China The most significantpurge in a generation claimsZhou Yongkang, a formersecurity chief, and tightensXiJinping's grip, page 33.The economic impact of theanti-corruption campaign,page 34

On the coverFor allits military might,Israel faces a grim futureunless it can secure peace:leader, page 7. Thepummelling of Gaza has costIsrael sympathyin Europe,and even among Americans.Israelis are debating how torespond, pages 16-18

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TheEconomist

Volume 412 Number 8898

Published since September 1843to toke part in "a severo contest betweenIntelligente, which presses forward, andan unworthy, timid ignorante obstructingour progress."

Editorialoffices in London and aso:Atlanta, Beijing, Berlin, Brussels, Cairo.Chicago. Hong Kong, Johannesburg, lima.Los Angeles, Mexico City, Moscow, New Delhi,NewYork, Paris, San Francisco, Sáo Paulo,Singapore, Tokyo, Washington DC

5 The world this week

Leaders

7 IsraelWinning the battle, losingthe war

8 Mukesh AmbaniIndia's unloved bil[ionaire

9 Argentina defaultsEighth time unlucky

9 Crime and punishmentStuffed

10 Fund managersFundamental fears

Letters

12 On Hong Kong,cyber-security, Scotland

Briefing

16 Israel and the worldUs and thern

United States

19 America and AfricaThe next great disruption

21 Skilled labourBehind the scenes

21 Primary reformA modest proposal

22 Tattoos in the workplaceIn k blots

22 Religious freedomRabbi to the rescue

24 The Florida governor'sraceClose and caustic

25 LexingtonAmerica and the spacerace

The Americas

26 Argentina's defaultNo movement

27 BelloTerri] limits

28 Canadian licence platesPlategate

28 Politics in VenezuelaWhose hand on the tiller?

Asia

29 Race and religion inSouth-East AsiaThe plural society

30 The PhilippinesDAP dancing

31 Sport in IndiaThe kabaddi craze

31 India and NepalNeighbourhood watch

32 Nuclear power in JapanFlicking the switch

China

33 CorruptionThe fall of Zhou Yongkang

34 Corruption and theeconomyIs a nti-g raft anti-growth?

34 AviationThe sky is a limit

Middle East and Africa

35 South AfricaUp the creek

36 Ebola in west AfricaDeath and disbelievers

37 The Syrian warA pincer move

37 LibyaOut of control

38 Islam in EgyptManipulating the minarets

Europe

39 Sanctions on RussiaThis is going to hurt

40 The war in UkraineClosing in

41 Spain's economyIberian dawn

41 Turkey's foreign policyNasty neighbourhood

42 German politicsFor curvy cannons andextra sleep

1 1O 7 ata. 2014

New sanctions on RussiaThe cost ofVladimir Putin'sUkraine gamble is going up,but he shows no sign ofcha nging course, page 39.How far wi ll he go to stave off aUkrainian victory? Page 40.Western sanctions willthwartRosneft's ambitions tojointhe ranks of oil's superpowers,page 50

How America fell out of lovewith space A revealing newhistory of the Apolto moonlandings holds lessons fortoday: Lexington, page 25

► Contents continues overleaf

Obituary70 Robert Panara

Educator of the deaf

Principal commercial offices:25 St James's Street, London Sw1A 1HG

Tel.: 020 7830 7000

Rue de l'Athenée 321206 Geneva, SwitzerlandTel: 41 22 566 2470

750 3rd Avenue, 5th Floor, NewYork, NY 10017Tel: 1 212 541 0500

60/F Central Plaza18 Harbour Road, Wanchai, Hong KongTel: 852 2585 3888

Other commerciat offices:Chicago, Dubai, Frankfurt, Los Angeles,Paris, San Francisco and Singapore

Decluttering businessesCompanies mustfight aretentless baffle againstbureaucracy: Schumpeter,page 53

India's unloved billionaireWhy Mukesh Ambani, India'srichest man, needs to reformhis empire: leader, page 8. litHe coutd make his country abetter place, But he wouldhave to cha nqe hil.company'sways, page 47

Bonds and risk Regulatorsshould nottighten the ruleson the fund-managementindustry: leader, page 10. tThere are worries that asset -management may spawn thenext financial crisis, page 54

Nixon and ReaganThe rise of Ronald Reaganmeant far more than victoryfor the Republicans, page 62

4 Contents

The Economist August 2nd 2014

ri

O

Britain

43 PrisonsRough justice

44 The economyResized and reshaped

International

45 Commemorating the firstworld warIn foreign fields

46 How the first world warreshaped EuropeRedrawing the Illd p

Business

47 Reliance IndustriesReimagining Ambani

50 RosneftArctic chill

51 Arbitration awardsNow try collecting

51 Commercial propertyThe warehouse boom

52 Whole Foods MarketVictim of success

53 SchumpeterDecluttering the company

Finance and economice

54 Fund managersAssets or liabilities?

55 ButtonwoodWhither interest rates?

56 Deleveraging in AmericaDebt calm

56 Forgiving defaultBorrow, renege, borrowagain

57 Latin AmericaneconomiesAndean idols

58 Free exchangeWhy the ECB shouldadopt QE

Science and technology59 Sex differences

The Mars and Venusquestion

60 Solar energyPicking up steam

60 Renewable energyPee power

61 EntomologyIt's gotta bee me

Books and arts62 Nixon and Reagan

Invisible bridge

63 Governing BritainA difficult truth

64 European historyRise of the Reformation

64 Cricket in PakistanBatting for survival

65 King TutankhamunBoy-king in Oxford

68 Economic and financiali ndicatorsStatistics on 42economies, plus a closerlook at import cover

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