity. Perhaps Othello should
boozy doctor, brings a silver samovar to a have got her an Amazon voucher instead.

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 The Economist December 7th 2024 81

Economic & financial indicators

Gross domestic product Consumer prices Unemployment Current-account Budget Interest rates Currency units
% change on year ago % change on year ago rate balance balance 10-yr gov't bonds change on per $ % change
latest quarter* 2024† latest 2024† % % of GDP, 2024† % of GDP, 2024† latest, % year ago, bp Dec 4th on year ago
United States 2.7 Q3 2.8 2.7 2.6 Oct 2.8 4.1 Oct -3.4 -6.6 4.2 1.0 -
China 4.6 Q3 3.6 4.9 0.3 Oct 0.5 5.0 Oct‡§ 0.7 -4.4 1.6 §§ -98.0 7.27 -1.8
Japan 0.3 Q3 0.9 -0.3 2.2 Oct 2.6 2.5 Oct 3.7 -4.7 1.1 37.0 150 -2.2
Britain 1.0 Q3 0.6 1.1 2.3 Oct 2.9 4.3 Aug†† -2.9 -4.0 4.2 10.0 0.79 1.3
Canada 1.5 Q3 1.0 1.2 2.0 Oct 2.3 6.5 Oct -1.2 -1.2 3.1 -30.0 1.41 -3.5
Euro area 0.9 Q3 1.5 0.8 2.3 Nov 2.4 6.3 Oct 3.2 -3.1 2.0 -29.0 0.95 -3.2
Austria -0.6 Q3 -0.5‡ -0.5 1.9 Nov 2.9 5.6 Oct 2.3 -2.3 2.5 -44.0 0.95 -3.2
Belgium 1.2 Q3 1.3 1.1 4.9 Nov 4.0 5.8 Oct -0.9 -4.6 2.7 -31.0 0.95 -3.2
France 1.2 Q3 1.6 1.2 1.7 Nov 2.5 7.6 Oct -0.6 -6.1 3.3 44.0 0.95 -3.2
Germany -0.3 Q3 0.4 -0.1 2.4 Nov 2.4 3.4 Oct 6.3 -1.6 2.0 -29.0 0.95 -3.2
Greece 2.7 Q2 4.4 2.2 3.1 Oct 3.0 9.8 Oct -6.5 -0.7 2.9 -62.0 0.95 -3.2
Italy 0.4 Q3 nil 0.5 1.6 Nov 1.1 5.8 Oct 1.5 -4.3 3.2 -91.0 0.95 -3.2
Netherlands 1.7 Q3 3.3 0.6 3.8 Nov 3.4 3.7 Oct 9.6 -1.9 2.3 -40.0 0.95 -3.2
Spain 3.4 Q3 3.4 2.7 2.4 Nov 3.0 11.2 Oct 2.6 -3.2 2.8 -71.0 0.95 -3.2
Czech Republic 2.0 Q3 1.7 1.0 2.8 Oct 2.4 2.7 Oct‡ 0.7 -2.4 3.9 -29.0 23.9 -5.6
Denmark 3.6 Q3 5.1 1.8 1.6 Oct 1.3 2.9 Oct 10.8 2.1 1.8 -80.0 7.08 -2.7
Norway 3.5 Q3 -7.1 1.7 2.6 Oct 2.2 4.1 Sep‡‡ 17.3 12.5 3.5 -2.0 11.0 -1.6
Poland 2.7 Q3 -0.4 2.3 4.6 Nov 3.8 4.9 Oct§ 0.4 -5.7 5.6 13.0 4.07 -1.5
Russia 3.1 Q3 na 3.5 8.5 Oct 8.5 2.3 Oct§ 3.3 -1.7 16.1 416 105 -13.0
Sweden 0.6 Q3 1.1 0.7 1.6 Oct 1.8 7.8 Oct§ 6.5 -0.9 1.9 -65.0 10.9 -4.4
Switzerland 2.0 Q3 1.7 1.2 0.7 Nov 1.2 2.6 Oct 7.4 -0.9 0.2 -52.0 0.88 -1.1
Turkey 2.1 Q3 -0.8 2.9 47.1 Nov 57.7 8.6 Sep§ -1.7 -4.1 27.7 450 34.8 -16.8
Australia 0.8 Q3 1.3 1.1 2.8 Q3 3.1 4.1 Oct -0.6 -1.0 4.4 -15.0 1.55 -2.6
Hong Kong 1.8 Q3 -4.2 2.5 1.3 Oct 2.0 3.1 Oct‡‡ 11.9 -3.2 3.3 -40.0 7.78 0.4
India 5.4 Q3 3.0 7.0 6.2 Oct 4.7 8.0 Nov -0.5 -4.9 6.7 -59.0 84.7 -1.6
Indonesia 4.9 Q3 3.8 5.0 1.5 Nov 2.3 4.9 Aug§ -0.2 -2.5 6.9 31.0 15,930 -3.0
Malaysia 5.3 Q3 6.3 5.1 1.9 Oct 1.9 3.2 Sep§ 1.4 -4.5 3.8 2.0 4.45 4.7
Pakistan 3.2 2024** na 2.8 4.9 Nov 13.6 6.3 2021 -1.2 -7.4 11.9 ††† -324 278 2.7
Philippines 5.2 Q3 7.0 5.5 2.3 Oct 3.2 4.7 Q3§ -2.9 -6.1 6.0 -24.0 58.2 -5.0
Singapore 5.4 Q3 13.6 3.5 1.4 Oct 2.4 1.8 Q3 19.3 0.2 2.7 -24.0 1.34 -0.7
South Korea 1.7 Q3 0.5 2.3 1.5 Nov 2.4 2.3 Oct§ 3.8 -1.8 2.8 -85.0 1,410 -7.5
Taiwan 4.2 Q3 0.9 5.0 1.7 Oct 2.1 3.4 Oct 13.5 0.5 1.5 27.0 32.4 -3.1
Thailand 3.0 Q3 4.9 2.6 0.9 Nov 0.4 1.0 Oct§ 2.1 -3.7 2.3 -67.0 34.3 1.8
Argentina -1.7 Q2 -6.8 -3.1 193 Oct 220.3 7.6 Q2§ 0.8 nil na na 1,012 -64.2
Brazil 4.0 Q3 3.7 3.0 4.8 Oct 4.3 6.2 Oct§‡‡ -1.6 -7.6 13.8 287 6.04 -18.4
Chile 2.3 Q3 2.7 2.2 4.7 Oct 4.0 8.6 Oct§‡‡ -2.4 -2.2 5.6 -6.0 975 -11.2
Colombia 2.0 Q3 0.8 1.6 5.4 Oct 6.7 9.1 Oct§ -2.7 -5.7 10.5 5.0 4,417 -9.2
Mexico 1.6 Q3 4.4 1.4 4.8 Oct 4.8 2.5 Oct 0.3 -5.2 10.0 56.0 20.3 -14.2
Peru 3.8 Q3 2.8 3.0 2.3 Nov 2.4 5.9 Oct§ 1.0 -4.0 6.6 -63.0 3.74 0.3
Egypt 2.4 Q2 12.6 2.4 26.5 Oct 28.5 6.7 Q3§ -5.2 -3.7 na na 49.8 -38.0
Israel -1.0 Q3 3.8 0.1 3.5 Oct 3.2 2.5 Oct 4.6 -7.2 4.6 45.0 3.62 3.0
Saudi Arabia -0.8 2023 na 1.3 1.9 Oct 1.7 3.3 Q2 0.4 -2.4 na na 3.76 -0.3
South Africa 0.3 Q3 -1.4 1.1 2.8 Oct 4.6 32.1 Q3§ -1.8 -5.2 8.9 -104 18.1 4.0
*% change on previous quarter, annual rate. †The Economist Intelligence Unit estimate/forecast. §Not seasonally adjusted. ‡New series. **Year ending June. ††Latest 3 months. ‡‡3-month moving average. §§5-year yield.
†††Dollar-denominated bonds. Source: Haver Analytics Note: Euro area consumer prices are harmonised.

Markets Commodities
% change on: % change on:
Index one Dec 29th Index one Dec 29th The Economist commodity-price index % change on
In local currency Dec 4th week 2023 Dec 4th week 2023 2020=100 Nov 26th Dec 3rd* month year
United States S&P 500 6,086.5 1.5 27.6 Pakistan KSE 105,104.3 5.9 68.3 Dollar Index
United States NAS Comp 19,735.1 3.5 31.5 Singapore STI 3,799.9 2.5 17.3 All items 133.5 133.1 1.7 4.4
China Shanghai Comp 3,364.7 1.7 13.1 South Korea KOSPI 2,464.0 -1.6 -7.2 Food 146.9 144.3 4.8 8.9
China Shenzhen Comp 2,024.4 1.4 10.2 Taiwan TWI 23,255.3 4.1 29.7 Industrials
Japan Nikkei 225 39,276.4 3.0 17.4 Thailand SET 1,450.8 1.4 2.5 All 122.4 123.7 -1.1 0.5
Japan Topix 2,740.6 2.8 15.8 Argentina MERV 2,216,277.0 0.5 138.4 Non-food agriculturals 134.6 135.2 1.5 9.2
Britain FTSE 100 8,335.8 0.7 7.8 Brazil BVSP* 126,087.0 -1.2 -6.0 Metals 119.3 120.8 -1.8 -1.8
Canada S&P TSX 25,641.2 0.6 22.3 Mexico IPC 51,328.6 3.1 -10.6 Sterling Index
Euro area EURO STOXX 50 4,919.0 3.9 8.8 Egypt EGX 30 30,832.6 3.3 23.9 All items 136.5 135.0 4.5 4.1
France CAC 40 7,303.3 2.2 -3.2 Israel TA-125 2,364.6 2.5 25.3
Germany DAX* 20,232.1 5.0 20.8 Saudi Arabia Tadawul 11,886.9 2.6 -0.7 Euro Index
Italy FTSE/MIB 34,083.9 3.0 12.3 South Africa JSE AS 86,314.5 1.4 12.3 All items 145.5 144.6 5.4 7.3
Netherlands AEX 891.6 2.0 13.3 World, dev'd MSCI 3,830.1 1.2 20.9 Gold
Spain IBEX 35 11,931.6 3.0 18.1 Emerging markets MSCI 1,097.5 0.9 7.2 $ per oz 2,629.1 2,641.0 -3.7 31.0
Poland WIG 81,643.0 3.2 4.1
Brent
Russia RTS, $ terms 751.2 3.4 -30.7 US corporate bonds, spread over Treasuries
$ per barrel 73.5 73.6 -3.3 -4.7
Switzerland SMI 11,783.6 1.2 5.8 Dec 29th
Turkey BIST 9,886.1 2.6 32.3 Basis points latest 2023 Sources: Bloomberg; CME Group; FT; LSEG Workspace; NZ Wool
Australia All Ord. 8,728.5 0.8 11.5 Investment grade 96 154 Services; S&P Global Commodity Insights; Thompson Lloyd & Ewart;
Hong Kong Hang Seng 19,742.5 0.7 15.8 High-yield 315 502 USDA; WSJ. *Provisional.
India BSE 80,956.3 0.9 12.1
Indonesia IDX 7,326.8 1.1 0.7 Sources: LSEG Workspace; Moscow Exchange; Standard & Poor's For historical indicators data, visit
Malaysia KLSE 1,614.1 0.6 11.0 Global Fixed Income Research. *Total return index. economist.com/economic-and-financial-indicators

C003
 82 The Economist December 7th 2024

OBITUARY
John Kinsel

One of the last Navajo code-talkers died on October 19th, aged 107

200 more. Not all used metaphor: some were happy chance, such
as “two star” for a major-general. Others, such as “train” and “unit”
were straight translations into Navajo. “Train” was coh-nai-ali-
bahn-si: no need to stretch that any further.
Learning the code-lists wasn’t difficult, he thought. If you got a
puppy dog you gave it a name, and each time you saw it, you re-
membered. His serial number, the same. For him, the English
words were much harder. His early childhood was spent herding
sheep and goats up in the canyons and red mesas, with only Nava-
jo in his world. School came late, and was tough and indifferent;
from government boarding school he remembered only cold, hun-
ger, the thin ration of oatmeal they got for breakfast and the mil-
itary outfits, with peaked caps, they had to wear on Sundays. At 12
he could still speak no more in English than one, two, three, four,
five, yes and no. At Catholic school later he picked up English
from hymns, but all his life he struggled in it. In Navajo, naturally,
he soared. His real, Navajo, name, as opposed to the English one
he was given at school, meant a leader who talked a lot. A great
name for a radio man.
He was especially proud of three code-words he had helped
with. One was “turtle”, for a tank, after their slow, tottering pace
and the armour on their backs. The second was “bird carriers” for
N THE DAY John Kinsel came back from the second world aircraft in general. The third, his own creation, was “rabbit trail”,
O war, his mother immediately called in the medicine man. It
was not to treat his leg, though it had been broken in Iwo Jima, and
for route. That metaphor came naturally after all his days in the
mountains, noting how after a snowfall or sandstorm the rabbits
on that leg he had walked the last seven miles over the Arizona hopped out and went this way, that way, leaving tracks. From his
mountains to Lukachukai and his family, lugging a suitcase so full home in Lukachukai he could see a far white path, a creature-trail,
of hard-to-get cigarettes that he had bound it up with rope. The threading through the rocks. So: rabbit trail. It was as vivid as the
medicine man was needed to re-initiate him into his community cipher for code itself, which was “peck”: the jerking jab of a hen on
and tribe. To make him a Navajo again. grains, or a human on a keyboard.
That night everyone gathered for the Enemy Way ceremony. In general, though, he did not talk about his own doings. There
The same ceremony had been performed when he left to join the was no “I” in his war, only “we”: the Navajo code-devisers and ra-
Marines, to make sure he returned in one piece. It had worked, so dio crews. That was the Navajo way: community, tribe, rather than
that when the rocks exploded in Iwo Jima they largely missed him, self, an ethic underscored by being in the Marines. They kept
and when malaria got him like a punch in the stomach on Guadal- close. Most of them had their eagle feathers for protection and
canal, he didn’t die. This time the prayers and dances, and the kill- their pipes for tobacco, or stronger stuff. They wished aloud for
ing of the Monster by the Warrior, were a powerful disinfecting. sweat lodges, and he was once part of a group that scrounged
They would drive out the memory of being under mortar fire in flour, lard, salt and a pan to make frybread. But, most important at
open rice paddies, and of all the shattered corpses he had seen this point, they were all doing the same job, taking messages from
and, worse, smelled. The ghosts would be laid, and he would walk commanding officers, translating into cipher, and broadcasting to
the Pollen Path of purity once more. the battalions—or the reverse. Most days they did “jump-offs”, giv-
Yet compared to most of the others who fought in the Pacific, ing the time when the front lines would move. Each message
he felt he had an easy war. While they faced death on the front line could usually be turned to code and sent within 30 seconds.
he was in the rear, sending coded messages by radio. Though he Code-talkers therefore did much to win the war, though he did
went through basic training with the other boots at Camp Elliott, not vaunt himself. When he got home he built a log cabin near the
for much of the time after it he and his colleagues were sitting place where he was born, using logs gathered in the forest. It had
comfortably, memorising words and tossing metaphors to each no electricity or running water, but looked out on the red mesas
other. What did a grenade remind them of? Potatoes. An amphibi- and a good shade tree. His work for the Bureau of Indian Affairs
ous vehicle? Perhaps a frog. A dive bomber? Obviously a chicken rewarded him well enough, though his Purple Heart for Iwo Jima
hawk. How would they think of December? Crusted snow. took more than four decades to arrive. His one concession to pride
The trick, which outfoxed the enemy completely, was then to was his official Navajo Code-Talkers uniform, which he wore as
turn those metaphors into Navajo. The Japanese were good code- often as he could and explained in careful detail. Red cap, the Ma-
breakers, but not this time. The Navajo language was unwritten, rine Corps. Gold shirt, the sacred corn pollen, or life. Turquoise
tonal and fiendishly complicated. And that was precisely why the necklace, his own warrior identity. Right-arm patch, an eagle
Marines were so glad to have him, when he spontaneously volun- feather and the special Navajo colours, white, black, blue and yel-
teered after meeting two Marines on the road. A first cohort of 29 low, to protect him. Light brown pants, the spirit of Mother Earth.
code-talkers (or windtalkers, as they called themselves) had ar- And dark socks, representing Night.
rived at Camp Elliott in May 1942 and drawn up a list of 211 words. He had left his people, but returned as their hero. As the Ene-
Mr Kinsel and 25 comrades, who came a few months later, added my Way prayer ended, Bik’eh hózhó: “It is finished in beauty.” ■

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 Subscriber-only live event

The year in
review 2024

Thursday December 12th

4pm gmt / 11am est / 8am pst

Join our editor-in-chief and senior editors for a look Zanny Minton Beddoes
back at the biggest stories this year. The world in Editor-in-chief
2024 experienced major shifts, from the conflicts
in the Middle East and Ukraine, advances in
artificial intelligence and elections reshaping Edward Carr
politics. Our obituaries editor, Ann Wroe, will also Deputy editor
participate, with a tribute to lives well lived.

There will be the opportunity to ask questions Rachana Shanbhogue

and engage with our editors. Business affairs editor

Reserve your place:

economist.com/registernow

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