Tag: Business and finance

CHINESE banks are not far removed from the age of the abacus. In the 1980s they used these ancient counting boards for much of their business. In the 1990s many bank employees had to pass a basic abacus test. Today the occasional click-clack, click-clack can still be heard in villages as tellers slide their abacus beads up and down the rack.

But these days the abacus is mainly a symbol, more likely to be used in the branding of China’s online-finance companies than as a calculating tool. At least three internet lenders have paid homage to it in their names: Abacus Loans, Small Abacus and Modern Abacus. The prominence, so recently, of the abacus is testament to how backward Chinese banking was a short time ago. The rise of the online lenders shows how quickly change has come.

By just about any measure of size, China is the world’s leader in fintech (short for “financial technology”, and referring here to internet-based banking and investment). It is far and away the biggest market for digital payments, accounting for nearly half of the global total. It is dominant in online lending, occupying three-quarters of the global market. A…Continue reading

BILL GATES is an unlikely Luddite, however much Microsoft may have provoked people to take a hammer to their computers. Yet in a recent interview with Quartz, an online publication, he expressed scepticism about society’s ability to manage rapid automation. To forestall a social crisis, he mused, governments should consider a tax on robots; if automation slows as a result, so much the better. It is an intriguing if impracticable idea, which reveals a lot about the challenge of automation.

In some distant future robots with their own consciousnesses, nest-eggs and accountants might pay income taxes like the rest of us (presumably with as much enthusiasm). That is not what Mr Gates has in mind. He argues that today’s robots should be taxed—either their installation, or the profits firms enjoy by saving on the costs of the human labour displaced. The money generated could be used to retrain workers, and perhaps to finance an expansion of health care and education, which provide lots of hard-to-automate jobs in teaching or caring for the old and sick.

A robot is a capital investment, like a blast furnace or a…Continue reading

THIS week, United Airlines introduced the change that no flyers were eagerly awaiting: “basic economy” class. You might think that some budget-conscious travellers would welcome the arrival of the new no-frills designation, which offers the lowest fares but strips away flyers’ ability to select their seats, bring full-size carry-on bags onto the plane and earn elite qualifying miles. They might, except basic economy doesn’t actually bring lower fares than the ones already available.

Ben Schlappig was the first to note this on his popular «One Mile at a Time» blog. Mr Schlappig looked at fares on a Minneapolis-Denver route before and after the introduction of basic economy. (On February 22nd United began offering basic economy only between its seven American hubs and Minneapolis; other routes in the United States, Latin America, and the Caribbean will follow.) Prior to the rollout, he found that standard economy fares on this route started at $173. When the “new” fares became available, the basic economy seats began…Continue reading

THERE exists a genre of information which might be termed “little-known facts that everyone knows”. It is the sort of tidbit you expect to amaze your friends at a dinner party, but which is greeted with rolled eyes. Casinos don’t have clocks or windows. Alanis Morissette’s song “Ironic” contains no example of irony. The body exerts more calories digesting celery than is contained within the vegetable. (Except the last of these facts—and everyone knows this—is in fact untrue.)

Then there is Bloody Marys and aeroplanes. Have you ever wondered why the only time most people fancy gulping down vodka, tomato juice and Worcestershire sauce is when strapped into the seat of a passenger jet? It is a little-known fact (that everyone knows) that our taste buds are dampened by the low pressure and humidity in the cabin, as well as the white noise of the engines. This particularly affects flavours that are sweet and salty. The umami taste, however, remains prominent. Tomato juice is high in umami. Worcestershire sauce, meanwhile, is what one cook…Continue reading

Could the rise of renewables be putting the traditional electricity market into a crisis? Also: Economist Diane Elson takes governments to task about the gender biases in their economic policies. And how the Brazilian government is tackling one of its biggest financial problems: pensions.