The True Cost Of Surveillance

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The Conservative government recently published proposals for new legislation to regulate spying in the UK. The draft Investigatory Powers Bill seeks to do many things, particularly gathering up powers already contained in a lot of different existing laws and subjecting them all to a coherent oversight procedure. Most of the discussion generated by these proposals has been about the implications for liberty. But there is another and related dimension that should be considered, and that is the potential for the Bill to harm the economy.

First published on CapX: read more here

We Are The New Georgians

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Sometimes it seems as if Britain is surrounded by existential threat. Armed extremism, financial  upheaval, cultural confusion – all can feel like they could break a brittle, uncertain society. But these are only the headline concerns of the day. Deep beneath the headlines there is another country where real change happens, sometimes slowly, and sometimes not. At this level Britain really is in a state of transformation. It is nothing to do with terrorism, or politics, or religion. It is a lot to do with new machines, new materials, new algorithms, and new patterns of behaviour. These are things that are changing the shape of minds as well as environment, and what is really striking is just how relaxed Britain is about it. To find a historical parallel for this era of peaceful redrafting of the fundamentals one has to go back at least two and a half centuries. It is Georgian Britain that offers the best guide to what is happening today, and some clues to what might happen next.

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The Mystery Of Haile Selassie

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In late January 1941 a party of soldiers and civilians crossed the border from Sudan into Italian-occupied Ethiopia. The men in uniform included British political advisors, some peculiar soldiers of fortune, and the shambling, eccentric and driven figure of Major Orde Wingate. There were priests of the Ethiopian Orthodox Church in their robes, and a group of aloof Ethiopians who looked very far from home as they assembled for a ceremony in the dried-up riverbed. Among them there was a very small, black-bearded man of bearing, a man who the British had been referring to as ‘Mr Smith.’ This was Haile Selassie the First, The King of Kings, Emperor of Ethiopia. A few months earlier he had been living in straitened circumstances in a cold villa just outside Bath. Now, thanks to the machinations of war, he was on his way to Addis Ababa to reclaim the throne of the 225th monarch in the House of David, in one of the greatest comebacks of all time.

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The World’s Most Pointless War

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Africa has had a good press this last few years. It deserves it. In most countries life is getting better, and people have more power to work, to spend, to choose. But not everywhere. And particularly not in one country that few know, that fewer have visited, and that today is on fire.

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Junk Bond

james-bond-1400x788You approach a new James Bond film with finely blended expectations of excitement and concern and dread. Excitement at the prospect of the second most expensive action film ever produced, concern at the health of a venerated British institution, and dread at the prospect of yet another prime turkey in the turkey-infested realm of the Bond franchise. So before we go any further let us address the turkey in the room: Spectre, the twenty-fourth film in the sequence, is a turkey. It is not an enormous great clucking monster turkey. It is just an ordinary medium turkey, the kind of turkey a middle-aged couple might order for a quiet Christmas at home without the children. How it managed to cost $300 million is anyone’s guess, but at that price it is certainly the most disappointing dinner for two in history.

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Here It Comes: The Next Meltdown

emerging-markets-crash-1400x788The average cycle time between financial crashes is ten years. A decade is about as long as it takes for bad debts to be purged, for financial risk-taking to swing from appetite to aversion and back to appetite again. In other words, the world is about due for some trouble. The only question – usually – is where the epicentre will be. But that’s easy: it will be in the emerging economies.

First published on CapX: read more here.

 

Russia’s World of Digital Control

red-web-1400x788In the English language the words ‘spy’ and ‘Russia’ are fellow travellers. The Russian state is secretive by nature and the methods of the secret state are the methods of the spy services: surveillance, interception, and information control. All of these techniques are part of the political management system of Putin’s Russia, and they have all been greatly enhanced in the last fifteen years. Thanks to two outstanding Russian journalists, Irina Borogan and Andrei Soldatov, we now know much more about how Russia uses and co-opts the worlds of digital communication and information flow to monitor its citizens at home, and shape their world view. On a recent visit to London, Borogan and Soldatov joined CapX for a conversation about their recent book The Red Web on Russia’s domestic programme of surveillance and censorship.

First published on CapX: read more here.

Chinese Competition? You Ain’t Seen Nothing Yet

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What’s the biggest economic risk from China? A GDP growth crash? A bond price meltdown? Low-cost knock-off competition? Copyright theft and counterfeiting? Actually it is quite likely that the answer is none of the above. The biggest risk from China is competition, but not the sort of cheap-and-cheerful competition that Western companies have grown used to. It’s something much more scary than that.

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White Is The New Amber

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Edmund de Waal, a celebrated potter and ceramicist who had one of the literary hits of 2010 with his biographical memoir The Hare with Amber Eyes has now written a study of the remarkable history and nature of porcelain. De Waal has devoted much of his working life to porcelain, and this is not a mere history of the white ceramic that helped shape the wealth of nations from its discovery in China more than two thousand years ago. It is an attempt to capture the inner nature of porcelain, its power to mesmerise and to bankrupt its addicts.

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China Hasn’t Crashed. Yet.

1chinaFor as long as I can remember I have been reading financial reports about the coming ‘hard landing’ in China – and explanations from the financial wizardry as to why there won’t be a hard landing as long as the Communist Party is in charge and in funds. Last week it seemed that the wizardry had finally been proved wanting, with consecutive days of near 10% falls in the mainland and Hong Kong stock markets, and enough downs and ups in Western markets to make it seem as if the day of doom was close to hand. Is this the end of the China boom? Is it the beginning of the next recession? Could this be the final, violent phase of the global crash that began in 2007?

First published in Capx.co: read more here

Corbyn Has Found the Fear

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Jeremy Corbyn, an awkward unclubbable left-wing activist who thinks Venezuela is the model of how a society should be managed, is coming closer to winning the leadership of the Labour Party, Britain’s main opposition party. Of all possible responses from Labour to its humiliation in the recent general election, the Corbyn surge is the least-expected. The Conservatives cannot believe their luck. The focus-group centrists of Labour are banging their heads on their keyboards in despair. The great mass of disinterested onlookers are going ‘what? who? why?’, before changing channel. And Corbyn surges on.

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Is Capitalism a Good Thing?

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Capitalism: Money, Morals & Markets by John Plender

John Plender, a journalist on the Financial Times, has written a book about capitalism and whether it is a good thing – and that is taking ‘good’ in its broadest sense, to include ‘moral’ as well as ‘useful’. Now, there are those who would object that a journalist on the famously pink  paper is the last person who would know anything about capitalism. But let’s not cavil and trade insults like economists: Plender’s book, Capitalism: Money, Morals and Markets is a good thing, on balance, all things considered. And that is pretty much Plender’s verdict on capitalism.

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India Needs a Total Reset

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Earlier this year, India’s finance minister used the occasion of his budget to declare a truce. There would be no more multi-billion tax raids on big foreign companies in India. Investors could rest easy: the days of ‘tax terrorism’ were over. One month later, the London-listed Cairn Energy opened a brown envelope to find that the Indian authorities were demanding $3.2 billion in extra tax. Cairn had just joined countless other investors who have learned that India’s economy is schizophrenic. It will extend one hand as a friend, and the other as an enemy. If India is to get anywhere near its massive potential, it needs treatment.

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How to Crack the Knowledge Code

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Why is Switzerland so rich? Why is Portugal so poor? And what exactly is the recipe for going from poor to rich? These are the sorts of questions that development economists and policy folk from a thousand think-tanks spend their days and nights puzzling over. But according to a group of economists and data-crunchers at Harvard’s Center for International Development, the answers may not be as elusive as some fear.

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Calcutta: The City of Questions

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People say a lot of things about Calcutta, but one thing they never say is that Calcutta is a pleasant place. Intense, chaotic, corrupt, and confusing, yes. Unremitting discomfort and infinite inconvenience, yes. Pleasant, no. Calcutta (or Kolkata if you insist on following the endless name-changes inflicted by the government of West Bengal) is never going to be your ideal destination for a quiet relaxing break. But it is unforgettable: addictive, insistent, and amazingly friendly (for a place that is so violent). Calcutta is India in highly concentrated form. Use with caution.

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The Spook In The Machine

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Book Review: Intercept by Gordon Corera

Keeping secrets, sending secrets, stealing secrets: it’s a very ancient trade. The business of intercepting and deciphering communications has been going on for as long as people have had brains enough to profit from knowing more than their enemies. And today, as this bleakly entertaining new book from Gordon Corera reminds us, the branch of intelligence known as signals intelligence is now conducted on an industrial scale. The dream of the East German Stasi – that everyone should be spied on, all of the time – is close to becoming a nightmarish and universal reality.

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Meet the Baboons Who Broke the Banks

Llloyds-1-1400x788Book Review: Black Horse Ride by Ivan Fallon

On the Sunday of the ninth of September 2007 a meeting was called in the Treasury. It was, as they say, fateful – although none of the participants realised it at the time. That afternoon the course of the UK economy and political life was altered for years to come. If things had been decided differently there might have been no collapse of Northern Rock, no bank bailout, the Labour government might have emerged from the financial crisis with its reputation enhanced instead of ruined, and Gordon Brown might still be Prime Minister.

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How to Lose a Lot of Money in Africa

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If you haven’t heard what investors call the “Africa Story”, here it is. Africa south of the Sahara is on a roll. The once debt-ridden disaster zone of the world economy is back on its feet, and fighting. Sub-Saharan Africa is now growing faster than any other region of the world: from bankruptcy to boom in the space of less than a generation. The only bad news is that Africa is back in debt. And for some African economies, debt will turn to disaster. Soon.

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