Archive for the ‘Europe’ Category


We’re All State Capitalists Now

If there is one issue on which the rival candidates for the U.S. presidency agree, it’s that America’s global leadership will endure. Mitt Romney insists it is not a “post-American century,” while Barack Obama declared in his State of the Union address that “anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn’t know what they’re talking about.”
They must enjoy this kind of chest-beating in Beijing.
That a resurgent China poses a challenge to American power — especially in the Asia-Pacific region — has been clear for some time to those who know what they’re talking about. The real question is whether the United States has a credible response. Should it apply some version of the “containment theory” that the late George Kennan recommended for dealing with the Soviet challenge after 1945? Or something more subtle, like the “co-evolution” suggested by former Secretary of State Henry Kissinger?
Leave aside the military and diplomatic calculus and consider only the economic challenge China poses to the United States. This is not just a matter of scale, though it is no small matter that, according to the IMF, China’s GDP will overtake that of the United States within four years on the basis of purchasing power parity. Nor is it only about the pace of China’s growth, though any Asian exporter forced to choose between China and America would be inclined to choose the former; their trade with China is growing far more rapidly than trade with the United States.
No, according to some commentators, the contest between the two Asian superpowers is also fundamentally a contest between economic models: market capitalism vs. state capitalism. Speaking at the World Economic Forum in Davos this January, David Rubenstein of the Carlyle Group expressed a widely held view that the Chinese model of state capitalism is pulling ahead of the U.S. market model. “We’ve got to work through these problems,” Rubenstein said. “If we don’t do [so], in three or four years … the game will be over for the type of capitalism that many of us have lived through and thought was the best type.” I think this view is dead wrong. But it’s interesting to see why so many influential people now subscribe to it.
Market capitalism has certainly had a rough five years. Remember the Washington Consensus? That was the to-do list of 10 economic policies designed to Americanize emerging markets back in the 1990s. The U.S. government and international financial institutions urged countries to impose fiscal discipline and reduce or eliminate budget deficits, broaden the tax base and lower tax rates, allow the market to set interest and exchange rates, and liberalize trade and capital flows. When Asian economies were hit by the 1997-1998 financial crisis, American critics were quick to bemoan the defects of “crony capitalism” in the region, and they appeared to have economic history on their side.
Yet today, in the aftermath of the biggest U.S. financial crisis since the Great Depression, the world looks very different. Not only did the 2008-2009 meltdown of financial markets seem to expose the fundamental fragility of the capitalist system, but China’s apparent ability to withstand the reverberations of Wall Street’s implosion also suggested the possibility of a new “Beijing Consensus” based on central planning and state control of volatile market forces.
In his book The End of the Free Market, the Eurasia Group’s Ian Bremmer argues that authoritarian governments all over the world have “invented something new: state capitalism”:

In this system, governments use various kinds of state-owned companies to manage the exploitation of resources that they consider the state’s crown jewels and to create and maintain large numbers of jobs. They use select privately owned companies to dominate certain economic sectors. They use so-called sovereign wealth funds to invest their extra cash in ways that maximize the state’s profits. In all three cases, the state is using markets to create wealth that can be directed as political officials see fit. And in all three cases, the ultimate motive is not economic (maximizing growth) but political (maximizing the state’s power and the leadership’s chances of survival). This is a form of capitalism but one in which the state acts as the dominant economic player and uses markets primarily for political gain.

For Bremmer, state capitalism poses a grave “threat” not only to the free market model, but also to democracy in the developing world.
Although applicable to states all over the globe, at root this is an argument about China. Bremmer himself writes that “China holds the key.” But is it in fact correct to ascribe China’s success to the state rather than the market? The answer depends on where you go in China. In Shanghai or Chongqing, for example, the central government does indeed loom very large. In Wenzhou, by comparison, the economy is as vigorously entrepreneurial and market-driven as anywhere I have ever been.
True, China’s economy continues to be managed on the basis of a five-year plan, an authoritarian tradition that goes all the way back to Josef Stalin. As I write, however, the Chinese authorities are grappling with a problem that owes more to market forces than to the plan: the aftermath of an urban real estate bubble caused by the massive 2009-2010 credit expansion. Among China experts, the hot topic of the moment is the new shadow banking system in cities such as Wenzhou, which last year enabled developers and investors to carry on building and selling apartment blocks even as the People’s Bank of China sought to restrict lending by raising rates and bank reserve requirements.
Talk to some eminent Chinese economists, and you could be forgiven for concluding that the ultimate aim of policy is to get rid of state capitalism altogether. “We need to privatize all the state-owned enterprises,” one leading economist told me over dinner in Beijing a year ago. “We even need to privatize the Great Hall of the People.” He also claimed to have said this to President Hu Jintao. “Hu couldn’t tell if I was serious or if I was joking,” he told me proudly.
Ultimately, it is an unhelpful oversimplification to divide the world into “market capitalist” and “state capitalist” camps. The reality is that most countries are arranged along a spectrum where both the intent and the extent of state intervention in the economy vary. Only extreme libertarians argue that the state has no role whatsoever to play in the economy. As a devotee of Adam Smith, I accept without qualification his argument in The Wealth of Nations that the benefits of free trade and the division of labor will be enjoyed only in countries with rational laws and institutions. I also agree with Silicon Valley visionary Peter Thiel that, under the right circumstances (e.g., in time of war), governments are capable of forcing the direction and pace of technological change: Think the Manhattan Project.
But the question today is not whether the state or the market should be in charge. The real question is which countries’ laws and institutions are best, not only at achieving rapid economic growth but also, equally importantly, at distributing the fruits of growth in a way that citizens deem to be just.
Let us begin by asking a simple question that can be answered with empirical data: Where in the world is the role of the state greatest in economic life, and where is it smallest? The answer lies in data the IMF publishes on “general government total expenditure” as a percentage of GDP. At one extreme are countries like East Timor and Iraq, where government expenditure exceeds GDP; at the other end are countries like Bangladesh, Guatemala, and Myanmar, where it is an absurdly low share of total output.
Beyond these outliers we have China, whose spending represents 23 percent of GDP, down from around 28 percent three decades ago. By this measure, China ranks 147th out of 183 countries for which data are available. Germany ranks 24th, with government spending accounting for 48 percent of GDP. The United States, meanwhile, is 44th with 44 percent of GDP. By this measure, state capitalism is a European, not an Asian, phenomenon: Austria, Belgium, Denmark, Finland, France, Greece, Hungary, Italy, the Netherlands, Portugal, and Sweden all have higher government spending relative to GDP than Germany. The Danish figure is 58 percent, more than twice that of the Chinese.
The results are similar if one focuses on government consumption — the share of GDP accounted for by government purchases of goods and services, as opposed to transfers or investment. Again, ignoring the outliers, it is Europe whose states play the biggest role in the economy as buyers: Denmark (27 percent) is far ahead of Germany (18 percent), while the United States is at 17 percent. China? 13 percent. For Hong Kong, the figure is 8 percent. For Macao, 7 percent.
Where China does lead the West is in the enormous share of gross fixed capital formation (jargon for investment in hard assets) accounted for by the public sector. According to World Bank data, this amounted to 21 percent of China’s GDP in 2008, among the highest figures in the world, reflecting the still-leading role that government plays in infrastructure investment. The equivalent figures for developed Western countries are vanishingly small; in the West the state is a spendthrift, not an investor, borrowing money to pay for goods and services. On the other hand, the public sector’s share of Chinese investment has been falling steeply during the past 10 years. Here too the Chinese trend is away from state capitalism.
Of course, none of these quantitative measures of the state’s role tells us how well government is actually working. For that we must turn to very different kinds of data. Every year the World Economic Forum (WEF) publishes a Global Competitiveness Index, which assesses countries from all kinds of different angles, including the economic efficiency of their public-sector institutions. Since the current methodology was adopted in 2004, the United States’ average competitiveness score has fallen from 5.82 to 5.43, one of the steepest declines among developed economies. China’s score, meanwhile, has leapt from 4.29 to 4.90.
Even more fascinating is the WEF’s Executive Opinion Survey, which produces a significant amount of the data that goes into the Global Competitiveness Index. The table below selects 15 measures of government efficacy, focusing on aspects of the rule of law ranging from the protection of private property rights to the policing of corruption and the control of organized crime. These are appropriate things to measure because, regardless of whether a state is nominally a market economy or a state-led economy, the quality of its legal institutions will, in practice, have an impact on the ease with which business can be done.
Table: Measures of the rule of law from the WEF Executive Opinion Survey, 2011-2012

(Note: Most indicators derived from the Executive Opinion Survey are expressed as scores on a 1-7 scale, with 7 being the most desirable outcome.)
It is an astonishing yet scarcely acknowledged fact that on no fewer than 14 out of 15 issues relating to property rights and governance, the United States now fares markedly worse than Hong Kong. Even mainland China does better in two areas. Indeed, the United States makes the global top 20 in only one: investor protection, where it is tied for fifth. On every other count, its reputation is shockingly bad.
The implications are clear. If we are to understand the changing relationship between the state and the market in the world today, we must eschew crude generalizations about “state capitalism,” a term that is really not much more valuable today than the Marxist-Leninist term “state monopoly capitalism” was back when Rudolf Hilferding coined it a century ago.
No one seriously denies that the state has a role to play in economic life. The question is what that role should be and how it can be performed in ways that simultaneously enhance economic efficiency and minimize the kind of rent-seeking behavior — “corruption” in all its shapes and forms — that tends to arise wherever the public and private sectors meet.
We are all state capitalists now — and we have been for over a century, ever since the modern state began its steady growth in the late 19th century, when Adolph Wagner first formulated his law of rising state expenditures. But there are myriad forms of state capitalism, from the enlightened autocracy of Singapore to the dysfunctional tyranny of Zimbabwe, from the egalitarian nanny state of Denmark to the individualist’s paradise that is Ron Paul’s Texas.
The real contest of our time is not between a state-capitalist China and a market-capitalist America, with Europe somewhere in the middle. It is a contest that goes on within all three regions as we all struggle to strike the right balance between the economic institutions that generate wealth and the political institutions that regulate and redistribute it.
The character of this century — whether it is “post-American,” Chinese, or something none of us yet expects — will be determined by which political system gets that balance right.

Read the article online here:

We’re All State Capitalists Now — By Niall Ferguson | Foreign Policy


The Economist (@EconEurope)
10/17/11 2:07 PM
François Hollande wins the French Socialist primary and will now join battle to topple Nicolas Sarkozy next year.

We have a Winner!

THE decisive victory of François Hollande at the Socialist Party primary yesterday marks the countdown to France’s 2012 presidential election. A former party leader and long-time apparatchik, Mr Hollande secured 57% of the vote, next to 43% for his rival, Martine Aubry, the mayor of Lille. His nomination was backed by all four of the defeated first-round candidates, and the margin of victory was clear, raising hopes among left-wing voters that he will be able to unify the party around his candidacy.
In a telling image broadcast live last night, Mr Hollande embraced Ms Aubry and each of the defeated first-round candidates before cheering crowds outside the Socialist headquarters on the Paris left bank. It was a carefully orchestrated show of unity, after a campaign that had exposed not only ideological but personal differences among the candidates.
Beside Mr Hollande stood a grinning Arnaud Montebourg, whose protectionist campaign for “deglobalisation” secured him a surprise 17%, and third place, in the first-round vote, and even Ségolène Royal, Mr Hollande’s former partner and mother of their four children, who was beaten into fourth place in the first round with just 7%.
In the end, Mr Hollande benefited from his poll lead as favourite both to win the nomination, and to beat Nicolas Sarkozy, the incumbent president, in next spring’s election. Mr Montebourg, who took great delight between the first and second rounds in playing an extravagant courtship game with the two finalists, finally announced that he would vote for Mr Hollande—but only because he looked the better-placed to win the presidency. Mr Hollande has topped such polls ever since Dominique Strauss-Kahn, the former IMF managing director, was excluded from the race after his arrest in New York on sexual-assault charges that were later dropped.
The Socialist primary exercise has put the party in extraordinarily buoyant mood. For one thing, turn-out, already high in the first round, was even stronger yesterday, with 2.8m votes cast by left-leaning voters. This has lent the party a fresh, modern air.
For another, the Socialists now seem set to rally behind Mr Hollande, an instinctive consensus-seeker. Last time round, when Ms Royal won the primary to become the Socialists’ 2007 presidential candidate, the party was deeply divided, and she led her somewhat solitary election campaign from outside the party hierarchy.
This time, Mr Hollande has urged unity, and reached out to his defeated rival. Like the Labour Party ahead of Britain’s 1997 general election, the French Socialists seem to be so fed up with losing elections that they will do whatever it takes to win. The last presidential election they won was in 1988.
Although all polls suggest that Mr Hollande would beat Mr Sarkozy hands down were the presidential vote held today—one this month gave him 60% next to Mr Sarkozy’s 40%—there are plenty of obstacles in the way.
One is that Mr Hollande now has to try to reconcile the left wing of his party, represented by Mr Montebourg, with the social-democratic middle. He needs the left-wingers if only to stave off a far-left threat from outside the party, where a grumpy anti-establishment politician, Jean-Luc Mélenchon, enjoys support.
Yet Mr Hollande also needs to appeal to the centre if he is to pick up voters disillusioned with Mr Sarkozy. This will mean some complicated political gymnastics, and will expose him to a charge of incoherence that the right has already identified. During the primary campaign, Mr Hollande called in one breath for ambitious deficit-reduction and in another for the creation of up to 70,000 new teaching jobs.
Mr Sarkozy, who has yet to declare his candidacy, has been notably absent from the airwaves in recent months. Once he throws in his hat officially, the poll gap between the two politicians could narrow, not least because the president is a formidable campaigner.
Mr Sarkozy will doubtless make much of the inexperience of Mr Hollande, who has never held a ministerial job. Mr Hollande will point to rising debt and deficits on Mr Sarkozy’s watch. In the end, the choice will be only partly political: it will also be between a big hyperactive personality with experience but mixed results, and a largely charisma-free alternative in Mr Hollande, who campaigns as a “normal” candidate. After the whirlwind of Mr Sarkozy, that could just be what voters want.

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Keynes and Hayek, the Great Debate (Part 1): Nicholas Wapshott – Bloomberg

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Millionaires in Asia overtake Europe

FT.com / Global Economy


By Alice Ross
Published: June 22 2011 15:50 | Last updated: June 22 2011 15:50
A visitor looks at Chinese security personnel as she walks into a hall for the Top Essence luxury goods show
A visitor looks at Chinese security personnel as she walks into a hall for the Top Essence luxury goods show in Beijing

Millionaires across the world are now richer than they were before the financial crisis, the latest sign that the wealthy have weathered the downturn far better than other groups.
Global wealth among individuals with $1m of investable assets or more rose to $42,700bn in 2010, up from $40,700bn in 2007, according to the Merrill Lynch Cap Gemini World Wealth Report.
Rising equity markets and Asian growth helped expand the fortunes of the global elite, with the number of Asian millionaires now exceeding that of Europe.
There were 3.3m millionaires in Asia-Pacific at the end of 2010, compared to 3.4m in the US and just 3.1m in Europe, the report found. There were 3m millionaires in both Europe and Asia at the end of 2009.
Strong stock markets last year were a key driver of the gains, with global equities rising 18 per cent on average, according to the report.
“The performance in many markets helped to contribute to the growth in wealth in 2010,” the report stated. “Equity and other asset classes rose in value, though not at the exuberant pace of 2009’s bounce-back.”
The countries with the most millionaires in the world remain the US, Japan and Germany respectively, with China and the UK in fourth and fifth place respectively. China now has 535,000 millionaires, according to the report, only about a sixth of those in the US.
The report also found that 83 per cent of the world’s global millionaires were over 45 years old and 73 per cent were male.
The report, one of the most comprehensive annual pieces of research into the world’s wealthiest individuals, indicates that millionaires in European countries with high levels of debt and sluggish economic growth are struggling to keep pace with their Asian peers.
Italy’s number of millionaires fell by 4.7 per cent in 2010, making it the only country in the study to record a drop. Spain fell down the league table from 12th to 14th place.
The ranks of millionaires in the UK showed an increase of only 1.4 per cent last year, compared to a 23.8 per cent rise in 2009. In contrast, the number of millionaires in the US grew by 8.3 per cent in 2010.
Adam Horowitz, head of UK, Ireland and Israel at Merrill Lynch Wealth Managers, said the contrast was likely to be due to differences between wealthy investors in the UK, where more people buy property, and the US, where people are more highly invested in equity markets.
The world’s millionaires also multiplied at a slower pace in 2010 than they did during the bounce back in equity markets in 2009, the report shows. The number of global millionaires rose by 8.3 per cent last year, down from a 17.1 per cent increase the previous year

FT.com / Global Economy – Millionaires in Asia overtake Europe


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Liveable v lovable

The FT asks a very good question, Why is it no one really wants to live in the most liveable cities? 

…The polls underlines the fundamental fault that lies at the heart of the idea of measuring cities by their “liveability.The most recent surveys, from Monocle magazine, Forbes, Mercer and The Economist, concur: Vancouver, Vienna, Zurich, Geneva, Copenhagen and Munich dominate the top. What, you might ask, no New York? No London? No LA or HK? None of the cities that people seem to actually want to emigrate to, to set up businesses in? To be in? None of the wealthiest, flashiest, fastest or most beautiful cities

“These surveys always come up with a list where no one would want to live. One wants to live in places which are large and complex, where you don’t know everyone and you don’t always know what’s going to happen next. Cities are places of opportunity but also of conflict, but where you can find safety in a crowd.
“We also have to acknowledge that these cities that come top of the polls also don’t have any poor people…” 

Liveable usually does not mean the most dynamic…

… can someone coming from somewhere else improve themselves, reinvent themselves? Is there upward mobility? The top cities score badly again. London and New York are magnets for immigrants precisely because they allow those kinds of new beginnings

The common criteria of What makes a city great for all these surveys are:

Blend of beauty and ugliness – beauty to lift the soul, ugliness to ensure there are parts of the fabric of the city that can accommodate change.

Diversity – if lots of people are wanting to come to a city, there must be something there. 

Tolerance – the only way diversity works but also an accommodating attitude to sexuality (gay communities are famously successful inner-city regenerators) and religion (there are signs of increasing intolerance towards religious minorities all over the world). 

Density – density of habitation is crucial in ensuring density of activity, a vibrancy of commerce, residential and cultural activity. 

Social mix – the close proximity of social and economic classes keeps a city lively. 

Civility – impossible to measure and slightly against my stated notions about the benefits of friction but critical nevertheless. I once criticised the ingratiating politeness in the US and was told by an American who used to live in Paris that “it’s better to be told to have a nice day by someone who doesn’t mean it than to be told to go f*** yourself by someone who does”. Discounts any Israeli or Russian city from ever getting on the listEH

Read the whole article here 

Liveable v lovable 

By Edwin Heathcote FT.com

Published: May 6 2011 17:52 | Last updated: May 6 2011 17:52
A collage of city monuments and landmarks
Vancouver is Hollywood’s urban body double. It is famously the stand-in for New York, LA, Seattle and Chicago, employed when those cities just get too tough, too traffic-clogged, too murderous or too bureaucratic to film in. It is almost never filmed as itself. That is because, lovely as it is, it is also, well … a little dull. Who would want to watch a film set in Vancouver? To see its skyscrapers destroyed by aliens or tidal waves, its streets populated by cops and junkies, its public buildings hosting romantic reunions? Yet Vancouver (original name, Gastown) has also spent more than a decade at the very top of the charts of the best city to live in the world. Can that really be right?
The big cities it seems, the established megacities of the US, Europe and Asia are just too big, too dangerous, too inefficient. So what do these top cities have in common? How exactly do you measure “liveability”?No. Not at all. In fact, Vancouver’s boringly consistent topping of the polls underlines the fundamental fault that lies at the heart of the idea of measuring cities by their “liveability”. The most recent surveys, from Monocle magazine, Forbes, Mercer and The Economist, concur: Vancouver, Vienna, Zurich, Geneva, Copenhagen and Munich dominate the top. What, you might ask, no New York? No London? No LA or HK? None of the cities that people seem to actually want to emigrate to, to set up businesses in? To be in? None of the wealthiest, flashiest, fastest or most beautiful cities? Nope. Americans in particular seem to get wound up by the lack of US cities in the top tier. The one that does make it is Pittsburgh. Which winds them up even more.
So that’s the mountains, lakes and huge cups of generic coffee accounted for. Then there’s efficient public transport (that faint whoosh is the sound of London, NY and LA disappearing). There are also cultural institutions, global connectivity, green urban policies, well-designed housing within an easy commute, and so on. Each determinant on its own seems an indisputably good thing. But what do they mean together? Can Munich (Monocle’s Number 1) really be one of the best places in the world to live? On a Sunday afternoon?All the surveys use an index. But what is on it? “There’s always proximity to nature,” says Tyler Brûlé (editor of Monocle and patron saint of liveable cities and airport lounges, whose column appears weekly in the FT’s Life & Arts section). “Global connectivity is important, education and we’ve recently added chain store metrics – is there a Starbucks or a Zara?” he says.
To even begin to understand how these slightly unsettling results are arrived at, we need to understand who compiles them and who they are for. The lists are made by well-travelled academics, researchers and journalists for corporate, media and creative executives on generous expense accounts as well as other academics enjoying grants and stipends. And, of course, by Tyler Brûlé.
Most of these people are profoundly concerned with things like well-designed street furniture, a proliferation of eye-wateringly expensive artisanal retail, boutique hotels with good (English-speaking) service and environmentally friendly mayoral policies. Certainly these are all things which help but they skew the polls to a particular type of European or marginal Pacific city. What they also do is to strip out all the complexity, all the friction and buzz that make big cities what they are.
I spoke to Joel Kotkin, a professor of urban development, and asked him about these surveys. “I’ve been to Copenhagen,” (Monocle’s Number 2) he tells me “and it’s cute. But frankly, on the second day, I was wondering what to do.” So, if the results aren’t to his liking, what does he suggest? “We need to ask, what makes a city great? If your idea of a great city is restful, orderly, clean, then that’s fine. You can go live in a gated community. These kinds of cities are what is called ‘productive resorts’. Descartes, writing about 17th-century Amsterdam, said that a great city should be ‘an inventory of the possible’. I like that description.”
Joel Garreau, the US urban academic and author, agrees. “These lists are journalistic catnip. Fun to read and look at the pictures but I find the liveable cities lists intellectually on a par with People magazine’s ‘sexiest people’ lists.”
Ricky Burdett, who founded the London School of Economics’ Cities Programme, says: “These surveys always come up with a list where no one would want to live. One wants to live in places which are large and complex, where you don’t know everyone and you don’t always know what’s going to happen next. Cities are places of opportunity but also of conflict, but where you can find safety in a crowd.
“We also have to acknowledge that these cities that come top of the polls also don’t have any poor people,” he adds. And that, it seems to me, touches on the big issue. Richard G Wilkinson and Kate Pickett’s hugely influential book The Spirit Level: Why More Equal Societies Almost Always Do Better (2009) seems to present an obvious truth – that places where the differential in income between the wealthiest and the poorest is smallest tend to engender a sense of satisfaction and well-being. But while it may be socially desirable, that kind of comfort doesn’t necessarily make for vibrancy or dynamism. If everybody is where they want to be, no one is going anywhere.
“Sure, Vancouver is beautiful,” says Kotkin, “but it’s also unaffordable unless you’re on an expense account and your company is paying your rent.” Burdett agrees: “Economically all these cities at the top of the polls are also in the top league.” In fact, it can often be exactly the juxtaposition of wealth and relative poverty that makes a city vibrant, the collision between the two worlds. Where parts of big cities have declined, through the collapse of industries or the fears about immigration that led to what urbanists have termed the “donut effect” (in which white populations flee to the suburbs, leaving minorities in the centres), there is space to be filled by artists and architects, by poorer immigrants arriving with a drive to make money and by the proliferation of food outlets, studios and galleries. These, in turn, attract the wealthy back to the centre, at first to consume, and then to gentrify. Whether in New York’s SoHo, Chelsea or Brooklyn, in Berlin’s Mitte or London’s Shoreditch, Hoxton and now Peckham, it is at these moments of radical change that cities begin to show potential for real transformation of lives, or for the creation of new ideas, culture, cuisine and wealth. Once gentrification has occurred, bohemians may whinge about being priced out, as they always have done but, in a big enough city they are able to move on and find the next spot.
In a strange way the everyday conflict with the (unliveable) city can also become part of the attraction. Professor Tony Travers of the LSE says, “At one level the kind of urban sophisticates who live in these areas, in Hoxton or Brooklyn, want to fight the city. The urban struggle is part of the self-image of living on the edge.”
If the relative poverty of newcomers to the city distorts income equality in one direction, then the arrival of the super-wealthy does the same from the other end. The recent turmoil in the Middle East has led to a huge wave of investment in London property, one of the traditional safe havens for foreign money. London, unlike many cities that appear high on liveability lists, has few controls on property ownership. “If cities are any good,” says Travers, “they’ll attract a footloose international crowd who bring wealth.” And so the gap gets bigger.
He adds: “But they also come because of stability. If they buy something, they’ll be able to get their money back.” Which explains why New York and London remain popular, desirable and hugely expensive, despite never appearing on the lists.
The big cities also suffer from size. It’s true that Tokyo (Monocle’s Number 4) occasionally makes it on to these lists but metropolises like London, New York, Paris and Istanbul struggle with aged infrastructure and vast, sprawling transport systems. They are penalised in surveys for their inefficiency compared to, say, a small Scandinavian city. But it’s easy to be efficient when you’re small and when you have a highly taxed, wealthy population. It is also easy to initiate green measures, from recycling to cycling, which prove far more challenging in a proper metropolis with its problems of crumbling infrastructure and mobile population.
Yet it is proven again and again that the biggest cities are in fact the greenest. Their density, the close proximity in which people live and the minimal amount of land they occupy – compared with largely suburban Vancouver, for example, makes for a far smaller carbon footprint. Mumbai is probably the greenest big city there is – slums like the million-strong Dharavi use minimal land, energy and water. And, of course, without wishing to patronise, it is undeniable that there are happy people living surrounded by their families in Brazil’s favelas and millions living lives of drudgery and lonely despair beneath northern Europe’s leaden skies. The world’s most liveable informal cities lists have yet to be pioneered.
There is one criterion which throws up shockingly counter-intuitive results – beauty. On this criterion alone, almost any Tuscan hill town, perhaps Venice, perhaps Paris, would come out on top, yet none of these are there. Most of the beauty in the cities which occupy the tops of the leagues seem to ghettoise their beauty outside the city. They have convenient escapes, though the most beautiful and enjoyable – Rio, San Francisco and others – are curiously absent from the lists. The problem is that beauty doesn’t do you any good at all. It’s not a factor for the efficient, mid-sized chart toppers – though places such as Zurich certainly have their lovely bits. But it also damages your chances of making it into the disaffected megacities mentioned at the start of this article. The most beautiful cities become monuments to their own elegance, immobile and unchangeable. They cannot accommodate the kind of dynamic change and churn that keeps cities alive. In London, New York and Berlin, it is their very ugliness which keeps them flexible.
“The other big question,” says Kotkin, “is can someone coming from somewhere else improve themselves, reinvent themselves? Is there upward mobility?” The top cities score badly again. London and New York are magnets for immigrants precisely because they allow those kinds of new beginnings. They do have class structures but they are increasingly malleable.
There is one problem, though, that remains hard to ignore – violence. Johannesburg may be beautiful but its per capita homicide rates are astronomical; Los Angeles and New York are held back for the same reason. Washington DC’s per capita homicide rate, for example, is more than 30 times that of London and this continues to hold US cities down in the rankings. Urban guru Richard Florida remarks that the key to liveability is to “ensure that a city can guarantee the safety of all its residents”.
Of course, the ultimate difficulty with these surveys is that tastes are individual. I find London infuriating but –with the possible exception of New York – couldn’t think of anywhere else I’d rather live. “The city is a unique and private reality,” wrote Jonathan Raban, author of Soft City. He proposed that his London was a “soft city”, a place that everyone remakes in their own manner, in which every place evokes a personal memory or connection and which we navigate through our own unique mental maps. Our cities are our own – we make them inside us. No city means the same to two people so how on earth can we measure them?
Edwin Heathcote is the FT’s architecture critic
…………………………………………..
Rankings: the best and the worst
New York
The only city that gives me a thrill every single time I walk through it. Fast, furious, brash, cosmopolitan yet completely self-absorbed, it is the perfect big city.
Rio de Janeiro
An extraordinary cocktail of pleasure and pain, beaches and favelas, condos and shacks, Rio is one of the most beautiful, most tolerant and most varied cities on earth. Unfortunately, its high murder rate discounts it from traditional best cities lists. But what a cityscape.
Istanbul
Istanbul
Istanbul

The fulcrum of the delicate balance between Europe and Asia, Christianity, secularism and Islam, Istanbul manages to be both one of the most beautiful cities on earth and yet accommodating to huge and constant change. It is a young, international, wildly commercial city with an extraordinarily vibrant street scene, open 24 hours and genuinely alive.

London
London seems to have the ability to reinvent itself. It has been a magnet for immigrants for centuries and remains a place where the poor can make something of themselves and the wealthy can enjoy their money. Its infrastructure is crumbling, its property overpriced and its weather dull but London’s cultural life is astonishing and most of its museums are free.
Rome
It might be more than 1,500 years since Rome was a proper world city but its allure lies in a blend of history, chaos, beauty and infinite layers of culture.
A few that don’t make the grade
Moscow
Impossible to traverse on foot, infinitely rude, corrupt, understandably alcoholic and seriously traffic-clogged, Moscow needs work. It does have some beautiful bits, from the Kremlin through to the masterworks of revolutionary modernism but the legacy of the communist police state hangs heavy.
Dubai
Everything that could go wrong with a city does here. It is, in fact, a place with no “here”. A succession of malls, highways, hotels and hideous towers, it has spent its history announcing its arrival but hasn’t a clue what to do when it gets there.
Birmingham
Once it was the workshop of the world, an astonishing morass of industry that somehow threw up a powerful, elegant Victorian city, which has been completely destroyed. Its decline has been less complete than that of, say, Detroit or Flint but it manages to be uglier nevertheless.
Jerusalem
I know, I know – beautiful, holy, history lingers in its every shady corner. Yet the treatment of Arabs as second-class citizens, the ghastly security wall smashing through its edges and the omnipresent guns have spoilt it. Jerusalem is the perfect example of why tolerance is so critical to a city.

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>Jewish Texts Lost in War Are Surfacing in New York
NY Times
By SAM DOLNICK
March 7, 2011

In 1932, as the Nazis rose to power in Germany, a Jewish librarian in Frankfurt published a catalog of 15,000 books he had painstakingly collected for decades.

It listed the key texts of a groundbreaking field called the Science of Judaism, in which scholars analyzed the religion’s philosophy and culture as they would study those of ancient Greece or Rome. The school of thought became the foundation for modern Jewish studies around the world.

In the tumult of war, great chunks of the collection vanished. Now, librarians an ocean away have determined that most of the missing titles have been sitting for years on the crowded shelves of the Leo Baeck Institute, a Manhattan center dedicated to preserving German Jewish culture.

The story of how the hundreds of tattered, cloth-bound books with esoteric German titles ended up in New York includes impossible escapes, careful scholarship and some very heavy suitcases. And while the exact trails of many of the volumes remain murky, they wind through book-lined apartments on the Upper West Side, across a 97-year-old woman’s cluttered coffee table and into a library’s cavernous stacks.

For Jewish scholars, the collection of Science of Judaism texts (in German, Wissenschaft des Judentums) is a touchstone marking the emergence of Jewish tradition as a philosophy and culture worthy of academic study.

“We’re all heirs to the legacy of Wissenschaft,” said Jonathan D. Sarna, a professor of American Jewish history at Brandeis University.

The University Library Frankfurt still houses the bulk of the collection, but experts there have determined over several decades that they were missing some 2,000 books listed in the 1932 catalog. In the last two years, a team led by Renate Evers, head librarian at the Leo Baeck Institute, found that her shelves had more than 1,000 of the lost titles.

While scholars say the books in New York are probably not the same copies as those lost from the Frankfurt library, their rediscovery offers the chance to rebuild what one professor called “a legendary collection.” Frankfurt librarians are putting the collection online, while the Center for Jewish History, the institute’s parent organization, is seeking a grant to do the same.

“This is very exciting,” said Rachel Heuberger, head of the library’s Judaica division. “You can reconstruct a collection that otherwise never would have come to life again.”

Scholars say the books were most likely brought to New York from Europe by private collectors and antiquities dealers. In the past 50 years, donors, nearly all of them German Jews who immigrated and prospered here, gave them to the Leo Baeck Institute.

The donors, photographed in their cinched ties and sober suits, represent a generation of scholarly New York immigrants that is nearly gone. They escaped the Nazis, built new lives and created a sophisticated community that centered on books, culture and learning. Their ranks included the political philosopher Hannah Arendt and Dr. Ruth Westheimer.

Many came to this country hauling suitcases filled with books, and as they settled here, they created academic journals and scholarly institutes. They debated politics during formal dinners in Washington Heights parlors. They took typewriters along on vacation so they could keep working.

Herbert A. Strauss, who came to New York with his wife in 1946, owned one of the lost books, an 1843 volume by Ludwig Philippson. Where he got it, his widow, Lotte, has no idea. A historian and a professor, he was always coming home to their Upper Manhattan apartment with his arms full of new tomes.

“He was not only married to me,” Mrs. Strauss said. “He was also married to his desk.”

When he died in 2005, she donated 4,500 of his books to the Leo Baeck Institute.

The couple had met in Germany, and escaped together to Switzerland just steps ahead of the Gestapo. They recounted their ordeals in separate memoirs published in 1999.

Mrs. Strauss, 97, a great-grandmother, recalled meeting her husband. “I was fascinated by him,” she said. “He was good-looking and he had new ideas.”

On a recent afternoon in her sun-drenched apartment, Mrs. Strauss pulled out her husband’s brittle papers. There were Nazi-era ration cards decorated with swastikas — red for bread, blue for meat. There was a lifeguard certificate from Berlin that showed a young man, sleeves rolled up past his elbows, smiling at something off-camera.

Did he carry books with him when he came to New York?

Mrs. Strauss laughed. “We came here poor as church mice,” she said. “You went as you were; you didn’t carry a thing.” She was eight months pregnant and had one dress to her name. Mr. Strauss built his library, and their life, in New York.

Ludwig Schwarzschild, a dermatologist, brought his library with him when he came to the United States in 1934. Although his practice north of Frankfurt was shuttered by the authorities, he, his wife and their two young children were able to take most of their possessions out of Germany, said their daughter, Lore Singerman, of Annapolis, Md.

Mrs. Singerman, 78, remembered a Manhattan childhood of heavy European furniture and crowded bookcases. Reading was highly prized — prayer books, The Saturday Evening Post, National Geographic.

Her father owned one of the lost Wissenschaft volumes, an 1888 edition of a Hermann Cohen book. His family donated it to the institute in 1970, the year he died. Mrs. Singerman does not know where her father got the book, but said, “If it was in German, he probably brought it with him — he didn’t buy German books here.”

Fred W. Lessing, another German Jewish donor, built such a vast book collection at his home in Scarsdale, N.Y., that he ordered catalog cards from the Library of Congress to keep track of it all. He was chief executive of a Yonkers metal company, but his passion was his library and discussions with professors and writers.

Mr. Lessing scoured auction catalogs for treasures, with a special focus on the history of the Enlightenment. His children knew enough not to touch his “good books,” said his daughter Joan Lessing. “His library was part of our lives,” she said. “Books were in every room.”

Mr. Lessing gave the institute an early-20th-century edition of a volume by Adolf Eckstein, but his daughter did not know where he had gotten it.

Even the Frankfurt librarian who cataloged the entire collection, Aron Freimann, came to New York. After arriving in 1939, he went on to work at the New York Public Library.

Today, his granddaughter, Ruth Dresner, lives in the Riverdale section of the Bronx. She keeps her grandfather’s catalog on her shelf — she calls it his “magnum opus” — and plans to leave it to her children.

“I’m 80 years old, and I’m very devoted and dedicated to perpetuating tradition,” she said. “I am very proud.”

This article has been revised to reflect the following correction:

Correction: March 9, 2011

A caption on Tuesday with an article about Jewish texts lost in World War II that have resurfaced in New York described an accompanying map incorrectly. It is a map of central Europe, not only of Frankfurt.

Jewish Texts Lost in War Are Surfacing in New York – NYTimes.com

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weOctober 03 2010 7:47 AM GMT
Big Mac index gives more than a taste of true worth

By Steve Johnson

Intervention has kept some emerging market currencies artificially weak, at the same time many have raised interest rates to stem inflation. It is only a matter of time before some allow their currencies to appreciate
Read the full article at: http://www.ft.com/cms/s/0/2736d936-cd89-11df-9c82-00144feab49a.html?ftcamp=rss

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