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The power outage posed particular problems for Argentine electoral officials. PHOTO: Reuters
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- Argentina, Uruguay and Paraguay were plunged into darkness
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African swine flu spread to 58 of Vietnam's 63 provinces
- Sotheby's sold itself for $3.7b to Patrick Drahi
- The U.N. figure for forcible displaced people crossed 70m
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12 died, 100 were injured in a southwest China quake
- Xi Jinping visited North Korea, reminding us of Beijing's role
- Hungary, Poland and Czechia shot down an EU emissions goal
- Adidas was denied a trademark for its signature three stripes
- Quebec enacted a controversial law targeting religious symbols
- 44 perished in a horror bus crash in India
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EDITOR'S NOTE: Put the kettle on for this one, we've got quite a bit to work through.
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Read: People's money first. PHOTO: Forbes
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In the Zodiac, Libra is represented by a set of scales: tools of commerce, measurement, and – above all – balance. To an impartial observer, it may seem like a fitting name for a new technology to revolutionise payments and banking. But the fact that a company as unbound and disruptive as Facebook has named its cryptocurrency after the symbol for balance isn't just a misnomer, it's irony.
Economically 'Libratarian'
This week Facebook announced plans to launch a cryptocurrency some time in 2020. It was described at the announcement in exalted terms: as a solution that will bring the vast "unbanked" masses into the global economy. As Mark Zuckerberg had signalled earlier in the year, "it should be as easy to send money to someone as it is to send a photo". And so in the very near future Zuckerberg intends to make it possible for users to send and receive money through Facebook, Whatsapp and Instagram using his new currency.
Why not Bitcoin? Facebook's new currency starts by addressing two of the biggest issues afflicting existing cryptocurrencies like Bitcoin. The first is asset-hoarding. Wild fluctuations in the prices of Bitcoin and its ilk have spurred regulators to deem such instruments as speculative assets rather than currencies. As such, they are subject to more stringent marketing and sale regulations, for consumer protection. Libra's design gets around this problem by pegging its price to a basket of fiat currencies (like the Dollar and Euro). In other words, for every Libra in circulation there will be an equivalent amount of fiat currency held in vaults – digital or otherwise – around the world. The second issue plaguing existing digital currencies is anonymity-enabled illegality. As one might expect, an ability to transact with anonymity raises concerns about money-laundering and illegal activities like funding for terrorism or trading drugs. Facebook has decreed that by making users verify their accounts with a driver's license or passport (more on this later!), there will be little ability for anyone to use Libra for illicit purposes with impunity.
In tech we trust
So Libra addresses some of the shortcomings of Bitcoin. But you may be wondering what problems any of these new currencies hope to solve anyway. The proponents of cryptocurrencies proselytise a number of benefits. First, the creation of an ultra-low-cost capability for transferring funds across national borders. Second, the elimination of middlemen who inflate costs and impact the speed of financial transactions. And third, an increase in stability through 'decentralisation' - i.e., by eliminating dependence on governments, banks and institutions that are today imbued with the power to oversee financial systems.
The problem is that these ideological pronouncements are reminiscent of prior calls from the tech sector that have not fared well. Remember 'privacy is dead' and 'information wants to be free'? Many of our current problems with fake news, unsustainable news economics, and a cacophonic internet can be traced directly back to some of those ideological beliefs. In most religions, the blind pursuit of beliefs without enough thought given to unintended consequences, long-range impact, risk mitigation, or inclusiveness, leads to great pain and suffering.
Perhaps one of the most striking disconnects in the push for 'decentralisation' is that most of the solutions are in fact highly centralised (in most cases even more so than the incumbent systems they seek to replace). The only difference is that in the new systems both power and profits accrue to a different group of players (hint: usually to those who hawk the benefits of decentralisation).
In the case of Libra, the cryptocurrency will be steered by the Libra Association. It comprises industry-leading venture capitalists like Andreesen Horowitz and Union Square, and companies like Visa, Spotify, eBay, PayPal, and Uber. So the approach here might be to make Libra "too big to fail" - a strategy that has certainly worked well for Facebook in the past.
Cheques and balance sheets
One of the defining traits of a financial institution or system is trust. After all, no sensible person would risk putting hard earned savings at risk in institutions that are unreliable. In fact, this is why governments strictly regulate and guarantee deposits made into approved financial institutions. It's no secret that Facebook's track record of gathering, using, and abusing its users data and privacy has been abysmal. The company has been beset by an incessant stream of privacy scandals. So can this company really be trusted to manage our money? In order to answer this question we should start by trying to understand why Facebook would want to take on this new role of financial custodian in the first place.
To begin with, Facebook knows that it's running out of steam in terms of growing its user numbers. Second, there is only so much more money to be made by proffering its users' intimate details to marketers. Although it should be noted that Libra will keep the dream alive a little bit longer as Facebook harvests even more of your private data (i.e., your driver's license or passport).
The bigger picture here is that there are vast sums of money to be made in the realm of finance - far more than Facebook could ever make through advertising. For decades, banks and wire transfer companies have benefitted from charging high – if not extortionate – fees to transfer money internationally. Their hegemony was challenged by PayPal at the turn of the century, but the damage was limited. Now Facebook has arrived on the scene with hopes of upending the entire banking system. If it is successful, Libra will dismantle more than banks. It will displace the currencies and the national and international systems of checks and balances on which our existing (moderately stable) global economy is built. Despite all its faults, it is impossible to argue that the world's worst impulses aren't kept in check by the vast and overlapping arrays of bureaucrats, procedures, rules and regulations that oversee the current financial system.
Regardless of whether you believe them to be toothless or not, national and international regulators do toil around the clock to curtail egregious and blatantly illegal activity. They are the referees, if you will, of money. And their job is to ensure there is enough trust and belief in the minimum standards of fairness that we all agree to participate in the game. Without these referees, and without this trust (as we saw in 2008), the global system faces an apocalyptic crash.
Flip a digital coin
Which brings us to an inevitable conclusion about Libra. The best-case scenario is that the Libra Association will act in the interest of the greater good. It will prevent its group of powerful insiders from benefiting to the detriment of the larger populace. But even so, it will still undeniably undermine and disrupt trust in the existing system. And that will inflict enormous collateral damage on the world. Take everything you know about fake news, and apply it to the concept of 'fake money'. There is little to suggest either that this damage will be contained, or that it is justified.
First, there are already far less disruptive and highly successful alternatives for serving the unbanked (mPesa and PayTM among them). Second, Libra's mooted disintermediation of financial middlemen will simply give rise to new intermediaries as other companies arrive to 'build on' the new technology. And third, the purported benefit of decentralisation is little more than hot air as power simply gets transferred to a new, opaque, conflicted, and far less accountable group of overseers. Libra aims to shift the oversight and regulation of the world's vast banking, currency trading and payments system from institutions that are mandated to abide by and enforce laws, to a private entity steered by companies like Facebook and Uber (can you name two less-trusted brands from the technology era?). And that's the best-case scenario.
The worst-case scenario is that the project will allow Facebook and its partners to extract even greater (much greater) power and wealth from individuals, organisations and governments, leaving the world at the mercy of a small group of technocrats with little historical interest, knowledge or appreciation for the nuanced and layered systems they disrupt.
The Libra project is being birthed in the religious zeal of 'technologists' and sold as a financial utopia / heaven / nirvana. But it is in fact a commercial initiative propelled more by self-interest, and with the potential to inflict vastly greater misery than benefit on the world.
The most likely outcome for Libra therefore is that it will achieve a swift death, and in the process hasten regulation of the wild west that is the world of cryptocurrency and technology.
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Boris Johnson has places to be. PHOTO: Jeff Overs / BBC
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Hunt becomes the hunted
Conservative Party MPs have whittled their (and Britain's) leadership prospects to just two candidates: Boris Johnson, and Foreign Secretary Jeremy Hunt. A rolling series of votes eliminated all other hopefuls: the women went first, followed by the moderates, then the mediocre, and eventually, Johnson's arch-rival Michael Gove. It is in keeping with the Brexit-afflicted bedlam of British democracy that 120,000 card-carrying Tory members will now get to decide who leads their 66 million compatriots. Their choices are a well-documented and prodigious liar who appears singularly focused on self-empowerment. And Hunt, a man memorably described by one commentator as a "a human vacuum; you forget he exists the moment that you're not looking at him".
The prize-fighters have just over a month to campaign. But theirs is unlikely to be a contest of ideas in which the merits of various policies are tested. That's because all those policies pale in comparison to the emergency that ejected their predecessor: Brexit.
So far both men have boldly averred that Britain can leave the European Union on October 31st AND do so with a new deal. EU leaders disagree. They have, in the words of one newspaper, "lined up to torpedo Boris Johnson's hope of reopening the Brexit deal". But that is exactly the kind of categorical view from Europe that somehow gets lost en route over the English Channel.
You may remember another instance, in April of this year, when Donald Tusk agreed to the October Brexit extension with the proviso and plea, "please do not waste this time". In the minds of Tory leaders apparently that translated to "please waste several months on a leadership ballot and delay exploring any solutions".
EDITOR'S NOTE: There remains a mathematical chance that Hunt could win, but we'd counsel you to get used to the honorific "Prime Minister Boris Johnson").
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In Greenland, once-reliable paths across ice-sheets are melting. PHOTO: The Independent
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A climate triptych: water, dust and oil
The photo above, captured by Danish climatologist Steffen M Olsen, may well go down in the annals of climate history. It doesn't have the visceral squeeze of that other arresting climate photo – the stricken polar bear on a disintegrating piece of ice – but it does capture cause and effect (humans, and the environment we've altered).
Meanwhile in India, all four major dams supplying Chennai have run dry. India's sixth-largest city, home to just under 5m, is now officially on the borrowed time of pumped lake-water and government water trucks. Farming regions (on which 70% of the country's population depend) have been bitten once by drought and again by weakened monsoonal rains. By next year, 21 Indian cities will have tapped out their ground water. This includes the capital, New Delhi. Meanwhile, the Himalayas are shedding 800b tonnes of ice that isn't being replenished by snowfall each year. The collapse of India's water supply cannot be described in the future tense.
And in Canada, where there was once a sheen around Prime Minister Justin Trudeau, there is now a thick sludge of tar sand oil. This week his government delivered a one-two punch by declaring a 'climate emergency' on one day and approving a huge pipeline expansion to carry crude oil the next. On the heels of Trudeau's announcements came the news that permafrost is melting in the Canadian arctic, a full seven decades ahead of schedule. No amount of charisma, nuance or spin can obfuscate what is now a global reality: we know which actions will hasten the destruction of life on Earth, but we are proceeding nonetheless, all for the sake of short-term profits.
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Fill my cup. PHOTO: Wütternberg State Museum / P. Frankenstein, H. Zwietasch
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Before Bordeaux it was Helleniko
We tend to describe globalisation as a modern phenomenon, despite a barrage of evidence to the contrary. There are few things as enjoyable as sipping on a fine Mediterranean wine, and apparently we've known that fact for two and a half millennia.
This week we found out that the Celts living in modern-day France were using decidedly Greek drinking vessels as early as the 5th century B.C.E. Ancient tendrils of trade and interaction suggest a level of cooperation amongst ancient peoples that is all too easy to forget amongst the invariably bloody accounts of the history books. This gives new meaning to the adage: in vino veritas.
Shrink-wrapped carrots
Good customer service (omotenashi) in Japan dictates that any goods sold must be carefully ensconced in several layers of wrapping and plastic bags (Japan uses 40 billion of them annually). Individually shrink-wrapped items of fruit are commonplace in markets. But now the government is taking the difficult step of shaking off decades of practice – not to mention centuries of tradition – with a plastic- and packaging-free campaign. If Japan can do it, the rest of us can too. Get yourself a shopping bag, pronto.
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The face that launched a thousand ships. PHOTO: AFP
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Gulf War III
During the Bush administration – a distant era – there was at least a modicum of effort spent on making the case for war with Iraq (piecemeal and legally tenuous as it was). Today, the White House seems largely insouciant as it scrapes together a cursory jus ad bellum for the next Gulf War. National Security Advisor John Bolton's pronouncements to a credulous media have been righteous, apoplectic, and unsubstantiated. In the absence of any defensible legal argument for military action against Iran, mere trifles must shoulder the mantle. Was it an encroaching unmanned surveillance drone that was shot down, or the U.S.S. Arizona all over again?
We'll skip past the philosophical quandaries posed by the deployment of robotic weapons in the modern era. Let's also walk right past the internationally agreed-upon fact that one ought not to fly military aircraft into other countries' airspaces. In fact we can even take a pass even on the report that broke late in the week alleging that U.S. President Donald Trump had okayed retaliatory airstrikes against Iran after the drone was shot out of the sky. Thankfully, at least for now, the president countermanded his order. But not since the medieval period have the lives of so many people hung on the whims of a capricious ruler (and it is a whim: Trump has reportedly already lost interest in armed action against his other bogeys, Venezuela and North Korea).
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Quote of the week
"Sent from Samsung device."
– Egypt's famously not-free press delivered a pearler this week. In the wake of disgraced ex-President Mohamed Morsi's death in a courtroom, Egypt's major newspapers (bar one) circulated the same 42-word article which failed to mention that he had at one point led the nation, or the fact that his early expiration was the result of medical neglect in prison. But the veil between diktat and news bulletin tore when a newsreader accidentally read too far down the government email. A look of horror dawned across her face as she read out the automatic signature appended to emails sent on Samsung phones.
Headline of the week
The leaders' debate proved one thing, there is nothing that isn't improved by the absence of Boris Johnson
– The Independent
Special mention
Japanese women sitting their medical school entrance exams. For years Juntendo University falsified the exam results to exclude women from prestigious courses. When the practice was revealed last year the blowback was rightfully cyclonic. The results are in from this year's test: 8.28% of female applicants passed compared to 7.72% of the male applicants.
Some choice long-reads
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EDITOR'S NOTE: Read this. It is perhaps the finest example of sport writing we've read in years.
Tom Wharton
@trwinwriting
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