Letters to the editor

You can’t bank on it

SIR – The new bank capital standards put forward by the Bank of England will not, as you state, “remove the implicit subsidy big banks have unfairly enjoyed” by their being too big to fail (“Buffering”, November 15th). So-called “bail-in” bonds are, after all, not equity, they are debt—the very same debt that carries lower risk premiums because of an implicit guarantee from taxpayers.

It is sheer folly to imagine that we can eliminate the too-big-to-fail subsidy by providing even more subsidies. Masking the new bonds as capital simply adds a layer of confusing debt to the banks’ balance-sheets. Andrew Haldane, the Bank of England’s chief economist, recently decried financial-reform efforts as “fighting complexity with complexity”. To that we can now add fighting subsidy with subsidy.

Professor Cornelius Hurley
Director
Centre for Finance, Law and Policy
Boston University

Chinese fossils

SIR – It is correct that the Chinese word for dinosaurs (konglong) means “fearful dragons” (“Bone China”, November 15th). However, the Chinese term is a direct translation of “dinosaur”, the Greek derivation of which is deinos, meaning “terrible” and sauros, meaning “lizard”. The term dinosaur was coined in 1842 by Richard Owen, a British naturalist, and later translated via Japanese to Chinese. Chinese names for inventions and discoveries are often original and evocative. For example, “fire car” (huoche) means “railway train”, and “film” is “electric shadow” (dianying).

Michael O’Sullivan
Chief executive
Cambridge International Examinations
University of Cambridge

A bad rep

* SIR – What was missing from Buttonwood’s discussion (November 15th) about capitalism’s reputation was a mention of the cultural crisis in American society. The beneficiaries of 21st century capitalism are completely isolated from the people they are leaving behind. In the 19th century the robber barons built mansions on main street and were at least somewhat integrated into their communities. Society was bound by close cultural ties, whether national, ethnic, or religious. Today elites cluster in homogenous communities, what Charles Murray calls SuperZips, where they eat, shop, marry, raise their children and pray differently from everyone else. This self-segregation has produced an elite with little understanding of the lives of regular Americans.

At the same time globalisation and secularisation have destroyed any sense of community between elites and the masses, and created bitterness among those left behind. Economic liberty may have created great wealth, but fraternity is sorely in need of attention.

Alex Ewing
Cincinnati, Ohio

* SIR – Buttonwood could have been clearer by being more discriminative into the nature of capitalism. Two extreme distinctions are: 1) capitalists who are productive; who make more money by in net creating far more value for the country, without reducing that value by preventing competition or limiting peoples’ potentials; 2) capitalist who are not productive, who are predators; who make money by in net taking value away from others (even if legally).

Capitalism is a marvellous way to create value. The people of a country with the culture, values and laws where the first type of capitalists have vastly more impact than the second type will be richer. Add something else, and its citizens will also have safety and freedom, in the nature of democracy, that allows cultural, artistic, mental and spiritual development.

Apprehension about capitalism is created by the impact of the second type of capitalists, like the ones that brought the economy down six years ago.

Carlos W. Moreno
Cincinnati, Ohio

* SIR - In response to Buttonwood’s pointed assessment of the bad reputation of ‘capitalism’: the marketing community has long since found a replacement by the name of ‘entrepreneurship’.

Mario van Gastel
Austin, Texas

Don't be neutral

SIR – As a pro-business publication, I believe that The Economist should be championing the removal of net neutrality (“Not neutral about net neutrality”, November 15th). “Neutrality” does not work in any comparable industry, so why is the internet an exception? Take postal services. If a business wants a parcel delivered by the standard service, Royal Mail will happily deliver it over a couple of days. If you want it guaranteed the next day, you pay extra.

It is the same with toll roads and business-class fares. You pay a premium for a premium service. This system has worked well and produced choice, innovation and competition that has benefited customers. The same will be true for the internet. Net neutrality has had its day and it is now stifling progress.

Chris Goswami
Director of marketing
Openwave Mobility
Styal, Cheshire

The Catalonia question

SIR – You argued that the Spanish government should let the Catalans have a referendum on independence (“Let them vote”, November 15th). But there is no possible mechanism for doing that without contravening the Spanish constitution. The constitutional court has ruled that the referendum cannot take place, so the government in Madrid is merely upholding the law.

The Spanish constitution of 1978 not only brought democracy back to our country, it also established Spain, as you rightly said, as “the most devolved country in Europe”, with the 17 autonomous regions enjoying all sorts of powers in areas such as spending, education and the right to promote regional languages. The constitution is the bedrock of Spain, voted for by the overwhelming majority of Spaniards, including, incidentally, 90% of Catalans.

Crucially, the constitution enshrines the unity of the Spanish nation and does not recognise a right to self-determination, something that is common in the constitutions of other Western democracies. The Spanish government cannot concede this right, or even negotiate about it, without reforming the constitution, but the Catalan parliament can certainly make a proposal to change our Supreme Law.

The Catalan government knows this full well, so why doesn’t it act within the legal and constitutional framework?

Federico Trillo-Figueroa
Ambassador of Spain
London

SIR – You mention that Catalonia’s succession from Spain would raise doubts over its membership of the European Union and the euro but forget to mention membership of La Liga, Spain’s premier football competition. The prospect of playing clubs like Girona or Sabadell week in and week out could be enough to persuade a large proportion of FC Barcelona’s huge fan base to vote to remain part of Spain, even if their inclination is to leave.

Jonathan Dykes
Barcelona

Motoring on

* SIR - The Economist’s interest in Detroit reflects the fact that we remain a relevant global city (“Chapter 9 draws to an end”, November 15th). Antoine de la Mothe Cadillac established Detroit in 1701 to keep the British from moving West of New England and to monopolise the fur trade in North America. A century long struggle followed between the French and the British for commercial control of the Great Lakes region.

19th century Detroit became an industrial powerhouse and then in the 20th century put the world on wheels. The population reached 2 million; the streets were safe, children were well-educated and institutions were well healed. The world noticed. The decline that followed has been unprecedented but the city remains resilient.

Leaders of Detroit and Michigan recognise their responsibilities to all citizens and the important role that the city plays as a significant economic engine of the state and region including our Canadian neighbours. We will continue to leverage our natural, human and cultural resources for the betterment of our community and will find our way on the world stage once more.

Gregory R. McDuffee
Chairman
Urban Land Institute Michigan
Detroit, Michigan

* SIR – As a recent Detroit retiree I can’t help but feel that we are being scapegoated for the sins of others particularly the felonious ex-mayor over the necessary bankruptcy. Banks and insurance companies involved in the ill fated and possibly illegal swaps deal get prime downtown property when they shouldn’t gey anything. They knew the risk they were taking and did it anyway.

Retirees who did nothing wrong were promised a pension in the Michigan constitution and voted ‘yes’ to the grand bargain are treated like criminals and are saddled with significant health-care cost increases on top of substantial pension cuts. This doesn’t seem right or fair to me.

William Plumpe
Detroit, Michigan

Politics in Tower Hamlets

SIR – A column that refers to Bangladeshis as having “colonised” London’s East End, that links the (false) corruption claims against me to an “effort to import South Asian political ways” and accuses white East Enders of “bafflement or irritation” at Muslims has no place in, as Bagehot puts it, a “zesty, multi-coloured” London (November 15th). The column accuses me of building an “ethnic block” that does not interest younger Bangladeshis. Yet young people voted for my administration disproportionately, not on racial grounds, but because we introduced university bursaries and college allowances, funnelled millions of pounds into youth services and helped create some of Britain’s best urban schools.

As a metropolitan social democrat brought up in Britain, elected on an anti-austerity manifesto, I am not sure what kind of ethnic politics I am supposed to be replicating. Unlike a fair few local Labour Party activists, I am not aligned to any Bangladeshi party and haven’t visited the country since 1995.

Lutfur Rahman
Mayor of Tower Hamlets
London

The age of consent

SIR – “How young is too young?” (November 15th) referred to Shakespeare’s Juliet as being “around 13”. True, old Capulet says that his daughter has not yet reached 14, but Shakespeare’s source for the play has her at nearly 16, according to a paper by Karl Franson, “Too Soon Marr’d”, published in 1996. The earliest legal age of marriage in Elizabethan England was 14, but early teen marriages were rare. The marriages we know about were not allowed to be consummated until the spouses were much older. Shakespeare cast Juliet as unusually young for artistic purpose, not as a sociological reflection of his times.

Susan Stein
Omaha, Nebraska

Statistical meanies

SIR – I agree that “averages should not be the sole basis for making policy decisions” (“Misleading means”, November 22nd). Your article reminded me of a sign that was posted outside the office door of a visiting African scholar. Putting the matter succinctly, it read, “A statistician is a fellow who says that if you ate a chicken and I ate nothing, we each ate, on average, half a chicken.”

Lawrence Mohr
Professor emeritus of political science at the University of Michigan
Portland, Oregon

* Letters appear online only