Best of the financial columnists

The green elephant in the room; China’s new digital dictatorship; the great Netflix brain drain; and do higher wages really cost jobs?

The green elephant in the room

John Vidal

The Guardian

We are amazed by images of wildlife seen in ever more beautifully filmed natural history documentaries such as the BBC's new Planet Earth II series, says John Vidal in The Guardian. They raise awareness, entertain, inform and amuse. We weep when we hear there are fewer birds in the sky, or that thousands of species are critically endangered. But there is a more destructive elephant in the room that the BBC and the media don't see: "hyper-consumerism". The average US supermarket offers nearly 50,000 products. In the UK we throw away millions of tonnes of food every year. Mobile phones and computers and cars are built to last just a few years. The free-market economy celebrates speed, obsolescence and quantity over longevity and efficiency. We know this leads to destruction of the soil, deforestation, over-extraction of minerals, waste of natural resources and pollution, and that the triumph of corporate power is responsible. To avoid ecological disaster, this dangerous beast must be culled.

China's new digital dictatorship


The Economist

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China's leaders have long behaved as if the country can avoid the "democratic transformation that every rich country has passed through on its way to prosperity" and there are worrying signs that the Communist Party may seek to retain control via a "new form of digital dictatorship", says The Economist. Under Xi Jinping, citizens enjoy freedoms "unimaginable a generation ago". Yet the huge middle class it has created are "distrustful" of the way things are going. The party's reaction to this has been to create a "social credit system" which "harnesses digitally stored information" to "chivvy" citizens into behaving better. Although that sounds fair enough, this could "mark the beginning of something bigger and more sinister". This is, after all, a regime that "already tries to police how often people visit their parents". The new system will record vague "sins" such as "assembling to disrupt social order". If Xi continues along this route, "anger and resentment towards the government" will only increase.

The great Netflix brain drain

Anthony Horowitz

The Spectator

There is a revolution taking place in TV, and "it can be defined in one word: Netflix", says screenwriter Anthony Horowitz. It has 75 million users and annual revenues of around $7.5bn. All of the most talked-about programmes of 2016 premiered on Netflix: House of Cards, Stranger Things, The Crown. The "smart" stars of cinema are flocking to TV. But what is "good news for audiences and for US broadcasters may not be so good for writers and producers" in the UK. The main reason The Crown, about as British a story as they get, wasn't shot here, is money. The first season's budget was £100m. My own Foyle's War cost a tenth of that for nine seasons. If I had pitched Breaking Bad here in the UK, I would have been "laughed out of the room" executives just aren't brave enough to take on such big projects. Yet when a broadcaster does push the boat out the BBC's The Night Manager cost £30m it pays off. "Netflix are cheerfully appropriating our talent, our ideas and even our royal family." And we let them.

Do higher wages really cost jobs?

Bourree Lam

The Atlantic

Donald Trump has picked Andrew Puzder for labour secretary, so the plan to raise the federal minimum wage to $10.10 now looks unlikely to be implemented, says Bourree Lam. Puzder thinks minimum wages lead to job losses. But do they? A recent report by President Obama's Council of Economic Advisers looking at minimum wages in the leisure industry over the past two years found no evidence that increases cost jobs, "adding to the pile of evidence" discrediting Puzder's position. But the "mountains of research" have not led to any kind of consensus among economists. Perhaps Trump's election will at long last settle the issue. Any future action on minimum wages will now have to take place at the state and local level. The differences in policy between states will generate lots of natural experiments on the effects of wage hikes on jobs. The data could provide a definitive answer to a question that impacts on so many.