The Economist 2020-01-24 - ESLPAI€¦ · Why should a secular government shelter persecuted Hindus from Afghanistan, Bangladesh and Pakistan, but explicitly vow not to take a single

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[2020-01-24]

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Leaders

NarendraModistokesdivisionsintheworld’sbiggestdemocracy[Jan23rd2020]

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IntolerantIndia

NarendraModistokesdivisionsintheworld’sbiggestdemocracy

LASTMONTHIndiachangedthelawtomakeiteasierforadherentsofallthesubcontinent’sreligions,exceptIslam,toacquirecitizenship.Atthesametime,therulingBharatiyaJanataParty(BJP)wantstocompilearegisterofallIndia’s1.3bncitizens,asameanstohuntdownillegalimmigrants(seeBriefing).Thosesoundliketechnicalities,butmanyofthecountry’s200mMuslimsdonothavethepaperstoprovetheyareIndian,sotheyriskbeingmadestateless.Ominously,thegovernmenthasorderedthebuildingofcampstodetainthosecaughtinthenet.

YoumightthinkthattheBJP’sschemewasamiscalculation.Ithassparkedwidespreadandlastingprotests.Students,secularists,eventhelargelyfawningmediahavebeguntospeakoutagainstNarendraModi,theprimeminister,forhisapparentdeterminationtotransformIndiafromatolerant,multi-religiousplaceintoachauvinistHindustate.

Infact,theschemelookslikethemostambitiousstepyetinadecades-longprojectofincitement.TheBJPfirstrosetonationalprominencebyagitatingforthedemolitionofamosqueinthecityofAyodhya,tomakewayforatempletoRam,aHindudeity.Thedestructionofthemosquein1992byamobofHinduextremists,followedbydeadlyriots,onlypropelledtheparty’sascent.Likewise,amassacreofMuslimsinthestateofGujaratin2002,whenMrModiwaschiefminister,madehimaherotoHindunationalistsaroundthecountry.

Alas,whathasbeenelectoralnectarfortheBJPispoliticalpoisonforIndia.Byunderminingthesecularprinciplesoftheconstitution,MrModi’slatestinitiativesthreatentododamagetoIndia’sdemocracythatcouldlastfordecades.Theyarealsolikelytoleadtobloodshed.

ThesadtruthisthatMrModiandtheBJParelikelytobenefitpoliticallybycreatingdivisionsoverreligionandnationalidentity.Suchsubjectskeeptheparty’sactivistsandtheiralliesinHindu-nationalistgroupsenergised—alwaysaboon,givenIndia’srelentlesssequenceofstateelections.Theyalsodistractattentionfromawkwardtopicssuchastheeconomy,whichhasstruggledsincetheBJP’sthumpingelectionvictorylastyear(seearticle).Mostimportant,MrModiseemstocalculatethatasizeableminorityofIndianvotersaresympathetictohisconstantinsinuationthatMuslimsaredangerousfifth-columnists,alwaysschemingtodoHindusdownandsellouttheircountrytoPakistan.Thatisenoughtokeephiminoffice.BecauseofIndia’sfirst-past-the-postelectoralsystemandadividedopposition,theBJPwonitsoutrightmajorityinparliamentwithjust37%ofthevote.

JustnowtheBJPmaybehuntingforanewgrievance.TheSupremeCourtrecentlyissuedarulingthathadtheeffectofdeprivingitofitsfavouritecause,byclearingthewayforaHindutempletobebuiltatthesiteofthedemolishedmosqueinAyodhya.Thecitizenshipruckusappealstothepartyfortheverysamereasonsthatithaspromptedwidespreadalarm.TheplantocompilearegisterofgenuineIndiansaspartofahuntforforeigninterlopersaffectsall1.3bnpeopleinthecountry.Itcoulddragonforyears,inflamingpassionsoverandoveragain,asthelistiscompiled,challengedandrevised.Justhowtheregisterwillbedrawnup,andwhattheconsequencesofexclusionare,remainwoolly.Indeed,MrModiisalreadyclaimingithasallbeenmisunderstood.Meanwhile,thehullabaloohelpsreinforcethenotion,soelectorallyvaluabletotheBJP,thatHindus,althoughabout80%ofthepopulation,arethreatenedbyshadowyforcesthatitalonehasthecouragetoconfront.

ThisimperilstheinspiringideaofIndiaastheworld’slargestdemocracy.MrModi’spoliciesblatantlydiscriminateagainsthisMuslimcompatriots.WhyshouldaseculargovernmentshelterpersecutedHindusfromAfghanistan,BangladeshandPakistan,butexplicitlyvownottotakeasingledowntroddenMuslim?Thecitizenshiprowisonlythelatestinaseriesofaffronts,fromtheBJP’slionisingofvigilantesthoughttohavekilledMuslimstothecollectivepunishmentofthepeopleoftheKashmirvalley,whohavesufferedarbitraryarrests,smotheringcurfewsandaninternetblackoutforfivemonths.

Sinceindependence,Indiahasconfoundedpredictionsthatitsdemocracywouldcrumblebyaccommodatingitsmanyconstituenciesoflanguage,ethnicity,casteandreligion.Asecularandimpartialgovernment,evenifflawedinmanyotherways,protectsallthesegroups.Thedeliberateandsustainedpersecutionofoneofthemconstitutesanimplicitthreatagainstall—andsoputsthepoliticalsystematrisk.VotersshouldrecallthattheBJPhasexperimentedwithpoliciesthatdisadvantageotherminorities,fromlow-casteHinduswhodefytheparty’sviewoftheirreligiontospeakersoflanguagesotherthanHindi.

Becausehisrabble-rousinghasahumancost,MrModiisalsotarnishingthememoryofMahatmaGandhi,apreacherofnon-violence.Asitis,manyMuslimshavebeenlynchedorbeatentodeathforsupposedslightstoHinduism,suchaslovingaHinduwomanorkillingacow.Fromtimetotimethestokingofanti-MuslimsentimentleadstomassacresliketheoneinGujarat,inwhichmorethan1,000peoplewerekilled.ByperpetuallyfiringupHindusandinfuriatingMuslims,theBJPmakesfreshbloodshedmorelikely.

MrModimayimaginehecankeepcommunaltensionsundercontrol,rampingthemupandtampingthemdownashispoliticalfortunesdemand.Butevenifheisonlycynicallyexploitingreligiousbigotry,manyintheHindunationalistrank-and-filearetruebelievers.Theyarenoteasilyrestrained,astheslaughterinGujaratshowed.WithhiswarlikerhetoricaboutPakistan,hishead-crackinginKashmirandhisflagrantlybiasedapproachtocitizenship,theprimeministerhasraisedthezealots’expectations.Hemaynotwanttotakethingstoofar—hehasacountrytogovern—buttheywillhavenosuchcompunction.

Somethingworthdefending

Happily,manyIndianshavealreadyhadenough,astherecentprotestsshow.TheSupremeCourt,whichthisweekdeclinedtosuspendthecitizenshiplaw,should

heedthis,showsomeunexpectedspineanddeclareitunconstitutional.Andratherthanstokehostilitybetweentwooftheworld’sgreatreligions,MrModishouldlookforotherpathstovoters’hearts.■

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Asia

TheUN’shighestcourtordersMyanmartoprotecttheRohingya[Jan23rd2020]





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Provisionaljustice

TheUN’shighestcourtordersMyanmartoprotecttheRohingya

THEINTERNATIONALCOURTOFJUSTICE(ICJ)inTheHagueruledonJanuary23rdthatMyanmarmusttakeactiontoprotecttheRohingya,apersecutedMuslimminoritygroup.ItwasthefirstinternationalcourtrulingagainstMyanmar,whichstandsaccusedofgenocide,andastarkrebuketoAungSanSuuKyi,thecountry'sdefactoleader.Shevisitedthecourtinpersonlastmonthtodenyallegationsthatin2017thearmysystematicallyburnedRohingyavillages,murderingandrapingthousandsandpromptingmorethan730,000oftheterrifiedvictimstofleetoneighbouringBangladesh.

InacomplaintfiledinNovember,theGambia,actingonbehalfoftheOrganisationofIslamicCo-operation,abodyof57countries,notonlyaccusedMyanmarofviolatinganinternationaltreatyagainstgenocide,butalsoarguedthattheRohingyawerestillimperilled.Whilethecourtdeliberatedwhethergenocidehadindeedbeencommitted,theGambiawantedittoimposetemporaryinjunctions,knownas“provisionalmeasures”,topreventanymoreharmbeing

done.ItaskedtheICJ,whichadjudicatesdisputesbetweenmembersoftheUnitedNations,toorderMyanmar’sgovernmenttoprotecttheRohingyafromviolence,instructthearmytoceaseitspersecution,preserveallevidencerelatedtotheallegationsofgenocideandsubmitareporttothecourtonthemeasurestakentocomplywithitsorderswithinfourmonths.

The17judgesunanimouslyagreedtotheGambia'srequests—evenClausKress,theGermanjudgeappointedbyMyanmar,andXueHanqin,aChinesejudgewhohasexpressedreservationsabouttheGambia'srighttobringthesuit.“Tohavethatdegreeofconsensusisnotcommon,”saysMichaelBecker,aformerassociatelegalofficerattheICJ.MoreoverthejudgesdecidedthatafterMyanmarhasdelivereditsreporttothecourtinfourmonths'time,itmustprovideupdateseverysixmonthsuntilthecasehasconcluded.“Thatwasn'tsomethingthatwasaskedfor[bytheGambia],”saysPriaPillai,whorunstheAsiaJusticeCoalition,anallianceofhuman-rightsorganisations.

ItwasnotatotalvictoryfortheGambia.TheICJdidnotinstructMyanmartoadmitUNinvestigatorstothecountry.MembersoftheUN'sIndependentInternationalFactFindingMissionhavebeenbarredfromenteringMyanmar,hamperingtheirabilitytogatherevidenceaboutthe“clearanceoperations”of2017.Thecourtdidnotexplainwhyitturneddownthisrequest.MrBeckerwasnotsurprisedthatitdid:“It'sacontentiousquestion,orarguablewhetherMyanmarhasanystandingobligationtoallowUNinvestigatorsintothecountry.”

Nonetheless,theordersthatthecourtdidapprovewerewelcomedbytheGambia,andbyRohingyaadvocacygroups,suchasTheBurmeseRohingyaOrganisationUK,whichdescribedtheverdictas“alandmarkmomentforaccountability”.TheprovisionalmeasuresarelegallybindingandinNovemberMyanmarexplicitlyrecognisedtheICJ'sauthority.“Ingeneralprovisionalmeasuresareadheredto,”explainsMsPillai.“There'salotofweightgiventotheICJ.”

IftheGambiadecidesthatMyanmarisfailingtocomplywiththecourt'sorders,itcanseekafreshroundofprovisionalmeasuresor,eventually,enlistthehelpoftheUNSecurityCouncil.MrBeckerthinksitunlikely,however,thatthecouncilwouldspringintoaction“inparticularbecauseofChina'scloserelationshipwithMyanmar”.Asapermanentmemberofthecouncil,Chinacanvetoitsresolutions,andinthepasthasthwarteditseffortstopunishMyanmarforits

treatmentoftheRohingya.

Thepresidentofthecourt,AbdulqawiYusuf,wasatpainstoemphasisethattherulinghasnobearingonthemeritsofthecase,whichhasyettobeheard.Inordertosatisfytherequirementsforprovisionalmeasures,theGambiahadtoconvincetheICJthatactsofgenocidemightplausiblyhaveoccurredandcouldbeatriskofoccurringagain.Crucially,itdidnothavetoprovethatgenocidehaddefinitelytakenplace.Reachingadecisiononthatisexpectedtotakeyears.

Thedaybeforethecourt'sverdict,morethan100civil-societygroupsinMyanmarsignedaletterbackingtheICJ.“WeunderstandveryclearlythattheICJcaseagainstMyanmarisdirectedtowardthoseresponsibleforusingpoliticalpowerandmilitarymight,andnottothepeopleofMyanmar,”theywrote.Unfortunately,theirsisaminorityview.WhenAungSanSuuKyiwenttoTheHagueinDecember,thousandsofhersupportersalloverMyanmartooktothestreetstoproclaimtheirallegiance.TheICJ’sdecisionmaybeanembarrassmenttoMsSuuKyiabroad,butathomeitwillonlyreinforceherimageastheguardianofthenation.ItisalsolikelytostrengthentheprejudiceagainsttheRohingyaasnotjustunwelcomeinMyanmar,butasaninternationalembarrassment.






China

ThecoronavirusdiscoveredinChinaiscausingglobalalarm[Jan25th2020]






TheWuhancrisis

ThecoronavirusdiscoveredinChinaiscausingglobalalarm

CHINA’SLEADER,XiJinping,oftenwarnsofficialstobewaryof“blackswanrisks”,meaningsuddenunexpectedeventsthatcanharmtheeconomy.Peopletypicallyassumehemeanswobblybanksortradetensions.Butthemostimmediatethreatmaybeanew,sometimesdeadly,virusthatappearstobespreading.Theoutbreakraisesdarkmemoriesofanotherone17yearsagothatkilledhundredsofpeopleand,briefly,nearlyhaltedChina’sgrowth.

Themainworryiswhetherthegovernmentcancontrolthevirus,whichcancauseseverepneumonia.Thebugisknownas2019-nCoV,ormorecommonly,theWuhanvirus.ItappearstohaveoriginatedinearlyDecemberinafishandanimalmarketinWuhan,acityof11mpeople.OnJanuary20thanofficialsaid14healthworkerswhohadtreatedpatientswereill.Thiswasthefirstclearevidencethatthediseasecouldpassfromhumantohumanandthereforespreadmorewidely.

BetweenJanuary17thand22ndthenumberofconfirmedinfectionsgrewtenfold.Itstoodat618asTheEconomistwenttopress,ofwhom17haddied.TherearecasesinmostofChina’sprovinces.InfectedtravellersfromChinahavebeenfoundinAmerica,Japan,SouthKorea,TaiwanandThailand.OnJanuary23ndWuhandeclaredatravelban.HourslaterWuhan’spublictransportwashalted,airportsclosedandexpresswaysblocked.Asimilarlockdownwasimposedontwonearbycities,EzhouandHuanggang.

ThishasechoesofSARS,arespiratorydiseasealsocausedbyacoronavirus,thefamilytowhichtheWuhanvirusbelongs.Morethan8,000peopleinChinaandothercountriescontractedSARSbetween2002and2003.Closeto10%ofthemdied.Datareleasedsofarsuggestthenewvirusmaybelesslethal.OfficialstriedtocoverupSARS,probablyincreasingitstoll.Thistime,theyhavebeenquickertotakepreventivemeasuresandgiveinformation.

OfficialsinWuhaninitiallydownplayedthenewvirus,butthatchangedjustbeforethegovernmentsaidthathealthworkershadbeeninfected.Onthedayofthatannouncement,MrXisaidofficialsshould“putpeople’slivesandhealthfirst”,acrucialsignalthathewouldtoleratenocover-ups.Thegovernmentstartedprovidingdailyupdates.IthasappointedZhongNanshan,adoctorrenownedfordisputingtheofficiallineduringtheSARScrisis,toleadanadvisoryteam.

NowthatChinahasswitchedtocrisismode,fewdoubtthegovernment’sresolve.Buttherearestillplentyofreasonstoworry,bothabouttheimpactonpeople’shealthaswellasonfirmsandinvestors.JustasSARSsuggestshowacoronavirusmightspread,italsohaslessonsforhowsuchapathogenmightaffectaneconomy.InMay2003passengertrafficnumbersinChinaplungedmorethan40%fromayearearlier.Shops,restaurantsandhotelsallsuffered.Inannualisedterms,quarter-on-quartergrowthatthepeakofSARSfellto3.5%,downfrommorethan12%,accordingtoWangTaoofUBS,aSwissbank.

InthecaseoftheWuhanvirus,therearesomegroundsforoptimism.Mosthopefully,thegovernment’sfasterresponsecouldmeanthatittakeslesstimetocontainit.IfexpertsconcludethatthevirusisnotasdangerousastheonethatcausedSARS,ChinamightalsobeabletorelaxitscontrolsontraveltoandfromWuhanbeforebigeconomicdamageisdone.Effortstoensuretransparencycouldreducepanic.

However,Chinesepeoplearefarmoremobilethantheywereintheearly2000s.About450,000ofthemtraveldailybytraininHubei,theprovinceofwhichWuhanisthecapital.ThatismorethandoublethedailypassengervolumeinGuangdongin2002whenthatprovincebecameahotspotofSARS.Helpedbyavastbullet-trainnetworkbuiltoverthepastdecade,passengersfromWuhanwillhavegonefartherandfasterthanthoseinGuangdongbackthen.Chinaisalsofarmoreconnectedtotherestoftheworld.In2018some205,000peopletookflightsintoandoutofChinaeachday,sixtimesasmanyasontheeveofSARS.

Thetimingofthenewoutbreakcompoundsthedifficultyofcontainingthevirus.Ithascomejustaheadofthespringfestival,apublicholidaywhichthisyearrunsfromJanuary24thto30th.Inrecentdaysmillionshavetravelledacrossthecountrytocelebratewithrelatives.Attransporthubs,travellers’temperaturesarebeingcheckedtodetectfever.Butitmaytakeaweekormoreforthevirustoincubate,sosomeinfectedpeoplemaynotbespotted.

Theeconomyisbiggerbutlessfizzythanitwasin2003.DuringtheSARSoutbreakafewbigsectorsthrivedevenasothersstruggled.Exportssurged35%.Spendingoninfrastructureandhousingheldstrong.Today,however,exportgrowthisfarweaker—only0.5%in2019.Propertysaleshavestartedfallingafteralongboom.Andthecountryhaslessscopetoincreaseitsspendingoninfrastructure,havingalreadybuiltsomuchoverthepastdecade.Inthefirstfewdaysafterthenumberofconfirmedinfectionssurgedthismonth,Chinesestocksfellabout5%.Theycouldtumblefurther.DuringSARS,HongKong’smainindexdeclinedbynearly20%.

ThepartoftheeconomymosthurtbySARSwastheservicessector,whichthenaccountedforabout40%ofGDP.Todaytheshareishigherthan50%.Butconsumerspendingcouldbemoreresilientthistimebecauseofhugegrowthinthepopularityofonlineshopping.Iftheyarefearfulofventuringout(Wuhanhasorderedresidentstowearmasksinshopsandotherestablishmentswherepeoplecongregate),peoplecancontinuetobuygoodsathome.

ChinacanalsodrawcomfortfromthespeedwithwhichitseconomyrecoveredafterSARSwasconquered.Bythesecondhalfof2003itwasbacktodouble-digitgrowth.Consumersindulgedtheirpent-updemandforeverythingfromcarstobeer.Butasthecurrentcrisisgrows,thegrimrealityofthepresentisallthatmanypeople—especiallythemillionsconfinedtoWuhan—arelikelytobecontemplating.■

ThisarticleappearedintheChinasectionoftheprinteditionundertheheadline"ThecoronavirusdiscoveredinChinaiscausingglobalalarm"






Financeandeconomics

Transatlantictraderelationsarestilltense[Jan25th2020]






Stillfrosty

Transatlantictraderelationsarestilltense

ASRECENTLYASaweekago,abigtransatlanticbust-upseemedinevitable,withtheannualmeetingoftheWorldEconomicForumatDavosinSwitzerlandthemostlikelyboxingring.AmericahadtakenoffenceatFrance’sdigital-servicestax,whichhitsthelikesofAmazon,FacebookandGoogle,onthegroundthatitdiscriminatesagainstAmericancompanies.TheFrenchhadinsistedthatthetaxwasonlyatemporarymeasureandwouldberepealedassoonasgovernmentswereabletoreachamultilateralagreementontaxreform.TheAmericans,unconvinced,werepoisedtowhackdutieson$2.4bnofFrenchchampagne,beautyproductsandhandbags.

ButthenonJanuary19thAmerica’spresident,DonaldTrump,struckatemporarytrucewithhisFrenchcounterpart,EmmanuelMacron.Francewouldsuspendthecollectionofrevenuesfromitstechtax,andtheAmericanswouldsuspendtheirtariffthreats.

Alove-inatDavos,then?Notquite.Soonaftertheapparentceasefire,tensions

begantoriseagain.TheeliteassembledattheSwissresortweretreatedtoplentyoftheatrics.StevenMnuchin,America’streasurysecretary,warnedtheBritishgovernmentthatitsversionofadigital-servicestaxwouldnotescapepunishment.WhenSajidJavid,theBritishchancelloroftheexchequer,informedtheaudiencethatBritainwouldprioritiseatradeagreementwiththeEuropeanUnion(EU)overonewithAmerica,MrMnuchinseemedhurt,saying“Ithoughtwe’dgofirst.”

ForhispartMrTrump,freshfromagreeinga“phaseone”dealwithChina(seeFreeexchange),andexpectedsoontosignintolawarevisedtradedealwithCanadaandMexico,flexedhisdealmakingmuscle.FirstherepeatedanoldthreattoapplytariffsonimportsofEuropeancars.ThenhesaidthathethoughthecoulddoadealwiththeEUbeforethenextpresidentialelectioninNovember.Hisadministrationhashobbledthedispute-settlementsystemoftheWorldTradeOrganisation(WTO).ButonJanuary22ndheheldanimpromptunewsconferencewithRobertoAzevêdo,theWTO’sdirectorgeneral,promising“dramatic”action.

Howtointerpretallthehigh-altitudehotair?Intruth,therearefewsurprises.FewwatchingAmerica’sreactiontoFrance’sdigital-servicestaxwouldhaveexpectedBritaintoescapeMrTrump’swrath.AndithasbeenclearforsometimethatBritainwillhavetofocusonestablishinganewtradingrelationshipwiththeEU,itslargestandclosestneighbour,beforegettingintoserioustalkswithAmerica.

Asforthetransatlantictraderelationshipmorebroadly,MrTrump’sstatementsthisweekwerehardlynew.TheywillnotgenerateanythingmorethanashallowtradedealwiththeEU—thoughthatmightsufficeforMrTrump.MrAzevêdohasnoconcessionstoofferthepresident,astheWTOisdrivenbyitsmembers.

EvenMrTrump’strucewithMrMacronmayinvolvelessthanmeetstheeye.OnJanuary22ndBrunoLeMaire,France’sfinanceminister,admittedthatthebiggeststickingpoint—thatAmericawantscompaniestobeabletooptoutofaninternationaltaxagreement—hadnotbeenaddressed.AsTheEconomistwenttopressthesquabblingpartieswereduetoholdmoremeetings.Somestillhopeadealcanbeforgedbeforetheendofthisyear,undertheauspicesoftheOECD,amultilateralforum.Ifnot,analmightypunch-uplooms.■

ThisarticleappearedintheFinanceandeconomicssectionoftheprinteditionundertheheadline"Transatlantictraderelationsarestilltense"






Business

Thenumberofthebest[Jan25th2020]






Bartleby

Thenumberofthebest

HOWBIGshouldabusinessteambe?Itisanenormouslyimportantissueforcompanies.Teamsthataretoosmallmaylacktheskillsrequiredtogetthejobdone;teamsthataretoobigmaybeimpossibletoco-ordinate.

Similartrade-offsmayapplywhenitcomestofirmsasawhole.Startupsareoftenshortofstaff.Thefoundersmustplayahostofdifferentroles,fromobtainingfinancetoproductdevelopmentandmarketing,forwhichtheymaynotbeequallysuited.Buttheupsideisthattheycanhavehighlycollaborativeworkingenvironments.

Peoplewhohaveworkedforstartupssaytheculturechangeswhenthecompanyreachesacertainsize.PattyMcCord,formerlyofNetflix,referredtothe“stand-on-a-chairnumber”—thebiggestgroupthatcaneasilyhearthebossaddressthem.

RobinDunbar,ananthropologistatOxfordUniversity,hasdonealotofworkonprimategroups.Hisargumentisthatthesizeofthegroupislinkedtothesizeof

thebrain.Withtheirlargebrains,humanscancopewithlargerbands.Alargersocialgrouphasmanyadvantages,allowingforgreaterprotectionandspecialisation.

Whereas150issometimesreferredtoasthe“Dunbarnumber”,theacademichimselfinfactreferstoarangeoffigures.Heobservesthathumanstendtohavefiveintimatefriends,15orsogoodfriends,around50socialfriendsand150-oddacquaintances.

Runningalargernetworkcanbedifficult.Somuchtimeisneededtomaintainrelationshipsthattheirqualityinevitablysuffers.Thearmedforceshavespentmillenniaexperimentingwithunitsize.ARomancenturionoversaw100.ThemodernAmericanarmycompanyhas180members.Britain’sequivalentnumbers120.

Theseareroughestimates,ratherthanrigidfigures.ButitisstrikingthatmanygroupactivitiesseemtobeclosetoaDunbarnumber.TheSpecialAirService,Britain’selitefightingunit,hasfour-manpatrols;whenyourlifedependsonit,youneedtohaveabsolutetrustinyourcolleagues.Asaresult,suchgroupsarelimitedinsize.

Sports-teamsizesrelatetotheplayingarea.Therearefiveplayersinabasketballsideandsixinicehockey;outdoorsthereare11playersinfootballandcricketteams,and7-15inthevariousformsofrugby.Perhapsthisistheoptimalsizeforcoachingpurposes,orperhapscrowdswouldstruggletodistinguishindividualplayersifteamswerelarger.

Smallworkteamsmayalsotendtowardsthesetwosizeranges.“Ifyouwantacommitteetodecidesomething,limitittofourtofivepeople,”saysMrDunbar.“Buttobrainstorminameeting,youneed12-15.”Manycompaniesuse“agile”teamswhichdrawemployeesfromacrossthecompany;theytendtohavebetweenfiveandninemembers.

Mostbusinessesaresmall.AsurveyofBritishfirmsin2015foundthatonly0.6%employedmorethan150people.Noraresmallcompaniesnecessarilyephemeral.Onestudyconcludedthat89%oforganisationsthatlastmorethan100yearsemployfewerthan300people.

Anothergroupoflong-lastingorganisationsisreligiouscongregations.TheHutterites,aProtestantgroupwithGermanorigins,limitedtheircommunitiesto

150.Theybelievedthatitwaspossibletomaintainsolidarityinagroupoffewerthan150peoplewithpeerpressure;onceyouexceededthatnumber,youneededtheequivalentofapoliceforce.

Formuchofeconomichistory,workwasconductedinsmallunitsbypeasants,tenantfarmersandartisans(forexampleblacksmiths).Theadventofpoweredmachineryenabledproductionatamuchlargerscale,withworkerscrowdedintofactories.Thesedaystheriseoftheserviceeconomymeansthatworkersarenolongerconcentratedinsuchlargegroups.

Thismaynotbeabadthing.Itwaseasyforemployeesinlargefactoriestoregardremotecompanyownersas“them”ratherthan“us”,andindeeditwaseasyforbusinessownerstoperceiveworkersasanundifferentiatedmassofpeopleandtreatthemaccordingly.Strikeswerecommon.

Themoderncompanymaysettleonamodelwithasmallgroupof“core”workersandalargergroupofcontractworkers.Theresultmaybemorecohesionwithinthecorestaffbutthenon-corestaffmaybelesswelltreated.Thesmallcoreteamsmayworkeffectively.Thebigquestionwillbetheeffectonmoraleofthoseoutsidethoseteams.

ThisarticleappearedintheBusinesssectionoftheprinteditionundertheheadline"Thenumberofthebest"






Graphicdetail

HowisNetflixfaringinthestreamingwars?[Jan23rd2020]






Dailychart

HowisNetflixfaringinthestreamingwars?

NETFLIXANNOUNCEDonJanuary21stthatitreached167msubscribersattheendof2019—morethanthepopulationofallbutsevencountries.YetthecompanyfacesfiercecompetitionfromnewservicessuchasDisney+andAppleTV+.Inalettertoshareholders,thecompanywrotethat,althoughithas“abigheadstartinstreaming”,thetransitiontovideo-on-demandentertainmentis“stillinitsearlystages,leavingampleroomformanyservicestogrow”.

InAmericatheeffectsofsuchcompetitionhavealreadybeguntoemerge.InJulyNetflix’ssharepriceplungedby14%whenthecompanyrevealedthatithadnotonlymisseditstargetfornewsubscribersworldwideinthesecondquarterbuthadactuallylostcustomersintheUnitedStatesforthefirsttimeineightyears.Thecompanyblamedaweakslateofcontentaswellastheincreasedsubscriptionfees(ithadnotifiedcustomersinAprilthatthecostsofalltheirplanswouldrise).Inthethirdquarterthestreamingservicegainedonly500,000Americansubscribers,ratherthanthe800,000ithadforecast.Thisweek’sreportbroughtmoredomesticdisappointment.Nexflixaddedonly

420,000newAmericancustomers,wellbelowtheexpected600,000.Thecompanyacknowledgedthattheselacklustrefigureswerecausedbycompetitionfromrivalservices—whichwillonlyintensifyinthecomingmonthswiththelaunchofPeacock(ownedbyNBCUniversal),Quibi(ashort-formmobile-videoplatform)andHBOMax.

Outsideitshomemarket,thestoryisahappierone.Netflixhasworkedhardtoproduceoriginalforeign-languagecontentandlicenseestablishedfavouritesacrosstheworld.Ithasalsostruckpartnershipswithsuccessfullocalproductioncompanies,particularlyinFrance,IndiaandSouthKorea.Theseeffortshavepaidoff.Thecompanyadded8.8mnewsubscribersworldwideinthefourthquarter,farexceedingitsownforecastof7.6m.

Tofendoffitschallengers,Netflixwillhavetocontinueproducinghitshowsandfilms,ofthekindthatearnedit24Oscarnominations—thehighesttotalofanystudioordistributor—earlierthismonth.Theseareoftenlaunchedinthelastquarteroftheyeartocatchtheholidayseasoninmuchoftheworld,whencustomerswatchmoretelevision,andbecausetherearefewersportingevents,blockbustersandnetwork-televisionfinalestocompetewith.Thecompanyisreportedlyspending$17.3bnonnewcontentin2020,upfrom$15.3bnin2019;Disney,bycomparison,isprojectedtospend$1bnonDisney+contentthisyear.Althoughthestreamingwarsareintensifying,Netflixinsiststhatitsmainobjective—producinghigh-qualityentertainment—hasnotchanged.





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Britain

TheremarkablesimilaritiesbetweenthequeenandAlexFerguson[Jan25th2020]

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Losingthetitle

TheremarkablesimilaritiesbetweenthequeenandAlexFerguson

THEPARALLELSbetweenaroyalfamilyandafootballsquadarenotexact—footballerstendtobemoredisciplinedandbettertrainedthanroyals—butmonarchsandfootballmanagersarebothinchargeofsmallgroupsofunusualindividualswhoareconstantlyinthepubliceye.Misstepsbyonemeandisasterforall.SoitisnotsurprisingthatsimilaritiesareemergingbetweenthequeenandEnglishfootball’smostsuccessfulmanager,ManchesterUnited’sSirAlexFerguson.

Bothroyalandfootballsquadshavetoberefreshedtokeepthefanshappy,andFergusonandWindsorhavebothshowntheabilitytonurtureyoungtalenttomaturity(DavidBeckhamandRyanGiggs;WilliamandHarry)andtobringinoutsiders(WayneRooneyandEricCantona;KateandMeghan).Butnewhiresdonotalwaysworkout,andgreatmanagershavetobewillingtosacrificetalentedindividualsintheinterestsoftheteam.JustasFergusonsackedBeckhamwhenhisegoandhisendorsementsgotinthewayofhisfootball,so

thequeenhasdealtruthlesslywithHarryandMeghan.Theywantedtobeabletostayhalfinthefamily,doingsomeroyalworkwhileexploitingtheirtitlesfortheirprivateinterest;and,asthemostpopularoftheroyals,theymightreasonablyhaveexpectedthatWindsorwouldaccedetotheirdemands.Instead,theyhavebeenputonthetransferlist,andwilllosetheirroyaltitles.LikeBeckham,theywillberelegatedtoNorthAmerica.

NeitherWindsornorFergusonhavetoleratedincompetence.JustasMassimoTaibi,anItaliangoalkeeper,wasoutinlessthanayearafteraseriesofgaffes,soPrinceAndrewwasdroppedfromtheroyalsquadafterhisdisastrousinterviewonhisrelationshipwithJeffreyEpstein,asexabuser.Thepalace’sannouncementthathewouldbewithdrawingfromroyaldutiesismorelenientthanthetreatmentthatmighthavebeenmetedoutinpreviousages,whenroyalslosttheirheadsratherthantheirjobs.Still,firingone’sfavouritesonshowsacertainsteeliness.

AlthoughWindsor,with68yearsinthejob,hassurpassedFerguson,his27inpostmadehimthelongest-servingmanageratthetopofBritishfootball.Bothmanagers’longreignshaveconferredadegreeofstabilityfromwhichtheirorganisationshavebenefited.Ferguson’smanyyearsinpowerenabledhimtoassertanirongrip,sincetherewasnohopeofunhappyplayersoustinghim;Windsor’slongstintinthejob—shehastakenthetitlesofBritain’slongest-everreigningmonarch,longest-livedBritishmonarchandlongest-reigningqueenofalltime—enabledhertoeasehercountrythroughalongperiodofrelativedecline.

Monarchies,likefootballclubs,outlivetheirincumbents.SinceFergusonsteppeddown,Unitedhavestruggled.Manageraftermanagerhasfailedinhisshadow.Windsor’smanyfansmusthopethesimilaritiesdonotextendthatfar.

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