Business people should stand up for themselvesHENRY HAZLITT, one of the great popularisers of free-market thinking, once said that good ideas have to be relearned in every generation. This is certainly true of good ideas about business. A generation ago Margaret Thatcher and Ronald Reagan did an excellent job of making the case in favour of business. Today it looks as though the case needs to be made all over again.It is hardly surprising that business has fallen from grace in recent years. The credit crunch almost plunged the world into depression. The new century began with the implosion of Enron and other prominent firms. Some bosses pay themselves like princes while preaching austerity to their workers. Business titans who once graced the covers of magazines have been hauled before congressional committees or carted off to prison. ...

  How an original business model got Spaniards hookedIT IS called El Gordo (“the Fatty”) because of the huge amount it pays out: €2.3 billion ($3.3 billion) in this year’s draw, to be held on December 22nd. Yet Spain’s Christmas lottery is notable not just for the vast sums to be won, but also for its clever business model.Spaniards are not especially big gamblers, with spending per head below the average for the European Union, according to a 2006 study by London Economics, a consultancy. Yet they spend about €12 billion a year on lottery tickets, over 1% of GDP—almost as much as the country spends on research and development. Roughly three-quarters of them participate in the Christmas lottery. ...

  The unflappable oil giant changes tackIN RECENT years, as the price of oil rose to record levels, analysts fretted that Exxon Mobil’s conservatism was undermining its future growth. As rivals threw money at new projects or acquisitions, it spent more on share buybacks and dividends than it invested. Critics complained that the firm was slowly winding itself up. But Exxon’s managers endlessly intoned that they invested for the long term, and would not be moved by temporary swings in prices. That approach was vindicated when oil prices plunged last year. Now Exxon has taken advantage of lower oil and gas prices to replenish its reserves—and raised a different set of questions about its future. On December 14th Exxon agreed to buy XTO Energy, a natural-gas firm, in a deal valued at $41 billion. The deal was apparently struck when Exxon’s chief executive, Rex Tillerson, entertained Bob Simpson, XTO’s boss, at a quail hunt on company land in Texas. If completed, this will be Exxon’s first acquisition worth more than $2 billion since its transformational $80 billion purchase of Mobil in 1999. It will increase Exxon’s proved reserves by the equivalent of 2.3 billion barrels of oil, or almost 20%. But it also brings promising exploration rights, with the potential to increase reserves and production even more, and great expertise in exploiting them. ...

  As one long-running antitrust case comes to an end, others emergeTRUSTBUSTERS on either side of the Atlantic had seemed in permanent disagreement in 2009, at least when it came to technology firms. In January the European Commission decided to go after Microsoft for bundling its web browser with its operating system—a tactic which America’s Department of Justice (DoJ) had decided to let stand a long time before. In May the commission fined Intel €1.06 billion (then $1.44 billion) for having abused its dominance, whereas the Federal Trade Commission (FTC) in Washington did not seem interested. And in November the commission objected to the proposed $7.4 billion purchase of Sun Microsystems, a troubled maker of computer hardware, by Oracle, a business-software giant—a deal that the DoJ had already approved.Yet on December 16th, American and European antitrust regulators began playing in tune. First Neelie Kroes, Europe’s competition commissioner, announced that she had reached a settlement with Microsoft. Starting in March, all versions of Windows will come with a “choice screen” inviting users to install any of 12 different browsers. This should make Europe’s browser market more competitive, and end the decade-long antitrust action against the world’s biggest software firm. ...

  Airborne at last, the Dreamliner and the A400M still have a lot to proveON THE face of it the A400M, a dumpy military transport made by Airbus, and Boeing’s sleek 787 Dreamliner (pictured) have little in common other than that they both flew for the first time in the past few days. But they share a similar history: both planes finally took to the air more than two years late and far over budget. Moreover, both were developed in unnecessarily complicated ways, even though big aviation projects are difficult enough without taking on further risks.In an effort to reduce the cost of developing an innovative new aircraft, Boeing recruited “risk-sharing” partners who became largely responsible for designing whole sections of the plane, while creating one of the most complex and extended supply chains in industrial history. But Boeing failed to supervise its partners’ work adequately and has probably ended up spending more to put things right than it ever would have saved. With the A400M, European defence ministers jeopardised the project from the outset by setting up a politically conceived consortium to produce the aircraft’s giant turboprop engines rather than allowing Airbus to buy them from America’s Pratt & Whitney. ...

  An ambitious overhaul of India’s confusing hotch-potch of indirect taxes could give business a boostTO MANY Indians the tendu leaf is a source of comfort. Hand-picked, dried then dampened, the leaf is rolled into the beedis, or cigarettes, that glow in India’s winter gloom. But the leaf is also a small example of India’s fiscal fragmentation. In the state of Rajasthan and many others, the state government charges a value-added tax (VAT) of just 4% on the leaf, deeming it an essential good. In Uttarakhand, the government charges the standard rate of 12.5%. In Madhya Pradesh, meanwhile, leaf-rollers must pay a hefty 25.3%.India’s appeal to business rests on the potential size of its market: over 1 billion consumers, spending about $600 billion a year. But viewed through a fiscal lens, the country is not one market, but 28 states, each with its own tax-raising powers, which they are not afraid to use. ...

  Three deals signal the way forward for the car industryHAVING weathered the storm, global carmakers are now turning their attention to the tie-ups they hope will give them an edge in the upturn. Two such deals, the first involving General Motors and its Chinese partner SAIC, and the second between Volkswagen and Suzuki, have been concluded in the past few days. Another, linking PSA Peugeot Citroen and Mitsubishi, is still under negotiation. All three are aimed at winning a bigger presence in Asia and tapping into low-cost manufacturing expertise, while sharing components and development budgets. Of the three, the most significant is VW’s announcement this week that it has agreed to pay $2.5 billion for 19.9% of Suzuki, a family-owned Japanese maker of small cars and motorcycles. Along with Fiat, Suzuki may be the only manufacturer of international importance that knows how to make money out of small, inexpensive cars. That is something VW forgot long ago. But it needs to relearn it, argues Max Warburton of Bernstein Research, if it is not to suffer from the worldwide trend towards downsizing, as new emissions laws bite and growth shifts to poorer consumers in emerging markets. ...

  Two fallen internet titans are trying to regain their footing“THEY never come back” may be an ironclad law of boxing, but AOL and Yahoo! are trying to prove that it does not apply to lumbering online giants. On December 9th Time Warner span off AOL, undoing a famously ill-conceived merger. A couple of days earlier Yahoo! and Microsoft finalised an agreement to merge their web-search and much of their advertising businesses, freeing Yahoo! to hone a new strategy. Peculiarly, both firms’ comeback plans hinge on giving away content to attract traffic and thus advertising—an online strategy that has disappointed many media companies.AOL and Yahoo! came of age a decade ago in different corners of the internet: one as the biggest provider of dial-up access, the other as the leading web directory. Both soon turned into “portals” providing both content and communications tools, such as web-mail and instant messaging. More recently, both have drifted while the internet evolved around them. A series of weak bosses failed to do away with fiefs, professionalise management and keep the brands fresh, even as competition—from broadband in the case of AOL, and from rivals such as Google and Facebook for Yahoo!—ate into revenues. ...

  Magazines attempt to win back control of their digital editionsLET it never again be said that old-media firms are slow to deal with new technology. On December 8th Conde Nast, Hearst, Meredith, News Corporation and Time Inc invested in an as-yet-unnamed venture that will create and sell digital magazines and newspapers for the new generation of e-readers that is likely to succeed Amazon’s monochrome Kindle in the next year or so. It was as if a group of explorers had announced plans to settle a country that had not yet been discovered. Consumers can already get hold of many publications on smart-phones and e-readers. But smart-phones have small screens, and e-readers render magazines as crudely illustrated black-and-white books. They cannot reproduce magazines’ distinctive fonts or elegant graphics. Worse, they are unsuited to advertising, on which most magazines depend. In the year to June, Meredith’s publishing arm, which produces Better Homes and Gardens among dozens of other titles, made almost twice as much from advertising as it did from newsstand sales and subscriptions. ...

  The fashion for hiring temps has reached the executive suiteTEMPORARY work is all too familiar to the masses. Farmers have always relied on seasonal workers to plough the fields and pick the crops. Companies have been hiring temps to answer the phones and do the filing for as long as anyone can remember. Now a new group of people are experiencing the joys of the flexible economy: the managerial elite. The practice of appointing interim bosses actually originated in Europe some years ago as a way of coping with the continent’s rigid employment laws. But European companies were always as discreet about the practice as possible. Now the habit has reached the United States, and Americans are doing what they do naturally: shouting about it from the rooftops. No with-it company can be taken seriously without a “flexible boardroom” and a “just-in-time talent pipeline”. ...

  The newly expanded pharmaceutical firm bets on old-fashioned research“THE fundamental question is whether it is still worthwhile to invest in pharmaceutical science,” says Severin Schwan, the newish boss of Roche, a once-stodgy Swiss drugs firm. A cursory glance at his rivals, who have been trying to concentrate less on coming up with new medicines and more on making simpler things such as “branded” generics and over-the-counter drugs, suggests that the answer is no. Indeed, some analysts claim that the industry’s giants face such a precipitous decline in sales from drugs coming off patent, with so few promising new prospects to replace them, that their entire business model is collapsing.That argument has Mr Schwan leaping out of his seat with indignation. Using a deck of PowerPoint slides he sets out to disprove “the chorus of gloom”. Drugmaking is “so crude”, he argues, that half of all known diseases cannot be treated at all, and the drugs for the other half work properly only half the time and with huge side effects. “Imagine a car that starts only half the time, and whose brakes often don’t work,” he says. He sees this sorry state of affairs as a huge business opportunity. In particular, he is convinced that rapid advances in diagnostics, genomics and biotechnology will bring “a brand new revolution” in personalised medicine. ...

  Rising demand from China and India is stoking Indonesia’s exports of coalFOR power stations on the coast of China, it is often cheaper to import coal by sea from Indonesia than from mines in the interior. The same goes for many Indian consumers. Japan and South Korea, both big importers, are also close—putting Indonesia at the heart of an Asian coal boom.The majority of electricity in China, India and several other Asian countries comes from burning coal. Demand for the stuff has grown rapidly, along with the region’s economies. It is likely to continue to do so, despite environmental concerns, because coal is abundant and cheap. Last month the International Energy Agency predicted global demand for coal would increase by 1.9% a year until 2015, outpacing all other fossil fuels except natural gas. ...

  Business lobbyists complain that a regulatory tsunami is on its way. But some firms are embracing the proposed reforms“WHEN people hear the word regulation, they feel stifled, delayed, and many times they believe that government is being intrusive,” said Hilda Solis, America’s labour secretary, on December 7th as she unveiled plans for 90 new regulatory initiatives to improve the lot of workers. If you doubt her word, try mentioning regulation to the boss of an American company. Then stand back and wait for the inevitable explosion.Stifled, delayed and intruded upon are the least of the complaints you hear from America’s bosses these days. Their list of grouses includes ever-increasing regulation, stricter corporate-governance standards and the threat of higher taxes in response to the ballooning deficit. This week the Environmental Protection Agency announced that it considered carbon dioxide to be a dangerous pollutant, raising the spectre of clumsy administrative measures to reduce emissions—a prospect even more terrifying to business than the cap-and-trade scheme currently under consideration in Congress. Meanwhile, hopes of business-friendly reforms to America’s convoluted corporate-tax regime, among other things, have fallen by the wayside. ...

  How Italy’s bakers cope with seasonal demandFLUFFY, dome-shaped, dotted with sultanas and candied citrus peel, panettone is an Italian Christmas cake. Italians will eat about 40m of them over the holiday season this year. They are becoming popular elsewhere too: an estimated 1m have crossed the Atlantic this autumn. Delia Smith, a celebrity chef, recently caused a surge in demand in Britain with a recipe for trifle made with panettone. That is great news for the big manufacturers of the Milanese speciality back in Italy. But catering to the growing and ever more dispersed appetite for panettone requires some deft industrial planning.The grand cafes in Milan, such as Taveggia, Sant’Ambroeus and Cova, about which Ernest Hemingway wrote in “A Farewell to Arms”, simply squeeze a few batches of panettoni into their normal baking schedules as Christmas approaches. But for industrial producers such as Bauli, which will make 12m this season, that is not possible. Although Bauli is diversified into year-round products like croissants and biscuits, seasonal cakes account for over 50% of its turnover, which is expected to be €420m ($570m) this year. ...