Apple’s not-so-beautiful problem


Hugo Rifkind

So, what is Apple going to do next? Financial results released by the company last night showed revenues down to $54.5 billion in the final quarter of 2012. It’s a funny sort of “down”, this, because revenues in the same quarter of 2011 were, I think, a mere $28.3 billion, which eagle-eyed business analysts among you might notice makes them what, technically, we might usually call “up”. But they’re down compared with how much further up they were expected to be, and as a result the share price has plunged.

You know why. Apple’s problem is that the iPad today is little different from the one that launched three years ago (albeit sometimes smaller) and the iPhone today is much the same as the one they brought out a whole 6 years ago (albeit a bit bigger). Both of these products changed the world (in a limited-horizons sense of the word “world”, admittedly) and the world has since caught up. Yes, all sorts of otherwise sane folk get wildly furious if you suggest an Android or Windows device can now do stuff an Apple one can’t (they can, they can, they can) but pretty much everybody agrees they can at least do the same.

Does this mean that Apple needs a new innovation, so as not to fade away? Probably. You think of Nokia, you think of Blackberry, and you realise that strokey, sexy technology doesn’t often stand still. Though maybe not. Or, at least, not much of an innovation. Think of the Biro. Invented in the 1880s, and revolutionising the exciting world of, um, pens, it’s much the same today. Basically, we’re done with pens. This is what pens look like. Finished.

One day, we’ll be there with handheld screen things - whatever the group term is for phones and tablets. Probably we aren’t there yet. Tech types suggest that the near future consists of tactile feedback - flat screens that pulse at your fingers and don’t feel flat; maybe best understood as a few steps farther along the path from the way your phone goes buzz when you unlock it. Apple will be working on this already, because everybody is.

After that, though, what next? These things can get thinner, shinier and HDer, but there comes a point where we’ll surely get bored. And after that we’ll still need to buy the things, and the people who make them will still make lots of money if we buy theirs; but it won’t be sexy and investors won’t be so inclined to go nuts. Sheer perfect functionality is a humdrum sort of thing. Nobody blogs about forks, do they?

Ditch the compassion, Republicans

Oliver Kamm

With the inauguration of President Obama for a second term, Republicans seek an idea that can win back voters. Conservatism in other advanced industrial economies is in a similar quandary. One answer is provided by Gertrude Himmelfarb, the historian, in The Weekly Standard. She argues that conservatives need “to recapture compassion from the liberals, de-sentimentalizing while reaffirming it”.

I don’t think this argument will work to the electoral advantage of conservatives on either side of the Atlantic. Nor is it one that I find appealing.

Conservative modernisers such as David Frum in North America and Daniel Finkelstein in this country argue that a successful centre-right party needs to acclimatise itself to a diverse nation. This is true. And the obligation to deal with society as it is rather than wishing that it conformed to some Arcadian alternative requires acknowledging that people have diverse aims in life. Compassion doesn’t get them there. It’s a recipe for authoritarianism.

In personal relations, compassion is a virtue. In politics, it’s an affectation. Citizens of a complex society, in a market economy, will exercise innumerable choices. Some people will suffer and a fair society will protect the vulnerable. It should also provide citizens with the ability to make autonomous choices. That requires a degree of redistribution to reduce inequalities.

But that’s a principle of equity, not compassion. If the State sets out to be compassionate, there is no inherent limit to its powers. If devout religious believers are offended by the publication of satires on what they hold sacred, I may feel for their hurt on a personal level while insisting that no government has the right to suppress speech in order to make them feel better.

Himmelfarb’s views have had some currency in British politics, notably with her book The Roads to Modernity (which, in its UK edition, carries a foreword by Gordon Brown). She sharply distinguishes the Anglo-Scots and American Enlightenment, which she characterises as being concerned with liberty and small government, and  the French Enlightenment.

This is a misreading of history. The French philosophes admired English liberty. The reforms enacted by the French Constituent Assembly from 1789 to 1791 were an historic advance for secularism and the abolition of the hereditary principle. That’s why they gained support from Thomas Jefferson, among many others. There is no sharp break between Enlightenment traditions; conservatives need at last to accept the values of the Enlightenment. 

Goldmines dig up trouble for for Mongolia

Giles Whittell

Chilly? Spare a thought for the people of Mongolia. This is their minus 30 time of year.

Since the age of the great Khans, the nomads of the Gobi Desert have coped heroically with the most extreme weather on earth. This year is no exception, but there are complications. Their frozen landscape is host to an over-heated economy, an undernourished democracy and a general sense that Central Asia’s quiet success story may be grinding to a halt.

The focus of what ails Mongolia is also the main source of its wealth. About 400 miles south of Ulan Bator a Canadian firm part-owned by Rio Tinto – which yesterday fired its CEO over unrelated losses in Mozambique – is about to start extracting ore from a hole in the ground so huge and rich that it could account for nearly a third of Mongolia’s GDP over the next half-century.

The Oyu Tolgoi mine’s prodigious gold and copper deposits have been valued at close to $300 billion in today’s money. Already about $6 billion has been ploughed into it, making it the main driver of Mongolia’s breakneck economic expansion even before it yields its first ounce of gold.

So, who gets the money? The state has a 34 per cent stake, but Rio Tinto and its subsidiaries have the other 66 per cent and most of the profits for the next 30 years. This may sound like a good deal for Big Mining, and it is. But when the Government produced a draft law last month giving Mongolians an automatic 34 per cent stake in all future mining ventures, business cried foul. Foreign investors and their local partners wrote to the President warning that the new law would “shut down the entire minerals industry of Mongolia”.

Translation: put foreign capital in a straitjacket and you put yourself in the same category as Mongolia’s less savoury neighbours. Mining will continue in your country, but with less of our investment and know-how and less of the transparency required of us by the Western jurisdictions where we are domiciled.

The protesters have a point. Mongolia’s growth rate is already falling sharply and its foreign business community is increasingly spooked by apparently arbitrary official harassment on the Putin-era Russian model. The larger problem is the Government’s direction of travel towards populism and resource nationalism – at a time when people such as Vladimir Putin and Hugo Chavez have given them a bad name, and in a country that has done so well from doing right by investors.

Critics of the new law say it will replace a burgeoning market economy with sclerosis and corruption dominated by a few oligarchs. One critic in particular accuses the current regime of making sweetheart deals with the Oyu Tolgoi investors at the public’s expense – but his voice is seldom heard these days because he’s been locked up.

Nambaryn Enkhbayar, President of Mongolia until 2009, was arrested last year and jailed on one of the more comical rap sheets faced by a post-Soviet leader. The charges against him include one of abusing his office to require the national airline to ship eight books from Korea to Mongolia “without charge”. There are also corruption allegations relating to an ex-employee and a coal mine, but so far he has not been allowed to answer them.

If his case sounds a bit like those of Yulia Timoshenko in Ukraine and Mikhail Khodorkovsky, going quietly spare in a Siberian labour camp across Mongolia’s northern border, it should. None is a saint, but all are once-powerful reformist figures seen as contenders for leadership through the ballot box by rivals who have therefore muzzled them.

Sad, but true: a full generation after the fall of Soviet Communism there is not one country in the former Soviet bloc east of the Soviet Union’s old western border that has successfully combined a functioning democracy and the rule of law.

For many years, Mongolia looked like the exception – and a possible model for other landlocked, resource-rich countries scrabbling for a foothold in the global economy, like Afghanistan. Its backsliding on free markets and judicial transparency is by no means irreversible, but swift, enlightened action by the current Government is needed to reassure the world that it is serious about building an open society as well as getting rich on gold. Due process for Enkhbayar would be a good place to start.

Can 1,000 Catholic priests be wrong?


Oliver Kamm

The question answers itself, but here’s the context.

More than 1,000 priests have signed a letter to the Telegraph protesting against same-sex marriage. They maintain that the Government’s forthcoming Equal Marriage Bill heralds a return to religious persecution. The Bishop of Portsmouth maintains that “it is quite Orwellian to try to redefine marriage”, and terms the proposed reform “totalitarian”.

It’s tempting to dismiss this as inflammatory nonsense, because that’s what it is. Even so, two points are worth drawing out.  

First, the clerical opponents of gay marriage continually commit the logical fallacy of begging the question (ie, assuming in their premises the truth of what they’re arguing for). They complain that the Government’s proposals “redefine marriage” – a redefinition that they are conscientiously and by Church teaching bound to oppose.

Yet the argument of the proponents of reform, including The Times, is explicitly that we are not redefining marriage. We merely seek to extend marriage rights to couples who are now barred from them on no better ground than that they are of the same sex. Reforming marriage to enable a woman to own property independently of her husband was a change of far greater scope than same-sex marriage will be. It was opposed on similar grounds of its supposedly being contrary to natural law. And it was obviously right and just. Same-sex marriage is a modest reform of similar type.

Second, because of that point, the Church will damage itself by the vitriol and hyperbole of its campaign. That’s a prediction, not a complaint – indeed it’s a scenario that I welcome and look forward to.

Damian Thompson, the prominent Catholic journalist, comments on his Telegraph blog that “David Cameron is at war not just with fundamentalists, but also with middle-of-the-road clergy and lay people from Britain’s largest and, arguably, best-integrated religious minority”.

I see no reason to doubt this, but draw the opposite inference. The war has been declared by the Church. Religious liberty is an axiom of a free society; but on public policy, the Church is a lobby like any other. It is not a repository of wisdom about the right and the true. Numerous Catholics implicitly acknowledge this by ignoring Pope Paul VI’s encyclical Humanae Vitae, proscribing artificial contraception.  

The history of civilisation is to a large extent bound up with separating religious from civic authority. By its obduracy, the Catholic Church is hastening the process.

Is there anyone in charge?

Philip Collins

After the significant nothing of the mid-term coalition review, two
points have survived two days of coverage. The first is that Nick
Clegg committed his party again to coalition. For anyone who doubted
that this coalition will last until the next general election,
this week’s press conference surely dealt with the doubt.

But another aspect of the choreography of the day left me astounded.
Why on earth, in a day of activity that has been devised precisely to
dramatize continued co-operation between Conservatives and Liberal
Democrats would you allow a Cabinet Minister (Lord Strathclyde) to
resign, citing his irritation at his coalition partners as his reason?

Surely whoever was in charge (is there anyone?) would have taken a
look at the diary and suggested gently to Tom Strathclyde that Monday
wasn’t an ideal day and could he possibly hang on a week? Don’t come
in for a week, stay in the garden. But don’t undermine the relaunch by
resigning in the middle of it.

The loss of the leader of the Lords is not the end of the world and
not many voters will have noticed. But I cannot help but wonder at the
comical ineptitude at the people running this mess and thank the Lord
Strathclyde that they are not planning a major overhaul of the benefit
system involving an administrative overhaul that has scared off every
government since the Second World War.  Ooops, they are.

A prominent pacifist

Oliver Kamm

We publish today a letter from Canon Paul Oestreicher criticising a leading article on the Falklands War. Oestreicher insists that, in the political controversy about the Thanksgiving Service at St Paul’s, the clerics who criticised Margaret Thatcher were motivated not by pacifism but by a wish for an “expression of compassion for the victims on both sides”.

In fact, we didn’t accuse the Church leadership of pacifism, though we did cite the judgment of Reinhold Niebuhr, the Protestant ethicist, on that issue. We observed that the politicians had a surer sense than the bishops of what the nation was giving thanks for: victory in a just war against aggression. But Oestreicher’s intervention gives me an opportunity to relate the background of this prominent clerical campaigner.

Oestreicher is a pacifist. His position illustrates Niebuhr’s point that pacifism ends up either making no judgments at all or having an undue preference for tyranny. Some years ago he wrote a letter to The Guardian comparing the US/UK occupation of Iraq, mandated under UN Security Council Resolution 1483, to the Nazi occupation of France.

In the 1960s Oestreicher was a leading figure in a bizarre exercise of Christian-Marxist dialogue. In the Catholic Herald he recounted the contributions of the “intellectual giant” and French Communist ideologue Roger Garaudy, who later became an indefatigable Holocaust denier, and a “charming and pretty young sociologist from Prague”, who predictably urged Christians to combat “blind and irrational anti-Communism”.

The Marxism in this “dialogue” was unlike the contemporary and creative New Left. It was rank Stalinism. A volume of essays by the participants was co-edited by Oestreicher and James Klugmann, a leading British Communist who had worked clandestinely for Soviet intelligence in the 1930s and tailored his own convictions to whatever happened to be the Soviet line of the time. In his own essay, Oestreicher made the pitiful claim that it took as much courage to be a Communist in the US as it did to be a Christian in the USSR.

Oestreicher’s longstanding politics, in short, appear to be not anti-war so much as anti-American and anti-British. 

An unreliable source in Syria

Oliver Kamm

The Daily Mail disturbingly reported this week: “Syrian rebels beheaded a Christian man and fed his body to dogs, according to a nun who says the West is ignoring atrocities committed by Islamic extremists.”

Its source for this claim was Sister Agnès-Mariam de la Croix, a Carmelite nun in Syria. She maintains that Islamist militants are inflicting atrocities of scarcely conceivable horror on the country’s Christians.

I am not given to underestimating the cruelty that religious absolutists, and specifically Islamist extremists, can inflict. But I’m wary of this source, in this conflict. Reliable information about the violence in Syria is scarce owing to the determination of President Assad to restrict what is known of his crimes. Only yesterday, the UN raised its estimate of the death toll in the uprising to 60,000.

Sister Agnès-Mariam has a notable record, however, of saying things that are convenient to the Assad regime and that do not accord with the conclusions of more reputable investigators. She claimed that the massacre of 100 civilians at Houla was the work of anti-Assad rebels.

It’s unsurprising that Father Paolo Dall’Oglio, a Jesuit expelled from Syria after 30 years, was caustic about Sister Agnès-Mariam’s testimony when she was on a trip to Ireland last summer. He told the Irish Times: “I have been there, I know the people, including the youth, who are working for the revolution, and I know that what she is saying is insane. It corresponds with the regime version of the facts.”

Syria’s is unquestionably a brutalising conflict. But there is also much nonsense being circulated by fringe elements on the Right and Left who wish to denigrate the Arab Spring and the case for solidarity. A peculiarly monstrous example, confected by a right-wing conspiracist and Birther website called World Net Daily, also made it to the Daily Mail a few months ago. It was seriously claimed (with literally no documentary evidence, such as a photograph) that Egypt’s Muslim Brotherhood was conducting crucifixions in front of the presidential palace. In Syria’s conflict, a Carmelite nun is suspiciously serving the cause of a murderous despotism. 

Crippling austerity and a euro break-up won’t help Europe recover

Oliver Kamm

Political speculation and newspaper commentary this year have concerned the possibility and consequences of a Greek exit from the euro. I have long been sceptical that this would happen, owing to its immense costs. But I felt that the austerity programme required of Greece was so unyielding that it was counterproductive. While living standards have been collapsing, the debt burden threatens to become overwhelming without credible plans to restructure it. (See here an Intelligence Squared/Google debate on austerity – which I argue is not the answer for Europe – a few months ago where I discuss the problem with, among others, George Papaconstantinou, former Greek Minister of Finance.)

Recent Greek developments have thus been modestly encouraging: a successful debt buyback, an improvement in the country’s credit rating, and a decline in government bond yields after the European Central Bank said it would again accept Greek sovereign debt as collateral. If the eurozone is to get out of this mess, it will do so this way: not by fantasies of a purportedly orderly break-up of the euro, but by structural reforms in the debtor countries that are acknowledged, rewarded and made easier.

Greece is an extreme case, and the conjunction of variables in each of the problem countries is different. In Greece, the banks were relatively strong but were undermined by a catastrophic fiscal position (in 2009, the Greek Government admitted that its budget deficit of 12.7 per cent of GDP had been vastly understated in an earlier estimate of 3.7 per cent). In Ireland, the weakness ran the other way: a banking crisis born of excessive bank lending, rather than a crisis of public debt, that then became a fiscal crisis owing to the need to nationalise the stricken banks.

What the countries have in common, despite these differing histories, is extreme stresses that turn private debt into potential public debt. And the only route out of this is to build the fiscal dimensions of the euro that were lacking at its launch, make structural reforms and adopt a more rational approach to the economics of austerity.


Angry Oborne’s brush with pseudo-Cicero

Oliver Kamm

Peter Oborne, the Telegraph’s chief political commentator, is angry. He often is. The latest spark for his anger is The Times, which he thinks is not a properly run newspaper. Oborne’s criticism should be judged on its merits; so should Oborne’s qualities as a commentator.

I’ve never met Oborne but I did an ill-tempered radio debate with him once, on the tenth anniversary of the euro. Oborne would presumably claim that the eurozone crisis has vindicated his prediction of the currency’s eventual demise (it hasn’t), but his reasoning stays with me. He argued that the yield spread between German government bonds and the debt of other eurozone members showed that markets expected the currency to fail – not the size of the spread, but the fact that there was a spread at all between different eurozone countries’ bond yields.

That’s like saying that the difference in municipal bond yields between Massachusetts and California shows that the market expects the dollar to collapse. In other words, it’s nonsense. Different countries within Europe’s currency union have different borrowing histories and (obviously) different credit ratings. Within the eurozone, fiscal policy remained with national governments, some of which borrowed too much. That’s why we are where we are.

My favourite Oborne column was a screed, when he was at the Daily Mail, against a welfare system that “blatantly rewards the workshy and the idle”. He concluded:

Writing more than 2,000 years ago, a Roman politician made the following observation: “The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.”

These words were uttered by Cicero in 55BC. Today they are every bit as apposite.

It will seem incredible, but Oborne copied this passage without checking it or apparently even noting the fantastic anachronism of a Roman statesman’s referring to “assistance to foreign lands”. The “apposite” quotation is entirely bogus.


Magazine Rack | selected longer reads for the weekend

Jon Rosen visits the pygmy Mbuti people of northeastern Congo, on Roads & Kingdoms

Steve Danning analyses the fall of Michael Porter’s MonitorGroup consultancy, in Forbes

Julia Phillips takes part in a dog sled race in Siberia, in The Morning News

David Runciman reviews Nassim Taleb’s latest book in The Guardian

Compiled by @TomasRuta

'There's no way of prettifying it. Legislation would be the intrusion of the State into the press'

Oliver Kamm

Journalists committed gross intrusions of privacy. The press must be free. These two truths are at the heart of the debate over regulation of the press.

Lord Justice Leveson has gone to great lengths to balance them and stresses that any new regulatory body would be independent. It would, however, be supported by law. The required legislation would not itself establish the new organisation, and Lord Justice Leveson emphasised that no new powers would be granted to Parliament. Instead, the legislation would establish the ideals that regulation should embody.

This is a skilful and accommodative set of proposals, aimed at securing political consensus and press participation. But the balance between statute and self-regulation is the crucial issue. There is no way of prettifying it: legislation would be the intrusion of the State into the workings of the press. David Cameron is right to baulk at it.

Nor is it credible to suppose that a new mechanism would be without coercion. Lord Leveson made clear that if a newspaper or magazine failed to sign up to the new system, it would be subject to exemplary damages in cases of libel or invasion of privacy. There are already laws applicable to the journalistic malpractices that Lord Leveson heard evidence of. The proposals he has made to counter them abridge press freedom.


Follow our live coverage on

Leveson: pick of the comment from the web

The report on Lord Justice Leveson’s inquiry into press ethics was published earlier today, calling for a stronger press regulator underpinned by new legislation. Soon afterwards, David Cameron, the Prime Minister, rejected the notion of enacting legislation that might impinge upon the freedom of the press - a position that is opposed by his coalition partner, Nick Clegg, the Deputy Prime Minister, and also the Leader of the Opposition, Ed Miliband.

Here’s the pick of the Leveson comment from the web, updated as it comes in. For The Times’s live Leveson blog, head here.

Philip Webster, The Times:

Already tonight, the numbers game is being played at Westminster. MPs are calculating whether an alliance of Labour, Liberals and around 40 Tories can outvote the majority of David Cameron’s Conservative supporters and Labour MPs who are opposed to statute.
The only certainty is that there will be a vote in the House of Commons very soon. Labour will set out to embarrass David Cameron as soon as they can. As Deputy Labour leader Harriet Harman has just said, Mr Cameron will be accused of protecting the press barons if he does not think again.
Mr Cameron will get a good press tomorrow for rejecting state regulation, but his Parliamentary problems are just beginning.

Andrew Gilligan, Telegraph blogs:

Regulation is either independent of the industry, or it’s self-regulation. It can’t be both. You’d expect a High Court judge to know that, wouldn’t you?

Fraser Nelson, Spectator Coffee House:

This is a defining moment for the Prime Minister, invoking ancient liberties to give a calm, eloquent and robust defence of freedom of speech. I hope those 42 pro-regulation Tory MPs were in the chamber listening to him: this is politics at its boldest and best.

Nick Davies, the Guardian journalist who broke the phone-hacking scandal (Video):

He [Leveson] has damned a whole bunch of behaviour that deserves to be damned. And he’s damned the editors responsible for it.

Gary Gibbon, Channel 4 blogs:

The Lib Dems and Labour are now coralled together [in favour of statutory underpinning of Lord Justice Leveson’s proposals], but keeping them together beyond one ambush vote and through a whole process of legislation could be very different. David Cameron’s team still thinks it can hold out against legislation.

Dan Hodges, Telegraph blogs:

Cameron has, not for the first time, secured clever triangulation. He has rung the bell for last orders in the last-chance saloon, but is giving journalists the chance to drink up and leave, rather than send in the bouncers. Miliband, trapped by his own bullish rhetoric on this issue, has to set himself against the media, and continue with his demands for full implementation of Leveson, including a statutory regulatory body. Meanwhile the press, who recognise which way the wind is blowing, will make those demands appear gratuitous by agreeing to a new voluntary framework.

UKIP’s empty libertarianism

Oliver Kamm

Having written yesterday that UKIP’s policies are unpleasant, I note with complacence that the UKIP candidate in the Rotherham by-election has been supported today by Neil and Christine Hamilton, whom the party apparently regards as electoral assets. Mr Hamilton once complained at my describing him as a disgraced former minister, but, as he is undeniably a former minister, I’m not sure what else to say.

On his Spectator blog, Alex Massie says sensible things about UKIP (my only difference with him is that I favour tough anti-tobacco legislation). It’s a highly illiberal party with incoherent and destructive policies. But the term “libertarian” would be applicable to it in an American context. Libertarianism in that tradition doesn’t mean what it ought to mean: it’s instead a philosophy of minimal government and immense private coercion.

The fascination of US libertarians with gold makes philosophical sense in that context. If the currency is pegged to the price of gold, government is powerless to act as lender of last resort or to stimulate the economy through monetary or fiscal means. And libertarianism is a starkly empty conception of politics. As Hannah Arendt wrote (Past and Future, p. 148): “Without a politically guaranteed public realm, freedom lacks the worldly space to make its appearance.”

An alliance of the Conservatives with UKIP would be a catastrophe for the Tories. It would undo the work of David Cameron and his fellow modernisers, such as my close colleague Daniel Finkelstein, to reconcile Conservatism with modernity. This is of some autobiographical interest to me, though of scant interest to anyone else.

On election day in 2010, Daniel expressed incredulity and some hilarity that I’d voted Labour even though I recognised (and had long said) that Gordon Brown was utterly unsuited to high office. Labour has, in not quite such an extreme form, got the wrong leader now too. But if the Tories were to treat UKIP as their ally, they would abandon any claim to be a credible party of government, even given Labour’s current state.


If the press is to serve the people, Parliament should not seek to be its master.

The report from the Leveson Inquiry into the conduct of the press will be released on Thursday. Today, James Harding, Editor of The Times, sets out his alternative vision for press regulation; a middle ground between self-regulation and statutory regulation. Click here to read the article for free

Why is Mark Carney the new Governor of the Bank of England?

Oliver Kamm

The appointment of Mark Carney as Governor of the Bank of England is a political coup not only for George Osborne. It has also given heart to conspiracy theorists (see here for a peculiarly silly example) who believe the world is ruled from Goldman Sachs, where Carney spent 13 years. Carney’s cachet in fact reflects not the power of Goldman’s but the reputation of the Bank of Canada, where he has been Governor since 2008.

The Bank of Canada has a good name in international markets as well as the domestic economy. That is reflected in the surprising strength of the Canadian dollar during the financial crisis. Normally, a high-yielding currency does best in times of global financial stability. In a crisis, investors usually prefer the safety of the US dollar, as the world’s leading reserve currency. But amid immense ructions in the financial system, the Canadian dollar and the Swiss franc have been big beneficiaries, rather than the US dollar and the euro.

Part of the reason is the credibility of Canadian monetary policy. Canada had an inflation problem in the 1970s. John Crow, Governor of the Bank of Canada from 1987 to 1994, withstood political criticism to run a tight monetary policy. Canada adopted inflation targeting in 1991, a year ahead of the UK. Whereas the UK’s adoption of that framework was an outcome of the failure of the previous policy of targeting the exchange rate and joining the European Exchange Rate Mechanism, Canada’s policy was a natural development from what had gone before. It has achieved what it set out to do.

Canada’s financial system proved notably resilient to the global banking crisis of 2007-09. Restrictions on mergers of the big domestic banks were a source of stability. Carney commented to international central bankers in 2009 that “price stability does not guarantee financial stability and is, in fact, often associated with excess credit growth and emerging asset bubbles”. That judgment describes recent British economic history. The new Governor of the Bank of England has expertise and experience in charting a different course.


Read our editorial on Mark Carney’s appointment

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