Letters to the editor

E-politics

We read your special report on technology and politics with interest (March 26th). However, your claim that most progress in this field has occurred in the United States and your limited focus on the use of big data to “mobilise the masses” were both too narrow. The Aam Aadmi Party in India, for example, won an overnight victory in Delhi’s state elections in 2015 on a clean-hands ticket and developed software to project the real-time flow of its donations online. Political movements like Podemos in Spain and the Five Star Movement in Italy have used software to include people in formulating policy, membership debates and internal voting. In Argentina, Pia Mancini and her Partido de la Red, or Net Party, used the free software DemocracyOS to thrust open the traditional backroom process of policymaking and transformed it into an online proposing, debating and voting frenzy.

The Dutch Labour Party (PvdA) and social liberal D66 are both developing online voting systems for policy and to select candidates. The Danish Liberal Alliance has experimented with blockchain to conduct internal voting.

The use of technology in politics goes far beyond understanding and mobilising the masses. As long as politicians continue to see technology as a mere unidirectional tool for the few to know and influence what the masses do, it will remain a means for manipulation, as your special report suggests. This is not where IT’s strength lies. Instead, political parties should see technology as a means to let the masses know and influence what the few in power do. Numerous political parties and those supporting democracy are already doing just that.

YVES LETERME
Secretary-general
SAM VAN DER STAAK
Senior programme manager
International Institute for Democracy and Electoral Assistance (IDEA)
Stockholm

Men of steel

The ability of Britain to produce its own steel is more than a matter of national pride or free markets (“Cast-iron arguments”, April 9th). Machiavelli noted that the failure of many city states in early modern Italy was due to their lack of strategic supplies in times of conflict, a lesson which Britain learned following two world wars. In both instances, Britain’s industrial capacity was central to its fighting ability, while its reliance on imports (especially food) nearly brought defeat. It was this memory which influenced policymakers to support the Common Agricultural Policy, a strategic but wholly uncompetitive set of subsidies which the EU fully endorses.

ANDREW GRAY
Norwich

Although China’s manufacturing activity has decreased recently, the country’s excess steel capacity has come about because of the unconstrained building of factories. The world has never encountered a beast of such epic dimensions and it should be constrained by any means possible. Tariffs are just fine in my book.

TYLER OWEN
Executive vice-president
Owen Industries
Carter Lake, Iowa

* Let me offer some additional reasons for the decline of the British steel industry to the ones you mentioned. The big factor is the dwindling manufacturing base that transforms steel into usable machines, equipment and infrastructures. Today the British economy transforms 184kg of crude steel per person, whereas Germany transforms 527kg. At its peak in the 1970s Britain was transforming 460kg against Germany’s 550kg.

Germany has preserved its manufacturing base, but the British steel industry also endured bad management. Nationalisation in 1967 merged 14 steel companies but failed to restructure them sufficiently and left most mills operating to preserve local employment. Privatisation at a rock bottom price in 1988 did not bring significant restructuring either, since it consisted mostly in closing the worst mills and not building new ones that could have competed with new mills on the continent. Tata Steel’s takeover in 2006 had even fewer strategic, industrial or commercial synergies.

An adversarial relationship between management and the unions did not help. In Germany, Mitbestimmung, or co-management, led to much smoother transitions that preserved customer relationships and business confidence.

As a result of many years of mismanagement by all sides, the British industry lost the confidence of many of its domestic customers. In 2014, Tata Steel UK had a meagre 30% market share in its own home base, and 70% of its customers already relied on foreign, mostly continental, imports. So if today Chinese imports are cheaper, why not continue?

MARCEL GENET
Managing director
Laplace Conseil
Paris

Constitutional issues

Bello pointed to the near fatal flaw with presidential constitutions based on a strong separation of powers (April 9th). In the 1980s Fred Riggs, a political scientist, studied such constitutions around the world and found that they all led to severe gridlock resulting in either a presidential coup d’état over the parliament or a parliamentary coup unseating the president. Except in the United States. Many factors are credited with explaining this American exception, including the victory of the north in the civil war, the availability of land, industrialisation, the power of economic elites and the capacity of certain presidents to temporarily overcome crisis and obstructionism and set a new course, as with the New Deal in the 1930s.

However, this constitutional American exceptionalism is under growing pressure from globalisation, social fragmentation and a backlash from those who think they have lost out.

The American constitution is deeply revered as the glue that holds the United States together. But in this rapidly changing environment it is becoming increasingly dysfunctional. Can it adapt further and avoid the fate of other such constitutions?

PHILIP CERNY
Professor emeritus of politics at the University of Manchester
York

Welfare in South Korea

Your article on social welfare in South Korea (“Doubt of the benefit”, April 2nd) said that sluggish growth had stalled even timid welfare plans under President Park Geun-hye. Yet in 2013 South Korea began to pay child-care allowances and nursery-school fees to all parents regardless of income. The Basic Pension Scheme was introduced in 2014 successively after the National Pension Scheme in 1988. Low-income families now receive more benefits, under a reformed National Basic Livelihood Security System.

Job creation is also a priority. The government is increasing the support for startups and the employment services. The government views welfare as a vital pillar of national progress and has raised its total welfare budget in 2016 to 123.4 trillion won ($108 billion), a 33% increase from 2012.

The government is also managing the consultation between the central and regional governments regarding the welfare programmes under the principle of properly distributing precious tax for promoting welfare.

NAMKWON JO
Director-general for welfare policy
Ministry of Health and Welfare
Sejong, South Korea

Market scale

* You oppose combining Deutsche Börse with the London Stock Exchange, on the basis that it would lead to a merger of their clearing houses, Eurex and LCH.Clearnet (“Don’t clear the clearers”, April 2nd). Your concern is that there will be some extra offsetting of the collateral (margin) held by the merged clearing house (when a user has a long position in one market and a short position in another), the degree of offset depending on the correlation between markets.

This already happens for positions margined by a single clearing house, such as Eurex or LCH.Clearnet. So your argument is that increasing scale is, of itself, a risk for the margining system. The logic of that argument is difficult to follow, unless the true danger you wish to avoid is of an administrative “cock-up” over margining. Such administrative faults have occurred in the past and led to the failure of clearing houses for the French sugar market in 1974, the Kuala Lumpur palm-oil market in 1983, and the Hong Kong stock-index market in 1987.

But failures of clearing houses are very rare and have tended to occur at young clearing houses with one main commodity and inadequate systems of margining. In each of these cases there were influential members who decided that, rather than paying-up their own debts, it was preferable that the clearing house should fail. The lesson is that a clearing house should not feel obligated to a cabal of the members.

The main danger for a clearing house is that its management is inept or subject to special interests. Because of their systemic role in the financial system, there is an indisputable need for the regulation of clearing houses, but increasing scale is not a particular danger.

GORDON GEMMILL
Emeritus professor of finance
Warwick Business School
Coventry

Land of hope and dreams

As a New Jerseyan by birth, I took umbrage at your statement that Bruce Springsteen is “New Jersey’s most famous poet” (“Out of luck”, April 9th). Although there can be no questioning that singer’s talent, William Carlos Williams was born, lived most of his life in and then died in New Jersey. And none other than Walt Whitman spent many years in the state, where he died in the only home that he ever owned.

He enjoyed those years, remarking that “Camden [New Jersey] was originally an accident, but I shall never be sorry I was left over in Camden. It has brought me blessed returns.” He sung of the open road, too, but unlike the Boss, Whitman was an actual poet.

DANIEL LURKER
Washington, DC

Lesser languages

Johnson’s column on the use of English in the international business world (April 9th) reminded me of an old joke:

What do you call someone who speaks three languages?

Trilingual.

What do you call someone who speaks two languages?

Bilingual.

What do you call someone who speaks one language?

English.

THORSTEN LONISHEN
Cologne, Germany

*Letters appear online only