The Economist Magazine Cover For 05/11/2024

The Economist Read in browser MAY 11TH 2024 How we chose this week’s image SUBSCRIBER ONLY Cover Story How we chose this week’s image Insert a clear and simple description of the image Edward Carr Deputy editor We had two covers this week. In most of our editions, we wrote about the breakdown of the economic order. In Britain, after local elections which made it even more likely that Labour will form the next government, we asked whether it can work with business. At first glance, the world economy looks reassuringly resilient, yet we fear that it is flirting with collapse. A worrying number of triggers could set off a descent into anarchy, where might is right and war is once again the resort of great powers. Even if it never comes to conflict, the degradation of the economy could be fast and brutal. Our working metaphor for this breakdown in norms had been “entropy”, a measure of randomness that crops up in the study of thermodynamics. The smashed globe was peak randomness, we thought. But our science-minded colleagues objected that nobody understands entropy, and suggested that a better term for a seemingly steady state vulnerable to sudden collapse would be “metastable equilibrium”. A former science editor even went so far as to illustrate the mechanics with a sketch. Oh dear. The Economist was rapidly heading down a rabbit hole better suited to Nature or Science. As British journalists like to say, time to reverse ferret. We shifted from the laboratory to the salesroom. In 2018 a painting by Banksy destroyed itself just after the hammer came down at a price of £1.04m ($1.4m), including fees. We would be repeating the trick: you might think the world is secure, but it is about to be shredded. However, some of our colleagues found this imagery every bit as confusing as entropy. And, in truth, “Girl with balloon” is a flawed metaphor for ruination. In 2021 Banksy’s half-shredded masterwork returned to auction—and fetched £18.6m. We thought some more. The institutions that safeguarded the old system are either already defunct or fast losing credibility. The World Trade Organisation is in stasis, owing to American ­neglect. The IMF is gripped by an identity crisis, caught between a green agenda and ensuring financial stability. The UN Security Council is paralysed. Meanwhile, sanctions and subsidies threaten open markets. One way of representing this was to have the world as a ball of wool about to unravel. So far fragmentation and decay have imposed a stealth tax on the global economy. It is perceptible, but only if you know where to look. Unfortunately, deeper, more chaotic collapses are possible. The first world war killed off a golden age of globalisation that many at the time assumed would last for ever. In the early 1930s, following the onset of the Depression and the Smoot-Hawley tariffs, America’s imports collapsed by 40% in just two years. In August 1971 Richard Nixon unexpectedly suspended the convertibility of dollars into gold; only 19 months later, the Bretton Woods system of fixed exchange-rates fell apart. Again, though, we worried about the metaphor. Unravelling does not happen slowly and then suddenly. Yet that is the threat today. The return of Donald Trump to the White House, with his zero-sum worldview, would continue the erosion of institutions and norms. The fear of a second wave of cheap Chinese imports could accelerate it. Outright war between America and China over Taiwan, or between the West and Russia, could cause an almighty collapse. We wanted something more violent and troubling than a wool-planet. That favoured an image of the rules being torn apart. We have put some words over a disordered map. However, “world order” was too reminiscent of President George W. Bush, so for the final cover we substituted “economic” instead. Buttressed by strong growth in America, it may seem as if global commerce can survive everything that is thrown at it. It can’t. In the British election, due by the end of January 2025, the central forecast of our model gives Labour a thumping 106-seat majority. The transformation of Labour’s political fortunes since the last general election has been accompanied by a fervent romancing of business. Bosses are keen to listen. It is easier to get tickets to see ­Taylor Swift’s opening night at Wembley next month than to attend the party’s “business day” in September at a dingy ­Liverpool conference centre. Here is an office painted red. It is apt because polls of business leaders suggest they would rather see Labour in power than the Conservatives. Since the election in 2019, Britain has left the EU and had three prime ministers, five chancellors and seven chief secretaries to the Treasury. Labour promises to end political instability and investment-chilling policy churn. The trouble is that a person-free image lacks warmth. Besides, if you probe business leaders in private, they profess alarming uncertainty about what lies in store under a Labour prime minister. Much better was Labour’s prime minister-in-waiting, Sir Keir Starmer. Here he is chomping on a rose—a symbol of courtly romance and the Labour Party itself. At the heart of Sir Keir’s pitch is a grand bargain. Labour promises to restore basic governing principles that have too often been neglected by the Tories: political stability, predictable policymaking and supply-side reform. In ­return, it will ask companies to swallow big changes, notably in labour markets. Our artist has done a tremendous job. But how to position the noble knight’s arms? Here they are outstretched as if Sir Keir were an old lothario. In reality, he is a decent man, but not a flamboyant one. We preferred him as an eager suitor, hands clasped meekly behind his back. A great deal is at stake for Labour and Britain in striking the right bargain with business. The country has been plagued by low growth since the financial crisis of 2007-09. Money is so tight that the only way to pay for better public services is to improve the economy. Unfortunately, romances often end in disappointment. Cover image • View large image (“The new economic order”) • View large image (“Be mine: Labour’s courtship of business”) Backing stories → The liberal international order is slowly coming apart (Leader) → The world’s economic order is breaking down (Briefing) → What companies can expect if Labour wins Britain’s election (Leader) →