2019-11-09_The_Economist

12 Leaders The EconomistNovember 9th 2019

1

2 About a fifth of America’s billionaires made their money in in-

dustries in which government capture or market failure is com-

monplace (see Finance section).

Yet many others operate in competitive markets. The retailers

owned by Mike Ashley, one of Mr Corbyn’s targets, are known for

low prices and ruthless competition (as well as questionable

working conditions), not rent-seeking. For every Mark Zucker-

berg, the boss of Facebook, there are several technology entre-

preneurs with lots of rivals. Think of Anthony Wood, who

created Roku, a video-streaming platform; or Tim Sweeney, co-

founder of the firm behind “Fortnite”, a video game. Nobody can

seriously accuse these innovators of having sewn up their mar-

kets or of depending on state favours. The same goes for sports-

men such as Michael Jordan or musicians like Jay-Z, billionaires

both. Even hedge funds face ferocious competition for investors’

funds, which is why so many are throwing in the towel.

When capitalism functions well, competition whittles pro-

fits away for some but also produces them for others as entrepre-

neurs seize markets from sleepy incumbents. Their success will

eventually set off another cycle of disruption, but in the mean-

time fortunes can be made. The founders of MySpace, a social-

media website, got rich when they sold it to News Corp; Facebook

subsequently ate its lunch. Blockbuster, a video-rental store,

helped make Wayne Huizenga a billionaire; then Netflix arrived.

This process creates vast benefits for society. According to esti-

mates by William Nordhaus, an economist, between 1948 and

2001 innovators captured only 2% of the value they created. Per-

haps that is why billionaires are tolerated even by countries with

impeccable social-democratic credentials: Sweden and Norway

have more billionaires per person than America does.

Taxes should be levied progressively. But that does not justify

limitless redistribution or punitive levies. Ms Warren’s proposed

wealth tax has already doubled once during her campaign.

Thomas Piketty, an economist behind many of the most-cited

inequality statistics, wants a wealth tax of up to 90% on the rich-

est billionaires. Such expropriation would surely chill incen-

tives to innovate and to allocate capital efficiently. An economy

with fewer entrepreneurs might have fewer billionaires but

would ultimately be less dynamic, leaving everyone worse off.

Wealth is worrying when it becomes entrenched or shielded

from disruptive forces. Where that decay has set in, govern-

ments should tackle it directly. Whatever Mr Corbyn says, Britain

is hardly corrupt by global standards—bribery is rare, for exam-

ple. But it does have a problem with inherited wealth, the source

of one-fifth of billionaires’ fortunes. Higher inheritance taxes

would be welcome there and in America, where it is too easy to

pass wealth between the generations.

A broader agenda of attacking rents while maintaining dyna-

mism would weaken excessive intellectual-property and copy-

right protections, which often last too long. (Selling Lucasfilm

more than three decades after the first “Star Wars” film should

not have netted George Lucas $4bn.) It would shake up antitrust

enforcement to promote competition in old and new industries

alike. Most important, it would fix America’s campaign-finance

laws to rid its political system of corporate capture at both state

and federal level.

Doing all this would achieve much more than an indiscrimi-

nate attack on the rich—and without the associated damage. By

all means, correct policy failures. But billionaires are usually the

wrong target. 7

A

dulterer, pervert, traitor, murderer. In France in 1793, no

woman was more relentlessly slandered than Marie Antoin-

ette. Political pamphlets spread baseless rumours of her deprav-

ity. Some drawings showed her with multiple lovers, male and

female. Others portrayed her as a harpy, a notoriously disagree-

able mythical beast that was half bird-of-prey, half woman. Such

mudslinging served a political purpose. The revolutionaries

who had overthrown the monarchy wanted to

tarnish the former queen’s reputation before

they cut off her head.

She was a victim of something ancient and

nasty that is becoming worryingly common:

sexualised disinformation to undercut women

in public life (see Europe section). People have

always invented rumours about such women.

But three things have changed. Digital technol-

ogy makes it easy to disseminate libel widely and anonymously.

“Deepfake” techniques (manipulating images and video using

artificial intelligence) make it cheap and simple to create con-

vincing visual evidence that people have done or said things

which they have not. And powerful actors, including govern-

ments and ruling parties, have gleefully exploited these new op-

portunities. A report by researchers at Oxford this year found

well-organised disinformation campaigns in 70 countries, up

from 48 in 2018 and 28 in 2017.

Consider the case of Rana Ayyub, an Indian journalist who

tirelessly reports on corruption, and who wrote a book about the

massacre of Muslims in the state of Gujarat when Narendra

Modi, now India’s prime minister, was in charge there. For years,

critics muttered that she was unpatriotic (because she is a Mus-

lim who criticises the ruling party) and a prosti-

tute (because she is a woman). In April 2018 the

abuse intensified. A deepfake sex video, which

grafted her face over that of another woman, was

published and went viral. Digital mobs threat-

ened to rape or kill her. She was “doxxed”: some-

one published her home address and phone

number online. It is hard to prove who was be-

hind this campaign of intimidation, but its pur-

pose is obvious: to silence her, and any other woman thinking of

criticising the mighty.

Similar tactics are used to deter women from running for

public office. In the run-up to elections in Iraq last year, two fe-

male candidates were humiliated with explicit videos, which

they say were faked. One pulled out of the race. The types of im-

age used to degrade women vary from place to place. In Myan-

Sex, lies and politics

As deepfake technology spreads, expect more bogus sex tapes of female politicians

Fake nudes