zevin 8 90s hellscape

8
Globalization and Its Contents
The Economist reached the last years of the twentieth century on a high. The money pouring into finance seemed to vindicate its stance on Big Bang at home, while the fall of communism did the same for its long slog on behalf of Western liberalism abroad. At the same time, it rapidly gained readers and influence in the US, which became its home away from home. Pennant-Rea stepped down in 1993 just as the ‘new economy’ of the Clinton years got underway – to its boosters a break from all precedent, as information technology unleashed investment and growth alongside low inflation, low unemployment and near-constant productivity gains, which were bound to attenuate or even eliminate the business cycle itself.1 Since then, three points have connected the constellation of liberal ideas at the Economist: the planetary primacy of finance, vast enough to be shared out between Wall Street and the City of London; the American Empire, as both policeman and journalistic training ground; and globalization, its precondition the prior two, as cornucopia for former colonies and satellites. In all these years, no other publication articulated these points with greater authority, passion or geographical range.
Financial deregulation, and the boom in equities it fuelled, was the unmistakable leitmotif of this period. Global stock markets soared in value from under $3 trillion in 1982 to over $30 trillion in 2000. As the boom gained pace on Wall Street, financial profits rose threefold in the five years to 2000, reaching $21 billion. In some of the riskiest, most profitable lines, London outpaced New York – dominating not just foreign exchanges, but with 43 per cent of over-the-counter derivatives markets, 20 per cent of the hedge fund market and 57 per cent of European private equity business by 2006.2 In a pattern of divergence dating back to the turn of the twentieth century, interest and exchange rates stoked this speculative frenzy even as industrial production sank yet further. Britain lost 4.1 million manufacturing jobs between 1979 and 2011: from 26 to 22 per cent of total output during Thatcher’s reign to 18 per cent under Major to just 11 per cent at the end of New Labour.3 The City, in stark contrast, added over 70,000 well-paying jobs up to 2008, as the financial sector went from 7 to nearly 10 per cent of GDP. Equity market turnover, roughly equal to the national product in 1997, was three times greater a decade later.4
The City had not enjoyed this kind of prominence since 1914. Geography alone made it relevant to the new world order, with a trading day that straddled time zones in the US and Asia, while its berth in Europe made it a capital market of choice for states ‘transitioning’ from communism in the east. The Economist could not have ignored these developments if it tried. Hedge funds set up shop in St James and Mayfair, pulling up West End office prices to the highest in the world. Fund managers flapped through Economist Plaza, and some moved into its tower. A Japanese concept restaurant opened up on the premises, co-owned by a Russian oligarch’s son, the perfect spot to do a deal over smoky plum negronis.5 In an attempt to reach the same class of people, and advertisers, Economist Group executives launched Intelligent Life, since rebranded 1843, a luxury lifestyle effort to show ‘The Economist in evening dress, on holiday, and at leisure’.
The stature of the Economist rose along with that of finance, enmeshed in its central nervous system as never before. Editors departed to join banks, as others arrived from government bodies meant to regulate them. Rupert Pennant-Rea renewed the ‘community of interest’ between the paper and Bank of England, becoming its deputy governor in 1993; when the Bank was freed to set rates five years later, the paper cheered. Clive Crook, then the paper’s powerful deputy editor, had started his career at the Treasury writing speeches for ministers and senior civil servants. Experience of finance was, and remains, all but required to be a contender for the top job – whether at a private bank or multilateral lending institution, in Tokyo, London or New York. Though not as well-paid as their banking peers, the editor-in-chief can aspire to perks few other journalists can match – with lucrative stock options, bonuses and pensions, but also speaking fees, board memberships, book deals, reverential TV appearances, prime billing on the global forum circuit, the odd secret society invitation.6
Despite the new cosmopolitanism of the City, at least one aspect of its gentlemanly capitalist social character remained: the presence of the ancient universities. Graduates of Oxford and Cambridge were more numerous than ever at the Economist. From the latter, deputy editor Ed Carr, and ex-Europe head Gideon Rachman, now a Financial Times columnist, were vetted for the top job in 2006. Many others would continue to rise through the ranks – from the US editor John Prideaux (Cambridge) to Washington bureau chief James Astill (Oxford) to the former New York bureau chief Patrick Foulis (Cambridge), to younger recruits such as Jeremy Cliffe (Oxford) and Emma Hogan (Cambridge). But this cloistered cross-sample actually overstates the academic diversity of the staff. Just one Oxford college (out of thirty-eight), enrolling no more than 600 students (out of some 22,000), has churned out a hugely disproportionate share of the most important Economist editors.
An informal agreement between a fellow of Magdalen, the historian R. W. Johnson, and Andrew Knight, had transformed that college into a sort of Economist prep. ‘Knight called me in 1970 to help him recruit talent.’ ‘If they’re really good, let’s take them straight away instead of sending them to the provinces first’, Knight told Johnson, who ‘only gave him really top flight people’ like David Lipsey, Stephen Milligan and Chris Huhne – respectively becoming a Labour life peer, Tory MP and Liberal Democrat Cabinet minister. It got so packed with them, a joke circulated about a possible candidate for editor in 1993. ‘Don’t worry’, one Economist staffer said to another, ‘she only went to Wadham.’7 Former Magdalen men included the Mid-East and Africa editor Chris Lockwood (one of two Economist journalists that Prime Minister David Cameron named under oath as friends and advisers at the Leveson Inquiry into press standards), and Matt Ridley.8 The 5th Viscount Ridley and Baron Wensleydale, as Ridley is also known, made a splash as science editor from 1983 to 1992 – and continued to do so later from the House of Lords, with popular non-fiction titles purveying feel-good social Darwinism for the Economist audience.9 Most striking of all was the record at the top, with the last editor but one, his nearest rival as deputy editor, and the editor before that all members of the ‘Magdalen mafia’: John Micklethwait, Clive Crook, and Bill Emmott.
Bill Emmott and the Modern Greats

Emmott was born into fairly humble circumstances in 1956. His father was a public accountant, whose family had owned a sweet shop in Lancashire, and who met his mother while working for a local council at the end of the Second World War. Raised in London, he went to Latymer Upper in Hammersmith, at the time a selective grammar school, after which he won a spot at Magdalen to study the standard cursus for future editors – Philosophy, Politics and Economics. At Oxford’s Nuffield graduate college in 1978, as part of ‘a cunning plan to combine an academic career with freelance writing’, he began a dissertation inspired by current events in France, where an alliance between the Socialist and Communist Parties, the Union de la gauche, seemed on the cusp of victory at the polls; prodded by R. W. Johnson, then working on his Long March of the French Left, Emmott delved into the French Communists’ previous spell in government from 1944 to 1947 in search of clues as to its future behaviour.10
Johnson also passed his name to Knight, who recalled their first interview: ‘Emmott was a very nice, smart chap, just not particularly ebullient.’ Johnson remembered a more severe judgment: ‘He’s useless, no spark, no spirit!’ Johnson insisted, and Knight finally relented – just as Emmott was due to leave for the Paris archives in 1980.11 Chris Huhne, two years Emmott’s senior at Magdalen (and at the start of a lucrative career in finance and politics, ultimately cut short by matrimonial lies about a speeding ticket), was leaving for the Guardian, and Dick Leonard proposed Emmott take over the European desk. Giving up the doctorate, Emmott changed his ticket for Brussels, where he covered the European Economic Community (EEC) until 1982. After a stint as economics correspondent in London, in 1983 he set off for Japan on an assignment that altered his life and outlook.
Land of the Rising Pun: Japanese Lessons in Finance

By then, Japan was no longer an undiscovered country. After stuttering at the start of the 1980s, its industrial engine roared back to life, promising to add another decade to its thirty miraculous years of growth since the war. In large part because of the turn to deficit finance under Reagan, Japanese exports increased at the average rate of 9.5 per cent from 1979 to 1985, and to the US alone at 23 per cent per annum. More striking were the current account surpluses these generated, which made Japan for the first time the largest creditor to the Americans.12
Emmott, arriving at this historic juncture, took note of the policy changes that had allowed Japan to harness this capital globally, and advised other states to follow suit: the abolition of exchange controls in 1980; the erosion of barriers between banking and brokerage; in 1984, a concerted opening that invited foreign banks into currency and government bond markets, with more reforms promised – of the sort the City undertook ‘after a long and gruelling battle with vested interests’ in 1986.13 Emmott found the doors of Japan Inc. wide open to him as a correspondent for the Economist, whose profile Norman Macrae had raised among the country’s ministerial and commercial elites. The famed Economist deputy editor was therefore an essential reference for Emmott, present in his attention to details of Japanese daily life, and how they had changed. On average, people were older, families smaller, farmers fewer, and a new group of pleasure-seeking youngsters had emerged, shinjinrui. Emmott pitched his analysis of Japan as a challenge to Macrae, however, in a book that would help him win the editorship, The Sun Also Sets: Why Japan Will Not be Number One, in 1989.
Emmott came out against the widely held view that Japan was about to overtake the US as both an economic and a political superpower – singling out Macrae for criticism. ‘Every risen economic power’, Macrae had argued in the Economist the year before, ‘seeks eventually to mould its era.’14 Macrae had welcomed the prospect, arguing that the Japanese might emerge as more ‘progressive top bankers’ than either the British under the first Duke of Wellington, ‘who opposed railways on the grounds that they would enable the working classes to move about’, or the Americans, ‘who thought that slavery was a peculiar social and economic institution that could endure’.15 In The Sun Also Sets, which Emmott drafted in London in 1988, he conceded ‘Japan is Asia’s natural leader’, but only America – with its unique mix of ‘free enterprise, open markets, individual initiative’ and inflow of driven young immigrants – could lead the world.16 And whereas Macrae had credited civil servants in Tokyo with almost heroic professionalism and creativity, Emmott scorned them as obsolete. Deprived of much of their power by market deregulation, the Ministry of Finance and ‘infamous’ Ministry of Trade and Technology were fighting ‘a losing battle’, he contended; ‘the trend is firmly set toward freedom and a more open system.’17
When the Tokyo stock market crashed just after the book appeared, leading to a ‘lost decade’ of economic growth and ending all talk of a Pax Nipponica, Emmott looked like an oracle. But that was somewhat misleading, for it was precisely the unshackling of finance that had led to the crisis which Emmott had celebrated as the harbinger of renewal and modernity. ‘The idea of Japan as a superpower is based primarily on the country’s huge exports of capital and on its sudden emergence as the world’s largest net creditor.’18 And when a rising yen threatened to staunch this flow after 1985, the stock market bubble that pumped it back up bedazzled him. From 1986 to 1989, residential and commercial property prices doubled. Foreign exchange and government bond futures markets – back in 1980 ‘long on exotic names and bewildering regulations and short on business volume, innovation and freely flowing cash’ – leapt ahead of those in Western countries. With nine of the ten largest commercial banks, the four top Eurobond underwriters and the four largest investment banks, ‘these command the same mixture of fear, admiration and hate as do Japanese car or video manufacturers’. By 1988, Tokyo’s market capitalization was 50 per cent greater than New York’s, and even ordinary Japanese were getting in on the act – buying ‘Roni Wrinkle’ condoms, as ‘gleaming white’ BMWs clogged the streets, housewives bought gold and shorted futures, and ‘money fever’ took hold.19
In 1989, there were clear signs pointing to a Japanese bubble. Average price to earnings ratios on the Nikkei index had risen past 60. Land prices were so high that the grounds of the imperial palace in central Tokyo were worth more than the state of California. But even if a bubble did exist, it was ‘convenient’ and ‘there might never be a crash’ and if there were, ‘Japan could, and almost certainly would, recover.’20 The stock market sank like a stone a few months later, losing half its value in a year, and Japan began two decades of deflation with low or negative growth. But it would have been easy to miss that in Emmott’s next books, Japan’s Global Reach in 1992 and Japanophobia in 1993. ‘The sunset of 1990–1993, first in finance but then in the real economy, has made life appear dark.’ But long-term prospects ‘are bright and warm’ and ‘the macroeconomic picture in Japan looks very healthy’.21 Since then, no crisis – however big – has dented his belief in the rationality of financial-market exuberance.
Emmott was just as blasé about a wave of savings and loan failures in the US in a special survey on banking for the Economist in 1988 – urging financiers to seize this chance to demand repeal of Glass-Steagall, which barred commercial banks from underwriting or trading securities. At the same time, he dismissed the Economist’s own Wall Street correspondent Christopher Wood, who predicted that soaring asset prices in New York, London and Tokyo were driven by unsustainable levels of private debt, and would soon lead to a major depression. Emmott called him ‘emotional’, a ‘doomster’ and argued that the ‘industrialized countries are chugging merrily along, apparently oblivious to the crash’ that had briefly spooked them in October 1987.22 In 1989 Michael Milken, the ‘king of junk bonds’ at Drexel Burnham Lambert, bankrupted the fifth largest US investment bank and went to jail. ‘There is nothing wrong, in principle, with junk bonds’, Emmott wrote. He bridled at caricatures of Wall Street as a ‘den of greed and chance’, which was a ‘harsh judgment to make of the freest-flowing and most sophisticated financial markets the world has ever known’.23 Made business affairs editor in 1989, Emmott surveyed the landscape from atop St James with optimism. A Labour voter when he joined the paper in 1980, he was now a devotee of Thatcher. Even if it required another decade of her monetarist disciplines – ‘it may even take a generation before British business has recovered fully from its conditions in the 1970s’ – the country could look forward to ‘again becoming the workshop of Europe’, as foreign direct investment flowed to Midlands factories, gleaming shopping malls opened in Newcastle, and financial firms rushed to open in London.24
The Tweed Jungle: ‘Free Minds, Free Markets, Free-for-All’

Back in Britain, Emmott also had time to pursue a hobby – planning to be editor when Pennant-Rea stepped down, a contest that turned out to be as cutthroat as the hostile takeovers he covered as business affairs editor, with ten colleagues (out of about fifty) duelling for the job. In Vanity Fair, Jacob Weisberg described a ‘bitter power struggle’ to replace Pennant-Rea turning ‘the chummy corridors of the world’s most prestigious financial weekly’ and ‘a place staffers have fondly compared to an Oxford common room’ into ‘a kind of Euro trading pit – Barbarians at the Gate in Tweed’.
In a gruelling seven-week competition that reached a ‘fever pitch of anxiety and neurosis’, what counted was age, class – and floor. The thirteenth floor, housing domestic and foreign writers, produced the most candidates, including Nico Colchester, deputy editor, formerly at the Financial Times; Matt Ridley, returning from Blagdon, his family’s 9,000-acre estate in Northumberland; and Mike Elliott, the gregarious, foul-mouthed Washington bureau chief. Floor twelve, where business writers worked, sent forth economics editor Clive Crook, and Emmott. ‘The 13th is more British. The 12th is more American’, Weisberg reported. ‘The 12s view the 13s as woolly-headed liberal academics who don’t understand economics. 13s stereotype the 12s as bloodless techno-heads and libertarian ideologues.’ Taking bets on the outcome, the associate editor David Lipsey gave odds to the two floors’ eventual finalists, Colchester and Emmott. Both men had to make it past a committee composed of the management guru Sir John Harvey-Jones, the chocolatier Sir Adrian Cadbury and Pearson’s director, Frank Barlow, before their fate was decided by the whole board ‘over a breakfast of kippers at the Savoy’ – a process some editors likened to a ‘setup’, and which left Colchester ‘unable to talk about it without choking up’.25
Emmott had a less bloodstained account: his advantage was neither youth nor his books so much as his secondment to be editorial director of the Economist Intelligence Unit in 1992, where he got to know board members and executives (displaying ‘an Attila the Hun style of management’, according to Weisberg) – above all Marjorie Scardino, there after running the North American business, and who rose during the same period to lead the entire Economist Group.
Emmott was something of an ideas man among the Economist’s later editors – not only in his ‘Sphinxlike’ bearing, but in range: articles on Japan carried haikus, stock market surveys digressed into Dickens, laments about Italian backwardness were introduced by Dante. Like Bagehot, he wrote widely under his own name, his voice merging with the paper, even as his name transcended it. Three books and a documentary film have arrived since he stepped down, and his musings can be read hourly – on Twitter, where his sobriquet is ‘#bill_emmott: scarlet pimpernel, agent provocateur’, and in print in most major time zones, including the US, Britain, Italy, Japan and India. He is paid to share his thoughts at Alpine business retreats, and on corporate and nonprofit boards.
Emmott’s task as editor, he later told the Financial Times, was ‘to get readers and make them addicted to the paper’.26 He was successful. Circulation exploded from 500,000 to over a million in thirteen years under his reign, with the greatest rise coming in North America. He modernized the paper, hiring more foreign correspondents and implementing a rigorous fact-checking operation. But Emmott also displayed an interest in the traditions of the paper, and the history of liberalism continuous with it. On a trip to open a bureau in Kolkata, India, in 1999, he stopped at a Scottish cemetery for a ‘little ancestor worship’. The first editor, James Wilson, was buried there, having died ten months into his job as India’s finance minister in 1860. Tracking down his overgrown grave, Emmott happily observed the ledger inscription, ‘Wilson, the right Hon’ble James, who was expressly sent from England to restore order to the finances of India.’27 In 2006, his farewell was similarly mindful of his forebears. ‘What is striking is how strongly this period has fitted Wilson’s original view, how it made his principles feel more relevant than ever.’ For ‘the economic and political impact of the liberalisation of domestic and international markets for goods, services, technology and capital – globalisation … would bring delight to Wilson’s eyes.’28
The British Model: ‘Thatcher and Sons’

When Emmott became editor in 1993 in the aftermath of Thatcher’s revolution, Britishness itself had a new valence for him and other editors. The very harshness of the medicine Thatcher had meted out – double-digit interest rates, sweeping privatizations of the telecom, gas, airline and other state-owned industries, slashing of top income tax rates in half, undoing of labour regulations, enforcement of pit and plant closures amidst high levels of unemployment – now allowed the Economist to position itself at the cutting edge of change. By the time the New Economy boom arrived, the country appeared to have turned a corner; at home and abroad, the paper was once again in the enviable position of giving lessons, not taking them.
Full of confidence, Emmott and his deputies took one contrarian stance after another – eager to restore the Economist’s reputation for radicalism. In 1994, the paper came out against the monarchy as an ‘idea whose time has passed’, suddenly wishing to replace it, pending a referendum, with a republic. Bagehot, ‘the finest and most influential writer ever to have been editor’, had, it recognized, defended this ‘dignified’ part of the constitution back in 1867, saying ‘we must not let daylight in upon magic’. But much had changed, including the notion that loutish uneducated masses could not understand or even vote for a representative assembly. Bagehot, the leader added, had also said, ‘Among a cultivated population, a population capable of abstract ideas, it would not be necessary.’29
Economist board members, all members of the Order of the British Empire, grumbled. When asked, Knight called it shocking, ‘not at all in keeping with the traditions of the Economist’. Indeed, the paper had strong ties to the aristocracy and the royal family, not just by way of the royal-watcher Alastair Burnet, but also in Norman St John-Stevas. Sedulous courtier of the House of Windsor, swathed in downy shades of Tyrian purple (‘crushed cardinal’, he called it), who owned a framed pair of Queen Victoria’s stockings, St John-Stevas had been parliamentary correspondent from 1954 to 1967. After being elected a Tory MP for Chelmsford, St John-Stevas continued to write and pass information to the Economist.30 That helped at the start of the Thatcher era, when he advised the prime minister in his role as leader of the House of Commons until she sacked him as a tongue-wagging ‘wet’ in 1981. He called Thatcher ‘Blessed Margaret … she who must be obeyed … the leaderene … Attila the Hen’ and TINA (for ‘there is no alternative’), sometimes in her presence, and she later wrote: ‘I was sorry to lose Norman but he made his own departure inevitable. He turned indiscretion into a political principle.’ Royals sometimes returned the attention. Prince Charles disclosed his political frustrations to the Economist in 1986 in an interview with Simon Jenkins, who called it ‘the manifesto of a social democratic prince’.31
Emmott, for his part, had long held the monarchy in disdain, though not out of deeply republican convictions. Commenting on a picture of Charles and Diana rambling through a Balmoral wheat field, he once lamented ‘the Royal family sets a tone that remains anti-business’. The Queen was past hope, showing more interest in her corgis than any form of commerce. He encouraged her eldest son to act like a true role model, not a country squire, and ‘to promote interest in business of every sort, as much as places to work as a way to get rich’.32 In 1994, he observed ‘the crown even has a certain, though not inevitable, bias against capitalism’.33
This contrarian posture was effective optically even when it was wide of the mark. In 1997, the paper attacked New Labour on the eve of its landslide, since on economic policy its ‘basic instincts are illiberal’ – a misread of the party Tony Blair and Gordon Brown had pushed to the right in opposition, by dropping demands for public ownership and accepting the fiscal and monetary strictures Thatcher had laid down. For David Lipsey, now political editor and Bagehot columnist, this was the ‘one sour note of my tenure’ at the Economist, since Emmott ‘came to his decision in private, without discussing it face to face with me’. Emmott’s fear that ‘there was a hidden Old Labour wishing to get out from under the New Labour exterior’ proved ‘as wrong as could be’ – something Lipsey was in a position to know. Long on the Labour right – he had started out as an advisor to Anthony Crosland and James Callaghan, before turning to journalism in 1979 – the Bagehot columnist was so ‘carried away with excitement as Tony Blair threw away the baggage of Old Labour, as I had been urging’ that he ‘surreptitiously rejoined’ the party.34 As the Blair-Brown duumvirate pushed neoliberalism further than Thatcher had dared, in particular in the City – devising new ‘light-touch’ regulations, slashing capital gains from 40 to 10 per cent on long-term assets, granting the Bank of England full independence to set rates – Emmott backtracked. ‘Tiresome as third-way nonsense is to curmudgeons such as The Economist, its success as a marketing device is not in doubt.’ Downing Street spin-doctors, ‘reconciling Britain to the Thatcher revolution, consolidating it, extending it’ meant ‘voters are happy, leading-thinkers are happy, everyone except the bewildered souls who believed in Old Labour are happy.’35 Never a favourite, always shown grinning dementedly for no reason, in 2001 and 2005 Blair got the Economist’s blessing: superimposing his smiling face onto Thatcher’s head – lipstick, earrings, coiffure – it advised readers, ‘Vote conservative’.36
Pushing Buttons Abroad

Each tartly-worded leader and irreverent cover raised the circulation of the Economist, as well as its profile as intellectual maverick – above all in the US, where social issues became an index of its liberalism as such. In 1996 the paper came out for gay marriage, inflaming the religious right, though its reasons had little to do with romantic love: ‘single people were more likely to fall into the arms of the welfare state’, and marriage was a ‘great social stabiliser of men’.37 It repeatedly called for stricter gun laws, especially after the Columbine shooting in 1999, earning it the ire of America’s second amendment enthusiasts.38 Even ‘hard’ drugs ought to be legalized, it explained in 2001, with reference to the US, where one in four prisoners was locked up for minor drug offences. Had not John Stuart Mill written: ‘Over himself, over his own body and mind, the individual is sovereign’?39 If it took safer lines on the death penalty and euthanasia, there was nothing circumspect about its political interventions. After endorsing Bill Clinton in 1992, four years later it opted for Bob Dole; even more scandalous, judging by the letters that poured in from readers, it demanded Clinton resign as president in 1998 over his mendacity about an extramarital affair with an intern in the Oval Office, citing ‘deceit’, ‘moral weakness’, ‘bankruptcy’, ‘sleaziness’, ‘self-pitying paralysis’, ‘reckless risk-taking’, ‘broken trust’, ‘disgraced office’. It was not the ‘sexual dalliance’ itself that irked the paper – it had endorsed Clinton back in 1992, ‘knowing full well he was a bit of a rogue and a risk-taker’ – but the ‘flagrant lying’, ‘unworthy of a president’. (Later, it said Donald Rumsfeld should hand in his badge over torture at Abu Ghraib in Iraq.)40
There was a great deal of tough love to go around. Emmott claimed to ‘flinch a little’ when he remembered meetings with Bill Gates, co-founder of Microsoft, ‘a self-confessed devoted reader of The Economist’, who ‘would berate the publication’s then-editor-in chief for its support for the antitrust action against him and his company’ from 1998–2001. For fun, Emmott would tease Jon Corzine, CEO of Goldman Sachs.41 And Emmott fired shots across the bow of Japan. One article on the state tobacco monopoly’s unfair competition with foreign cigarette-makers, ‘Marlboro Country’, prompted the Japanese company to summon him to a boardroom where each of his sentences was cut out, pasted on a board and refuted. After a cover of a samurai tripping over himself in 1998, ‘Japan’s Amazing Ability to Disappoint’, the embassy in London issued a ‘petulant protest’ and Motoo Shiina, a Diet member, personally chided Emmott.42
The Italian prime minister had more than petulant words for the paper. ‘Why Silvio Berlusconi Is Unfit to Lead Italy’ in 2001 – on his legal problems and links to organized crime, which appeared just before the spring elections – sparked a bitter row with the tanned media mogul turned politician. Berlusconi sued for libel, twice, and Il Giornale, a Milan newspaper owned by his brother Paolo, derided ‘The E-Communist’ and compared its goateed editor to Lenin. Away when the decision to run this material was taken, Emmott came to own it – obscuring the fact that Clive Crook chose it, Tim Laxton and David Lane researched it, and Xan Smiley wrote it. Much of Emmott’s career since 2006 has nevertheless been devoted to sparring with Berlusconi, as well as browbeating the country into market reforms: a 2012 documentary, Girlfriend in a Coma, shows Emmott doing his best Michael Moore, accosting Berlusconi in a crowded salon of ‘elites’.43
Finance and Globalization

The Economist did not ignore the financial bubbles that punctuated the New Economy years – in sovereign debt, dotcom stocks and housing – up to 2008, but it minimized them as relatively small bumps on the road to globalized capitalism. Mexico, East Asia and Russia were among the hardest hit by interlinked currency and debt crises. When Moscow defaulted in 1998, triggering the collapse of Long Term Capital Management – the heavily exposed hedge fund that lost $4.6 billion in four months – the paper defended the computer wizards whose models had failed to foresee this: ‘it is pleasant to mock the Nobel Laureates who helped found LTCM, but much of this mockery clouds the truth’, for ‘the question arises whether recent events are ever likely to be repeated.’44 But it also went on the attack against any who used such examples of ‘market failure’ to criticize, question or hold up globalization, with deputy editor Clive Crook leading the charge.45
Crook was thirty-eight in 1993, but looked ‘more like a teenager in the grey flannel slacks, white oxford-cloth shirt, and blue pullover sweater that are his only known costume’.46 ‘Fearsomely brilliant’, ‘arguing for Free Trade in this gruff Lancashire accent’, he was ‘the Manchester School come to life’; others called him the ‘intellectual Godfather’, with Emmott by turns ‘enthralled’ and ‘intimidated’, as editors asked (on points of doctrine), ‘Is Clive ok with this?’ Penning the feistiest articles in favour of trade liberalization, Crook sensed that 1999 was the moment to ‘come out fighting’ at the World Trade Organization summit in Seattle. Holding high the banner of the WTO, the Economist exhorted the national governments gathered there to make a better sales pitch to citizens whose ‘support for free trade is weak at best’. Trade reform ‘was not irreversible’, after all, and the last round in Uruguay in 1994 urgently needed updating to cover farming, services, finance, telecoms, computing and transport. ‘Anti-globo’ protestors, meanwhile – over a hundred thousand of whom took to the streets, from environmentalists to organized labour – should be ashamed.47
One cover showed a nameless Indian girl clutching a blanket, her glistening eyes raised in accusation, under the title ‘The Real Losers from Seattle’. Five billion poor people in the developing world would suffer if greens, trade unions and anarchists got their way. India, ‘home of our cover child’, showed how growth and welfare had improved in tandem after the country rejected ‘decades of socialist anti-globalisation’. To demand that trade agreements include labour standards or child welfare safeguards or environmental protections was totally misguided. These would ‘not give that Indian child a better life’, and ‘tying trade to rules that forbid her from working will not help her either: that way lies greater poverty, not a better education.’48 In a sign of how concerned Crook and other editors were about the growth of anti-globalization sentiment in these years (a fact obscured by what came after), on 11 September 2001 – the day two planes crashed into the World Trade Center in Manhattan – the Economist on newsstands had nothing to do with Middle Eastern terrorists. In red, white and black, the cover read ‘Pro Logo’, and savaged the Canadian activist Naomi Klein for her ‘utterly wrong-headed’ No Logo (1999), the best-selling ‘bible of the anti-globalisation movement’.49
For his part, Emmott spied untrammelled vistas for financial innovation until the end. In his last signed piece in 2006, he hailed US banks for entering sectors served only by payday lenders and pawnbrokers. Citibank signed an agreement with 7-Eleven to put cash machines in 5,500 stores, while credit card companies ‘targeted the unbanked and under-banked’ – poor minorities and immigrants, who stood to gain from access to cheaper credit. (Banks anticipated culling $9 billion in fees from them, and that was ‘before any cross-selling of other products’.) The subprime mortgage crisis hit the next year. Among the community banks Emmott cited as paragons, just one limped into 2012.50 Yet the crash barely checked his stride. In 2008 ‘Crisis, What Crisis? Enough Kerfuffle, It’s Just a Slowdown’ appeared in the Guardian. Five months went by before a retraction, and as the title suggests, this was no standard mea culpa: ‘I Wasn’t Right. But That’s OK.’ A sense of civic duty had led him to ‘overly optimistic economic predictions’, he explained, in an attempt ‘to argue that we risked talking ourselves into recession’.51
America’s New World Order

Emmott had predicted a ‘golden age’ of peace and prosperity when he took over the Economist soon after the collapse of the Soviet Union. ‘US defence spending will fall to 3 percent of GDP’, freeing up $125 billion a year to spend on health, education, debt repayment. ‘American troops will be withdrawn from virtually all overseas bases’, with foreign investment doing the rest – in a ‘world of three billion new capitalists, workers, managers, inventors, investors and traders’.52 A year on, he still saw the Pax Americana as uniquely consensual. Proof of its success, he argued in 1994 before the Trilateral Commission – a ‘discussion forum’ for business and political elites in the US, Europe and Japan, set up in 1973 – was the spread of ‘globalisation, by choice’ based on ‘voluntary decisions of governments.’53 Butter, not guns, was the order of the day.
In the event, Emmott’s editorship witnessed nonstop American interventions abroad, which flew in the face of his forecast, and led to a falling out with his foreign editor Johnny Grimond. Until 1989 Grimond edited the American Survey, as perhaps the strongest and most vocal opponent of Beedham on staff when the latter retired. Grimond was also one of the few journalists with ties to the political party whose history was intertwined with the Economist: his father, Jo Grimond, led the Liberals from 1956 to 1967; his grandmother, Lady Violet Bonham Carter, was president of the Liberal Party; Asquith was a great-grandfather. A graduate of Eton and Oxford, who stood for parliament himself in 1970, Grimond was a careful guardian of the house style, and seemed well attuned to Emmott. In 1993, both signed off on the US mission to Somalia and after some hesitation to Rwanda in 1994.54
But by far the most significant military actions of the period came against the former communist federation of Yugoslavia, as it fractured along ethnic lines; at least at first, the Economist was not just hesitant, but critical of the aerial bombings NATO led in 1993 and 1999, a stance almost without precedent and so far without repetition. In both cases, Grimond wrote the main leaders. Bosnia was not a genocide but a civil war between Muslims, Serbs and Croats, he wrote, on whom outsiders ‘could impose a peace, if at all, only with resources of soldiers and willpower they do not have’. Better to send food and medicine but peacekeepers only ‘where there is peace to keep’. ‘Serbs, brutal as they are, are not exterminating Muslims as Nazis exterminated Jews.’55 Six years later, Grimond doubted the legality as well as strategic sense behind the more intensive bombardment of Serbia, whose rationale was to stop the genocide of Albanians in Kosovo. ‘NATO’s first unambiguous attack on a sovereign state could set an awkward precedent.’56 Did China have the right to attack India to protect Muslims in Janmu or Kashmir? What about Russia, whose rampage in Chechnya was so horrific? ‘So far, the West’s war against Serbia has been a shambles. The humanitarian catastrophe it was designed to avert has merely been intensified’ while, ‘dazzled by technology and obsessed with avoiding casualties of their own, the allies seem unable to hurt, let alone destroy, Serbia’s army. Meanwhile, the list of accidents – innocents bombed, aircraft lost – grows longer.’57 Over time, this position softened: ‘the West was not wrong in principle to intervene, whatever the legal position’, reasoned the Economist by April, though it still insisted the bombing was doing more harm than good.58
Emmott had deferred to his more experienced foreign editor during the conflict, but doubts set in soon after, as the glow of victory cast it in a new light – and senior British and American officials pelted the paper with angry letters, stunned by its uncharacteristic criticism. By July, Emmott had reconsidered his foreign policy. ‘The post-communist, post-Kosovo world now taking shape will not be an end-of-history sort of place in which all good democrats can put their feet up. It will be a world of clashing interests and outrageous atrocities, in which democrats will have to get involved.’59 Emmott then demoted Grimond to lead the Britain section, and gave the Bagehot columnist his job. For a world that must be made safe for democracy, Peter David was a better fit: passionate Zionist, whose Lithuanian Jewish parents moved to England from South Africa as critics of apartheid in 1960, Beedham had hired him to cover the Middle East in 1984. David felt so strongly about the part America played in the region, he dedicated a coffee-table book to the glories of the first Gulf War in 1991, Triumph in the Desert, prefaced by General Colin Powell, with photos of smiling marines hugging grateful Kuwaitis.60 It was David who set the tone of foreign coverage after 11 September 2001.
Reacting to the terrorist attacks that day with intense patriotic feeling, Economist covers depicted jets, helicopters, tanks and other military hardware against smoke, sand and billowing flags for the next three weeks, as titles grew larger and more guttural: from 15 September on, ‘The Day the World Changed’, ‘The Battle Ahead’, ‘Closing In’. Articles spoke of ‘lost innocence’, ‘implacable evil’, an attack more infamous than Pearl Harbor, and asked if ‘anything will ever be the same?’ On 22 September it called for war, without yet knowing where, or who, it would strike. ‘It will be long. It will cause anguish and arguments. It will involve more casualties. It is as hard to define the exact objective as to tell whether or when that objective has been achieved.’ The US-led Western alliance would prove its worth beyond doubt by sending ground troops to wherever that ground turned out to be: ‘America’s allies in NATO have proclaimed their willingness to stand up and be counted by invoking for the first time its Article 5 on mutual defence.’ ‘America must demand, and receive, the tangible support it implies.’61
When Afghanistan emerged as the target, the paper ran with apple-cheeked Afghans staring up from headlines, as if the Economist were a charity solemnly asking donors to save the children by blowing them up. It pressed President George W. Bush not to stop at al-Qaeda there, but to bring down the Taliban too, a case of regime change in which ‘permanent obligations need not be incurred’.62 Seventeen years later, the US was still at war in Afghanistan, with no end to its mission in sight, unable to secure the garrisoned capital of Kabul and losing ground to the Pathan rebels outside it. Before Operation Enduring Freedom was even underway, however, the Bush White House had begun planning for the second Gulf War.
The Economist backed each stage of the build-up to it – applauding Bush’s ‘axis of evil’ speech in 2002 as ‘remarkable’ and ‘brave’, stirring up fears that Saddam Hussein had weapons of mass destruction (‘aggressive, cruel and reckless … remove Mr. Hussein before he gets his bomb’), and then rationalizing the failure to discover any afterwards (‘both at the time, and in retrospect, the decision to go to war rather than to wait was justified’).63 In the newsroom, Crook backed David at meetings and in the editorial process, inserting as much flammable material into articles as possible. Another recalled David referring to ‘classified CIA material’ he had seen – provided by Russia, and claiming Iraqis had supposedly visited Moscow to buy nuclear technology and rocket launchers. ‘It was very convincing stuff.’ Outside St James, these same editors somehow interpreted the millions of anti-war protestors in New York, London and elsewhere as, ‘if anything, even keener on “regime change” than the British or American governments’.64
Emmott denied there had been no debate. He organized special discussions between editors to get disagreements ‘out in the open’ – estimating the overall tally for and against at ‘60–40’, with senior editors Crook, David, Smiley, Micklethwait and Edwina Moreton, diplomatic and deputy foreign editor, in favour of the war; Barbara Smith, Grimond and Max Rodenbeck, Middle East bureau chief, spoke out against. Still, Emmott acknowledged that these debates took place with the expectation the answer ‘was already there’, and that ‘I and Peter and Clive would endorse an invasion’. 65
In fact, Emmott had already vaulted past his subordinates, producing a blanket justification for all imperial actions on the part of the US now and in the future – perhaps in psychological overcompensation for his dereliction during the Balkan wars. Its title a reprise of Dean Acheson’s triumphalist account of his role in constructing the American world order in the launch to the Cold War, ‘Present at the Creation’ was Emmott’s twenty-eight-page survey in June 2002 making the case for a pre-emptive strike in Iraq, in which he reimagined the decade since the end of the Cold War as one of ‘hesitance’, ‘declining interest in foreign affairs’, Americans acting by ‘improvisation, with no clear sense of purpose or coherent strategy, and a rather short attention span’. Then 9/11 intervened, forcing the US to recognize tasks as Herculean as any in 1945: after ‘happy victories in Afghanistan’, there were ‘rogue states developing weapons of mass destruction’, ‘violent militancy in Central Asia’, the need for ‘nation-building in Iraq’, ‘pressure on Iran and Pakistan’, ‘encouraging China to toe the line’, keeping ‘one eye on Indonesia’, ‘training armies and police forces … in the more than 60 countries where al-Qaeda is said to have cells’.66 Instead of bringing home its 250,000 soldiers and closing its 725 overseas bases, the US needed more of both. Since ‘America’s special national interest’ was the ‘closest match to a world interest’, providing ‘more trade, more investment, more security, more democracy’, its continued presence overseas would be welcome. The long arc of globalization still bent towards peace, he believed, even when it looked like it might be taking a detour. Free trade ‘answered the criticisms of country building: it is a way of helping countries help themselves’, while multilateral bodies like an international court of justice ‘can usefully supplement such police actions as well as reduce their costs’.67
Emmott thanked the leading historians of grand strategy and international relations Paul Kennedy, John Lewis Gaddis and Graham Allison for feedback on this manifesto, and listed a bibliography of foreign policy mandarins with ties to the White House and the State Department: Dean Acheson, Henry Kissinger, Walter Russell Meade, Donald Kagan, Richard Haass, Joseph Nye, Adam Joffe, John Bolton, Samantha Power. Emmott outdid his sages, however. Both more optimistic and more ambitious about the potential for America to remake the world in its image, he predicted invading Iraq would yield peace between Israel and Palestine, bring moderates to power in Iran, and give ‘a new start for America with the rest of the Arab world’. A ‘radically warmer relationship with Russia’ was already evident, and in exchange for ‘more western investment in oil and gas’, it would hunt down jihadis, share intelligence, sign arms treaties, back a missile defence shield, and ‘make America’s military access to Central Asia [bases in Uzbekistan and Kyrgyzstan] permanent’. Moscow was also prepared to help out on the UN Security Council, where the US needed its cooperation on authorization votes and weapons inspectors. In a suitably cynical conclusion to this effusion of goodwill, he admitted this was for show, to speed up the timetable for war. ‘There will be a multilateral process. It will fail. And then America will invade.’68 For thirty-two weeks after this, the paper dutifully repeated the demand UN inspectors be given a chance.
If victory in Iraq was even more spectacular than in Afghanistan – the Baathist regime crushed in three weeks of shock and awe – so was the insurgency and civil war that followed. The failure of both invasions to yield secure, stable democracies never caused Emmott to question the fundamental morality of American power – ‘its ultimately self-denying purpose’, its ‘blend of opportunity, knowledge and freedom’.69 Afghanistan and Iraq were success stories. The US was ‘not a true hegemon’, nor ‘a true policeman’. ‘It is like a giant elder brother, a source of reassurance, trust and stability for weaker members of the family, and nervousness and uncertainty for any budding bullies.’70 Only after stepping down did he criticize this sibling, who had turned out to be rather troubled. ‘Few of his contemporaries think of George Walker Bush as a visionary American president, unless they are using the term to imply a touch of madness’, he wrote in 2008 about the man he once put in heroic profile on the cover of the Economist. Even then, Emmott was nostalgic about Bush’s ‘grandest of grand foreign-policy strategies, seeking nothing less than a transformation of the Middle East and Central Asia’, with ‘democracy, or at least accountability, replacing dictatorship. But it collapsed in ruins.’71 For all his hand-wringing, and casting about for new champions of globalization in India or China, however, Emmott saw no alternative: ‘America is the one country from whom an intervention or retaliation would be feared’, he reasoned, now about Asia. ‘Even after the Iraqi disaster, America should be seen as a stabilizing force.’72
Exit Stage Right

In the aftermath of the Iraq invasion, there was more bickering inside the Economist – albeit with US foreign policy a side show to the main event: jockeying to replace Emmott. Even at the start of his tenure, there had been rows. After convincing Crook and Emmott to send an office email announcing a ‘triumvirate’ in 1994, Asia editor (and ardent admirer of Singapore’s Lee Kuan Yew) Jim Rohwer quit in a storm when Crook got cold feet. In 1997, there was the fallout over Emmott’s secretive decision to back the Conservatives over New Labour. In 1999, Sebastian Mallaby, the Washington bureau chief, resigned after Emmott spiked his American politics survey, which argued that the checks and balances of the US constitution actually hampered effective government. Pressing Emmott to punish this ‘illiberal’ heresy and banish Mallaby to Berlin, Crook emerged one rival down for the editorship when Mallaby left.73 But it soon became clear that Emmott was determined to stay past the usual ten years. In 2005, it was Crook’s turn to leave in frustration for the Atlantic Monthly. By then the board of directors was putting pressure on Emmott, concerned that top talent was fleeing the paper because of his determination to stay. When Emmott replaced Crook with Emma Duncan as deputy editor, viewed as unlikely to challenge him, John Micklethwait did so instead – bringing the board a job offer from the rightwing British weekly the Spectator that forced Emmott to depart suddenly in March 2006.
Dukes of Moral Hazard: Micklethwait and Wooldridge

The appointment of John Micklethwait as the sixteenth editor was announced with great fanfare in 2006. ‘In his tailored suit and polished shoes’, the Guardian found him ‘poised, unmistakably upmarket … the essence of a well-educated English gentleman editor, charming, a touch self-deprecating, but to the point.’ The Independent caught up with the new forty-three-year-old head of ‘one of Britain’s greatest media brands’, ‘blood relative of the Duke of Norfolk, tall, straight-backed with a thick mop of hair, a clipped English accent and a desk that looks out across the royal parks’.74 Micklethwait was cool, polite, experienced; having spent the 90s in New York and Los Angeles – the two fastest growing urban markets in the fastest growing national market for the Economist – he told the board he could double circulation again to 2 million inside a decade.75 The first person to move directly from editing the American section to editing the paper, his experience gave him an edge over the other finalists, business editor Ed Carr and deputy editor Emma Duncan.
A practising Catholic, Micklethwait attended Ampleforth, the same school as Knight, a mentor who brought him along to Bilderberg conclaves, where he became a well-connected note-taker. Like Emmott, he went to Magdalen, though he studied history, not PPE. In personality, Micklethwait was a combination of the two men – at meetings, ‘vague, diffident, easy to underestimate’, but with a class profile and worldly ambitions cut from much the same cloth as Knight. After university he got a job at Chase Manhattan Bank in New York. ‘I was not a terribly successful banker’, he confessed later, joking that his first investment was in Eurotunnel, which lost £925 million in its first year and later went bankrupt.76 His next job was at the Economist as finance and business editor in London, before his posting to Los Angeles.
During and after his sojourn in America, much of the intellectual thrust came from his colleague and writing partner, Adrian Wooldridge, described as a ‘Norman Macrae-like figure – clever, if rather kooky’. ‘When I first arrived he terrified me, because he seemed so posh, always dressed in very stripy Jermyn Street shirts and nodding emphatically in meetings.’ Wooldridge came to the paper in 1988 – after Balliol and All Souls, Oxford, and a Harkness Fellowship to Berkeley, in pursuit of modern history – developing a distinctly wry and assertive writing style, as Washington bureau chief from 2000–10, and in a series of columns, as Lexington, Schumpeter and, presently, Bagehot.
The Liberalism of Frequent Flyer Miles: Redeeming Globalization

Micklethwait and Wooldridge spent well over a decade in the US working and raising families, feeling so at ease in New York, Los Angeles and everywhere in between – from authentic Texas to suburban Illinois – they began to write with a curious Oxbridge-on-the-Mississippi twang: conservatives were not just mad or proud but ‘pig-wrestling mad’, ‘damned proud’, ‘country-club Yankees’ being ‘just the sort who get up Joe Sixpack’s nose’.77 Emmott had raised the bar for future editors, penning three books before, and one during, his tenure (not to mention several in Japanese translation). Acting together, Micklethwait and Wooldridge wrote even more, with five books on discoveries made in America – examining its business consultants in The Witch Doctors in 1996; leadership of globalization in A Future Perfect in 2000; spirited innovations in The Company in 2003; politics in The Right Nation in 2004 (accurately predicting Bush’s victory and helping to secure Micklethwait the editorship); and its peculiar religiosity in God Is Back in 2009.
This body of work, closely overlapping with their articles for the Economist, displayed levels of giddiness about American-style capitalism that surpassed Emmott’s.78 Nowhere was the breathless tone more apparent than in The Future Perfect, written after the East Asian financial crisis and WTO protests in 1998–99, ‘to make the intellectual case for globalization’. That case rested in large part on a group they dubbed the ‘cosmocrats’ – a perplexing neologism, evoking a Soviet-era space program, instead of the global race of yuppies they had in mind – ordering ‘loups de mer’ for dinner, while ‘forever eliminating barriers, overcoming limits, removing rigidities’. A ‘broadening class of people who have benefited from globalization’, cosmocrats might just be ‘the most meritocratic ruling class the world has ever seen’.79
The cosmocrats were everywhere, if you knew how to look. There were relative unknowns like Patrick Wang in Hong Kong, scion of an industrial family, ‘his suit exquisitely tailored, his thick black hair neatly combed, and he speaks impeccable Harvard Business School English’. Or Jang Ha-sung, economist and activist shareholder in Seoul, ‘preppie-looking in a blue blazer, club tie and button-down shirt, a former student of finance at the Wharton school’, feet up at home, as ‘opera burbles in the background’. Western countries also had some: in Bolton, England, Marcus de Ferranti, Eton graduate, electronics heir, fighter pilot, who emerged from aristocratic torpor to found a virtual telephone exchange; in Johannesburg, Lyn Van Haght, ‘tall, blond Californian’, who ran a heavily-fortified testing centre for private education company Sylvain, ‘creating the black middle class that the continent needs so desperately’.80
Some looked strange: Steven Hirsch, an LA pornography studio chief, ‘tanned and aerobicized’ but oddly ‘sounds as if he has graduated from a high-powered business school’ or Jackson Thubela in Soweto, a ‘gold toothed twenty year old who often wears an Adidas tracksuit’ and ran a phone stand. Others looked just as you might expect: Jack Welch, the legendary CEO of ‘boundaryless’ General Electric, or Bill Gates, who was not just a brilliant businessman but a daring philanthropist, ‘imaginative enough to solve problems that have flummoxed the public sector’ with a ‘relentlessly curious and competitive brain’.81
Wooldridge and Micklethwait brushed past some less appealing signposts of globalization along the way. An appointment with a toy wholesaler in downtown LA was punctuated by a shocking scene along Fifth Street, ‘dingy and dilapidated, host to denizens of the lowest rungs of the underclass’, among them ‘amputees delivering drug-crazed lectures to the sidewalk, beggars begging from each other’.82 Other ‘losers from globalization’ had a picaresque dignity, ranked and sorted as ‘has-beens’, ‘storm damage’, and ‘non-starters’. Dwight Bobo, a worker on strike at a GM stamping factory in Flint, Michigan, was a has-been. ‘Perhaps the saddest thing about Bobo is the fact that he is a decent man who must surrender to the inevitable.’ They added, ‘a bit like the deer that he hunts’, he ‘is simply being culled’.83 But this trailed off: ‘We must be careful not to take the hand-wringing too far.’ To show ‘the human race is, in general, advancing’, they travelled to Brazil where ‘the crapshoot that Bobo resents is helping to change the life of Marcos Andrade’, machine operator at a stamping facility GE had built in Sao Caetano do Sul, who ‘whistles when he hears how much workers in Flint are paid’. The two authors marvelled with him as bathos for Bobo turned to Schumpeterian shrug: ‘the creative destruction continues’.84
Even Thomas Friedman got an earful for his naïve thesis in 1999’s Lexus and the Olive Tree, that globalization was as inevitable as the dawn. ‘Given the carnage it has caused’, they wrote, before adding, ‘(or is said to have caused)’, advancing it would require political leadership. Here was a mission for the cosmocrats, if only they chose to accept it. The very tawdriness of politics ‘seems to put them off’. If there is ever ‘a great battle about globalization, then the people one might have expected to form the heart of the defense will probably be on a plane somewhere’.85
In the meantime, Micklethwait and Wooldridge made the case for globalization on their behalf. In Future Perfect, the advance of industrial production was ‘surely not the root cause’ of pollution in places like China, ‘and may well prove part of the solution’.86 The Company celebrated a revolutionary idea gifted to posterity by two Victorian Liberals, who established that companies had the same legal rights as human beings, and that investors had limited liability on the capital placed in them. All efforts since then to put limits on companies was misguided: the 1991 US Civil Rights Act resulted in ‘more red tape and more lawsuits’ and the 2002 Sarbanes-Oxley legislation that set tougher rules on corporate auditing, accounting and reporting was an ‘overreaction’ to fraud at Enron, Tyco and WorldCom.87 They even decried calls for corporate social responsibility from corporations. For ‘in general, companies have become more ethical: more honest, more humane, more socially responsible’. From Quaker candy makers to Hewlett-Packard, from IBM to Johnson & Johnson, ‘they pillage the Third World less than they used to, and they offer more opportunities to women and minorities’, especially compared to before, ‘when the initials of the Royal African Company were branded on the chests of thousands of slaves’.88
The Right Nation and God Is Back were more substantial, unearthing positive elements for their cosmocratic liberalism, albeit from two unlikely sources. The first stemmed from a fascination with rightwing American intellectuals: William Buckley at National Review, Milton Friedman and the Chicago boys, and the neoconservatives, including Irving Kristol, Daniel Bell, Seymour Lipset and Nathan Glazer. Aside from the admirable ‘cutting edge’ they gave to US foreign policy, the neocons were also ‘muckrakers of the Right’, ‘discrediting government’ by exposing affirmative action and welfare dependency. In fact, they were quite close to the philosophical traditions of the Economist. ‘As they grew older, neocons embraced old-fashioned liberalism – the liberalism of meritocratic values, reverence for high culture and a vigorous mixed economy.’ Looking past the misleading label, ‘America’s conservatism is an exceptional conservatism: the conservatism of a forward-looking commercial republic rather than the reactionary Toryism of old Europe.’ They cited an exchange in which Max Beloff, a British peer, incredulously asked Irving Kristol how he dared call himself conservative, since without deference to tradition, including those threatened by ‘the abuses of capitalism, it is only the old Manchester School [of classical liberalism].’89
There remained a difference between the ‘old-fashioned liberalism’ of Europe and the ‘exceptional conservatism’ of America, however – though, on closer inspection, the latter turned out to be a great improvement. In alliance with the evangelical right, neocons not only showed great tactical nous. They demonstrated how religious observance went hand in hand with wealth creation, in a kind of generalized ethic of capitalism. Future Perfect opened in New York at a Bruderhof retreat, a community which embraced global supply chains and the internet for its toy business – proof that ‘if the modern marketplace can do the devil’s work, it can also do the Lord’s.’90 America was not just economically and militarily dominant (‘superpower is too weak a word’), crucially it was also the most devout state in the West. This explained the productivity gains of the New Economy. ‘Today the triumph of secularization in Europe seems to be going hand in hand with the decline of the work ethic, just as the survival of religion in the United States is going hand in hand with the survival of the work ethic.’
This went beyond Max Weber’s theory about the origins of capitalism in Protestant Europe. It hinted that industriousness was elastic, rising or falling with changes in the religious sentiment giving rise to it. Europeans ‘liked to think of themselves as rational heirs to the Enlightenment’, but they suffered from a consequent competitive disadvantage when it came to God.91 Later, in Shanghai, Micklethwait and Wooldridge sat in on a Bible study group composed of young professionals, all convinced that Christianity was behind American greatness. In full agreement, the authors pointed out that the US supplied not only missionaries to China, but also a ‘gospel of pluralism’ in the form of the first amendment – engineered by ‘the genius’ of the founding fathers as much to keep the state out of religion as the other way around.92
If spirituality increased material wellbeing, a great deal sprinkled over the earth would increase it by a large amount. ‘Religion is being driven by the same two things that have driven the success of market capitalism: competition and choice.’ The cosmocrats had found the ultimate consumer durable: God. The Shanghai Bible study group had ‘biotechnologists, a prominent academic, a Chinese-American doctor, successful entrepreneurs, two ballet dancers’ and ‘BMWs parked in front’. ‘In much of the world it is exactly the sort of upwardly mobile, educated middle classes that Marx and Weber presumed would shed such superstitions who are driving the explosion of faith.’ The millenarian element in the Economist’s free trade manifesto of 1843 had returned as a form of religious sociability. More than faith, this was a sign of US dominance ‘so omnipresent that everyone has, as it were, a virtual America buried inside their brains’.93
2008: Saving the System

On becoming editor in 2006, Micklethwait said his goal was to make the Economist ‘the user’s handbook for globalization’, tackling ‘the big issues’.94 ‘Whenever there is dissent within the office, argument always comes round to the question, “What would be the liberal approach?”’ A return to first principles – pivoting on economic freedom and suspicion of the Leviathan state – should not be confused with pro-business bias, he patiently explained. ‘We do not treat business people with slavish idolatry or put them on the cover playing golf.’ The stakes were far higher. ‘We’d rather be seen as pro-capitalism.’95 Just two years on, that stance was put to the test, as the biggest crisis since the Great Depression engulfed the global capitalist system.
The Economist did not see that crisis coming: indeed, its market analyses (suffused by efficient market theory) ruled it out. In 2006, as US real estate prices began to fall, setting off a reaction in the repo markets in housing debt – on which big banks and other financial institutions had come to rely for short term-funding – the horizon was cloudless, at least for the financial system. The Economist recognized that as housing prices ‘flatten off’, the US economy – driven by consumer spending and residential construction, abetted by low interest rates – would slow down. But that needn’t result in a crash. On 24 March 2007, ‘Cracks in the Façade’ considered what the rise in delinquencies and defaults on subprime mortgages, and the cost of insuring against these, might mean for markets and the wider economy; the ‘biggest risk’ was that ‘politicians rewrite the rules ham-fistedly’.96 By 2008, when this securitized, supposedly safe debt turned toxic, banks holding it as loan collateral rushed to cover their losses, and panic selling swept markets (even those unrelated to mortgages), exposing highly leveraged banks as illiquid, when not insolvent.97 Lehman Brothers collapsed in September, brought down by the credit squeeze, with state authorities everywhere stepping in to avert more failures.
As Lehman sent shockwaves through world markets, the Economist – hurricanes, cliffs, ruins, free-falling globes on the cover – suddenly declared it ‘time to put dogma and politics to one side and concentrate on pragmatic answers’.98 There was no such thing as laissez-faire in a foxhole, for ‘when global finance stops only governments can start it again’, clearing banks of bad assets, guaranteeing their liabilities, dowsing them in liquidity. The Troubled Asset Relief Plan (TARP) was the first step to restoring confidence in the financial system, and the paper saluted former Goldman Sachs executive Hank Paulson at the US Treasury for pledging $700 billion to the effort (‘a number plucked out of thin air’, he later revealed).99
Still, the administration of George W. Bush had taken too long to summon this courage, and should never have let Lehman fail (especially after bailing out the mortgage lenders Fannie Mae and Freddie Mac). Lamenting that ‘Conservative America needs to recover its vim’, in November 2008 the Economist endorsed Democrat Barack Obama as the best man to restore ‘America’s self-confidence’ and re-1aunch its global brand – ‘reselling economic and political freedom to a world that too quickly associates American capitalism with Lehman Brothers and American justice with Guantanamo Bay’.100 In Britain, Gordon Brown’s ‘bold and comprehensive’ handling of the crisis earned him the belated approval of the Economist. As he recapitalized the banks, provided £1 trillion in guarantees, and the Bank of England pumped £200 billion into government bonds and kept interest rates at zero, Bagehot mused, ‘How did Britain’s hapless Prime Minister become saviour of the Universe?’101
Not a Step Back: Liberalism and the Crisis at the Economist

Some financial journalists reconsidered their positions in the aftermath of this calamity, chastened by their blindness to it, and writing bold think-pieces announcing the death of neoliberalism, the revenge of Keynes, even of Marx.102 Not the Economist. Steadfast, it acted as a kind of automatic stabilizer for a liberal ideological order suddenly racked with self-doubt – which helps explain why neoliberal policies that caused the crash were prescribed as the only cure for its aftereffects, amidst persistent stagnation in the world economy a decade later.
Not only did the Economist demand that governments bail out banks, warning of utter disaster on the scale of 1929 if they did not – ‘no country or industry would be spared from the equivalent of a financial heart attack’ – it pushed aggressively for the austerity that flowed from this, in order to pay down the debts that states had taken off banks’ balance sheets. The crisis thus became a powerful rationale for urging cherished reforms, advocated long before 2008. In ‘Capitalism at Bay’, the paper advised liberals to keep calm and carry on. ‘All the signs are pointing in the same direction, a larger role for the state, and a smaller and more constrained private sector. This newspaper hopes profoundly that this will not happen.’ But, ‘in the longer term a lot depends on how blame for this catastrophe is allocated. This is where an important intellectual battle could and should be won.’103 The Economist suited up for battle. As the credit crunch turned into a global recession, it argued nothing much was wrong with the real economy, still less capitalism; and if the causes of the crisis were technical – ‘dodgy lending’, ‘cheap money from emerging economies, outdated regulation, government distortions and poor supervision’, ‘dangerous incentives and the reckless use of mathematical models’ – so were the solutions: ‘smaller, better regulated, more conservative’ banks, and more oversight.
In point of fact, the Economist pushed back against proposals to attach conditions to the bailouts, or restrict banks’ freedom: ‘wholesale nationalizations’ would ‘undermine property rights’, sap the entrepreneurial spirit, and foment cronyism. Breaking up the banks or returning them to Glass-Steagall rules, which had once kept investment and depository banks separate, was ill-advised. Even oversight could go too far, for ‘liberalisation had good consequences as well: by making it easier for households and businesses to get credit, deregulation contributed to economic growth.’104 With concessions as footling as these in the pit of the crisis, the paper clambered out in no time. Deregulation was back on the agenda by 2010. In 2012, the front cover evoked the London Blitz under the banner ‘Save the City’, signalling finance had been unfairly attacked.105
Having demanded a bailout for Wall Street, the Economist refused to countenance the same for the US car industry or the millions it employed. ‘Banks qualify for help because the entire economy depends upon their services. They are vulnerable to sudden collapses in confidence that can spread to other banks that are perfectly solvent.’ Detroit ‘employs a network of suppliers, which would suffer if production shuts down’, and yet, ‘nothing would sap a recovery and job-creating enterprise like locking up badly used resources in poorly performing companies.’106 And even as monetary policy grew increasingly unorthodox, with central banks buying up public and private assets and keeping interest rates at or near zero, the Economist took up the battle hymn of a doctrinaire deflation (‘growth friendly fiscal consolidation’) in country after country by the turn of 2010, from Portugal, Ireland and Spain to Italy and France – but nowhere more lustily than in Britain itself, which could once again become an economic model unto the world.107
Enthralled by the Liberal-Conservative coalition that came to power there in 2010, the Economist hailed its legislative agenda as ‘revolutionary’: cuts of a quarter to most state departments, higher consumer taxes, student tuition fees raised from £3,200 to £9,000, a public sector pay freeze and 330,000 layoffs in four years, spending cuts to bring deficits down 6.3 per cent by 2014–15.108 This was just the start. Why should the ‘bloated’ National Health Service be off-limits? ‘Tories should have used their disastrous inheritance as an excuse to break their promise to maintain NHS spending.’ In welfare, means-testing child benefit and eliminating winter fuel payments and bus passes for the elderly could yield savings. David Cameron appeared on the cover in a Union Jack Mohawk, ‘Radical Britain: The West’s Most Daring Government’.109 If that was not clear enough, Wooldridge spelled it out under his own name in the Times in 2012: ‘Stop the war on wealth, we need these rich few.’110 A year later, Margaret Thatcher’s death was treated like the martyring of an insurgent, rifles pointed skywards, spent ammo clanking to the ground. ‘Freedom Fighter’, blared the Economist in black and white.111
Bestirring the ‘Weakened West’

Though he acknowledged past mistakes in Afghanistan and Iraq, Micklethwait showed neither remorse nor reticence about urging on further American wars. On this score, the Economist did not always give Barack Obama the credit he deserved, grumbling that he was too hesitant to use the hard power at his disposal. In Libya, all went well. When Arab Spring protests gave way to an armed rebellion against Muammar Qaddafi in February 2011, the paper called for a NATO-enforced no-fly zone from the start. Soon it was demanding aerial bombardments, a naval blockade and regime change – to guard ‘against the threat of butchery in Benghazi’ and give ‘a region of 350 million Arabs stuck in poverty and dysfunctional politics’ a ‘chance to come alive’. Such an attack was ‘unarguably legal’, based on a ‘helpfully elastic’ UN resolution ‘endorsing “all necessary measures” to protect civilian life’, opposed only by ‘the pacifist brigade’.112 Some 17,000 air sorties later, it was ‘a good war’ for NATO: admirably restrained, its pilots ‘keeping collateral damage to a minimum’, and with Europe supposedly in the lead of an operation essentially conducted by the US, a ‘template for future operations’.113
Concerning Syria, however, the president was a disappointment. There, in a bloody civil war in the aftermath of the Arab Spring, where Obama was funding and arming Islamist rebels, it called for partition in 2012: a Turkish run ‘safe-haven’ in the north-west, funded by NATO and Arab League countries, to train the Free Syrian Army fighting against forces loyal to President Bashar al-Assad.114 A year later, it called on Obama to strike at Assad for using chemical weapons: ‘hit him hard’, it urged. Let a ‘week of missiles rain down on the dictator’s “command and control” centres, including his palaces’ to ‘deter him from ever using WMD again’. Should this fail, show him ‘as little mercy as he has shown to the people he claims to govern. If an American missile then hits Mr Assad himself, so be it’.115 When Obama asked Congress to authorize the attack he had readied, and settled for mediation by Putin, the paper was aghast at this blow to presidential power (which must be ‘quick and agile’, ‘take hard and unpopular decisions’), to ‘the credibility of US foreign policy’ (creating expectations this might be ‘subject to the vagaries of congressional sound bites’ in future), and to all those ‘who cherish freedom’ and ‘put their faith’ in the West (represented on the cover as a lame and toothless lion, casting a forlorn look at Syria from across the Mediterranean).116
This overwrought language about the fate of the free world was reminiscent of the Cold War for a reason. Under Micklethwait, the Economist once again spied a Russian behind every setback for the West; a narrative that took shape in 2008 after Moscow trounced Georgia in a dispute over South Ossetia and Abkhazia in the Caucasus. This, argued the paper matter-of-factly, was a setback for the West, ‘which has been trying to prise away countries on Russia’s western borders and turn them democratic, market-oriented and friendly.’117 Six years later, such prising provoked a new conflict, when pro-Western protestors toppled Viktor Yanukovych in Kiev, and Putin reacted by backing pro-Russian separatists in east Ukraine and annexing Crimea, home of Russia’s Black Sea Fleet and a Russian majority population. For the Economist, this was quite simply the end of ‘the existing world order’. Crimea was a new Sudetenland, Putin another Hitler, ‘armed with a self-proclaimed mission to rebuild the Russian Empire’ from ‘Central Asia to the Baltic’. Anything less than sanctions against him was ‘appeasement’: a ‘fundamentally antagonistic’ state, Russia should be ‘cut off from dollars, euros and sterling’, finance and trade, with a total embargo on its oil and gas.118
The editor most responsible for this feverish coverage was Edward Lucas, who came of age as the Cold War ended. His father John Lucas – a philosopher who hosted dissidents at Oxford and smuggled Plato and the Greek New Testament into communist Czechoslovakia – raised him to fight in the closing act of that conflict. At the LSE, he campaigned for Solidarity in Poland, before setting off to Berlin, Prague and Krakow as an activist-cum-journalist in 1988. Expelled from Lithuania after he arrived to show ‘symbolic support’ for its anti-Soviet regime in 1990, he started an ‘intentionally provocative’ English-language weekly in Estonia in 1993 with a column, Troopwatch, that ‘monitored the occupation forces’ misbehaviour’.119 As Moscow bureau chief at the Economist from 1998 to 2002, he formed a view of Russia that differed from the prevailing optimism about the post-Soviet transition to liberal democracy and capitalism.
In 2008, Lucas’s The New Cold War: How the Kremlin Menaces Both Russia and the West barely glanced at the decade of economic chaos and decline that followed the fall of the Soviet Union. ‘Never in Russian history have so many Russians lived so well and so freely’, he observed, with a growing middle class able to buy property, travel abroad and send their children to boarding school.120 But if Moscow now accepted the rules of the game so far as capitalism was concerned, it remained unreconciled to the geopolitical order governing it – with the same gnawing hunger for power as before. ‘Once it was the communist trade unions that undermined the West at the Kremlin’s behest. Now pro-Kremlin bankers and politicians betray their countries for thirty silver roubles.’ Long before the standoff over Ukraine, Lucas pushed for a confrontational line on Russia. ‘Until we make it clear we believe in our own values, we cannot defend ourselves against the subversion and corruption leaking into our citadels of power.’121 In 2012, Deception: Spies, Lies and How Russia Dupes the West arrived to reinforce that point.
In style and outlook, Lucas was a link to the Crozier-Moss-Beedham tradition at the Economist: amiably bedraggled, with a wry sense of humour and the air of an MI6 man – like those he ‘rubbed shoulders and clinked glasses’ with as a young man, but refused to join, because ‘I reckoned I could do more good on the outside’ – and with similar extracurriculars. Senior vice president at the Center for European Policy Analysis, a Washington and Warsaw-based think tank with a list of donors that includes the US State Department and arms companies, Lucas runs its stratcom [i.e. propaganda] program, euphemistically described as an ‘on the ground effort to monitor, collate, analyze, rebut and expose Russian disinformation’ in ‘central and eastern Europe’.122
Given this outlook, it is hardly surprising that revelations about the reach of the US security and surveillance state since 2008 should not have perturbed the Economist. Obama’s unprecedented use of drones to assassinate suspected terrorists on his ‘kill lists’ – in Yemen, Somalia or Pakistan, where America was not at war, and without judicial oversight even when the targets were its own citizens – ‘do not undermine the rules of war’, though more could be done to ‘adapt’ a ‘potent new weapon’ to the constitution.123 When the US Army private then named Bradley Manning leaked hundreds of thousands of secret government documents related partly to the wars in Iraq and Afghanistan in 2010, exposing war crimes committed by US mercenaries, the Economist insisted that both he and the ‘digital Jacobins’ at Wikileaks to whom Manning confided this cache be punished. Julian Assange should be extradited, though in the meantime the paper found ‘some consolation’ that his revelations actually offered ‘a largely flattering picture of America’s diplomats: conscientious, cool-headed, well-informed, and on occasion eloquent’.124 Three years later Edward Snowden, a private analyst for the National Security Agency, exposed the staggering extent of its illegal surveillance of US citizens and foreigners, including such staunch allies of the US as German chancellor Angela Merkel. Disagreement between Lucas and other editors resulted in a toothless verdict on the American security empire – ‘our point is not that American spies are doing the wrong things’ – and a vindictive one on the traitor who had exposed it: Snowden, who had fled to Moscow must return to face US justice.125 Lucas, writing under his own name, was less equivocal. He denied the NSA had done anything illegal and strongly insinuated Snowden was a Russian agent in a 2014 e-book, The Snowden Operation: Inside the West’s Greatest Intelligence Disaster.
The Rise of ZMB and the Keynes-Hayek Divide

In 2015, Michael Bloomberg hired Micklethwait to restructure the news side of his data terminal business in New York. Of the three finalists competing to replace him in London – Ed Carr, Tom Standage and Zanny Minton Beddoes – the last was a long-running favourite with both staff and management, in possession of all the prerequisites to be editor: PPE at St Hilda’s College, Oxford, MPA from Harvard’s Kennedy School and time spent in America, where she had lived since 1996. In due course appointed, she became the first woman to occupy the role, after 172 years – well-known from television and radio, elegant in brightly coloured suits and patterned dresses, a prized guest on panels and at global gatherings from the Davos Forum to Bilderberg. Sharp and eloquent, she was also refreshingly willing to listen and debate with her interlocutors. Born in Shropshire to an Army officer father and a German mother, she went to Moreton Hall, a public girls’ school near her home.
In her first summer at Harvard, Beddoes travelled to Poland with her professor Jeffrey Sachs, working as an intern in an old Soviet Ministry building, ‘writing policy memos designed to help Poland’s reformers to build a market economy’. In 1992, she turned down a job from Goldman Sachs to pursue similar work as a junior economist at the IMF, first in Senegal and Mali and then in Kyrgyzstan. ‘This meant basic things, like figuring out national income, which had never been done before. In Kyrgyzstan, I’d go to the train station and literally count trains to see what they were sending out.’ Opting to pursue journalism after two years of this, she wavered between the Economist and the Financial Times – with Harvard classmates Clive Crook and John Heilemann at the first, and New Labour’s Ed Balls at the second. ‘Economist editorials have more heft’, she decided, perhaps with the example of Sachs in mind, who had launched ‘shock therapy’ in Yugoslavia, Poland and Russia in a signed piece for the paper in 1990, urging a ‘transition to a private-sector market economy in one year’.126 Emmott hired her for the new post of emerging markets correspondent in 1994 and two years later promoted her to be economics editor, based in Washington, D.C.
In that post until 2007, Beddoes enthusiastically backed globalization, explaining the role that regional and global financial markets played in it: private pension schemes in Latin America in 1995, copper, uranium, cotton, oil and natural gas in Central Asia and the Caucasus in 1998, global banking and regulations after the Russian default in 1999, rebalancing of the world economy away from US households in 2003 and towards Asians and Europeans in 2005.127 But the 2008 crisis altered the landscape at the Economist, and her place within it, as fault lines emerged over how to respond to the Great Recession. Named business editor just as the crisis hit, Beddoes convened the section editors and invited two outside economists to offer critiques. ‘We saw mistakes we had made in the 1960s and 70s – corporatism, industrial policy, state subsidies, high taxes.’ But there were other historical missteps – in the 1920s and 30s, when laissez-faire needlessly prolonged a depression: ‘this also bolstered my position, which you might call small-government Keynesianism’. In contrast to Micklethwait, Beddoes defended a bailout of Detroit automakers at the time – doing so again in a heated exchange on the Bill Maher show in 2012, pointing out that if they had filed for bankruptcy ‘in the midst of this huge financial crisis, they would have been liquidated, with hundreds of thousands of jobs lost throughout the Midwest.’
This mild-mannered, post-2008 ‘Keynesianism’ put her at odds with two wily old operators at the Economist, Ed Lucas and the capital markets editor and Buttonwood columnist (on finance), Philip Coggan. ‘There is a kind of divide, yes, between the Keynesians and the Hayekians’, Lucas explained in 2011. Beddoes was a ‘fierce Keynesian … on what to do about the Eurozone, on US stimulus’. ‘I think she is wrong. But she is very, very smart and articulate.’ On the other side were Coggan and himself: ‘I’m the most Austrian of all the Austrians’ and ‘we want to save capitalism from itself’, giving it a supple yet strong regulatory framework – clawing back some ground from the financiers, their tax breaks and offshore wealth havens. (Neither fiscal stimulus nor monetary easing would work – since, they argued with Hayek, after a certain threshold, lower interest rates had deflationary effects, encouraging people to save and not to spend.)128
For a moment, he and Coggan seemed to have the upper hand. After three years of recession, and with the spectre of a sovereign debt crisis hanging over Europe, young indignados took to the streets in Madrid to protest austerity in May 2011, kicking off a global ‘movement of the squares’ that reached New York by September. In October, the Economist cover featured a young man with a twenty-dollar bill taped to his mouth, American flag grazing his cheek, at the Occupy Wall Street encampment. ‘Rage against the Machine: Capitalism and Its Critics’ seemed, after the requisite jokes about hygiene among the campers, to side with its critics. That was Coggan, who argued for taking their ‘deep-seated grievances’ seriously – with youth unemployment at 21 and 17 per cent in Europe and the US respectively, real wages falling for the middle class, and inflation eroding the savings of the elderly, as bankers raked in bonuses. He contrasted the Occupy movement with the ‘selfish’ protests in Seattle in 1999, ‘easy for economic liberals to dismiss’ as ‘an attempt to impoverish the emerging world through protectionism’. Lucas was slightly cooler. For without organized labour, argued a second piece written largely by him, the occupations in Berlin, London, Madrid, New York and Rome would struggle to be heard. ‘Protestors can occupy the world’s financial markets physically, but they have not shown they can spook them.’
In fact, it was the incoherence of Occupy’s demands that interested Coggan and Lucas, allowing them to invent some. Closing tax loopholes, lowering marginal rates, and moving ‘“to Basel 3 and higher capital requirements” is not a catchy slogan, but it would do far more to shrink bonuses on Wall Street than most of the ideas echoing across from Zuccotti Park.’ In his Buttonwood column, Coggan mooted reforms of this kind after 2008, urging readers dissatisfied with efficient market theory to look at Hayek and his teacher Ludwig von Mises – whose theories of the business cycle helped to explain the crisis as one of low interest rates leading to a credit boom, followed by misallocation of resources and a protracted slump.129 Paper Promises: Money, Debt, and the New World Order in 2011 suggested the Austrian school offered the best solutions as well: ‘there is nothing to be done except to let prices and wages fall to adjust to the new reality.’130 Coggan and Lucas were more extreme, or simply more rigorous, than their colleagues; but the goal of deepening austerity they had in common with them. If states must curb the power of bankers, it was so as to pare back what waged workers could expect too: for the US to ‘reduce its debt burden, it must tackle its cherished entitlement programs’, retirement, pensions, health care, social security.131
Beddoes, for her part, did not see a serious divide between Hayek and Keynes at the Economist in the years leading up to her appointment. ‘Ed Lucas may think my economic views are crazy. A few are sceptical of quantitative easing or fiscal stimulus. But not many’, she said in 2012. For her, the crisis simply required ‘pragmatic short-term acceptance of demand stimulus, without abandoning small state micro-economic policies, and with a path to balanced budgets’. The survey she wrote in October 2012, ‘True Progressivism’, was in fact a kind of synthesis of the two positions, incorporating the Coggan critique of finance within it. ‘That cover had a huge effect and met with almost no internal dissent.’132 It was also an intellectual manifesto, as important for making her case to be editor as books had been for Emmott and Micklethwait.
In it Beddoes acknowledged the problem of inequality, which had seen the richest 1 per cent in the US double their share of national income since 1980, while the top .01 per cent (around 16,000 families) had quadrupled their take. And that trend towards greater inequality was not confined to America; measured by Gini coefficients it had risen in China, India, Russia, Sweden and almost everywhere else that had chosen ‘openness’ and ‘reform’ in the last three decades. In addition to the populist dangers this bred, a growing body of literature suggested too large an underclass ‘slows growth, causes financial crises and weakens demand’.133 Up top, financiers should pay their share of income tax, and the ‘implicit subsidy’ to banks too big to fail (around $30 billion in lower borrowing costs) should end; ditto cronyism, in communist China as in the capitalist US, where private money flowed without legal limit into politics. Moving towards the middle, the state should stop subsidizing mortgages in the form of interest deductions. At the bottom, better access to health care and education was essential.
But the small print involved much the same entitlement cuts Coggan wanted. Sweden was the upmarket model cited for tax reform and budget discipline. It was true, she granted, that income inequality had leapt by 25 per cent there since 1980. But the Swedes were still among the most equal of peoples, in part because market reforms had boosted growth without sacrificing services (improved, in their turn, by charter schools and private health providers). Latin America, on the other hand, was a bargain option. Inequality was also falling in (most) countries there, thanks to ‘targeted’ spending on primary schools for the poor, while its conditional cash transfers offered a more ‘cost-effective’ welfare system (less than .4 per cent of GDP in Brazil) that also produced good behaviour in terms of school attendance and job hunting. Globalization had winners and losers, just as Micklethwait and Wooldridge had shown; but for Beddoes, at least, it was not enough to lament the has-beens this scattered on the roadside of progress. For the rich world to ‘live within its means’ while becoming fairer still involved trade-offs – which she preferred to see as ‘whether to invest in poorer kids or continue to pay generous pensions to richer older people’.134 Liberalism should aim for equality of opportunity, not outcome, which meant a new round of reforms based less on class conflict than the inter-generational kind.
New Offices, New Progressivism

After seven turbulent years, 2015 looked like a relatively auspicious time to take up the reins of the Economist. The global economy remained anaemic, but stability had returned to the developed bits of it, in part because of falling commodity prices. Beddoes started out on the same path as her predecessor. In Britain, she backed David Cameron’s Conservatives in April, citing their ‘energetic and promising reforms’ since 2010: government spending cut from 45.7 per cent of GDP to 40.7 per cent, even as ‘public satisfaction with the police and other public services has gone up’; a million public sector workers laid off, but unemployment at a record low.135 Labour, then under Ed Miliband, was a threat to all this progress – for, despite a commitment to carry on with austerity, it also had plans to raise the top rate of tax by 5 per cent, collect a ‘mansion tax’ on houses worth over £2 million, and cap rent rises, zero-hour contracts and household energy bills. Not only did these timid gestures ‘risk chasing away the most enterprising, particularly the footloose global talent that London attracts’, they betrayed an ‘ill-founded faith in the wisdom of government’.136 When a sincere leftist emerged to lead Labour after the defeat Miliband duly suffered at the polls, the Economist was caught between disbelief and disdain. Lost in a ‘political time-warp’, Jeremy Corbyn had ‘nothing to offer but the exhausted, hollow formulas which his predecessors abandoned for the very good reason that they failed’ – dooming Labour to ‘electoral oblivion’ until the day he quit, which was sure to be soon.137
Across the Atlantic, America looked more inspiring than ever – or at least its outgoing president did; in October 2016, Obama became the first one to contribute a signed piece to the Economist, showing how complete was the ideological marriage between them, in which he warned of the dangers of populism, declared capitalism ‘the greatest driver of prosperity and opportunity the world has ever known’, and pitched the upcoming election as a choice to ‘retreat into old, closed-off economies or press forward, acknowledging the inequality that can come with globalisation while committing ourselves to making the global economy work better for all people’.138 As the curtain descended on Obama’s time in office, the Economist signed off on his last military adventure abroad, the orchestration of Saudi Arabia’s assault on Yemen. Later – after Riyadh’s imposition of an economic blockade and two years of pummelling the country by land, sea, and air had provoked the worst humanitarian crisis anywhere in the world – the paper finally asked if a moral issue might be at stake: ‘How can the West denounce the carnage in Syria when its own ally is bombing civilians in Yemen?’ In fact, quite easily; the two wars were different. ‘The West should stay close to the Saudis, uncomfortable though this may be’, seeking only to ‘restrain the damage of their air campaign, and ultimately bring it to an end’.139 What its coverage downplayed was not just the suffering inflicted by the Saudi-led strikes, over 60 per cent of which hit non-military targets – weddings and funerals, farms and fisheries – but the direct culpability of the US in supplying the warplanes, bombs, intelligence, targeting and refuelling, to carry them out.140
Beddoes’s first year or so was less about controversy than tone. ‘Mind-stretching journalism’ was the order of the day, built on life-cycle issues and served up with lashings of new technology. The Economist peered into the future of autism, clones, drones, longevity, millennials, assisted suicide, viral resistance, microchips, robots, artificial intelligence, driverless cars, gene editing and quantum mechanics. ‘We don’t want to be the grandpa at the disco’, she told the Guardian in 2016, which pointed to the eight social media staffers she had hired, as well as the Twitter-storm of articles designed to convert millions of social media followers into paying subscribers, and with more resources devoted to Economist Radio, TV and now Film.141 Months after her elevation, the Economist itself changed hands, when Pearson decided to sell its 50 per cent stake in the company shortly after it offloaded the Financial Times in a deal with Japan’s financial news giant Nikkei. Here, because of its unusual charter, the Economist could put together its own all-cash offer for £469 million – with Exor Investments, the Agnelli family vehicle that controls entities as diverse as Fiat, Juventus and La Stampa, taking a 43.4 per cent stake in the Economist Group while accepting a 20 per cent voting cap. To finance the deal, the paper agreed to sell its historic tower in St James for around £130 million; at the end of 2017, about 200 staff moved into custom-built offices – fit for a ‘21st century media organization’, as Beddoes put it – close to the premises it had occupied in the late nineteenth century, on the bustling Strand.