America'snew

businessmodel

OnthecoverDonaLd Trump is rewritingthe ruLes that governreLations between thepresident and firms. Notforthe better: Leader, page 11.The president-elect wants tochange the landscape oftrade, page 19. He is part of aLongtradition of electedoffidals intervening inbusiness, page 21. America isnot the only country whereworkers are angry; they arefuming in China, too, page 49

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••Volume 421 Number 9019

Published since September1843to take port in "o severe contest betweenintelligence, which pressesforward, andan unworthy, timid ignorance obstructingour progresso "

Editorialoffices in Londan and also:A~Lanta, B~ijin~, BerLin, Brussels, Cairo, Chicago,lima, MelOco City, Moscow, Mumbai, Nairobi,New DeLhi,NewYork, Paris, San Francisco,Sào Paulo, Seoul, Shanghai, Singapore, Tokyo,washinçton DC

9 The world this week

Leaders11 Trump and companies

America's new businessmodeL

12 Burqa bansThe freedom to cover up

12 After Italy's referendumSaLvaging the wreckage

14 GLobal educationHomework for aLL

16 Big oiLShape up

Letters17 On Hong Kong, Indian-

Americans, Peru,nationalism

Briefing19 Business in America

DeaLing with DonaLd21 American corporatism

Chairman president

Europe23 Post-referendum ItaLy

Grim non-resignation24 Russia's active measures

Propaganda for today26 Minority government

in SpainRajoy shorthanded

27 Austria's electionPopuList defeat

28 CharlemagneFrance's unLikeLyLiberaLs

Britain29 University admissions

Afoot in the door30 The Brexit process

Red, white, bLue or grey?32 Bagehot

The end ofthetwo-partysystem

Middle East and Africa33 Telecoms in Africa

ContinentaL disconnect34 Gambia's election

Strongman down35 Warin South Sudan

Genocide or mere atrocity?35 Saudi Arabian diplomacy

Outpaced by Iran36 Israel's army

WeLcometo Tank GirL

United States37 Deporting migrants

HamiLton's heirs38 Standing Rock

Water, Lifeand oiL39 Hate crimes

Bythe numbers40 Health care

Drug money40 Lawyers

Libidos and don'ts41 Trump appointments

Fox meets henhouse42 Lexington

FareweLLto aLLthat

The Americas43 Colombia's peace

agreementAtumuLtuous finaLchapter

44 BeLLoThe Andean sun

Asia45 Japan and Russia

Two men in a tub46 An election in Uzbekistan

Cloning Karimov47 Politics in New ZeaLand

The prime minister quits47 Jayaram JayaLalithaa

The passing of a TamiLtitan48 Indonesia's economy

Back in business

Italy Matteo Renzi reckLessLyLedItaLyintoa poorLyconceived referendum. Howtopick up the pieces: Leader,page 12. MrRenzi may notkeep his pLedge to step down,page 23. Astate rescue oftheworLd's oLdest bank Looksprobable, page 63

Clever kids Cynics shouLd stopknocking the Latest gLobaLeducation comparisons andstart Learning from them:Leader, page 14.PISA showsthat reforming education issLowand hard, but possibLe,page 52. Where migrants go toschooL is more important thanwhere they camefrom, page 54

Two men in a tub Shinzo Abehas invited VLadimir Putin to asummitin whichjointbathingin hot springs is on the agenda.The odds of a breakthrough intheir countries' 70-year-oLdterritoriaL dispute are Long,page45

~~Contents continues overleaf

8 Contents The Economist December iotn 2016

Oil OPEC'sintervention willnot save a flabby industry fromthe lash ofmarketforces:leader, page 16. Big oil firmsare taking a new approach tofinding and drilling for crude.Willit last? Page 55. Rosneftstrikes a deal, page 56. LatinAmerica is setto extend itslead in alternative energy:Bello, page 44

Pensions in Dallas The run ona retirementfund signals anunwelcome emergency for thefire and police services,page64

Palaeontology Newfossi lsilluminate thejourney that ledultimatelyto human beings,page 67. Adinosaur's tail has atale to tell, page 68

China49 Anxiety and atienation

Global trends reflected51 Banyan

Trump and Taiwan

Internationat52 Scoring education

polidesMust try ha rder

54 Migrants at schoolLessons in integration

Business55 OHcompanies

Fit at fifty-or less56 Rosneft and Glencore

Striking a deal56 Auditors

Bother in Brazil57 Motorcycle

manufacturingDigital rider

57 South Korea's chaebolBefore parliament

58 Sika and Saint GobainSwiss roiled

59 Alt-right mediaThe Breitbart side

60 SchumpeterCharles Koch, businessphilosopher

Finance and economics61 The American economy

Full speed a-Fed62 Buttonwood

First blast oftheTrumpettes

63 Italian banksA monte to climb

63 The euro zoneThank God forthe ECB!

64 Pensions in AmericaStampede in Dallas

65 Insurance linganonAfrica's Jarndyce v Jarndyce

66 Free exchangeThe four freedoms

Sdence and technology67 Palaeontology (1)

Romer's gap68 Palaeontology (2)

Feathered find68 Solar energy

Shine on69 Molecular biology

Body of knowledge69 The Breakthrough prizes

Move over, Alfred70 Astronomy

The remains ofthe day

Books and arts71 Books ofthe year (1)

High fliers75 Books ofthe year (2)

Economist writers' books

78 Economic and finandalindicatorsStatistics on 42 economies,plus our monthly poll offorecasters

Obituary80 Whitney Smith

Half mast

Books oftheyear China,language, microbes,hereditary power, inequalityand medieval manuscriptsprovided the themes forthecream ofthe literarycropin2016, page 71. What we wrotewhen we weren'tin the office,page 75

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OrecycleCl 2016 The Economist Newspaper Ltmited. Ali rights reserved. Neitherthis pubficaticn nor any partofit may be reproduced, stored in a retrievalsystem, ortransmitted in anyform orbyany means, etectrcnic. mechanical, photocopying, recordinq or other-wise. withcut the prior permission ofThe Economist Newspaper limited. Published everyweek, exceptfcr a year-end doubtetssue. byThe Economist Newspaper Limited. The Economistisa registered trademark ofThe Economist Newspaper Limited. Printed byVogel Druck und Medienservice GmbH, teibnizstralse 5, 97204 Hcchberq. Deutschland. France, Numéro Commission Paritaire: 68832 GB. Encartd'abonnement de deux pages situé entre les folios 10 et 130. Rapp. Italia: IMDsrl ViaGuido da Velate 1120162Milano Aut. Trib. MI272 del 13/04/88 Poste Italiane SpA· Sped Abb Post DL353/2003 (conv. L. 27/2/2004 n.46) arti comma 1 DCBMilano, Dir. Resp. Domenico Tassinari