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President Donald Trump may have scooped the headlines at the end of last week's World Economic Forum with his “America First” speech, but the real story was elsewhere. For Rana Foroohar the lesson of this year's gathering in Davos was the increasing fragility of states confronted by profound changes wrought by technology.

In her column this week Rana says that the “dirty secret” of the Alpine gathering was that the much-vaunted “Fourth Industrial Revolution” is set to make people less, not more secure. The effects of this are far-reaching, going well beyond immediate concerns about incomes and jobs. She points to the ability of companies to personalise products based on our data streams. This, Rana says, is not just a shift in business model. “It’s a fundamental challenge to liberal democracy.”

Yet, she did find some cause for optimism in the form of Illah Nourbakhsh, a robotics professor, who has launched projects to educate elementary school children about the power and risks of data. “The idea is to create a new generation of citizen scientists who understand the power of data. I predict that if they truly do, they’ll start to demand a lot more ownership and control over it themselves.” If this is right, we will no doubt hear more from them about this at the Davos gatherings of the future.

Big Tech splitting Society into winners and losers

Time’s up: The light shone by the FT last week on the Presidents Club me-only fundraising dinner has exposed behaviour that is wholly shocking, writes Carolyn Fairbairn. In an opinion piece, the head of the CBI business lobby says that the scandal underscores the need for profound change in business culture. In particular she argues that “the overwhelming presence of men at the top of corporate life — and in other fields — makes the Presidents Club and events like it all too possible”. To change that we need new power structures, “not just in terms of the treatment of women but also in terms of who’s included”.

Italian nightmare: Are investors too complacent about Italy’s forthcoming general election? Wolfgang Munchau thinks so. In his latest Monday column he argues the received wisdom that the March poll will result in a stalemate and business will continue as usual could be seriously misplaced. Wolfgang notes that financial markets never quite got the eurozone right, and did not react when they should have.

Brexit transition: Jacob Rees-Mogg was in characteristically arch form last week when he warned that Britain risks becoming a “vassal state” if the Brexit transition process sees the UK abiding by EU rules while losing its current membership rights. Nick Clegg agrees. In an unusual coming together of a leading Remainer and hardline Brexiter, Nick argues that Rees-Mogg is right to say that “it would be more ‘honest’ simply to extend the Article 50 timetable rather than condemn the country to the humiliation of negotiating our departure from the EU having already evicted ourselves from it.” 

Trading with China: Protectionism à la Donald Trump is a dead end, writes Zaki Laid i. Nobody really believes that tariff barriers can reduce a trade deficit. Yet, he adds, Europe finds itself in a quandary: if rising economies, particularly China, are making inroads into European markets, how can the continent protect itself without indulging in protectionism? The answer he says is for Europe to rebalance its economic relations with China, where there is currently a flagrant lack of reciprocity. 

Best of the rest

The Trump we saw in Davos should leave us encouraged — by Fareed Zakaria, Washington Post

One well-aimed speech could topple Mrs May — by Matthew Parris, The Times

How Blockchain Can End Poverty — by Phil Gramm and Hernando de Soto, Wall Street Journal

Bottled water is a nonsense. Just ban it and fill our towns with drinking fountains — by Sonia Sodha, Guardian Observer

One highly complicated gas pipeline. Nordstream 2, China's tech challenge and free trade — by Alexander Armbruster, Frankfurter Allgemeine (in German)

The Heightened Risks of a US Downturn — by Martin Feldstein, Project Syndicate 

What you've been saying

Why has Carillion been allowed to collapse? — letter from Andrew Wilkinson

In the case of Carillion, there are simply too many jobs and livelihoods at risk for liquidation to be considered the appropriate solution. In the US, a comparable business would, under the Chapter 11 process, have had contract terms adjusted, claims compromised and equity re-allocated, and would have emerged re-organised and re-capitalised. Something has gone badly wrong with our rescue culture when an enterprise of the importance of Carillion is allowed to collapse into compulsory liquidation. 

We need an FCA stress test rule for companies — letter form Ben Tyler

Jonathan Haskell and Stian Westlake (Letters January 24) link the Carillion balance sheet’s lack of resilience to the weight of intangible assets. High “goodwill” arising through acquisitions was also a feature in the collapse of Connaught and Yellow Pages. As an investor I should like to see protection through an Financial Conduct Authority rule that mirrors bank stress tests. Nobody can stop directors from overpaying for assets, but we can introduce a stress test where “companies must prove their solvency even if the value of 40 per cent of intangible assets were to vaporise” before signing off accounts, paying out dividends, signing off further acquisitions or even paying bonuses.

Comment from Paul A. Myers on ‘Trump tells Davos ‘America First, not America alone’

No future American president committed to reestablishing a leading role for the US in trade will ever go near Davos. The Davos elite are the ugly frog princes of the next decade. 

Today’s opinion

FT View: American dreamers are hostage to a toxic debate Congress must find an alternative to Trump’s Faustian immigration bargain

Europe risks being squeezed between Washington and Beijing It must protect itself without succumbing to the lure of protectionism

Italy’s political threat to the EU and to investors Markets are too complacent about the parliamentary election next month

The dangers of digital democracy Personalising products and services using data streams challenges liberal democracy

Businesses must change to end the abuse of power Let us use the exposure of such scandals to break down entrenched structures

Dollar weakness driven by monetary policy after all Dollar has weakened in face of Fed tightening but ‘puzzle’ explained by expectations about ECB policy

FT View: Cape Town’s water crisis should be a wake-up call Few cities are doing enough to plan for and adapt to climate change

The Big Read: China’s HNA tries to navigate turbulent times Once the darling of Beijing’s overseas corporate expansion plan the group has fallen out of favour and faces a cash crunch

FT View

FT View: American dreamers are hostage to a toxic debate Congress must find an alternative to Trump’s Faustian immigration bargain

FT View: Cape Town’s water crisis should be a wake-up call Few cities are doing enough to plan for and adapt to climate change

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