club in washington d.c. hosted the talk. >> it is good to be here and to be the capstone speaker for this year. i am going to talk about the topic of my book but much more broadly about the muslim world, the united states's perspective on relations with the muslim world and where do we go from here with the muslim world? for much of the past decade since the events of 9/11 we talked a lot about the muslim world. in our media it has become part of the language of our politics. it matters a lot to us. thinking often is the united states or the muslim world are not on the right path -- not on the same page.

we fought a lot about how to fix that relationship and particularly think about writing those things that are not going right. that context, that worries us more than the question of extremism. the perception that the muslim world thinks too much about conservative ideas and too permissive towards extremism and this is something that will be addressed for policy consent. much of that is quite true. extremism is an issue of paramount concern. it is a foreign policy consideration. it is the major focus of u.s. foreign policy and to that extent it is also the way in

which many americans view the muslim world. but there's also a tendency that it becomes too all consuming. it becomes the only thing that matters when we think about the muslim world and it also reduces every political or religious trend of three billion people in an area stretching from the atlantic to the pacific a under one consideration. my beginning point is as important as extremism and fundamentalism has been and is to the muslim world and the concerns that the united states and the west have about the muslim world is not the only thing that is happening, that is deserving of our attention in the muslim world. those other things, solid economic factors that i will talk about that we don't pay attention to or are not overly

concerned with that will in this end be the solution to things we are concerned with, if we thought about a lot of the discussion in this country about the muslim world is how do you get the muslims to think differently about their own religion and the west? how do you get them to move away from conservative ideas towards so-called moderation? if that is the goal, some of the other trends are much more important. in my opinion, economics is a very big issue. we don't think in terms of the economics of the muslim world. there's something we understand intuitively. there is a relationship between poverty and extremism. we think when you have poverty

or lack of opportunity that it translates into circumstances that lead people to support extremism. among the more sophisticated observers in the muslim world they understand the problem has to do with the way in which things are done in the muslim world. in too many places you have government controlled economies that are not really growing any more. the government controls too many things. it is not able to provide jobs or opportunity for the population. is providing less and less service like water and sanitation and basic services or you look at the demographics of the muslim world wherein country after country in excess of 55% of the population or more are categorized that way. having that many young people is trouble in and of itself loan if

there is no job market to absorb them or provide a path to a better life or upward mobility. these are things that don't dominate our discussion about the muslim world. we understand these problems exist. when we think in this way we think the solution to the muslim world is developments, job creation, essentially helping the bottom of the society in order to stabilize and provide some opportunity. this is important but this is not the kind of economic issue that i have in mind. if we look at the muslim world and you ask many americans what is distinctive about the muslim world they will tell you they're too religious or too anti-western or too extreme. it is also true that large parts of the muslim world are outside

the global economy and are not integrated into the global economy and by that i don't mean people in the muslim world don't self things to the west and don't buy things from us, limey large parts of the muslim world are not part of the globalization of the supply chain by which i mean when we think about other areas of the world like east asia or latin america or eastern europe, those economies produce things that are components to things that are built elsewhere and alternately are things that you and i by. if you went to walmart today you don't find too many things made in the middle east. not too many things that have components built in the arab world. we trade with many parts of the muslim world. we by oil or agricultural bias

and they by finished goods. that doesn't mean those economies are participating in the global economy in a manner that favors these other economies. that is a very important factor. when we talk about a globalized world in which large parts of the world are integrated economically into one another. production and trade create relationships and networks between people. sitting outside of that global economic webb has consequences. those consequences have a lot to do with the reality on the ground in the muslim world in profound ways. one of the most important consequences is in many parts of the muslim world in middle-class, that will be the

danger of society. we often preached it not to copy, what matters in the west, the protestant reformation. the muslims don't need a lutheran. if you look at european history, it originally e road. scotland in the early reformation period, it is a highly puritanical rigid and in

tolerant place. we produced such luminaries, it was not because of religious reformation. it is capitalism that made the west into what is. it was in commerce and trade. there is a middle-class in the arab world. if there was a middle-class here. the relatively affluent society,

what we need is the middle of society tied to market forces. it is not generating well. it is leading off. if we go to saudi arabia or algeria or egypt it is a middle class but that is not producing the budget of the area. formal salaries -- it is not like the latin american middle-class of today. it is not like the chinese

middle-class. where these were most integrated into the global economy that looks like a middle-class elsewhere you have a lot more moderation. ready muslims are most separated from the global economy, they lack the middle-class, and america and eastern europe and asia you have a lot more extremism. long and short issue is not as long. the problem is not that the muslims are not integrated in terms of culture in the world. they are not integrated economically into the world. when i was doing this, the question was how do we know this is true? how do we know it exists and

there was a middle class, it would actually act the way that we think. there are very few places in the muslim world where we can see evidence of the rise of a middle class and the impact it has. it is largely in places like turkey or pockets like the persian gulf and in many places you see semblances of it. let me begin by giving you an example. is not fashionable to talk about dubai. the headline is in the wrong way. i am not talking about dubai as encouraging -- 20% return on

your money. that capitalist practice -- bad capitalist practice, dubai is where it is because it fits into the global economy and where it spends its money and it is not unique to. we will look at 19 in southeast asia where the financial crisis where lot of financial countries are guilty, engaging in bad behavior. what was interesting was there was up for persian gulf rate. enormous reserves of oil and natural gas. dubai couldn't rely on oil and

money. decided to change its rules, laid down a lot of high-speed internet fiber and broadband and build a lot of facilities to encourage businesses to come to dubai. it doesn't have much population. 200,000 people. muslims would engage the global economy. lebanese and jordanian businessmen, and middle classes engaging european, asian, latin american businesses, the face of prosperity. regardless of whether the right

decisions were made or long decisions were made it was obvious that you create a market economy, capitalists like everybody else. dubai is a place of superlatives. it became antithesis to what we associate to the other world. dubai became -- before it began to falter, the most desired place in country after country,

they visit on vacation. they went to dubai not because it was from puritanical -- the image of a very strict laws and practices. dubai is a cross between las vegas, disneyland and rodeo drive. that is what attracted them to dubai. the muslim middle classes behave like middle-classes everywhere which is the enormous amounts of manic consumption and desire for improvements of life.

it is in my book. one saudi businessman wants said i really like this place because you stay in a five star hotel and five star mosques. his conception of religion went with his worldly tastes. dubai is a proof of concept and negation of every conception the west has about the muslim world. it is some kind of scriptural directive that muslims almost are like automated robots following the dictum of the extremists. dubai shows if you create the place -- uconn generate the muslim middle class and middle-class tastes are not the ones you associate with al qaeda

and extremism. let me give you another case and that is turkey which also is equally poignant example. turkey was a secular country for a long time. we associate it with the mall is some. is a very prosperous and open country. it is a member of the g 20 which is the largest 20 economies of the world now which recently had their summit with president obama in pittsburgh. it is a major point for tourism and business. turkey is also has opened a political system as you can find in the muslim world. is not perfect but better than most others. it is not secularism that brought turkey to where it is. where turkey has gone is because

turkey integrated into the global economy and ironically, the muslim middle class part of turkey that has led the way. how did this happen? turkey in 1970 and 80s was a bankrupt economy much like brazil and argentina and mexico and did exactly what they did. they asked for help. they said the same thing to turkey as other countries which was to change the economy. you cannot protect these large industries with paris and poor money into them. you have to let them die and put into what the rest of the world was willing to buy. the secular elite businessman, they were dependent on government handouts and government support. the ones who were going to take

up this mandate were those not protected by the government which was small-town business. you can go to turkey in the middle of turkey, a city -- a tourist visit in turkey which is not too far -- in the middle of nowhere. and the case study in american terms is something like louisiana. the middle of the country, is not associated with a big metropolis or the cultural hub. it is fiercely conservative, small-town values but also very capitalist. today when you go there, it is one of the major industrial centers in turkey. six or 7% of all adenosine is sold around world are manufactured there.

one company manufactures 1% of all denim jeans globally. every global brand -- they export furniture and weather and many different -- it is a very wealthy little town. the businessmen are very wealthy -- mercedes-benz plowing in front of it. people do business at the mosque. they were in support of

extremism. if you sell whether you understand your heart is not good for business. people an enormous amount of money, there are not interested in the world. the religion you see among these people is very conservative, very small town. it is religion personal not about political action. when i was a graduate student he dealt with a question of why so many brazilians were leaving the catholic church, catholicism in the 1980s was asking catholics

to be engaged in social action. they didn't want to do it. they're opting out of a religion that was all about political action. we preach to them they ought to be moderated. if economic interests and class interests required of them to adopt a form of religion or a in interpretation of religion which is compatible with their

interests. if you go to wal-mart, it is made in turkey. why the interests of these businessmen pushed turkey in the direction of democracy or openness. a year and a half ago it was rumored that there may be a military coup in turkey because the military was not happy with the choice of president. one of these very pious tycoons, what did he think was the impact of military intervention? he said it won't matter what government rules turkey, they have to listen to us because we pay for the government. we provide the jobs.

the budget in the government in turkey comes from us. we pay taxes. is a very western formula. in much of the middle east you don't find that. country after country. a small percentage of money comes from taxes. it definitely doesn't come from productive businessmen and there is no need to open the political system, no need for democracy, no need for openness. it is also true this up and coming middle class is not necessarily religiously liberal. it is conservative but it is interested in engaging the world. let me give an example. in islam it is forbidden for practicing muslim to either pay

interest or receive interest. it is like medieval catholicism. if you want to abide by the book you should not have money in a bank or an economic venture that pays interests. for a long time muslims talked about interest-free banking. islamic banking or islamic finance. some of fundamentalist thinkers talked about it. they could never make it work. you can never make it work. they couldn't make it work until european american banks decided to make it work. citibank. biddle deutsche bank decided to get into the islamic finance business. they have made islamic finance into a global area of business. about $5 trillion. it is not that big in terms of

global economy but it has grown at 30% of year in the past decade. even last year when you had the global economic turndown it grew by 50%. it grew by more than you think. there is quite a common issue, islamic bonds. bonds that are interest free. you even have it in a variety of western society is. ford motor co. financed the acquisition of the issuance of an islamic bond. or the united states's second largest coffee shop owned by

islamic mutual-funds. why would these banks roll up their sleeves and decide to produce islamic products? finance years. the will bankers look for ways to make money, look for products to make money. it could be credit swaps or islamic bonds. the point is they realized there is a market of islamic -- people who have money, who are willing to engage global and financial activity but provided it is compatible with their values. a few years ago a bank in chicago announced it was going to provide islamic cars loans not based on interest. it had a huge demand. the first count was a line out of the bank applying for islamic car loans.

people who buy cars tend to be middle-class or not. even in this country among the muslim population there is a large demand for islamic financial products. what this tells us is it is a point of engagement between the global economy and the rising segment of the muslim population that has the means to invest. people who buy bonds generally are investors, people who have cash or the means to invest substantially in terms of putting money away. they have piraeus values but are obviously looking to make money. they are looking to make investment. ..

>> and they are widely popular. one of them, who is an egyptian lives in london, gives his sermons in three pieces and polo shirts. when you look at his audience, his audience is by and large a particular segment of society, which is better to do

middle-class who are interested in an islam that is business friendly and serves their interests. so there are, you know, we could keep looking around the muslim world. what we see is evidence that, you know, first of all there is a middle-class emerging, that it is tied where it is emerging it is tighter immigration of muslims economies. where possible to the extent possible into the global economy. it is tied to the market economy. and where it rises, it does bring very different attitude towards religious values and towards dealing with the west and towards issues that particularly matter to us. which is extremism, which is attitudes toward al qaeda, etc. it is not secular. in other words, and we shouldn't expect it necessarily to be. what matters is not whether or not it's secular, but what kind

of engagement doesn't foresee, what kind of attitude does it see. now, middle-class and of itself is not a huge amount. you don't need -- is not the entirety of society. but we don't have anywhere stable, prosperous democracies and you have stable, prosperous middle-class. and so in other words, muslim codgers are going to go the way of latin american countries, eastern european countries, they have to produce that segment of society. and we also know that when you have that kind of a middle-class, and when it can define and dominate the public countries, then you see a shift in a direction in which those countries think about their future, think about the direction that they are going.

for instance, one very poignant recent case, and that's the case of indonesia. we went back to 2002, bali bombing. our perceptioperception of indonesia was very much that was going the way of the arab world, who that you had a very powerful radical organization in it. that it was tied to the things that we think our sources of radicalism. poverty and education. and they were supporting a very strong terrorist organization that was tied to al qaeda. and it was capable of heinous acts, like the bombing of the discotheque in bali, bombing of hotels in jakarta, and the like. and fast-forward a decade today. they have pretty much imploded. it's not just because the indonesians are better at

security than, say, pakistanis are or egyptians are, because that's not actually true. it imploded because it's really not able to get to richmond from the society. it's not able to get nursery from society not because he indonesia salt it poverty problem. it is still a poor country. but at the core at its middle you have a middle-class that is not tied into the global economy. you do actually see indonesian products at american shops. and indonesia was a major oil producer, income oil has gone steadily down, thinking of leaving opec because it no longer make sense for it to be an opec. and it is relying increasingly on global trade. it's model is thailand, taiwan, singapore, japan.

trying to integrate itself into the global economy, and the consequence is that you have steadily a decline in support for extremism. that doesn't mean that indonesia is islam any means liberal. there's plenty of conservatives but there is no support for terrorists. there are still terrorists in indonesia. there was a bombing just a few months ago. if you look at the results of the last election in indonesia, the country in an overwhelmingly voted for a moderate middle. the president's party even in head-to-head contest nation, against fundamentalist party. and the side of the fundamentalist party shrunk and the size of the radical groups is also shrinking. so what happened in indonesia is instructive. in the sense of having a direct correlation between rise of the middle-class and tie to the global economy, and a decline of

extremism, and creation, if you would, of a perspective in the society that is supportive of shared global value, participation, in the larger world. and you know, if we looked at country after country, we look at iran or look at pakistan and other countries, this ultimate will be the defining battle. i mean, for very long time in the west, we thought that the solution to the muslim world would come from and in like a cleric or an enlightened intellectual. but actually, the change agent in the muslim world will be business. it will come from the market. exchange of ideas will come when you have the prevents of market forces. why don't i stop you and be very happy to answer any questions you have. thank you.

[applause] >> please write your questions out on the pieces of paper. there are cards on each table and somebody will collect them and bring them here. and i will ask the question. and i'm going wit the first two you. is democracy or the lack thereof tied to the lack of progress in the muslim world? >> well, yes, in the sense that stable democracies require a i think prosperous economies, and they require a stable middle-class. even in historically when we look at many different cases, there was always a sort of very simple way of formulating that, you know, past a certain level of wealth in society and past a

certain level of economic activity and integration in the global economy, it would be impossible to manage societies through both governments. so yes. i mean, they economies, first of all, countries have much better chance of being democratic if they have a viable middle-class. if they are accountable to global forces at their open to trade, and if they had a middle-class, and then once they get the democracy is much more likely that they can preserve it, sustain it, and build on it if again they have that middle-class and have the economic base. >> is the term muslim word even a valid term given the cultures in the world? >> in my opinion it is. for the reasons that first of all, the muslims themselves believe that they belong to a muslim world. and they do have a sense of shared identity, or common interest at some levels.

and at the same time, it is valid as using the term the western world, which the muslims use as well. there is diversity but there is a general, if you would, understanding that there is a shared history of religion, culture, political system, sense of identity that binds people in the west and separates them from the rest of the world. so i think it is, it is. not to exaggerate, all muslims belong to a single society and there is no division. but in a general sense, there is a family of countries and with people who have a sense of at least a minimal shared identity. >> what is the main difference between oil producing countries and non-oil-producing countries in terms of the middle-class? >> well, oil-producing countries generate wealth, and they generate the middle-class, but

it's the wrong kind of middle-class. in the sense that the middle-class is not tied to market forces, and at the same time it is not responsible for generational wealth in society as a result, there is no, if you would, boston tea party formula there. no representation without taxation that if you're not paying any taxes, you don't deserve any representation. that's essentially the long and short of it. and also, that the economy by and large remain outside of the supply chain of globalization. countries that do not produce oil, are compelled to participate in trade. and less they're able to get money from the outside in the sense of aid or other things. at the end of the day, governor has have money in its coffers to pay salaries and do things. that either gets this money from the outside, somebody gives it the money like a rich

grandfather, or that it has to earn that money. the only way to earn that money is to find some kind of economic activity that the rest of the world is willing to engage you on. so you either are born in titled with wealth, or you have to earn your money. and i think there's a huge difference. i mean, there's a big difference between oil-rich countries in the middle east and south korea and taiwan. and as i said, it's very similar to the difference between bill gates and bill gates' grandchildren. i mean, generational wealth produces, is transformative in itself in terms of what it does to society and to a people. living off of wealth is not transformative that it's actually degenerative. >> next question. since we know the tragedies of terrace, do you believe it

increases radicalism? >> you know, every time i give this talk, invariably i get that question. there hasn't been a single time i haven't. so i told my answer. [laughter] >> well, let me put it this way. by and large, and there are threes about his long before islam became an issue, that terrorism is by and large middle-class and above. i mean, you can look from to the europe and europe to the red army faction, to latin american to tomorrow's terrorists. all of these terrorist groups, you can either look at berkeley, the weatherman. they were all middle-class and above. first of all, we do think that poverty causes radicalism. but it's not that simple. first of all you have to separate the generals from the soldiers. the generals are often middle-class and above. the foot soldiers may be recruited from various places. there's a difference also

between, you know, large guerrilla movements, insurgencies and terrorist organizations. there always was a difference between the viet cong. but the leadership's with 10 to have the same social profile. accept a larger territorial organizations like the vietcong would recruit from among the peasants and the like. the key issue is not whether or not the middle-class produce terrorists. terrorists will always be middle-classes. the question is whether the middle-class as a whole supports terrorism. for instance, wealthy germans became terrorists. or wealthy italians are wealthy uruguayans became terrorists. but the question was whether the middle-class as a whole in that country supported terrorism or not. the middle-class as a whole does not support a, then you have the effect that you have indonesia just like you had it in europe which means these movements would be like a flash and the

pain. they would be there for a while and then they would implode. but if you have a circumstance when you don't have that middle of society, which is connected to wealth and the world in many ways, and it's defining the national debate and the national discourse and is sending agent again the agenda, then you have much more tolerance for these. so we shouldn't put our aim that, you know, or think that, you know, there will never, ever be a terrorist middle-class. terrorists from the middle-class. there always will be. the goal should be that you should have a kind of middle-class that generally would not be interested in terrace. >> this is a long question. i'm going to try to shorten it. it says how do your conclusions about the stabilizing effects of a growing bill class compared with robin wright's recent book which identifies the challenge presented by huge populations of

young muslims who have no future? >> well, robin wright, who was a very renowned journalist for "washington post" and is now a fellow at the united states institute of peace, has chronicled new cultural trends in the muslim world. and she writes about many of the things that i also alluded to, like a new breed of televangelists, new cultural forms, etc. the muslim world is very young. in fact, in some ways it's so young that they -- word used is a swing vote. that's the one you have to look at. when you look at country after country, majority of the population are 25 and under. then you basically are getting with very, very young societies. and that causes all sorts of problems. one is that youth agenda is the most unstable portion of the

population. every civil war, democracy movement, revolution, major wars in the world are all associated with youth because it's a risk takes in segment of the population. it produces instability, etc. in many parts of the muslim world, it presents another problem, which is the youth has been growing much faster than the economy scan. and many of these government run bloated inefficient economies cannot produce jobs to keep up with the use. so the consequence is that the pie gets, you know, divided in ever smaller slices and you end up with more and more poverty, lack of mobility, and you could say some of that translates, if not into radicalism and terrorism, it just translates into anger. and the anger can manifest itself in many different ways.

we site in iran in june of last year. we see it in varieties of other peoples around the muslim. now the question is, how can you create -- how can you change this scenario? you can always been money on the worst of the worst, right? so the very bottom of the society you can get money for health care, etc. but that's not really providing a sustainable economy that can grow at a pace to address this, addressed the problem. and the only way you can do that is to open these economies to global market forces. which means that you have to have job generating businesses. and job generating businesses cannot be produced in many countries without investment from the global economy, from outside without access to global markets, and without producing

things that people other than your own country would want to buy. which means that you have to be able to supply the world. now, so in other words, i don't see any other way for the many muslim economies to get out of the current situation, without going to path of mexico, brazil, argentina and turkey did 20 years ago. we can keep sort of kicking the ball down the road and keep procrastinating, but you're only basically putting a band-aid on the problem. at the end of the day, we're not going to get anywhere on this, on this we go through that. but going through that process hasn't added a bandage, as we saw in turkey, as i have been explained. that it also will end up producing the right kind of a middle-class that and can be transformative to the society as a whole. >> could you say something about the depth of the aspect of how does growth of the middle-class impact this?

>> well, i mean, the way in which the middle-class will address this issue is probably complicated. you know, the split is in recent times has been between communities in control of a country like iraq or lebanon, and it's become a facet of regional rivalry between different powerbrokers. but by and large, where we've had harmony between these communities has been where you've had a middle-class. i'm in, say in iraq, when it was a viable middle-class, in the middle-class the sectarian issues tended to dissolve. it was in that middle-class that you had and america's. between shiites and sunnis. and that's not unique to the melody. it's also true of the balkans. so among the middle-class in sorry able to was a lot intermarriage. ethnic tensions came from outside usually from the lower society, from serf peasant and

villages, etc., that were on the outlined territories. and the middle-class interests are focused on larger issues of stability of creating an environment that you can sustained prosperity. and support an inclusive environment that would enable you to pursue commerce and the like. so ultimately, if we think of the middle-class is a force for reducing many of the tensions we see, whether it's between countries or within countries, or whether it is between the muslim world and the west, that would also be create an environment in which this and other ethnic issues, kurdish versus arab, etc., these kinds of conflicts can also be dealt with in a peaceful way. >> how do your observations apply to muslim immigrants in

europe, and the united states? >> that's much more complicated, because you're not dealing with countries where the muscles are in charge of the economy and society. here you have a much more complex issue of integration of a migrant community into the mainstream of society. so the issue is not just economic. the issue is about identity. it's about citizenship. it's about the terms under which you can integrate an existing culture with an outside culture. we don't know how it will unfold, but there is big difference between europe and the united states. one is the size of the muslim population. in europe, is so large that issue of immigration is about muslims in the way that you would say in the united states it would be about the hispanic community. so whether it's in the netherlands, germany france, the

main migrant community around which the debate take shape, is the muslim community. secondly, muslims to europe are actually working class migrants by and large. they went to work in textile mills, or to work menial jobs in berlin, service, cars, street cleaners in paris. where as in the united states the muslims arrived by large as middle-class to begin with. nor is it was a middle-class migration. that our pockets of, you know, war refugees came from somalia or the kurds or there was a wave of palestinians who went to work for ford motor factor in gm, etc., in michigan. but by and large, the muslim migration to the united states is already middle-class. whereas in europe the issue is whether the muslims in europe can achieve middle-class status.

that issue of upward mobility is not a barrier to muslims in the united states. they are educated. their integrated into the economy. they are by and large well-to-do in many ways. they are indices for the wealth as a community, actually exceeds averages of many other ethnic groups in the u.s. so it's a very different, if you would, environment between these two. >> is the use of the middle-class and above significantly more inclined towards a democratic viewpoint, or are they more influence by the elders believes? >> i think there's definitely a globalization of information and culture does favor by and large democratic decimation. in other words, you have the youth and are acting much more through mediums of internet and modern technologies with the global culture. that obviously means that the

current youth unlike a generation ago is not insular. the muslim world is not albania. there is no as we saw in iran, which is one of the most closed countries, but they're completely integrated into the global economy, sometimes much more advanced than western youth or in use of twitter and facebook, etc. that's true of many other societies around the muslim world as well. but by and large, the interest in democracy does not have to did do with what your parents tell you or what you read. it would have to do with what your interests are. that if you have jobs that provide you with income, that you actually are able to form a family. if you can see careers that are in tune with your expectations based on the degree that you got at university, if you see a forward path of upward mobility and wealth generation, if you see opportunity.

and then you associate all of these positive things with relations between your country and the rest of the world, you become protective of that relationship. and if that relationship demands you to have an open society and competitive elections and the like, you become defender of that as well. so you know, we often think in terms of the fact that somehow the muslims have to convert, if you would, to liberal democracy. and we don't think in the sense that that would be great if they could just read the text and sort of convert. but that's never the way it happens. first of all, socialized into democratic capitalist behavior. and they have to have a vested interest. you know, we forget that the population that is not part of the global economy has no vested interest in its health. there is no better interest and

is functioning. it doesn't see its own prosperity and its own future with having anything to do with it. and therefore does the white house to adjust. >> switching subjects. how the islamic banks make money if they can judge interest? [laughter] >> well, through ingenious, if you would, ways of, you know, sort of building these financial products islamic banking, islamic finance has sort of a few characteristic one is that just that it demands -- you cannot basically get money on -- you cannot charge interest. you have to participate as a partner. so if you give your money to an islamic bank and an islamic bank would invest in a project, and you and the bank are essentially

partners so you subject to equal risk and reward. so there's no guarantee that you get money on your money. now, that also tends to sort of -- also islamic finance demands that you cannot invest or speculate on either, that there has to be a tangible product, tangible asset in which you invest. that's why it appears a lot in the direction of real estate which is one of the reasons dubai got into trouble which is over investment in real estate. but at the level that it is operating, there is enough, if you would, there has been enough investment, there's enough opportunities that the market has been -- obviously it cannot grow indefinitely. because it does have limitations to how far it goes. so i don't want to think about islamic finance as some kind of sort of a superior form of finance. it isn't. what matters, the way we ought

to think about it is it's a contact point between global finance and local bodies of the up-and-coming middle-class. is indicative of the trends on the ground, rather than being viewed as capable of growing older late to be a major portion of finance. >> moving to iran now. why did the middle-class that went against the shah in 1979 allow and anti-regime to take over? >> well, i argue in my book that the middle-class in iran at the time period did not have the characteristics of the middle-class that i'm describing. it was not connected to market forces. it was not connected to the global economy. its understanding of democracy was not rooted in the actual knowledge of the way in which these mechanisms are to work.

it was overtly persuaded by leftist ideologies which tended to celebrate revolution, or did not problem with ties whether revolution would do. and also it was in many ways the very first time this revolution of this kind happen in the muslim world. so there was no learning experience associated with it. but i think the larger lesson of a ran out to be that it shouldn't matter so much that the middle-class is secular as it's a middle-class that is tied to productive activities of a market economy. and is integrated into the world. so it was a secular middle-class, but it saw its interest in supporting a revolution that was being led either religious clergy. and that and make my thing has to do with the fact with the realities, that the fact that iran was an oil-rich country, it

was close to the world, did not have a market economy, there was no middle-class was not tied to economic activities that would make it a producer of wealth. and the producer of governments income. so all the characteristics, if you would, of many wealthy, secular middle-classes in the middle east today. except you know any different time period and with lessons on iran. now just waiting those middle-classes from taking the same risks that the iranian middle-class took in the 1970s. >> this is a follow up on exactly what you just have right now. you say the secular nature of this movement doesn't matter. but what about women's rights? >> women's rights is a very important issue. alternately, without incorporating large numbers of -- incorporating the size of the portion of the population to the

economy, the middle east economies cannot grow beyond the point. but the key in my opinion is that interacting with a capitalist economy will force all kinds of changes on society that the society at the beginning may not count and may not be prepared to do, but ultimately will. so i think that, you, we should in my opinion to begin by saying that liberal values somehow like seeds that happen to fall on the ground and grow will grow in the middle east. democracy will grow on its own. it will not happen that way. the transformation will have to come from the market. liberalism will come politically and socially will come to the muslim world on the back of market forces. so the transformation will come from that direction. those turkish businessmen that i

was describing are very, you know, conservative that they are not supportive of women's views. their wives don't participate in the economic activities. but if they continue to integrate in the global economy, they will begin to change. they will not be able to resist those forces indefinitely. so we've been trying, women's rights come in the muslim world for quite a long time. and actually we've been going in the negative direction, by all indices. which means that preaching in a vacuum doesn't work. it doesn't work. and therefore, you have to have a sort of a historical force behind you. and that housework of force is no different than the host workforce that transforms the west that it will come from capitalism. >> so last two questions. with israel, will israel eventually be motivated to make peace with palestinians in order to do more business with arab

countries? >> well, you know, conflicts and wars cannot be solved through trade that obvious the it helps, but you have to first have stability before trade would grow. yes. when we look around the world, people saying the best way to heal the wounds of the former yugoslavia is that under the rubric of european union, unite, serbs and cross and boston's will trade with one another ultimately, develop relations that the french and the germans developed together. it's not that many decades ago that these two countries are at least one of them, with the other one twice. it led to world war ii in each time, and finally what it is, what was it that made for lasting peace in europe was the coal and steel union between france and germany that became the basis for the european community.

that logic i think it's largely done. so whether it is into pakistan, israel or any other conflict we think that ultimately when the dust settles, that the best way of creating lasting peace between them is to create economic interlink which is between them. i mean, the details of it is not my expertise, but i think if there was a lot more cost indians doing business with israelis and depending for prosperity on israel, it and there were a lot more israelis doing business in palestinian territories, it would probably create, in the least, it would create at least within each political entity a source of support for very different way of looking at this conflict. and how to get to the next level. i and in that sense also i would say it's not different from any other conflict that we've seen, which economic relations are key

to stability. >> what compelled you to write this book is? >> well, i think, you know, the core issues, to core issues are there. namely, that there is this great debate that has been happening about the muslim world in the united states and in the west, about what is wrong, why does the muslim gone wrong, what is wrong with it and how can we write it? and i don't think that the debate itself is this place, but i think the question on the table is a wrong question. and we've been going about it the wrong way. and the more i actually looked at muslim world into these places, you know, look at what was happening on the ground, to me was more evident than we are expecting change in a vacuum. we think major civilizational changes will come because one side wins the debate contest any

other site says, no, i saw the light, i'm going to be different from tomorrow. it doesn't happen that way. and that, the muslim world is not very different from the other parts of the world, that you have to look out the forces that really is the most important transformative force of our time. and in my opinion, it is the market forces. whether you look at different history or different parts of the world in our lifetime, the single transformative force in the past two decades across the world that has changed the profile of our world is not the rise of democracies, the rise of capitalism that democracy has taken root on the back of the. global culture has taken root on the back of the. and the second question was whether muslims are capable of it. you know, standing in a mall in dubai or, you know, in istanbul or, you know, looking at countries like pakistan or iran,

it's very evident that there is proof of concept here. they haven't got it right. they may not have the right set of forces, but there's a proof of concept. if you look at pakistan, for instance, a country that obviously, the west sees through a prism of merely dark extremism, we went back a decade, pakistan grew out of rate of 7% a year for much of the period between 2001 and 2007. and as soon as the middle-class began to take root, they demanded democracy. most people have forgotten the lawyers movement in pakistan. the first liberal social movement in the muslim world. hasn't happened anywhere else that it happened in pakistan. and it happened because of the middle-class factor. and even if you thought today, well, what can get pakistan on a different plane? what can make pakistan look a

lot more like india and in the sense of economy? and has to be the middle-class that it's not going to be anything else. there's no other force that can make that change. and i think that, you know, we will only get, you know, our relations with the muslim world right, or we can help the muslim world find its way if we at least ask the right questions and look at the right pitcher that that should be our beginning point and that's what i hope this book would do. thank you. [applause] >> thank you very much. >> thank

>> we're here at the regional library speaking with mike cecere, on his book "great things are expected from the virginians: virginia in the american revolution." might, to start off with can you tell us a bit about what exactly virginia's role was in the american revolution? >> gladly. virginia's role, and i tell my students, virginia played a crucial role in the revolution. a lot of folks that are knowledgeable of the revolution understand the role of people like washington and jefferson and such. but militarily speaking, virginia's role was gigantic, was huge. even though, when you look for battlefields and to look for key events, military events, you don't find me except of course what happened at the end at

yorktown. nevertheless, virginians served everywhere from canada all the way down to georgia on battlefields throughout, and they were a huge part of the american army. included out west. they played a crucial role in the war. and of course, in the revolution, and this is something in my research for other books, i've been kind of learning more about the revolution wasn't just the war from 1775 to 81 or so. is also a lot of events that led up to 1760s, virginia played an important role in the opposition to british policies that led to ultimately combat in 1775. so we played a leading role politically speaking, and of course militarily speaking. >> how did you come up with a title for the books to? a is something i came across about five years ago when i was doing research on my first book, which really happened by accident.

as a reactor, as a revolutionary war reenactors, some of my friends and i were trying to create a new unit, and wanted to get the impression correct. want to have the right color uniforms. so i was doing research on the color of the hunting shirts of the third virginia. and i came across the letters and diary of a captain, captain john smith, from virginia. and in it he writes a letter home after arriving in harlem heights in 1776, and there was a passage in the letter that just struck me as kind of a neat quote. and essentially it is, we have arrived in virginia, and by the way, this was the first virginia regiment to join the continental army. and so now the virginians are really arriving in force. and he writes great joy was expressed at our arrival, and as a result, great things are

expected from the virginians and we expect to go through a great fatigue. and i thought great things are expected from the virginia's. that's a neat little tighter. i kind of store it away for a while. and actually wrote a book on children. a few years later when i decided to expand my research on virginians will, that was the natural tile that came to mind. >> virginia produce some of our country's most notable leaders, people like mason and jefferson and george washington. is there something about the state itself or the prerevolutionary context that brought out great leadership in people? >> i don't know about great -- if there's anything about virginia itself that product great leaders. i know that what a lot of a lot of people forget is the importance virginia played. we were the biggest, most prosperous -- we were the largest colony of the 13 colonies, and i think a lot of

folks forget that, including my own students. and are almost oblivious to the fact that -- there's a phrase they used to use. virginia was the bomb be used as a. we were it. and so i guess our sheer size contributed. i'd like to say there was a special quality about virginians. i've been here 20 years myself, and i love the state, but i really couldn't account for what it was, what cause, why virginia -- i will say though, you are right. the names you mention. washington is the father of the country. and jefferson is the father of the decoration. and later on you have madison and mason and important leaders of another player's. virginia did produce great leaders for sure. >> what your everyday virginians think about british and the revolution and? >> well, it depends. of course you're going to have some tory or loyalist support,

but it wasn't so great here in virginia. as many as in new york where you found quite a bit of loyalist support. and that's what my book focuses a lot on, more of the every day virginian. i have a lot of quotes on the. what i think is the is it you can see, as you see the whole dispute kind of percolate and develop, more and more everyday virginians buy into what their leaders are saying, that their rights are threatened and that they may become absolute slaves to the people 3000 miles away in england. so you read the virginia gazette and such like that, and you get the -- were at a disadvantage. were always at a disadvantage as researchers, because there's not a whole lot of material of everyday virginians. that's difficult. so almost every book you read about is goingo