The price of a cup of coffee at the Sheraton, Doha, is $10. It is a classic case of short-term profit maximisation at the cost of potential long-term damage to the Sheraton brand. This "business as normal" approach, with short-term advantage put before strategic thinking, also characterises the US and European delegations that have been bunkered down in the Sheraton for the WTO shindig.

Apart from egregious security measures, you would not know that the World Trade Organisation negotiations were taking place against a backdrop of global instability not seen in 50 years. European governments have fought to defend their subsidies to farmers; Washington has tried to reinforce the fortress around its textile industry. Such realpolitik was understandable - if not acceptable - six months ago. Today, it is mind-boggling.

These governments should have the courage of their liberal convictions and allow proper global competition in industries of vital importance to less wealthy regions. It would be painful for European farmers and US garment-makers. But any sincere supporter of competition accepts that there will be losers in the battle for market share, and that some of them will be friends and fellow-citizens. Sensible western governments would concentrate their resources on minimising the dislocation for those losers by, for instance, offering grants for retraining or for proposals to change land use.

But neither financial nor intellectual capital should be invested in the kind of fudge put forward by the Europeans (I mean us) in Doha, which included a redefinition of farming subsidies as environmental protection measures. The British delegation has blamed it all on the French, who are manning the barricades for their farmers as they always do. But if Tony Blair had really engaged with this issue in advance of Doha, we surely would have found a more acceptable European position.

I am not arguing that the Europeans and the Americans should come over all saintly and altruistic. But it is in our economic and political interests to have the courage of our globalising convictions. How on earth do we expect to bind India, Pakistan and China, among others, into a "war" against terrorism if we don't give them a fair crack at profiting from the system our troops are defending?

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It is EastEnders (or EC1ers) for the City's underemployed bankers and brokers. The high court battle between Unilever Superannuation Fund and Merrill Lynch Investment Managers is the most avidly followed soap opera in town. Like all good soaps, it benefits from media mythologising. In this case, we are told that the power-dressing, superstar fund manager of MLIM, Carol Galley, is "widely known in the City as the Ice Maiden".

Well, I have been keeping an eye on Galley's impressive career for almost 20 years, and I have never heard anyone call her that, though her success has earned her many less flattering monikers.

It would be more accurate to say that she is widely known as the Ice Maiden among City reporters. I am pretty sure that the London Evening Standard started it in January 1996. At the time, she had become a figure of controversy, because MAM - as her fund management group was then known - owned a big stake in Forte, the hotels group, which fell to Granada. Galley was held personally responsible for delivering Rocco Forte's proud family business to a bunch of uncouth caterers and TV producers.

As you would expect of someone who has succeeded in her industry, she is decisive and relatively ungarrulous - traits that a Standard reporter appears to have decided were typical of "an ice maiden". And so a legend was born.

The other crucial element in a successful soap is a plot line that stretches belief. And at the heart of Unilever's claim for £130m in damages from Merrill is the complaint that the fund managers made a profit of only £200m on £1bn of funds they invested.

This may sound churlish of Unilever. But its sense of grievance is understandable for two reasons.

First, Merrill gave undertakings about the returns it would earn on Unilever's money - and Unilever claims those undertakings were broken. Second, if Merrill had not "actively" managed the money at all, but simply placed it in a basket of shares that represented the constituents of the FT Stock Exchange index, the return would have been £110m greater. To use the jargon, Merrill underperformed the market.

The case has a wider significance. Should the likes of Merrill/MAM invest pension fund money on the basis of their analyses of the relative merits of different shares and markets? Or should funds be indexed, with money invested in a way that ensures a portfolio simply tracks the market, with no discretion given to the fund manager?

The latter is becoming the norm. But in my view, pensioners (in other words, millions of us) will be worse off over the long term if they are deprived of the potentially superior capital gains to be had from active fund management.

Indexing, however, has the advantage of being cheap and less risky. You could train a bunch of chimpanzees to oversee an indexed portfolio. And the great thing about power-dressing, well-groomed monkeys is that they have never even heard of a seven-figure guaranteed bonus.

Robert Peston is editorial director of QUEST(TM); www.csquest.com; e-mail: rpeston@csquest.com

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