Economist 3/17/16

  1. In the Saint Patrick of popular culture, only two features of his life stand out; he banished snakes from Ireland, and he used an Irish plant, the shamrock, as a teaching aid, using its triple-leaved shape to explain the idea of a single God in three persons. As with so much else that occurred on the edges of the Roman world, in the shadowy time when the empire was collapsing, the story of Patrick’s life is a mixture of tantalising clues and big question-marks. It is agreed that he came to Ireland to preach Christianity in the fifth century and that he died in the second half of that century. The most rock-solid fact we know about Christianity’s introduction to Ireland is that in the year 431 the pope sent a missionary called Palladius to the island; there is no date of similar certainty for Patrick’s mission.What we do possess, though, is Patrick’s own voice: two powerful Latin documents in which the saint’s personality emerges. In the better known of those texts, his “Confessio”, the saint recounts touching details of his own life.
  2. THIS Sunday, the metro system in Washington, DC will celebrate its 40th birthday. It won’t be much of a party.On Wednesday, those gripes reached a new level, as the entire Metro system was shut down for the day due to safety concerns. The closure was caused by a fire on a track earlier this week.It is the first time the Metro has been taken out of commission other than for extreme weather, and it unleashed commuting chaos across the region. The Washington region is highly dependent on the Metro, the country’s second-biggest transit network after New York.Afterconsistent growth  from the 1990s to 2009, the number of daily riders has dropped alarmingly in the past few years. People have begun to see it as a broken system of delayed trains, crammed carriages and weekend track work that renders service infrequent and unreliable.Metro’s problem is twofold. Bad management is partly to blame, although there is hope that Mr Wiedefeld can turn this around. But the more intractable issue is inadequate funding. Without the money to be proactive, Metro is constantly playing catchup on important safety measures and repairs.
  3. By 2030 the majority of Indians will be of working age. This could be what economists call a “demographic dividend”, creating a high worker-to-dependent ratio—or it could be a time bomb. India is producing nowhere near enough jobs for the tens of millions of young people joining the workforce every year.The argument running through Ms Sengupta’s book, made of seven richly detailed portraits of young Indians, is both simple and beguiling. For centuries Indians born into wretched circumstances have accepted their lot as karma—punishment for misdeeds in past lives. This belief explains the persistence of the caste system.Young Indians today demand the right to shape their own futures.Yet at every step the young are thwarted. A traditional preference for boys means that India has one of the most skewed sex ratios in the world: 1.13 boys for every girl, second only to China. (The ratio in America is 1.05.) One in three children under five is underweight. Nearly two-thirds of food meant for early-childhood feeding programmes is pilfered. A rare bright spot is education: in 2013, 96% of primary-school-age children were enrolled. But here, too, India fails its young. By the age of ten, only 60% of students can complete work at the level of a five-year-old. More than half cannot subtract.
  4. In 2015, after just over ten years in business, Tesla’s sales surpassed 50,000 cars. By 2020 it hopes to sell 500,000 a year, mostly Model 3s. These will cost as little as $35,000 (before the generous subsidies many governments dish out).But it is entering a part of the market where competition is intense and profit margins slimmer.Tesla has shown that the barriers to entry in the car industry are far lower than widely assumed. The company bought a factory in Fremont, California, from GM and Toyota for just $42m, after the American firm pulled out of their joint venture and filed for bankruptcy in the wake of the financial crisis.It is run frugally. Sanford C. Bernstein, a research firm, reckons Tesla’s total capital spending and outlay on research and development so far is under $4 billionone-seventh of what Volkswagen spends in a year.It tackled high costs by stringing together hundreds of small, mass-produced laptop batteries. Tesla claims that its power-packs cost half what big carmakers pay their suppliers for custom-designed large-format batteries
  5. Tesla currently has no direct competitors. Yet Apple looks set to launch a luxury electric car.In a couple of years Audi, Jaguar and other premium-car makers plan electric vehicles on a par with Tesla’s two priciest cars.Launching the Model 3 will put Tesla’s business model under far more strain. Other carmakers look on its extreme vertical integration with bemusement.Other carmakers are now largely brand managers, assemblers and systems integrators, ensuring that all the parts they buy from suppliers work in harmony when bolted and welded together. This serves to spread risk and push costs to suppliers. Tesla makes most of its parts in-house.It has sought to attract buyers and tackle “range anxiety” by building its own worldwide network of more than 3,500 roadside “superchargers”.Tesla sells directly to the public, through its website and in showrooms located in shopping centres. This means it keeps the retail markup, but it is unclear how much.In all, Tesla’s way of working requires lots of cash. Barclays, a bank, thinks the firm will burn through $11 billion over the next five years, and will not generate significant profits until then.

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