The Economist back on form

After the horrible hiccup of the first weeks of the new editorship, with that terrible essay about Russia written by unreconstructed cold war intelligence agents, the magazine has come back to form in recent weeks. The five leader columns in the most recent edition showcase what the Economist does best – investigating marginal issues to reach workable solutions that would make a meaningful difference to humanity.

Two of the five leaders were rather traditional, though pertinent and well written. One of those was about the Nigerian election. This election matters to everyone. Nigeria is the most populous African nation with the largest economy, and is home to ethnic tensions, plentiful natural resources, and one of the more scary insurgent groups in the form of Boko Haram. Yet few other publications bothered to report on the election at all, while the Economist had substantial depth in its coverage. The theme of the leader was the election as a high point for democracy in the country, with a relatively free campaign, won by a challenger for the first time ever and enabling the first peaceful transfer for power thanks to the grace of the loser.

The second unremarkable leader was about British foreign policy and its shameful sinking into irrelevance under the opportunistic and shallow guidance of David Cameron. It would have been unthinkable a generation ago that France and Germany would lead talks in Ukraine on behalf of Europe with Britain nowhere to be seen. In the background is the ugly prospect of an EU referendum during the next parliament, a campaign likely to scrape the xenophobic barrel and further cost the nation precious influence. Just like in Scotland, even a close no vote would have far-reaching ramifications, while a yes would be even more damaging. Unlike in Scotland, the campaign will not be dignified and valuable in itself. The Economist rightly pins all this on Cameron the anti-statesman, while showing little optimism for a revival of British foreign policy under Ed Miliband should he win the upcoming election.

The other three leaders were all ground breaking. One researched the phenomenon of special economic zones, a modern favourite of policy makers and one where little previous scrutiny had been undertaken. The article acknowledged some benefits of special zones, at least when compared with an alternative to doing nothing. But the main point was that, if special conditions are considered of benefit to a region, why not simply apply them to the whole country? It is a great question. Usually, special economic zones are an attempt to do something positive by a government too timid to attempt something more far-reaching. If the zones are good, they are harming the residents of their nation who don’t happen to live there. And they also create all sorts of corruption and semi-criminal opportunities exploiting the different conditions in different places.

Then comes a wonderful leader about prenatal care. For many years, we have known that the early environment for young children has a major influence on their life outcomes. A stress free, loving home life and early education pays off in later life. One of the main drivers of persistent inequality of opportunity is that wealthier families tend to be able to offer their children healthier starts in life: that way advantages and disadvantages tend to persist through generations.

Good policy has taken steps to remedy this unfairness. Bill de Blasio’s signature campaign pledge for his role as mayor of New York City was to extend schooling to all children between ages two and four. Barack Obama often campaigns for the same. It is hard to conceive of a better use of public money, but it runs into predictable opposition from conservative interest groups. Better social housing, stronger enforcement of requirements on absent parents, and health campaigns about smoking or even clean air can also help.

Now a new study has shown that environmental factors play a critical role even in the womb. It ingeniously analysed the performance of batches of children from the same country around the time of external catastrophes such as flu epidemics, and also Moslem baby outcomes for those conceived around Ramadan. The results appear conclusive that especially the early months of pregnancy are a predictor of later outcomes.

The Economist points out that this makes generational inequality of opportunity even more entrenched, since wealthier mothers can more easily modify their lifestyle during pregnancy. It also shows some policies to mollify the situation, such as earlier pregnancy tests (to stop harmful alcohol consumption earlier), earlier midwife care and more caring policies by employers. For me, such articles show how far society has progressed thanks to science, and how many opportunities are still to be discovered and then utilized.

The final leader was about tax. The whole debate about tax has become poisoned by the US republicans, arguing essentially that all tax is bad. Well, without tax we can’t have education, or police or an army, leave alone any thoughts of welfare. It is valid to argue about the overall size of government and even about the respective roles of federal and regional authorities, but not that no tax should ever be increased.

The Economist leader argues for an increased taxation focus on land. It is well reasoned. Land cannot be moved, so such a tax is tough to evade even by serial evaders. As urbanization marches forwards, land becomes a critical resource again. Current zoning restrictions are often corrupt, open to special interests and anyway inefficient. Inefficient use of prime land is a key source of waste. Finally, taxing land is an antidote to inequality, since the wealthy tend to have it and the poor not. Piketty argues for a wealth tax, something unlikely to be practical in the near future, but a land tax might be feasible and maybe the next best thing.

It is typical of the Economist to look at an issue from a new angle and come up with a radical but practical solution. For me, the Tobin tax on financial transactions has all the same advantages, and I remain disappointed with the continuing opposition to that in the Economist.

The left often appears to argue for such taxes out of spite or jealousy or punishing success. They often fail to make the positive argument, that taxing these things can enable reducing tax on other things, the things that hinder growth or prevent people moving out of poverty. More taxes on land, financial transactions, property and carbon could finance elimination of income tax on all incomes up to the national median. That is the valuable prize, not squeezing the rich.

So, five leaders create a wonderful, thoughtful agenda. There is an election going on in the UK at the moment, and the usual junk that passes for political debate in the US. I can confidently claim that the five topics for these leaders will have no airing in these debates, beyond puerile posturing on UK foreign policy. Yet decisive action on these five could have more beneficial impact than anything that will be debated. Imagine a manifesto built around radical restructuring of the tax base, social policies centred on prenatal and early care, industrial policy with more than gimmicks, a foreign policy with a global dimension and genuine help to emerging economies? We must dream on, I am afraid.

How can this be changed? That is tough within a broken system, and with an electorate used to being fed the equivalent of TV gossip shows passing as political debate. It all cause me to question our current models of democracy even more. But, if my faith in democracy is currently being questioned, at least my faith in my favourite magazine has been largely restored.