Time for a civic surge

WITH their towering columns and gilded clockfaces, the Victorian town halls of England’s northern cities look like the seats of empires. And so they once were. Bradfordian woolmen and Mancunian cottonspinners led Britain’s Industrial Revolution, bringing their cities national clout and global fame. But a century-long suction of power to the capital has turned Britain into an extraordinarily centralised country. Ninety-five per cent of taxes are raised in London, leaving the grand council chambers of the regions to hear debates on parking fines and dog fouling.

Now there is a chance for England’s cities to win back some of their long-lost power. Seeking savings and an answer to English envy of Scotland’s growing autonomy, George Osborne, the chancellor, has offered to cede billions of pounds of spending on transport, education, policing and health to clusters of cities that agree to join together and be run by an elected mayor (see article). The new freedoms, which represent the biggest change...

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Bigger than Blatter

SO THE stubborn septuagenarian resigned from the tiddlywinks committee. Why all the fuss and headlines, some eye-rolling observers have been wondering? What does it matter who runs FIFA, football’s abstruse governing body, or where its tournaments are held? All these shenanigans, like the furores that occasionally erupt in other sports, are absurdly overblown. Football belongs on the back pages, not the front.

That view, common among sports non-enthusiasts, rests on the mistaken notion that corruption in sport is also a sort of game, in which rubicund rogues harmlessly siphon off gate receipts. Even many fans, perturbed by the disruption of their hobby, miss its real gravity. Because at bottom this is not a recreational issue but a criminal one. Neither harmless nor victimless, sports corruption is perpetrated by crooked officials, abusive governments and gangsters, sometimes in concert. It matters—and, welcome as Sepp Blatter’s demise is, the problem goes well beyond him, FIFA and football (see article...

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Meet Shinzo Abe, shareholder activist

“STUPID, greedy, adulterous, irresponsible and threatening.” At least the Japanese vice-minister for the economy, speaking about equity investors in 2008, was being honest. Indeed, he could not have summed up most Japanese politicians’ contempt for shareholders any more pithily. But as Shinzo Abe, the prime minister, tries to boost a flaccid economy, official attitudes are changing at last.

Japan’s companies are sitting on ¥231 trillion ($1.9 trillion) in cash, an amount nearly half the size of the economy itself. Mr Abe wants that hoard to boost capital expenditure or wages, or to be returned to investors, who could put it to better use. He thinks a dose of shareholder capitalism will do the trick. Government bigwigs, including Mr Abe himself, now offer meetings to foreign activist investors. A new governance code, which came into force this week, seeks to break open the cosy world of the Japanese boardroom by requiring firms to appoint at least two outside directors (see article).

...

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Rump stake

IN THE beauty contest among big emerging markets, India has a fair claim to the crown. Growth is above 7%, inflation below 5%. Interest rates are falling, if slowly; the rupee has been fairly resilient. Yet India’s economy looks rather less handsome in one regard: the finances of many of its companies and the public-sector banks that fund them are in rotten shape.

An analysis last year by the IMF showed that India’s corporate sector has a higher level of debt relative to equity than that of any other emerging market, bar Brazil. A third of the 3,700 listed companies sampled in a recent study by Credit Suisse paid more in interest than they earned. Not surprisingly, the incidence of Indian public-sector bank loans that are troubled has risen—to 12% at the last count—and that could grow further. Among private banks the share of troubled loans is 4%. Public-sector banks account for more than 70% of India’s loan stock. These banks already require around $40 billion of fresh capital by 2018 just to conform to internationally agreed rules on minimal capital standards. Add in the rising share of bad debts, and the worry is that banks will not...

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Winds of change

FEW investors come in more belligerent form than Daniel Loeb, an American activist shareholder known for attacking lacklustre chief executives in the most personal of terms. Yet Mr Loeb has lately found a second home in Japan, a country where shareholders with opinions have hitherto been about as welcome as skunks at a garden party.

Late last year Mr Loeb’s fund, Third Point, took a stake in Fanuc, a secretive and highly profitable robotics firm which until recently seldom made direct contact with its investors, choosing instead to hoard a vast and expanding pile of cash. No one expected Mr Loeb’s gambit to succeed. In the past, successive waves of investors have tried to encourage Fanuc to change its ways, only to throw in the towel, usually at a loss. So the firm’s surprise news in March, that it would start talking to shareholders and return some of its cash to them, reverberated far and wide.

Mr Loeb has since taken tea with Fanuc’s president, Yoshiharu Inaba, at its headquarters in the foothills of Mount Fuji. He is receiving further encouragement from the very top of government. He has had private meetings with Shinzo Abe, the...

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Block shock

IN ADVERTISING, an old adage holds, half the money spent is wasted; the problem is that no one knows which half. This should be less of a problem in online advertising, since readers’ tastes and habits can be tracked, and ads tailored accordingly. But consumers are increasingly using software that blocks advertising on the websites they visit. If current trends continue, the saying in the industry may well become that half the ads aimed at consumers never reach their screens. This puts at risk online publishing’s dominant business model, in which consumers get content and services free in return for granting advertisers access to their eyeballs.

By some estimates, more than 200m people worldwide are now regular users of ad-blocking programs (see chart). Eyeo, the maker of Adblock Plus, the most widely used such software, says it has been downloaded more than 400m times. Until fairly recently, ads were mostly being blocked on desktop and laptop computers but now people are installing the software on their mobile devices, which are expected to account for a growing share of their time online.

Ad-blocking software used...

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Edging towards a settlement

THE company’s boss is merely “cautiously optimistic”. Not everyone is on board. But there are good reasons to believe that the six-year deadlock over one of the Middle East’s biggest corporate collapses could be broken before long.

Ahmad Hamad Algosaibi & Brothers Company (AHAB), whose interests range from industrial products to fast food, defaulted in 2009, amid claims—still untested in court—that it had suffered a huge fraud. Attempts to reach a settlement with creditors got nowhere until April this year, when AHAB agreed terms with a steering committee representing foreign creditors. This week it presented the plan to all the 95 international banks and hedge funds concerned, which between them are owed $4 billion. Their response was “encouraging”, says an adviser to AHAB, who is confident that “the vast majority” would have voted for the plan if asked to do so after the meeting (in practice it is the firms’ credit committees that must decide).

Having last year spurned an offer of at least 20 cents on the dollar, they are now being offered a minimum of 28 cents. They will also get their hands on AHAB’s property portfolio if the company’s recoveries from litigation against other parties fail to meet a certain threshold. AHAB, which is now run by former forensic accountants from Deloitte, has locked horns with, among others, the liquidator of...

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Mind the gap

Inequality: What Can Be Done? By Anthony Atkinson. Harvard University Press; 384 pages; $29.95 and £19.95.

CONTEMPORARY books on inequality are divided into those published “BC”, or before “Capital in the Twenty-First Century” by Thomas Piketty, or “AP”, for after Piketty. The 44-year-old French economic historian’s study of rising wealth and income inequality, which first came out in French in August 2013, caused a storm when it was published in English seven months later and became an international bestseller. The book did an excellent job of focusing people’s minds on the subject. It also set the lines of empirical battle and even offered a possible remedy: a global tax on wealth. If Mr Piketty whetted the public’s appetite for discussions of inequality, he also made it far more difficult for subsequent authors to say something new and original about it.

That is unfortunate for Sir Anthony Atkinson, a British economist who has now written his own book. Sir Anthony, who is 70, has been working on inequality and poverty for more than four decades. He was an academic mentor to the young Mr Piketty and they...

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Walking the walk

Plugged in to climate concerns

SIX big European oil and gas firms called on June 1st for a globally co-ordinated price on carbon-dioxide emissions, to restrain the impact on the climate of burning fossil fuels. It was a bombshell, in its way. Five years ago no one would have expected the move: as producers of much of the world’s dirty fuels, their industry was disinclined to join forces and advocate accelerating the switch to cleaner ones. “It is a sort of revolution,” says Patrick Pouyanné, the boss of one of the six, Total. And it is not just the energy firms. As world leaders prepare to meet in Paris in December to produce an agreement on reducing greenhouse-gas emissions, attitudes towards climate change have altered profoundly among businesses of all kinds.

In 2009, when a global conference in Copenhagen failed to come up with a new agreement to replace the Kyoto protocol, many businessmen were not much worried about either the failure or global warming itself. They saw Europe’s host of related regulations—along with a carbon-trading system of limited impact—as little more than a burden on firms’ competitiveness...

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Riding the crest

A wave of Japonisme

KATSUSHIKA HOKUSAI, a Japanese printmaker who died in 1849 aged nearly 90, is one of those artists whose long, impressive career has come to be known for a single iconic work. During his lifetime his images of Mt Fuji and his floral prints were widely imitated in the West. But “Under the Wave off Kanagawa (The Great Wave”—pictured)” is so famous, and has been reproduced in such a wide variety of contexts and formats, that it has swamped his other achievements. It is a testament to the complexity of Hokusai’s oeuvre and to the depth of the collection at the Museum of Fine Arts (MFA) in Boston that in wandering through its new exhibition dedicated to the great Japanese printmaker, one could easily overlook this familiar image among the many riches on display. Surrounded by a host of equally inventive and beautifully crafted prints, paintings and drawings, “The Great Wave” appears as an exemplary, but not exceptional, representative of a versatile master’s work.

One of the revelations of this show is how fresh Hokusai’s works manage to feel two centuries after they were created. Perhaps this has...

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Black moods

CHEAP but dirty now, clean and still affordable sometime in the future. That used to be the coal industry’s pitch. But changing public moods about pollution, and stubbornly costly new technology, are denting the coalmen’s mood.

The biggest surprise is the slowdown in consumption in China, which burns half the world’s coal. Last year’s fall in demand no longer looks like a blip. In the first four months of 2015 it fell 8% year-on-year (and imports dropped by a stonking 38%). Environmental worries are spurring China to increase energy efficiency and boost its use of natural gas and renewables, particularly wind power. The economic slowdown has especially hit demand for the higher-quality (and more profitable) coal used in steelmaking.

Another big blow to the coal industry comes from cheap natural gas in North America. This is by far the cheapest fuel for power generation. Between early last year and the end of next year, coal-fired stations equivalent to more than a tenth of America’s power-generating capacity will close or be switched to gas.

European coal consumption is dropping too: In the European Union it fell by 4.7%...

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From rock to crock

Original Rockers. By Richard King. Faber & Faber; 252 pages; £18.99.

How Music Got Free: The End of an Industry, the Turn of the Century, and the Patient Zero of Piracy. By Stephen Witt. Viking; 296 pages; $27.95. Bodley Head; £20.

TWO months ago Geoff Barrow, the instrumentalist for Portishead, an award-winning British rock group, revealed on Twitter that 34m streams of his music had earned him precisely £1,700 ($2,604) after tax. He sarcastically applauded Apple, YouTube and Spotify, and his record label, Universal, for “selling our music so cheaply”. Some have quibbled with Mr Barrow’s figures, but no one has suggested the band has earned more than a tenth of a penny for each song streamed. What is more, few artists achieve Portishead’s level of success, which suggests that writing music has become a lousy way to make a living. Two new books present differing explanations of how the economics of the music industry fell apart.

Richard King’s wistful effort, “Original Rockers”, reflects on the three formative years in the mid-1990s when he worked at Revolver, a record shop in Bristol, Portishead’s home town. It was an establishment that cultivated a high-handed air and “a reputation for stocking and specialising in iconoclastic and esoteric records”. Dominated by its anti-social and...

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Sex in the boardroom

ONE by one, the glittering prizes are falling to women. General Motors, IBM, PepsiCo, Lockheed Martin and DuPont are among a couple of dozen giant American companies with female bosses. Oxford University is about to follow the footsteps of Harvard and appoint its first female leader; and next year the United States may elect its first woman president. Women still have an enormous way to go: the New York Times points out that more big American firms are run by men called John than by women. But the trend is clear: women now make up more than 50% of university graduates and of new hires by big employers.

Will this growing cadre of female bosses manage any differently from men? Forty years ago feminists would have found the very question demeaning. Pioneers such as Margaret Thatcher argued that women could and would do the same job as men, if given a chance. But today some management scholars argue that women excel in the leadership qualities most valued in modern firms. Some ask whether the financial crisis would have been as bad had Lehman Brothers been Lehman Sisters, given research suggesting a link between testosterone...

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Ties that bind

I dreamed of Africa

The Lights of Pointe-Noire. By Alain Mabanckou. Translated by Helen Stevenson. Serpent’s Tail; 280 pages; £8.99. To be published in America by New Press in March 2016.

THE world knows little about the Republic of Congo, and this travelogue-cum-memoir barely changes that. The author’s real achievement is to capture a universal experience, one ever more common in the age of mass migration: what it means to come home after a long absence.

Now living in America and France, Alain Mabanckou, a Congolese novelist who teaches creative writing at the University of California, Los Angeles, and who was recently shortlisted for the 2015 Man Booker International prize, visits his home town on Africa’s equatorial Atlantic coast for the first time in 23 years. The resulting encounters, and his accompanying thoughts, are familiar to many passing through international airports today, if rarely expressed so silkily.

Here are the remembered aspirations of parents who bless their children’s departure yet regret it nonetheless, and the migrant’s sense of guilt for having...

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Only and lonely

Buy Me the Sky: The Remarkable Truth of China’s One-Child Generation. By Xinran. Translated by Esther Tyldesley and David Dobson. Ebury; 286 pages; £20.

SINCE Xinran Xue wrote “The Good Women of China” in 2002, she has sought to tell the story of ordinary Chinese people. That first, brilliant book was based on a Chinese radio show that Ms Xue (who writes under her first name only) hosted for eight years, inviting women to call in and talk about themselves. The result was a moving and shocking account of what it was like to be a woman in socialist China.

The country is far more open now than it was even two decades ago, yet the task of recounting the first-person experiences of some of its 1.4 billion people is just as vital—and sometimes as tricky. In “Buy Me the Sky”, her seventh book, Ms Xue takes on China’s first generation of only children, those born between 1979 and 1984, after the one-child policy was introduced nationwide. Each chapter uses the life and experiences of a “single sprout”, as she calls them, to enliven a larger story.

The central question is what developing an idea of children...

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Tragedy on the Yangzi

IT APPEARS to have been the deadliest disaster on water in the 66-year history of Communist-ruled China, and the worst accidental loss of life during the tenure of President Xi Jinping. On the evening of June 1st the Oriental Star, a tourist ferry with 458 people on board—most of them old—capsized on the Yangzi river in what officials described as a tornado (the upturned hull is pictured above). By the time The Economist went to press, official media had reported the rescue of 14 passengers and crew (the captain and an engineer were detained). It was feared that the others on board were unlikely to have survived.

The stakes for any government are high when an accident this horrible occurs. In South Korea last year the poor response to the sinking of a ferry, which left 304 dead, severely tarnished the image of that country’s president, Park Geun-hye. Following the Yangzi disaster, China’s state media were quick to note Mr Xi’s urgent instructions on the rescue. The prime minister, Li Keqiang, flew to oversee the effort.

The media have carefully controlled the flow of information—anxious...

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Who wants to be a mandarin?

GOVERNMENT jobs have long been prized in China. Most years new records are set for the number of people sitting civil-service exams. University students, for all their disenchantment with politics, have been flocking to join the Communist Party in the hope of getting a leg-up into the bureaucracy. Such a career has offered security and perks aplenty. The only drawback has been pitifully low wages. This month officials are to get their first pay rises in nearly a decade; even so, many are heading for the door. Students are showing signs of losing interest in the career. Civil servants are anxious.

The reason is President Xi Jinping’s campaign against corruption, the most intense and sustained in the party’s history. It has made it harder to trouser the bribes that have traditionally supplemented those meagre official salaries. Many civil servants now fear a knock on the door by agents of the party’s anti-corruption department. In 2014 it punished 232,000 officials, 30% more than in the previous year. That was still only about 3% of officialdom, but the publicity surrounding these cases has compounded anxieties. Many officials are being taken, with...

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The everything creditor

FROM shoes to furniture and cosmetics to cars, shoppers in China can find just about anything on Taobao, the country’s biggest online marketplace. They now have one more category to choose from: distressed assets. Cinda, a state-owned bank set up to manage non-performing loans, will launch an auction on Taobao later this month of bad debts with a face value of 4 billion yuan ($646m)—backed by collateral such as bankrupt factories and even unused mines. As the economy slows, such debts are piling up. This innovative technique may help the state to offload some of them.

Bad loans in the Chinese banking system reached more than 982 billion yuan at the end of March, more than double their level three years earlier. Non-performing loans are only about 1.4% of the total on banks’ books, reportedly. But this ratio would have been higher were it not for banks shuffling off their dud loans to Cinda and China’s three other asset-management companies (AMCs).

Established 15 years ago, the AMCs were initially treated as an expedient way of cleaning up banks’ balance sheets. Bad loans accounted for about a quarter of banks’...

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Misha’s moment

Saakashvili riding into town

THE new governor of Odessa in southern Ukraine has many useful attributes. He once implemented a boldly successful anti-corruption campaign, sacking all the traffic police. That is valuable experience in a region that, even in a country as crooked as Ukraine, is renowned for graft. He speaks numerous languages, a plus in a polyglot maritime area. As an out-of-towner, he is not implicated in the oligarchic in-fighting that blights Odessa and much of Ukraine.

The oddity (and perhaps problem) is that the new governor, Mikheil Saakashvili, is not just any out-of-towner. He is a former president of Georgia, on the other side of the Black Sea—although, after leaving office in 2013, he faces allegations of abuse of office (which he denies) and cannot safely return. Mr Saakashvili led the “rose revolution” of 2003 and tried to steer Georgia towards membership of the European Union and NATO—a strategy that led Russia’s Vladimir Putin into a war with his small Caucasian neighbour in 2008. As with Ukraine after the orange revolution of 2004, Georgia’s fitful progress westward was hampered by the Kremlin’...

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Waiting for Schindler’s list

KONSTANTIN VON NOTZ, the leading Green politician on the Bundestag committee investigating American spying in Germany, embodies German ambivalence over America. He asks if the German-American relationship is a “friendship or a mere partnership”. Partnership implies a cynical “mathematics of interests”, so he prefers friendship. But that requires “shared values”, including strict parliamentary supervision over government snooping. That is why he will insist on June 8th, when the Bundestag goes back into session, on seeing what has become known as “the list”.

This list has become a potential timebomb both for Germany’s ruling coalition and for the transatlantic relationship. It refers to the documentation of millions of “selectors”—search terms for phone numbers, e-mail addresses and so on—that America’s National Security Agency (NSA) has over the years fed into the computers of its German equivalent, the BND. The Germans monitored these and passed the intelligence back to America. Under a 2002 deal, the selectors may not point to German citizens, European firms or European Union governments.

But for years the BND failed to check the...

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