A Biased Market

Economics focus

A biased market
Oct 30th 2008
From The Economist print edition

Skewed news reporting is taken as a sign of a dysfunctional media. In fact, it may be a sign of healthy competition

Illustration by Jac DepczykBARACK OBAMA recently told a writer for the New York Times Magazine that he was convinced he might be two or three percentage points better off in the polls for the American presidential election if Fox News, a right-leaning television station, did not exist. Sarah Palin, the Republican nominee for vice-president, has made hay railing against the bias of the “liberal media”. Allegations of partial news reporting are common in American politics. But few stop to ask what leads to differences in the way the news is reported.

Bias can be thought of as a supply-side phenomenon that arises from ideology. Owners’ or employees’ political views will determine how a newspaper or channel slants its coverage of a piece of news. But this does not square with the assumption that readers and viewers value accuracy. If so, then competition should hurt media outlets that systematically distort the news (in any direction). The brouhaha about bias in America, as free a media market as any, suggests something else is going on.

The key to understanding why bias flourishes in a competitive market may lie in thinking more clearly about what readers actually want. Sendhil Mullainathan and Andrei Shleifer, two Harvard economists, argued in an influential paper* that it may be naive to think that people care about accuracy alone. Instead, they modelled the consequences of assuming that newspaper readers also like to have their beliefs confirmed by what they read. As long as readers have different beliefs, the Mullainathan-Shleifer model suggests that competition, far from driving biased reporting out of the market, would encourage newspapers to cater to the biases of different segments of the reading public. A more recent paper** by Matthew Gentzkow and Jesse Shapiro, two economists at the University of Chicago’s business school, set out to test this proposition.

To do so, they first needed a way to measure the political slant of American news coverage. Their solution was rather imaginative. The researchers ran computer programs that analysed debates in Congress and identified phrases that were disproportionately used by Republicans or Democrats. The list of frequent Democratic phrases, for example, included “estate tax”. While talking about the same issue, Republicans tended to use the phrase “death tax”. (This is not just coincidence. Mr Gentzkow and Mr Shapiro quote an anonymous Republican staffer as saying that the party machine trained members to say “death tax”, because “‘estate tax’ sounds like it hits only the wealthy but ‘death tax’ sounds like it hits everyone”.) Having identified partisan phrases, the academics then analysed the news coverage of more than 400 American newspapers to see how often they cropped up in reporting. This gave them a precise measure of “slant”, showing the extent to which the news coverage in these papers tended to use politically charged phrases.

Mr Gentzkow and Mr Shapiro then needed to assess the political beliefs of different newspapers’ readerships, which they did using data on the share of votes in each newspaper’s market that went to President Bush in the 2004 presidential elections, and information on how likely people in different parts of that market were to contribute to entities allied to either Democrats or Republicans. The researchers were now able to look at the relationships between circulation, slant, and people’s political views.

First, they measured whether a newspaper’s circulation responded to the match between its slant and its readers’ views. Not surprisingly, they found that more “Republican” newspapers had relatively higher circulations in more “Republican” zip codes. But their calculations of the degree to which circulation responded to political beliefs also allowed them to do something more interesting: to calculate what degree of slant would be most profitable for each newspaper in their sample to adopt, given the political make-up of the market it covered. They compared this profit-maximising slant to their measure of the actual slant of each newspaper’s coverage.

They found a striking congruence between the two. Newspapers tended, on average, to locate themselves neither to the right nor to the left of the level of slant that Mr Gentzkow and Mr Shapiro reckon would maximise their profits. And for good commercial reasons: their model showed that even a minor deviation from this “ideal” level of slant would hurt profits through a sizeable loss of circulation.

Have I got skews for you
Showing that newspapers have a political slant that is economically rational does not necessarily answer the question of whether ownership or demand determines bias. Here, the academics are helped by the fact that large media companies may own several newspapers, often in markets that are politically very different. This allowed them to test whether the slants of newspapers with the same owner were more strongly correlated than those of two newspapers picked at random. They found that this was not so: owners exerted a negligible influence on slant. Readers’ political views explained about a fifth of measured slant, while ownership explained virtually none.

None of this is particularly helpful to seekers of the unvarnished truth. These conscientious sorts still have to find the time to read lots of newspapers to get an unbiased picture of the world. But by serving demand from a variety of political niches, competition does allow for different points of view to be represented. After all, just as Mrs Palin does not spend her time condemning Fox News, Mr Obama is unlikely to have too many complaints about the New York Times.



* “The Market for News”, American Economic Review (September 2005).
** “What Drives Media Slant? Evidence from U.S. Daily Newspapers” (May 2007) http://faculty.chicagogsb.edu/matthew.gentzkow/biasmeas081507.pdf

The frayed knot

Marriage in America





May 24th 2007 | MORGANTOWN, WEST VIRGINIA
From The Economist print edition


SKC





As the divorce rate plummets at the top of American society and rises at the bottom, the widening “marriage gap” is breeding inequality

THE students at West Virginia University don't want you to think they take life too seriously. It is the third-best “party school” in America, according to the Princeton Review's annual ranking of such things, and comes a creditable fifth in the “lots of beer” category. Booze sometimes causes students' clothes to fall off. Those who wake up garmentless after a hook-up endure the “walk of shame”, trudging back to their own dormitories in an obviously borrowed football shirt, stirring up gossip with every step.

And yet, for all their protestations of wildness, the students are a serious-minded bunch. Yes, they have pre-marital sex. “I don't see how it's a bad thing,” says Ashley, an 18-year-old studying criminology. But they are careful not to fall pregnant. It would be “a major disaster,” says Ashley. She has plans. She wants to finish her degree, go to the FBI academy in Virginia and then start a career as a “profiler” helping to catch dangerous criminals. She wants to get married when she is about 24, and have children perhaps at 26. She thinks having children out of wedlock is not wrong, but unwise.

A few blocks away, in a soup kitchen attached to a church, another 18-year-old balances a baby on her knee. Laura has a less planned approach to parenthood. “It just happened,” she says. The father and she were “never really together”, merely “friends with benefits, I guess”. He is now gone. “I didn't want to put up with his stuff,” she says. “Drugs and stuff,” she adds, by way of explanation.

There is a widening gulf between how the best- and least-educated Americans approach marriage and child-rearing. Among the elite (excluding film stars), the nuclear family is holding up quite well. Only 4% of the children of mothers with college degrees are born out of wedlock. And the divorce rate among college-educated women has plummeted. Of those who first tied the knot between 1975 and 1979, 29% were divorced within ten years. Among those who first married between 1990 and 1994, only 16.5% were.

At the bottom of the education scale, the picture is reversed. Among high-school dropouts, the divorce rate rose from 38% for those who first married in 1975-79 to 46% for those who first married in 1990-94. Among those with a high school diploma but no college, it rose from 35% to 38%. And these figures are only part of the story. Many mothers avoid divorce by never marrying in the first place. The out-of-wedlock birth rate among women who drop out of high school is 15%. Among African-Americans, it is a staggering 67%.

Does this matter? Kay Hymowitz of the Manhattan Institute, a conservative think-tank, says it does. In her book “Marriage and Caste in America”, she argues that the “marriage gap” is the chief source of the country's notorious and widening inequality. Middle-class kids growing up with two biological parents are “socialised for success”. They do better in school, get better jobs and go on to create intact families of their own. Children of single parents or broken families do worse in school, get worse jobs and go on to have children out of wedlock. This makes it more likely that those born near the top or the bottom will stay where they started. America, argues Ms Hymowitz, is turning into “a nation of separate and unequal families”.

A large majority—92%—of children whose families make more than $75,000 a year live with two parents (including step-parents). At the bottom of the income scale—families earning less than $15,000—only 20% of children live with two parents. One might imagine that this gap arises simply because two breadwinners earn more than one. A single mother would have to be unusually talented and diligent to make as much as $75,000 while also raising children on her own. And it is impossible in America for two full-time, year-round workers to earn less than $15,000 between them, unless they are (illegally) paid less than the minimum wage.






But there is more to it than this. Marriage itself is “a wealth-generating institution”, according to Barbara Dafoe Whitehead and David Popenoe, who run the National Marriage Project at Rutgers University. Those who marry “till death do us part” end up, on average, four times richer than those who never marry. This is partly because marriage provides economies of scale—two can live more cheaply than one—and because the kind of people who make more money—those who work hard, plan for the future and have good interpersonal skills—are more likely to marry and stay married. But it is also because marriage affects the way people behave.

American men, once married, tend to take their responsibilities seriously. Avner Ahituv of the University of Haifa and Robert Lerman of the Urban Institute found that “entering marriage raises hours worked quickly and substantially.” Married men drink less, take fewer drugs and work harder, earning between 10% and 40% more than single men with similar schooling and job histories. And marriage encourages both spouses to save and invest more for the future. Each partner provides the other with a form of insurance against falling sick or losing a job.

Marriage also encourages the division of labour. Ms Dafoe Whitehead and Mr Popenoe put it like this: “Working as a couple, individuals can develop those skills in which they excel, leaving others to their partner.” Mum handles the tax returns while Dad fixes the car. Or vice versa. As Adam Smith observed two centuries ago, when you specialise, you get better at what you do, and you produce more.

Perhaps the most convincing work showing that marriage is more than just a piece of paper was done by Mr Lerman of the Urban Institute. In “Married and Unmarried Parenthood and Economic Wellbeing”, he addressed the “selection effect”—the question of whether married-couple families do better because of the kind of people who marry, or because of something about marriage itself.

Using data from a big annual survey, he looked at all the women who had become pregnant outside marriage. He estimated the likelihood that they would marry, using dozens of variables known to predict this, such as race, income and family background. He then found out whether they did in fact marry, and what followed.






His results were striking. Mothers who married ended up much better off than mothers with the same disadvantages who did not. So did their children. Among those in the bottom quartile of “propensity to marry”, those who married before the baby was six months old were only half as likely to be raising their children in poverty five years later as those who did not (33% to 60%).

Changes in family structure thus have a large impact on the economy. One of the most-cited measures of prosperity, household income, is misleading over time because household sizes have changed. In 1947, the average household contained 3.6 people. By 2006, that number had dwindled to 2.6. This partly reflects two happy facts: more young singles can afford to flee the nest and their parents are living longer after they go. But it also reflects the dismal trend towards family break-up. A study by Adam Thomas and Isabel Sawhill concluded that if the black family had not collapsed between 1960 and 1998, the black child-poverty rate would have been 28.4% rather than 45.6%. And if white families had stayed like they were in 1960, the white child poverty rate would have been 11.4% rather than 15.4%.



Children of the sexual revolution
Since the 1960s, the easy availability of reliable contraception has helped to spur a revolution in sexual mores. As opportunities for women opened up in the workplace, giving them an incentive to delay child-bearing, a little pill let them do just that without sacrificing sex. At the same time, better job opportunities for women changed the balance of power within marriage. Wives became less economically dependent on their husbands, so they found it easier to walk out of unhappy or abusive relationships.

As the sexual revolution gathered steam, the idea that a nuclear family was the only acceptable environment in which to raise a child crumbled. The social stigma around single motherhood, which was intense before the 1960s, has faded. But attitudes still vary by class.

College-educated women typically see single motherhood as a distant second-best to marriage. If they have babies out of wedlock, it is usually because they have not yet got round to marrying the man they are living with. Or because, finding themselves single and nearly 40, they decide they cannot wait for Mr Right and so seek a sperm donor. By contrast, many of America's least-educated women live in neighbourhoods where single motherhood is the norm. And when they have babies outside marriage, they are typically younger than their middle-class counterparts, in less stable relationships and less prepared for what will follow.

Consider the home life of Lisa Ballard, a 26-year-old single mother in Morgantown. She strains every nerve to give her children the best upbringing she can, while also looking for a job. Her four-year-old son Alex loves the Dr Seuss book “Green Eggs and Ham”, so she reads it to him, and once put green food colouring in his breakfast eggs, which delighted him. But the sheer complexity of her domestic arrangements makes life “very challenging”, she says.

She has four children by three different men. Two were planned, two were not. Two live with her; she has shared custody of one and no custody of another. One of the fathers was “a butthole” who hit her, she says, and is no longer around. The other two are “good fathers”, in that they have steady jobs, pay maintenance, make their children laugh and do not spank them. But none of them still lives with her.

Miss Ballard now thinks that having children before getting married was “not a good idea”. She says she would like to get married some day, though she finds the idea of long-term commitment scary. “You've got to definitely make sure it's the person you want to grow old with. You know, sitting on rocking chairs giggling at the comics. I want to find the right one. I ask God: ‘What does he look like? Can you give me a little hint?’”

If she does find and wed the man of her dreams, Miss Ballard will encounter a problem. She has never seen her own father. Having never observed a stable marriage close-up, she will have to guess how to make one work. By contrast, Ashley, the criminology student at the nearby university, has never seen a divorce in her family. This makes it much more likely that, when the time is right, she will get married and stay that way. And that, in turn, makes it more likely that her children will follow her to college.

Most children in single-parent homes “grow up without serious problems”, writes Mary Parke of the Centre for Law and Social Policy, a think-tank in Washington, DC. But they are more than five times as likely to be poor as those who live with two biological parents (26% against 5%). Children who do not live with both biological parents are also roughly twice as likely to drop out of high school and to have behavioural or psychological problems. Even after controlling for race, family background and IQ, children of single mothers do worse in school than children of married parents, says Ms Hymowitz.

Children whose father was never around face the toughest problems. For those whose parents split up, the picture is more nuanced. If parents detest each other and quarrel bitterly, their kids may actually benefit from a divorce. Paul Amato of Penn State University has found that 40% of American divorces leave the children better (or at least, no worse) off than the turbulent marriages that preceded them. In other cases, however, what is good for the parents may well harm the children. And two parents are likely to be better at child-rearing because they can devote more time and energy to it than one can.

Research also suggests that middle- and working-class parents approach child-rearing in different ways. Professional parents shuttle their kids from choir practice to baseball camp and check that they are doing their homework. They also talk to them more. One study found that a college professor's kids hear an average of 2,150 words per hour in the first years of life. Working-class children hear 1,250 and those in welfare families only 620.

Co-habiting couples have the same number of hands as married couples, so they ought to make equally good parents. Many do, but on average the children of co-habiting couples do worse by nearly every measure. One reason is that such relationships are less stable than marriages. In America, they last about two years on average. About half end in marriage. But those who live together before marriage are more likely to divorce.

Many people will find this surprising. A survey of teenagers by the University of Michigan found that 64% of boys and 57% of girls agreed that “it is usually a good idea for a couple to live together before getting married in order to find out whether they really get along.” Research suggests otherwise. Two-thirds of American children born to co-habiting parents who later marry will see their parents split up by the time they are ten. Those born within wedlock face only half that risk.

The likeliest explanation is inertia, says Scott Stanley of the Centre for Marital and Family Studies at the University of Denver, Colorado. Couples start living together because it is more fun (and cheaper) than living apart. One partner may see this as a prelude to marriage. The other—usually the man—may see it as something more temporary. Since no explicit commitment is made, it is easier to drift into living together than it is to drift into a marriage. But once a couple is living together, it is harder to split up than if they were merely dating. So “many of these men end up married to women they would not have married if they hadn't been living together,” says Mr Stanley, co-author of a paper called “Sliding versus deciding”.



A little help from the government
Most American politicians say they support marriage, but few do much about it, except perhaps to sound off about the illusory threat to it from gays. The public are divided. Few want to go back to the attitudes or divorce laws of the 1950s. But many at both ends of the political spectrum lament the fragility of American families and would change, at least, the way the tax code penalises many couples who marry. And some politicians want the state to draw attention to benefits of marriage, as it does to the perils of smoking. George Bush is one.

Since last year, his administration has been handing out grants to promote healthy marriages. This is a less preachy enterprise than you might expect. Sidonie Squier, the bureaucrat in charge, does not argue that divorce is wrong: “If you're being abused, you should get out.” Nor does she think the government should take a view on whether people should have pre-marital sex.

Her budget for boosting marriage is tiny: $100m a year, or about what the Defence Department spends every two hours. Some of it funds research into what makes a relationship work well and whether outsiders can help. Most of the rest goes to groups that try to help couples get along better, some of which are religiously-inspired. The first 124 grants were disbursed only last September, so it is too early to say whether any of this will work. But certain approaches look hopeful.

One is “marriage education”. This is not the same as marriage therapy or counselling. Rather than waiting till a couple is in trouble and then having them sit down with a specialist to catalogue each other's faults, the administration favours offering relationship tips to large classes.

The army already does this. About 35,000 soldiers this year will get a 12-hour course on how to communicate better with their partners, and how to resolve disputes without throwing plates. It costs about $300 per family. Given that it costs $50,000 to recruit and train a rifleman, and that marital problems are a big reason why soldiers quit, you don't have to save many marriages for this to be cost-effective, says Peter Frederich, the chaplain in charge.

Several studies have shown that such courses do indeed help couples communicate better and quarrel less bitterly. As to whether they prevent divorce, a meta-analysis by Jason Carroll and William Doherty concluded that the jury was still out. The National Institutes of Health is paying for a five-year study of Mr Frederich's soldiers to shed further light on the issue.

Americans expect a lot from marriage. Whereas most Italians say the main purpose of marriage is to have children, 70% of Americans think it is something else. They want their spouse to make them happy. Some go further and assume that if they are not happy, it must be because they picked the wrong person. Sometimes that is true, sometimes not. There is no such thing as a perfectly compatible couple, argues Diane Sollee, director of smartmarriages.com, a pro-marriage group. Every couple has disputes, she says. What matters most is how they resolve them.

At the end of the day, says Ms Squier, the government's influence over the culture of marriage will be marginal. Messages from movies, peers and parents matter far more. But she does not see why, for example, the government's only contact with an unmarried father should be to demand that he pay child support. By not even mentioning marriage, the state is implying that no one expects him to stick around. Is that a helpful message?





Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.

RNA - Really New Advances

Jun 14th 2007
From The Economist print edition

Molecular biology is undergoing its biggest shake-up in 50 years, as a hitherto little-regarded chemical called RNA acquires an unsuspected significance

IT IS beginning to dawn on biologists that they may have got it wrong. Not completely wrong, but wrong enough to be embarrassing. For half a century their subject had been built around the relation between two sorts of chemical. Proteins, in the form of enzymes, hormones and so on, made things happen. DNA, in the form of genes, contained the instructions for making proteins. Other molecules were involved, of course. Sugars and fats were abundant (too abundant, in some people). And various vitamins and minerals made an appearance, as well. Oh, and there was also a curious chemical called RNA, which looked a bit like DNA but wasn't. It obediently carried genetic information from DNA in the nucleus to the places in the cell where proteins are made, rounded up the amino-acid units out of which those proteins are constructed, and was found in the protein factories themselves.

All that was worked out decades ago. Since then, RNA has been more or less neglected as a humble carrier of messages and fetcher of building materials. This account of the cell was so satisfying to biologists that few bothered to look beyond it. But they are looking now. For, suddenly, cells seem to be full of RNA doing who-knows-what.


And the diversity is staggering. There are scnRNAs, snRNAs and snoRNAs. There are rasiRNAs, tasiRNAs and natsiRNAs. The piRNAs, which were discovered last summer, are abundant in developing sex cells. No male mammal, nor male fish, nor fly of either sex, would be fertile without them. Another RNA, called XIST, has the power to turn off an entire chromosome. It does so in females because they, unlike males, have two X chromosomes and would otherwise get an unhealthy double dose of many proteins. There is even a “pregnancy-induced non-coding RNA”, cutely termed PINC. New RNAs are rushing forth from laboratories so rapidly that a group called the RNA Ontology Consortium has been promised half a million dollars to prune and tend the growing thicket of RNA-tailed acronyms.

In the light of this abundance, perceptions about what a gene is need to change. Genes were once thought of almost exclusively as repositories of information about how to build proteins. Now, they need to be seen for what they really are: RNA factories. Genes for proteins may even be in the minority. In a human, the number of different microRNAs, one of the commonest of the newly discovered sorts of RNA, may be as high as 37,000 according to Isidore Rigoutsos, IBM's genome-miner in chief. That compares with the 21,000 or so protein-encoding genes that people have.

Philosophers of science love this sort of thing. They refer to it as a paradigm shift. Living through such a shift is confusing for the scientists involved, and this one is no exception. But when it is over, it is likely to have changed people's views about how cells regulate themselves, how life becomes more complex, how certain mysterious diseases develop and even how the process of evolution operates. As a bonus, it also opens up avenues to develop new drugs.

Increase and multiply
Not everyone agrees with Dr Rigoutsos about how many microRNAs there are. But the results of a project called the Encyclopaedia of DNA Elements (ENCODE), published in this week's Nature, suggest he is on the right track. The project looked in detail at 1% of the human genome. When ENCODE started, four years ago, the conventional wisdom was that only a few percent of this 1%, corresponding mainly to the protein-coding genes, would actually be transcribed into RNA. In fact, most of it is. What this means is unclear—just how unclear being shown by the fact that although the consortium was willing to identify only eight places where this transcription definitely results in an RNA molecule with a job other than passively carrying the code for a protein, they found another 268 where there was likely to be one, and several thousand more where the data hinted there might be one. That compares with 487 protein-coding genes in the same sequence.

Other evidence suggests that microRNAs regulate the activity of at least a third of human protein-encoding genes. This means there are very few cellular processes that do not happen under their watch. Around 20 microRNAs, for instance, are made only in human embryonic stem cells. These molecules could turn out to be the key to understanding how such cells remain in a state from which they can become any other type of cell—the very reason embryonic stem cells hold such great medical promise.

The existence of microRNAs may also help to explain why some creatures are more complex than others. Until their discovery, this was something of a paradox. Knowing that DNA stores data that then get translated into living organisms, and that the complexities of development must require lots of information, biologists naturally expected that the more intricately formed an organism is, the more genes it would have in its cells. They therefore struggled when they found that C. elegans, a tiny worm that lacks a proper brain but is nevertheless widely studied by geneticists, has about 20,000 genes—only a little bit short of the number in a human. Indeed, this seems to be a general number for animals. Another geneticists' favourite, the fruit fly Drosophila, has a similar number. But, of course, the genes in question are protein-coding genes. Add in the genes whose RNA does other things and the balance changes.

It changes even more if exactly what those RNA molecules do is examined. Single microRNAs, for example, often regulate the levels of hundreds of different proteins. They are like powerful strings controlling copious protein puppets. Super-imposed on this, some types of regulatory RNA edit other kinds of RNA. The effect of extra genes for both of these sorts of RNA molecules is therefore multiplicative rather than additive.

The picture that is emerging is thus one of “hard-wired” simple organisms, which mostly stick to using RNA for fetching and carrying, and “soft-wired” complex ones that employ it in a management capacity. In the complexity stakes, it is not how many protein-coding genes you have, but how you regulate them, that counts.

What's up, Doc?
Another consequence of RNA's rise to prominence is that researchers have a new source of explanations for illness. Small RNAs have been linked to many types of cancer, to genetic diseases of the central nervous system, and even to infections. Some scientists, for instance, think that RNA molecules help the protein that causes Creutzfeldt-Jakob disease to recruit non-infectious proteins to join its ranks.

The new RNA world is also a source of ideas about how diseases might one day be treated. In this line of work it is best to start simple, which is why the main hunt for new drugs centres on a technology called RNA interference, or RNAi (see article). This, in theory at least, promises to turn down the production of any single protein to very low levels. That distinguishes it from microRNAs, which control many proteins simultaneously.

A hypothetical RNAi drug might, for instance, become the ultimate analgesic by affecting the activity of SCN9A, a gene recently pinpointed as the reason why a Pakistani street performer—who put knives through his arms and walked on burning coals—could not feel pain. The technology has also helped over-eating mice stay slim and live a fifth longer. That was done by choking an insulin-receptor gene in the animals' fat cells. This made the cells less inclined to store every calorie. The technique has even created edible cottonseed (for anyone who might want to try it) by eliminating cotton's gossypol toxin. Not least, it can claim to have produced allergy-friendly soya beans, by turning off the gene that encodes the protein that provokes the reaction.

It is also a technology that can be used at one remove. Recently, Michael White of the University of Texas and his colleagues used RNAi not to treat lung cancer directly, but to convert tumorous cells that do not respond to Taxol, a widely used anti-cancer drug, into cells that are sensitive to it. They did this by silencing Taxol-suppressing genes that were usually active in those cancer cells.

RNAi drugs work by mugging another sort of RNA—one of the classes of the molecule discovered decades ago. These are the messenger-RNA molecules that shuttle information from DNA to the cell's protein factories. The drugs themselves are short pieces of RNA made of strands about 21 genetic letters long. What is unusual about these molecules is that they have two parallel strands, instead of a single one.

One of DNA's differences from RNA is that it comes as a double-stranded helix. Molecules of RNA usually have only a single strand. When a double-stranded RNAi drug enters a cell, an “argonaute” protein picks the molecule up and unzips it down the middle. It chops one strand in two and discards those remnants. The other strand acts as a guide for the argonaute. It can pair with a messenger-RNA molecule—at least, it can do so as long as this messenger contains a sequence of 21 letters that complement those of the drug.

When such RNA molecules do pair, the argonaute slices the messenger to oblivion like a sword-swinging samurai, just as it did with the other half of the original RNAi drug. Thus the gene whose message it was carrying is silenced. This is how RNAi drugs stop the production of disease-related proteins at source—they hold the tap turned off whereas most medicines try to mop up a continuous leak. Messenger destruction is specific because 21 letters of code are nearly always enough to identify the instructions for one type of protein over another.

The most probable explanation for RNAi is that it evolved as a defence against viruses. Double-stranded RNA is rare in nature, but viruses often make it when they reproduce. This means that organisms which have evolved the ability to recognise and destroy double-stranded RNA molecules have a competitive advantage over those that do not.

That is one example of the role of RNA in evolution. But there are many more. The evolution of microRNAs, for instance, underlines their importance in the origin of complexity. Their number appears to have ballooned when land plants and vertebrates evolved. But it is early days in this research. Dave Bartel, of the Massachusetts Institute of Technology, is surveying grand lists of small RNAs in mosses, flowers, worms, flies and mice in the hope that he will learn when different families of microRNAs emerged and which genes these microRNAs are regulating.

Dr Bartel has already discovered microRNA genes interspersed among sets of protein-encoding genes called Hox clusters. Hox clusters contain basic instructions about body plans, and the genes within them are arranged in the order in which they influence their owner's shape during development. In short, a Hox gene at one end of a cluster contains the information: “Give this embryo a head”. The gene at the other end says: “And a tail, too”. The role of the interspersed microRNAs is to regulate these high-level commands.

Ronald Plasterk, of the University of Utrecht, in the Netherlands, suggests that microRNAs are important in the evolution of the human brain. In December's Nature Genetics, he compared the microRNAs encoded by chimpanzee and human genomes. About 8% of the microRNAs that are expressed in the human brain were unique to it, much more than chance and the evolutionary distance between chimps and people would predict.

Such observations suggest evolution is as much about changes in the genes for small RNAs as in the genes for proteins—and in complex creatures possibly more so. Indeed, some researchers go further. They suggest that RNA could itself provide an alternative evolutionary substrate. That is because RNA sometimes carries genetic information down the generations independently of DNA, by hitching a lift in the sex cells. Link this with the fact that the expression of RNA is, in certain circumstances, governed by environmental factors, and some very murky waters are stirred up.

It's evolutionary, my dear Watson
What is being proposed is the inheritance of characteristics acquired during an individual's lifetime, rather than as the result of chance mutations. This was first suggested by Jean Baptiste Lamarck, before Charles Darwin's idea of natural selection swept the board. However, even Darwin did not reject the idea that Lamarckian inheritance had some part to play, and it did not disappear as a serious idea until 20th-century genetic experiments failed to find evidence for it.

The wiggle room for the re-admission of Lamarck's ideas comes from the discovery that small RNAs are active in cells' nuclei as well as in their outer reaches. Greg Hannon, of the Cold Spring Harbor Laboratory in New York State, thinks that some of these RNA molecules are helping to direct subtle chemical modifications to DNA. Such modifications make it harder for a cell's code-reading machinery to get at the affected region of the genome. They thus change the effective composition of the genome in a way similar to mutation of the DNA itself (it is such mutations that are the raw material of natural selection). Indeed, they sometimes stimulate actual chemical changes in the DNA—in other words, real mutations.

Even this observation, interesting though it is, does not restore Lamarckism because such changes are not necessarily advantageous. But what Dr Hannon believes is that the changes in question sometimes happen in response to stimuli in the environment. The chances are that even this is still a random process, and that offspring born with such environmentally induced changes are no more likely to benefit than if those changes had been induced by a chemical or a dose of radiation. And yet, it is just possible Dr Hannon is on to something. The idea that the RNA operating system which is emerging into view can, as it were, re-write the DNA hard-drive in a predesigned way, is not completely ridiculous.

This could not result in genuine novelty. That must still come from natural selection. But it might optimise the next generation using the experience of the present one, even though the optimising software is the result of Darwinism. And if that turned out to be commonplace, it would be the paradigm shift to end them all.

Species inflation

Species inflation

Hail Linnaeus
May 17th 2007
From The Economist print edition

Conservationists—and polar bears—should heed the lessons of economics

MEPL“NO SCIENCE in the world is more elevated, more necessary and more useful than economics.” That was the view of Carl Linnaeus, a Swedish naturalist, born three centuries ago this week, who is better remembered for devising the system used to this day to classify living organisms.

Linnaeus sought to reveal what he saw as the divine order of the natural world so that it might be exploited for human benefit. He lived at a time when exploration and trade were bringing new specimens to the attention of European scientists. Those specimens, particularly the plants, were scrutinised as potential crops. At the turn of the 17th century there was no sense of how creatures were related to each other; descriptions and classifications were unsystematic. Linnaeus gave life to an organising hierarchy with kingdoms at the top and species at the bottom.

The system he created has proved both robust and flexible. It survived the rise of evolution. It also survived the discovery of whole categories of organism, such as bacteria, that the Swede never suspected existed. But, rather as John Maynard Keynes observed that “there is no subtler, no surer means of overturning the existing basis of society than to debauch the currency,” so Linnaeus's system is being subtly debauched by over-eager taxonomists, trying to help conservation.

Go forth and multiply
As new areas are explored, the number of species naturally increases (see article). For example, the number of species of monkey, ape and lemur gradually increased until the mid-1960s, when it levelled off. In the mid-1980s, however, it started rising again. Today there are twice as many primate species as there were then. That is not because a new wave of primatologists has emerged, pith-helmeted, from the jungle with hitherto unknown specimens. It is because a lot of established subspecies have been reclassified as species.

Perhaps “reclassified” is not quite the right word. “Rebranded” might be closer. Taxonomists do not always get it right first time, of course, and what looked like one species may rightly later be seen as two. But a suspiciously large number of the new species have turned up in the limited group of big, showy animals known somewhat disparagingly as “charismatic megafauna”—in other words the species that the public, as opposed to the experts, care about.

One reason for this taxonomic inflation is that the idea of a species becoming extinct is easy to grasp, and thus easy to make laws about. Subspecies just do not carry as much political clout. The other is that upgrading subspecies into species simultaneously increases the number of rare species (by fragmenting populations) and augments the biodiversity of a piece of habitat and thus its claim for protection.

In the short term, this strategy helps conservationists by intensifying the perceived threat of extinction. In the long term, as every economist knows, inflation brings devaluation. Rarity is not merely determined by the number of individuals in a species, it is also about how unusual that species is. If there are only two species of elephant, African and Indian, losing one matters a lot. Subdivide the African population, as some taxonomists propose, and perceptions of scarcity may shift.

The trouble is that the idea of what defines a species is a lot more slippery than you might think. Since it is changes in DNA that cause species to evolve apart, looking at DNA should be a good way to divide the natural world. However, it depends which bit of DNA you look at. The standard technique says, for example, that polar bears are just brown bears that happen to be white. This is not good news for those relying on the Endangered Species Act. For a certain sort of Colorado rodent (with, alas, a nose for prime riverfront real estate) the question of whether it is “Preble's meadow jumping mouse” or a boring old meadow jumping mouse may be a matter of life or death: local property developers are on the death side. The Bahamas switched overnight from protecting their raccoons to setting up programmes to eradicate them when a look at the genetic evidence showed the animals were common Northern raccoons, not a separate species.

The 21st-century answer to this 18th-century riddle is that a species is what a taxonomist says it is. Evolution often fails to produce the clear divisions that human thought in general, and the law in particular, prefers to work with. It therefore behoves taxonomists to be honest. If they debase their currency, it will ultimately become valueless. Linnaeus the economist would have known that instinctively.

SURVEY: CLIMATE CHANGE Selling hot air

SURVEY: CLIMATE CHANGE

Selling hot air
Sep 7th 2006
From The Economist print edition

Kyoto's main achievement was to create a market in carbon. It's flawed, but better than nothing

THE huge hall at the Kölnmesse, Cologne's massive conference centre, looks like any other trade fair: rows of sellers' booths, some with buyers milling around them, some deserted. The participants' costume is a little unusual—not just the standard suits, but also chinos and T-shirts with green slogans. But what is being sold is very different: industrial gases to be captured from Chinese factories, trees to be planted in Africa, methane to be extracted from pig-effluent in Brazil. This is the carbon market, the main achievement of the Kyoto protocol.

Kyoto was a hard-fought attempt to do something immensely difficult: create a global mechanism for solving a long-term problem. Not surprisingly, its achievements have been limited. America and Australia did not ratify the treaty. Canada looks as though it may fail to comply. It signed up for a 6% reduction below 1990 levels by 2012, but the latest figures suggest that it is now running around 23% above 1990 levels. According to the new environment minister, Rona Ambrose, “it is impossible, impossible, for Canada to reach its Kyoto targets.”

Japan is supposed to be cutting its emissions to 6% below 1990 levels. It has no mandatory scheme, but many companies are participating in a voluntary one. Still, emissions are currently running at 24% above 1990 levels, so it will probably have to buy credits from other countries.

The EU has taken Kyoto most seriously. In 2005 it launched the European Emissions-Trading Scheme (ETS), which is supposed to cut emissions from the EU's five dirtiest industries. Most big European countries have additional schemes to penalise big CO2 emitters and to boost renewables, which is why wind farms are sprouting all over Europe. Some big European countries, such as Germany, France and Britain, are either near to meeting their targets or have already done so by cutting domestic emissions. Others, such as Spain and Italy, are further behind.

America was heavily involved in the design of the Kyoto protocol, and insisted that it should include the possibility of a market in emissions credits, on the ground that its trading scheme to reduce sulphur-dioxide emissions had been a big success. Europe reluctantly agreed and, once America walked away from Kyoto, turned out to be the mainstay of the carbon market that the protocol has created.

The carbon market works like any other commodity market: companies trade and the market sets prices. But it is unusual in that the commodity being bought and sold does not exist: it is the certified absence of carbon emissions. The market is big, and growing fast. In the first half of 2006, carbon to the value of €12 billion ($15 billion) was traded, five times more than in the same period in 2005.

There are two parts to the carbon market. The first, and largest in terms of cash, is the trade in allowances handed out to companies in the EU's five dirtiest industries under the ETS. Those companies have also been given emissions-reduction targets, which they can meet by cutting their own emissions, or by buying allowances from other companies, or by purchasing credits from developing countries. That is the second bit of the carbon market. The trade in allowances does not actually reduce emissions. The trade in developing-country credits does.

The Carbon Fair in Cologne, organised by the World Bank, is the annual get-together of the second bit of the market. The buyers are from the participants in Europe's ETS and Japan's voluntary-reduction scheme. The sellers are developing countries. The rich countries that ratified Kyoto are expected to produce 3.5 billion tonnes of carbon above their targets by 2012, so the prospects for sellers look good.

Some of the sellers at the Kölnmesse are more popular and better organised than others. The Chinese state planning committee stall has a glossy 200-page book crammed with projects, and a crowd of potential buyers. The man on the Senegalese stall has a photocopied piece of paper with six projects, and no customers.

The middlemen are niche investment banks, such as Climate Change Capital and Natsource, and project-management companies, such as Camco and AgCert. Camco, which floated earlier this year, works mainly in China. It identifies factories that emit lots of greenhouse gases and works out how to cut emissions; AgCert builds sealed pools to contain the pig-effluent in Brazil and Mexico, captures the methane it produces and burns it to produce electricity.

Projects have to be certified by the UN. Most involve cutting emissions not of CO2 but of more potent greenhouse gases. HFC, for example, an industrial gas, has 11,000 times the greenhouse effect of CO2. Some 58% of the credits sold between January 2005 and March 2006 were for HFC projects. Capturing it costs little—under $1 per tonne of CO2-equivalent—and selling it is lucrative. Thanks to the insatiable demand for credits, developing-country sellers have been getting up to $24 a tonne. Two Chinese deals alone, set up by the World Bank, which has put together a consortium of buyers, are worth $930m. At current prices, China is reckoned to have about $6 billion-7 billion-worth of HFCs that could be captured.

Not surprisingly, given both Chinese efficiency and the amount of dirty industry in the country, two-thirds of the deals signed between January 2005 and March 2006, by value, were with China. Keen to keep hold of the cash for its own purposes, the Chinese government has slapped a 65% tax on HFC projects and is funnelling the money into a “sustainable development” fund. “Sustainable development!” snorts a Chinese official. “It'll be spent on infrastructure.”

All right for some
Observers have three concerns about the carbon market. The first is about profits and prices. Giving the ETS allowances away (rather than auctioning them) made the scheme easy for the power-generators and other polluters to swallow. But it also, in effect, handed them wads of cash: they simply passed the extra costs on to consumers and pocketed the money. According to a report by IPA Energy Consulting, Britain's power-generation sector alone made a profit of around £800m ($1.5 billion) from the scheme in its first year.

Meanwhile, power prices went up steeply. According to a paper by Jos Sijm of the Energy Research Centre in the Netherlands, when allowances were €20 a tonne, European generators passed on between €1 and €19 per MWh to customers, depending on the structure of the market and the sources of electricity. In France, where the price is determined largely by carbon-free nuclear generation, they passed on least. In Germany, where it is largely determined by coal, they passed on most. Partly as a result, German off-peak electricity prices doubled in the two years to January 2006, to just over €40 per MWh, setting consumers squawking.

The second worry is about the purchase of credits from developing countries. Partly thanks to the Chinese government's 65% tax on emissions-reduction credits, European companies are paying many times the actual cost of reducing emissions. That price they pay is passed on to European consumers, who may eventually revolt when they realise how much money they are pouring into Chinese government coffers.

Third, the time-horizons for Kyoto (up to 2012) and, even more, for the ETS (whose first period runs only up to 2008) are too short. So whereas projects in the near term (such as capturing nasty Chinese gases) are financially worthwhile, longer-term ones that may be just as desirable (such as investing in cleaner power-generating plant) are not.

All that said, this is the first attempt to deal rationally with a hugely complex problem, so it would be odd if it did not encounter difficulties. And it has made some headway: last year it got rich-world consumers to invest $2.7 billion to cut developing-country greenhouse-gas emissions by around 374m tonnes of CO2 equivalent. That is only about half of Texas's annual emissions—but it's a start.

Aircraft emissions

Aircraft emissions

The dirty sky
Jun 8th 2006
From The Economist print edition

Governments need to take action to cut aircraft emissions
aviation-images
ALL big ideas start life on the fringes of debate. Very often it takes a shocking event to move them into the mainstream. Until last year interest in climate change was espoused mainly by scientists and green lobbyists—and the few politicians they had badgered into paying attention. But since Hurricane Katrina, something seems to have changed, particularly in America. Nobody knows whether the hurricane really had anything to do with the earth warming. But for the first time less verdant voters and big business had a clearer idea about the “extreme weather events” whose increasing frequency scientists had been talking about.

There are plenty of anecdotal signs of change: Britain's pro-business Tories have turned green; Al Gore is back in fashion in America; hybrid cars no longer get stared at. Companies are beginning to take action (see article) and encouraging governments to do the same. Europe already has an emissions-trading system (ETS) for its five dirtiest industries. In America, although the Bush administration still resists federal legislation, more and more states do not. Even China has brought in a myriad of measures, including fuel-economy rules 20% tighter than America's.



So far the political rows about global warming have centred on two polluters, smoggy factories and dirty cars. Now a new front is being opened up—in the skies. Next month the European Parliament will vote on whether to extend its emissions-trading system to airlines. If it decides in favour, the whole industry will feel the impact, for it will affect not just European airlines but all those that fly into and out of the EU. Talk about this prospect soured the International Air Transport Association's annual meeting this week in Paris, where the lords of the skies would have otherwise congratulated themselves for surviving a wretched few years of terrorism threats, disease scares and rising fuel prices. But whatever happens in the EU, the airlines look set to face vociferous demands that they should pay for their emissions (see article).

A few clouds in the sky
In some ways, the airlines are an odd target for greens. They produce only around 3% of the world's man-made carbon emissions. Surface transport, by contrast, produces 22%. Europe's merchant ships spew out around a third more carbon than aircraft do, and nobody is going after them. And unlike cars—potent symbols of individualism (and, some would say, individual selfishness)—airlines are public transport, jamming in as many people as they can into each plane. By shipping hordes of ordinary people around the globe for not very much money, they have improved the lives of millions.

What's more, many air travellers cannot easily switch. Car drivers can hop on the train or the bus, but transatlantic travellers can't row from London to New York. Nor can aircraft fuel be swapped for a green alternative. Car drivers can buy electro-petrol hybrids but aircraft are, for now, stuck with kerosene, because its energy-density makes it the only practical fuel to carry around in the air.

Yet in other ways, airlines are a fine target. They pay no tax on fuel for international flights, and therefore escape the “polluter pays” principle even more niftily than other forms of transport. Their emissions are especially damaging, too—partly because the nitrogen oxides from jet-engine exhausts help create ozone, a potent greenhouse gas, and partly because the pretty trails that aircraft leave behind them help make the clouds that can intensify the greenhouse effect. And the industry's energy consumption has been growing faster than that of other polluting industries. Air transport will soon be central, not marginal, to the emissions issue.

Education, not regulation
What, if anything, should be done? As usual, there are dangers on both sides. Excessive regulation would unnecessarily restrict individual choice and throttle an industry that makes both rich and poor countries better off. On the other hand, airlines no less than any other industry must pay for pollution.

As the debate grows, some flyers may reconsider their ways. Put frankly, air travel makes a mockery of many people's attempts to live a green life. Somebody who wants to reduce his “carbon footprint” can bicycle to work, never buy aerosols and turn off his air-conditioner—and still blow away all this virtue on a couple of long flights. And, although other forms of transport cannot easily replace flying, demand for many flights is sensitive to price. A quarter of flying is business-related; many of those journeys are essential, but others achieve only marginally more than a telephone call or videoconference. As for stag-nights in Prague and student spring breaks in Jamaica—well, the gangs of drunken revellers probably wouldn't notice if they were in Blackpool or Daytona Beach instead, as indeed many were a decade ago.

However, addressing individuals' consciences won't go that far. Air pollution is a collective problem, which in this case requires government action—or, to be more accurate, a change in policy. As it stands, the market is skewed in favour of air travel; the aim should be to make it more balanced. Two approaches are on offer. Some think the best way to limit emissions is to tax them; others argue for a system that sets a cap on pollution, and lets polluters trade the right to emit.

This newspaper has long argued for a global carbon tax as a reasonable way to tax all forms of pollution. But there is no sign of governments embracing that idea. One of the strongest arguments for aircraft emissions being dealt with by a trading system is practical: a system already exists. Europe's ETS has many obvious flaws (see article). Given that it is the world's first serious attempt to cut emissions internationally, that is not surprising. The world can learn from its imperfections, and design a better scheme for airlines.

Slowly, businessmen and politicians are coming to agree with scientists. If this generation does not tackle climate change, its descendants will not think much of it. That means raising costs for all sources of pollution. Even those deceptively cheap weekend breaks cannot be exempt.

Democracy and Islam

Democracy and Islam

The one thing Bush got right
Feb 2nd 2006
From The Economist print edition

For all his other foreign-policy mistakes, George Bush is right about democracy

“AND always keep a-hold of nurse, for fear of finding something worse.” To judge by their reaction to his state-of-the-union message, some critics of George Bush's foreign policy have been paying rather too much attention lately to Hilaire Belloc's rhyme. In his speech, Mr Bush said again that America was committed to the “historic long-term goal” of spreading democracy. But in the Middle East, ask his critics, hasn't his democracy agenda ushered in something worse than the previous pattern of rule by strongmen: the rise in Iraq, Egypt and now Palestine of a form of political Islam that is hostile both to the West and to the underlying values of democracy itself?

The detailed answer to this question has to be long, if only because the thing people call “political Islam” comes in so many different shapes and sizes (see article). The short answer, however, is no. Mr Bush has made many big mistakes in the Middle East. They range from inept planning and follow-through in Iraq to supine neglect of Palestine. But his democratisation policy is not one of them. In fact, it may be the one big thing that this president has got right in the region.

The least bad system
Democracy's defining feature—the freedom to hire and fire your government—does not guarantee that countries will make wise choices, or that democracies will be good neighbours. The lesson of the 20th century is that no people is immune from falling under the spell of some hypnotic voice or pernicious doctrine. In 1933 Germans freely elected the Nazi Party, which went on to reduce Europe to rubble. But only the most twisted history could blame democracy rather than dictatorship for the depredations of Hitler, Stalin and Mao Zedong. The merits of democracy are obvious and the appeal of it seems universal. So why do the familiar arguments have to be rehashed all over again in the case of the Middle East?

One reason people on the left object to Mr Bush's “freedom agenda” is that they see it as a veil for something else: an American policy of stomping about the world deposing unfriendly regimes at will. If such a policy existed, it would be wrong. But Mr Bush's agenda so far consists mainly of using the bully pulpit of superpowerdom to extol democracy's virtues. His administration has deposed only two regimes—the Taliban in Afghanistan and Saddam Hussein in Iraq—and in neither case was spreading democracy his principal motive, given or real. It was much more old-fashioned than that.

Rightly or wrongly, both regimes were seen as threats to America. Afghanistan, which gave safe haven to al-Qaeda, surely was. As for Iraq, when weapons of mass destruction failed to materialise, Mr Bush talked up the humanitarian case for having got rid of Mr Hussein and conveniently forgot about his WMD case. To that extent, he is to blame for the cynicism his freedom talk now engenders. But the fact remains that he had to install some sort of successor regime in these two countries, and instead of imposing a friendly strongman, as America did in cold-war days, he plumped for democracy. Some of the consequences are messy. It was presumably no part of Mr Bush's design to deliver power in Iraq to Islamists friendly to Iran's ayatollahs. But the decision to allow Afghans and Iraqis a free choice was surely right in principle.

Will it turn out right in practice? Here from the opposite direction comes a second criticism, this time from the foreign-policy realists. However fine in the abstract, democracy is delivering dangerous results. Fanatical religious types rather than secular liberals are expanding into the space American guns and influence have forced open in the politics of Iraq, Egypt and Palestine. This will split multi-sectarian Iraq apart, set Arab against Jew in Palestine and deliver Egypt into the anti-western hands of the Muslim Brotherhood. Like Jimmy Carter's human-rights foreign policy in the 1970s, George Bush's democracy policy will be remembered for its dangerous naivety—a luxury a superpower cannot afford.

Even in the Middle East
In time, the realists may be proved right. An Arab country might one day vote in an al-Qaeda government and make war on America. But where is their evidence? Having attempted an insurrection in Saudi Arabia, al-Qaeda is growing less popular there. Iraq under the dictator was neither at peace nor friendly to the West; the present haggling between elected parties may be the only realistic way to bind a fissiparous country together. In Egypt, the good showing of the Brotherhood in December's election was a salutary warning to the eternally ruling Hosni Mubarak that it is not such a clever idea to keep locking up your liberal opponents. Where Islamists do well, it is often because they are the only opposition left standing.

As for last week's election in the Palestinian territories, this did not create the Hamas problem: the organisation was murdering Israelis long before winning power. It remains to be seen whether victory will make it more murderous. Having to keep voters sweet may instead force it to pay less heed to its ideology of destroying Israel and more to the Palestinians' real needs and achievable goals. If it does not change it can be cajoled and punished accordingly. A democratic mandate does not license any government to make war on its neighbour or ignore its obligations under international law.

It is sometimes argued that political Islam is itself a pernicious doctrine, logically incompatible with the values of democracy, and that this is what makes its promotion in the Arab world a futile exercise. Many Islamists do insist that because God alone can make law, men who make their own laws are apostates. But this idea is held only by a minority in the world of Islam, where democracy has in recent years both spread and put down powerful roots in countries as far apart as Turkey and Indonesia. There is no obvious reason why the Arab world must remain an exception.

Holding elections is not a panacea. Democracy cannot at a stroke heal national conflicts, create civic institutions or modernise traditional societies. But whatever else people think of Mr Bush, on this one thing—the universal potential and appeal of the democratic idea—he is on the side of history.