economic inequality and Hong Kong protests

October 21st, 2014

Hong Kong’s protest movement – now more than three weeks old – has largely focused on definitions of universal suffrage and various methods for electing political leaders. However, many of those taking part also feel economically disenfranchised ….

The territory’s per capita GDP has soared from below $7,000 two decades ago to about $38,000 now. ….

However, that economic dynamism has come at a price. A fifth of Hong Kong’s 7m people live in poverty, according to the charity Feeding Hong Kong, while the income gap is the widest in the developed world. ….

“The Hong Kong economy has been flying since 1997. It has skyrocketed. But a lot of people don’t enjoy the success,” says Eric Yeung, a 26-year old protester, who works in a hospital. “We are earning our money to feed this small group of people. They get richer, while we get more underprivileged. Our burden has become heavier.”

Josh Noble, “Economic inequality underpins Hong Kong’s great political divide“, Financial Times, 21 October 2014.

coping with dementia

October 19th, 2014

English journalist Fiona Phillips reflects on how she reacted when each of her parents were diagnosed with dementia, an incurable disease that many of us will suffer from before we die.

A couple of weeks ago, Pope Francis said something that brought all the guilt of putting my mother in a care home flooding back. At a special mass to honour grandparents, he said a society that does not care for its elders “has no future”. He warned of a “poisonous” culture in which they are abandoned in care homes, where, he said, “they often suffer neglect, fear and loneliness”.

Up to 80% of people living in care homes have Alzheimer’s Disease or some other form of dementia. It is a wretched, cruel, misunderstood condition that I’ve seen both parents through.

I’ll never forget the day I had to leave my mum in a care home – in her late 60s, the youngest resident there – with her early-onset Alzheimer’s. I still wake up at night with the guilt of leaving her and her imploring “But I’m your mum…” …. The four hours I spent in my car, my face flooded with tears, was a journey I still carry around with me. My dad had said he couldn’t look after her. I hated him for it. What we didn’t know then was that he was already in the early stages of Alzheimer’s himself, and didn’t know what the hell was happening to him. ….

Mum was admitted to hospital with dehydration on several occasions during her time there. My guilt and heartbreak drove me down nearly every weekend to Wales to see my once always-so-glamorous mum sitting in a chair, head bowed, smile gone, with somebody else’s clothes on, dirty nails, and her hair savaged into a care-home crop. The look of an institution. Not a home. That look will always haunt me. ….

Mum had already died when it became clear that my dad could no longer live independently. I found this out when I arrived on his doorstep unexpectedly and found that he’d been living like a tramp for months. It was the only occasion he’d opened the door to me in all the months I’d been making futile visits to the house, after driving hundreds of miles.

This time he cried when he saw me, as though he was relieved that his predicament had been unmasked. He was living on a dirty mattress on the floor, surrounded by clutter, piles of mouldy dishes in the sink and bundles of notes to himself as a prompt to his disappearing memory. I decided there and then that I had to move him nearer to me.

Fiona Phillips, “Dementia: Why putting my parents in a home will haunt me forever“, BBC News Magazine, 17 October 2014.

Fiona Phillips (born 1961) is now an Alzheimer’s Society ambassador.

improving public healthcare in Pakistan

October 19th, 2014

BBC News brings us the heartwarming story of one man’s struggle to provide free, world-class care to millions of Pakistan’s kidney patients.

Pakistan’s shambolic public health system suffers from corruption, mismanagement and lack of resources. But one public sector hospital in Karachi provides free specialised healthcare to millions, led by a man whose dream was inspired by the UK’s National Health Service. ….

Adib Rizvi was barely 17 when Hindu-Muslim communal riots forced him to migrate from India to the newly created country of Pakistan.

Without a family, he spent much of his time as a medical student in Karachi in the 1950s living in boarding hostels.

“In those days, I had plenty of time to roam about and observe what goes in our hospitals,” he remembers. …. “I saw people being abused for not being able to pay for treatment. I saw elderly women taking off their earrings and pawning them to pay for medicine.

“People would beg for healthcare, but they would be demeaned. It was like people were required to pawn off their self-respect to get a service which I felt should have been their right as citizens in the first place.”

After completing his medical degree in Karachi, Dr Rizvi went to Britain for a fellowship in surgery. There, he spent a decade working in hospitals.

“I was inspired by the National Health Service (NHS). It showed me that providing free healthcare was doable,” he says.

But when he returned to Pakistan in 1971 and joined Civil Hospital Karachi as assistant professor of urology, most people around him told him he was talking utopia. “They said it can’t be done here.”

At the time, he had a choice.

He could have opted to set up his own private hospital. He could have built up his own lucrative empire while keeping his day job at the poorly run government hospital – a path taken by many highly qualified physicians in Pakistan.

“But the option never really appealed me,” he says. “I always felt that in order to really make a difference, I had to be committed to this public sector hospital. Because when you contribute to public sector institutions, you help the common man. That’s what I wanted to do.”

Shahzeb Jillani, “Pakistan’s ‘miracle’ doctor inspired by NHS“, BBC News, 19 October 2014.

The Sindh Institute of Urology and Transplant (SIUT) is part of Civil Hospital Karachi (a large teaching hospital). It began in 1971 with a shabby eight-bed ward. SIUT hospital today is  a world-class kidney disease centre, with 800 beds in two multi-storey buildings.

workers’ rights

October 18th, 2014

FT columnist Simon Kuper complains that politicians routinely ignore the rights of workers, even as they focus on “‘Rights’ – for gay people, women and other suppressed groups”.

Politicians rarely mention them any more except to mock them. Barack Obama spoke of “bitter” jobless small-town Midwestern voters who “cling to guns or religion, or antipathy toward people who aren’t like them”. David Cameron evokes a “broken Britain” of dysfunctional jobless slackers. Mitt Romney identified 47 per cent of Americans “who believe that they are victims?.?.?.?who believe that they are entitled to healthcare, to food, to housing, to you-name-it”. And French president François Hollande, at least according to his angry ex-girlfriend Valérie Trierweiler, calls poor people “the toothless ones”. ….

Many working-class people are now shifting to parties that still promise community – a national or ethnic community. France’s Front National and the Scottish, Catalan and Flemish nationalists have never done better. The US Republicans own most white working-class votes. The UK Independence Party just won its first parliamentary by-election, on the largest increase in voting share for any British party in any by-election ever. Nigel Farage, Ukip’s leader, says: “We are now tearing great holes in the old Labour vote in the north of England.”

The left discovered rights. Now it ought to rediscover community.

Simon Kuper, “The working classes deserve respect“, Financial Times, 18 October 2014.

the explosion of obesity in Mexico

October 18th, 2014

A quarter of a century ago, two-thirds of Mexicans were of normal weight, according to official statistics. Now, about a third of the population is clinically obese, and more still are overweight – adding up to a supersized segment of adults second only to the US.

The explosion coincided with Mexicans’ embrace of US fast food alongside their beans and tortillas, plus less exercise – almost a third of children spend four hours a day in front of computer screens, for example – compounding a genetic propensity to accumulate fat, the state health service, IMSS, says.

Jude Webber, “Education and taxation called to arms in Mexico’s obesity fight“, Financial Times, 17 October 2014.

the Holocaust in Italy

October 18th, 2014

FT columnist Gillian Tett reviews “My Italian Secret”, a new documentary produced by film-maker Oren Jacoby. The film shows how hundreds of ordinary Italians, and some not-so-ordinary, such as legendary cyclist Gino Bartali, worked together so that thousands of Jews could escape the Holocaust.

In recent years Joseph Perella, one of the giants of the American private equity world, has become obsessed with Italy’s history. The periods that normally attract attention, such as the Renaissance or the Roman empire, are not what interests Perella. Instead, what has sparked his passion is a saga that is relatively unknown in America today, namely how ordinary Italians treated their Jewish minority during the second world war. ….

[U]ntil I saw the Perella-financed film, I did not know that about 80 per cent of the Jewish population in Italy survived the war.

And while that high survival rate partly reflects the fact that the Nazis never completely controlled Italy, the attitude of the Italian population was also crucial. Although some Italians co-operated in shameful ways with the Nazis to send Jews to concentration camps – with tragic results – many others created networks to protect them, often at great personal risk. And despite the Vatican failing to speak out against the Holocaust, Catholic priests and nuns played a central role in these rescue missions, in sharp contrast to those in countries such as Poland.

Gillian Tett , “The quiet heroes of wartime Italy“, Financial Times, 18 October 2014.


a conversation with economist Jean Tirole

October 17th, 2014

In this special FT News podcast, Professor Jean Tirole, who won the Nobel economics prize this year for his insights into market dominance, talks to Ferdinando Giugliano about his views on the evolution of regulation and whether economics has become excessively mathematical.

Ferdinando Giugliano, “Interview with Nobel economics laureate Jean Tirole“, The World blog, Financial Times, 17 October 2014.

This 14-minute interview can be freely accessed. (Registration is required, without charge, and blogs do not count against your 8 free downloads per month.) Here is an interesting quote, from the end of the interview (at 13:24): “It [economics] is a science. It’s a social science, but it’s a science. And it is very important to use the right tools.” For Professor Tirole, these tools include mathematics and statistics.


FT Tirole podcast




Nobel for humility and competence

October 15th, 2014

The Nobel Prize for economics is often awarded to a thinker for one powerful insight. This was the case with Eugene Fama last year with the efficient markets hypothesis, or Robert Lucas with his theory of rational expectations.

In contrast, this year’s winner, Professor Jean Tirole, has excelled in the field of industrial organisation in a way that defies easy summary, precisely because his approach embodies the versatility needed to address the complexity of the modern global economy. ….

What Prof Tirole realised was that you can treat an industry correctly only if you respect its particular features. But this is difficult. Between the dogmatic extremes of market fundamentalism and bureaucratic omniscience lies huge complexity.  ….

John Maynard Keynes expressed the wish 80 years ago that economists be thought of as humble and competent people on a level with dentists. The work of Prof Tirole displays competence of the very highest level. But what makes it so deserving of the Nobel is the humble virtue of continuously adapting his approach to the contours of the real world.

A Nobel for work of true economic value“, editorial, Financial Times, 15 October 2014.

the simple economics of increased longevity

October 15th, 2014

Thanks to technological change, life expectancies everywhere are rising. John Kay this that this is wonderful -a demographic change to be welcomed rather than feared.

Achieving these extended lifespans costs money. Not necessarily much, because healthy lifestyle is a more important contributor to longevity than medical treatment. But we all die, either from the remaining diseases we have not yet learnt to cure, or the accumulated effects of old age itself. So medical and care costs will inevitably be an increasing fraction of national income. But this is money the public really wants to spend. It resists attempts to control the grotesque costs of private US healthcare. “More for the National Health Service” is always the British electorate’s top spending priority. ….

Gloomy prognostications, sometimes of population explosion, then of secular stagnation, have repeatedly been falsified. But one certainty is that all the issues of concern result from developments that give us more choices – the choice between higher material living standard and more leisure, the indulgence of spending more looking after ourselves, and the opportunity for women to have careers as well as, or along with, family lives.

What is not to like about these developments? Why should we care about lower gross domestic product per capita, or higher public spending as a share of national income if it is the consequence of things that make us better off?

John Kay, “Economic growth allows us to choose longer lives – surely that’s a good thing?”, Financial Times, 15 October 2014 (ungated link).

promoting peace in the Middle East

October 14th, 2014

Ft columnist Gideon Rachman has a wonderful op-ed today.

General Sir Philip Chetwode, deputy chief of Britain’s Imperial General Staff, warned in 1919: “The habit of interfering with other people’s business and making what is euphoniously called ‘peace’ is like buggery; once you take to it, you cannot stop.” ….

… [A]s the US struggles to cope with turmoil across the Middle East, Sir Philip’s complaint – quoted in David Reynolds’s recent book, The Long Shadow – has a contemporary ring to it. ….

The British military effort in Iraq in 1920, like the allied effort today, was conducted largely through aerial bombing. Then, as now, there was strong scepticism about the long-term chances of achieving political stability in such an unpromising environment. AJ Balfour, the British foreign secretary complained – “We are not going to spend all our money and men in civilising a few people who do not want to be civilised.” In an echo of America’s current Middle East confusion, even British policy makers knew that they were pursuing contradictory goals. As Professor Reynolds points out – “The British had got themselves into a monumental mess in the Middle East, signing agreements that, as Balfour later admitted, were ‘not consistent with each other’.”

Gideon Rachman, “America, Britain and the perils of empire“, Financial Times, 14 October 2014.