Albania _All900 Croatia HRK48 France_._ €7.50 Ireland €7.50 Latvia .._ _€7.50 Netherlands €7.50 Romania _ RON29 Spain __..€7.50Austria €7.50 Cyprus €7.50 Germany._ €7.50 Israel. NIS43.00 lebanon H13.000 Nigeria Naira 1.700 Saudi Arabia Rials50 Sweden _..SKR66Bahrain Dinar4.50 (zech Rep _.(ZK199 Gibraltar GIP5.99 ltaly €7.50 lithuania _.._€7.50 Norway NKr66 Serbia RSD720 Switzerland (HFI0Belgium €7.50 Denmark DKr53 Greece €7.50 Kazakhstan..KZT2,800 luxembourg €7.50 Poland PlN29 Slovakia €7.50 Turkey Tl18Bosnia BAM16 Estonia €7.50 Hungary HUF2,170 Kenya KShs680 Malta €7.50 Portugal CONT •..•. €7.50 Slovenia €7.50 UAE Dirhams 45Bulgaria.... ....BGN13 Finland €7.50 Iceland IKr860 KuwaiL Dinar3.60 Montenegro €7.50 Qatar Rials45 South Afr;ca R70.00 UK f5.99

OnthecoverCountries must overhaultheir tax systems to makethem fit for the 21st century:leader, page 9. Beloved ofliberals and economists,land-value taxes have nevercaught onoThe time may nowbe right, page 18. Our newhouse-price index suggeststhat in many cities themarket is slowing, page 61

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••Volume 428 Number 9104

Published since Septemberl843to toke part in "a severe con test betweenintelligence, which pressesforward, andan unworthy, timid ignoronce obstructingaur progresso •• .

Ednorialoffices in London and also:Beijing, Berlìn, Brussels, Cairo, Chicago, Madrid,.Mexico City, Moscow, Mumbai, Nairobi, New Delhi,NewYork, Paris, San Francisco, Sào Pau lo, Seoul,Shanghai, Singapore, Tokyo,Washington OC

'7 The world this week

leaders9 Taxation

Stuck in the past10 Democracy in America

Sign me up10 Brazilian politics

BrasfLiahas a probLem11 Foreign directinvestment

Prudence not protectionism12 Education

Down with schooL hoLidays

letters14 On Germany, Adam Smith,

the Moon, Democrats,conscription, Norway,George Costanza

Briefing18 land-value tax

On firmer ground

Europe21 Turkey's economy

How Lowcan it go?22 Germany

Far Left and right overlap23 Polish nationalism

Buying back the familysilver

23 The French and trainsA love affai r

24 CharlemagneStreet politics in Russia

Britain25 The labour Party

Surreal strength26 Welfare policy

Poor economics27 Bagehot

Land of extremes

Middle East and Africa29 America and Iran

The pain of no deal30 Jerusalem's holy sites

Beware offalling rocks30 Canada and Saudi Arabia

Apointless fight

31 ZimbabweOpen for chaos

31 Jihadists in MozambiqueBurnings and beheadings

32 Congo's coming etectionKabila stops running

United States33 Propertyin Seattle

Build, baby, build34 Uberin NewYork

Jammed up34 Voter purges

On election day, stay away35 Poverty

Going, going, not gone36 The cost of haulage

Keep on trucking37 lexington

Never Trumpers' forlornhope

The Americas38 Brazilian politics

Convict, zealot, bore39 Colombia

Duque fakes charge40 Bello

The perils of Maduro

Asia41 Bangladesh protests

High-school vigilantes42 Tourism in Indonesia

Building ten Balis43 An Antipodean tiff

Kicking Kiwisout43 Women in Japan

Toxic test-doctoring44 Polishing Narendra Modi

The image factory

China45 Chinese politics

On the Xiside46 Ai Weiwei's studio

Bulldozed in Beijing

5

BrazilelernonJair Bolsonaro,a presidential candidate whois second in the polls, is athreatto democracy: leader,page 10. The outcome oftheforthcoming general electionis impossible to predict, page 38

Iran American sanctions bringmore agonyto an economythat is already dysfunctional.Whether they will accomplishanything else is an openquestion, page 29

Turkeylnvestorconfidenceisebbing, as il diplomatic crisiswith America hastens aneconomie one, page 21

~~Contents continues overleaf

6 Contents The Economist August 11th 2018

XiJinping Howto read thesummer grumbles aboutChina's swaggering leader,page45

Foreign directinvestmentChina's abilityto invest inAmerican startups is lookingmore uncertain, page 49. Howto safeguard national securitywithoutscaring offChineseinvestment: leader, page 11.Alibaba makes a welcome moveto rejig its legal structure.Others mayfollow, page 52.Singapore is a model for howto reform some ofthe world'smost flawed investmentvehicles: Schumpeter, paqe 54

Trade wars WeakChinesemarkets give America theedge, at leastin confidence,page 58. Tariffs on steelandaluminium are generatingsome winners, butthey are notquite the success DonaldTrumpthinks, page 59

International47 Summer holidays

Overlong and not over yet48 Posh summer

Flute or Latin?

Business49 China and Silieon Valley

Cheques and balances50 Bartleby

Time to get in training51 PepsiCo under Indra Nooyi

Coolfizzin51 Elon Musk and Tesla

Beckoning the barbarians52 Alibaba

Enigma variations52 Oil firms

Too much in the tank53 Oanone' 5 sodal goals

Choosing Plan B54 Schumpeter

Sovereign-wealth funds

Sdence and technology64 Underwater senses

Navyseals65 Aerospace

A breath offresh air66 Astronomy

Aim for the sun66 Wild medidne

Scratchi ng an itch

Books and arts67 Egypt after the revolution

Brothers, generals, suckers68 The history of opium

High and mighty69 Icelandie fiction

An isle full of noises69 Imagining warwith

North KoreaUnder a mushroom cloud

70 Young people in IndiaDreams and nightmares

l

72 Economie and finandalindieatorsStatistics on 42 economies,plus our monthly poll offorecasters

Obituary74 Luc Nkulula

Under the volcano

School and summer Mostcountries' schools haveexcessively long summerholidays, page 47. They arebad for children and for socialmobility: leader, page 12

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Philosophy brief56 Alexis de Tocqueville

The French exception

Finance and economies58 Trade war (1)

Is China losing it?59 Trade war (2)

Metal clashing60 Factor bond investing

Fama and fortune60 Prediction markets

Collective oracle61 Property prices

Housing correction62 Buttonwood

Triple-B movie63 Free exchange

Mangonomics

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OrecycleCl2018 The Economist Newspaper Limited. Alt rights reserved. Neitherthis publication nor any part ofit may be reprcduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mecbanical. photocopying, recording or cther-wise,without the prior permission ofThe Eeonomist Newspaper Limited. Published every week, exeeptfor a year-end double issue,by The Eeonomist Newspaper Limited. The Economistis a registered trademark ofThe Eeonomist Newspaper Limited. Printed byVogel Druek und Medienserviee GmbH,leibnizstraBe S, 97204 Hochberq, Oeutsehland. France. Numéro Comrnission Paritaire: 68832 GB. Encartd'abonnementde deux paqes sttué entre Ies folios 10 et 130. Rapp. Italia: IMOsrl ViaGuido da Velate 1120162Milano Aut. Trib. MI 272 del 13/04/88 Poste Italiane SpA - Sped Abb PostOl353/2003 (conv. L. 27/2/2004 n.46) art i comma l OCBMilano, Dir. Resp. Domenico Iassinari

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