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Leaders | OK Zoomer
Reasons to be cheerful about Generation Z
They are not doomed to be poor and anxious
A vast cohort is coming of age. Globally, some 2bn people were born between 1997 and 2012, and so are part of “Generation Z”. In America and Britain this group makes up a fifth of the population, rivalling the share of baby-boomers; in India and Nigeria the young far outnumber the old. For each generation there is a simple narrative: that boomers were shaped by post-war plenty, for example, or millennials by the financial crisis of 2007-09. For Gen Z the popular view is that smartphones have made them miserable and they will live grimmer lives than their elders.
More and more people in the West tell pollsters that today’s children will be worse off than their parents. Youngsters themselves worry about everything from the difficulty of buying a home to the looming dangers from climate change. Social scientists fret that Gen Z-ers, having spent their formative years doomscrolling and suffering from fomo, are now gripped by an epidemic of anxiety and depression. Politicians in America and Britain are mulling banning smartphones and restricting social media for the under-16s; parents and schoolteachers everywhere are trying to police screen time.
All this can make it hard to feel optimistic about Gen Z. But when you look around the world, and at a wider set of measures, the Zoomers are far from doomed. In many respects, they are doing rather well.
For a start, the popular narrative makes an important omission: the roughly four-fifths of the world’s 12- to 27-year-olds who live in emerging economies. Thanks to growth and the spread of technology, youngsters in places like Jakarta, Mumbai or Nairobi are far better off than their parents were. They are richer, healthier and more educated; those who have smartphones are better informed and connected. Small wonder that, in a survey by the un in 2021, the young in emerging economies were more optimistic than those in the rich world.
Yet in some places there is a fear that the rapid progress of recent decades might fail to repeat itself. That anxiety is evident in China. Thanks to economic uncertainty and an emphasis on quantity over quality in higher education, over a third of degree-holders there may be unemployed.
In the rich world the picture is rosier than people think. Those of Gen Z who are in work—and in America there are nearly as many of them in workplaces now as there are boomers—are doing nicely. Red-hot demand for workers helps, as does the fact that Gen Z-ers are wisely acquiring marketable skills. More of them are pursuing science, engineering and medical degrees; the humanities have fallen out of favour.
Wages for Gen Z are rising at a much faster pace than they are for older workers, and the youth-unemployment rate across the rich world is at its lowest in decades. In America the income of the average Zoomer, after adjusting for taxes and transfers, comfortably exceeds that of a millennial or a Gen X-er at the same age, in real terms. True, housing affordability has worsened since the 1980s. But, thanks to Gen Z-ers’ stronger wage growth, house prices as a multiple of earnings are roughly where they were for millennials a decade ago. And young people today are at least able to put more of their salaries into savings.
Already Gen Z-ers are transforming the world of work. They have bargaining power—and they know it. Many millennials came of age in the shadow of the global financial crisis; they felt so precarious that they were afraid to ask for pay rises. Gen Z seems to have fewer qualms about quitting for a better opportunity, or taking things slowly and enjoying life. Bosses, unused to being on the back foot, complain. But older workers will be quietly thankful if overall pay and perks go up.
Gen Z will shape society in other ways, too. Young people’s concern about climate change will, as they reach voting age, make states more likely to act. More broadly, Zoomers tell pollsters they want bigger government. They may change their minds when they have to pay more taxes—or they may not.
They are a serious bunch, less given to late nights, binge drinking and promiscuity than their elders were. There is a dark side to this. They socialise in person less, have less sex, and are more likely to say they are lonely. Reported rates of anxiety and depression are rising in much of the West. Some of this probably reflects a greater willingness to open up about mental health. But other factors play a role.
The extent to which social media fuel mental distress among the young is furiously debated. In the West the rise in anxiety coincides with the adoption of social media. However, hard evidence of causation is limited, and most of it comes from studies of adults in the rich world.
What is clear is that Generation Z has been at the sharp end of a technological revolution. The speed with which smartphones and then social-media apps were adopted around the world left users, and young people in particular, scrambling to figure out how best to navigate them. Social media have brought benefits, such as entertainment and connectivity, but also costs. Some content may be harmful, and time spent scrolling could have been devoted to study or sleep.
OK Zoomer
Transformative technologies often have downsides. In the past, people have adapted: think of the seat belts and regulations that made cars less deadly. Encouragingly, there are signs that social-media habits are already shifting as users weigh the costs and the benefits. Instead of posting about themselves publicly, for example, many are retreating to private groups on messaging apps. So far, the evidence that would justify a blanket ban on smartphones for the young does not exist, though schools should be free to bar them from classrooms, and parents are right to restrict screen time.
It is only natural for the old to worry about the young. If that leads to better mental-health treatment, or fewer restrictions on building more homes, well and good. But celebrate Gen Z’s resourcefulness, and its successes, too.
Leaders | The Middle East on fire
Israel should not rush to strike back at Iran
Instead it should try a novel response to Iran’s missile attack: restraint
illustration: the economist/getty images
Apr 18th 2024
The war cabinet in Israel is grappling with a perilous decision: how to respond to Iran’s unprecedented drone and missile attack on April 13th. The barrage was, fortunately, blocked with help from friends and neighbours. Should Israel “take the win”, as President Joe Biden is urging, letting a blatant act of war go unanswered? Or should it retaliate and risk sparking a regional conflagration?
A small country with many enemies, Israel has long prized massive—some would say disproportionate—deterrence. It has wrecked Gaza in the attempt to crush Hamas, which massacred Israeli civilians on October 7th. Israeli retribution against Iran now seems inevitable. But Israel’s government should stay its hand.
There is a precedent. In 1991 Saddam Hussein, Iraq’s despot, hit Israel with dozens of Scud missiles. His aim was to provoke Israeli retaliation, and thus divide an Arab coalition poised to help America evict his forces from Kuwait. At America’s urging, Israel did not retaliate. Today, too, Israeli restraint could make it easier to build a coalition against a regional threat: Iran. But only America can muster such a coalition.
Iran claims Israel invited the attack by killing seven members of its Islamic Revolutionary Guard Corps (irgc), including two generals, with an air strike on its diplomatic compound in Damascus. This is cant. Iran cared little for diplomatic premises when it took American diplomats hostage in 1979, and when its agents or allies blew up the American embassy in Beirut in 1983 and the Israeli one in Buenos Aires in 1992. Regardless, Iran’s recent strike is disproportionate.
It fired 170 drones, and about 120 ballistic and 30 cruise missiles. It made overt the long covert war with Israel, breaking the taboo against openly attacking each other’s territory. The strike is a challenge to America, too. Mr Biden has repeatedly warned Iran and its allies “Don’t”. They ignored him. First proxies started shooting at Israel; now Iran has joined in.
As the war in Ukraine shows, drones and missiles favour the attacker because they are hard and costly to shoot down. But they can be thwarted by technology and co-ordination. American, British and French forces—and more quietly Jordanian and perhaps Saudi ones—took out many of the Iranian warheads. The rest were almost all destroyed by Israel. The few that got through did little damage.
The attack proves the menace of Iran’s ever more zealous rulers. Its proxies in Lebanon, Yemen, Iraq and Syria hollow out states and destabilise the region. This “axis of resistance” has fired drones and missiles not only at Israel but at Saudi Arabia, the United Arab Emirates and Pakistan. Iran’s weapons are being used against Ukraine, too, as it aligns itself with Russia, China and North Korea. The danger is all the greater because Iran is alarmingly close to having nuclear arms.
Even so, Israel should bide its time. Restraint would help to heal the rift with America over the conduct of the war in Gaza. It would allow the budding air-defence partnership to grow into a bigger and more lasting coalition. The more Israel can create a common front with like-minded countries, the better. Co-ordinated sanctions, diplomatic isolation, cyber-attacks and support for Iranian dissidents—and rapprochement between Israel and Arab states—may prove better at containing Iran than strikes. If Israel acts rashly, its neighbours will bear a heavy cost in a wider regional war; America and Europe will be sucked into hostilities; oil prices will soar; and global trade will be disrupted. Only Iran’s “axis of resistance” would welcome chaos. Iran itself could cross the nuclear threshold.
America would be vital to creating a coalition to contain Iran. America and European powers can start by co-ordinating sanctions on the irgc and allowing the “snapback” of un penalties suspended under a now-defunct nuclear deal from 2015. Diplomacy with Iran, direct or indirect, should continue but with no illusions. America and Israel—and ideally others—need to make a calibrated but credible threat of military action if Iran makes a dash to acquire nukes.
To make all this possible, however, Israel needs to end the war in Gaza, starting with a temporary ceasefire and the exchange of prisoners and hostages. The more Hamas loses hope of fomenting a regional war, the likelier it is to agree to such a deal. Progress towards Palestinian statehood, under a reformed Palestinian Authority, would unlock the big prize—normalisation with Saudi Arabia.
None of this will be easy or without risks. But Iran’s attack highlights the dangers of escalation in a never-ending war. It also shows that Israel alone cannot defeat Iran and its network. To counter it, Israel needs its own network—with America, Europe and emerging Arab friends. A moderate coalition is the surest way to end the perpetual conflict with the Palestinians, which feeds Islamic radicalism, and to contain Iran.
Asia | Waving the red flag
An obscure communist newspaper is shaping Japan’s politics
Stories by Shimbun Akahata consistently pack a punch
Tomorrow’s news, todayphotograph: alamy
Apr 18th 2024|tokyo
Since japan’s parliamentary session began three months ago, one issue has dominated the agenda: a financial scandal within the ruling Liberal Democratic Party (ldp). At the end of last year, prosecutors launched an investigation into factions of the ldp which had failed to report revenue from fundraising events, thereby evading taxes. Several people linked to the ldp, including accountants and parliamentarians, have been indicted. In December four cabinet ministers and five vice-ministers were sacked. On April 4th Kishida Fumio, the prime minister, asked two of his party’s heavyweights to quit and punished 37 other ldp members.
What is perhaps surprising is that this political turmoil can be traced back to Shimbun Akahata (“Red Flag Newspaper”), a relatively niche newspaper run by the Japan Communist Party (jcp). It is read by 850,000 subscribers, down from a peak of around 3.5m in 1980. It first reported on the funding discrepancies in 2022. “I didn’t expect things would blow up,” says Sasagawa Kamiyu, the 33-year-old journalist who first reported on the scoop after scrutinising government documents. He worked with Kamiwaki Hiroshi, a law professor at Kobe Gakuin University, who filed a criminal complaint with prosecutors.
This is not the first time that Akahata has punched above its weight. In 2013 it led investigations on black kigyo (“black companies”), which shed light on the prevalence of abusive workplaces and pushed the government to introduce tighter regulation. In 2019 it reported on politicians subsidising dinners for supporters during an annual cherry-blossom-viewing party. Abe Shinzo, then prime minister, was questioned by prosecutors; though he was never charged, the scandal hounded Abe until his resignation in August 2020. The paper reports on issues “that everyone else is too afraid to touch”, says Nick Kapur at Rutgers University in America.
The paper’s tumultuous history contributes to its “strong will to stand up against power”, says Kogiso Yoji, its chief editor. Akahata was founded in 1928, six years after the jcp was established. Japan’s militarist regime banned the communist party because it was viewed as subversive. Akahata was produced and circulated underground; police arrested and tortured those reading it. After the second world war, American occupying forces made the jcp a legal party, as it claimed to promote democracy and free speech.
But Akahata’s accomplishments point to an awkward truth. Traditional media remain powerful in Japan. Yomiuri and Asahi, two of Japan’s national newspapers, have some of the largest circulations in the world, printing 6.8m and 4m copies a day respectively. Yet such mainstream outlets often fail to hold politicians to account. Self-censorship is widespread as journalists develop close-knit ties with authorities and try to avoid upsetting ultra-nationalist groups, which the police estimate have tens of thousands of members. These can be an intimidating force in public life.
According to Reporters Without Borders, an ngo based in Paris, Japan’s freedom-of-press ranking slipped from 11th in 2010 to 68th in 2023. Akahata’s scoops usually derive from information available to the public, including government reports and social media posts. Regarding the cherry-blossom scandal, journalists were invited to and attended Abe’s banquet every year. Yet they failed to realise that he might be violating political-funding rules. “Usually, the big media outlets already know what we know,” says Mr Kogiso. “We just have a different perspective.”
China | Degrees and difficulty
Why so many Chinese graduates cannot find work
Our number-crunching suggests that their plight could be much worse than previously thought
photograph: ren yong/sopa images/ zuma/eyevine
Apr 18th 2024
Around this time each year companies visit university campuses in China looking for potential employees. This year the mood is grim. At a job fair in Wuhan a firm was looking to hire management trainees—but it wanted only elite graduates and offered just 1,000 yuan ($140) per month, claimed a post that went viral on social media. At a fair in Jilin most of the advertised positions required advanced degrees, said a soon-to-be graduate online. “Next time don’t bother inviting us.” Another griped that firms are not hiring. The recruitment process is “a lie”, she wrote.
The data paint a similarly bleak picture. The unemployment rate for people aged 16 to 24 in cities reached a record high of 21.3% last June. That was perhaps too embarrassing for the government, so it stopped publishing the data series while it rejigged its calculation to exclude young people seeking jobs while studying. (America, Britain and many other countries include such students when calculating their rates.) The new numbers are lower, but still depressing: in March 15.3% of young people in cities were unemployed. That’s nearly three times the overall jobless rate.
For young graduates the situation is probably even more dire. China does not release an unemployment rate for this cohort. But we combed through data from the country’s decennial census and its statistical yearbooks in order to produce an estimate. By our calculations (including students who are seeking jobs), the unemployment rate for 16- to 24-year-olds with a university education was 25.2% in 2020, the last year for which census data are available. That was 1.8 times the unemployment rate for all young people at the time.
It could be that things have got better since 2020 or that the variables affecting our calculations have changed in unpredictable ways. But it is also possible that things have got worse. To simplify, if we assume that the proportional relationship from 2020 still holds, over a third of young graduates might be unemployed today.
chart: the economist
One reason to believe that things are not improving is that graduates as a share of unemployed youth are increasing faster than might be explained by broader demographic trends (see chart 1). Graduates of universities and vocational and technical colleges accounted for 70% of the unemployed young in 2022, up from 9% two decades ago. As a percentage of the youth population, those graduates amounted to 47% in 2020.
China’s sluggish economy is at least partly to blame. Demand for graduates has stagnated. Meanwhile, the supply of them is growing. This year nearly 12m students are expected to graduate from higher-education institutions, an increase of 2% compared with last year. Between 2000 and 2024 the number of Chinese graduates per year grew more than tenfold (see chart 2).
chart: the economist
The trend can be traced back to Min Tang, a Chinese economist who proposed expanding enrolment in higher education as a way of dealing with the Asian financial crisis of the late 1990s. Such a policy would postpone young people’s entry into the job market and stimulate the economy by way of education spending, he said. The government adopted his plan, which coincided with societal changes that pushed in the same direction. Children born under China’s one-child policy began to come of age in 1999. With family size limited, parents had more to invest in each child—and more of an incentive to encourage their studies, since these children were expected to provide for their parents in old age.
chart: the economist
As demand for slots increased, universities grew in size and number. Laws passed in the early 2000s allowed companies to get in on the action. Privately run institutions, called minban daxue, charge substantially higher fees than public universities and have an incentive to admit ever more students. Enrolment at these schools has ballooned, increasing by 560% since 2004. Back then one in ten students in college or university studied at a minban daxue. Now one in four does (see chart 3).
Minban daxue tend to require lower scores on China’s university-entrance exam, the gaokao, than public institutions. But the acceptance rate at all colleges and universities has been rising. Before 1999 less than a quarter of gaokao-takers were accepted by these institutions. Today most make it in (see chart 4).
The rising number of graduates might not be such a problem if they were learning skills desired by employers. But Chinese companies complain that they cannot find qualified candidates for their open positions. Part of the problem are low-quality minban daxue. Yet the skills mismatch extends across higher education. For example, the number of students studying the humanities is growing even though demand for such graduates is much lower than that for specialists in other fields.
chart: the economist
Some students are trying to dodge the tough private-sector job market. The number of people sitting for China’s civil-service exam hit a record high of 2.3m in 2024, a 48% increase year on year. Others are pursuing postgraduate studies. The number of master’s and doctoral students has increased by so much that some campuses have run out of housing.
Unable to find work befitting their degrees, a number of graduates are settling for low-skilled jobs, such as delivering food. Last year a memo from an airport in Wenzhou noted that it had hired architects and engineers to be its groundskeepers and bird-control personnel.
Xiaoguang Li of Xi’an Jiaotong University and Yao Lu of Columbia University have studied underemployment in China. Using national survey data, they found that 25% of workers between the ages of 23 and 35 were overqualified for their job in 2021, up from 21% in 2015. The problem is likely to get worse, says Ms Lu, as graduates facing unemployment have no choice but to accept menial work.
As a result of all this, the returns from pursuing higher education seem to be falling. In a working paper published last year, researchers led by Eric Hanushek of Stanford University found that in China the wage premium associated with higher education dropped from 72% to 34% between 2007 and 2018 for those under the age of 35.
In 2008 an official in the education ministry seemed to admit that the state had made a mistake in expanding college and university enrolment so quickly. But the ministry quickly backtracked. Today the government seems to care more about the size of the education system than the quality of it. Sixty-one new colleges and universities opened in China last year. “Our country has built the largest higher-education system in the world,” boasted the People’s Daily, a party mouthpiece.
In his state-of-the-nation speech last month Li Qiang, the prime minister, at least paid lip service to the idea of making sure more graduates were learning the skills needed in sectors such as advanced manufacturing and elderly care. But many will continue to find that their degree is not a ticket to a good job. Told for years that higher education was a ladder to a better life, their frustrations are growing.
United States | Lexington
Truth Social is a mind-bending win for Donald Trump
And disturbing evidence of how he destabilises reality for Americans
illustration: kal
Apr 18th 2024
Since shares in Donald Trump’s media firm began trading publicly on March 26th, their value has slid by more than half, prompting headlines, and some crowing from the left, about the decline. Which still seems less newsworthy than that anyone is buying at all: even at roughly $26 per share, investors are prizing Mr Trump’s social-media platform, Truth Social, at a heroic value relative to its performance or apparent potential.
One must write “roughly” $26 per share because even the Wall Street Journal has struggled to ascertain just how many shares are outstanding. Other possible red flags for investors include the company’s independent auditor reported on March 25th that its “operating losses raise substantial doubt about its ability to continue as a going concern”. After forecasting sales of $144m for 2023, Truth Social delivered just $4.1m, and a loss of $58.2m.
Truth Social says it is contending with such entrenched giants as Facebook and Amazon, but it does not disclose its audience numbers. In a regulatory filing it tried to make a virtue of this by arguing that “adhering to traditional key performance indicators” such as traffic or advertising results—the sorts of results that typically obsess media investors—could “potentially divert its focus from strategic evaluation” of its business. For March, the analytics firm Similarweb found Truth Social had about 7.7m unique visitors, or roughly 0.05% of Facebook’s traffic.
Maybe such realities will suddenly drag down the stock. But it has a long way to fall to depart the reaches of faith for the realm of reason. John Rekenthaler, a vice-president of Morningstar, an investment research firm, has estimated that if people valued Truth Social as they did the initial offerings of such firms as Tesla, Google and Facebook, the shares would be selling for 50 cents.
Investors in Truth Social, compared with those in other startups, are clearly not relying upon the same sort of analysis or even indulging the same sort of dream. They are not even playing the same game as the very online investors who drove up such meme stocks as amc and GameStop to irrational valuations that were also relative fractions of the paper value of Mr Trump’s company.
Something else is happening here, a tremor in market logic, even a rupture with common sense. Maybe investors believe that Mr Trump will win in November and, as the first president with his own social platform, insist on making all his pronouncements upon it. Maybe they adore him and want to multiply his billions. Whatever their motives, the performance of Mr Trump’s stock so far represents the purest demonstration of his power not just to bend reality, but to convert illusion into reality—and also, maybe, of how Americans are coming to confuse the two.
For years Mr Trump has used his mastery of the virtual world—the controversy and excitement he generates online—to increase his political power. He has just 7m followers on Truth Social, compared with 87m followers on X. But by taking ownership himself of the virtual events he is so skilled at provoking, he has created tremendous paper value, and he appears to be on his way to turning that virtual value into real wealth. Mr Trump holds 78.8m shares in the company, or about 57% of the total, and he is due to receive 36m more if the share price stays above $17.50 until late April. Under a “lockup” agreement Mr Trump cannot sell for six months, until September 25th, unless the company’s board releases him from the restriction.
What Mr Trump has called “truthful hyperbole”, and others call lying, has been central to his success. When he built Trump Tower it had 58 floors, but in numbering them he skipped ten to claim 68 instead. This tactic has occasionally caught up with him, most severely in the $355m penalty imposed on him in February after a New York judge found Mr Trump had lied for years to secure loans and make deals—trebling the size of his penthouse apartment, for example, and valuing his Mar-a-Lago estate in Florida based on its potential for residential development, though he had surrendered the rights to develop it as anything but a club.
Yet Mr Trump’s trademark hyperbole is the very foundation of Truth Social. Its value rests on his participation—his agreement with the company constrains his posting elsewhere—and his posts are full of exaggerations if not lies, whether about the criminal cases against him, President Joe Biden, or the state of the country. Is that some sort of fraud? Or is it just life online, and how value is best created there, to be exchanged for an offline currency via advertising, the stockmarket or the ballot box?
There is no spoon
Virtual reality always seems to be a step away. Alternative digital worlds like “Second Life” have not caught on, and clunky ar headsets have proved more aversive than immersive. But Americans may not recognise the degree to which reality online—a reality that did not exist for most just a generation ago—has washed back into the real world, distorting their politics, their relationships, their apprehension of what is true or what has value. The rules governing all of this have changed, and it is not clear what the new rules are. Mr Trump and others are still inventing them.
Officials in the administration of President George W. Bush used to deride what they called the “reality-based community” and insist they could “create our own reality”. They were pikers compared with Mr Trump. It seemed like a joke, during his campaign for president in 2016, when he referred to his political following as a “movement”. Now it is reasonable to call him the most consequential figure in American politics since Ronald Reagan. Maybe Mr Trump will lose the election in November, and maybe that will cause stock in Truth Social to crash, if it does not collapse before then. But it does not seem like a crazy act to buy a few shares now, just in case.
Middle East and Africa | Striking out
One of the Middle East’s oldest conflicts has entered a new era
Iran’s attack on Israel throws out old rules and puts allies in a delicate position
photograph: afp
Apr 18th 2024|dubai
Even an ineffective act can be transformative. The Middle East spent the first half of this month waiting for Iran to retaliate for an Israeli air strike, on April 1st, which killed two generals at its embassy compound in Damascus. When it came, on the night of April 13th, it was bolder than expected, a barrage of more than 300 missiles and drones aimed at Israel. That it caused no death and little destruction did not diminish its import: this was the first time Iran has struck Israel directly.
Now the region waits nervously again, this time to see when and how Israel conducts its almost inevitable response. Its partners in the West, particularly America, must strike a delicate balance between defending their ally and restraining it. Friendly Arab states are in an awkward position, too. And the belligerents themselves, Iran and Israel, must now navigate a conflict in which the old rules of engagement have been abruptly shredded.
No one doubted that Iran would retaliate. Months of Israeli strikes had wiped out almost the entire leadership of its Islamic Revolutionary Guard Corps (irgc) in Syria. The attack on a consular building was a last straw for hardliners, who demanded a muscular response. But most observers, including Israel, thought Iran would do so in a less direct way, pursuant to a long-standing policy of fighting Israel through proxies rather than head-on.
Iran’s strike was telegraphed for days. That gave ample time to prepare: not only for Israel, but also for an ad hoc coalition that included America, Britain, France, Jordan and other Arab states. They shot down all but a handful of the projectiles. Four missiles hit Nevatim air base, in southern Israel, but caused little damage.
Israel’s leaders have vowed to hit back. “Any enemy that fights against us, we will know how to strike him, no matter where he is,” Yoav Gallant, the defence minister, said on April 16th. Their options range from a response in kind against military bases in Iran to cyber-attacks on key infrastructure or strikes on the irgc abroad.
Allies have spent days pushing for restraint. Joe Biden told Binyamin Netanyahu, the Israeli prime minister, that America would not support a direct counter-attack. The American president worries that it would lead to expanding tit-for-tat bombardment—the sort of regional war he has sought to avoid since October 7th. European leaders sent a similar message.
To dissuade Israel, they will need to convince it that they take the Iranian threat seriously. That is easier said than done. America promises new sanctions on Iran’s missile and drone programmes, but that alone will not reassure Israel. Some American officials suggest a loftier idea. They point to the unprecedented co-operation between Western and Arab states during the Iranian attack: Jordanian jets downed dozens of Iranian drones, while Qatar, Saudi Arabia and the United Arab Emirates (uae) helped behind the scenes. Such co-ordination seems to fulfil a long-held American goal. For years it has urged Arab states and Israel to integrate their air defences, hoping to blunt Iran’s arsenal.
If Israel refrains from a spectacular counter-attack, these officials argue, there is an opportunity to reinforce a regional coalition. The idea appeals to Israeli officials as well. “This event is not over,” said Benny Gantz, a member of the war cabinet. “The regional co-operation which we built, and which withstood a significant test, needs to be strengthened.”
Don’t forget Gaza
Such talk makes Arab officials uncomfortable. They are still furious with Israel over Gaza and also worry about the threat from Iran, which has threatened to attack Jordan if it co-operates further with Israel.
Jordan says, rightly, that it shot down Iranian drones because they violated its airspace. It also probably saw a diplomatic benefit. The kingdom is among the world’s most aid-dependent countries. America, its largest single donor, provided $1.2bn, along with military aid worth around 20% of Jordan’s defence budget in 2022. Helping protect Israel gives King Abdullah a boost with lawmakers in Washington.
Gulf states had their own motives. Some officials were miffed to watch America rush to Israel’s defence. They saw a contrast with 2019, when Iranian-made drones struck Saudi oil facilities, and 2022, when they hit Abu Dhabi, the capital of the uae. America did little in response. The incidents are not quite analogous. There was no advance warning of the attacks on Saudi Arabia and the uae. Saudi Arabia is pushing for a defence treaty with America. By helping shoot down Iranian drones, Gulf leaders hoped to show that a formal arrangement would offer tangible benefits.
Like Israel, many Arab states see Iran as their main threat. But a sense of shared danger will not override their anger about Gaza or their fear of an Iranian attack. The prerequisites for deeper co-operation, they insist, are a ceasefire in Gaza and a commitment from America to defend them if attacked. Neither seems imminent.
Israeli leaders should not be overconfident. Their air defences were impressive, albeit they had days of advance warning and ample foreign help. A surprise attack might be more effective. Still, Iran can only repeat the trick so many times. America estimates it has around 3,000 ballistic missiles. So it used 4% of its arsenal—and a much larger share of those able to reach Israel—in a single night, to no great effect.
Iran had two goals: to appease hardliners and to deter Israel from future strikes. It almost certainly failed at the latter. Firing hundreds of missiles and drones and hitting nothing of value makes Iran look belligerent yet weak—a mix that invites, not deters, further attacks.
That suggests a longer-term worry. Mr Biden spent the first half of his presidency trying to revive the nuclear deal with Iran, which imposed strict caps on enrichment work in exchange for relief from economic sanctions (and which Mr Trump abandoned in 2018). The effort failed. Iran now has a stockpile of 122kg of uranium at 60% purity, enough to produce three nuclear bombs if refined further to weapons-grade.
The Iranians have been cautious. They have walked up to the “nuclear threshold” but refrained from crossing it, lest they trigger tougher multilateral sanctions or a military strike. The past few weeks may change their calculus. If drones and missiles are not enough to deter Israel, they may reckon they need a nuclear weapon to do so. That, in turn, would greatly increase the chances of an Israeli attack on their nuclear facilities. Iran chose to move its decades-long conflict with Israel into the open—but the consequences of that decision will be hard for anyone to predict.
The Americas | Musk v Moraes
Elon Musk is feuding with Brazil’s powerful Supreme Court
The court has become the de facto regulator of social media in the country
illustration: klawe rzeczy
Apr 14th 2024|saõ paulo
Over the past two weeks Elon Musk, a serial entrepreneur, has been on a very public tirade against Alexandre de Moraes, one of the Brazilian Supreme Court’s 11 judges. The dispute is about X, a social-media company that Mr Musk owns. On April 6th X announced that a Brazilian court had ordered it to block an undisclosed set of “popular” accounts or face hefty fines. Instead, Mr Musk said he would lift restrictions on previously suspended Brazilian accounts, and threatened to close down X in Brazil. Mr Moraes then opened an inquiry into Mr Musk for obstruction of justice. That prompted Mr Musk to rail that censorship in Brazil is worse than in “any country in the world in which this platform operates”, and to call Mr Moraes a “dictator” who should be impeached and put “on trial for his crimes”
So far, so hyperbolic; on April 15th it emerged that X had sent a letter to Brazil’s Supreme Court, assuring the court that X would comply with its orders. But the row is revealing on two issues. One is the power of Brazil’s Supreme Court, which enjoys outsize authority over the lives of Brazilians. The other is the debate over how to regulate social media without hurting freedom of speech. Brazilians adore social media. According to gwi, a market-research firm in London, they spend an average of three hours and 49 minutes a day swiping and scrolling, more than people anywhere else (see chart). They also send the most messages on WhatsApp, a messaging platform, and rely heavily on social media for news. This makes Brazil fertile ground for the spread of misinformation and efforts to regulate it.
chart: the economist
So far, regulating has been left to Brazil’s Supreme Court. The body draws its strength from the period after the military dictatorship that ended in 1985, when an assembly was called to rewrite the country’s constitution. It produced one of the world’s longest charters, covering everything from maternity leave to public wages. It also let political parties, trade unions and some other organisations file cases directly with the court, rather than having them filter up from lower bodies.
A prolix constitution combined with the empowerment of a wide range of actors to file petitions means that “just about anything can get to the court”, says Luís Roberto Barroso, the court’s president. The us Supreme Court receives around 7,000 petitions a year, and reviews the 100-150 it deems of national relevance. Brazil’s heard over 78,000 new cases in 2023 and made more than 15,000 judgments.
To deal with this workload, Brazil’s court allows individual judges to rule on cases. Requiring the full bench to rule would take months or even years. In an average year only around 10% of the court’s decisions are taken by the full court, says Diego Werneck of Insper, a university in São Paulo. The rest are unilateral. This has led to accusations that unelected judges have too much power. “We decide cases that in other parts of the world are left to politics and ordinary legislation,” says Mr Barroso. Since 2019 the most visible target of criticism has been Mr Moraes.
That year Jair Bolsonaro, a far-right populist, became president. He was no fan of the court. After he took office, threats to the court’s justices and their families increased dramatically, says Felipe Recondo of Jota, a news website focused on Brazil’s judiciary. In response, the court launched a probe into “fake news” under the leadership of Mr Moraes, and gave itself the power to investigate threats and defamatory statements made against it online. Usually this power rests with prosecutors. The court thus became victim, prosecutor and arbiter all at once.
Mr Moraes repeatedly used this trinity to order social networks to take down the accounts of politicians and influencers, saying they threatened Brazil’s institutions. In February 2021 he ordered the arrest of a far-right congressman, Daniel Silveira, who had uploaded an expletive-laden rant about the court’s members to YouTube. Such decisions are almost impossible to appeal. In 2022, one day after the full court upheld Mr Silveira’s prison sentence, Mr Bolsonaro pardoned him. But the pardon was later overturned by the Supreme Court. Mr Silveira is still detained.
In the buildup to the presidential election of 2022, which Mr Bolsonaro lost, he spread lies about voting machines being rigged against him. Mr Moraes, who is also president of the electoral tribunal, expanded his crusade. In August 2022 he authorised police to raid the homes of eight businessmen, froze their bank accounts, and ordered social networks to suspend some of their accounts. This was prompted by WhatsApp messages from the two men which had been made public, and which appeared to express support for a coup.
Critics call Mr Moraes’s tactics heavy-handed and opaque. Pablo Ortellado of the University of São Paulo notes that it is unclear how many accounts have been suspended, why, and for how long. Davi Tangerino, a criminal lawyer, says that an “endless inquiry without a defined scope” is not compatible with the rule of law.
Yet many Brazilians believe these unorthodox tactics were justified at the time. Fired up by Mr Bolsonaro’s baseless claims of fraud, his supporters camped outside military barracks in the capital for two months before the election, urging the army to stage a coup. On January 8th 2023, a week after his opponent Luiz Inácio Lula da Silva was inaugurated, bolsonarista zealots stormed Congress, the presidential palace, and the Supreme Court. Instead of conceding defeat, Mr Bolsonaro continued to question the result from Florida, where he briefly went into self-imposed exile.
Other institutions failed to restrict Mr Bolsonaro’s behaviour. As president he appointed a pliant attorney-general, who shelved over 100 requests to investigate him. Some members of the army supported staging a coup. Police did not dislodge the coup-mongers camped outside the barracks. In February this year investigators revealed that Mr Bolsonaro possessed a document that outlined his plan for a coup. It would have involved arresting Mr Moraes and calling new elections. Police also claim to have found evidence that Mr Bolsonaro’s aides were monitoring Mr Moraes’s whereabouts. Mr Bolsonaro denies wrongdoing. Against this fragile backdrop the Supreme Court was “the last bastion of democracy”, says Mr Tangerino, though he thinks its actions have since gone too far.
Meanwhile Brazil’s Congress was sitting on legislation that would regulate online speech. A bill influenced by the European Union’s Digital Services Act, which came into force in February, was approved by Brazil’s Senate in 2020, but stalled in the lower house. It would have required social-media platforms and search engines to produce reports detailing their content-moderation efforts. The firms would have been forced to tell users when their posts were taken down and provide them with instructions for appealing the decision. Yet legislators got bogged down in quarrels over which institutions should administer the new law. Tech companies were enraged by its requirement for them to pay influencers and journalists for their content. The law floundered, leaving regulation to the Supreme Court, says Peter Messitte, a judge who runs a programme on Brazilian law at the American University in Washington.
On April 9th, spurred by Mr Musk’s spat with Mr Moraes, the speaker of the lower house said he would create a working group to draft a new social-media bill within 45 days. The dispute between judge and tech boss rumbles on; on April 18th Mr Musk accused Mr Moraes of violating Brazilian law. X says the United States’ Congress has asked to see the Brazilian Supreme Court’s orders on content moderation. To avoid foreign pressure, Brazil’s other institutions would do well to reclaim their responsibilities.
Europe | Charlemagne
How a conservative conference morphed into a crisis of liberalism
A Brussels hard-right confab descends into a mix of farce and petty tyranny
illustration: ellie foreman-peck
Apr 17th 2024
One of the few benefits of Britain leaving the European Union, at least for denizens of Brussels, was that Nigel Farage all but disappeared from the city’s parliament, pubs and speaking circuit. The blowhard Brexiteer’s return to the Belgian capital on April 16th will have done little to rekindle his passion for the place. As the former mep addressed several hundred fellow-travellers of the hard right at a conference, Belgian police swooped into the venue with orders to shut the event down. Outnumbered, the coppers ended up beating a discreet retreat, allowing Mr Farage to deliver a few more quips about gravy-train Eurocrats and fake-news media. After some to and fro, the police opted to seal the conference venue instead, leaving the afternoon’s speakers stuck outside and—worse, for attendees including Charlemagne—caterers unable to deliver food. Not to worry: lunch was replaced by a stern lecture from Suella Braverman, Britain’s former home secretary, about the dastardliness of human-rights lawyers.
The half-hearted police raid at a reactionary gabfest was the culmination of a discomfiting series of events around the “National Conservatism” conference on April 16th-17th. At the ninth such jamboree, organised by the Edmund Burke Foundation, an American outfit, the star attraction of this iteration was Viktor Orban, Hungary’s proudly illiberal prime minister. Unsurprisingly, some speakers held views outside the centrist consensus, albeit ones endorsed by plenty of voters. This lèse-libéralisme sent local Belgian authorities on a misguided mission to prove the “cancel culture” decried by conservatives is not just a conspiracy. A policy that aims to exclude hard-right parties from coalition governments, known as the cordon sanitaire, metastasised into an ugly variant whereby merely expressing such ideas is beyond the pale.
The first sign of trouble came a few days before the event, when its original venue, a posh set of heavily gilded rooms near the eu institutions used by political parties and diplomats for their own shindigs, decided to turf out the conservatives. One of Brussels’s 19 district mayors had ginned up fears of “anti-fascist” protests, arguing that security was impossible to arrange. This is clearly nonsense. Brussels hosts dozens of summits featuring grandees that run into no such problems. Nor had policing been an issue when the National Conservative bunch had held a similar event at the same venue in 2022. Discomfiting as that show of censorship was, more was to come. A backup Brussels venue was secured at a cavernous Sofitel near the European Parliament also well used to political confabs. As the conservative organisers were in the midst of setting up their stage on the day before the event, another Brussels district mayor worked to evict them, taking pride in foiling the conference of people whose views he disagrees with.
And thus it was that the homeless nationalists ended up cramped inside the Claridge, a former nightclub turned into a concert venue and part-time conference hall (with no connection to the luxurious London hotel, nor anything remotely posh). If the site originally booked was the Ritz of political rallies, this was more akin to a roadside motel, jammed between a second-hand clothes shop and a kebab joint in Belgium’s poorest district; upcoming events include a Shrek-themed rave (“Bring out your inner ogre!”). Even then, yet another Brussels mayor sent in the cops.
The offstage rigmarole spiced up what was otherwise predictable globalist-bashing fare. Those speakers who could attend—Eric Zemmour, a French firebrand, was among them though barred by police on the first day—delivered platitudes about family values and bent elites. Among the forces to be combated: the European Parliament, the European Commission, the mainstream media, polite society, the un, immigrants, political correctness, ngos, “Bolshewokism”, George Soros, and green regulation. Things liked by conference speakers included the freedom-loving owners of the Claridge, farmers, Donald Trump, national sovereignty, motherhood and “the will of the people”. Conspicuously absent, as well as lunch (which did arrive later, for there is only so much self-sacrifice even conservatives will put up with), was any kind of speech a liberal society should not be able to tolerate.
Conservatives at the gates
Charlemagne holds little truck with the ideas featured at the conference. Many well-meaning speakers, notably from America, do not seem to realise their Hungarian patrons (who helped fund the event) are abusers of their conservative ideology, using it as cover to build a patronage system benefiting cronyish insiders. Some, like Mr Zemmour, hold truly reprehensible views. But to be misguided is their business, not that of either the thought police or the Brussels variant. Happily, the ham-fisted censorship proved surmountable. As the first day of the conference closed, Alexander De Croo, the Belgian prime minister, decried attempts to shut it down as “unacceptable”. An overnight court ruling quashed the original order to ban the event. Boosted by the furore around the efforts of his liberal enemies to silence him, Mr Orban got to address his fans, railing against the eu and the very liberal norms that (belatedly) ensured his right to speak.
Stuck between the hubbub of police blockading the venue and persecuted conservatives within, your columnist got to chat for a few minutes with the owner of the Claridge. A first-generation migrant from Tunisia, Lassaad Ben Yaghlane has run the place with his family for a decade. When he got the call to host the event, he thought before agreeing, then decided there could be no harm in providing anyone a room to debate in. The conservative organisers were a polite lot, he said. Didn’t he mind that some speakers were spewing migrant-bashing rhetoric from a stage he was providing? The 59-year-old shrugged and asked: “What’s a democracy if you say, ‘You can listen to this guy but not that one’?”
International | War and recruitment
Would you really die for your country?
Military conscription is on the agenda in the rich world
photograph: getty images
Apr 17th 2024|ermelo
Belly down in a muddy Dutch forest, Sabrina van den Goorbergh fires blanks from a Colt c7 assault rifle. The third-year medical student is taking part in the Dienjaar (service-year), a new programme that lets young Dutch sign up for a year-long trial in the armed forces rather than the regular four-year enlistment term. The programme is a success, drawing three applicants for each spot, and the government plans to scale it up from 625 to 1,000 trainees next year.
chart: the economist
Yet it can hardly begin to solve the country’s recruitment problems. The Dutch armed forces number 49,000, less than a fifth of their size during the cold war, and one in ten positions is vacant. Last year regular enlistment yielded just 3,600 of a hoped-for 5,000 new soldiers. This is at a moment when, in the face of the largest war on the continent since 1945, many European countries actually want to expand their armed forces, not just maintain them. By 2030 Germany hopes to raise its troop strength from 182,000 to 203,000, and France from 240,000 to 275,000 (see chart 1). Poland plans to go from 197,000 to 220,000 by the end of this year, and eventually to 300,000.
The problem is that today’s career-oriented, individualistic young people are reluctant to join up. And it is not just Europe that is struggling with recruitment. In and around the world’s conflict hotspots the question of how to get more people into uniform is vital. Some countries are reconsidering an old solution: mandatory military service for young people (or young men), often for school-leavers. Terminology varies. Conscription typically means compelling civilians to enlist in the armed forces, whereas military service often refers to a subset of that—ordering young people to do a stint in the forces.
At the start of the 20th century around 80% of countries had some form of conscription; by the mid-2010s it was just under 40%. The practice reached its peak during the world wars, and many countries continued to rely on it throughout the cold war. Thereafter the West’s focus turned to high-tech counterinsurgency campaigns such as those in Afghanistan and Iraq. Mass-conscript armies were mostly replaced by smaller, professional volunteer forces. Since 1995, 13 members of the oecd, a club of mostly rich countries, have scrapped conscription. All but eight of nato’s 32 members have done away with it. But authoritarian countries such as Iran, North Korea and Russia have doubled down on their press-ganged armies.
The most urgent discussion around mandatory military service and conscription is in countries that face a serious threat of war, or are already in one. Take Ukraine. More than two years on from Russia’s invasion, thousands of men there are fleeing across the country’s borders, or hiding, to avoid being served enlistment papers. On April 2nd a lack of troops meant Ukraine’s government was forced to lower the minimum age of conscription from 27 to 25. Russia has thrown hundreds of thousands of forcibly mobilised men into the meat-grinder of its war.
In Israel, military duties are a central pillar of citizenship. After the October 7th attacks, some 300,000 Israelis left civilian life and rushed to join their units. Israel wants to lengthen male conscripts’ service to three years (young women currently serve for 24 months and young men for 32) and to extend the call-up age for reservists to 45. At the same time, ultra-Orthodox Jews’ exemption from service is the subject of a bitter political struggle.
Meanwhile in Asia, Taiwan is trying to prepare for a possible war with China as Sino-American tensions persist. Taiwan extended military service in 2022, from four months to a year. But the island still boasts just 169,000 active soldiers (China has around 2m). South Korea, where military service has a brutish reputation, is trying to make it more appealing. Service has been shortened to 18 months, wages are rising and sadistic drill-sergeants have been pruned. The government also wants to hire more women (men-only conscription has fuelled male resentment and anti-feminist politics).
chart: the economist
In many places recruiters for the armed forces are struggling in the face of shifting values: young people have grown averse to fighting even in defensive wars. For decades the World Values Survey (wvs), an academic research project, has been asking people around the world the same question: “Would you be willing to fight for your country?” In the survey’s most recent round, between 2017 and 2022, just 36% of Dutch 16- to 29-year-olds said yes (see chart 2).
Recruiters try to counter with the rhetoric of patriotism, self-fulfilment and shared values; the emphatic slogan of Germany’s armed forces, the Bundeswehr, is Wir. Dienen. Deutschland. (We. Serve. Germany.) They also run campaigns with influencers on TikTok and Instagram. But it does not seem to be enough to hit their targets.
This is partly to be expected. As countries get richer, their citizens tend to become less eager to sacrifice themselves for the nation. Herfried Münkler, a German political scientist, called Western democracies “post-heroic” societies, in which “the highest value is the preservation of human life” and personal well-being. History certainly plays a role. Willingness to fight is low in the countries that lost the second world war (Germany, Italy and Japan). In Spain and Portugal, decades of military dictatorship left many citizens suspicious of the armed forces.
But things can change when conflicts draw near. According to a forthcoming paper by Wolfgang Wagner and Alexander Sorg of the vu University in Amsterdam and Michal Onderco of the Erasmus University in Rotterdam, proximity to war makes citizens more willing to fight. In Europe, this helps explain why countries close to Russia are less doveish.
chart: the economist
Political alignment is a poor predictor of willingness to bear arms. “The radical right is not so eager to fight,” says Mr Wagner, at least in Germany and the Netherlands. Last year he and his colleagues commissioned a study in those countries which found that few people who planned to vote for either far-left or far-right parties were willing to fight for their country. Those who backed centrist parties, such as Germany’s Social Democrats and Christian Democrats, were more prepared to do so.
Besides changing values, military recruiters face an economic hurdle: young people currently have lots of employers bidding for their services. In most wealthy countries, Generation Z has its pick of jobs. Unemployment among 15- to 24-year-olds in the European Union was 14.5% last year, down from 22.4% in 2015. In Germany it was just 5.8%. In such tight labour markets, armies have a hard time competing with the private sector. Besides, sitting at a desk is rather nicer than crawling through mud.
In some wealthy countries, however, young people’s willingness to fight remains high. In France the share is 58% in the wvs. The figure is higher still in Singapore, Taiwan and South Korea. In Denmark, Finland, Norway and Sweden, four of the wealthiest and most peaceful countries in the world, two-thirds or more of citizens say they are willing. (All are close to Russia.) Their expanding armed forces also have no trouble finding soldiers: all four have compulsory military service for young people.
Sweden actually eliminated the practice in 2011, but brought it back in 2018 after failing to meet recruiting targets. It is an intriguing case study for others. Having just joined nato, it is scaling up from 69,700 to 96,300 soldiers, which requires about 10,000 recruits a year. All of the country’s 19-year-olds (men and women) must fill out service questionnaires; a bit under a third qualify, and a tenth are ultimately inducted.
Rather than souring young people on the armed forces, in Sweden mandatory service seems to make them more enthusiastic. In exit surveys at the end of their stints, “about 80% of the conscripts would recommend other young people to do military service”, says Pal Jonson, the defence minister. Some 30% re-enlist as soldiers or reserves. Because more young people qualify than are needed, only the best candidates make it in, and military service looks good on one’s cv.
This kind of conscription helps keep Nordic armies a melting-pot for different classes, and discourages political polarisation. (Volunteers in armed forces tend to skew towards the right; in Germany neo-Nazi cells have been uncovered in the Bundeswehr.) In the Middle East too, many states see military service for young people as a social adhesive. The United Arab Emirates introduced it in 2014 partly to forge a sense of shared identity among its youth. Morocco, Jordan and Kuwait have followed suit.
You got no time to lose
Shortfalls across many democratic states suggest that better recruitment strategies can do only so much to boost troop numbers. Few medical students have Ms Van den Goorbergh’s drive to take up infantry training on the side. In liberal societies, large segments of the population have come to see serving in the army as someone else’s job. Reintroducing obligatory military service for youngsters might be politically and practically unworkable for the same reason recruitment is falling short: citizens feel alienated from the armed forces.
Yet the Nordic model seems to help bridge that gap, ensuring that military service remains a natural part of social life and nudging more school-leavers to consider a related career. Other youngsters may still only join up in a crisis. “It is fear that moves you to action,” says Andrei, a former television producer now fighting in eastern Ukraine. He signed up the day after Russia invaded. Most Ukrainians did not believe they would ever have to fight for their country, either.
Business | Pups in cashmere
Who will lead the LVMH luxury empire?
Bernard Arnault sizes up his heirs apparent
photograph: camera press
Apr 18th 2024|berlin
Bernard arnault likes to describe lvmh as une affaire de famille. The world’s richest man calling the €400bn ($425bn) luxury empire, of which he is chief executive, chairman and controlling shareholder, “a family business” is both a humblebrag and true. All five of his children work for him. And at lvmh’s annual general meeting on April 18th, after we published this, two of his sons (Alexandre and Frédéric) are poised to join Delphine and Antoine, his eldest offspring from his first marriage, on its board. Only 26-year-old Jean, the youngest, does not have a board seat (yet).
Arnault père can head lvmh for another five years. In 2022 shareholders, who credited the then-73-year-old with minting their fortunes as well as his own (see chart), happily amended the company’s by-laws to raise the mandatory retirement age for the ceo from 75 to 80. The wolf in cashmere, as the billionaire is known thanks to his killer dealmaking instincts, is showing no signs of letting up. But the boardroom reshuffle and other recent job moves suggest the succession plans for his lupine litter are well under way.
chart: the economist
Last year Delphine took over as head of Christian Dior, the iconic fashion house which is lvmh’s second-largest brand (and which had a sparkling run under Pietro Beccari, who quadrupled sales in five years and was recently put in charge of Louis Vuitton, the group’s crown jewel). Antoine is now chief executive of the family holding company which controls lvmh. Alexandre is the de facto number-two at Tiffany & Co, a jeweller. Frédéric and Jean have senior roles in the group’s watch business.
Erwan Rambourg of hsbc, a bank, sees three possible succession scenarios. One is for the 49-year-old Delphine, who since 2000 has worked her way up through Dior and Vuitton, to inherit the top job from her father. Another is the enthronement of 31-year-old Alexandre, who did well as boss of Rimowa, a German luggage-maker that he persuaded his father to buy. He is now jazzing up Tiffany’s old-fashioned image through collaborations with superstars such as Beyoncé, an American pop icon, and Jay-z, a rapper. The third is a collegial approach in which the five scions run five divisions of the group.
If Mr Arnault has made up his mind, he is keeping his decision to himself. Either way, he will hand over an enviable business. True, after a stellar 2023, when sales rose by 9%, revenues in the first quarter of 2024 did dip by 2% year on year, to €21bn, chiefly owing to softening demand from Chinese shoppers worried about their country’s economy. In January Mr Arnault foreshadowed the slowdown by talking of “normalisation” following a period of post-pandemic revenge shopping for bling.
This first-quarter disappointment may, though, prove to be a blip. And Mr Arnault’s new normal could still mean rude health. Flavio Cereda of gam, an asset manager, expects global luxury sales to expand by 6-7% annually in the next few years—and lvmh to keep gaining market share. A tidy inheritance, for whichever Arnault fils or fille prevails.
Business | Bartleby
The lessons of woke Scrabble
When heritage meets innovation
illustration: paul blow
Apr 18th 2024
“Thick”, scoffed the headline on the Daily Mail website on April 9th, in response to the news that Scrabble has had an overhaul. In some parts of the world the word-play game has been relaunched with a double-sided board; one side now shows a new, simpler design that is meant to be less intimidating and more inclusive than the original.
The idea that Scrabble needs to be made less competitive in order to be attractive to Gen Z was always going to make some people rather vexed (16 points). “Next, they’ll turn to chess, but with only one piece each and only two squares on the board,” ran one typically balanced reader comment. Rants about snowflakes and wokeness aside, the new version of the game, which Mattel is introducing outside North America, looks like a perfectly good solution to a common strategic problem: how to make changes to much-loved products.
Reams of innovation research focus on the need for managers to draw on diverse sources of thinking. The more you rely on a group of the same old faces for new ideas, the more you constrain the chances of breakthroughs. To take one example among many, a recent paper by Paul Vicinanza of Stanford University and his co-authors analysed the emergence of prescient ideas in court rulings, earnings calls and speeches by American politicians. It found that such ideas tended to come from the periphery. But the perils of entrenched thinking can also apply to customers. If the people who buy your products and services view them as traditional, they are more likely to resist changes.
Such resistance is most obvious for brands with a long heritage and a loyal following. Consumers like the notion of longevity. In a study by Fabien Pecot of tbs Business School Barcelona and fellow researchers, the authors showed people two logos for an unfamiliar chocolate company, one with an old-school font and a black-and-white photo of a building, the other with a more modern font and a picture of a contemporary office. Participants were willing to pay more for the brand that had apparently been around for aeons (five points but really handy if you have a lot of vowels).
But a rich history—even an entirely fictional one—also makes it harder to make changes. In another study, by Minju Han of Singapore Management University and her co-authors, people were told about a made-up cosmetics company. Some heard it had been founded in 1917, others that it had been established 100 years later. Each group then tested two hand creams, one ostensibly made to the original formula and the other a newly developed product. Even though the cream was the same in every instance, people who thought the firm had been founded in the early 20th century rated the new product as inferior to the original; those who thought it had been established recently gave them the same ratings. Heritage can command a premium but it can also be a prison.
These trade-offs are also visible in a paper by Giulia Cancellieri of Ca’ Foscari University of Venice, Gino Cattani of New York University and Simone Ferriani of the University of Bologna, which looks at the programming decisions made by Italian opera houses. Directors of such cultural institutions have to balance respect for the traditional canon with a desire to put on original productions; in management terms, they have to innovate while being true to their qi (which is not the right word but does give you 11 points and gets rid of that stranded “q”).
The researchers examined in particular how attendance was affected by reinterpretations of classic operas. They categorise these changes depending on whether they are more cosmetic (the plot of “La Bohème” remains unchanged, for example, but takes place in a Dunkin’ Donuts) or more radical (Mimi has incredibly warm hands, say). They find that opera-goers liked novelty but that they reacted differently depending on its extent: season-ticket holders, who were more familiar with the classics, were less tolerant of radical changes whereas single-ticket visitors were keener on them. Freedom to innovate depends in part on how much you depend on loyal, repeat customers.
Given all these pitfalls, Mattel’s innovation works well. It allows traditionalists to play the game they grew up with while also permitting an experiment that might bring in new players. Despite the sound and fury, it is all rather elegant (which gives you a bingo, 58 points and total, annihilating victory).
Business | Schumpeter
What is weighing on CEOs’ minds this earnings season?
Shareholder letters are proving to be bleakly prophetic
illustration: brett ryder
Apr 18th 2024
Schumpeter likes to write—and receive—handwritten letters. When he got out his pen last year and wrote to Larry Fink, boss of BlackRock, he explained to the passive-investing billionaire that he was doing so because he believed they shared a mutual interest: letter-writing. Your columnist went so far as to use a John Donne quote, “letters mingle souls”, to elicit a response. Evidently soul-mingling, whatever its merits in Elizabethan England, is not the done thing in Hudson Yards. Mr Fink agreed to an interview but not, sadly, to an exchange of correspondence.
The personal touch is not quite dead, though. You can see that in Mr Fink’s latest letter to shareholders, as well as those of Warren Buffett, America’s most celebrated investor, and Jamie Dimon, Wall Street’s top banker. Mr Fink, to explain the importance of retirement savings, tells an uplifting story about his late mum and dad. Mr Buffett writes of his sensible (and now very rich) sister, Bertie. Mr Dimon, though hardly heart-on-sleeve, sounds like he carries the cares of the world on his shoulders. The least personal is Amazon’s Andy Jassy, who in a shareholder letter on April 11th came across as an Amazonian to the marrow of his bones. No matter. The day the letter was published his firm’s stockmarket value soared by $30bn to a record high of almost $2trn. That is an roi—return on ink—of $6m a word. For shareholders, pure poetry.
There is more to these letters than self-publicity. They give a sense of how America’s corporate bigwigs see the world. Two letters, from Messrs Dimon and Jassy, are particularly relevant as the country enters the spring earnings season. After three Goldilocks months from January to March, when the stockmarket rallied on hopes of lower inflation, falling interest rates and a soft landing, they are less upbeat than you might expect.
The main pressure on companies in this round of results will be to prove their worth. Buoyed by expectations of lower interest rates, the recent rally has lifted the share prices of the big companies that make up the s&p 500 index. The index’s ratio of price to earnings looks high compared with the average of the past five years. Yet inflation has not fallen as fast as hoped—and therefore nor have rates. For the lofty valuations to be justified, in other words, earnings must rise. That should be easy enough for beneficiaries of the artificial-intelligence (ai) boom—Amazon and Microsoft, which provide the computing power; Nvidia, which supplies them with ai chips; and Meta, whose advertising business has been strengthened by ai. It will be harder for less techie firms. Unless they, too, show strong earnings growth, the market’s mood may sour.
When it comes to ai, the big question on earnings calls will be to what extent big tech’s investments in ai infrastructure and services are in fact generating higher revenues. In his letter, Mr Dimon indulges in the hype. ai, he writes, may be as transformational as “the printing press, the steam engine, electricity, computing and the internet”. But he also makes clear it is still early days. His bank, JPMorgan Chase, appears to be experimenting with “generative” ai, the type that has grabbed attention in the past 17 months, rather than deploying it at scale. Mr Jassy describes a three-layer system of building blocks that Amazon’s cloud-computing arm, aws, is creating to help customers train generative-ai models, feed their data into existing ones and develop ai-related applications. For such services to make real money, however, big firms like JPMorgan Chase must move from experiments to deployment.
Look beyond big tech, propelled by the tailwinds of ai, and bosses’ main concern is the business cycle. In recent weeks expectations of a soft landing have given way to those of a “no landing”: growth and inflation staying higher for longer, keeping long-term interest rates elevated. If those forecasts come true, investors will be asking whether revenues and profits can grow fast enough to offset the drag of higher rates. If not, fears of stagflation, seemingly put to rest last year, may resurface. On this score, Mr Dimon sounds almost prophetic. Consumer spending, and thus the American economy, have remained resilient, he writes, partly thanks to government largesse. But sloshing buckets of public money into clean-energy investments, military spending and so on risks making inflation stickier—and keeping rates higher—than markets expect. Adding to the uncertainty is “one of the most treacherous geopolitical eras” since the second world war.
Days after Mr Dimon’s letter was published, his words came back to haunt him. Fears of a long spell of higher interest rates contributed to a rare slump in JPMorgan Chase’s share price on April 12th, decent first-quarter results notwithstanding. Meanwhile, tensions in the Middle East put upward pressure on oil prices, further stoking fears of inflation. Mr Jassy also alluded to economic uncertainty in inflationary times. Though consumers continue to spend, he warns shareholders, they are doing so carefully. To save money, people are trading down whenever they can.
The write stuff
Mr Dimon and Mr Jassy lead giant companies. The bigger a business, the more it tends to benefit from faster economic growth. The richer it is, the less it fears an interest-rate crunch that could curtail its access to capital. Other large, deep-pocketed firms, such as oil producers and obesity-drug sellers, may reinforce big tech’s and big banks’ hopeful earnings narrative. Smaller, more indebted ones will struggle if their interest costs do not fall.
In business, the worse your balance-sheet, the higher the interest-rate risk. That is true in society at large. As Mr Dimon points out, nearly 40% of Americans do not have $400 in savings to deal with emergency payments such as medical bills or car repairs. His was not a cheerful letter. It was a bleakly powerful one.
Finance and economics | Buttonwood
Why the stockmarket is disappearing
Large companies such as ByteDance, OpenAI and Stripe are staying private
illustration: satoshi kambayashi
Apr 18th 2024
The law of supply and demand is one of the first things that students of economics learn. When the price of something goes up, producers bring more to market. What, then, is going on in global stockmarkets?
Global share prices have never been higher, having risen by 14% over the past year. At the same time, the supply of stocks is shrinking. As analysts at JPMorgan Chase, a bank, note, the pace of company listings is slower this year than last, and last year was already a slow one. This means that equity issuance net of stock buy-backs so far this year is already negative, at minus $120bn—the lowest such figure since at least 1999. Companies including ByteDance, Openai, Stripe and SpaceX have valuations in the tens or even hundreds of billions of dollars, and remain private.
Jamie Dimon, JPMorgan’s boss, is among those to have voiced concern. He identifies demand for environmental, social and governance reporting and the pressure of quarterly earnings reports as part of the trend’s explanation. But for the most part, the disappearing stockmarket is a side-effect of something more positive for company founders: they simply have more options. Private-equity funds managed $8.2trn by the middle of 2023, according to McKinsey, a consultancy—more than twice the amount in 2018. If founders do not want to go public, they now face less pressure to do so. There are plenty of funds that are willing to invest in them regardless.
Founders have many reasons to stay private. The rise of intangible assets is a big one. Such assets range from copyrights, software and other intellectual property to brand recognition. René Stulz of Ohio State University notes that requirements for disclosure of financial information and strategy favour companies with tangible assets, such as machinery and real estate. When a firm announces it owns a building, competitors can hardly steal the asset. When it comes to ideas, research and other intangibles, the less rival firms know, the better. If a company tries to withhold information when listing, it may be undervalued. Worse still, it may be breaking the law.
People other than company founders may be worried by the trend, however. Public markets are more transparent than private ones. Thus their reduced importance matters not just for investors, but for regulators monitoring financial stability and analysts assessing the market. Stocks also still tend to be the cornerstone of portfolios for less sophisticated retail investors. Alexander Ljungqvist, Lars Persson and Joacim Tag, three economists, suggest that the disappearance of markets may reduce public support for business-friendly government policies, as voters benefit less from corporate profits.
Might anything be done to revive stockmarkets? The changing behaviour of institutional investors may blunt some of the trend’s more damaging consequences. Allocations from such investors to private equity have grown in recent years, rising to 10% of their assets in 2023 from 6% five years earlier, at the same time as allocations to listed equities have dropped by a similar amount. This will provide households with exposure to privately held investments through their pension and mutual funds.
But institutional investors will do little to improve transparency in private markets. One option that might appeal to regulators is to impose tighter requirements on large companies that choose not to list, in order to close the gap between the rules faced by public and private firms. A less coercive option would be to reduce the amount of information that companies are forced to share when they go public.
Unfortunately, such efforts have produced mixed results in the past. The Jumpstart Our Business Startups (jobs) Act, which was introduced in America in 2012, reduced disclosure requirements for public firms. Although an assessment in 2015 indicated that it had boosted initial public offerings by 25%, another in 2022 suggested that it had done so by encouraging low-quality offerings that ended up underperforming the market.
As a result, the best hope for stockmarkets may lie with the greed of private-equity investors. Public markets still provide an unparalleled exit route for those who would like to turn corporate holdings into ready cash. Bain, another consultancy, notes that private-equity funds are currently sitting on $3.2trn in unsold assets. At some point, end-investors will want the money back. But until then, Mr Dimon is right: shrinking public markets are cause for concern.
Finance and economics | Free exchange
Can the IMF solve the poor world’s debt crisis?
The fund will freeze out China if that is what it takes to offer relief
illustration: álvaro bernis
Apr 18th 2024
It is now four years since the first poor countries were plunged into default because of spiralling costs from covid-19 spending and investors pulling capital from risky markets. It is two years since higher interest rates in the rich world began to put even more pressure on cash-strapped governments. But at the spring meetings of the imf and the World Bank, held in Washington, dc, this week, many of the world’s policymakers were acting as if the worst debt crisis since the 1980s, by portion of world population affected, had come to an end. After all, the poorest countries in the world grew at a respectable 4% last year. Some, such as Kenya, are even borrowing from international markets again.
In reality, the crisis rolls on. The governments that went bust still have not managed to restructure their debts and dig out of default. As such, they are stuck in limbo. Over time more—and bigger—countries could join them. So in between the spring meetings’ embassy dinners and think-tank soirées, the imf’s board announced a radical new step to deal with the problem.
The core of the difficulty in resolving debt crises has been that there are more creditors, with less in common, than in the past. Over 70 years of debt restructurings, Western countries and banks came to do things a certain way. Now decisions require the assent of a new group of lenders, some of which see no reason to comply. Each part of the process, even if it was once a rubber stamp, can be subject to a protracted negotiation.
Chief among the new lenders is China. Even though the country is now the world’s biggest bilateral creditor, it has yet to write down a single loan. India has doubled its annual overseas lending from 2012 to 2022; it sent $3.3bn to Sri Lanka soon after the country was plunged into crisis. The United Arab Emirates and Saudi Arabia are in the group, too. They have together lent more than $30bn to Egypt. The Gulf creditors’ preferred method is to deposit dollars at the recipient’s central bank—a form of lending so novel that it has never been subject to a debt restructuring before.
As a result, the seven countries that have sought restructuring since the start of the pandemic have been unable to strike a deal to whittle down what they owe. Only two small countries have made progress: Chad, which rescheduled rather than reduced debts, and Suriname, which reached a deal with all its creditors but the biggest, China. Zambia has waited four years for a deal. Since no creditor wants a worse bargain than any other, there has been next to no principal debt relief during the worst debt crisis in four decades. Four years ago g20 countries signed up to the Common Framework, an agreement to take equal cuts in restructurings, but creditors have split over the degree of generosity needed.
The imf, which usually cannot lend to countries with unsustainably high debts, has been unable to do much. Yet on April 16th it made a move. It said it would lend to countries that have defaulted on debts but have not negotiated a deal to restructure all their debts. The policy is known as “lending into arrears”.
In the past the fund, worried about getting its cash back, has lent into arrears sparingly and only with the permission of creditors still tussling over restructuring. Now all it is asking for is a promise from borrowing countries and co-operative creditors that its cash injections will not be used to pay off the holdouts. The imf’s economists have long feared that such a step would antagonise problem creditors, which are also countries with stakes in the fund itself. It seems the fund’s patience has run out: officials want to get debt restructuring moving.
The new policy has the potential to impose discipline on the holdouts. In theory, restructurings work because easing the burden on borrowers maximises creditors’ chances of getting some—perhaps most—of their money back. The fund lending into arrears sharpens the incentive to comply because lenders who hold up negotiations face the prospect of not getting anything. They would be the ones frozen in limbo, while everyone else strikes a deal and carries on. The policy also strengthens the hand of debtors. In the past they may have feared walking away from their debts to, say, China, which is an easy source of emergency cash even after a default. Now if they wish to do so, they will have an alternative lender in the form of the imf.
Getting cash flowing would certainly be good for populations of the troubled countries. Doing so might also keep the fund honest. Its debt-sustainability analyses are used as a benchmark for restructurings, and it may have an incentive to be too optimistic about sustainability, to avoid pushing a borrower into restructuring limbo. In a process that does not depend on playing down poor countries’ problems so as to avoid impossible restructurings, the fund will probably become a better broker, distinguishing between countries that need debt write-downs and those that just need a little more liquidity to make their next payment.
Arrears and tears
The question is whether the imf can stomach the costs. Its threat will only bring creditors into line if it chooses to make use of its new powers. But in Washington officials still worry about aggravating the newer creditors, particularly China, with which the fund prizes its relationship. They might turn their back on co-operative restructurings altogether. Some borrowers could walk away from the imf and take bail-outs from elsewhere.
In the end, though, the fund may have little choice. Too many countries are in crisis. A clutch of big developing countries that have avoided default are teetering closer than ever to the edge. To avoid a catastrophe for hundreds of millions of people, international financiers need a way to get governments out of default before a country like Egypt or Pakistan goes under. Lending into arrears is the best available tool.
Science and technology | AI’s next top model
Large language models are getting bigger and better
Can they keep improving forever?
illustration: daniel zender
Apr 17th 2024 (updated Apr 18th 2024)
In ai-land, technologies move from remarkable to old hat at the speed of light. Only 18 months ago the release of Chatgpt, Openai’s chatbot, launched an ai frenzy. Today its powers have become commonplace. Several firms (such as Anthropic, Google and Meta) have since unveiled versions of their own models (Claude, Gemini and Llama), improving upon Chatgpt in a variety of ways.
That hunger for the new has only accelerated. In March Anthropic launched Claude 3, which bested the previous top models from Openai and Google on various leaderboards. On April 9th Openai reclaimed the crown (on some measures) by tweaking its model. On April 18th Meta released Llama 3, which early results suggest is the most capable open model to date. Openai is likely to make a splash sometime this year when it releases gpt-5, which may have capabilities beyond any current large language model (llm). If the rumours are to be believed, the next generation of models will be even more remarkable—able to perform multi-step tasks, for instance, rather than merely responding to prompts, or analysing complex questions carefully instead of blurting out the first algorithmically available answer.
For those who believe that this is the usual tech hype, consider this: investors are deadly serious about backing the next generation of models. gpt-5 and other next-gen models are expected to cost billions of dollars to train. Openai is also reportedly partnering with Microsoft, a tech giant, to build a new $100bn data centre. Based on the numbers alone, it seems as though the future will hold limitless exponential growth. This chimes with a view shared by many ai researchers called the “scaling hypothesis”, namely that the architecture of current llms is on the path to unlocking phenomenal progress. All that is needed to exceed human abilities, according to the hypothesis, is more data and more powerful computer chips.
Look closer at the technical frontier, however, and some daunting hurdles become evident.
Beauty’s not enough
Data may well present the most immediate bottleneck. Epoch ai, a research outfit, estimates the well of high-quality textual data on the public internet will run dry by 2026. This has left researchers scrambling for ideas. Some labs are turning to the private web, buying data from brokers and news websites. Others are turning to the internet’s vast quantities of audio and visual data, which could be used to train ever-bigger models for decades. Video can be particularly useful in teaching ai models about the physics of the world around them. If a model can observe a ball flying through the air, it might more easily work out the mathematical equation that describes the projectile’s motion. Leading models like gpt-4 and Gemini are now “multimodal”, capable of dealing with various types of data.
When data can no longer be found, it can be made. Companies like Scale ai and Surge ai have built large networks of people to generate and annotate data, including phd researchers solving problems in maths or biology. One executive at a leading ai startup estimates this is costing ai labs hundreds of millions of dollars per year. A cheaper approach involves generating “synthetic data” in which one llm makes billions of pages of text to train a second model. Though that method can run into trouble: models trained like this can lose past knowledge and generate uncreative responses. A more fruitful way to train ai models on synthetic data is to have them learn through collaboration or competition. Researchers call this “self-play”. In 2017 Google DeepMind, the search giant’s ai lab, developed a model called AlphaGo that, after training against itself, beat the human world champion in the game of Go. Google and other firms now use similar techniques on their latest llms.
Extending ideas like self-play to new domains is hot topic of research. But most real-world problems—from running a business to being a good doctor—are more complex than a game, without clear-cut winning moves. This is why, for such complex domains, data to train models is still needed from people who can differentiate between good and bad quality responses. This in turn slows things down.
More silicon, but make it fashion
Better hardware is another route to more powerful models. Graphics-processing units (gpus), originally designed for video-gaming, have become the go-to chip for most ai programmers thanks to their ability to run intensive calculations in parallel. One way to unlock new capabilities may lie in using chips designed specifically for ai models. Cerebras, a chipmaker based in Silicon Valley, released a product in March containing 50 times as many transistors as the largest gpu. Model-building is usually hampered by data needing to be continuously loaded on and off the gpus as the model is trained. Cerebras’s giant chip, by contrast, has memory built in.
New models that can take advantage of these advances will be more reliable and better at handling tricky requests from users. One way this may happen is through larger “context windows”, the amount of text, image or video that a user can feed into a model when making requests. Enlarging context windows to allow users to upload additional relevant information also seems to be an effective way of curbing hallucination, the tendency of ai models to confidently answer questions with made-up information.
But while some model-makers race for more resources, others see signs that the scaling hypothesis is running into trouble. Physical constraints—insufficient memory, say, or rising energy costs—place practical limitations on bigger model designs. More worrying, it is not clear that expanding context windows will be enough for continued progress. Yann LeCun, a star ai boffin now at Meta, is one of many who believe the limitations in the current ai models cannot be fixed with more of the same.
Some scientists are therefore turning to a long-standing source of inspiration in the field of ai—the human brain. The average adult can reason and plan far better than the best llms, despite using less power and much less data. “ai needs better learning algorithms, and we know they’re possible because your brain has them,” says Pedro Domingos, a computer scientist at the University of Washington.
One problem, he says, is the algorithm by which llms learn, called backpropagation. All llms are neural networks arranged in layers, which receive inputs and transform them to predict outputs. When the llm is in its learning phase, it compares its predictions against the version of reality available in its training data. If these diverge, the algorithm makes small tweaks to each layer of the network to improve future predictions. That makes it computationally intensive and incremental.
illustration: daniel zender
The neural networks in today’s llms are also inefficiently structured. Since 2017 most ai models have used a type of neural-network architecture known as a transformer (the “t” in gpt), which allowed them to establish relationships between bits of data that are far apart within a data set. Previous approaches struggled to make such long-range connections. If a transformer-based model were asked to write the lyrics to a song, for example, it could, in its coda, riff on lines from many verses earlier, whereas a more primitive model would have forgotten all about the start by the time it had got to the end of the song. Transformers can also be run on many processors at once, significantly reducing the time it takes to train them.
Albert Gu, a computer scientist at Carnegie Mellon University, nevertheless thinks the transformers’ time may soon be up. Scaling up their context windows is highly computationally inefficient: as the input doubles, the amount of computation required to process it quadruples. Alongside Tri Dao of Princeton University, Dr Gu has come up with an alternative architecture called Mamba. If, by analogy, a transformer reads all of a book’s pages at once, Mamba reads them sequentially, updating its worldview as it progresses. This is not only more efficient, but also more closely approximates the way human comprehension works.
llms also need help getting better at reasoning and planning. Andrej Karpathy, a researcher formerly at Openai, explained in a recent talk that current llms are only capable of “system 1” thinking. In humans, this is the automatic mode of thought involved in snap decisions. In contrast, “system 2” thinking is slower, more conscious and involves iteration. For ai systems, that may require algorithms capable of something called search—an ability to outline and examine many different courses of action before selecting the best one. This would be similar in spirit to how game-playing ai models can choose the best moves after exploring several options.
Advanced planning via search is the focus of much current effort. Meta’s Dr LeCun, for example, is trying to program the ability to reason and make predictions directly into an ai system. In 2022 he proposed a framework called “Joint Embedding Predictive Architecture” (jepa), which is trained to predict larger chunks of text or images in a single step than current generative-ai models. That lets it focus on global features of a data set. When analysing animal images, for example, a jepa-based model may more quickly focus on size, shape and colour rather than individual patches of fur. The hope is that by abstracting things out jepa learns more efficiently than generative models, which get distracted by irrelevant details.
Experiments with approaches like Mamba or jepa remain the exception. Until data and computing power become insurmountable hurdles, transformer-based models will stay in favour. But as engineers push them into ever more complex applications, human expertise will remain essential in the labelling of data. This could mean slower progress than before. For a new generation of ai models to stun the world as Chatgpt did in 2022, fundamental breakthroughs may be needed.
Culture | Show me the Monet
On its 150th anniversary, Impressionism is surprisingly relevant
What the once-derided movement reveals about art today
illustration: james hosking/courtesy of musée d’orsay
Apr 18th 2024|paris
The world was not always an arena of Claude Monet superfans. “Wallpaper in its embryonic state is more finished than that seascape,” sneered Louis Leroy, an art critic, when describing Monet’s “Impression, Sunrise”. The painting of a hazy port in Normandy was hung in a show put on by the Anonymous Society of Painters, Sculptors and Engravers Etc that opened on April 15th 1874. Some of the comments about the sketchy style adopted by Monet and some of his fellow “rebels” were so acerbic that they sound more like put-downs from social-media trolls than professional art commentary. An “appalling spectacle of human vanity losing its way to the point of dementia” was how another critic in the 1870s described the new style.
The Anonymous Society’s show 150 years ago is remembered as the Impressionist movement’s birth; it was then that the painters were called “Impressionist” by Leroy, though the artists would not claim the label themselves for another couple of years. (An impression was a sketch, in the lingo of painters in 1874.) That show is now the subject of another exhibition, “Paris 1874: Inventing Impressionism”, which recently opened at the Musée d’Orsay. In September it will travel from Paris to the National Gallery in Washington, dc.
Today Impressionist paintings are among the most recognisable, beloved and valuable, so it is easy to forget the shock many people felt when first confronted by them. The startled reaction was as much a result of the subject matter as it was the rough brushwork depicting the fleeting quality of natural light. The artists rejected the focus of traditional painting—classical myths, history and idealised portraits—in favour of scenes of contemporary life, including the theatre and Paris’s boulevards.
Theirs was a democratic and capitalist undertaking: the 31 artists who took part in the Anonymous Society’s show wanted to select which of their works to exhibit and to sell them directly. This was in response to a government-sponsored Salon put on by the Académie des Beaux-Arts, which screened paintings with a jury and had conservative taste. Only four paintings sold during the Anonymous Society’s exhibition; the company formed to put on the show dissolved within months.
Viewers regarding these paintings from the past can see some parallels with the present. The Impressionists evoked the destruction of the natural world, with a pure environment altered by railroads and smokestacks. They also painted in the shadows of violence and political uncertainty: only a few years after France’s defeat in a war with Prussia and a subsequent insurrection against the government, known as the Paris Commune. The way the artists “deliberately or maybe unconsciously erased anything having to do with war from the paintings”, focusing instead on “happy scenes of modern life”, is “in itself fascinating and intriguing”, says Anne Robbins, co-curator of the show at the Musée d’Orsay. She posits that this is not unlike how people are anxious to move on from dislocations wrought by covid-19.
The Impressionists were also reacting to new technology, which influenced the creation of art, as it does today. They worked outdoors, rather than in studios, thanks to the invention of portable paint in tubes. Their pictures were influenced by another innovation: photography. Some other artists tried to emulate photography’s clarity. But with the Impressionists’ thick, visible brushstrokes, it is “almost as if they were saying, ‘Look, this is paint. This is not photography,’” says Philip Hook, author of “The Ultimate Trophy”, a history of Impressionism.
Déjà vu
Fittingly, the Musée d’Orsay makes good use of innovative tech to present these works, harnessing virtual reality to imagine what the exhibition in 1874 might have looked like. Visitors can don a headset and go on a startlingly realistic guided tour. You can almost touch the paintings you could have bought back then for 1,000 francs (if only you had!). Many museums have tried to use tech to complement their old-fashioned shows and lure in younger audiences; this is one of the most successful attempts to date.
This exhibition is about the art world in 1874, but it makes you ponder art’s current state. It raises the question of what has happened to the avant-garde today. In going from shocking audiences to gaining broad acceptance, the Impressionists set a “template that has been repeated regularly with every new modernist art movement”, says Mr Hook. In subsequent decades artists played with style, subject matter and form, challenging viewers to consider what exactly art is, from Marcel Duchamp’s urinal to Tracey Emin’s unmade bed.
Today there is much less revolutionary experimentation. “Artists challenge much less today,” says one art dealer, who finds contemporary architecture more willing to break with norms. “In a moment when I thought more artists would be reaching out more politically, they seem to be reaching in more conservatively,” agrees Josh Baer, an art adviser and gallerist. Depicting beauty and personal identity are today’s popular artistic preoccupations. “I thought we’d be seeing something a little bit more aggressive,” Mr Baer adds.
This year’s Whitney Biennial in New York is a collection of sleek works that take little risk. The Venice Biennale, which opens on April 20th, will be another pulse-taking. With prizes and pavilions, it is often described as the Olympics of the art world, and it usually captures the zeitgeist. This year’s theme is “foreigners everywhere” and focuses on artists whose identity and sexuality make them outsiders.
Many feel the political correctness that has strangled dissent on college campuses has infected the art world, with artists becoming afraid to ruffle feathers and go against consensus. In today’s political climate museums are “terrified” to push the envelope, says Leslie Ramos of the Twentieth, a firm that advises on art and philanthropy: they have to be “woke but not too woke, interesting but not too scholarly, not too expensive but not too cheap”. Others blame the internet: a premium is now put on creating large, vibrant canvases that look good on social media.
Those paintings by young artists (called “ultra-contemporary” in today’s parlance, according to Clare McAndrew of Arts Economics, a research firm) can sell for six- and seven-figure sums. Here the Impressionists also offer a humbling reminder. Of the 31 artists who presented at the Anonymous Society’s show in 1874, fewer than ten are remembered today. A handful are so obscure that the curators could find virtually nothing about them, says Ms Robbins of the Musée d’Orsay.
The odds are that an even smaller proportion of artists working now will be celebrated in 150 years. As Helena Newman of Sotheby’s, an auction house, puts it: “Look at what we see today, and we know in our bones that only a small amount will stand the test of time.”
Obituary | A gaijin makes good
Akebono was the first foreign-born grand champion of sumo
The wrestler who shocked and changed Japan died in early April, aged 54
photograph: getty images
Apr 18th 2024
Lumberingly, he paced to the centre of the ring, then back to his corner again. Several times he did this, flexing his arms. Then he squatted, and fixed his opponent with his stare. That stare, of absolute focus, which he could keep for days.
Except for his loincloth, he was naked. His mountainous torso glistened with sweat, oil, fat and muscle. Moments before he had rinsed his mouth with power-water, rubbed his body with power-paper and grabbed a handful of purifying salt to scatter in the ring. His long hair was caught up in a topknot styled like a leaf of the ginkgo tree. He had clapped his hands to alert the gods, stamped his feet to scare off evil spirits, and shown with a few deft postures that he had no weapons. He was more than ready.
Then it was over. In seconds he had charged forward, lunged for the throat, and pushed his opponent out of the ring. Job done.
So ended many of Akebono’s matches. At 2.03 metres, he towered above his rivals. (His name meant “dawn”, because when he stood up it was like the sun rising.) He also outweighed most of them, swelling from 154kg, when at 18 he started training, to 235kg five years later. His long arms could shove a rival off-balance in a heart-beat, making him touch the ground with something other than the soles of his feet, which doomed him. Brute force was all it took; no matter if they were on your belt, push them, and fast.
Much of his size-advantage came from the fact that he was a gaijin, a foreigner. It had been enhanced for sure by sumo training, which involved huge meals of chicken-broth stew and litres of beer, followed by naps, to build bulk. But Akebono was also American, a Hawaiian, one of very few foreigners before the 1990s who endured the training regime. He was big when he arrived, a handy centre in high-school basketball games, and his first coach feared he might prove too lanky for sumo. He was wrong. His pupil romped through the regular 15-match tournaments, rose swiftly through the rankings and became, in 1993, the first-ever non-Japanese yokozuna, or grand champion.
His ascent seemed quite improbable. He had been brought up poor on Oahu Island as Chad Rowan, the son of a half-Irish taxi-driver. His boyhood was spent learning street-smarts and watching wrestling on tv, and his future seemed to be as a beach bum. Then a Hawaiian sumo-recruiter spotted him, and that was that.
The first months were tough, since he spoke almost no Japanese and pined for a decent American steak. But in the wrestlers’ training stable he suffered no more nor less than all the others in the lowest ranks, getting up at 4am to exercise before breakfast, slopping out for his superiors, cooking their rice and serving it before getting a mouthful himself. The only differences were his dumbness, but he was shy anyway, saying little either in Japanese or English; his Hawaiian horror of cold winters; and the need to forget all the codes of life he had learned over 18 years.
But he stuck it out, and felt as he progressed that, when he wrestled, he was neither American nor Japanese: just a wrestler, whose body by the end did the thinking for him. It was never a matter of planting his flag in the middle of the ring and taking on a rival nation. He was learning a great, ancient skill.
The more serious racial frictions emerged as he climbed higher. An essential virtue of the sumo wrestler was hinkaku, dignity. He should be sober, uncomplaining, and modest, celebrating his triumphs with nothing more than a wave of the right hand. The sumo elders doubted that foreigners could ever possess that. In 1992 another hefty Hawaiian, Konishiki, “the Dump Truck”, had been turned down for the title of yokozuna. In terms of tournaments won, he deserved it; but, said the elders, he did not have enough hinkaku. Konishiki called this racism, pure and simple. Only eight months later, however, Akebono was promoted to that foremost rank and stayed there for eight years.
His elevation calmed the controversy, for he had the sumo ethos in spades. Already, as a sekitori or senior wrestler, he qualified for a car and driver, customised kimonos to wear in public and a host of assistants. But he was not a man for showing off. As a yokozuna his new monthly salary of $15,000, though huge for a sumo wrestler, was still tiny by American standards. And it was all he needed. Once the splendid belt was off he stayed dignified and humble, an ordinary Hawaiian who loved welcoming high-schoolers, plying them with snacks and teaching them how to wrestle. To American visitors, he was still “Chad”.
His example brought many more foreign wrestlers to sumo. Some were Hawaiian; more were Mongolian. Eastern Europeans came. By 2000 many Japanese worried that their national sport did not have enough native recruits, let alone champions. In 2002 the elders reduced to one the number of foreigners allowed in each stable. But the truth was that, among the young, sumo was increasingly seen as hidebound and audience-unfriendly. Akebono himself wanted it to be more exciting and open to anyone. But when he asked to join the rule-imposing body that governed sumo—just for a year, perhaps—he was told, firmly, “No”. At that point he retired as a yokozuna, feeling he had no future there. He had worried sometimes that Japan was becoming too Americanised; but clearly not as far as that.
In 2001, at his retirement as a yokozuna, he sat in the ring in his robes. He had no plans to abandon martial arts in general, and was to win several pro wrestling championships before both knees and heart gave out. But he was laying down his sumo career. Eleven thousand people watched as, one by one, 320 friends and colleagues came up to snip a few strands from his topknot with a pair of gold-plated scissors. He felt sad, much more than he thought he would. His head felt lighter, but not with the loss of his hair; more with the loss of a great honour, and the responsibility he had carried to bring two nations together.
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