A likely war is not an inevitable one. Markets are wary of a weakening France. Big tech suffocating the disruptors. Fall out when financial systems feel the heat. Battery innovation.
QUOTE OF THE WEEK
ARTICLE OF THE WEEK
Odd Arne Westad, Sleepwalking Toward War
(Foreign Affairs, July-August 2024)
The fact that a war is likely doesn’t make it inevitable. As unpalatable this perspective may be, opening our eyes to it may be the only way to influence policy. The Norwegian historian observes that like Germany and Britain before WWI, China and the US seem to be locked in a downward spiral that may end in disaster for both countries and for the world at large. Like the situation a century ago, profound structural factors fuel the antagonism: economic competition, geopolitical fears, and deep mistrust work to make conflict more likely (metered paywall that may require prior registration).
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Lionel Laurent, France Is Getting Weaker, and Markets Know It
(Bloomberg, 13 June 2023)
In France, the gloom is palpable, with an uneasy feeling that the financial markets are sensing weakness. The looming snap parliamentary elections mean France now faces the uncharted combination of a pro-Europe president on the way out and a hard-right nationalist government on the way up. After years of sleepwalking, the French elites have just woken up. What was unthinkable “can happen here”, with Le Pen’s far-right party now a “catch-all” appealing “to the young, the not-so young, the well-off and the left behind”. Establishment parties seem unable or unwilling to respond to anger over immigration and le coût de la vie (living costs) (gifted article, reads in 7-9 min).
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Mark Lemley and Matt Wansley, How Big Tech Is Killing Innovation
(The New York Times, 12 June 2024)
The argument is not new, but the two academics make the case unambiguously. They state that a handful of incumbent tech companies are sustaining their dominance by learning how to co-opt potentially disruptive startups before they can become competitive threats. They use generative AI as an example (gifted article, reads in 6-8 min).
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Sandra Aguilar-Gomez, Heatwaves ripple into the financial system
(VOXeu, 12 June 2024)
The effect of extreme heat days on agriculture or tourism are well understood. Less so are the broad economic repercussions like reduced labour productivity and increased operational costs. This column discusses some recent studies that analyze the impact of heat on the financial sector impact (notably in low- and middle-income economies). They reveal a correlation between extreme heat and increased delinquency rates, particularly among SMEs (free access, reads in 7-9 min).
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Tom Ough, The cement that could turn your house into a giant battery
(BBC, 12 June 2024)
An example of why technology offers so much hope for renewable energy. Batteries is one of the fields in which the pace of progress is just stunning. A team at MIT describes a new way of creating an energy storage device – called a supercapacitor – from three materials that are basic and cheap: water, cement and a soot-like substance called carbon black. Early-stage but potentially immensely promising (like recharging EVS as they drive along the road). And doesn’t need lithium (free access, reads in 5-6 min).
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