| | | | British Politics, Remade? | | Votes are being counted in the UK's election, but exit polls show Prime Minister Boris Johnson's Conservatives poised to win a strong victory. If those indications hold, The Guardian's Martin Kettle writes, the results could transform British politics. Conservatives would have an "incontrovertible mandate to take the UK out of the European Union in January," and a thoroughgoing victory would shift "all recent analysis of the party's place in UK politics, reuniting it with its reputation as the most resilient and successful election-winning party in Europe." The question, he writes, is whether a Tory victory would signal public support for "getting Brexit done" or a larger endorsement of "Johnsonian Conservatism."
Messy as UK politics have been, in a Washington Post column Henry Olsen calls the December campaign a relative oasis—and something the US should envy. UK candidates are subject to low spending limits (about $11,500, plus six to nine pence per voter in a district), and political ads are banned from TV and radio. "Imagine a world in which voters aren't bombarded with television ads and robocalls for months, but are fully politically literate," Olsen writes. "It sounds like a dream world, but it's not: It's Britain." | | Maybe US Education Isn't So Terrible | | On GPS, author Teru Clavel recently examined the reasons why East Asian students consistently outperform their American counterparts—from higher expectations to more equitable school funding to a greater value placed on teachers—but in a Bloomberg column, Noah Smith suggests US education may not be so inferior. Yes, the US lags behind in math, but the most recent PISA scores (the education measure produced by the OECD) rate the US higher than Japan in reading. In a different report, the US education lag is narrower, and a World Bank metric that combines different studies shows that the US, "educationally speaking, is rather average for a rich country."
That gives Smith some hope: "It stands to reason that if American kids can learn to read better than kids from Taiwan or Germany, then they're smart enough to make up some of the gap in math," he writes. His suggestion: "to spend more money on education, especially on underfunded schools in poor neighborhoods." | | For Capitalism to Survive, Does Taxation Need to Change? | | In a Foreign Affairs essay, Joseph Stiglitz, Todd Tucker, and Gabriel Zucman warn that as multinational corporations and wealthy individuals perfect the use of tax havens, the modern state is being starved of resources.
Large multinationals pay low effective rates, they write, as do wealthy individuals who derive capital gains. Case in point: "Today, according to the latest available estimates, corporations around the world shift more than $650 billion in profits each year (close to 40 percent of the profits they make outside the countries where they are headquartered) to tax havens, primarily Bermuda, Ireland, Luxembourg, Singapore, and a number of Caribbean islands." The authors argue for a new system of international corporate taxation, similar to that used by US states, in which countries might tax corporations based on the share of their assets, sales, and acivities within a given jurisdiction—rather than allowing companies to count profit in convenient places like Ireland, where Apple has paid a rate as low as 0.005%.
Without taxes, the state can't function properly, they write—and when the state breaks down, it can no longer punish bad actors, provide security, and guide standards, all of which are necessary in a capitalist system. "By eating up the state," they write, "capitalism eats itself." | | Why Trade Wars Are Bad News for Asia's Emerging Economies | | In the US-China trade war, some have argued that emerging economies will come out on top: As the US looks to diversify its imports, and as supply chains move away from China, countries like Vietnam have been well positioned to reap the benefit.
But in a recent Chatham House report, James Crabtree (and others) suggested the picture isn't so rosy. In a chapter on what US-China competition will mean for Asia's developing countries, Crabtree writes that "this talk of trade war winners is … misleading." Global flows of foreign direct investment stand to ebb, as does investor confidence, which could deprive emerging economies of investment. If protectionism becomes a trend and tariffs rise globally, developing countries will have less opportunity to grow their export economies (the key to Japan's and South Korea's past development successes); meanwhile, as production becomes more localized (including in China), less foreign manufacturing will move to their shores. On top of that, they'll be squeezed between China and the US; China will likely pull them further into its orbit, while buying fewer foreign goods. All of which spells bad news for the trade war's prospective "winners." | | Does the Saudi IPO Mask a Lack of Reform? | | The record-setting IPO of Saudi Arabia's state oil company, Saudi Aramco, "is a metaphor for the rollercoaster journey Saudi Arabia has been on as Prince Mohammed consolidated power and shook up the kingdom on a scale not witnessed since his grandfather, Abdulaziz, founded the modern state 87 years ago," Andrew England, Simeon Kerr, and Anjli Raval write in the Financial Times.
While Crown Prince Mohammed bin Salman has ushered in new rights for women and has promised a reform agenda, some results have yet to arrive, with women's labor participation lower than hoped, public sector wages rising to 50% of expenditure, and a $50 billion budget deficit slated for next year. With IPO revenue set to pour into Saudi Arabia's Public Investment Fund, MBS's reform vehicle, the authors suggest, it's an open question whether deeper changes will be instituted—or whether MBS's free wheeling in the global economy is more for show. | | | | | | |
