Economist 8/3/15

  1. PRISONS in Japan are filling up with an unexpected group: the elderly. For the first time, more crimes are being committed by people over 65 than by those aged between 14 and 19 (see chart). The young still have a slightly higher propensity to commit crime. But in absolute terms, because of Japan’s ageing population, the elderly are now responsible for more incidents of shoplifting, brawling and the like.Meanwhile, the number of crimes committed by the young has been falling since 2003—despite the police doing their utmost to arrest youngsters for tiny misdemeanours.At present Japan’s approach to juvenile wrongdoers places the emphasis on reform of the individual, not punishment. In theory, under the Juvenile Act of 1948, judges may hand down criminal sentences to those younger than 20.Most juvenile offenders in Japan are sent to one of 52 training schools. There they develop close relationships with teachers who prepare them quickly to rejoin society.In 2001 the threshold age at which convicted miscreants may get a penal sentence was lowered from 16 to 14. Such sentences for juveniles are now more common.For all the brouhaha about juvenile crime, one factor underlying it is neglected: a pervasive culture of school bullying in a group-oriented education system.
  2. WHEN workers on the London Underground go on strike, Britain’s capital becomes an odd cocktail of the miserable and the carnivalesque.The disruption is immense—a stoppage on July 9th reportedly sapped London’s economy by £300m ($470m)—and strangely reminiscent of Britain’s past, when industrial action by hard-left unions claimed tens of thousands of working days every year.London is growing. In February it passed its previous population record of 8.6m. Immigration from other parts of Britain, Europe and the wider world, combined with an above-average birth rate, put it on track for 10m by 2030.One recent report for the London Assembly found that four in five Underground users experience “discomforting overcrowding”.Fares are already eye-wateringly high (a monthly pass costs £225.10, compared with the equivalent of £74.63 in New York).TfL is replacing ticket offices with machines and moving staff onto platforms to speed the flow of people through the stations. Attendants with loudhailers instruct passengers like cinema directors: “stand back.Negotiations between TfL and the unions are beset with accusations of duplicity and provocation.
  3. The federal court for the Southern District of New York is now the venue for Kering’s suit against Alibaba, a Chinese e-commerce giant. Kering alleges that Alibaba helps fakers sell goods on its websites. The French firm is not the only one to be incensed. On July 17th the American Apparel & Footwear Association (AAFA) demanded that Alibaba crack down on counterfeits. Alibaba insists it has extensive measures in place to do just that.Counterfeit sales are, by definition, difficult to tally. Last year American border officials nabbed copies that, had they been genuine, would have been worth $1.2 billion. Their European Union counterparts seized €768m ($1 billion) of fakes in 2013. But these were surely a fraction of the counterfeits being peddled. Estimates for the total value of fakes sold worldwide each year go as high as $1.8 trillion.On July 21st the European Commission reported that lost sales due to fake clothes and accessories amounted to 10% of the industry’s revenue in Europe. This makes luxury firms shudder.In 2004 Tiffany claimed that eBay was liable for the counterfeit sales on its site. eBay retorted that it could not prevent every illicit post, though it would work to remove them. Courts agreed.Indeed Alibaba has acquired some weighty partners—it has signed agreements with Louis Vuitton, Coach and others to co-operate on fighting counterfeits. But its disputes look likely to heat up. The AAFA wants Alibaba to set up an automated system to take down dubious listings immediately, a demand that is unlikely to be met.
  4. For the first time, Israel sold more cyber-wares than arms. According to figures published recently by the cyber-task-force in the prime minister’s office, in 2014 Israeli companies sold around $6 billion of internet-security software, equivalent to about a tenth of the entire worldwide sales of such stuff.A big chunk of that came from Check Point, best known for its ZoneAlarm antivirus software for home computers, and a provider of a broad range of online-security products for business. Its revenues last year were $1.5 billion.Last year eight of them were sold to foreign investors, for a total of $700m. In September CyberArk, which specialises in protecting firms against attackers who pose as system administrators and other insiders, had one of the year’s biggest IPOs on the American NASDAQ market, and its current valuation is around $2 billion.The number of Israeli cyber-security companies has doubled over the past five years to 300.And Israel has a good supply of experienced software engineers.
  5. IN RECENT years a variety of global names in journalism have been put forward as potential buyers of the Financial Times. But it came as a surprise when, on July 23rd, the FT’s owner, Pearson, announced that it was selling the newspaper to Nikkei of Japan, for £844m ($1.3 billion). Pearson wants to concentrate on its education businesses, and its boss, John Fallon, argued that with the growth of mobile and social-media platforms, a better home for the FT would be a global, digital news company.However, it is not clear quite how Nikkei fits the bill. It publishes Japan’s largest business newspaper, the Nikkei. But it is almost entirely focused on the domestic market. Its daily has 2.7m paid subscribers to the FT’s 737,000, but only one-sixth of them receive the paper digitally.Pearson’s sale of the FT did not include its 50% stake in The Economist, which confers neither corporate nor editorial control. However, Pearson has said it is in talks to sell itsEconomist stake.

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