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A century of expanding government has distorted financial markets, stoked massive inequality, and soaked America in debt.Capitalism didn't fail, it was ruined... What went wrong with capitalism? Ruchir Sharma's account is not like any you will have heard before. He says progressives are right, in part, when they mock modern capitalism as "socialism for the rich." For a century, governments have expanded in just about every measurable dimension, from spending to regulation and the scale of financial rescues when the economy wobbles. The result is expensive state guarantees for everyone--bailouts for the rich, entitlements for the middle class, welfare for the poor. Taking you back to the 19th century, Sharma shows how completely the reflexes of government have changed: from hands-off to hands-on, from doing too little to help anyone in hard times to today trying to prevent anyone suffering any economic pain, ever. Trading sins of omission and indifference for excesses of spending and meddling, governments from the United States to Europe and Japan have pumped so much money into their economies that financial markets can no longer invest all that capital efficiently. Inadvertently, they have fueled the rise of monopolies, "zombie" firms, and billionaires. They have made capitalism less fair and less efficient, which is slowing economic growth and fueling popular anger. The first step to a cure is a correct diagnose of the problem. Capitalism has been badly distorted by constant government intervention and the relentless spread of a bailout culture. Building an even bigger state will only double down on what ruined capitalism in the first place.

"Capitalism didn't fail, it was ruined... What went wrong with capitalism? Ruchir Sharma's account is not like any you will have heard before. He says progressives are right, in part, when they mock modern capitalism as "socialism for the rich." For a century, governments have expanded in just about every measurable dimension, from spending to regulation and the scale of financial rescues when the economy wobbles. The result is expensive state guarantees for everyone--bailouts for the rich, entitlements for the middle class, welfare for the poor. Taking you back to the 19th century, Sharma shows how completely the reflexes of government have changed: from hands-off to hands-on, from doing too little to help anyone in hard times to today trying to prevent anyone suffering any economic pain, ever. Trading sins of omission and indifference for excesses of spending and meddling, governments from the United States to Europe and Japan have pumped so much money into their economies that financial markets can no longer invest all that capital efficiently. Inadvertently, they have fueled the rise of monopolies, "zombie" firms, and billionaires. They have made capitalism less fair and less efficient, which is slowing economic growth and fueling popular anger. The first step to a cure is a correct diagnose of the problem. Capitalism has been badly distorted by constant government intervention and the relentless spread of a bailout culture. Building an even bigger state will only double down on what ruined capitalism in the first place."

"Shaped by his twenty-five years traveling the world, and enlivened by encounters with villagers from Rio to Beijing, tycoons, and presidents, Ruchir Sharma's The Rise and Fall of Nations rethinks the 'dismal science' of economics as a practical art. Narrowing the thousands of factors that can shape a country's fortunes to ten clear rules, Sharma explains how to spot political, economic, and social changes in real time. He shows how to read political headlines, black markets, the price of onions, and billionaire rankings as signals of booms, busts, and protests. Set in a post-crisis age that has turned the world upside down, replacing fast growth with slow growth and political calm with revolt, Sharma's pioneering book is an entertaining field guide to understanding change in this era or any era."

In the middle of the last decade, the average growth rate in emerging markets hit over seven percent a year for the first time ever, and forecasters raced to hype the implications. China would soon surpass the United States as an economic power, they said, and India, with its vast population, or Vietnam, with its own spin on authoritarian capitalism, would be the next China. Searching for the political fallout, pundits predicted that Beijing would soon lead the new and rising bloc of the BRICs -- Brazil, Russia, India, and China -- to ultimate supremacy over the fading powers of the West. Suddenly, the race to coin the next hot acronym was on, and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) emerged from the MIST (Mexico, Indonesia, South Korea, and Turkey). Adapted from the source document.

When Nitish Kumar became chief minister of the dirt-poor Indian state of Bihar in 2005, kidnapping was said to be the leading industry in the capital city of Patna. Kumar set about energizing a landlocked economy with few outlets for manufactured exports. He focused on improving the yields of Bihar's fertile soil and ushered in a construction boom. Within a few years, a state once described by the writer V. S. Naipaul as "the place where civilization ends" had built one of the fastest-growing state economies in India. And Kumar was recognized as a leader in the new generation of dynamic chief ministers who are remaking the economic map and future of India. This generation includes the socialite turned statesman Naveen Patnaik in Orissa, the spellbinding orator Narendra Modi in Gujarat, the self-effacing Raman Singh in Chhattisgarh, and the quiet personalities of Sheila Dikshit in Delhi and Shivraj Singh Chauhan in Madhya Pradesh. As a result of their economic successes, these leaders have each won consecutive reelection bids. That these chief ministers have managed the double feat of economic success and political longevity belies the conventional wisdom about India's doldrums. After a decade of strong economic growth, during which India was hailed as democracy's answer to China, the bad news is back: New Delhi seems politically paralyzed in the face of the global economic slump. India's GDP growth rate has fallen from near double digits to five percent, and the capital has been buried in scandalous headlines about corruption, power outages, and incompetent police. Things do look bad in New Delhi, but the capital is not the whole of India. As India's most dynamic states post rapid and sustainable growth rates, the country is rediscovering its natural fabric as a nation of strong regions. States still growing at or near double-digit rates represent India's secret weapon for competing with the other major emerging markets, from China to Brazil, Indonesia to Mexico. The only hitch is that despite the chief ministers' high popularity in their home states, many of them are pushing rapid development with an autocrat's haste. Nevertheless, if India is to come back as a success story among the emerging markets, New Delhi should find ways to encourage the rise of its breakout states and the spread of their success to India's other states. Adapted from the source document.

Ruchir Sharma ("Bearish on Brazil," May/June 2012) argues that Brazil's incredible rise over the past ten years has depended on the sale of commodities, and that as commodity markets begin to slow, so, too, will Brazil's growth. Sharma correctly notes that in the coming years, Brazil will likely need to confront a decline in commodity purchases from China. But he fails to recognize that economic stability has also driven Brazil's growth. Throughout the late twentieth century, Brazil suffered from failed stabilization policies and devastating bouts of hyperinflation. In 1994, however, Brazil introduced a new currency, the real, which has kept inflation in check. Around this time, the government also began lowering tariffs, opening up markets, and privatizing industries, policies entrenched over the next decade by former Brazilian President Luiz Inacio Lula da Silva. Brazil faces many problems, from poor education and infrastructure to a complex bureaucracy and complicated tax regulations. Adapted from the source document.