IT WAS sadly typical for the Philippines. When it played host at the beginning of May to the annual meeting of the Asian Development Bank, the biggest single news story the event generated overseas was a negative one: that hoardings had been erected so delegates would not see some unpleasant slums. Sadly, too, the story itself is rather typical: giving things a sleek appearance sometimes seems to matter more than fixing sordid reality.

The Philippines has, that incident notwithstanding, enjoyed an image boost in recent months. Under Benigno Aquino, a president avowedly intent on tackling corruption, economic prospects look good. It is one of few countries in Asia expected to grow faster this year than last—though partly because a slump in government spending dragged the growth rate down in 2011. The stockmarket has been one of the world’s rare performers this year. Attention is now focused on the country’s many assets: a young population; mineral wealth; robust external finances; even the strength of its sometimes ridiculed democracy, restored in 1986. A much-cited projection by a bank, HSBC, of the world in 2050 highlights “the striking rise of the Philippines, which is set to become the world’s 16th-largest economy, up 27 places.”

The Philippine economy grew at an annual average rate of roughly 2% in the 1980s and 3% in the 1990s. It has achieved about 4.5% since the turn of the century. Future prospects are indeed enticing: besides the unexploited mineral resources, business-process outsourcing is booming, already employing some 600,000 people. Remittances from all those Filipinos overseas have remained strong through economic crises. As costs rise in China, the Philippines is among places manufacturers eye as an alternative. Tourism has huge potential, recognised by the government’s nicely pitched campaign: “It’s more fun in the Philippines.”

It is also more fun with a newish president. Some of the present feel-good mood stems from what people call a “halo effect”. The unlikely saint is Mr Aquino, known as Noynoy, or P-Noy (in a country fond of nicknames, the national one is “Pinoy”). He was swept to power in 2010, partly on a wave of affection for his late mother, Corazon Aquino, the first president after the dictatorship of Ferdinand Marcos. An undistinguished record as a senator did little to build hopes of a bold presidency.

Yet Mr Aquino remains broadly popular. His government’s stand against perceived Chinese bullying in the South China Sea seems to go down well with a public mostly insouciant of the risks involved. A 52-year-old bachelor, Mr Aquino’s love life fits the national penchant for turning politics into soap opera. But above all, he is liked as a welcome change after the nine-year presidency of Gloria Macapagal Arroyo, which in its final years was widely seen as corrupt. He has gained kudos for trying to bring her to account. The focus of that struggle at the moment is the attempt in the Senate to convict the chief justice, Renato Corona, who was among Mrs Arroyo’s appointments to the Supreme Court, and has been accused of trying to shield her.

The Senate trial, televised daily, has become crucial to the administration, both as a means of breaking the perceived hold of its predecessor over the judiciary, and as proof of its zeal in combating corruption. This has also entailed submitting a number of allegedly suspicious contracts awarded by Mrs Arroyo’s government to fresh tenders. Clean-ups in the tax and customs authorities have impressed some businessmen, while vexing others who say procedures are now gummed up.

The government has also started making some important reforms. In an effort to raise its revenues—at present a paltry 12% of GDP—it wants to jack up “sin” taxes on alcohol and tobacco. The bill enacting this made important progress in May when it passed a House of Representatives committee—a triumph over powerful tobacco and alcohol lobbies. It still has to pass the full House and the Senate, however.

In fact, the Aquino administration has little concrete to show for its two years in power. The centrepiece of its programme, public-private partnerships to tackle the inadequate infrastructure which is such a hindrance to all the nation’s economic hopes, is only now stuttering to life after just one of the ten projects scheduled for approval last year saw contracts awarded. The pursuit of Mrs Arroyo and the chief justice is a distraction as well as a mission. Securing Mr Corona’s conviction might entail so many promises to senators that the point of the exercise—enhancing the government’s clean image—is lost. Failure to do so however, would leave the administration looking weak and silly.

So Mr Aquino has his critics. Mr Corona, for example, who this week was in intensive care after a possible heart attack, portrays himself as the victim of a vendetta after a court ruling that land belonging to the Aquino clan should be redistributed. Mr Aquino’s supporters scoff at this, and praise the president’s scrupulous hands-off approach. But that too has a flip side. Some on the left have promoted a craze for “Noynoying”, a form of protest involving striking a languid, idle pose. A common view has Mr Aquino as a reluctant president, who, just as his mother is said to have done, crosses off on a calendar the days until his term ends.

Cometh the Manny?

They are going by fast. Philippine presidents, barred from serving consecutive six-year terms, do not have long to make their mark. The backward-looking settling of accounts with Mrs Arroyo does not help. Already there is speculation about the 2016 presidential election. Pundits feel better placed in naming one of the front-runners for 2022, who, being under 40, will be constitutionally barred in 2016: a world-champion boxer and congressman, Manny Pacquiao. If Mr Aquino’s presidency is to be remembered as more than an interlude under a decent, likeable man who did his best, he needs to give some dynamic leadership to the reforms the Philippines so badly needs. Noynoying just does not cut it.

^{Economist.com/blogs/banyan}

Yakuza, irezumi, mikoshi—and surely sake?

IT IS easy for outsiders to admire those in Japan who sport tattoos. First, think of the pain. The body art known as irezumi is inflicted on a wearer’s torso with wooden needles and charcoal ink. During up to 50 sessions, the irezumi master brooks no tardiness, insobriety or whingeing.

Then there is the lifetime of pariah status that follows. Bathhouses and onsen (hot springs) usually forbid entry to tattoo wearers. So do swimming pools. Men may believe their swirling, ornate body engravings reflect a roguish masculinity. But the worst of it is that many Japanese women disagree. And so body-art narcissism takes place mainly among other tattooed men. Such groups of even innocent men immediately take on the air of gangsters, for yakuza and irezumi are inseparable.

You might assume that an up-and-coming politician with a maverick streak, a descendant of social-outcast communities who used to dye his hair blond, would sympathise with such people. Yet Toru Hashimoto, the 42-year-old mayor of the huge city of Osaka, does not. He is on a mission to force workers in his government to admit to any tattoos in obvious places. If they have them, they should remove them—or find work elsewhere (though big companies are just as tattoo-phobic). Even Lady Gaga, the tattooed diva who has raised a fortune for victims of the March 11th tsunami, would not get a job in his government, he insists.

The crackdown says a few things about this clever nationalist, who is gaining huge attention in Japanese politics. First, he likes a bit of blood sport. Picking fights with people who cannot easily defend themselves keeps him in the media gaze. Mr Hashimoto’s campaign follows his order forcing teachers in Osaka to stand for the national anthem.

Second, it sets him firmly in the socially conservative camp, displaying even a dash of authoritarianism. Since the end of the second world war, tattoo-wearers have mostly faced social—though not official—ostracism. During the periods before then when tattoos were banned, it was either by repressive shoguns or by the Meiji modernisers in the late 19th century, who thought the sight of naked men with engraved buttocks would earn Japan ridicule in the West (which was mostly fascinated instead). Aligning himself with strongmen may serve only to boost Mr Hashimoto’s popularity, at a time when many Japanese are fed up with the weak-willed characters in national government.

The curious bit is that many of the tattooed have right-wing tendencies too. Many seem to approve of Mr Hashimoto’s crackdown. Horiyoshi the Third, an irezumi master based in Yokohama, is forgiving of the Osaka mayor. He says he believes Mr Hashimoto understands very well that public officials showing off their tattoos must be considered threatening. The tattooist, whose silk paintings are now on display at London’s Somerset House, keeps his own painted “body armour” well hidden beneath a pale-blue seersucker suit with a diamanté broach on the lapel. Most of the time, the master says, irezumi should be concealed.

Then he pulls back his sleeve a few inches to show the start of swirling decorations travelling up his arm. The simple act of revealing those tattoos, he says, is supposed to intimidate. Mr Hashimoto has a different way of showing that he means business, but it is equally effective.

Just another day in the commercial capital

CIVILIANS armed with rocket-propelled grenades and AK-47s firing at police in armoured personnel carriers are not images associated with the urban hearts of commercial capitals. But Karachi is no ordinary city. Earlier this month its crime-infested quarter of Lyari, a sprawling network of alleyways housing 1m people, saw battles that pitted police against a powerful local gang. In one scene locals flattened a carrier’s tyres with gunfire. Then they kept firing at the stationary vehicle, killing an officer inside.

The 31 people who were killed, in addition to five policemen, were mainly innocents caught in the crossfire and included a seven-year-old. For a week residents were besieged. They had little access to food, water or power, as shops shut down and the battle had damaged infrastructure. Then a defeated government called the operation off. The police promised to return after 48 hours, but never showed up again. A senior police official was close to tears when he explained that the gangsters wielded weapons that law-enforcers did not know they possessed.

The Lyari violence highlights the complicated relationship between crime and politics in Karachi. Political parties are organised along ethnic or sectarian lines, and represent the city’s Urdu-speakers, Sindhis, Baloch, Pashtuns and Barelvi Sunnis. In turf wars over neighbourhoods, they attack each other’s activists and ordinary folk alike. (This week indiscriminate firing on a Sindhi rally killed 11 people.) When deaths exceed a handful a day, the commercial capital grinds to a halt. It is this violence, rather than Islamist extremism, that holds Karachi hostage.

Political parties coexist with criminal gangs, tacitly supporting some and actually controlling others. Lyari’s dominant gangsters, the People’s Aman Committee (PAC), have traditionally lent their support to the country’s ruling Pakistan People’s Party (PPP). Yet police appear to have launched the Lyari operation because some members of the ruling party had developed a rivalry with elements of the PAC. The rundown district has long been a bastion of the PPP, which had put up with or worked with Lyari gangsters for decades. But its neglect of the area has strengthened the PAC, especially once the gang started providing social services. “This operation was political victimisation,” claims Zafar Baloch, the racket’s second-in-command. “The people of Lyari have supported the PPP for 40 years, but when we spoke out against the lack of development here we were targeted.”

Karachi politics plays out at the expense of civilian lives. It did not hurt that the police operation would have pleased the Muttahida Qaumi Movement (MQM), a coalition partner, at a time when opposition parties are campaigning for the resignation of the prime minister, Yousaf Raza Gilani. The MQM (also involved in extortion in Karachi) complained that the government was targeting its people while letting the PAC get away with crime.

But perhaps what makes the Lyari operation typical of Karachi was how, just as it was escalating into a policing and humanitarian disaster, it suddenly came to a halt. Since then the PAC has not retaliated. Perhaps some unpublicised bargain has been struck. If so, that would be in line with the usual pattern of violence in the city. Karachi manages to hold together because bouts of brutal, though contained, violence are interspersed with dealmaking and calm. Imran Ayub, a journalist on the Karachi beat, thinks the PAC and the government will strike a bargain that preserves the PPP’s Lyari constituency despite this disastrous operation. “This was no final showdown”, he says. In the context of Karachi’s violence, it is sobering to think what a final showdown would look like.

PAKISTAN and the United States are meant to be allies, but their differences are starkly drawn in the case of Shakil Afridi. He is regarded as a hero by American officials and a traitor by Pakistan.

The CIA secretly recruited the Pakistani doctor during the hunt for Osama bin Laden. He set up a fake vaccination programme, going from door to door in the northern town of Abbottabad, seeking a DNA sample from the house in which Americans suspected the al-Qaeda leader was living. On May 23rd Dr Afridi was sentenced in Pakistan, without a lawyer and under a hasty system of tribal justice, to 33 years in jail for treason.

Behind the scenes, Americans scrabbled but failed to reach a deal to free Dr Afridi from Pakistani custody. His activities were discovered by Pakistan’s spies after the American special-forces operation a year ago that killed bin Laden. Leon Panetta, America’s defence secretary, insisted Dr Afridi “was not in any way treasonous towards Pakistan”.

Working for a foreign intelligence agency is a crime in many places, including America. Pakistanis feel justified in punishing Dr Afridi. Although bin Laden was clearly an enemy of Pakistan, too, the American operation that killed him is seen as a national humiliation. The collapse in relations it sparked endures today (see article) .

Not only Pakistani nationalists are angry at the CIA for using Dr Afridi. It has also damaged the credibility of vaccination programmes in Pakistan, including the one against polio. NGOs condemn the ploy. The CIA is unrepentant.

INCHING through the crowded streets of Bangladesh’s capital brings both exhilaration and frustration. Dhaka’s garishly painted tricycle rickshaws, battered buses, occasional goats and luxury cars somehow all manage to creep onward. Drivers skilled at furious honking are also masters of compromise and smiles.

If only the bitter politicians could prove so deft. Some 18 months before a general election, Bangladesh suffers street protests. Opposition leaders are sent to jail, and disappearances and murders are widely blamed on an old rivalry for power. A confrontation over the next poll—who should oversee it, and whether it will be fair—is already so strident that some observers doubt a contested one will be held at all. Meanwhile, Bangladeshis fret over prices of food and fuel, chronic power cuts and broken promises of new roads.

As the leader of the Bangladesh Nationalist Party (BNP), Khaleda Zia, tells it, all ills lie at the government’s door. She ticks off a list of wicked acts she blames on her antagonist in an ancient rivalry, the prime minister, Sheikh Hasina. A young BNP politician abducted a month ago and very probably murdered. Two others killed earlier. Some 33 opposition figures, including senior MPs, dumped in jail this month over a trumped-up case of arson. In all, she says, 3,000 BNP members have been arrested. “It is to intimidate, to create a sense of fear.”

There is plenty more darkness about. In recent months Bangladesh has endured a spate of other mysterious killings—a Saudi diplomat shot dead; a trade-union activist tortured and murdered; a pair of journalists butchered after investigating corruption. This correspondent was trailed in Dhaka by a pair of secret-service men on a motorbike. A rumour of a bizarre coup attempt, in January, was used by the government to get closer political control over the army.

One of the country’s best known figures, Muhammad Yunus of Grameen Bank, has been harassed for some time. An increasingly paranoid Mrs Hasina sees him as a political threat. This month in Dhaka Hillary Clinton, America’s secretary of state, met the Nobel laureate and assured him of her support. It brought no relief. Ministers snipe at him, and the government has just ordered yet another official review of his bank.

“We are very worried that the commission has been formed and terms of reference include ownership,” says Mr Yunus. In effect, the government is seeking ways to grab Grameen, which is 97%-owned by its poor members, many of them women. Officials are also bent on settling scores with Mr Yunus, who oversees an ungainly charitable empire that includes a telecoms company as well as the bank. Over a lavish dinner, a group of government spies brags of having a thick file of allegations ready against the “money-monger”.

Engine trouble

The list of gripes against the government is long. Corruption is pervasive enough for donors to be alarmed. The World Bank has scrapped funding for a bridge over the Padma river. Japan, the largest single giver of aid, has just sent its deputy prime minister to Dhaka to demand a clean-up. In a case of recent graft, a railway minister, who quit after police found sacks of cash in his aide’s car, was suddenly cleared by an internal inquiry of any corruption and reinstated to the cabinet. Meanwhile, strong doubts persist about the fairness of democracy. The United States’s ambassador in Dhaka this week repeated Mrs Clinton’s warning that the next election must be “participatory”, ie, run fairly so the opposition will take part.

Most telling would be a shift in India’s attitude. Long a close ally of Sheikh Hasina’s Awami League—cheering her crackdown on Islamic extremists and insurgents from India’s north-east, and being open to more trade—India’s ruling Congress party may now, sensibly, be hedging its bets. Pranab Mukherjee, India’s finance minister, called on Mrs Zia recently, inviting her back to Delhi. Mrs Zia chuckles that she will go after Delhi’s summer heat is past. She also calls the neighbour a “friend”, a possible hint of change in a party that often seeks popularity by bashing India.

As Sheikh Hasina looks ever more strident, people may start tiptoeing away from her. Not every ill in Bangladesh can be laid at the prime minister’s door. Although she did mess with the constitution, scrapping arrangements she had previously insisted on in opposition for a neutral caretaker to run the government for three months before election day, she now appears to want to keep her options open, possibly in order to be better able to skew the outcome of the next election. Meanwhile, Mrs Zia’s party orders street protests and hunger strikes, and threatens angry mass rallies in June. The sad result is that politics grows more polarised and confrontational.

Still, Mrs Hasina is not quite the all-powerful bogeywoman her bitterest opponents suggest. Certainly she seems set on cracking down on civil groups, for example with a new bill to put non-government organisations more firmly under political control. But it is hard to see how the murders and attacks on activists and journalists help her government, other than to spread a general sense of intimidation.

The opposition, too, has a reputation for thuggery, corruption and intimidation, and does not bother much to hide it. A veteran leader of the BNP says that, should his party boycott the next election, 20 days of street protests by BNP supporters would then be followed by violent attacks by his party workers on their rivals.

The shame of it all is how little heed the squabbling politicians pay to what should matter more: keeping the economy growing and reducing poverty further. In the face of electricity shortages, blocked roads and land disputes, the Bangladesh economy has been doing remarkably well. Its clothing industry has the potential to generate over $40 billion a year from exports, according to McKinsey, a consultancy.

Indicators of well-being have been improving. If annual economic growth of over 6% is sustained, a country that not long ago was a byword for poverty can contemplate reaching middle-income levels in barely a decade. But that needs single-minded focus by the government on dealing with the country’s economic bottlenecks and social needs. Instead, like Dhaka’s wretched roads, politics looks jammed. Uncertainty leading up to the next election, and growing anxiety among diplomats and foreign observers of Bangladesh, suggest a hard, tense time ahead. More than anyone, blame the driver.

The Hour Between Dog and Wolf: Risk-Taking, Gut Feelings and the Biology of Boom and Bust. By John Coates. Fourth Estate; 310 pages; £20. To be published in America in June by Penguin Press; $27.95. Buy from Amazon.com, Amazon.co.uk

THE financial crisis was caused by many things: greedy bankers, a glut of Chinese savings, shoddy regulation, an obsession with home ownership—take your pick. John Coates, once a trader on Wall Street and now a neuroscientist at Cambridge University, presents yet another culprit: biology, or, more precisely, the physiology of risk-taking. Financial traders, he says, are influenced by what is going on in their bodies as well as in the markets. Two steroid hormones—testosterone and cortisol—come out in force during the excesses of bull and bear markets.

Testosterone, “the molecule of irrational exuberance”, is released into the body during moments of competition, risk-taking and triumph. In animals this leads to something called the “winner effect”. A male that wins one battle goes into the next one primed with higher levels of testosterone, helping him to win again. Eventually, though, confidence becomes cockiness. The animal starts more fights and experiences higher rates of mortality.

Mr Coates thinks the exuberance that turns a market rally into a bubble may be fuelled by the same chemical. Some of this is based on traders he knew who became ever more convinced of their own invincibility during the dotcom era. But he also offers harder evidence. In one experiment Mr Coates sampled testosterone levels in traders in London and found that higher levels of the hormone in the morning correlated with beefier profits in the afternoon. Such profits came from taking higher risks, not greater skill.

Biology may also be responsible for worsening market sentiment in bad times. The body’s response to prolonged periods of stress is to secrete increasing amounts of cortisol, a hormone that marshals resources to cope with crises. Sure enough, Mr Coates finds that cortisol levels in traders’ bodies fluctuate in line with market volatility, even displaying a striking correlation with the prices of derivatives.

A burst of chemicals can be helpful. Good traders seem to produce a lot of hormones, but only for short periods of time. The trouble comes when cortisol remains in the body for extended periods. Rational analysis becomes harder, allowing emotional responses to gain the upper hand; risk aversion grows as testosterone production is suppressed. “During a severe bear market,” writes Mr Coates, “the banking and investment community may rapidly develop into a clinical population.”

One answer, he thinks, is to change the chemical make-up of trading floors by hiring more older men and, especially, women. Their bodies release far less testosterone. Women have the same levels of cortisol as men, but their stress response is triggered less by competitive failures and more by problems in their personal lives. That may make them more resilient when the markets turn against them.

Mr Coates’s thesis is not entirely convincing. The experimental data are too scarce and the distinction he draws between the masculine world of risk-taking traders and the more feminised world of asset managers skips over the fact that many supposedly cautious, long-term investors made poor bets in the boom. But it makes intuitive sense that biological responses inform the mood of the markets. This book puts flesh on that idea.

The Old Ways: A Journey on Foot. By Robert Macfarlane. Hamish Hamilton; 433 pages; £20. To be published in America by Viking in October; $26.95. Buy from Amazon.com, Amazon.co.uk

READERS of Robert Macfarlane’s previous books will not be surprised at how this one begins. Distracted on a snowy evening, unable to write, he leaves his house in Cambridge with a flask of whisky in his pocket, follows a field path, climbs a hill, finds a deer trail, tracks it through a hedge, comes upon rabbit prints, sees where they lead, and ends up lying on his back in deep snow, gazing up at the stars.

Though a fellowship at Cambridge University’s Emmanuel College ostensibly ties him down, this Boys’ Own world is where Mr Macfarlane longs to be—in the mountains or the wilderness. He is torn between homing and roaming, but homing gets short shrift. To write this book he walked, by his own estimate, 7,000-8,000 miles of paths: the prehistoric chalk tracks of England, the gneiss of the Isle of Lewis, the path that makes a kora, or sacred circle, round the pyramidal ice-mountain of Minya Konka in Tibet, a rocky forest branch of the road to Compostela and, most riskily, a network of wadi trails near Ramallah, in Palestine, under the eye of Israeli guards. He makes a strange, magical land-voyage (pictured) out along the shifting Broomway on the misty coast of Essex, where the watery silt mirrors his steps as if an ancestral double walks with him. Tenderly, he recounts a journey across the Cairngorm massif to attend the funeral of his grandfather, also a hillwalker, and to lay a small posy of granite-grown flowers on his grandfather’s favourite path.

Along these trails he notices everything. The rock he treads on, whether quartz, feldspar, limestone or sandstone; the birds above him, whether exulting skylarks, hovering kestrels or a rising heron, “a foldaway construction of struts and canvas”; the foil or spoor of animals, and their eyes glowing orange or green in the dark (even spiders’ eyes, he writes, show in the dark like tiny stars); trees, grass, fly-tipping, flowers. In an effort to get closer to the earth he sometimes walks barefoot, quite often coming a cropper. He ends up tweezering hawthorn spikes from his heels, or flossing sheep dung with grass from between his toes.

Whereas walking is traditionally a solitary’s delight, Mr Macfarlane often goes with friends, or makes appointments with strange characters obsessed with the land he moves through. In Lewis he meets Steve, who makes sculptures out of rock and bones. In Madrid he calls on Miguel, who has fashioned books-cum-keepsake boxes of every walk he has done in the Guadarrama mountains. His most frequent companions, though, are ghosts, such as the Neolithic men, women and children who scampered or hunted across the mud near Formby in Merseyside, leaving their footprints behind, or the previous walkers who have dropped along his route the white stones that weave a connecting pattern through the book.

In particular he walks with the tall, rangy, blue-eyed figure of a poet, Edward Thomas, whose tormented life first led Mr Macfarlane to pace the chalk of the “south country” in his shadow. The section on Thomas, towards the end of the book, feels slightly like an appendage. Expanded and interwoven with walking, it would make an extraordinary biography. But Mr Macfarlane’s feet were obviously itching to go on, beyond, elsewhere.

He does not pretend to have deep thoughts while walking. Walkers know it seldom happens that way. The tendency is to notice that tree, that stile, that passage of light (rionnach maoim, he tells us in a typically lovely aside, is Gaelic for “the shadows cast on the moor by cumulus clouds”). The priority is to pace the aching body. It is only later that the walker reflects that the process of walking is inward as well as outward exploration; that it is a way of connecting with his own past, as well as with the universal human past of crossing and recrossing the earth; and that even as the walker sculpts the landscape with his observing eye and tramping feet, the landscape in turn observes and shapes him. The word “learning”, Mr Macfarlane notes, stems from liznojan, to follow a path, and the word “write” from making tracks; when setting out, even on a familiar path, many walkers have imagined they may cross into visionary worlds. The acts of walking and wordsmithing are very close.

As the pen rises from the page between words, so the walker’s feet rise and fall between paces, and as the deer continues to run as it bounds from the earth, and the dolphin continues to swim even as it leaps again and again from the sea, so writing and wayfaring are continuous activities, a running stitch, a persistence of the same seam or stream.

Small complaints could be made. The middle section on sea-roads, while enjoyable, doesn’t really fit; one senses here the inveterate explorer’s unease with sticking to one subject, or one path. Several chapters cry out for maps; indeed, almost all do. But then Mr Macfarlane has always decried the use of maps, recommending instead the charts formed by memory, incident, fear or affection, and carried in our heads. Readers are invited, instead, to wander and lose themselves; and it is hard to think of a more pleasurable way to do so without leaving one’s chair.

Time to Start Thinking: America in the Age of Descent. By Edward Luce. Atlantic Monthly Press; 292 pages; $26. Little, Brown; £20. Buy from Amazon.com, Amazon.co.uk

Better, Stronger, Faster: The Myth of American Decline…and the Rise of a New Economy. By Daniel Gross. Free Press; 272 pages; $26. Buy from Amazon.com

THE recession has humbled the world’s largest economy. But the reversal of fortune also makes many Americans worry that the downturn is symptomatic of broader decline. One specific question: did the financial crisis mark the passing of the mantle of economic leadership from America to more boisterous economies, such as China and India?

Edward Luce, a journalist with the Financial Times, amasses the evidence for decline in a new book, “Time to Start Thinking”. Median incomes have scarcely risen in two decades, he notes. Innovative capacity is withering; more than half of American patents are now granted to foreigners. America’s young people are poorly educated, and now rank 20th or worse in international rankings of proficiency in science and maths. Its government is venal, sclerotic and dangerously out of touch. Congress sits idly by while the nation’s infrastructure falls apart. Meanwhile, firms are strangled by new regulations. Unless America abandons complacency and “starts thinking”, he believes that steady decline looms.

Such fears are not new. Mr Luce, a speechwriter for Larry Summers when he was President Bill Clinton’s treasury secretary, quotes his old boss as arguing that “predictions of America’s decline are as old as the republic…as long as we’re worried about the future, the future will be better.” Yet Mr Luce also cites Mr Summers’s support for unfettered markets and a hands-off state as a contributor to decline. America’s economic rise was helped by high tariff barriers, aggressive public investment and active industrial policy—a very Chinese approach to growth. Now research at institutions such as the Defence Advanced Research Projects Agency, which contributed to the development of the internet and other innovations, is being neglected. Small wonder, he says, that America is in decline.

Daniel Gross, economics editor at Yahoo! Finance and author of “Better, Stronger, Faster”, takes a contrary view. The woes of an economy recovering from deep depression should not be mistaken for general decline, he argues. Nor is the rapid growth of relatively poor countries like China and India an indicator of American weakness or the superiority of more interventionist growth models. Asia’s billions are simply catching up with American technology and living standards, and they have a long way to go yet. America’s recovery may be disappointing, but it is better than the recovery in other places. America has done more than Britain on deleveraging, for example, and its corporate sector has been restructured more aggressively.

The two authors seem to be describing different parts of the elephant. Mr Gross praises world-beating innovators like Facebook and Google. Mr Luce instead quotes old Silicon Valley engineers who yearn for an era of “hard innovation”, of chips rather than apps. Occasionally their sources overlap. General Electric’s chief executive, Jeffrey Immelt, complains to Mr Luce of America’s lack of interest in proper industrial policy, whereas to Mr Gross he speaks of America’s export prowess. The fact that existing industries would prefer more government support is neither surprising nor a sign of broad failure.

In the end Mr Gross has the better argument. America’s choking regulations are a problem, but less onerous than those in earlier, more optimistic moments. Its regulatory system often works better than those of other countries. Mr Luce cites the Food and Drug Administration’s incompetence as a reason for worry, comparing it unfavourably with European regulators. But it is in Europe that resistance to genetically modified food is stifling innovation. As Mr Luce admits, America is rising to the challenge. Its educational woes have provoked a push towards broad reform. It may yet prove more responsive to trouble than China or India, to say nothing of Europe.

Certainly this will not be easy. There are worrying departures from the historical norm, notably in the distribution of the gains from growth. Congressional paralysis is also discouraging. Political leaders in Washington all see the need to let in more skilled immigrants, but they cannot agree on the detail. This makes reform hard if not impossible. America’s great advantage, though, is that it has a private sector that is nimble enough to succeed when the state falls short. Its challengers may find this the most difficult strength to replicate.

In the grip of the black dog

From Melancholia to Prozac: A History of Depression. By Clark Lawlor. Oxford University Press; 265 pages; $24.99 and £14.99. Buy from Amazon.com, Amazon.co.uk

WHAT is depression? The ancient Greeks believed it resulted from an imbalance in the body’s four humours: blood, phlegm, yellow bile and black bile (from the Greek word melas or “dark” and kholé, meaning “bile”), with too much of the latter resulting in a melancholic state of mind. Early Christianity blamed the devil and God’s anger for man’s suffering, with depression the result of the struggle against worldly temptations and sins of the flesh. In the Renaissance it was viewed as a disease of scholars, such as Robert Burton, author of “The Anatomy of Melancholy”, who were given to abstract and intense speculation.

In this well-researched book, Clark Lawlor of Northumbria University roams through the history and culture of depression and shows how attitudes to the illness have changed through the ages. He brings to life different schools of thought on the subject, and debates the role of the pharmaceutical industry in categorising and treating mental illness.

The most thought-provoking part of the book covers the rise of the “new science”, when the focus on melancholia changed yet again. Much of this can be attributed to Emil Kraepelin, a German psychiatrist and co-discoverer of Alzheimer’s disease, who argued that biological pathology underlay each of the major psychiatric disorders. Kraepelin’s work, however, was soon overshadowed by that of Sigmund Freud, whose conclusion that mental illness came from emotional causes, rather than physical ones, underpinned the rise of the psychoanalytical tradition in Europe and America in the 20th century.

These two views inform much of the continuing debate about the pathology and treatment of mental illness. For some, the illness is a medically treatable imbalance in brain neurochemistry—a serotonin deficiency—that can be remedied by selective serotonin reuptake inhibitors (SSRIs) such as fluoxetine, better known as Prozac, which has been prescribed to more than 35m people worldwide since its launch in 1988. For others, depression comes about as a response to psychological damage, with the Freudian school of psychotherapy in particular linking this to how sufferers were nurtured in childhood.

Today around 15% of people in developed countries suffer from depression, and the illness shows no sign of abating. The World Health Organisation’s recent World Mental Health Survey Initiative, which interviewed 89,000 people, found that more than 120m people worldwide suffer from depression, and it is responsible for 850,000 suicides each year. Prescribing pills has become a popular treatment, in part because it is much faster than a course of psychotherapy, which can take months or even years. But research shows that a holistic approach that treats both body and mind through a combination of medication and talking therapy offers the greatest long-term benefits. The success of this approach would suggest that Kraepelin and Freud were both right after all.

The eyes have it

THROUGH the smoky lenses of his glasses, the eyes look rather wild. The subject of this 1926 portrait (pictured) of a misanthrope by Giorgio de Chirico is Dr Albert C. Barnes. Chemist, businessman, educator and champion of equal rights for African-Americans, Barnes also assembled the greatest private collection of Post-Impressionist and early modern art in America. Many people longed to see it; Barnes liked nothing better than to refuse, often adding an unprovoked insult. For instance, when T.S. Eliot wrote a note requesting a visit, Barnes scribbled “Nuts” before returning it.

He built a mansion to house his collection in Merion, a smart suburb of Philadelphia, but kept out far more people than he let in. He was against catalogues, colour reproductions and any explanatory text on the walls. The Barnes Collection was simultaneously world famous and secret. Now all this has changed. After a long, bitter fight over its fate, the Barnes Foundation, the holder of the collection, is finally celebrating its move into the centre of Philadelphia.

The new Barnes is a handsome, low- slung, stone and glass building surrounded by greenery and water. It is open to all. For the first time there is a café and a well-stocked shop that sells “Masterworks”, a fat book full of colour reproductions from the collection. Lovers of the old Barnes feared that the move would destroy its magic. It has not. The surroundings are different, but the 24 art-filled galleries within are exactly as they were before—with one difference. Advances in glass technology allow the rooms to be flooded with natural light. The pinks now visible in Picasso’s 1906 “Girl with a Goat”, for example, are so vivid he might have applied them yesterday.

Barnes made his fortune developing and marketing Argyrol, an antiseptic. He stayed rich by selling the company in 1929, before the crash. He began buying contemporary art even before the 1913 Armory show introduced the work of the moderns to shocked Americans. And he was still collecting in 1951, the year he died in a car crash. His collection of 800 paintings includes 181 Renoirs, 69 Cézannes, 59 Matisses and 49 Picassos. Courbet, Goya, Van Gogh, Hals, El Greco, Gauguin, as well as American painters such as Maurice Prendergast and William Glackens, are all there. A great many are masterpieces. Yet trophy hunting was never his sport (he preferred boxing). His goal was education. Barnes taught people to see how artists used line, colour, space and light to create their works. He believed this would lead to a feeling of connection between art and viewer and a sense of shared humanity. His first pupils were the mainly African-American employees of his factory. The foundation continues to be a teaching institution.

Aesthetics, not art history, drives the way the collection is displayed. There is no separation of fine and decorative art. Works are not arranged chronologically or geographically. A Matisse may hang alongside a Renaissance portrait or Native American jewellery, superb African carvings or Chinese ceramics. Small carved ivories, fine enamels and scores of decorative metal works (from slotted spoons to intricate hinges) share wall space with paintings. The visitor is constantly surprised. Coming upon Seurat’s radiant “Les Poseuses” hanging above Cézanne’s brooding “The Card Players”— masterpiece upon masterpiece—is particularly exciting. For this writer, Cézanne’s unfamiliar “Girl with Birdcage” from 1888 or thereabouts was the key that unlocked the previously under-appreciated depths of his landscapes, apples and portraits.

Is the Barnes worth a detour? Make a beeline for it. The man could be a stinker, but his legacy is a treasure for all.

Every Nation For Itself: Winners and Losers in a G-Zero World. By Ian Bremmer. Portfolio; 229 pages; $26.95 and £14.99. Buy from Amazon.com, Amazon.co.uk

BRAZIL and Turkey, once reliable backers of America’s geostrategic goals, conspicuously went their own way in 2010 when they sought to broker a deal with Iran over its nuclear programme, even as America pushed for new sanctions. Their new-found assertiveness was a product of both their growing economic weight and America’s diminished clout.

This is an example of what is in store for the world, predicts Ian Bremmer in “Every Nation For Itself”. Countries like Brazil and Turkey want the status of a bigger global role. But they “balk at assuming the risks and burdens” that global leadership entails. Ideally a web of multilateral institutions and laws would impose order and hold wayward countries in line. But with America unable to afford, or unwilling to exercise, global leadership, and China still not ready to assume its responsibilities, there is no one to enforce these rules.

In the 1960s President Lyndon Johnson could divert a fifth of America’s wheat crop to alleviate starvation in India. That could not happen now, when biofuels are aggravating food shortages and exporters hoard supplies for their own people. Global warming, nuclear proliferation and internet regulation are all harder to address, with the G7 and G20 supplanted by what the author calls the “G-Zero”.

Mr Bremmer, founder of Eurasia Group, a political-risk consultancy, specialises in big thoughts. His previous books tackled the path that developing countries travel from autocracy to democracy, and the growth of state-sponsored capitalism. “Every Nation For Itself” enters a more crowded field. Innumerable books and essays have already plumbed the consequences of America’s loss, or possible loss, of global leadership, with the best providing either fresh insight or original reporting. Unfortunately, “Every Nation For Itself” does neither. It devotes endless pages to describing disparate arenas of global conflict, from cyberspace to water shortages, but these are largely a rehash of headlines and conventional wisdom. Their only purpose is to provide Mr Bremmer with repeated opportunities to assert that “in a G-Zero world” such conflicts can no longer be solved from above.

Mr Bremmer is certainly right that a world without America’s global leadership is a more dangerous place, but he overstates his case. Even when it stood alone as the world’s superpower, America struggled to impose its will. In 1993 it pulled its troops out of Somalia when murderous warlords foiled its attempts to deliver food relief to the starving country. The global groups that Mr Bremmer imagines once ran the world were seldom that effective. The G7 occasionally influenced the direction of the dollar or the relations between rich countries and the emerging markets, but more often it issued anodyne, forgettable communiqués.

Neither America nor the multilateral institutions are as impotent today as Mr Bremmer claims. Brazil and Turkey failed in their negotiation over Iran’s nuclear programme. The fact that Iran has been dragged back to the negotiating table and Myanmar is veering back towards democracy contradict Mr Bremmer’s thesis that sanctions are becoming ever less effective. He is right that the World Bank and the International Monetary Fund have been weakened by China’s growing power. But the opposite is true for the World Trade Organisation, whose clout has been enhanced significantly by the fact that both America and China abide by its rulings. “Every Nation For Itself” is a useful summary of current events. But as a guide to a complex world, it falls short.

BEFORE Queen Elizabeth’s Silver Jubilee in 1977, the villagers of West Hoathly in Sussex were placed under secret observation. A file was drawn up, noting their views on the monarchy, the country and the impending celebrations. The royal family was marvellous but these festivities had better not cost too much, said one villager, recorded as “Nurse, female, 50”, explaining: “People are not in the mood.”

West Hoathly was reliably monarchist, the file records, with anti-republican sentiment boosted by recent American elections (“Fancy having Jimmy Carter,” a villager shuddered). But still its Jubilee enthusiasts sounded a bit bleak. We’re due a celebration, said “Male, 53”—we’ve made it to 1977 without a nuclear war.

The files were commissioned by Mass Observation, a private social-research project that has studied the British since the 1930s. In all, 107 volunteers were recruited to record the Silver Jubilee. Their diaries and notes, together with complementary files on the 2002 Golden Jubilee, now form part of a vast archive held at Sussex University. On the eve of Queen Elizabeth’s Diamond Jubilee—to be marked from June 2nd to 5th—the archives offer a remarkably evocative glimpse of the recent past.

The 1977 files describe a country that was tired and riven by industrial conflict. Its people talked of feeling a bit lost, and yet—from a distance of 35 years—they seem enviably grounded in a shared culture with deep roots. There was striking uniformity to their celebrations. Invited to have fun, people first grumbled then formed committees. It is remembered that at previous royal jubilees children were given commemorative mugs, prompting endless rows about paying for them. “The Vicar! He needs grinding up afresh, that one,” fumed a farmer’s wife in north Wiltshire, on learning that her Women’s Institute branch must buy mugs. “Not that I’m criticising him, of course,” she added hastily.

Celebrations in 1977 involved children’s food—sausage rolls and jelly, hot dogs and ice cream—and beer for the grown-ups. There were violent sporting contests, from tugs-of-war to free-form football matches. To conquer reserve, fancy dress was worn, often involving men in women’s clothing. From the West Midlands came news of an all-transvestite football game, with the laconic annotation: “all ended up in the canal.”

London displayed both patriotic zeal (flag-draped pubs in Brick Lane, big street parties in Muswell Hill) and hostility (cheerless housing estates, slogans declaring “Stuff the Jubilee”).

Scotland was a nation apart. A file reports “total apathy” in Croy. In Glasgow the anniversary was called “an English jubilee”. Snobs sneered along with Scots. At Eton College, a wooden Jubilee pyramid was smashed by old boys. At Oxford University, examinations were held on Jubilee Day, in a display of indifference.

The Silver Jubilee is not really about the monarchy, asserts a file from south Wiltshire: the day is about “people wanting a bit of fun”. A report from Wimbotsham in Norfolk, close to a royal estate at Sandringham, stands out for its focus on the queen’s 25 years on the throne. Locals held a service on the village green, praying for the monarch in “happy togetherness” under dripping umbrellas before a tug-of-war, races and tea for 700.

By 2002 and the Golden Jubilee, Britain comes across as a busier, lonelier, more cynical place. The royal family was “just showbiz”, sniffed a diarist from Sussex. There is angry talk of Princess Diana and how her 1997 death was mishandled by the queen. There are fewer street parties than in 1977, all agree. This is variously blamed on apathy, the authorities (whose job it is to organise events, apparently) and above all on health-and-safety rules. In 1977, in contrast, one Wiltshire village cheerfully let a “pyromaniac” doctor take Jubilee fireworks home to add extra bangs.

The 2012 Jubilee finds Britain changed again. Diamond jubilees being rare (the last was achieved by Queen Victoria in 1897), the queen is firmly at the centre of the celebrations. Local councils have received more than 8,000 applications to close roads for street parties, suggesting that 2002’s passivity is fading. The country is not returning to 1977 and its home-made fancy-dress costumes or Coronation bunting dug out of attics. Today’s shops heave with Jubilee cakes, disposable decorations and flag-emblazoned baubles, letting consumers buy patriotism out of a box.

After 60 years on the throne, a jubilee about the queen

Visiting Wimbotsham, Bagehot is shown elaborate plans: cake-baking contests, pony rides, a teddy bears’ picnic, a sports day, a pensioners’ tea. But there will be no tug-of-war (people might hurt themselves) and the face painters have liability insurance. Still, the festivities will dwarf those seen in 2002, locals say. The monarchy endured a “big lull after Diana”, suggests David Long, the driving force behind Wimbotsham’s Diamond Jubilee. As the queen grows older, she is “more highly thought of”. Linda Nixon, a Wimbotsham pensioner, credits Prince William’s royal wedding with reviving enthusiasm. Prince William and his brother Prince Harry are “like everyday people”, she says.

In the Mass Observation Silver Jubilee files, critics grumble about the monarchy costing too much or entrenching privilege. Supporters say the queen confers global prestige or offers a bulwark against constitutional meddling by politicians. In short, the debate is about the best way to organise society. In both Golden and Diamond Jubilee Britain, by contrast, the issue is whether the queen deserves to be respected, and whether the public can relate to her. In short, individualism is all.

Diamond Jubilee Britain seems to be a hybrid. As in 1977, an unhappy nation fancies being cheered up, and the monarchy fits the bill. As in 2002, a truculent nation demands a monarchy on its own, emotional terms. Is that sustainable? Perhaps not, but it promises to be a fine party.

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THE vexed issue of voting rights for prisoners combines two of the Conservative Party’s main preoccupations: penal policy and the European Court of Human Rights (ECHR). Only the wrangles over the deportation of terrorists to insalubrious places, in which the ECHR is also involved, rival its potential for double demagoguery. This week David Cameron succumbed to temptation and took another whack at both prisoners and the court.

The latest bout of a long struggle between successive British administrations and European judges ended on May 22nd. As part of a ruling on a similar Italian case, the court upheld a 2005 judgment in a case brought by a British man convicted of killing his landlady with an axe. That found that Britain’s ban on virtually all prisoners voting violated the right to free elections enshrined in the European Convention on Human Rights. This time the court gave ministers six months to bring forward remedial proposals.

On May 23rd Mr Cameron told Parliament that he intended to stand up to the “foreign court” and enforce the will of the House of Commons, which last year voted overwhelmingly to keep the current ban. He thus ingratiated himself with both Tory backbenchers and the tabloid press, much of which was luridly livid about the court’s stance: “Contempt for Our Democracy” screamed the front page of the Daily Mail.

In fairness to Mr Cameron, he has taken a consistent view on this question. This time, however, with little room left for stalling, it may have a price. Precisely what the government’s next move will be is unclear; it will probably argue that the mood of Parliament makes compliance impossible. But it could face a hefty compensation bill (around 2,500 prisoners have filed complaints about voting with the court) which it might refuse to pay. Expulsion from the Council of Europe, the body to which signatories of the convention belong, seems unlikely. Dominic Raab, a Tory MP who argues the convention was not intended to guarantee votes for everyone, predicts “zero practical consequences” should the government stonewall.

Yet at the least Britain’s recalcitrance may give heart to less civilised countries, such as Russia, which are signatories to the convention but routinely flout it. And a compromise is available. The court ruled only that a “general, automatic and indiscriminate” ban on prisoners’ voting violated the convention. States have leeway to decide how to implement the rules: ministers could stipulate a tariff above which prisoners forfeit voting rights, or allow judges to remove them as part of their sentences. Those methods are commonly used in other countries and were desultorily considered by the previous, Labour, government.

A brave prime minister would revive them. “Those who break the law shouldn’t make the law,” the slogan of those opposed to change, rhymes but makes little sense. The ban is an anachronism: it dates back to the days before universal suffrage, when felons forfeited their property, ownership of which was a condition for voting. Plainly prisoners are and should be deprived of some rights while inside. But it is not clear why the right to vote, which may bring some benefit in terms of rehabilitation, should be one of them.

It’s even more fun if you pour beer in it

THE death in 2007 of Fiona Pilkington, who killed herself and her disabled daughter after years of complaining fruitlessly to the police about harassment by local thugs, remains the prism through which many Britons view anti-social behaviour. So it is worth asking whether the proposals for combating it that were trotted out by the Home Office on May 22nd would have changed the women’s fate. The Leicestershire police had all the tools they needed then to intervene, but did not do so; now they will have to. But the new measures perpetuate some past mistakes, and may introduce others.

The government intends to do away with the Anti-Social Behaviour Order (ASBO). An invention of the previous Labour government, ASBOs were dished out for a range of offences, from singing to dealing drugs. Offenders could be ordered to stay away from places or to desist from swearing, drinking, urinating al fresco and so on. With other measures against petty thuggery, ASBOs seem to have had some effect: the police recorded 3.2m anti-social incidents in 2010-11, down from 3.9m in the year the Pilkingtons died, and people’s perception of a serious problem in their area was the lowest in a decade.

But many—among them Frank Field, a member of the government when ASBOs were first debated in 1997-98— worried that they fast-tracked relatively mild offenders into the criminal-justice system. Violating one was a criminal offence—yet of the more than 20,000 issued in England and Wales during the decade to 2010, 57% were breached, 42% more than once. Over half of the breachers went to prison.

In addition to reducing victimisation, especially of the vulnerable, the coalition government wants to devolve responsibility for local misconduct to local communities. A new “community trigger” will be piloted in three places, forcing the police and other agencies to respond when there are enough complaints about someone or something (in Manchester it will be when one person complains three times or five people once). From November elected Police and Crime Commissioners are expected to keep police noses to that grindstone. And two new powers will replace ASBOs and five related civil orders.

The Crime Prevention Injunction (CPI), designed to intervene early, will be faster and easier to get than an ASBO. It will contain the same sorts of prohibitions but also positive requirements, such as undergoing treatment for drugs. Breaching it will be a civil rather than a criminal offence, though a stretch in prison can result. The Criminal Behaviour Order (CBO) is for hard-core troublemakers who also dabble in outright crime. Like the CPI, it can contain a mixture of restrictions and requirements. Violating it is to be a criminal offence.

The new measures will undoubtedly focus police minds on anti-social behaviour in a way that nothing yet has quite done. But there are worries. CBOs perpetuate the ASBO trick of creating under civil law a criminal offence applicable to one person. “It strikes me as a risky strategy to abandon the principle of equality before the criminal law and invent tailor-made offences in this way,” says Mike Hough of Birkbeck College London. Isabella Sankey of Liberty, a pressure group, fears the CPI could be worse than the ASBO, as the standard of proof will be lower and the test of anti-social behaviour broader.

The question for Martin Innes of Cardiff University’s policing programme is whether any such instruments are especially effective. It has been impossible to establish a statistical match between the use of ASBOs and falls in anti-social behaviour, he says. What seems to work is “feet on the street”—getting someone in authority to the scene to tell the offender to stop it—as well as focusing on victims rather than suspects and analysing data to predict risk patterns. In short, as so often, using existing powers more intelligently.

WHAT is the problem with the British economy? Are animal spirits dulled by too much regulation, making businesses wary of hiring? Or is the more pressing issue weak spending stemming from an overhang of debt, a shortage of credit and the threat of collapse in the euro zone, Britain’s main export market? Two reports published this week offer contrasting supply-side and demand-side views.

The first, written at the prime minister’s behest by Adrian Beecroft, a venture capitalist, emphasises the “terrible impact” of rules that make it costly to fire workers. The work-shy are free to coast, harming efficiency, it says. Small firms are wary of hiring for fear they will be stuck with a duffer.

Mr Beecroft proposes that firms should be able to sack staff without cause, so long as they give notice and a payoff linked to salary and service. Tiny firms, which cannot afford specialist staff to administer complex rules, should be exempt from many regulations.

The Beecroft report reflects employers’ fury about the difficulties of offloading a dud worker, and the lawyers who use the threat of court action to bargain for a bigger payoff. But as irksome as regulations are, they cannot readily explain the economy’s underperformance. Britain’s are among the least stringent job-protection laws: of the 40 countries in the index compiled by the OECD, only America and Canada have looser rules (see chart). And Britain’s jobless rate has stayed remarkably low given economic weakness.

By coincidence the report appeared the day before the IMF concluded its annual economic “mission” to Britain. The fund’s take is rather different. It thinks the economy has too much slack, not too many slackers. It wants the Bank of England to begin another round of “quantitative easing” to boost demand.

It is essential that Britain cut its large budget deficit, says the fund, though it would prefer a more growth-friendly tilt to austerity, such as cuts in public wages to pay for investment. The government should consider passing on its low borrowing costs to private firms and banks by buying their bonds. If none of this works and the darkest fears about the euro zone are realised, then budget cuts would have to make way for tax cuts and public works.

In that event, it might make sense to copy Germany’s response to the 2008 slump. It used temporary wage subsidies to make it easier for cash-strapped firms to keep workers—the opposite of the Beecroft fix, but the right one for the times.

Skip, skip, skip to my loo

PORTABLE toilets have come a long way since Britain first imported them from America 25 years ago. The beech panelling, wraparound mirrors, plasma-screen televisions and sumptuous toiletries of some modern trailers would not be out of place in a posh hotel.

Construction workers were the earliest adopters of mobile serviced lavatories, which became standard issue on building sites in the mid-1990s. Before then some had no facilities, whereas others set up typically squalid immobile toilets. Industrial users still account for three-quarters of the 100,000-plus portable loos in the country.

But it is hard to make money out of builders’ bums. Construction slumped during the financial crisis, falling by another 5% in the first quarter of 2012 compared with the three months before. Rental fees have dropped as the cost of transport, chemicals, waste disposal and even loo paper has risen. A basic portable unit, which costs £500 ($785) to buy, can often be hired for £20-25 a week.

So most hire firms now serve the events market too. Leasing to music festivals, sporting events and private functions brings higher margins, notes Martin Murdoch of PS Consultancy, who advises the industry. But this business is erratic. The organisers of this summer’s Olympics have commandeered 1,500 toilet blocks at the busiest time of year, infuriating the people behind the Glastonbury music festival, who cancelled their event. Since transporting loos is so time-consuming and expensive, most outfits remain small and fairly local. Even specialist events firms need construction work to tide them through the winter.

The industry’s best hope now lies in technology. Most luxury and bog-standard loos are “recirculating”, meaning they are flushed with existing waste from the tank below, combined with a blue chemical compound. But vacuum toilets, akin to aeroplane ones, are gaining popularity. They use little water and no chemicals; since they don’t send waste whizzing round again, they are better for health. Because they are so pricey, they will not soon transform the business. A high-end trailer with a vacuum toilet currently costs around £40,000 compared with £25,000-£30,000 for a recirculating one. Only a few festivals and individual clients are willing to spend the extra pennies for them, says Nicky Warner of Loos for Do’s, a rental outfit.

Yet the technology has promise. Some humanitarian organisations are considering using vacuum toilets for crisis situations, because there is less waste to dispose of. Mobile loos may even inspire the next generation of fixed facilities—they use so much less water than normal lavatories that architects are getting interested in installing vacuum toilets in new buildings, says Nicky Brown of Flexiloos, a vacuum supplier and manufacturer. If they catch on, the bottom could fall out of the flush toilet market.

THE limited-liability company is the building-block of capitalism, mobilising resources for investment. But its central tenet, that investors are not generally responsible for the liabilities of the firms they invest in, faces growing challenge. A decision by the Court of Appeal stretches almost to breaking point the “corporate veil” that has protected parent companies from the sins of their subsidiaries.

David Chandler loaded bricks for Cape Building Products in Uxbridge off and on between 1959 and 1962. A fireproof boarding containing asbestos was made in an open-sided factory on the same site. In 2007 he discovered that he had asbestosis. Cape Building Products no longer existed, and the insurance for its employees excluded his condition. So Mr Chandler sued the company’s parent, Cape PLC.

There was no dispute over the fact that Mr Chandler’s direct employer had breached its duty of care to him. But Cape PLC maintained that, as a separate legal entity, it was not responsible for its dead subsidiary’s failings towards its workforce.

The High Court found for Mr Chandler in 2011, ordering Cape to pay him £120,000 ($196,000). In April the Court of Appeal upheld the judgment. It also laid down general criteria under which a parent could be held responsible for the health and safety of its subsidiary’s employees. Their essence is that the parent must be in the same line of business, aware of the actual safety risks, more knowledgeable than its subsidiary about safety in the industry and accustomed to intervene in its trading operations, though not necessarily in matters relating to welfare.

Judge Arden was careful to say that the decision did not “pierce” the corporate veil, as liability would always depend on facts. Its importance, says Richard Meeran, a partner with Leigh Day, the solicitors who acted for Mr Chandler, is that there is no longer an objection in principle to a parent having a legal duty of care to its subsidiaries’ employees. Cape has applied for the right to appeal to the Supreme Court.

The judgment is not going to break Cape, a FTSE-250 company with a market capitalisation of around £400m and about the same in net assets. But the potential impact on other firms, including multinationals with offshoots in countries that permit rough and ready workplace standards, could be substantial. Since 2005 English courts have been obliged to accept jurisdiction when the parent is domiciled in England. Unlike courts in America, for example, they may not decline to hear a case in favour of a victim’s local court. A case in the works now, brought by goldminers against Anglo-American South Africa, may extend the definition of domicile. Establishing that a parent may owe a duty of care to its subsidiaries’ workers moves matters on.

This worries some, who fear that multinationals will think twice about incorporating in Britain. Fans of the limited-liability concept also fret that lifting the curtain between parent and subsidiary could lead to over-centralised corporate control and reduced investment.

But others argue that it will improve the competitive position of firms that want to maintain high standards abroad yet do not want to sacrifice the privileged access to capital markets that British domicile gives them. Large companies have a moral responsibility, if not a legal one, to level upwards, says Sir Robert Wilson, once chairman of RTZ, a mining multinational that has had its share of legal problems (and also a former chairman of The Economist Group). The courts, it seems, are leaving nothing to chance.

THAT Abdelbaset al-Megrahi lived for as long as he did was an embarrassment. The only man ever convicted of the aircraft bombing above the Scottish town of Lockerbie in 1988, which killed 270 people, was controversially released by the Scottish government in August 2009 on the ground that his prostate cancer would kill him within three months. Instead he survived at his home in Tripoli, Libya’s capital, for almost three years, dying on May 20th.

Yet the fact that he lasted longer than Muammar Qaddafi raised hopes that Megrahi, a former Libyan intelligence agent, might be free to reveal more of the truth about Lockerbie. After years of wrangling about his extradition, he was convicted at a specially convened Scottish court, sitting in the Netherlands, in 2001. But others must have been involved—either in Libya or elsewhere. One alternative theory in Britain is that the real culprit was Iran. (There is less doubt about Megrahi’s role in America, where 189 of the victims came from, and where there was widespread fury about his release.)

Megrahi kept silent, except for protesting his innocence, as he had always done; the Scottish Criminal Cases Review Commission, which investigates miscarriages of justice, found grounds for a renewed appeal, but he dropped it to help his release. Alex Salmond, Scotland’s first minister, insists that the Lockerbie investigation remains open. But given the upheavals in Libya, it seems possible that Megrahi’s secrets, if he had any, went with him to the grave.

IN 1974 a Conservative government concerned about dwindling coal stocks instituted the three-day week to conserve electricity. Industrial action by miners was responsible for the shortage then. Now politicians warn that Britain could again face blackouts if action is not taken soon to upgrade its energy sector. And if the warnings are dramatic, the government’s proposals for changing the way electricity is produced and traded are no less so.

Britain currently has an unusually deregulated, competitive energy market. But leaving the system as it is “would not be in the national interest”, noted Ed Davey, the energy secretary, when introducing a draft bill on May 22nd. Many of the country’s power plants face closure because they are inefficient, polluting or old. Energy firms have tended to sweat their assets rather than invest in new facilities. As a result, some 20% of generating capacity is due to come offline within a decade. Britain has also become increasingly reliant on imports, often from Russia, which uses commodities as a crude diplomatic tool.

These days nearly half of Britain’s electricity is generated from gas. A further 28% comes from coal, the most polluting fuel (see chart). Renewable technologies account for a mere 7% of current supplies. This sits ill with ambitious government pledges to cut planet-heating emissions and get 15% of energy from renewable sources by 2020. To achieve that, a far greater proportion of electricity must come from clean sources.

All this will be expensive: the industry regulator reckons that around £200 billion ($315 billion) needs to be spent by 2020. Investment currently amounts to £4 billion-6 billion a year. But the move to greener power in Britain must be achieved without infuriating voters already upset at high bills. Brian Potskowski of Bloomberg New Energy Finance, an energy consultancy, compares electricity-market reform to preventive surgery. Does the surgeon know what he is doing?

The bill introduces long-term contracts for low-carbon generation. These will set a minimum price for electricity generated for each technology, paid by consumers through their bills, to assure firms they will recoup high upfront costs. The contracts are intended to spark investment in clean and nuclear power—which will help the country hit its emissions targets—while also expanding the portfolio of generating sources and replacing declining capacity. The government claims it will also get consumers “off the hook” of volatile fuel prices, which it takes to mean ever rising ones. Ministers warn that bills would go up faster if the country keeps burning fossil fuels at the rate it does now.

The market certainly needs to adapt to the shifting economics of electricity generation. For traditional power sources such as coal and gas, generators’ main cost is the price of fuel—set-up and running costs are fairly slim. That equation is inverted for both renewables and nuclear, where the fuel is free (wind, sun) or comparatively cheap (nuclear) but upfront costs are hefty and often paid out years before they reap any return.

No deregulated market has attracted much low-carbon investment without some form of long-term guarantee, notes Ronan O’Regan of PwC, a consultancy, so some inducement for low-carbon generation may be needed. But the government has chosen not to use market incentives such as auctions, at least for now.

The draft bill represents a huge about-turn from the current deregulated market to a centrally-planned one. In a renewable energy “road map” in July 2011 the government specified how much energy it hoped to generate from different sources by 2020. The coalition is openly pro-nuclear. The new bill adds to the state intervention—in 2013 a minimum price for each technology will be specified. Some contract prices may even be decided on a project-by-project basis. That “makes a nonsense of competition”, says Tom Burke of E3G, an environmental consultancy.

The likely winners are some of the most expensive forms of generation. The government wants offshore wind to account for nearly a fifth of Britain’s renewable energy by 2020, for example, yet by official estimates offshore generation currently costs between double and triple that from gas. Onshore wind, a far cheaper technology, is to account for only 12%. The real cost of nuclear reactors has gone up, not down, in the decades since such facilities were first built, yet ministers hope eight new ones will be constructed—and have already listed the chosen sites.

It is doubtful that the draft bill has enough detail to break the current hiatus in energy investment. It is still unclear how prices will be determined, how often they will be reviewed and how contracts will be implemented. Uncertainty about the form of the contracts compounds existing investor fears about the durability of government price guarantees on energy—British politicians have already rowed back on subsidies for solar generation, as have other European governments.

The price of mishandling energy-market reform is high. Government predictions that fuel prices will keep rising may be mistaken and it will not be able to bat the blame for high electricity bills onto utility firms, as now. If the government gets it wrong, already sceptical consumers could turn against further efforts to mitigate climate change. The public already believes, wrongly, that it is paying dearly for green energy. And attitudes to the environment are hardening. Between 2005 and 2010 the proportion of people telling Ipsos MORI, a pollster, that they were not concerned about climate change rose from 15% to 27%.

Electricity demand will grow again as Britain emerges from recession—the nation does not need more capacity tomorrow, but it will do soon. Meanwhile the legislative process drags on and the documents detailing the policies get longer and more complicated. “I’m not sure what plan B is,” says Daniel Grosvenor of Deloitte, a consultancy. A phrase all too familiar from discussions about the economy could yet become apt in energy too.

Consumer engages in anachronistic behaviour

JAMES DAUNT, the managing director of Waterstones, once described Amazon as a “ruthless moneymaking devil”. On May 21st he announced a Faustian pact with the online retailer. Mr Daunt will not only sell Amazon’s Kindle e-reader in his stores, but will also streamline the process by which customers can buy Amazon’s e-books while they browse the shelves. The aim, he says, is to improve the Waterstones shopping experience.

Critics think he is mad, comparing the move to Sainsbury’s inviting Tesco to set up shop within its branches. Earlier noises about a partnership between Waterstones and Barnes & Noble, an American bookstore chain with a rival e-reader, could have created competition for Amazon. This deal, by contrast, seems to strengthen the internet giant. Amazon has already cornered some 90% of British e-book sales, according to Enders Analysis, which tracks the industry. Waterstones’ plan threatens to send yet more customers towards e-books and Amazon, reinforcing its stranglehold on the market.

Publishers are especially aggrieved. Class-action lawsuits in America and Europe have challenged their ability to set the price of e-books. If they lose the cases, Amazon will be able to edge out the competition, both digital and print, by offering deep discounts.

But Mr Daunt, who took charge of Waterstones last July, defends the deal by explaining that while readers like e-books, they also like bookshops, particularly those with well-curated choices, helpful staff, Wi-Fi and a café. He laments that Waterstones moved too slowly to launch its own e-reader, but insists it is now wise to accommodate the device most people prefer. Customers still buy print books, he adds. Daunt Books, the line of London shops he founded, is doing well out of charging undiscounted prices for a boutique bibliophilic experience (albeit in a few posh, book-loving corners).

The plan is expected to take effect in the autumn, after a refurbishment of Waterstones’ nearly 300 outlets is complete. The company will take a cut from Amazon purchases made within the shop’s Wi-Fi zone, but it will get nothing from off-site transactions, or from shoppers with 3G devices (which do not require Wi-Fi).

Worrying though it is, the deal may push publishers to abandon digital-rights management (DRM), notes Matteo Berlucchi, head of Anobii, a literary social-networking site. DRM software, designed to curb piracy, makes it difficult to transfer e-books between devices. Its effect is to lock consumers into one company’s digital ecosystem, making it impossible for Kindle users to buy e-books from the existing Waterstones platform, for example. The Kindle’s hegemony may push publishers to neutralise its power by removing DRM, as the music industry did a few years ago.

Though e-book sales are rising, Mr Daunt is gambling that they will level off at around a third or even half of the market. He can take heart from the music industry, says Benedict Evans at Enders Analysis. Though music is “the perfect digital medium”, there is still a decent, albeit declining, market for CDs—more than 86m albums were sold in Britain in 2011. “Books will be even more resilient,” he says. Publishers and sellers hope so.