Economist 3/31/14

  1. BUY land, advised Mark Twain; they’re not making it any more. In fact, land is not really scarce: the entire population of America could fit into Texas with more than an acre for each household to enjoy. What drives prices skyward is a collision between rampant demand and limited supply in the great metropolises like London, Mumbai and New York. In the past ten years real prices in Hong Kong have risen by 150%.A recent analysis by academics at the London School of Economics estimates that land-use regulations in the West End of London inflate the price of office space by about 800%; in Milan and Paris the rules push up prices by around 300%.Two long-run trends have led to this fractured market. One is the revival of the city as the central cog in the global economic machine.Knowledge-intensive industries such as technology and finance thrive on the clustering of workers who share ideas and expertise.second trend, the proliferation of green belts and rules on zoning. Over the course of the past century land-use rules have piled up so plentifully that getting planning permission is harder than hailing a cab on a wet afternoon.In most rich countries, land-value taxes account for a small share of total revenues. Land taxes are efficient. They are difficult to dodge.
  2. THE world is gradually moving away from capital punishment. At the end of 2014, 98 countries had abolished the death penalty, compared with 59 countries in 1995. The number of countries carrying out executions has halved. Last year at least 607 people were executed in 22 countries, 22% fewer than in 2013, according to Amnesty International, a human-rights organisation.In China alone there are 55 capital crimes, including economic crimes such as corruption (which account for 15% of executions, reckons Amnesty) and drug offences (8%). The war on drugs is enthusiastically waged in many countries. Half of all executions in Iran and Saudi Arabia are for such crimes. Indonesia has reinstated the death penalty for a raft of drug crimes, declaring a “national emergency”.The prosecution of terrorism is also expanding. In Iraq, nearly all executions were for terrorism. In addition to Cameroon and the United Arab Emirates, which extended capital punishment to terrorist-related offences.Pakistan reversed a moratorium on the death penalty for civilians in December of 2014, following the Peshawar school massacre executing 64 people after that.
  3. ONE frequent stumbling block for the European project is the fact that different countries want different things. Recent Eurostat polling on self-reported happiness highlights those divergences. As usual, Scandinavians are the happiest people in Europe and retired Danish women are the cheeriest among them, reporting a happiness score of 8.5 out of 10. In general, geography is the best predictor of merriness, followed by pay. Around the Mediterranean people prefer towns, while near the Arctic Circle rural life is best. Procreation affects cheerfulness too. In southern Europe families with children are happiest, whereas the British and Irish are the only people to become sadder when little ones arrive. Ageing draws out differences. Everyone is happiest when young and less so in middle age.
  4. In January the Bank of Korea revised its growth forecast for this year down from 3.9% to 3.4%. HSBC, a bank, thinks growth will barely top 3%.Consumer spending is feeble. Wages have grown by less than 1% a year over the past decade, on average, after adjusting for inflation. Households have been borrowing instead: their debts, of 80% of GDP last year, were higher than Americans’, according to McKinsey, a consultancy. Slowing growth in China, South Korea’s biggest export market, has taken its toll. So has the strong won. It has surged by 40% against the yen since late 2012, which has pinched exporters’ profits, since they compete against Japanese firms in electronics and carmaking.n response, the central bank cut its main interest rate twice last year. This month it clipped it by a further quarter of a percentage point, to 1.75%—an all-time low.The government expects the rate cut to pep up consumer sentiment and ease the squeeze on exporters.But South Korea is better protected than most, with a big current-account surplus and little external debt.
  5. The tourism in Japan boom began in earnest last year and has far surpassed anything the government dared hope for. Just over 13m foreigners, 11m of them Asian, came to Japan in 2014, up nearly 30% compared with a year earlier and half as many again as in 2010. Chinese arrivals have jumped by more than four-fifths since 2013. Mainlanders now dub Japan’s “four treasures”—brand-name rice cookers, vacuum flasks, ceramic knives and high-tech lavatory seats.A huge incentive is the weakness of the yen thanks to the Bank of Japan’s monetary easing. The currency has fallen sharply, including by nearly two-fifths against the yuan, which is loosely pegged to the dollar.Looser visa rules have also helped spur inbound tourism, along with tax-free shopping. Japanese businesses are adapting. No-frills hotels for travelling salarymen are being revamped to cater to foreign tourists—hotels in the Apa group (“Always Pleasant Amenity”) are popular with foreigners for their traditional twist and low cost.A foreign visitor spends on average ¥130,000, and a good chunk of the spending benefits depressed local regions once visitors can be lured away from Ginza.

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