Indholdsfortegnelse for 1211 i MoneyWeek

“The plan is working, and we must stick to it,” Rishi Sunak keeps saying. Given the chaos of the past few years, he sounds like a cowboy builder assuring a homeowner that he can definitely fix the hole in the roof he accidentally created while trying to redo the bathroom – and more cheaply than Keir, that dodgy plumber down the street. The data and mood music have certainly improved of late. Inflation has come down, even though core inflation remains sticky (the government never mentions that bit, of course). Growth has ticked up and sterling has hit its highest level on a trade-weighted basis since the Brexit referendum (oddly the government hasn’t mentioned this either). This is an auspicious backdrop for the UK stockmarket, where sentiment seems finally to…

“In terms of the [government] debt load, to me, it’s a future tax liability... [therefore] the debt burden is going to prove to be deflationary... as we’ve seen in many parts of the world before... debt is not inflationary. People who think that we can inflate our way out of it are totally mistaken. You can’t inflate your way out of these debts because the inflation... attacks... the poor and attacks... the elderly, and the Fed [and other central banks] will resist it. There’s no social appetite to having inflation eat away our debts... the debt [load]... is a deadweight drag on [economic] demand. It’s actually one of the reasons why I think rates and inflation are going to be coming down. People have it half-assed backwards, they think that…

Pharmaceutical giant GSK has suffered a “significant setback in its costly legal battle over Zantac”, say Emma Powell and Alex Ralph in The Times. A court in Delaware has ruled that experts can testify on behalf of just under 70,000 plaintiffs who insist that the heartburn treatment gave them cancer. The decision exposes the group to risky jury trials after victories in other US courts. The fall leaves GSK’s shares more than a quarter lower than in July 2022, when investors started to sell them off owing to fears about “potential multibillion-pound liabilities stemming from a wave of lawsuits”. The financial implications of successful Zantac lawsuits could be “enormous”, says Jess Jones in City AM. Shore Capital recently estimated that the overall legal risk has knocked $30bn off the value…

Germany’s state railway group Deutsche Bahn is investing €16bn in revamping its rail network this year, says Wirtschaftswoche. This bodes well for rail infrastructure and technology group Vossloh, which has secured a contract to provide Deutsche Bahn with at least 600 switches and carry out high-speed grinding on several key routes to improve the track. Vossloh’s order book is worth €800m, or 1.3 times sales. Contracts in Denmark and China have been secured, while the buoyant global rail industry looks likely to ensure that the targeted €1.2bn of revenue will be surpassed this year. Next year net income could well reach €60m, a figure last achieved in 2015 – when the stock was a third higher.…

Politics & economics The African National Congress took a “pounding” in last week’s election in South Africa, “crashing from 57% to 40% of the vote”, says Alec Russell in the Financial Times. Since the ANC took charge at the end of white rule 30 years ago, it has become “so corroded” that “just about anything it touches seems to wither away”. By accepting this election result, it has bequeathed “something of incalculable value to South Africa… Voters in Zimbabwe, Angola and other countries living under the dead hand of effective one-party rule will look on with envy”. What happens next is critical. A coalition with the uMkhonto we Sizwe (MK) party of disgraced former president Jacob Zuma and/or the Economic Freedom Fighters, “a rag-bag of racebaiters and would-be expropriators fond…

The UK general election campaign is now well under way (see previous page), and punters think that Labour is almost certain to win the most seats. Indeed, with £5.8m matched on Betfair, Labour is at just 1.03 (97.1%) to get the most seats, with the Conservatives at 46 (2.2%). It’s a similar story with the overall outcome – with a total of £4m matched, Labour is at 1.07 (93.5%) to get an overall majority, with no overall majority at 18.5 (5.4%) and a Tory majority at 55 (1.9%). I’ve already backed Labour to win both the most seats and an overall majority, and I would be truly shocked if I lost either bet, not only due to the huge Labour poll leads, but because of the general public mood. However,…

Labour leader Keir Starmer and his shadow chancellor Rachel Reeves spend a lot of time trying to reassure everyone that they will not push taxes any higher. They have already guaranteed not to raise the rate of income tax, of corporation tax, or of VAT over the lifetime of the next Parliament. Given that the Conservatives made the same promises back in 2019, and then raised taxes to a 70-year high, most voters will probably take that with a large pinch of salt. And even if the party is not planning to raise those three taxes, that doesn’t mean its determination to collect more revenue for the state won’t do a huge amount of damage. In fact, we are already seeing it. Apocalypse now Take the imposition of VAT on…

In options trading, the Greeks is the name for a group of metrics that measure how sensitive the price of an option is to changes in the factors that are used to calculate its value in financial models such as the Black-Scholes formula. The name is used because the most important metrics are denoted with Greek or pseudo-Greek letters. There are five major Greeks, plus a longer list of others derived from them. Delta measures how the value of the option changes in response to changes in the underlying price of the asset. It will be between -1.0 and 1.0, depending on the option type. If the option is deep out-of-the-money (the asset’s price is a long way from the strike price of the option and the option is likely…

“I think everybody should get rich and famous and do everything they ever dreamed of, so they can see that it’s not the answer.” US actor Jim Carrey (pictured), quoted on Medium “When I was young, people used to say that hoping Korea would become a semiconductor powerhouse was like hoping for a rose to bloom in a garbage can. However, we managed to do it.” Lee Jong Ho, South Korea’s minister of science and technologies, quoted on Bloomberg. He is hopeful that South Korea can become competitive in the burgeoning global space industry “I’d never made any significant amount of money on a movie, including Top Gun, and I was depleting a bank account to a point where my accountant was like: ‘This pandemic cannot last much longer’... But…

Bloomberg.com Bored by business books? Me too, says Tyler Cowen. Management bestsellers are full of “exhortations” that are cliched, banal, or lacking in context. They’re mostly written by people who want to get consulting or speaking-circuit gigs – and are out to avoid giving offence, rather than truly inspire. Unenthused business-book readers should try books about sporting and entertainment icons instead. Authors who write about music stars, athletes and sports teams tend to be passionate experts who tell compelling, business-relevant stories: “How the teams were put together, how leaders emerged, how people dealt with setbacks and failures, and so on.” Alex Ferguson’s (pictured)“scintillating” autobiography is “one of the best books I have read on how to understand and seek out talent”. I’ve learnt loads about management and group dynamics from…

As mentioned in the main story above, Inchcape (LSE: INCH) focuses on selling cars in around 40 emerging markets for a wide range of carmakers, both Western and Chinese. Thanks to strong economic growth and increasing rates of car use, Inchcape’s business is growing, with revenue increasing by around 4%-5% a year over the past few years. Adjusted earnings per share have done even better, rising by more than 40% from 2019 to 2023. The company makes a return on capital expenditure of just under 20%. Despite this, Inchcape still trades at less than nine times estimated 2025 earnings and has a solid dividend yield of 4.5%. Perhaps the most attractive Chinese car company is BYD (Hong Kong: 1211). BYD started out as a battery-maker, before moving into cars. Its…

Many small businesses will be watching the political debate over apprenticeships with keen interest. While Labour and the Conservatives may have competing visions of how apprenticeship schemes should work in future, one thing is not in dispute: the number of smaller firms taking on apprentices has collapsed in recent years. That’s largely because the Apprenticeship Levy, the government’s flagship policy on apprenticeship funding, was designed with bigger firms in mind. Smaller businesses are worried about the cost of funding apprenticeships, but also find it difficult to navigate a complex regulatory and administrative system. Nor have training providers done a good job of supporting employers. Labour’s headline proposal is to introduce greater flexibility into the apprenticeship system. In particular, it thinks employers should be allowed to use up to half of…

If you spent too much time reading the headlines, you would think that London has become a global backwater with no interesting companies on its exchanges. Not so. There are many leaders in their respective industries listed here, and most are currently on sale. The world’s foremost shipbroker, Clarkson (LSE: CKN),is a prime example. Shipbroking is a huge industry, but often overlooked. A gigantic operation Approximately 11 billion tonnes of goods are shipped around the world annually. That figure excludes oil, gas, grain and other commodities. Overall, shipping accounts for 80% of world trade, as it remains the most cost-effective and easiest way of moving goods and commodities. No one really knows exactly how big the industry is. There is no overall regulator or database on industry operators and ships,…

In 1986, Ivan Boesky (pictured) told an auditorium full of impressionable business graduates at the University of California, Berkeley, that greed is good, says The Times. “I think greed is healthy,” he said. “You can be greedy and still feel good about yourself.” A year later, the film Wall Street, starring Michael Douglas as Gordon Gekko, whose motto echoed Boesky’s words, came to “define the era of hubristic overconfidence in the money markets” before the 1987 crash. Boesky ascended Wall Street on what he called a “Jacob’s ladder of silver dollars” in the arbitrage sector – making big bets on companies on the brink of takeovers in the hope that the stock would soar on news of the deal. Indeed, often the news that Boesky was getting in was enough…

Fielden, Rye Whisky of England, 48% ABV £60, 70cl bottle, fielden.com, bbr.com I came across Fielden’s MD, Mark Harvey, at the launch of Walpole Brands of Tomorrow 2024. I am not a whisky expert, but it took no time for me to fall wholeheartedly into the legend surrounding Mark’s passion project. He only uses heritage grains and traditional farming techniques with no chemicals and no tillage to farm his crops. This mantra is known as restorative continuous cropping, and it leads to immeasurable improvements in biodiversity in the fields, encouraging life to bloom above and below the soil. This Elysian vision is depicted on his whisky label. The company has planted heritage grains in 15 farms from Cornwall to Norfolk, so there is serious ambition here. These grains are favoured because…

The 16th-Century Contest that Shaped the Modern World Roger Crowley Yale University Press, £20 Globalisation is a hot topic, but the phenomenon is nothing new, as historian Roger Crowley shows in this fascinating book. Globalisation really began, he says, in the 16th century, when European explorers discovered South America and Asia. The impetus wasn’t so much lust for gold or precious metals as a taste for the exotic spices and flavourings that came from Asia. Crowley examines the lives of the early explorers, from Ferdinand Magellan, who led the 1519–22 Spanish expedition to the East Indies, through to later voyagers such as John Cabot (born in 1450), who was instrumental to the development of transatlantic trade. Spain and Portugal tried to divide up the rights to these lucrative trade routes…

Asset manager Baillie Gifford is in make-or-break talks with seven British literary festivals that it supports on whether it should continue to sponsor them, says Harriet Agnew in the Financial Times. The Hay Festival and Edinburgh International Book Festival have ended their partnerships. The Edinburgh-based firm, with £225bn of assets under management, came under fire from singer Charlotte Church, comedian Nish Kumar and activist group Fossil Free Books for its investments in fossil fuels and purported links to Israel. Baillie Gifford’s literary patronage has spanned 20 years and includes the annual £50,000 prize for non-fiction. Festival organisers are now fretting over the future viability of their events. Baillie Gifford said “only 2%” of its clients’ money is invested in companies related to fossil fuels and that the “assertion that we…

Despite high interest rates, the UK property market continues to hum. Lender Nationwide reports that house prices advanced by 0.4% in May, leaving the average house worth 1.3% more than a year before. The market has been surprisingly resilient given major “affordability pressures”, says Nationwide’s senior economist Andrew Harvey. Confidence has “improved noticeably over the last few months, supported by solid wage gains and lower inflation”. Average UK pay excluding bonuses rose by 6% in the first quarter of 2024 compared with a year before. That’s a 1.9% rise in inflation-adjusted terms. But mortgage rates have ticked up since the start of the year, says Zoe Wood in The Guardian. The average two-year fixed mortgage costs 5.92%, up from 5.56% in late January. In more bearish housing news, data from…

Global debt surged to a new record high of $313trn last year, says the Institute of International Finance’s Global Debt Monitor. As a share of GDP, world debt dipped by 2% to 330%, the third consecutive fall as economies recover from the pandemic. Globally, state debt is worth $89.9trn, 29% of the total outstanding debt stock. Non-financial corporate debt makes up 30% and household borrowings 19% (the financial sector accounts for the rest). Public finances are stretched after Covid and the 2022 energy crisis, says Tom Stevenson in The Telegraph. Nations thus have a vested interest in higher inflation to erode the real value of the debt – perhaps 4% a year instead of 2% (but see Viewpoint, left, for another perspective).…

Anglo American “has survived” a near-£39bn takeover attempt by Australian mining rival BHP, say Jillian Ambrose and Jane Croft in the Guardian. The five-week pursuit came to an end after Anglo’s board rejected BHP’s eleventh-hour appeal to extend the takeover talks for a second time following three failed offers. The managers criticised the “highly complex and unattractive structure” of the proposed deal. The main sticking point was BHP’s plans to sell off some of Anglo’s South African business interests as part of the takeover. These were opposed by the South African government, Anglo’s largest shareholder, making rejection all but inevitable. Anglo-American’s CEO Duncan Wanblad “may have seen off a rival three times his company’s size”, but he still had to convince investors “that he can deliver what he has promised…

Italian luxury sportswear brand Golden Goose is to list on the Milan Stock Exchange in June with a valuation of about €3bn, says the Financial Times. The company plans to float approximately 25% of the company, raising €100m, while selling an unspecified number of existing shares, to strengthen its capital structure and reduce debt. Owned by British private-equity firm Permira, Golden Goose is famous for its €500 “distressed” trainers and is popular with celebrities such as Selena Gomez. The initial public offering (IPO) is “one of the most anticipated in Europe”, despite demand for luxury goods slowing down. Golden Goose achieved sales of €587m in 2023.…

● Boohoo’s co-founders Mahmud Kamani and Carol Kane and CEO John Lyttle are a “right bunch of try-on merchants”, says Alistair Osborne in The Times. At least they were, until a backlash by shareholders scuppered their “greedy bonus scheme” of £1m each plus a “refreshed” incentive plan, courtesy of chairman of the pay committee, Iain McDonald. He has a history of antagonising investors – witness his performance at THG, formerly The Hut Group. McDonald said the scheme was needed to ensure management would be “motivated and retained”. But Kamani owns 12.6% of the fast-fashion retailer, and “isn’t that incentive enough?” And where could they possibly go, in any case? Who would want a group of managers responsible for turning “a 413p share price four years ago into 34p” now? ●…

China is in a “far more serious” situation than Japan was when the latter’s bubble burst in 1990, says economist Richard Koo, who is known for developing the concept of the balance-sheet recession to explain what drove Japan’s stagnation. Koo argues that high levels of private-sector debt during a downturn cause companies and individuals to increase saving. This results in an worsening slowdown, as less is invested by businesses and consumer spending slows. China faces the risk of falling into this trap, while it also has other factors that could make the outcome even worse. “Japan’s population was still increasing for 19 years after the bubble burst. But in China, population decline and the bursting of the bubble started roughly at the same time, around 2022 and 2023,” Koo tells…

prospectmagazine.co.uk There’s a long tradition of “attack ads” dominating UK elections, says Róisín Lanigan. Famously, Saatchi & Saatchi’s “Labour Isn’t Working” poster, featuring a long dole queue, was credited with winning the 1979 election for the Tories. In 1992, the “Labour’s Tax Bombshell” and “Labour’s Double Whammy” campaigns helped John Major to a surprise win. Alas, the age of the memorable attack ad is over. “Social media has atomised our experiences of everything, including and especially politics.” It is hard for a single campaign to have a radical impact, and trust in all political advertising is so low that both attack ads and positive ads are treated with extreme cynicism and caution. Of course, there’s nothing new about campaigns using sleight of hand: on that famous 1979 poster, the downtrodden…

A few years ago I wrote a script called Four Murders and Some Funerals, about an old lady who is the victim of a terrible miscarriage of justice. Seeking revenge, she kills one of the perpetrators by accident, discovers she’s a natural at bumping people off, does away with the other three, and becomes a vigilante serial killer – righting wrongs wherever she finds them, usually where the law has failed. I still think it was a pretty good script, although it never got made: a bit like Miss Marple, only more savage and retributionist. In any case, in order to write it I had to come up with several original ways in which an old lady might kill people. I had one person pushed down a lift shaft, another…

We all hand money over to the taxman, but have you ever considered that the taxman should be giving you some cash? New figures from tax specialists RIFT Tax Refunds have revealed that the average taxpayer could be owed as much as £1,562 – an increase of 6.6% in one year. You can also backdate a tax claim for up to the last four years. The average four-year claim is just over £3,000. There are plenty of reasons why you could be owed money by the taxman. It may be that you have overpaid tax via PAYE owing to having the wrong tax code, or you could be eligible to claim tax breaks or benefits. The most common reason for people getting a tax refund is expenses incurred while working.…

Manchester United’s on-field performance over the past season has been patchy. But now the club is turning its attention to its non-playing staff. Employees have been told they must return to the office full-time, with existing hybrid working deals to be scrapped for all staff. It’s a bold move given that most employers are sticking with the hybrid model – including small and medium-sized enterprises. The British Chambers of Commerce (BCC) has found that fewer than 30% of smaller firms expect their workforce to be fully in-person over the next five years. Only a small minority work fully remotely, but hybrid models are almost ubiquitous. The BCC, in common with other business groups, thinks hybrid working is effective for many employers. Offering flexibility helps firms recruit and retain a broader…

“RWE should profit from the increasing demand for power from data centres” The past couple of years have been a very difficult time for investors in renewable-energy companies. The sector has suffered from poor sentiment due to the upswing in interest rates, which has hurt valuations. However, the underlying attractions of renewable energy are, I believe, better than ever. Growth in renewable energy looks set to continue its rapid upward trajectory as governments around the world get serious about their obligations to reduce carbon emissions and tackle climate change. Major buyers of power, such as the multinational global technology companies, also have an important role to play. Many of these firms no longer see it as acceptable to power their growth with electricity generated by fossil fuels. Crucially, these are…

Downward Spiral Collapsing Public Standards and How to Restore Them John Bowers Manchester University Press, £20 The years leading up to the 1997 general election saw a spate of scandals, including “cash for questions”, which led to a lot of soul-searching about standards in public life. Over a quarter of a century on, with a Conservative government facing another defeat, little seems to have changed, with ministers and MPs, most notably former prime minister Boris Johnson, departing under a cloud. Barrister John Bowers argues that this continued decline in the behaviour of elected officials shows that our political system is not fit for purpose and needs to be radically reformed. Reforms carried out after 1997 aimed to increase transparency, but they were incomplete and still left the government of the…

Left-winger Claudia Sheinbaum will be Mexico’s next president after an electoral landslide. Sheinbaum secured between 58% and 60% of the vote in Sunday’s presidential election, compared with about 28% for her main conservative rival. Sitting president Andrés Manuel López Obrador (known as AMLO) was prevented from seeking re-election by term limits, with Sheinbaum pledging to carry forward his political programme. AMLO is hugely popular, but has had a fraught relationship with investors during his six-year term in power. Nevertheless, the country’s IPC stock index has gained more than a fifth over the past five years, while economic growth has been creditable. That’s not a bad showing given AMLO’s background as “a self-proclaimed leftist revolutionary”, says Barron’s. While social spending has risen, he has avoided budget splurges for most of his…

Last week, billionaire Daniel Kretinsky “confounded” the market by clinching a £5.3bn deal to take over London-listed International Distribution Services (IDS), the parent company of Royal Mail, says the Financial Times. In an attempt to “appease politicians and postal workers”, Kretinsky’s EP Group has committed to protecting key principles at IDS during the first five years of ownership. Binding commitments include “keeping its UK tax residency, maintaining Royal Mail’s costly obligation to deliver mail everywhere in the UK at the same price and recognising the postal workers’ union”, as well as restrictions on separating Royal Mail from IDS’s profitable parcels business. It’s too soon to relax, says Phillip Inman in The Guardian. Whatever he says, “everything about the 500-year-old institution could now be at risk”. The “string of commitments” he…

Four to buy IAG The Telegraph British Airways’ parent company IAG’s strong financial performance, decreasing debt, and “dirt-cheap” valuation make it a compelling long-term investment. The positive first-quarter results, notably increased operating profits and passenger numbers, reflect improving conditions in the overall industry. With global demand from passengers on the rise and interest-rate cuts looming, IAG’s solid fundamentals and growth potential suggest significant progress. “Irrespective of any positive or negative personal feelings towards British Airways… IAG remains a worthwhile long-term investment.” 174p Impax Environmental Markets The Mail on Sunday Impax invests in environmentally focused small and medium-sized firms, from hazardous waste treatment in the US to reusable pallets in Australia. It “combines green credentials with hard-nosed commercial nous”. It should benefit from increasing support for green initiatives from governments, investors,…

Until last week, no previous US president, serving or retired, had been found guilty of a crime, says The Observer. Former president Donald Trump broke that record when, despite his attempts to discredit the criminal justice system, a jury unanimously convicted him for “manipulating” the 2016 election by falsifying business records to cover up “a sex scandal that threatened his chances”. With Trump due to be sentenced in July, he could in theory end up having to campaign for the presidency from prison, though his age and the appeal process mean he is unlikely to be jailed immediately. The case always looked like a stretch, says The Wall Street Journal. The statute of limitations had expired on the charge of records falsification, so the prosecution was forced to construct a…

Sometimes it’s helpful to step back and look at a long-term chart. The rise of Nvidia is one of those times. Over the past 18 months, it has rocketed from a market value of under $500bn at the start of 2023 to becoming one of just four $2trn companies early this year and now rapidly closing in on Apple and Microsoft at the $3trn level. As most investors know, the transformation of Nvidia is due to its domination of the market for chips for artificial intelligence (AI) systems. Nvidia used to be focused on graphics processing units (GPUs) – specialised chips that accelerate computer graphics. Researchers found that GPUs were very good at accelerating certain other types of calculations and Nvidia made the prescient decision to support these uses of…

NHS has to draw a line somewhere Max Pemberton The Spectator Obesity rates have nearly doubled in the UK since the 1990s and the NHS now spends around £6.5bn a year treating it, says Max Pemberton. Being overweight – which 60% of the UK population now is – costs the NHS twice as much as being a healthy weight. No intervention to reduce the figure has worked, and it is hoped that weight-loss injections known as GLP-1 agonists (Wegovy/Ozempic) could reverse this trend. Rishi Sunak says he is committed to rolling out these drugs, which can also be used to treat diabetes and have been found to cut the risk of heart attack and stroke by 20% after three years. But can we afford to medicate over half the population?…

newstatesman.com The phrase, “scan the QR code here to download the app”, is right up there with “rail replacement service”, says Ed Smith. Recently, on an otherwise idyllic spring holiday in Catalonia, we pulled up just outside the beautiful medieval village of Peratallada. But instead of exploring ancient alleyways, I found myself “in a municipal car park squinting at drop-down menus trying to punch in my address, date of birth and credit card details”. Eventually I gave up, and spent my stroll worrying if I’d return to find a parking ticket. There’s always been boring life admin to complete, and some apps save time. But this “appification” of life’s everyday essentials – parking, ticketing, banking, shopping – forces consumers to divulge personal information and hoovers up all our leisure time…

“Emerging markets will be the main driver of growth in car sales in the future” Over the past few months, the car industry has “never been far away from the headlines”, says Jon Wallace of the Jupiter Green Investment Trust. The seemingly unstoppable rise of electric cars appears to have hit a speed bump, and governments have rapidly reversed ambitious targets to ban sales of new petrol-powered cars by the end of the decade. Meanwhile, the threat of competition from Chinese carmakers has prompted US president Joe Biden to hike tariffs on electric vehicles from the country. Are these problems just a bump in a road on the way to a new future – or something more serious? Opportunities in emerging markets Probably the most immediate challenge facing the industry…

● “Although the mood music in the City suggests that interest rates are coming down sooner rather than later… providers of consumer credit don’t seem to be listening,” says Jeff Prestridge in The Mail on Sunday. Marks & Spencer has increased the rate on its credit card from 21.9% to 24.9%, and Barclaycard is increasing rates on its platinum card next month. Lloyds Banking group, meanwhile, has announced that interest rates on authorised overdrafts are changing. The current typical rate is 39.9%, but some customers, such as those with Club Lloyds accounts, pay 27.5%. Rates will now range from 19.9% to 49.9%, depending on your credit rating and how you use your account. ● “Millions of people who rely on their family or friends to manage their finances cannot access…

● Thousands of small firms may need to do more work to prepare for a raft of new rules on environmental monitoring, measurement and reporting. While most of the legislation due to come into force in the UK over the next 12 months is aimed at larger companies – including the new Corporate Sustainability Reporting Directive – the new regimes often require firms to collect information from suppliers. Smaller businesses unable to provide detailed information on issues such as carbon emissions may therefore struggle to win contracts. ● New rules on the strength of banks’ balance sheets could hit small businesses, a cross-party group of MPs has warned. The Prudential Regulation Authority, the UK’s chief City regulator, has announced that banks will soon have to increase the amount of capital…

What Went Wrong With Capitalism Ruchir Sharma Allen Lane, £25 It’s safe to say that capitalism is not enjoying the greatest of reputations at the moment. The economic success of the US once provided the inspiration for a generation of policymakers and intellectuals from India to China, says Ruchir Sharma. Now, even the Americans seem to have fallen out of love with the free market. Indeed, only half of Americans under 40 now say in surveys that they support capitalism; a third even say they are open to the idea of communism. Sharma agrees with such critics that change is needed, but differs in that, like his hero Ronald Reagan, he sees big government not as the solution, but as a large part of the problem. The idea that government…