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In Greece, an unlikely economic star since the pandemic, as many as 44% of all jobs are connected to tourism. 

Can Europe’s emerging “museum economy” support sustained wealth creation and the expansive welfare systems Europeans have become accustomed to since the end of World War II? And what happens if the dollar falls and the tourists leave?

Rent and other living expenses are rising in hot spots, making it harder for many locals to make ends meet. A heightened focus on tourism, which turns a quick profit but remains a low-productivity activity, tethers these economies to a highly cyclical industry

It also risks keeping workers and capital from more profitable areas, like tech and high-end manufacturing. 

some economists, residents and politicians are concerned about the boom’s long-term implications.

“It is literally, for Americans right now, the place to go,”

The strong dollar—and a powerful post-Covid recovery—has empowered millions of Americans who would have vacationed in the U.S. before the pandemic. They are now finding they can afford a lavish European holiday.

One reason is the brutal sovereign debt crisis that hit the continent’s south especially hard just over a decade ago. Unable to stimulate demand with public spending or to energize exports by devaluing their currency—the euro, which is shared by 20 states—those countries could only boost their competitiveness by lowering wages.

“Your dollar goes a lot further,” Cross said over coffee in the lobby of her five-star hotel. “You don’t feel you’re scrounging as much.”

Tourism now generates one-fifth of economic output in Lisbon and supports one in four jobs. That boom has reverberated far beyond the capital.

Portugal’s gross domestic product grew nearly 8% between 2019 and 2024, compared with less than 1% for Germany,

The government recorded a rare 1.2% of GDP budget surplus last year, and its debt-to-GDP ratio is expected to fall to 95% this year, the lowest since 2009

Portugal’s population is growing again after years of decline, thanks in part to an influx of migrant workers and to various tax incentives and investor visas that have attracted high-income workers. 

Moedas, Lisbon’s mayor, says there’s room for further growth. For a city that doubles in size to around one million every day, including commuters, only around 35,000 are tourists, he said. “We are very far from a situation of so-called overtourism.”

The trend is part of a global readjustment following the Covid-19 lockdowns. Spending on travel and hospitality worldwide grew roughly seven times faster than the global economy over the past two years, according to Oxford Economics. That pattern is expected to continue for the next decade, though to a lesser degree.

Europe, especially southern Europe, has benefited more than many other regions. Though it is home to just 5% of the world’s population, the European Union received around one-third of all international tourist dollars—more than half a trillion dollars—last year. This is up roughly threefold over two decades, and compares with about $150 billion for the U.S., where tourism has been slower to rebound.

In Portugal, a country of 10 million that juts out into the North Atlantic from Spain, Americans recently surpassed Spaniards as the biggest group of foreign tourists. 

This and a real estate collapse that left hundreds of thousands of workers suddenly available made the region’s tourist industry ultracompetitive, much cheaper than Caribbean beach destinations and on a par with Latin American destinations like Mexico. 

Once an owner of TAP, Neeleman increased the number of direct flights to the U.S. eightfold between 2015 and 2020, adding major hubs such as JFK and Boston Logan, betting that would open up an untapped market. As bookings soared, other U.S. airlines followed. 

“It was actually comical, because I went from knowing no one who had been to Portugal to everyone telling me they were going to Portugal,”

For Gonçalo Hall, a 36-year-old tech worker, the influx of foreign cash that has transformed Lisbon has been overwhelmingly beneficial for the city. When he lived in the capital 15 years ago, he wouldn’t walk in the historic downtown after 8 p.m. It was “full of homeless people, not safe. Lots of empty and abandoned buildings,” he said. 

“The quality of life in Lisbon doesn’t match the prices. Even expats are leaving,” said Hall, who moved to the Atlantic island of Madeira during the pandemic and continues to work remotely.  

The average Portuguese employee earns around €1,000 a month after tax, or around $1,100 a month, and only 2% earn more than €2,000. A one-bedroom apartment in Lisbon can easily cost more than €500,000 to buy, or over €1,200 a month to rent. Rents in nearby cities are also climbing as people leave the capital, squeezed out as lucrative short-term rentals transform the housing market. 

Jessica Ribeiro, a 35-year-old sociologist, pays around €490 a month for an apartment that she shares with her ex-husband in a town close to Lisbon. Neither can afford to leave. Both make a little more than the minimum wage of €820 a month, and soaring rents mean it is impossible to find an apartment in the neighborhood for less than €700, Ribeiro said. 

“The harm that tourism has brought is infinitely bigger than the benefits,” Ribeiro said. “It sends people away from their place of work, making their lives much harder.” 

A frequent complaint from residents and housing advocates is that some of the boom’s biggest winners are American companies, from Airbnb to Uber, which often pay little tax in the places where they do most of their business.

Lisbon is cracking down on Airbnbs and increasing taxes on tourists, doubling the nightly city tax from €2 to €4, which should raise €80 million a year. Airbnb has paid Lisbon and Porto, Portugal’s two biggest cities, more than €63 million after entering into voluntary tax collection agreements with local officials. Moedas said he is considering “a bit more regulation” of the city’s many Ubers, whose drivers he said don’t always respect traffic rules. 

Around nine in 10 Airbnb hosts in Portugal rent their family home and almost half say the extra income helps them afford to stay in their homes, according to a spokesperson for the company. “Guests using our platform account for just 10% of total nights booked in Portugal, and we follow the rules and only allow listings that are registered with local authorities,”

Higher rents are forcing many businesses and cultural and social spaces catering to locals to close, according to Silva. “This is not an economy that is serving the needs of the majority of people,” she said.

Signs of discontent are bubbling up across the region. Tens of thousands of local residents marched in Spain’s Balearic and Canary islands in recent months to protest mass tourism and overcrowding. On Mallorca, activists have put up fake signs at some popular beaches warning in English of the risk of falling rocks or dangerous jellyfish to deter tourists, according to social-media posts.

Serving foreigners is difficult to scale up and is more exposed to economic headwinds. Like the discovery of oil, southern Europe’s new focus on tourism can crowd out higher-value activities by hogging capital and workers, a phenomenon some economists have dubbed the “beach disease.”

“Portugal isn’t an industrialized country. It’s just the playground of the EU,” said Priscila Valadão, a 43-year-old administrative assistant in Lisbon. She makes €905 a month and rents a room from a friend for €250 a month. “The type of jobs being offered…are restricted to a type of activity that really doesn’t enrich the country,”

For Europe’s policymakers, having people open hotels or restaurants is easier than incentivizing them to build up advanced manufacturing, which is capital intensive and takes a long time to pay off, said Marcos Carias, an economist with French insurer Coface. 

“Tourism is the easy way out,” Carias said. “What is the incentive to look for ingenuity and go through the pain of creating new economic value if tourism works as a short-term solution?”

Proponents say tourism attracts capital to poor regions, and can serve as a base to build a more diversified economy. Lisbon’s Moedas said he is trying to leverage the influx of foreign visitors to build up sectors such as culture and technology, including by developing conferences and cultural events. 

“Some extreme left parties basically say we need to reduce tourism,” Moedas said, but that is the wrong approach. “What we have to do is to increase other sectors like innovation, technology…. We should still invest in tourism, but we should go up the ladder.”

While Dias, the hotel owner, is diversifying into nightlife, he refuses to envisage a future where the sector would have to rely heavily on visitors from elsewhere.

More than one-third of highly qualified Portuguese students leave the country after graduating,

Even higher-paid technology workers have started decamping to cheaper places. 

Tiago Araújo, chief executive of tourism tech startup HiJiffy, has held on to his employees but says many of them have been moving out of Lisbon. The trend, which started during Covid, is now being primarily driven by the housing crisis.

In Athens, Mayor Haris Doukas says he is working on extending the tourist season, increasing the average length of stay and promoting specific types of tourism, such as organizing conferences and business meetings, to attract visitors with higher purchasing power. He’s also called for new taxes to help the city accommodate the millions of additional tourists thronging to the ancient capital.

If Americans stop coming to Lisbon, he said, “I don’t think we can charge this kind of [price] because we will have to go to Europeans, and the Europeans, they don’t have money.”

I do not see them fleeing in large numbers.”

premiums are set to rise an average of 25 percent next year. The selection of health plans on the exchanges is also shrinking.

Customers bolting the exchanges won’t necessarily avoid the rising premiums by shopping “off-marketplace.”

The big downside to shopping off the exchanges is that customers would not receive insurance subsidies. But for customers who wouldn’t qualify for subsidies anyway, shopping off the exchanges potentially gives them more options – including, in some cases, cheaper plans.

a total of 6.9 million people are getting insurance in the individual market outside the exchanges.

about 11.1 million people are enrolled in ObamaCare exchange plans, with 9.4 million of them getting premium subsidies.

HHS report seemed to be nudging people back toward the exchanges, noting that roughly a third of those avoiding the exchanges potentially could qualify for subsidies.

“millions of them may qualify for financial assistance that would let them purchase coverage and health care at lower cost” if they returned to the ObamaCare fold.

millions of them may qualify for financial assistance that would let them purchase coverage and health care at lower cost” if they returned to the ObamaCare fold.

Both marketplaces, for example, require covering individuals with pre-existing conditions.

The estimated number of insurance providers available on the exchanges for next year is 167, a net decrease of 68.

The decline in choice alone could result in more consumers leaving, even if they have to pay higher costs outside the market, in order to keep their doctor.

The HHS study noted that some of the 6.9 million shopping off-market also could qualify for Medicaid programs, which were expanded in many states.

Just for 2016, we know rates are going up in exchange plans,

Unfortunately, epinephrine is inherently unstable. Research shows that it degrades pretty quickly over time, and it’s recommended that EpiPens be replaced every year.

Mylan stopped selling individual EpiPens and began to sell only twin-packs.It also raised the price.

Kids need them in many places. They need them at home. They need them at school. They need them at camp. They may even want to stash one at Grandma’s house. So people often need to buy quite a few.More revenue for Mylan. And it raised the price.

Then in 2010, federal guidelines changed to recommend that two EpiPens be sold in a package instead of one

People in anaphylaxis need a full dose every time. They therefore need to replace all their EpiPens every year, again and again.

In 2013, the government went further. It passed a law that gave funding preferences for asthma treatment grants to states that maintained an emergency supply of EpiPens. As the near sole supplier of the devices, Mylan stood to make even more money. Advertisement Continue reading the main story That year, Mylan raised the price again.

Of course, competition would bring the price down. But it’s very hard to bring such a device to market.

setbacks, all in the last year, have once again left Mylan with a veritable run of the market. It raised the price of EpiPens again. As of this May, they cost more than $600 a pack. Since 2004, after adjusting for inflation, the price of EpiPens has risen more than 450 percent.

An alternative still exists. The Adrenaclick, while still not cheap, is back and less expensive than the EpiPen. Some think it’s harder to use, though. It’s not on the accepted list for many health insurance plans. More important, few physicians think of it. Because of that, they write prescriptions for EpiPens. Since the Adrenaclick is not a generic version of the EpiPen, pharmacists can’t substitute one for the other. A prescription for an EpiPen must be filled with an EpiPen, regardless of what consumers might want.

you could argue that they’re an alternative when the “Cadillac” EpiPens are financially out of reach. Write A Comment But those are unsatisfactory arguments. Epinephrine isn’t an elective medication. It doesn’t last, so people need to purchase the drug repeatedly. There’s little competition, but there are huge hurdles to enter the market, so a company can raise the price again and again with little pushback. The government encourages the product’s use, but makes no effort to control its cost. Insurance coverage shields some from the expense, allowing higher prices, but leaves those most at-risk most exposed to extreme out-of-pocket outlays. The poor are the most likely to consider going without because they can’t afford it.

EpiPens are a perfect example of a health care nightmare. They’re also just a typical example of the dysfunction of the American health care system.

“I think the differences are still greater than the similarities,” he says. “Hitler was not only more intelligent, but craftier. He was not just a powerful orator, but a talented actor who succeeded in winning over various social milieus. So not just the economically threatened lower middle classes which Trump targeted, but also the upper middle classes. Hitler had many supporters in the German aristocracy.”

Trump was also democratically elected, while Hitler never had a majority vote. “He was appointed by the president of the German Reich.” Then there’s the fact that Trump does not lead a party “which is unconditionally committed to him”.

“A further obvious difference is that Trump doesn’t have a private militia, as Hitler did with the SA, which he used in his first months after coming to power to settle scores with his opponents, like the Communists and Social Democrats. You can’t possibly imagine something similar with Trump – that he’ll be locking Democrats up into concentration camps

“Finally, the American constitution is based on a system of checks and balances. It remains to be seen how far Congress will really limit Trump or if, as is feared, he can override it. It was different with Hitler, who, as we know, managed to eliminate all resistance in the shortest space of time and effectively establish himself as an all-powerful dictator. Within a few months, there was effectively no longer any opposition.”

“Hitler profited from the fact that his opponents always underestimated him,” Ullrich explains. “His conservative allies in government assumed they could tame or ‘civilise’ him – that once he became chancellor he’d become vernünftig (meaning sensible, reasonable). Very quickly it became clear that was an illusion.”

“There were many situations where he could have been stopped. For example in 1923 after the failed Munich putsch – if he’d served his full prison sentence of several years, he wouldn’t have made a political comeback. Instead, he only spent a few months behind bars, [having been released after political pressure] and could rebuild his movement.”

The western powers made the same mistake with their appeasement politics, indecision and indulgence. “In the 1930s Hitler strengthened, rather than weakened, his aggressive intentions,” Ullrich says. “So you could learn from this that you have to react faster and much more vigorously than was the case at the time.”

llrich also contends that if Hindenburg, the president of the Reich, had allowed Chancellor Brüning, of the Centre party, to remain chancellor to the end of 1934, rather than responding to pressure from conservatives to dismiss him in 1932, “then the peak of the economic crisis would have passed and it would have been very questionable whether Hitler could still have come to power”.

At the same time, Hitler’s ascent was no mere fluke. “There were powerful forces in the big industries, but also in the landowning class and the armed forces, which approved of a fascist solution to the crisis.”

If fascism “now just means aggressive nationalism, racism, patriarchy and authoritarianism, then maybe it is back on the agenda,” Bosworth continues. But today’s context is fundamentally different

Schama is clear: Trump is obviously not Hitler. “But, you know, if you like, he’s an entertainment fascist, which may be less sinister but is actually in the end more dangerous. If you’re not looking for jackboots and swastikas – although swastikas are indeed appearing – there’s a kind of laundry list of things which are truly sinister and authoritarian and not business as usual.”

Today’s “alt-right” agitators “live in a neoliberal global order where the slogan, ‘all for the market, nothing outside the market, no one against the market’ is far more unquestionably accepted than the old fascist slogan of ‘all for the state, nothing outside the state, no one against the state’”.

Schama also points to deeply worrying messaging, such as “the parallel universe of lies which are habitual, massive, cumulative”; the criminalization of political opponents; the threat to change the libel laws against the press and the demonization of different racial and ethnic groups, going as far as proposing a Muslim registry.

“What is that if it’s not racially authoritarian?” asks Schama. “If you want to call it fascist, fine. I don’t really care if it’s called that or not. It’s authoritarian, you know, ferociously authoritarian.”

Don’t ignore what people vote fo

f you’re of German heritage, it’s hard to understand how so many people could have bought Mein Kampf and gone on to vote for Hitler. Maybe no one really read it, or got beyond the first few pages of bluster, or took antisemitism seriously, you tell yourself. “Or they liked what he said,

“I think one of the mistakes this time around would be not to think that the people who voted for Trump were serious. They may have been serious for different reasons, but it would be a big mistake not to try and figure out what their reasons were.

Hitler presented himself as a “messiah” offering the public “salvation”, Ullrich points out. With austerity and hostility to the EU and to immigrants riding high, there is fertile ground for European populists next year to seduce with equally simplistic, sweeping “solutions”.

The problem, in Mazower’s view, is that establishment politicians currently have no response

“The Gestapo was piddling compared with the size and reach of surveillance equipment and operations today,

“Very belatedly, everyone is waking up to the fact that there was a general assumption that no government in the west would fall into the wrong hands, that it was safe to acquiesce in this huge expansion of surveillance capabilities, and the debate wasn’t as vigorous as it could have been.”

“Now, there is a lot of discussion about allowing this kind of surveillance apparatus in the wrong hands,” he adds. “And we’ve woken up to this a bit late in the day.”

Ullrich calls crises, “the elixir of rightwing populists”, and urges that politicians “do everything they can to correct the inequalities and social injustice which have arisen in the course of extreme financial capitalism in western countries”

Jane Caplan, a history professor at Oxford University who has written about Trump and fascism, highlights the want of “dissenting voices against marketisation and neoliberalism

The failure to resist the incursion of the market as the only criterion for political utility, or economic utility, has been pretty comprehensive.

Paranoia, bullying and intimidation are a hallmark of authoritarian regimes. They are also alive and well in our culture today, where online trolls, violent thugs at rallies, threats of expensive libel action and of course terrorist acts are equally effective in getting individuals and the press to self-censor.

Conard said Baker was undercounting the social benefits of investment. He looks, in particular, at agriculture, where, since the 1940s, the cost of food has steadily fallen because of a constant stream of innovations. While the businesses that profit from that innovation — like seed companies and fast-food restaurants — have made their owners rich, the average U.S. consumer has benefited far more. Conard concludes that for every dollar an investor gets, the public reaps up to $20 in value. This is crucial to his argument: he thinks it proves that we should all appreciate the vast wealth of others more, because we’re benefiting, proportionally, from it.

What about investment banks, with their complicated financial derivatives and overleveraged balance sheets? Conard argues that they make the economy more efficient, too. The financial crisis, he writes, was not the result of corrupt bankers selling dodgy financial products. It was a simple, old-fashioned run on the banks, which, he says, were just doing their job

He argues that collateralized-debt obligations, credit-default swaps, mortgage-backed securities and other (now deemed toxic) financial products were fundamentally sound. They were new tools that served a market need for the world’s most sophisticated investors,

“A lot of people don’t realize that what happened in 2008 was nearly identical to what happened in 1929,” he says. “Depositors ran to the bank to withdraw their money only to discover, like the citizens of Bedford Falls” — referring to the movie “It’s a Wonderful Life” — “that there was no money in the vault. All that money had been lent.”

In 2008 it was large pension funds, insurance companies and other huge institutional investors that withdrew in panic. Conard argues in retrospect that it was these withdrawals that led to the crisis — not, as so many others have argued, an orgy of irresponsible lending

Conard concedes that the banks made some mistakes, but the important thing now, he says, is to provide them even stronger government support. He advocates creating a new government program that guarantees to bail out the banks if they ever face another run.

the central role of banks, Conard says, is to turn the short-term assets of nervous savers into risky long-term loans that help the economy grow.

A central problem with the U.S. economy, he told me, is finding a way to get more people to look for solutions despite these terrible odds of success. Conard’s solution is simple. Society benefits if the successful risk takers get a lot of money

As Conard told me, one of the crucial lessons he learned at Bain is that it makes no sense to look for easy solutions. In a competitive market, all that’s left are the truly hard puzzles. And they require extraordinary resources. While we often hear about the greatest successes — penicillin, the iPhone — we rarely hear about the countless failures and the people and companies who financed them.

we live longer, healthier and richer lives because of countless microimprovements like that one. The people looking for them, Conard likes to point out, are not only computer programmers, engineers and scientists. They are also wealthy investors like him

He said the only way to persuade these “art-history majors” to join the fiercely competitive economic mechanism is to tempt them with extraordinary payoffs.

When I look around, I see a world of unrealized opportunities for improvements, an abundance of talented people able to take the risks necessary to make improvements but a shortage of people and investors willing to take those risks. That doesn’t indicate to me that risk takers, as a whole, are overpaid. Quite the opposite.” The wealth concentrated at the top should be twice as large, he said. That way, the art-history majors would feel compelled to try to join them.

Rather than simply serving as an invitation for everybody to engage in potentially beneficial risk-taking, inequality can allow those with wealth to crush new ideas.

Unlike Romney, Conard rejects the notion that America has “some monopoly on hard work or entrepreneurship.” “I think it’s simple economics,” he said. “If the payoff for risk-taking is better, people will take more risks

Conard sees the success of the U.S. economy as, in part, the result of a series of historic accidents. Most recently, the coincidence of Roe v. Wade and the late 1970s economic malaise allowed Ronald Reagan to unify social conservatives and free-market advocates and set the country on a pro-investment path for decades. Europeans, he says, made all the wrong decisions. Concern about promoting equality and protecting favored industries have led to onerous work rules, higher taxes and all sorts of social programs that keep them poorer than Americans.

Now we’re at a particularly crucial moment, he writes. Technology and global competition have made it more important than ever that the United States remain the world’s most productive, risk-taking, success-rewarding society. Obama, Conard says, is “going to dampen the incentives.” Even worse, Conard says, “he’s slowing the accumulation of equity” by fighting income inequality.

Conard’s book addresses what is perhaps the most important question in economics, the one Adam Smith set out to answer in “The Wealth of Nations”: Why do some countries grow so rich and others stay poor? Where you come down on the answer has as much to do with your politics as your economic worldview (two things that can often be the same)

Nearly every economist I spoke with said that Conard has too much faith in the market’s ability to reward only those who create real value. Conard, for instance, insists that even the dodgiest financial products must have been beneficial or else nobody would have bought them in the first place. If a Wall Street trader or a corporate chief executive is filthy rich, Conard says that the merciless process of economic selection has assured that they have somehow benefited society. Even pro-market Romney supporters take issue with this. “Ed ought to be more concerned about crony capitalism,” Hubbard told me.

“Unintended Consequences” ignores some of the most important economic work of the past few decades, about how power and politics influence economic growth. In technical language, this field is the study of “rent seeking,” in which people or companies get rich because of their power, not because of their ideas.

wealthy individuals and corporations are able to influence politicians and regulators to make seemingly insignificant changes to regulations that benefit themselves. In other words, to rig the game

Conard’s version of the financial crisis ignores much reporting and analysis — including work I’ve done with NPR’s “Planet Money” team — that shows that some of the nation’s largest banks actively manipulated customers and regulators and, sometimes, their own stockholders to profit from dangerous risk

he expressed anger over the praise that Warren Buffett has received for pledging billions of his fortune to charity. It was no sacrifice, Conard argued; Buffett still has plenty left over to lead his normal quality of life. By taking billions out of productive investment, he was depriving the middle class of the potential of its 20-to-1 benefits. If anyone was sacrificing, it was those people. “Quit taking a victory lap,” he said, referring to Buffett. “That money was for the middle class.”

Perhaps concentrated wealth will inspire a nation of innovative problem-solvers. But if the view of many economists is right — that it sometimes discourages innovation — then we should worry

on this one he resorted to anecdotes and gut feelings. During his work at Bain, he said, he saw that successful companies had to battle against one another. Nobody was just given a free ride because of their power. “Was a person, like me, excluded from opportunity?” he asked rhetorically. “If so, I wasn’t aware!”

both could be true. The rich could earn a great deal of wealth through their own hard work, skill and luck. They could also use their subsequent influence to make themselves even richer

One of the great political and economic challenges of our time is figuring out the balance between wealth that benefits society and wealth that distorts.

Glenn Hubbard said only that at a broad level, Romney and Conard share “beliefs about innovation and growth and responsible risk-taking.”

Conard and Romney certainly share views on numerous policy matters. Like many Republicans, they promote lower taxes and less regulation for those who achieve financial succes

for many white evangelicals, religious and economic spheres are conceptualized as two sides of the same coin. They describe their worldview as one in which the spiritual and the material are mutually dependent and interactive. And the popularity of this worldview cuts across social class.

approximately 31 percent of Americans, many of whom are white evangelical men, believe that God is steering the United States economy, thus fusing their religious and economic interests. These individuals believe in what I call an “Authoritative God.” An Authoritative God is thought to be actively engaged in daily activities and historical outcomes. For those with an Authoritative God, value concerns are synonymous with economic concerns because God has a guiding hand in both. Around two-thirds of believers in an Authoritative God conjoin their theology with free-market economics, creating a new religious-economic idealism. Nearly one-fifth of American voters hold this viewpoint, signaling that it can be a major political force.

Religious-economic idealism is the belief that the free-market works because God is guiding it.

this ideology explains two supposed paradoxes. First, it indicates why some religious working-class Americans have embraced the GOP. It is not that these individuals ignore their class interests, but rather that they believe issues of abortion and gay marriage are linked to whether God is willing to help solve both social ills and their economic woes.

the fact that income does not predict whether an American believes in an Authoritative God indicates that this is not a class-based ideology. Instead, it is a cosmic worldview, which appeals across economic divides. Most clearly, it benefits the wealthy because conservative economic policies tend to favor them. But wealthy Americans with an Authoritative God can also have a religious-like devotion to their economic conservatism. In this way, their economic pragmatism transforms into a type of religious dogmatism. And dogmatism does not bend to changing circumstances and outcomes, so that we can expect believers in religious-economic idealism to cling to laissez-faire policies even when they appear not to work.

religious-economic idealism makes economic and cultural issues fully compatible, which may be a blessing and a curse for the Republican Party. It blesses the GOP with strong support from individuals who may be personally disadvantaged by their economic strategies, but also curses them with an unforgiving and inflexible constituency if political compromise becomes a necessity of governing. In a universe where God decrees no government intervention, any deviation or compromise from the free market is heresy.

Americans who feel that “God has a plan” for them and their country are much more likely to think that “success is achieved by ability rather than luck” and that “able-bodied people who are out of work should not receive unemployment checks.” And over half (54 percent) of Americans who think God controls the economy feel that “anything is possible for those who work hard”; in contrast, only one-quarter of Americans who rely on human resourcefulness, rather than God’s plan, feel this way.

Because evangelicals assert that you alone are responsible for your eternal salvation, it makes sense that the individual is also responsible for his or her economic salvation without government assistance, especially if God is the only assistance you really need.

"I was wrong," he said. "I acted on my emotions."

Yanukovych did not answer several questions about whether he would support Russia — which has deployed tens of thousands of troops near the Ukrainian border — moving into Ukraine to protect ethnic Russians, the justification Putin used to take Crimea.Continue reading the main story Why movie streaming sites so fail to satisfy Also in Tech » Apple's war on Samsung has Google in crossfire At Mozilla, a chief's support of gay marriage ban causes conflict Continue reading the main story Advertisement (adsbygoogle = window.adsbygoogle || []).push({});

The association accuses Amazon of abusing its “market dominant” position and argues that because many people use Amazon as a modern card catalog to explore what books are available, if an author is not listed, a reader would assume that the writer has not published any books.

Why can’t Europeans enjoy the conveniences of a common currency?Two reasons. First, unlike Europe, the United States has a fiscal union in which prosperous regions of the country subsidize less prosperous ones. Second, the United States has fewer barriers to labor mobility than Europe. In the United States, when an economic downturn affects one region, residents can pack up and find jobs elsewhere. In Europe, differences in language and culture make that response less likely.

As a result, Mr. Friedman and Mr. Feldstein contended that the nations of Europe needed a policy tool to deal with national recessions. That tool was a national monetary policy coupled with flexible exchange rates. Rather than heed their counsel, however, Europe adopted a common currency for much of the Continent and threw national monetary policy into the trash bin of history.

The motive was more political than economic. Europeans believed that their continent, once united with a common market and currency, would provide a better counterweight to American hegemony in world affairs. They also hoped that a united Europe in the 21st century would damp down the nationalist sentiments that led to two world wars in the 20th.

Flash-forward to today. Greece finds itself overwhelmed by its accumulated debts. To be sure, it bears primary responsibility. The Greek government borrowed too much, and for years it hid its fiscal problems from its creditors. Once the truth came to light, a large dose of austerity was the only course left. The result was an economic downturn with a quarter of the Greek labor force now unemployed. Continue reading the main story 136 Comments Making matters worse, however, was the common currency. In an earlier era, Greece could have devalued the drachma, making its exports more competitive on world markets. Easy monetary policy would have offset some of the pain from tight fiscal policy. Mr. Friedman and Mr. Feldstein were right: The euro has turned into an economic liability that has exacerbated political tensions. For this, the European elites who pushed for the currency union bear some responsibility

Hegel’s probing account means to show is that the defender of holier-than-thou virtue and the self-interested Wall Street banker are making the same error from opposing points of view.  Each supposes he has a true understanding of what naturally moves individuals to action.  The knight of virtue thinks we are intrinsically good and that acting in the nasty, individualist, market world requires the sacrifice of natural goodness; the banker believes that only raw self-interest, the profit motive, ever leads to successful actions.

Both are wrong because, finally, it is not motives but actions that matter, and how those actions hang together to make a practical world.  What makes the propounding of virtue illusory — just so much rhetoric — is that there is no world, no interlocking set of practices into which its actions could fit and have traction: propounding peace and love without practical or institutional engagement is delusion, not virtue.

Conversely, what makes self-interested individuality effective is not its self-interested motives, but that there is an elaborate system of practices that supports, empowers, and gives enduring significance to the banker’s actions.  Actions only succeed as parts of practices that can reproduce themselves over time.  To will an action is to will a practical world in which actions of that kind can be satisfied — no corresponding world, no satisfaction.  Hence the banker must have a world-interest as the counterpart to his self-interest or his actions would become as illusory as those of the knight of virtue.

Actions are elements of practices, and practices give individual actions their meaning. Without the game of basketball, there are just balls flying around with no purpose.  The rules of the game give the action of putting the ball through the net the meaning of scoring, where scoring is something one does for the sake of the team.   A star player can forget all this and pursue personal glory, his private self-interest.  But if that star — say, Kobe Bryant — forgets his team in the process, he may, in the short term, get rich, but the team will lose.  Only by playing his role on the team, by having an L.A. Laker interest as well as a Kobe Bryant interest, can he succeed.

Every account of the financial crisis points to a terrifying series of structures that all have the same character: the profit-driven actions of the financial sector became increasingly detached from their function of supporting and advancing the growth of capital.  What thus emerged were patterns of action which, may have seemed to reflect the “ways of the world” but in financial terms, were as empty as those of a knight of virtue, leading to the near collapse of the system as a whole.  A system of compensation that provides huge bonuses based on short-term profits necessarily ignores the long-term interests of investors. As does a system that ignores the creditworthiness of borrowers; allows credit rating agencies to be paid by those they rate and encourages the creation of highly complex and deceptive financial instruments.  In each case, the actions — and profits — of the financial agents became insulated from both the interests of investors and the wealth-creating needs of industry.

Nothing but fierce and smart government regulation can head off another American economic crisis in the future.  This is not a matter of “balancing” the interests of free-market inventiveness against the need for stability; nor is it a matter of a clash between the ideology of the free-market versus the ideology of government control.  Nor is it, even, a matter of a choice between neo-liberal economic theory and neo-Keynesian theory.  Rather, as Hegel would have insisted, regulation is the force of reason needed to undo the concoctions of fantasy.

most economists see global trade as a win-win proposition, but resource limitation turns it into a win-lose, zero-sum contest. “The faster China grows, the higher grain prices go, the more people in China or India who upgrade to meat, the higher the tendency for Africa to starve,” he said.

Grantham argues that the late-18th-century doomsayer Thomas Malthus pretty much got it right but just had the bad timing to make his predictions about unsustainable population growth on the eve of the hydrocarbon-fueled Industrial Revolution, which “partially removed the barriers to rapid population growth, wealth and scientific progress.” That put off the inevitable for a couple of centuries, but now, ready or not, the age of cheap hydrocarbons is ending. Grantham’s July letter concludes: “We humans have the brains and the means to reach real planetary sustainability. The problem is with us and our focus on short-term growth and profits, which is likely to cause suffering on a vast scale. With foresight and thoughtful planning, this suffering is completely avoidable.”

“E.D.F. is educating people that dealing with climate change will be good for the economy and job creation. One of Jeremy’s insights is that we can make headway on the market side because higher commodity prices will enforce greater efficiency.”

When he reminds us that modern capitalism isn’t equipped to handle long-range problems or tragedies of the commons (situations like overfishing or global warming, in which acting rationally in your own self-interest only deepens the harm to all), when he urges us to outgrow our touching faith in the efficiency of markets and boundless human ingenuity, and especially when he says that a wise investor can prosper in the coming hard times, his bad news and its silver lining come with a built-in answer to the skeptical question that Americans traditionally pose to egghead Cassandras: If you’re so smart, how come you’re not rich?

Grantham believes that the best approach may be to recast global warming, which depresses crop yields and worsens soil erosion, as a factor contributing to resource depletion. “People are naturally much more responsive to finite resources than they are to climate change,” he said. “Global warming is bad news. Finite resources is investment advice.”

“Americans are just about the worst at dealing with long-term problems, down there with Uzbekistan,” he said, “but they respond to a market signal better than almost anyone. They roll the dice bigger and quicker than most.”

Grantham, the public face of a company that manages more than $100 billion in assets, the very embodiment of a high-finance insider in blue blazer and yellow tie, has serious doubts about capitalism’s ability to address the biggest problems facing humanity.

Grantham says that corporations respond well to this message because they are “persuaded by data,” but American public opinion is harder to move, and contemporary American political culture is practically dataproof. “The politicians are the worst,” he said. “An Indian economist once said to me, ‘We have 28 political parties, and they all think climate change is important.’ ” Whatever the precise number of parties in India, and it depends on how you count, his point was that the U.S. has just two that matter, one that dismisses global warming as a hoax and one that now avoids the subject.

Grantham, who says that “this time it’s different are the four most dangerous words in the English language,” has become a connoisseur of bubbles. His historical study of more than 300 of them shows the same pattern occurring again and again. A bump in sales or some other impressive development causes people to get excited. When they do, the price of that asset class — South Sea company shares, dot-coms — goes up, and human nature and the financial industry conspire to push it higher. People want to hear good news; they tend to be bad with numbers and uncertainty, and to assume that present conditions will persist. In the financial industry, the imperative to minimize career risk produces herd behavior.

So it’s news when Grantham, who has built his career on the conviction that peaks and troughs will even out as prices inevitably revert to their historical mean, says that this time it really is different, and not in a good way. In his April letter, “Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever,” he argued that “we are in the midst of one of the giant inflection points in economic history.” The market is “sending us the Mother of all price signals,” warning us that “if we maintain our desperate focus on growth, we will run out of everything and crash.”

here’s the short version: “The prices of all important commodities except oil declined for 100 years until 2002, by an average of 70 percent. From 2002 until now, this entire decline was erased by a bigger price surge than occurred during World War II. Statistically, most commodities are now so far away from their former downward trend that it makes it very probable that the old trend has changed — that there is in fact a Paradigm Shift — perhaps the most important economic event since the Industrial Revolution.”

When prices go up and stay up, it’s not a bubble. Prices may always revert to the mean, but the mean can change; that’s a paradigm shift. As Grantham tells it, oil went first. For a century it steadily returned to about $16 a barrel in today’s currency, then in 1974 the mean shifted to about $35, and Grantham believes it has recently doubled again. Metals and nearly everything else — coal, corn, palm oil, soybeans, sugar, cotton — appear to be following suit. “From now on, price pressure and shortages of resources will be a permanent feature of our lives,” he argues. “The world is using up its natural resources at an alarming rate, and this has caused a permanent shift in their value. We all need to adjust our behavior to this new environment. It would help if we did it quickly.”

Grantham is taking the Malthusian side in an ongoing debate about growth and commodity prices­. The argument often circles back to the bet made in 1980 between the biologist Paul Ehrlich, who foretold catastrophic scarcity caused by overpopulation, and the economist Julian Simon, who argued that any short-term increase in resource prices caused by population growth will stimulate inventors and entrepreneurs to find new ways to exploit those resources, lowering prices in the long run. The two men picked five commodities and wagered on whether their prices, taken as an indicator of scarcity, would be higher or lower in 1990. Simon won, 5-0, even though the world’s population grew by 800 million during that decade. Malthusians have been trying to live down that defeat ever since, but, as Grantham points out in his July letter, if we extend the original bet past its arbitrary 10-year limit to the present day, Ehrlich wins the five-commodity bet 4-1, and he wins big if the bet is further extended to all important commodities.

He’s an impassioned environmentalist not only for the usual reasons but also because he believes humanity’s vexed relationship with the planet is the great economic story of our time. “This commodities thing may turn out to be the most interesting call of my career,” he told me. “I have no doubt we’re going to have a bad hundred years. We have the resources to gracefully handle the transition, but we won’t. We apparently can’t.”

“Whether the stable population will be 1.5 billion or 5 billion,” he said to me, “the question is: How do we get there?”

I'm certainly happy to argue that libertarians and conservatives underestimate the extent to which markets are supported by regulations and laws that shape transactions away from destructive ends.  But that doesn't mean that markets aren't pretty great--or that the government therefore has the right to regulate things in any way that the government pleases.

In place of a market society, fascism sought to offer a "non-economic society," with non-economic incentives and satisfactions.

From that book forward Drucker has stressed the need for a strong non-economic society to make "inequality appear far less intolerable" and to shore people up against the bottom-line nihilism of the market. His work as a consultant to nonprofit organizations has been in furtherance of that goal. An anti-Utopian, he believed that "the bearable society" is the best we can achieve. Churches and secular voluntary organizations help men and women cope with the meaninglessness of much modern work.

Forecasters in The Wall Street Journal’s latest survey of economists said there is a 17% chance the U.S. will enter a recession in 2016,

Many investors have alternately feared the U.S. would succumb to global weakness or latched onto signs it would muddle through.

“I find it hard to believe that a quarter-point rate hike has created all this enormous uncertainty,” said Timothy Adams, head of the Institute of International Finance, a trade group representing financial institutions.

One reason economists aren’t even more worried: The U.S. relies less on trade than many of the world’s largest nations.

Still, the U.S. has more than 100 million people working in service industries—primarily transacting with other U.S. businesses and individuals

Some industries are sure to be hit harder than others if the global economy slows. Durable-goods makers

They forecast payroll growth falling from about 202,000 in the first three months of 2016 to 180,000 in the last three months

Little is known about how much emerging-market risk U.S. investors hold,” said Daniel Bachman, senior U.S. economist at Deloitte Services LP.

In a famous journal he kept from 1935 to 1944, the Romanian writer Mihail Sebastian chronicled an even more extreme shift in his own country. Like me, Sebastian was Jewish; like me, most of his friends were on the political right. In his journal, he described how, one by one, they were drawn to fascist ideology, like a flock of moths to an inescapable flame. He recounted the arrogance and confidence they acquired as they moved away from identifying themselves as Europeans—admirers of Proust, travelers to Paris—and instead began to call themselves blood-and-soil Romanians. He listened as they veered into conspiratorial thinking or became casually cruel. People he had known for years insulted him to his face and then acted as if nothing had happened. “Is friendship possible,” he wondered in 1937, “with people who have in common a whole series of alien ideas and feelings—so alien that I have only to walk in the door and they suddenly fall silent in shame and embarrassment?”

This is not 1937. Nevertheless, a parallel transformation is taking place in my own time, in the Europe that I inhabit and in Poland, a country whose citizenship I have acquired

the Dreyfus affair is most interesting because it was sparked by a single cause célèbre. Just one court case—one disputed trial—plunged an entire country into an angry debate, creating unresolvable divisions between people who had previously not known that they disagreed with one another. But this shows that vastly different understandings of what is meant by “France” were already there, waiting to be discovered

More important, though the people I am writing about here, the nativist ideologues, are perhaps not all as successful as they would like to be (about which more in a minute), they are not poor and rural, they are not in any sense victims of the political transition, and they are not an impoverished underclass. On the contrary, they are educated, they speak foreign languages, and they travel abroad—just like Sebastian’s friends in the 1930s.

What has caused this transformation

My answer is a complicated one, because I think the explanation is universal. Given the right conditions, any society can turn against democracy. Indeed, if history is anything to go by, all societies eventually will.

And it is taking place without the excuse of an economic crisis of the kind Europe suffered in the 1930s. Poland’s economy has been the most consistently successful in Europe over the past quarter century. Even after the global financial collapse in 2008, the country saw no recession. What’s more, the refugee wave that has hit other European countries has not been felt here at all. There are no migrant camps, and there is no Islamist terrorism, or terrorism of any kind.

in modern Britain, America, Germany, France, and until recently Poland, we have assumed that competition is the most just and efficient way to distribute power. The best-run businesses should make the most money. The most appealing and competent politicians should rule. The contests between them should take place on an even playing field, to ensure a fair outcome.

All of these debates, whether in 1890s France or 1990s Poland, have at their core a series of important questions: Who gets to define a nation? And who, therefore, gets to rule a nation? For a long time, we have imagined that these questions were settled—but why should they ever be?

the illiberal one-party state, now found all over the world—think of China, Venezuela, Zimbabwe—was first developed by Lenin, in Russia, starting in 1917. In the political-science textbooks of the future, the Soviet Union’s founder will surely be remembered not for his Marxist beliefs, but as the inventor of this enduring form of political organization.

Unlike Marxism, the Leninist one-party state is not a philosophy. It is a mechanism for holding power. It works because it clearly defines who gets to be the elite—the political elite, the cultural elite, the financial elite.

In monarchies such as prerevolutionary France and Russia, the right to rule was granted to the aristocracy, which defined itself by rigid codes of breeding and etiquette. In modern Western democracies, the right to rule is granted, at least in theory, by different forms of competition: campaigning and voting, meritocratic tests that determine access to higher education and the civil service, free markets

Two decades ago, different understandings of “Poland” must already have been present too, just waiting to be exacerbated by chance, circumstance, and personal ambition

Lenin’s one-party state was based on different values. It overthrew the aristocratic order. But it did not put a competitive model in place. The Bolshevik one-party state was not merely undemocratic; it was also anticompetitive and antimeritocratic. Places in universities, civil-service jobs, and roles in government and industry did not go to the most industrious or the most capable. Instead, they went to the most loyal.

As Hannah Arendt wrote back in the 1940s, the worst kind of one-party state “invariably replaces all first-rate talents, regardless of their sympathies, with those crackpots and fools whose lack of intelligence and creativity is still the best guarantee of their loyalty.”

Lenin’s one-party system also reflected his disdain for the idea of a neutral state, of apolitical civil servants and an objective media. He wrote that freedom of the press “is a deception.” He mocked freedom of assembly as a “hollow phrase.” As for parliamentary democracy itself, that was no more than “a machine for the suppression of the working class.”

These parties tolerate the existence of political opponents. But they use every means possible, legal and illegal, to reduce their opponents’ ability to function and to curtail competition in politics and economics. They dislike foreign investment and criticize privatization, unless it is designed to benefit their supporters. They undermine meritocracy. Like Donald Trump, they mock the notions of neutrality and professionalism, whether in journalists or civil servants. They discourage businesses from advertising in “opposition”—by which they mean illegitimate—media.

nepotism, state capture. But if you so choose, you can also describe it in positive terms: It represents the end of the hateful notions of meritocracy and competition, principles that, by definition, never benefited the less successful. A rigged and uncompetitive system sounds bad if you want to live in a society run by the talented. But if that isn’t your primary interest, then what’s wrong with it?

If you are someone who believes that you deserve to rule, then your motivation to attack the elite, pack the courts, and warp the press to achieve your ambitions is strong. Resentment, envy, and above all the belief that the “system” is unfair—these are important sentiments among the intellectuals of the Polish right.

Whatever mistakes the party might make, whatever laws it might break, at least the “truth” about Smolensk would finally be told.

the polarizing political movements of 21st-century Europe demand much less of their adherents. They don’t require belief in a full-blown ideology, and thus they don’t require violence or terror police. They don’t force people to believe that black is white, war is peace, and state farms have achieved 1,000 percent of their planned production. Most of them don’t deploy propaganda that conflicts with everyday reality.

yet all of them depend, if not on a Big Lie, then on what the historian Timothy Snyder once told me should be called the Medium-Size Lie, or perhaps a clutch of Medium-Size Lies. To put it differently, all of them encourage their followers to engage, at least part of the time, with an alternative reality. Sometimes that alternative reality has developed organically; more often, it’s been carefully formulated, with the help of modern marketing techniques, audience segmentation, and social-media campaigns.

In Hungary, the lie is unoriginal: It is the belief, shared by the Russian government and the American alt-right, in the superhuman powers of George Soros, the Hungarian Jewish billionaire who is supposedly plotting to bring down the nation through the deliberate importation of migrants, even though no such migrants exist in Hungary.

In Poland, at least the lie is sui generis. It is the Smolensk conspiracy theory: the belief that a nefarious plot brought down the president’s plane in April 2010.

The truth, as it began to emerge, was not comforting to the Law and Justice Party or to its leader, the dead president’s twin brother. The plane had taken off late; the president was likely in a hurry to land, because he wanted to use the trip to launch his reelection campaign. There was thick fog in Smolensk, which did not have a real airport, just a landing strip in the forest; the pilots considered diverting the plane, which would have meant a drive of several hours to the ceremony. After the president had a brief phone call with his brother, his advisers apparently pressed the pilots to land. Some of them, against protocol, walked in and out of the cockpit during the flight. Also against protocol, the chief of the air force came and sat beside the pilots. “Zmieścisz się śmiało”—“You’ll make it, be bold,” he said. Seconds later, the plane collided with the tops of some birch trees, rolled over, and hit the ground.

When, some weeks after the election, European institutions and human-rights groups began responding to the actions of the Law and Justice government, they focused on the undermining of the courts and public media. They didn’t focus on the institutionalization of the Smolensk conspiracy theory, which was, frankly, just too weird for outsiders to understand. And yet the decision to put a fantasy at the heart of government policy really was the source of the authoritarian actions that followed.

Although the Macierewicz commission has never produced a credible alternate explanation for the crash, the Smolensk lie laid the moral groundwork for other lies. Those who could accept this elaborate theory, with no evidence whatsoever, could accept anything.

picking apart personal and political motives is extremely difficult. That’s what I learned from the story of Jacek Kurski, the director of Polish state television and the chief ideologist of the Polish illiberal state. He started out in the same place, at the same time, as his brother, Jarosław Kurski, who edits the largest and most influential liberal Polish newspaper. They are two sides of the same coin.

The Smolensk conspiracy theory, like the Hungarian migration conspiracy theory, served another purpose: For a younger generation that no longer remembered Communism, and a society where former Communists had largely disappeared from politics, it offered a new reason to distrust the politicians, businesspeople, and intellectuals who had emerged from the struggles of the 1990s and now led the country.

More to the point, it offered a means of defining a new and better elite. There was no need for competition, or for exams, or for a résumé bristling with achievements. Anyone who professes belief in the Smolensk lie is by definition a true patriot—and, incidentally, might well qualify for a government job.

Hungary’s belated reckoning with its Communist past—putting up museums, holding memorial services, naming perpetrators—did not, as I thought it would, help cement respect for the rule of law, for restraints on the state, for pluralism

16 years after the Terror Háza’s opening, Hungary’s ruling party respects no restraints of any kind. It has gone much further than Law and Justice in politicizing the state media and destroying the private media, achieving the latter by issuing threats and blocking access to advertising. It has created a new business elite that is loyal to Orbán.

Schmidt embodies what the Bulgarian writer Ivan Krastev recently described as the desire of many eastern and central Europeans to “shake off the colonial dependency implicit in the very project of Westernization,” to rid themselves of the humiliation of having been imitators, followers of the West rather than founders.

Listening to her, I became convinced that there was never a moment when Schmidt’s views “changed.” She never turned against liberal democracy, because she never believed in it, or at least she never thought it was all that important. For her, the antidote to Communism is not democracy but an anti-Dreyfusard vision of national sovereignty

It’s clear that the Medium-Size Lie is working for Orbán—just as it has for Donald Trump—if only because it focuses the world’s attention on his rhetoric rather than his actions.

I described my 1999 New Year’s Eve party to a Greek political scientist. Quietly, he laughed at me. Or rather, he laughed with me; he didn’t mean to be rude. But this thing I was calling polarization was nothing new. “The post-1989 liberal moment—this was the exception,” Stathis Kalyvas told me. Polarization is normal. More to the point, I would add, skepticism about liberal democracy is also normal. And the appeal of authoritarianism is eternal.

Americans, with our powerful founding story, our unusual reverence for our Constitution, our relative geographic isolation, and our two centuries of economic success, have long been convinced that liberal democracy, once achieved, cannot be altered. American history is told as a tale of progress, always forward and upward, with the Civil War as a kind of blip in the middle, an obstacle that was overcome.

In Greece, history feels not linear but circular. There is liberal democracy and then there is oligarchy. Then there is liberal democracy again. Then there is foreign subversion, then there is an attempted Communist coup, then there is civil war, and then there is dictatorship. And so on, since the time of the Athenian republic.

In truth, the argument about who gets to rule is never over, particularly in an era when people have rejected aristocracy, and no longer believe that leadership is inherited at birth or that the ruling class is endorsed by God

Democracy and free markets can produce unsatisfying outcomes, after all, especially when badly regulated, or when nobody trusts the regulators, or when people are entering the contest from very different starting points. Sooner or later, the losers of the competition were always going to challenge the value of the competition itself.

More to the point, the principles of competition, even when they encourage talent and create upward mobility, don’t necessarily answer deeper questions about national identity, or satisfy the human desire to belong to a moral community.

The authoritarian state, or even the semi-authoritarian state—the one-party state, the illiberal state—offers that promise: that the nation will be ruled by the best people, the deserving people, the members of the party, the believers in the Medium-Size Lie.

arl Albrecht, who was famously secretive, only spoke publicly about Aldi’s business model on one occasion – in 1953. Its fundamental principles, he said, were “narrow product range and low price, [which] cannot be separated

Lacking capital, they stocked only a tight range of staples, such as pasta and soap, planning to widen the offering later. But they soon realised that offering a limited selection of cheap, fast-selling goods kept their costs down and the cash flowing, which they could use to invest in new stores. As the former Aldi executive Dieter Brandes and his son Nils wrote in “Bare Essentials”, their book about the company: “Basically, a completely new business model was created along the lines of a discovery in the natural sciences: by accident.”

in 1961, when they had 300 stores, they chose to split Aldi, short for Albrecht Discount, into two parts. The “Aldi equator” ran through Essen, with Theo taking the part of Germany to the north, and Karl the south. Aldi North and Aldi South shared all information, except profits, and conducted some supplier negotiations jointly, but were otherwise run separately, with their stores carrying different product ranges and featuring differently coloured floors – one yellow and one grey.

Theo continued to put in long hours at the office, managing even the smallest details in his quest to save money. He wore pencils down to the nubs and turned off the light when entering an office if he judged that his staff could see well enough without it. He once told his board to look at the thickness of the paper used for photocopies. Outside consultants and media interviews were banned, considered unnecessary expenditures or distractions. Asceticism was a virtue in life and business, he believed. “People live more on what they do not eat,” he once said. He wanted Aldi to be a place where “people who don’t hate their money can safely go shopping”

In their book “Bare Essentials”, Dieter and Nils Brandes argued that Aldi’s embrace of kaizen, its lean management structure and just-in-time approach to inventory – taking delivery of stock only when needed, to cut holding costs – made it the “most Japanese” company in Germany.

1976, Aldi South, Karl’s company, opened the first Aldi store on the east coast of the US. Three years later, in 1979, Theo’s Aldi North purchased Trader Joe’s, a California chain that sells cheap gourmet foods and enjoys a cult-like following. (The US is still the only foreign market where both Aldis operate.)

Second, the main chains – the big four as well as the leading “soft” discounter Kwik Save (which stocked a larger range than Aldi) – were listed on the stock exchange. The best way to fight Aldi early on is to slash prices, but few bosses of public companies are happy to accept lower profits, and thus lower bonuses, by pursuing long-term strategies

Fourth, and most importantly, the UK is, by global standards, a high-wage economy. This means that labour costs make up a big part of a supermarket’s operating expenses. Here, discounters have a major competitive advantage, because their business model – stocking a small range of products, eschewing delicatessens and promotions, and so on – allows them to operate with fewer, more productive, staff. (The most important performance measure in any Aldi branch is revenue divided by employee hours.)

Paying well obviously helps attract and retain staff, who might otherwise go to chains where the pace of work is slower. But it also serves to drive up wages across the industry, which, because of Aldi’s lower overall employee costs, hurts its competitors more.

As a private company, with no shareholders other than Karl Albrecht’s family to answer to, it could afford to be patient. “Aldi is very attuned to going into a country, making the investment, and building slowly and steadily,” said Richard Hyman, the retail expert. “Most other companies don’t have a 30-year view – or even a five-year view.”

By the time the supermarkets awoke to the structural shift that had occurred in the industry, the damage was done. “The big four bosses were not just sleeping at the wheel,” said Black. “They were comatose.”

“Ten years ago we had 900 lines, now we have 1,800,” said Neale. “That’s not because we are trying to become a big-four retailer, it’s because consumer tastes have evolved. We are managing the equilibrium between what customers want and costs.”

As the large supermarkets have realised, it is very hard to make money from internet sales because the profit margin on groceries is small and the delivery costs are so high – but now they can’t reverse course without losing customers. Andy Clarke, the former boss of Asda, told the Sunday Times last year that if the big four supermarkets had their time again “they wouldn’t have offered home deliveries, full stop”. “Online groceries are a cost drain,” Neale said. “Why should 90% of customers subsidise the 10% who get free home delivery?”

All supermarkets have their own private labels: made not by them, but for them, by manufacturers who agree to put their merchandise in a bag or box with the grocer’s logo on it. But Aldi takes this to extremes: more than 90% of the products it sells, from shaving cream to dark chocolate and frozen pizza, are private labels

Stocking mostly own-label goods allows the company to order huge quantities of a single item, to its own specifications, at a low unit cost.

Aldi’s entire ketchup order comes from one manufacturer that can operate the same, unchanging product run, all the time, and has no marketing costs to build into the price. “For many SKUs we are the biggest buyer by a country mile,” Neale said.

Among UK suppliers, who have often been treated badly by the big supermarkets, with their pressure for back margin fees and slow payment terms, Aldi has a good reputation

in 2010, following the death of Theo, which it said brought to an end “the story of the most eccentric, secretive and mysterious pair of siblings in Germany’s post-war economic history”. Karl died four years later, the richest man in Germany with a net worth of $25bn. (Second on the list was Dieter Schwarz, the Lidl owner, followed by Theo’s heirs.)

In 2017, Aldi South’s revenues reached €52bn, with about 20% of that from the UK and Ireland. In Ireland, Aldi has 12% of the market, and in Australia 13%, behind Woolworths and Coles. Its share in the US is only 2% – but Aldi plans to raise its number of outlets from 1,800 to 2,500 by 2022, which would make it the third-biggest chain in the US by store count, after Walmart and Kroger

In the UK there is still plenty of room to grow. Aldi hopes to have 1,000 shops in three years, up from just over 800 today. Dave McCarthy, a retail analyst at HSBC, said that given Aldi and Lidl’s expansion plans, their share of the market could peak at more than 20%.

Private lenders pushed for legislative changes in previous years to no avail, but now they’re receiving a more welcome reception from congressional Republicans and the Trump administration.

House Republicans, looking to revamp higher-education policies for the first time in a decade,

Private student lending has fallen in part because banks tightened underwriting standards after the 2007-2009 financial crisis. It also has dropped because of moves by Congress to allow students to borrow more directly from the government. Starting in 2006, most graduate students have been able to borrow unlimited amounts. Parents also face no restrictions on how much they can borrow under the Parent Plus program.

Promoting Real Opportunity, Success, and Prosperity through Education Reform, or Prosper, Act—calls for limits on the total federal student-loan amounts certain borrowers can receive. Many graduate students wouldn’t be able to borrow more than $150,000 in total federal loans for undergraduate and graduate studies. Parents in many cases would be limited to around $56,000 per dependent.

Critics say some of the industry’s proposals would hurt taxpayers and students who lack the credit to qualify for private-sector loans. Some schools and student advocates add that setting stricter dollar limits on federal loans would limit many students from attending schools of their choice.

Pushing more students to borrow private loans from banks without consumer protections is a terrible idea.”

has led to high default rates, runaway tuition inflation and taxpayer costs.

What we don’t want to see is continued nearly unlimited lending that has been fueling a rise in tuition costs,

Private student lenders target the most creditworthy borrowers. That includes parents of undergraduate students and graduate students with an established history of paying debts on time.

Several private lenders are offering lower interest rates than what the federal government charges the most creditworthy borrowers. And unlike federal loans, most private loans don’t charge an origination fee when borrowers sign up for the loan.

The government relies on interest payments from creditworthy borrowers to offset the money it loses on defaults from other borrowers and thereby keep the federal loan program solvent.

The important relationships between Vox and the European far right, as well as the American alt-right, are happening elsewhere.

there have been multiple contacts between Vox and the other far-right parties of Europe. In 2017, Abascal met Marine Le Pen, the French far-right leader, as Vox’s Twitter account recorded; on the eve of the election, he tweeted his thanks to Matteo Salvini, the Italian far-right leader, for his support. Abascal and Espinosa both went to Warsaw recently to meet the leaders of the nativist, anti-pluralist Polish ruling party, and Espinosa showed up at the Conservative Political Action Conference in the D.C. area, as well.

these are issues that belong to the realm of identity politics, not economics. Espinosa characterized all of them as arguments with “the left

the nationalist parties, rooted in their own particular histories, are often in conflict with one another almost by definition.

The European far right has now found a set of issues it can unite around. Opposition to immigration, especially Muslim immigration, is one of them; promotion of a socially conservative worldview is another.

dislike of same-sex civil unions or African taxi drivers is something that even Austrians and Italians who disagree about the location of their border can share.

Alto Data Analytics. Alto, which specializes in applying artificial intelligence to the analysis of public data, such as that found on Twitter, Facebook, Instagram, YouTube and other public sources, recently produced some elegant, colored network maps of the Spanish online conversation, with the goal of identifying disinformation campaigns seeking to distort digital conversations

three outlying, polarized conversations — “echo chambers,” whose members are mostly talking and listening only to one another: the Catalan secessionist conversation, the far-left conversation and the Vox conversation. 

the largest number of “abnormal, high-activity users” — bots, or else real people who post constantly and probably professionally — were also found within these three communities, especially the Vox community, which accounted for more than half of them

uncovered a network of nearly 3,000 “abnormal, high-activity users” that had pumped out nearly 4½ million pro-Vox and anti-Islamic messages on Twitter in the past year

For the past couple of years, it has focused on immigration scare stories, gradually increasing their emotional intensity

all of it aligns with messages being put out by Vox.

a week before Spain’s polling day, the network was tweeting images of what its members described as a riot in a “Muslim neighborhood in France.” In fact, the clip showed a scene from recent anti-government riots in Algeria.

Vox supporters, especially the “abnormal, high-activity users,” are very likely to post and tweet content and material from a very particular groups of sources: a set of conspiratorial websites, mostly set up at least a year ago, sometimes run by a single person, which post large quantities of highly partisan articles and headlines.

he Alto team had found exactly the same kinds of websites in Italy and Brazil, in the months before those countries’ elections in 2018

the websites began putting out partisan material — in Italy, about immigration; in Brazil, about corruption and feminism — during the year before the vote.

they served to feed and amplify partisan themes even before they were really part of mainstream politics.

In Spain, there are a half-dozen such sites, some quite professional and some clearly amateu

One of the more obscure sites has exactly the same style and layout as a pro-Bolsonaro Brazilian site, almost as though both had been designed by the same person

The owner of digitalSevilla — according to El Pais, a 24-year-old with no journalism experience — is producing headlines that compare the Andalusian socialist party leader to “the evil lady in Game of Thrones” and, at times, has had more readership than established newspapers

They function not unlike Infowars, Breitbart, the infamous partisan sites that operated from Macedonia during the U.S. presidential campaign

all of which produced hypercharged, conspiratorial, partisan news and outraged headlines that could then be pumped into hypercharged, conspiratorial echo chambers.

he Global Compact for Safe, Orderly and Regular Migration. Though the pact received relatively little mainstream media attention, in the lead-up to that gathering, and in its wake, Alto found nearly 50,000 Twitter users tweeting conspiracy theories about the pact

Much like the Spanish network that promotes Vox, these users were promoting material from extremist and conspiratorial websites, using identical images, linking and retweeting one another across borders.

A similar international network went into high gear after the fire at Notre Dame Cathedral in Paris. The Institute for Strategic Dialogue tracked thousands of posts from people claiming to have seen Muslims “celebrating” the fire, as well as from people posting rumors and pictures that purported to prove there had been arson

These same kinds of memes and images then rippled through Vox’s WhatsApp and Telegram fan groups. These included, for example, an English-language meme showing Paris “before Macron,” with Notre Dame burning, and “after Macron” with a mosque in its place, as well as a news video, which, in fact, had been made about another incident, talking about arrests and gas bombs found in a nearby car. It was a perfect example of the alt-right, the far right and Vox all messaging the same thing, at the same time, in multiple languages, attempting to create the same emotions across Europe, North America and beyond.

CitizenGo is part of a larger network of European organizations dedicated to what they call “restoring the natural order”: rolling back gay rights, restricting abortion and contraception, promoting an explicitly Christian agenda. They put together mailing lists and keep in touch with their supporters; the organization claims to reach 9 million people.

OpenDemocracy has additionally identified a dozen other U.S.-based organizations that now fund or assist conservative activists in Europe

she now runs into CitizenGo, and its language, around the world. Among other things, it has popularized the expression “gender ideology” — a term the Christian right invented, and that has come to describe a whole group of issues, from domestic violence laws to gay rights — in Africa and Latin America, as well as Europe.

In Spain, CitizenGo has made itself famous by painting buses with provocative slogans — one carried the hashtag #feminazis and an image of Adolf Hitler wearing lipstick — and driving them around Spanish cities.

It’s a pattern we know from U.S. politics. Just as it is possible in the United States to support super PACs that then pay for advertising around issues linked to particular candidates, so is it now possible for Americans, Russians or the Princess von Thurn und Taxis to donate to CitizenGo — and, thus, to support Vox.

as most Europeans probably don’t realize — outsiders who want to fund the European far right have been able to do so for some time. OpenDemocracy’s most recent report quotes Arsuaga, the head of CitizenGo, advising a reporter that money given to his group could “indirectly” support Vox, since “we actually currently totally align.”

“Make Spain Great Again,” he explained, “was a kind of provocation. . . . It was just intended to make the left a little bit more angry.”

The number of actual Spanish Muslims is relatively low — most immigration to Spain is from Latin America — and the number of actual U.S. Muslims is, relatively, even lower. But the idea that Christian civilization needs to redefine itself against the Islamic enemy has, of course, a special historic echo in Spain

“We are entering into a period of time when politics is becoming something different, politics is warfare by another means — we don’t want to be killed, we have to survive. . . . I think politics now is winner-takes-all. This is not just a phenomenon in Spain.

As Aznar, the former prime minister, said, the party is a “consequence,” though it is not only a consequence of Catalan separatism. It’s also a consequence of Trumpism, of the conspiracy websites, of the international alt-right/far-right online campaign, and especially of a social conservative backlash that has been building across the continent for years.

The nationalists, the anti-globalists, the people who are skeptical of international laws and international organizations — they, too, now work together, across borders, for common causes. They share the same contacts. They tap money from the same funders. They are learning from one another’s mistakes, copying one another’s language. And, together, they think they will eventually win.

Workers may be more reluctant to switch jobs

Government work has the lowest turnover, with a rate of 1.6% in November.

may not find high enough wages elsewhere to change jobs

Workers are also less mobile, in part due to a spouse’s job or other family concerns.

long overhang from the deep recession may weigh on some workers’ psyches

Changes to the tax law could cause turnover rates to pick up modestly this year