Philippa Kaur

THE TERM “dirty work” was coined by Everett Hughes, an American sociologist, to capture the attitudes of ordinary Germans to the atrocities of the Nazi regime. Hughes used it to convey the idea of something immoral but conveniently distant, activities that were tacitly endorsed by the public but that could also be disavowed by them. The term has since come to embrace a wide array of jobs, in particular those that are essential but stigmatised, both crucial to society and kept at arm’s length from it.In an insightful new book of the same name, Eyal Press, a journalist, reports unflinchingly on occupations in America that carry the taint of stigma. Among others, he interviews prison guards in Florida and slaughterhouse workers in Texas. The pandemic has changed people’s awareness of some essential work: meat-processing plants were designated as critical infrastructure by the Trump administration in 2020, for example. But these jobs remain largely hidden from view; many are in physically isolated locations. People do not know what these workplaces are like and do not care to.Dirty jobs often pay better than other openings. But they impose unseen costs. They usually involve inflicting harm on others (or on the environment), and they ask emotionally and morally compromising questions of the people who perform them. What is it like to work day in and day out as a “knocker” or a “live hanger” on a slaughterhouse kill floor? Should a prison guard risk her livelihood to speak up about the violence routinely meted out to inmates by her colleagues? Mr Press does not exculpate individuals who behave badly in these jobs. But by forcing readers to confront the context in which they operate, he makes it harder to condemn them as bad apples.The boundaries of dirty work can be drawn too loosely. Some sociologists include firefighting, on the ground that it exposes people to danger on behalf of others, yet it is difficult to think of jobs that are less morally compromised. Indeed, exposure to danger can be the thing that cleanses work. Mr Press also meets operators of military drones at an air-force base in Nevada. Although drone warfare is a more precise form of combat than many others, operators often struggle with the idea of taking life without taking risk. The personal danger that soldiers on the ground face is what separates an unfair video-game from an exercise in valour.The definition of dirty work can also be too rigid. Although the dirtiest work often lies at a remove and is concentrated among the low-paid, white-collar organisations have their own types of grubby jobs. Think of the difference between engineers who build social-media platforms in the name of connectedness and the content moderators who monitor the effluvia that result. The very language of decarbonisation points to emerging fractures within energy-firm workforces, between employees developing the clean energies of the future and those pumping the dirty fossil fuels of the past.Individual roles can also break into dirtier and cleaner tasks. A piece of research in 2012 found that animal-shelter workers who were involved in putting animals to sleep were less likely to talk to outsiders about their work. “All The News That’s Fit To Click”, a new book by Caitlin Petre, a professor of journalism at Rutgers University, examines the effect that performance metrics are having on newsrooms. As she interviewed people for the book, Ms Petre noticed the frequency with which journalists used metaphors of pollution and contamination to describe the risk that chasing eyeballs might compromise the integrity of their editorial judgments.Journalists tend to be good at telling stories, however. Ms Petre describes how many of them have drawn symbolic mental boundaries as a way of mitigating this risk. Analysing audience data to work out how to present their work is a “clean” use of metrics; using data to make decisions on content is impure and to be avoided. Criminal lawyers use a different but deep-rooted narrative to make sense of their own unpleasant tasks. They often defend people who have committed appalling crimes, for example, but because they do so in service of a noble ideal—everyone’s right to a fair trial—they are far less likely to feel morally compromised.The idea of dirty work should not obscure the fact that having a job is a source of dignity. But some roles exact a hidden toll. To draw the sting of stigma, employers have to persuade their workers and the public that such jobs are not just essential, but also worthy of respect.For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.This article appeared in the Business section of the print edition under the headline “Dirty work” More

ONE OF THE joys of reading the business pages is that they tend to deal with the cut and thrust of competition, rather than the cacophony of war. But when it comes to President Vladimir Putin’s assault on the sovereignty of Ukraine, there is a company—the world’s largest gas producer—that is right in the thick of it. Gazprom, majority-owned by the Russian state, has mastered the art of furthering the Kremlin’s interests as well as its own commercial ones. That extends to squeezing European gas supplies until the pips squeak. On February 22nd it received a dose of its own medicine when Germany said it would mothball the Nord Stream 2 (NS2) pipeline owned by Gazprom in retaliation for Russia’s warmongering in Ukraine. That is a blow. It will not stop the company from making mischief—and money—though.To understand Gazprom, it helps to remember it is a child of the cold war, born from the Soviet Union’s Ministry of the Gas Industry in 1989. Its boss, Alexey Miller, has run it since 2001, the year after Mr Putin took power. The two men are cut from the same cloth. When America imposed sanctions on Mr Miller in 2018, he remarked: “Finally I’ve been included. It means we are doing everything right.” Investors in the West, who buy Gazprom stock for a spectacular dividend yield, lament that it splurges on projects that benefit the state, not shareholders; a plan to build the world’s second-tallest skyscraper in St Petersburg is a case in point. As for mixing politics with commerce, its business model relies on a monopoly on the high-margin export of piped natural gas in order to cross-subsidise cheap gas to Russians. In a land of frozen winters, that is a precious quid pro quo for Mr Putin.The run-up to the latest Ukraine crisis offers a textbook lesson in how Gazprom serves the government’s interests while feathering its own nest. For years its efforts to circumvent Ukraine, an important transit route for its gas, have led it to construct alternative pipelines into northern and southern Europe that will strengthen its bargaining power when its contract with Ukraine ends in 2024. These efforts have also set European countries that stand to win and lose from the new configurations against each other. Gazprom’s decision to dribble only a bit of surplus gas to Europe as demand there has soared in recent months has a commercial logic—the resulting spike in spot prices has translated into record profits. However, it also sends a message: Europe should not take Gazprom for granted. “It suits their purposes to keep Europeans on their toes,” says Jack Sharples of the Oxford Institute for Energy Studies, a think-tank.Since the cold war, western European countries have tended to shrug off this nasty side of Gazprom. Instead they have become overdependent on its gas. Germany, which gets about half of the fuel from Russia, is in a particularly invidious position. Some Gazprom hangers-on, like Gerhard Schröder, an ex-chancellor who chairs Nord Stream deserve special ignominy. Former Eastern bloc countries, such as Poland, have no such illusions. They know that as well as extending the hand of friendship, Gazprom can wield the knuckle duster. They are also the most exposed, observes Anna Mikulska, an expert on Russian energy at Rice University’s Baker Institute. The most extreme case is Ukraine, where Gazprom has provided cheap gas and other benefits, then suspended them on and off as punishment for the country’s westward drift. Recently Moldova has suffered similar treatment.Though a belated recognition of this geopolitical thuggery, Germany’s decision to halt the approval process for NS2, a €9.5bn ($10.7bn) underwater pipeline running from Russia to Germany, came as a surprise. It is a setback for Gazprom. The pipeline was already halted for legal reasons; Gazprom needs it up and running by 2024 to exert maximum leverage over Ukraine when its contract comes up for renewal. Yet on the day of the announcement Gazprom’s share price rose. As Alex Comer of JPMorgan Chase, a bank, says, for the next few years it may make more money without NS2 than with it, because a lack of surplus gas in Europe will keep prices elevated.The betting is that given how dependent on Gazprom Europe remains, the firm will not suffer that much even if full-on fighting breaks out in Ukraine. Russia’s potential eviction from the SWIFT interbank payments system—which some Western politicians are calling for—would probably not entirely sever Gazprom’s links with its European customers, who still need a way to pay for its energy. An idea suggested by Ms Mikulska, among others, to sideline Gazprom with a “Gaslift” of liquefied natural gas (LNG), a maritime version of the airlift that overcame Russia’s blockade of Berlin in 1948-49, looks like a long shot. The destruction of pipelines on Ukrainian territory would damage the company’s exports but a subsequent rise in prices might well mitigate the problem, especially in a tight market. And though Mr Putin could turn off the taps as part of his war effort, for the time being he may prefer European cash pouring into his coffers.Put that in your pipelineWhatever happens, Gazprom’s fealty to the Kremlin is unlikely to be shaken. Being a loyal servant has won it the support it needs from the regime as other presidential pets, such as Rosneft, an oil giant, try to wrestle away its monopoly on piped-gas exports.The Kremlin-first strategy nevertheless carries risks. The more Gazprom’s customers realise it has Mr Putin’s interests at heart, not theirs, the warier they will be of doing business with it. European countries are already talking up investments in terminals to import LNG and in renewables. As their gas markets mature and shift to alternatives, rising demand will come from China, which already guzzles Gazprom gas and is less bothered by Mr Putin’s belligerence. But even the Communist Party in Beijing has good reason to care about Gazprom’s trustworthiness if it squeezes Europe too hard. The python may yet end up tying itself in knots. For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

A STRIKINGLY HARSH appraisal of China’s ongoing technological battle with America appeared on the website of a prestigious Beijing-based think-tank on January 30th. The paper, published by the Institute of International and Strategic Studies (IISS) at Peking University, found that China is likely to be the bigger loser from the technological and economic decoupling under way between the two world powers. China lacks control over core computing systems, the paper stated, and is far behind America in a number of important areas such as semiconductors, operating systems and aerospace. Within a week of its posting, the document vanished.The circumstances around its removal are unclear. Communist Party bosses may have decided it signals weakness at a time when Xi Jinping wants to project strength—his country’s, the Communist Party’s and, as he prepares to be anointed president for life later this year, his own. The report’s conclusions are indeed inconvenient for Mr Xi. He has been talking up “self-strengthening” against what his government calls “chokeholds” that the West exerts over access to critical technologies, from seeds to semiconductors. The power of the West to hobble its adversaries with sanctions may be about to be tested in Russia if it invades Ukraine—a military and economic confrontation that China’s rulers will be watching closely because it may illuminate their own vulnerabilities. China’s 14th five-year plan, a strategic blueprint published in 2021 that covers the years until 2025, makes self-reliance in science and technology a cornerstone of economic policy. The plan’s deadlines for China to break free from existing techno-dependence are fast approaching. The government is pouring billions into the effort, and cajoling Chinese companies to do the same. Combined public and private research-and-development spending soared to a record 2.8trn yuan ($440bn) in 2021 in a bid to catch up with foreign rivals. That is equivalent to 2.5% of GDP, still far from America’s 3% or so but up a fifth in the past five years (see chart 1). On February 11th SMIC, China’s biggest chipmaker, said that it would invest some $5bn in 2022 in new semiconductor factories. Three days later the Hong Kong unit of Standard Chartered, a British bank, became the first foreign lender outside mainland China to be directly linked CIPS, the Chinese answer to the Belgium-based SWIFT interbank payments system.To see how much all this adds up to, The Economist has surveyed six areas in which China’s reliance on the West has been of particular concern to the party and Mr Xi. We looked at mRNA vaccines, agrochemicals, civilian aerospace, semiconductors, computer operating systems and payments networks. Our conclusions mirror those of the IISS paper: although there has been some self-strengthening, self-reliance is some way off.Chinese progress has been most pronounced in fields that, though themselves technologically sophisticated, require less extended and complex supply chains. Start with the vaccines. Much of China’s progress in mRNA technology used in Western jabs such as Pfizer-BioNTech or Moderna has been linked to one man, Ying Bo. For several years Mr Ying worked on mRNA at Moderna, before returning to China from Boston at the start of the pandemic. His homecoming was hailed by state media as a patriot answering the call of the motherland. His company, Abogen Biosciences, has worked with the People’s Liberation Army to develop the country’s most advanced mRNA shot, and was part of a programme that has invested at least $2.3bn in developing local vaccines.Shots miredResults from phase-one clinical trials of Abogen’s jab, known as ARCoVax, were recently released, according to state media. In some ways, that looks impressive, coming just a year and a half after the Western versions. However, the company has not made any statements about wide-scale deployment. Annual production capacity of 200m doses looks modest next to the 4bn doses expected this year for the Pfizer-BioNTech vaccine. BioNTech offered to provide its shot to China in a partnership with Fosun, a local conglomerate, a year ago. By championing ARCoVax while denying approval to Western mRNA jabs (though not Western covid pills, one of which was approved this month), Mr Xi appears to have placed a higher value on self-reliance than on public well-being, says Huang Yanzhong of the Council on Foreign Relations (CFR), a think-tank. Similar considerations appear to have slowed progress in agrochemical technology. Foreign genetic modification and seed-editing methods have been banned from domestic use out of a long-held fear that this would hand foreign companies control of China’s grain supply. Chinese companies have been developing home-grown alternatives; Dabeinong Biotechnology, a big feed producer, is investing heavily in research. They have also been procuring them through acquisitions. The most notable of these was the $44bn purchase in 2016 by ChemChina, a state-controlled chemicals conglomerate, of Syngenta, a Swiss seed-and-agrochemicals giant with a granary’s worth of intellectual property. But a continued lack of domestic production capacity means that China is still dependent on the import of crops. In 2021 China spent at least 400bn yuan ($62bn) on imports of soy, corn and cotton—much of it genetically modified (see chart 2).Imported aeroplanes and parts cost China considerably less—$19bn last year. But here, too, the party wants the industry to fly free of foreign dependencies. If state media are to be believed, it already is. This year COMAC, a state-owned aerospace group, plans to start delivering its narrow-body c919, a rival to the Boeing 737 and Airbus A320 in development since 2008. Chinese airlines have ordered hundreds of them. On closer inspection, though, the c919 does not look all that Chinese. The programme has eaten up $72bn or more, according to the Centre for Strategic and International Studies, another think-tank, but the aircraft is a jumble of foreign parts. Because the turbofan engines being developed for it have been mired in technical troubles, for example, the aeroplanes will for now be fitted with engines from a joint-venture between France’s Safran and America’s GE Aviation. With hundreds of other components also produced abroad, the final product is a facsimile of a Western plane—and not exactly state-of-the-art. One Western airline-industry bigwig points out that the c919 is a generation behind Airbus’s fuel-efficient A320neo, and thus much less competitive in the global market.China faces the same problem in trying to extricate itself from the global semiconductor supply chain, which like that for aircraft is complex and dominated by America and its allies. China’s vulnerability to tech sanctions became clear in 2018, when Donald Trump’s administration halted the sales of sensitive hardware that used American technology to two Chinese telecoms-equipment makers, ZTE and Huawei. To avert anything like this happening again, the latest five-year plan stipulates that China should produce 70% of the chips it consumes by 2025, up from less than 20% last year. As in the other areas, the country is making some progress towards that goal. The state has poured hundreds of billions of yuan into the sector. SMIC said on February 11th that it would invest around $5bn in 2022 and complete the construction of three new factories. The money has also helped Chinese chipmakers to go on a recruiting binge. A Shanghai-based lab ran by Micron, an American chipmaker, has become a poaching ground for local firms. On January 26th Micron said it would close the lab altogether. The result has been to enable some big Chinese chipmakers to run production lines cleansed of American technology, notes Adam Segal of the CFR. But as with airliners, the Chinese chips lag well behind the cutting edge. SMIC and others are trying to fully domesticate the supply chain for chips with structures measured in tens of nanometres (billionths of a metre), an order of magnitude bigger than most advanced current chips. That puts them a generation behind TSMC of Taiwan and Samsung of South Korea, the two industry leaders. China is probably years away from replicating the lithography machines built by ASML, a Dutch firm which has cornered the market for equipment to etch the tiniest integrated circuits onto silicon wafers. Shanghai Micro Electronics Equipment Group, the state company tasked with catching up with ASML, is running behind on delivering the devices, according to Tilly Zhang of GaveKal Dragonomics, a research firm. Some large investments in semiconductor capacity have gone to firms that folded or turned out to be frauds. In the last two critical technologies China’s problem has less to do with mastering a technology or recreating supply chains and more with overcoming users’ lack of trust in its alternatives. The operating systems that power personal computers and smartphones are a prime example. When the Trump administration banned American firms from working with Huawei in 2019, a generation of the Chinese firm’s phones were deprived not just of chips but also of Google’s Android operating system. Together, these restrictions contributed to the decline of about 30% in Huawei’s revenues last year.Chinese companies are estimated to have invested around $4bn between 2019 and September of 2021 in the development of operating systems. Some analysts expect Huawei’s Android alternative, called HarmonyOS and partially based on Google’s open-source system, to gain market share. But virtually all Chinese smartphones continue to run on Android and Apple’s iOS, and nearly all Chinese desktops are powered by Apple’s macOS or Microsoft Windows. Alternative Chinese operating systems struggle to attract developers because they are not widely used—and they are not widely used because they do not have many apps or programs to download.Paying its wayA similar chicken-and-egg problem afflicts China’s effort to create a worldwide payments network. The bulk of global money transfers are processed through SWIFT, the Belgium-based interbank messaging system, and CHIPS, America’s domestic clearing system. These, plus the widespread use of the dollar in international finance and trade, give America power over the global financial system. To insulate itself against the threat of eviction from this system, which America has contemplated over Mr Xi’s crackdown on freedom in Hong Kong and its human-rights abuses in Xinjiang, China has since 2015 been expanding a parallel system for yuan payments known as CIPS. In September the service was processing 317bn yuan in transactions each day in more than 100 jurisdictions. The costs of CIPS’s expansion are unknown but probably large. Yet gauged against the size of the Chinese economy, the system’s footprint is puny. CIPS’s 80 or so connected institutions are dwarfed by SWIFT’s 11,000-plus. Much of the growth in the yuan’s cross-border use—to 2.7% in December from 1.9% two years earlier—was the result not of foreign demand for the Chinese currency but of Chinese state firms’ overseas expansion. A recent report from the Carnegie Endowment for International Peace, one more think-tank, notes that distrust of China has increased since the start of the pandemic. This does not bode well for the yuan in the short term.Such stumbles may only strengthen the Communist Party’s resolve to wean itself off the West in areas it sees as of strategic importance. Like all autarky, the technological sort will come at a cost: in billions spent, often wastefully, as well as in apps undeveloped, fields unplanted, arms unjabbed. In Mr Xi’s eyes, that appears to be a price worth paying. More

THE SHEER amount of guff written about leadership, management and careers is staggering. Publishers spew out new business titles, some good, most not. Re search papers proliferate, exploring everything from the impact of covid-19 on leadership in dental practices in England to the prevalence of psychopathy among sustainability managers. Blogs, newsletters, podcasts, social-media posts and columns (oh my God, the columns) add to the torrent of advice. It is hard for any would-be business guru to stand out in this ocean of effluent. That leaves a striking gap in the market—for a book on how to write a bestseller about leadership.A publication of this sort could start by noting that the most useful writing about business leadership focuses on people who run actual companies and take actual decisions. But usefulness is a terribly old-fashioned path to success. This how-to guide would quickly move on, and point to three other approaches that can help budding authors grab the attention of readers.The first is striking the right note of unreality. Two things are likely to be true of people searching for leadership advice: they have not made it, and they would like a shortcut to success. These readers do not want to hear that the route to the top is a Darwinian struggle that takes place over many years and that demands highly unusual attributes. They are after something that can be bought on Amazon and delivered the next day. They definitely do not want to be told that, by definition, only a few can succeed. If you are working on a book called “Loser: Why You Are Doomed to Disappointment”, stop. (Actually, don’t.)The job of the wannabe guru is to make their readers think that unimaginable success is within their reach. If only they believed in themselves a bit more or picked up a few new habits—waking up stupidly early, say, or keeping a journal—wealth will surely follow.This, incidentally, is why management mavens should embrace numbered lists (the fact that this is a numbered list is purely coincidental). Research done in 2011 found that drawing up plans to achieve goals can reduce the cognitive stress caused by unfinished tasks. By the same token the illusion that a finite number of steps will unlock success is itself deeply comforting.The second bit of advice for a would-be leadership writer is to find uncontested ground. In the battle for attention, it can help to focus on something wholly unconnected to business and to argue that the subject has something to teach managers. That approach gives the aspiring guru a chance to write about a topic or person that will attract a wider readership. It also builds their reputation as someone who can connect dots even (perhaps especially) when there are no dots to join.Some of these sources of leadership lessons are familiar: sports coaches and military commanders, Shackleton and Shakespeare, Trappist monks and Stoic philosophers. But authors limit themselves unnecessarily by narrowing the horizon to humans. An entire subgenre of internet posts offers leadership lessons from animals, for example. Keen to know how a giraffe would perform as CEO? So useless at managing projects that you are driven to wonder whether an elephant would do better? From inclusivity and lice to change management and dodos, only one thing mentioned in this paragraph is not made up.Indeed, why draw the line at sentient beings? “Skin: Leadership Lessons from the World’s Largest Organ” is a book idea crying out for an author. Skin constantly renews itself, as a thriving company should. It has a purpose. It is flexible. Sure, it has zero self-awareness, but look around: that is not an obvious bar to corporate success.The third piece of advice is to pick the right title. Conveying a sense of urgency is vital: one-syllable words are the norm for a reason. A dollop of physicality—suggestiveness, even—can be helpful, perhaps because potential readers are so likely to be sagging behind a desk. And for all the emphasis on co-operation and purpose, it doesn’t hurt to embrace zero-sum words about winning, victory and coming first. A title like “Love Bomb: Be Kind and Crush Your Rivals” makes for a nice blend of emotional intelligence and pent-up violence.With the synopsis settled, all that remains is to unveil a name for this how-to-write-a-leadership-book book. “Bollocks: Three Ways to Write and Get Rich” will be in stores this autumn and is available for pre-order now.For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.This article appeared in the Business section of the print edition under the headline “Writing about leadership” More

AMERICAN CONSUMERS are feeling flush. On February 15th the Commerce Department reported that the country’s shoppers spent 3.8% more in January than they had in December, unfazed by spiking inflation and covid-related uncertainty. That was the fastest monthly rise in nearly a year. Some of this splurge is going on new rags. Elsewhere, too, garment-sellers are booming. In Britain fashion was the only segment to see online sales grow last month, year on year, according to Capgemini, a consultancy. As catwalks and cocktail parties decamp from New York, which has just hosted its Fashion Week, to London, where another one is kicking off, the mood in the clothes business is as bright as the pastel-coloured dresses that are all the rage this season.High-end labels like Christian Dior (owned by LVMH, a luxury colossus) or Gucci (part of Kering, a fellow French group) are relatively immune to economic turmoil. People who can afford their frocks may take a knock in a recession but seldom end up shirtless. The same cannot be said of less luxurious fashion houses. But they, too, have had a good run of late.Ralph Lauren, a relatively upmarket American brand, opened 40 new shops in the third quarter last year alone, including a flagship store in Milan, as well as shops in Atlanta, Chicago, Detroit and Miami, often on those cities’ swankiest shopping streets. Its boss, Patrice Louvet, thinks consumers will keep replenishing their wardrobes and says his firm “is back on the offence”. In the mass market, sales at Hennes & Mauritz (H&M), a fast-fashion giant, are back to pre-pandemic levels and profitability is better than it has been in years. Helena Helmersson, who took over as its chief executive in January 2020, just before covid-19 hit Europe, has proclaimed that she wants to double the Swedish group’s sales by 2030 and reach an operating margin of above 10% within three years, up from less than 2% in 2020 and 7.7% in 2021.Ms Helmersson and Mr Louvet reflect an optimism in the industry as it emerges from the disruptions caused by the pandemic. But they should go easy on the champagne during upcoming Fashion Weeks. Clothes companies, in particular those catering more to the masses, face an assortment of challenges. Some of these, such as digitisation and sustainability, predate covid-19. The pandemic has only heaped on more, from supply-chain bottlenecks and sky-high shipping costs to worker shortages. On top of that, the caprices of the world’s most populous autocracy mean that one false step can cost firms a fortune. H&M sales in China slumped last year after the company expressed concerns about allegations of forced labour in the Xinjiang region.Fashion retailers’ success last year was driven by unusual circumstances that will not last. Pent-up demand triggered a wave of “revenge buying” when shops reopened at last, in particular for “occasion wear” (jargon for pricey stuff). Shoppers’ pockets were lined with infusions of government cash. And the pandemic was the final nail in the coffin for some weaker firms, reducing competition in the crowded market; Topshop, Laura Ashley and TM Lewin went under in Britain, and Ann Taylor, Brooks Brothers and J. Crew did in America.Now that consumers are no longer receiving cheques from the government, and have anyway already spruced up their wardrobes, they may become more parsimonious. Unlike luxury brands’ well-heeled customers, who might hardly notice that a handbag that cost $5,000 in 2019 now goes for $8,000 (as became true in November of Chanel’s Classic Flap), those of mass-market brands may balk at higher price tags. Necessary investments in digitisation and sustainability—Ms Helmersson has launched a vegan collection and invested in Sellpy, a digital platform to trade second-hand clothes—will eat into the fast-fashion houses’ profitability.Younger modelsAs for competition, some passé brands may be gone but a few fresh faces look much more threatening to the mass-market giants’ market share. Companies like Shein, a Chinese super-discounter, Britain’s Asos or Germany’s Zalando have greater digital nous than mostly offline H&M and Inditex, its Spanish arch-rival and owner of brands including Zara. They are also finding ways to appeal to young fashionistas. All this may be why analysts forecast a more modest increase in H&M sales than Ms Helmersson does, of around 50% by 2030, and less cushy margins. Its share price, like that of Inditex, is below where it was before the pandemic.In its annual report on the state of the clothing business, McKinsey, a consultancy, predicts that discount and luxury fashion will continue to wow investors this year. The middle-market retailers may enjoy another season or two of revenge buying. After that, their prospects are looking more threadbare. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.This article appeared in the Business section of the print edition under the headline “The middle-market corset” More

BYJU’S WAS piling on users even before covid-19 closed classrooms around the world. India’s most valuable private startup was co-founded in 2011 by Byju Raveendran, a celebrity maths tutor whose classes have drawn crowds big enough to fill stadiums. By 2019 tens of millions of Indian children had signed up to use the firm’s flagship product, an app that serves up online lessons intended to supplement regular schooling. That year Byju’s began sponsoring India’s national cricket team.Since then India’s schools have spent more time shut than open—and the fortunes of Byju’s have only improved. The number of children whose parents pay for them to have full use of its app has more than doubled, to 7m. Late last year investors valued the firm at over $20bn, a three-fold increase since pre-covid days. In January Bloomberg reported that Byju’s may soon unveil plans to go public in New York, by merging with a blank-cheque company. The news agency had previously rumoured that such a deal could raise around $4bn, valuing the firm at a cool $48bn.Byju’s is the biggest of a clutch of young companies benefiting from breakneck growth in online learning. Venture capitalists (VCs) plonked around $21bn into education technology companies in 2021, according to Holon IQ, a research firm (see chart). That was three times the amount raised in 2019 and 40 times more than a decade ago. Seventeen ed-tech startups became “unicorns” (private companies valued at more than $1bn), three times as many as had passed that milestone during any previous year. Half a dozen of them went public. They included Coursera, a marketplace for online courses with a stock market value of nearly $3bn, and Duolingo, an app for language learners which is worth around $4bn. Holon IQ has predicted that global ed-tech revenues could almost double from $227bn that year to around $400bn in 2025, a fifth higher than its pre-pandemic forecast.Until recently ed-tech firms had rarely made investors sit up. Schools and universities control much of the $6trn spent globally on education each year. They tend to be cash-strapped and conservative. In 2019 only about 3% of all education spending went on software or online teaching. Tory Patterson of Owl Ventures, who began investing in ed-tech firms in 2009, admits that speaking up for the sector has sometimes won him “blank stares”.No more. The closure of school buildings and college campuses forced educators to try out new kit (especially in India and America, where disruptions to learning have been particularly drawn out). Governments have given children stacks of tablet computers and sped up efforts to improve broadband in schools. They have also given teachers extra cash to spend on tools they think will help pupils “catch up”. Lawmakers in America have earmarked an extra $200bn or so for schools since the pandemic started. That sum is equal to about one-quarter of what is spent on these institutions in a typical year.For years many of the zippiest ed-tech firms have chosen not to sell to schools and universities but to go direct to learners. This category of companies has also benefited during the pandemic. Parents in Asia have long been keen to pay for tutoring and other services (such as Byju’s app) that might give their offspring an edge. Now families in Europe and America are also getting keen. Supervising remote learning has made parents everywhere more engaged in their children’s education, more aware of how they are performing in comparison to classmates and in some cases more critical of what they are being taught. Companies that offer after-school lessons—such as Outschool, an American unicorn, and GoStudent, an Austrian one—are growing fast as a result.Another type of outfit getting a boost from the pandemic are those that offer learning to adults. Workers furloughed during lockdowns commonly took online courses that they thought would improve their prospects. Remote working has made more roles plausible to more jobseekers, giving them more reason to reskill. At the same time, a flurry of job-switching in Britain and America has made big employers nervous. They are becoming more convinced that spending on staff training can help them hang on to workers and cut the cost of plugging holes. This is benefiting companies such as Coursera, which says selling subscriptions to corporate customers is its fastest-growing business. Up-and-coming firms include Guild, which helps blue-collar workers at giants such as Walmart and Disney gain new qualifications, and Better Up, an American company that helps professionals find coaching.Ed-tech’s pandemic report card is not without blemishes, however. In China, its single biggest market, the Communist Party declared last July that businesses could not typically make a profit from providing after-school tutoring to children in primary and middle schools. The regime has worried for years that huge demand for private education is widening inequalities and impoverishing the middle class. Even charitable tutoring could no longer take place during holidays and at weekends. Within days the share prices of New Oriental, TAL Education and Gaotu, the industry’s three listed Chinese giants, had fallen by two-thirds, wiping out $18bn in stockmarket value. Since February 2021 their collective worth has shrivelled from more than $100bn to less than $10bn. China’s most celebrated ed-tech unicorns, Yuanfudao and Zuoyebang, could be worth a fraction of their pre-crackdown valuations of $15.5bn and $10bn, respectively.The Chinese experience has rattled investors, says Thomas Singlehurst of Citigroup, a bank. It blocked a possible exit route for Western startups, some of whose VC backers may have hoped to sell them to China’s ed-tech titans. It may also inspire tighter rules in next-door India, another potentially vast market where some parents accuse ed-tech firms of misleading ads and aggressive sales tactics. Last month India’s education minister said the government was considering new regulation, though he gave no details. Since then at least 15 Indian ed-tech companies, including Byju’s, have created a group promising to scribble new codes of conduct.Western ed-tech firms are unlikely to face similar strictures. But they have their own challenges. In November Chegg, an American company that gives online help to undergraduates, warned that lower-than-usual enrolment in American universities was affecting its revenue. Its market capitalisation, which soared to around $14bn in early 2021, is back down to $4bn, lower than it was before the pandemic. Shares in ed-tech companies that listed in America last year are mostly trading below offer price. Several, including Coursera and Duolingo, have yet to turn a profit.Not straight As, then. But the industry’s boosters think it has room to improve. An influx of users and money in the pandemic has given more firms the muscle to expand abroad and to find ways of retaining users for longer, reckons Deborah Quazzo of GSV, a big educational investor. Take Byju’s. It has spent at least $2.8bn on a dozen acquisitions in an apparent attempt to string together services that will allow it to reach learners of all ages, from toddlers to career-changers. The deals are also helping it reach customers far beyond India. In 2021 it began offering online classes in coding and maths to children in America, Brazil, Britain, Indonesia and elsewhere. A big listing might teach ed-tech sceptics and Western rivals alike a lesson. ■This article appeared in the Business section of the print edition under the headline “Learnings growth” More

NOTPETYA IS A nasty name for the world’s vilest computer attack. Embedded in an innocuous piece of tax software, the virus, which the American government said had the Kremlin’s fingerprints all over it, struck Ukraine in June 2017, knocking out federal agencies, transport systems, cash machines—even the radiation monitors at Chernobyl, the husk of a nuclear-power station.It then went rogue, worming its way from the computers of multinational firms with local outposts in Ukraine to their global operations, causing collateral damage to victims ranging from Maersk, a huge shipping company, and Saint-Gobain, a French construction giant, to Mondelez International, owner of Cadbury chocolate. The total hit was put at $10bn, making it the costliest such attack ever. One of the most expensive blows fell on Merck, a New Jersey-based drugmaker with a market value close to $200bn, which lost 40,000 computers in the blink of an eye and was forced to halt manufacturing of its human-papillomavirus vaccine.Merck sought to cover its cyber-losses with a $1.4bn property-insurance claim. However, its insurers refused to pay, invoking a clause in the contract called war exclusion. This precludes coverage in the event of warlike action by governments or their agents. The matter ended up in a New Jersey court. Years later, as Russian troops and cyber-warriors are once again threatening Ukraine, a judgment in the case offers a timely reason to explore how much companies have learned since then about dealing with potentially catastrophic cyber-warfare. The short answer is: not enough.The Merck judgment, made public last month, is potentially a landmark one. It tackles a question of great importance in the context of modern-day belligerence: is cyber-warfare war? Merck’s insurers, including firms like Chubb, argued that there was ample evidence that NotPetya was an instrument of the Russian government and part of ongoing hostilities against Ukraine. In other words, it was an act of warlike behaviour covered by the war exclusion. The court, however, sidestepped the question of who was responsible for the assault. Instead, it said that insurers did nothing to change the language of their contracts to suggest that the war exclusion included cyber-attacks. It said it was reasonable for Merck to think that the exclusion applied only to “traditional” warfare, ie, tanks and troops, not worms, bugs and hackers.It is not the final verdict. A similar war-exclusion case involving Mondelez and its insurers continues in an Illinois court. But though it marked a victory for Merck, it may be a Pyrrhic one for companies at large. That is because many insurers are now seeking to strengthen the language in policies the better to shield themselves from payouts related to state-sponsored cyber-mischief. If a NotPetya-like virus were to come from Russia’s warmongering in Ukraine and burrow itself into the world’s supply chains, insurers are keen to ensure they limit their exposure to it. The consequences of that for corporate victims could be severe.The evidence suggests companies have a lot to fear. Last year a report by HP, a technology firm, said that state-sponsored attacks had doubled between 2017 and 2020, and that businesses were the most common targets. Increasingly, the state hackers’ weapon of choice is malware inserted into the software or hardware of suppliers, which is particularly hard for companies up the value chain to detect. Unlike other cyber-criminals, who attack and move on, states have strategic patience, lots of resources and are above the law within their own borders. They cover their tracks well, too, so it can be particularly hard to attribute blame for an attack.In the face of that, the insurance industry’s caution is understandable. It is already facing a surge in ransomware claims from companies during the covid-19 pandemic, which is driving up the price of cyber-insurance. The NotPetya attack revealed the risk of “silent cyber”, or unspecified cyber-risk hidden within insurance contracts. These could pose a systemic risk to the industry in the event of a large-scale, correlated attack. Partly in response to such threats, Lloyd’s Market Association, an advisory group, recently issued four model clauses for excluding war coverage from cyber-insurance policies. They enable insurance companies to customise their exclusions more easily and give companies more clarity on which risks are covered and which aren’t. But they appear to protect the insurers more than the insured.It is still an evolving market. The Merck war-exclusion judgment relied on case law rendered before cyber was even a word. The cyber-insurance industry, though growing fast, is still small and immature. Eventually, the actuarial techniques for gauging cyber-risk will improve, and the insurance industry will get better at requiring clients to introduce the cyber-equivalent of fire alarms and sprinkler systems to minimise danger. For now, though, the risk of considerable confusion persists if something close to a cyber-war were to break out.Self-isolationSo what should companies do? A well-known checklist of safety measures to implement includes things like two-factor authentication and swift software updates, which help keep hackers at bay. In light of the danger of infection along the supply chain, either from compromised hardware or software, firms should painstakingly assess their contingent exposures: factories or offices in far-flung locations, outsourced IT, cloud computing and even cyber-security itself.Corporate boards need to have a stronger grasp of the threat levels. As one former cyber-spook says, they need not just gender and racial diversity but technological diversity, too, in order to grill the company’s techies on cyber-defences. Furthermore, they need to recognise cyber-war as one of the growing number of geopolitical risks that firms face. Ensuring that any of a firm’s contact points with Ukraine and Russia are not a vulnerability for the rest of its operations is the first of many steps they should take. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.This article appeared in the Business section of the print edition under the headline “Cyber-rattling” More

VLADIMIR PUTIN, Russia’s president, has portrayed his aggression on the Ukrainian border as pushing back against Western advances. For some time he has been doing much the same online. He has long referred to the internet as a “CIA project”, and his deep belief that the enemy within and the enemy without are effectively one and the same means that if Alexei Navalny, Mr Putin’s foremost internal foe, uses YouTube—his video of the president’s seaside palace was viewed more than 120m times—then YouTube and its parent, Alphabet, are enemies, too.Faced with such “aggression” he wants a Russian internet that is secure against external threat and internal opposition. He is trying to bring that about on a variety on fronts: through companies, the courts and technology itself.In early December VK, one of Russia’s online conglomerates, was taken over by two subsidiaries of Gazprom, the state-owned gas giant. In the same month a court in Moscow fined Alphabet, Google’s parent company, a record $98m for repeated failure to to delete content the state deems illegal. And Mr Putin’s regime began using hardware it has required internet service providers (ISPs) to install to block Tor, a tool widely used in Russia to mask online activity. All three actions were part of the country’s effort to assure itself of online independence by building what some scholars of geopolitics, borrowing from Silicon Valley, have begun calling a “stack”. His efforts could serve as an inspiration, and a model, for tyrants elsewhere.In technology, the stack is the sum of all the technologies and services on which a particular application relies, from silicon to operating system to network. In politics it means much the same, at the level of the state. The national stack is a sovereign digital space made up not only of software and hardware (increasingly in the form of computing clouds) but also infrastructure for payments, establishing online identities and controlling the flow of information.Benjamin Bratton, a political philosopher at the University of California, San Diego, sees the stack as a set of new dimensions for the state, piled up one on top of the other, each of them analogous to the territory defined by its physical borders. The default stack is largely American, because that is where the internet grew up. But other places are trying to differentiate their stacks, some seeing opportunity, some staving off perceived threats. The EU, with ambitions to become the world’s super-regulator for all things digital, is putting together a what it hopes will be a more open stack, less tied into proprietary technologies and monopolistic applications. India, Japan and Taiwan are all working on their own distinct digital edifices.Most germane to an autocrat like Mr Putin is what has gone on in China. China built its internet with censorship in mind: the Great Firewall, a deep-rooted collection of sophisticated digital checkpoints allows traffic to be filtered with comparative ease; the size of the Chinese market means that indigenous companies, which are open to various forms of control, can successfully fulfil all its users’ needs; and the state has the resources for a lot of both censorship and surveillance.Mr Putin and other autocrats covet such power. But they cannot get it. It is not just that they lack China’s combination of rigid state control, economic size, technological savoir-faire and stability of regime. They also failed to start 25 years ago. So they need ways to achieve what goals they can piecemeal, by retrofitting new controls, incentives and structures to an internet that has matured unsupervised and open to its Western begetters.Russia’s efforts, which began as purely reactive attempts to lessen perceived harm, are becoming more systematic. Three stand out: the creation of domestic technology, controlling the information that flows across it and, perhaps most important, building the foundational services that underpin the entire edifice.Take the technology first—microprocessors, servers, software and the like. Although Russia has some notable firms in these areas—Baikal and Mikron in semiconductors, ABBYY and Kaspersky in software—for the most part companies and government agencies prefer Western wares. Russian companies’ share of the semiconductor market was less than 1% of the global total in 2020 according to EMIS, a data provider. In servers and business software the situation is much the same.The government has made moves to restart a chipmaking plant in Zelenograd near Moscow, the site of a failed Soviet attempt to create a Silicon Valley. But it will not operate at the cutting edge. So although an increasing number of chips are being designed in Russia, they are almost all made by Samsung and TSMC, a South Korean and a Taiwanese contract manufacturer. This could make the designs vulnerable to sanctions. An added problem is that they are often not up to snuff. Some experts have doubts about the capabilities of Russia’s home-grown Elbrus processors designed by a firm called the Moscow Centre of SPRAC Technologies.For crucial applications such as mobile-phone networks Russia remains highly reliant on Western suppliers, such as Cisco, Ericsson and Nokia. Because this is seen as leaving Russia open to attacks from abroad, the industry ministry, supported by Rostec, a state-owned arms and technology giant, is pushing for next-generation “5G” networks to be built with Russian-made equipment only. The country’s telecoms industry does not seem up to the task. And there are internecine impediments. Russia’s security elites, the siloviki, do not want to give up the wavelength bands best suited for 5G. But the only firm that could deliver cheap gear that works on alternative frequencies is Huawei, an allegedly state-linked Chinese electronics conglomerate which the siloviki distrust just as much as security establishments in the West do.It is at the hardware level that Russia’s stack is most vulnerable. Sanctions which might be raised if Russia were to invade Ukraine would probably see the country as a whole treated as Huawei now is by America. Any chipmaker around the world that uses technology developed in America to design or make chips for Huawei needs an export licence from the Commerce Department in Washington—which is usually not forthcoming. If the same rules are applied to Russian firms, anyone selling to them without a licence could risk becoming the target of sanctions themselves. That would see the flow of chips into Russia slow to a trickle.When it comes to software Russia’s government is using its procurement power to amp up demand. Government institutions, from schools to ministries, have been encouraged to dump their American software, including Microsoft’s Office package and Oracle’s databases. It is also encouraging the creation of alternatives to foreign services for consumers including TikTok, Wikipedia and YouTube.From Russia, with likesHere the push for indigenisation has a sturdier base on which to build. According to GroupM, the world’s largest media buyer, Yandex, a Russian firm which splits the country’s search market with Alphabet’s Google, and VK, a social-media giant, together earned $1.8bn from advertising last year, more than half of the overall market. VK’s VKontakte and Odnoklassniki trade places with American apps (Facebook, Instagram) and Chinese ones (Likee, TikTok) on the top-ten downloads list (see chart 1).This diverse system is obviously less vulnerable to sanctions—which are nothing like as appealing a source of leverage here as they are elsewhere in the stack. Making Alphabet and Meta stop offering YouTube and WhatsApp, respectively, in Russia would make it much harder for America to launch its own stack-to-stack warfare against the country—as would disabling Russia’s internet at the deeper level of protocols and connectivity. And it would push Russians to use domestic offerings more, which would suit Mr Putin well.As in China, Russia is seeing the rise of “super-apps”, bundles of digital services where being local makes sense. Yandex is not just a search engine. It offers ride-hailing, food delivery, music-streaming, a digital assistant, cloud computing and, one day, self-driving cars. Sber, Russia’s biggest bank, is eyeing a similar “ecosystem” of services, trying to turn the bank into a tech conglomerate. In the first half of 2021 alone it invested $1bn in the effort, on the order of what biggish European banks spend on information technology (IT).Structural changes in the IT industry are making some of this Russification easier. Take the cloud. Its data centres use cheap servers made of off-the-shelf parts and other easily procured commodity kit. Much of its software is open-source. Six of the ten biggest cloud-service providers in Russia are now Russian, according to Dmitry Gavrilov of IDC, a research firm. He says most successful ones are “moving away from proprietary technology” sold by Western firms (with the exception of chips). And as in the West, cloud computing has allowed specialised providers of online software to break through; in Russia this has included amoCRM, Miro and New Cloud Technologies.Import substitution is a slow process and success is by no means guaranteed. However, it can no longer be considered a “joke”, in the words of Andrei Soldatov, editor of Agentura.ru, an online portal, and co-author of “The Red Web”, a book about digital activism in Russia. “The government is making steady progress in dragging people into a domestic digital bubble,” he recently wrote.If technology is the first part of Russia’s stack, the “sovereign internet” is the second. It is code for how a state controls the flow of information online. In 2019 the government amended several laws to gain more control of the domestic data flow. In particular, these require ISPs to install “technical equipment for counteracting threats to stability, security and functional integrity.” This allows Roskomnadzor, Russia’s internet watchdog, to have “middle boxes” slipped into the gap between the public internet and an ISP’s customers. Using “deep packet inspection” (DPI), a technology used at some Western ISPs to clamp down on pornography, these devices are able to throttle or block traffic from specific sources (and have been used in the campaign against Tor). DPI kit sits in rooms with restricted access within the ISPs’ facilities and is controlled directly from a command centre at Roskomnadzor.This is a cheap but imperfect version of China’s Great Firewall, says Roya Ensafi of Censored Planet, a project at the University of Michigan to measure internet censorship. It has improved Roskomnadzor’s ability to block sites and interrupt the virtual private networks many use to camouflage internet usage. It also allows the regulator to block, as it did during protests in 2019, live-video streaming without taking down whole mobile-phone networks.Complementing the firewall are rules that make life tougher for firms. In the past five years Google has fielded 20,000-30,000 content-removal requests annually from the government in Russia, more than in any other country (see chart 2). From this year 13 leading firms—including Apple, TikTok and Twitter—must employ at least some content moderators inside Russia. This gives the authorities bodies to bully should firms prove recalcitrant.The ultimate goal may be to push foreign social media out of Russia, creating a web of local content controllable through courts, corruption and bully boys. But this China-level control would be technically tricky. The DPI boxes are unable to filter out all foreign traffic. It would also be unpopular: Russians are keen on YouTube and WhatsApp. And it would make life more difficult for Russian influence operations, such as those of the Internet Research Agency, to use Western sites to spread propaganda, both domestically and abroad.A view to instill“Russia is less about blocking and more about shaping the information environment,” says Justin Sherman of the Atlantic Council, a think-tank. Strategically placed constraints, both online and offline, should suffice to guide the digital flow without hard barriers. Making foreign services less reliable will shift consumers towards domestic ones. Facing throttling, fines or worse, Western firms are likely to comply with government demands, as they did when leant on to remove apps Mr Navalny’s supporters designed to show voters which opposition candidates were best placed to win elections.Russia’s homegrown stack would still be incomplete without a third tier: the services that form the operating system of a digital state and thus provide it its power. In its provision of both e-government and payment systems, Russia puts some Western countries to shame. Gosuslugi (“state services”) is one of the most visited websites and downloaded apps in Russia. It hosts a shockingly comprehensive list of offerings, from passport application to weapons registration. Even critics of the Kremlin are impressed, not least because Russia’s offline bureaucracy is hopelessly inefficient and corrupt. Sergey Sanovich of Princeton University observes that by leapfrogging into the virtual world, leaders in Moscow showed they could deliver, and got a better grasp of what agencies far from the capital are doing. Privacy concerns, which can be a barrier to online government, were not much of a worry.The desire for control also motivated Russia’s leap in payment systems. In the wake of its annexation of Crimea sanctions required MasterCard and Visa, which used to process most payments in Russia, to ban several banks close to the regime. In response, Mr Putin decreed the creation of a “National Payment Card System”, which was subsequently made mandatory for many transactions. Today it is considered one of the world’s most advanced such systems. Russian banks use it to exchange funds. The “Mir” card which piggybacks on it has a market share of more than 25%, says GlobalData, an analytics firm.Other moves are less visible. A national version of the internet’s domain name system, currently under construction, allows Russia’s network to function if cut off from the rest of the world (and give the authorities a new way to render some sites inaccessible). Some are still at early stages. A biometric identity system much like India’s Aadhar, aims to make it easier for the state to keep track of citizens and collect data about them while offering new services (Muscovites can now pay to take the city’s metro just by showing their face). A national data platform would collect all sorts of information from tax to health records—and could boost Russia’s efforts to catch up in artificial intelligence (AI).These plans must be taken with a dollop of salt. “Russia’s industrial policy seems that of a superpower, but in reality it is an economic minnow,” says Janis Kluge of the German Institute for International and Security Affairs, a think-tank. Even if it had the means, he says, it does not seem willing to spend what it takes. Mr Putin has said that national capabilities in AI will determine who becomes “the ruler of the world”. But Russia is not making those capabilities a particularly high priority.That said, as technology gets cheaper and more openly available, a country like Russia will be able to do ever more with only a modest effort. Stacks are modular; their layers can in principle be swapped out. You do not have to control all of them to get your way. In other words, Russia does not need the latest and smallest semiconductors, say, to build a serviceable edifice on top of what it has; and if it is hard to reach what is available elsewhere, serviceable may be good enough. The country’s bureaucrats have shown that they are able to learn quickly and improvise around technologies they lack.The Kremlin’s progress is being observed by others, including Iran (which requires censorship by software at ISPs), Kazakhstan (which may delegate some of its digital transformation to Sber) and Turkey (which demands the physical presence of foreign firms’ content moderators). They may back Russia diplomatically as it promotes its digital ambitions. Together with China, Russia has stalled UN talks aimed at defining responsible state behaviour in cyberspace, instead insisting on “information sovereignty”—code for doing whatever it pleases. Now it wants a Russian, Rashid Ismailov, to take over as secretary-general of the International Telecommunication Union (ITU), which governs swathes of the telecoms world. Mr Ismailov’s resumé includes stints as a deputy telecoms minister and Huawei executive.Russia wants the ITU to replace the Internet Corporation for Assigned Names and Numbers as the overseer of the internet’s address system. America and its allies will block this. But the idea appeals to countries desiring stack sovereignty, which may be enough to win Mr Ismailov the votes he needs to beat Doreen Bogdan-Martin, an ITU official from America, in October, when the new secretary-general will be chosen.Try another dayIf push comes to shove in Ukraine, the strength of Russia’s stack against sanctions, and perhaps other forms of attack, will be tested. The costs could be high: capabilities would be lost and networks degraded. Russia may become more dependent on Chinese hardware and software, something its own elites fear (though this would hardly be a win for the West).Whatever the upshot of such “stack-to-stack warfare”, as Mr Bratton calls it, the Kremlin’s efforts have shown would-be imitators that there is plenty of mileage in trying to take control of what layers of the internet you can, and of aligning yourselves with fellow travellers. New ways of instantiating the state offer new forms of influence, diplomacy and common cause—as well as of war. For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More