land past west investing the fact that there's no real threat for america and its allies that's a question we'll have to just hear the she'll say that. i don't think it's really a military necessity no one will believe it was a possibility to be ran attacking europe it's nice size did not reach could not reach western europe it was the deployment was crowd in the czech republic knowledge a new department in rumania but i think mistakes of purely political washington probably wants to reassure its former satellite countries so you do know so it's a political move hardly a military necessity and also considering the state of the us economy i don't think it's a wise move in financial terms but when obama had this reset policy it would brush at least he was achieving something corp russia and she issued but this new deployment is aware i don't tag an amazing russia which is going to turn into maybe

some kind of new arms race which is totally pointless not only because the effectiveness of the she dog is problematic gargle but also because it's going to cost a lot of money and unnecessarily because frankly i don't think iran is in a position to attack anyone in the west. this season the way that with libya. colognes a very warm welcome to the business program fresh concerns but the european economy has caused another wave of turbulence on the global markets stocks soaring sharply by hundreds of points daily and while investors are way the chances of the meltdown europe take nell for more than stellar says russia doesn't have to worry about so much. russia is actually a much better position and other central european countries say turkey in the

region because it has less strong trade and investment relationships with europe because it's more of a global trading country and it depends on the price of global commodities such as all which depends on growth in emerging markets such as china and india. so russia's fate is truly dark with the growth of china and india are not at the moment looks reports and hasn't been affected by the downturn in developed markets as compared to other. countries i think russia is in a post with brazil as essentially a commodity exporter which is exposed to movements in commodity prices which are affected by global growth it's not like china and india which are large enough that they can determine their own fate to make their own economic weather to a great degree because it depends on commodity prices which depend upon global developments. let's have a look at the markets now well prices are heading down u.s. crude up six week highs concerns about the euro zone taking precedence over

tightening spike is trading at eighty nine dollars a barrel branches that under one hundred twelve thoughts and european stocks are higher after european commission president jose manuel barroso said the commission will soon present options for the introduction of coming of your books which some believe can help resolve the debt crisis and also in focus is a conference call between uncle morkel nicolas sarkozy and prime minister george. at eight b. a moscow time so we'll be bringing the details and. they'll be brainstorming the continuing crisis point as a solution is on the horizon and here in russia the markets are high investors waiting for the central bank's refinance rate decision which was left unchanged eight only twenty five percent now fear. that only data from the u.s. and europe include. us inflation figures you are just sixteen thirteen last time let's take a look at some index moves in the. is one percent up the company has increased its

twenty eleven correction for cars by three percent to five hundred twenty billion cubic meters of gas. getting over two percent we'll bring you the details in just a moment and make of barrel farm is down despite stronger than expected results as fast top net profits rose twenty percent to twenty nine million dollars looking forward to alexander rifkin at metropole light see believes although investors are generally still cautious rational stocks looking more and more attractive. to what we will be still fall in the europe will say you know your goals we especially everybody's trick in european banks and all the things that are related to. greek and probably countries bond some book branch will always involve every situation so we will definitely see all the truth you will. see that russia still stay. because we can call it so when we work now we can call it some say if someone wants to

restore the stool and worst of definitely will be cocksure some of the investor source into the big piles of the it will be free of the gears have been some new ideas one in some new ideas especially definitely not in the liquid names everybody is looking at the weekly stocks or what is looking at the right time to give you. and other news russia is considering delaying the privatization of the ten percent stake in its second largest bank. the sale plans for next year depends on disposal of another asset seven point six percent of the country's top planned back earlier it was reported to russia to brutalize astrologers patient runs due to the latest volatility in the stock markets. but to care system of the russian conglomerate has more than doubled second quarter net profits just three hundred and thirty million dollars the company mostly benefited from a strong performance of its oil assets under a decline in operational costs of mobile phone operator m.t.s.

. our target is to generate returns so-called total shareholder return in the excess so far of course the record which you know he's around forty percent and the interest industries which are of interest to us and the first of all the ones that we have already invested in both in the developed as in developing us is because we're covering a number of industries including telecom oil potentially petro chemicals retail banking high tech. that's all we have time for now for more stories you can log on toll website archie dot com slash business and join my colleague and also time for another business update.

wealthy british style it's not on it's right on. the. market. find out what's really happening to the global economy for no holds barred look at the global financial headline used to mean to cause a report on our chief culture is that so much of the taxpayer's money i mean in the minds of the real mystery that's emerging countries in an ever changing world but what does it mean when a country is finally emerged. on

. top down here must say this is reviewing its harrell's forces spending spain. use the power to randomly stop and search suspects the companies put on the pressure to revise controversial gould's. pads for life and all stare and see if the government sits down to approve a range of major tax hikes and spending cuts all downplaying fresh outrage a person love the shots of. the u.s. in romania seal a deal paving the way for americans to build new military bases in the former

communist states it brings for which the bush era missed all of it is that the plan to be around. next all these debates crosstalk discusses the future of western capitalism and its main engine the once mighty and shrinking american middle class. well. the latest in science and technology from. the future covered. it. below in welcome crosstalk i'm peter all of emerging countries in an ever changing

world but what does it mean when a country is finally emerged. it. discussed the fate of western capitalism and globalization i'm joined by john laughlin the director of studies at the institute of democracy in cooperation he's a lecturer in politics at the university of kent and allan friedman he's a former economist working for the greater london authority and i'd like to point out predicted the second wave of this great contraction all right gentlemen let's look at capitalism as it stands today we have china we have brazil we have india we have russia lecturing the west now west lecturing the united states and the european union john is a case where the west says do what we say but don't do what we do budget deficits fiscal policy demands and gridlock all around or the reason why these countries are lecturing america is that for forty years america has had an exorbitant privilege

in the international financial system the dollar is the dominant reserve currency and moreover since the decision taken by president nixon exactly forty years ago in august nine hundred seventy one to close the gold window in other words to cut all links between the dollar. and gold the whole world has lived in a dollar dominated regime of fear paper currency that is to say of currencies which are expressions of debt that will never be reimbursed and it's that basic fact that the monetary system is based on that which nobody has any intention of reimbursing which in my view has generated the problems that we now see in the eurozone in the banking committee where or somebody else they are all right these are we hopeless connected with debt we have everybody else paying for it so when the us makes a mistake when the european union makes and i salute the eurozone it's all pretty privileged even i mean it's you know the indians are. actually the brazilians are very upset because they were exporting your information to us. i think there is

definitely doubt some and that's why you know you have to look at global imbalances and see exactly where these huge distortions and. balances come from but i would say this. everyone in a way has benefited from this that fuel this sort of economy the chinese in a way have because they're in a bill to keep down their currencies are already defined in a certain way isn't it i mean at the end of the day you can't have an entire economy running on debt to greece and there's no you can't but the fact is i think there's been too much complacency in the global system that is a problem the big problem of the global system is not even just state that it's the fact that we have too much that corporate private and public and the fed of the that the real economy is being undermined by all the kind of hot money circulating around the world so we really need to do is tie finance to the real economy no one has really come out of this not in the west lots in the east not in the north not in the south so i think it's a global problem which i don't think we've heard real solutions. least not from

countries very political i think political will is actually from the very countries that you say are now starting to say why should i listen to the u.s. and the reason is the spin i follow the work of radical who makes planes very clearly that these ideas about globalization and free trade that everybody took as being this must be true were actually very carefully fostered myth and you can trace it through the the liberations of the people who advised the president that were fostered by the u.s. in the stream it's a truism of gone ok the first myth is the usa is the greatest power in the world economically and politically the second myth is that the nations are vanishing the not coming back but the third myth is that the state cannot play any role in the economy and in particular it cannot invest now the developing world never play with many people wanted them to abandon that but actually a lot of the countries that have no paraded as paradigms of new liberalism like looks like india actually thirteen percent of the indian economy is in state hands

the banks are still controlled are still capital controls and that was never allowed as part of the explanation for their success i think they're just now starting to say hung on all the things you told us not to do those things that have got us through and maybe you shouldn't say that it would. west is more ideologically driven than any of the countries there were you know just as the west is more hypocritical because i think one could make the same point about the american economy which awful depends to a very large extent on the money that's channeled through the pentagon whose budget level let's forget is two billion dollars a day and that money goes to factories all over the united states and represents a considerable part not only of the american economy but much more importantly of the american power in the world you know the invisible hand is guided by the iron fist of american military power so the idea of this dissembled to american supremacist based on free markets and so on he's completely wrong it was certainly the case that there is not and cannot be a free market economy without

a strong state historically true and certainly true today just look at how the states have to bailout finance if they didn't bail out the banks everyone was going to go down has been a collusion of the free markets and collusion of the strong states since the late nineteenth century at the very least possibly going back further in history and so really what we are talking about is states and markets colluding at the expense of civil society really slowly don't actually have enough or ptolemy wages property and so on to make ends meet that's the real situation where the circle we have the tea partiers and united states don't want to raise any taxes they just want to slash slash slash it's a very serious very interesting last jobs to be slashed federal jobs local jobs create more unemployment there's a very curious poll which went on when the events in madison wisconsin were going on the sort of the american had brought rising as it was dubbed and turned out i'm told this anecdotally but i trust that two thirds of those people participating declared their affiliation is tea partiers there is just people feel betrayed

there's a rage against the government now it's misplaced it's chaotic actually tea party support once they started going on about the debt ceiling and people realized it meant cuts social spending tea party support dropped from forty percent to twenty percent in the polls. i don't think from what i've seen american people are one hundred percent behind this you know dismantling what is left of the social state to the contrary they feel cheated by the banks they feel cheated by the politicians and they're expressing it to named because nobody is giving them leadership not only leadership i mean if we look at we go into this great contraction the great recession we look at wall street has recovered handsomely very handsomely we can talk about the eurozone a little while here but main street has just been gutted and remains that way i mean right now we have. unemployment figures in the united states i mean when there's no good job growth at all you have no recovery from a recession when you don't have job growth well i think like many people that the

financial sector is grossly over prone i think it's committed all sorts of abuses that that has become obviously a commodity that people there's a sort of dis important there's a responsible isolation and so on and so on but i repeat what i said just now which is that the fundamental problem is the debt generated by the monetary system and in a sense attacking the finance industry is only shooting the messenger because their job the job of banks is to safeguard people's savings and to invest it and in a situation where as edmund burke wrote everyone is forced to play the game although nobody understands the rules the very few understands the rules these people. i'm not denying they're committed to be used to it but ultimately they are presented with an unbearable situation in which they have to provide for a risk which is generated by the unstable monetary regime that we live in that's just saying that we need a banking system over the economy i mean a real economy i think that's what we've really happened here and that's what causes so much rage to me i would i'm the first to agree you need a banking system as john pointed out to have an economy but it seems that the

economy has been sacrificed for so long in favor of banks because when you're bailing out greece you're not bailing out greece are bailing out french and german banks that's what you're very obviously through it and the big problem is that we're solving the interest of very sad. which is overblown and i'm sorry we went on this and in fact whose growth and profit if there are any never trickle down to the masses it's a complete myth to say generate financial wealth and for profit and somehow everyone would benefit it's just not true it's not true in the us it's not true in the u.k. it's not true anywhere i mean except for maybe a city say like single poor small country like luxembourg i can survive on on the proceeds of the with no wealth of the truth of what we need to do so channel money into productive capacity that can even include reducing that have been if it can be productive productivity whether it is in. china and russia i mean you don't have to do it in the u.k. you are preparing a major of the new u.s. that hung on the very nature i mean to get out of a crisis you have to obviously preserve the jobs that are being destroyed but what

you actually have to do is get out of it by investing in what's new you know the interesting thing about the economy now is seventy eighty percent of jobs in the advanced world are service jobs and we have to think through what means because the internet has vastly expanded the capability of humans to interact with the curious thing is they've reacted to that by actually being much more interested in things that are locally produced locally used the nature of service is the personal effect means that actually you can rebuild an economy on the basis of advance services in london i really saw this because people were getting absolutely terrified by the collapse of revenues from compact discs and so on and what happened is all the money was being spent on life performance and we were just about to dismantle our performance venues and i said hold on no you're going to need it and actually the apollo which was threatened with closure framus stance all in and west london is reopened as the apollo that's the way to go but trouble goes it's a very interesting example because i think it does show that people have

a desire for in a real in this case real services they can participate in and benefit from rather than a complete virtuality which is what global finance after all is the same time as you say it's now and grates on me which is a global change and does benefit from. this kind of globalization has brought about the current crisis so i think what we also need is to diversify our economies and not just have services even though they can be better more productive so this is and less productive ones but also high tech industry high tech manufacturing that is also in even agricultural i mean there is still food shortage russia has huge resources in this respect that's where the money needs to go not into finance and not into services which in the end can be also very fortunately with good financial eyes all right gentlemen we're going to go to a short break and when we turn from the break we'll talk about the state of western capitalism and globalization today with arkie. ok.

you can talk. well when one deals with war for a customer lost but this tremendous amounts of damage that are done not just human damage but damage the physical environment in which the battlefield takes place and tremendous amounts of damage done by aerial bombs by napalm boy coming from saddam's whether it's hard sonic booms or in mammals or it's the burning oil field syria in our rock or a good strong breeze in the pacific for a landing purposes to list just goes on and on the geneva convention says nineteen forty nine states that carrier shall be the state gets in warm to protect involved against widespread and long term and severe damage to the united states although it is accepted almost all of the provisions protocol one has taken

exception to that. on. its.

welcome back to crosstalk i'm peter lavelle we're discussing the fate of capitalism in the age of globalization all right let's shift gears here i mean one of the things that's happening in western economies is this what i call this age of entitlement where people believe that the state owes them something and looking at the baby boomers here me is this some mentality and it's mixed in with election cycles here too you know where it would be elections like all going on in the united states nobody wants to touch fees and title men so it's just the kiss of death when you want to be elected ok that when telly has to start changing i mean the welfare state and the abuses that are committed against it is a massive problem and. just to give an anecdote recently a few years ago in london the bar of hammersmith was won by the conservatives and they want it by going around all the council flats in hammersmith and promising

people a new kitchen if they voted conservative and they did and presumably the new kitchens were provided in other words the state the state's role as a political community is a law based community has been completely bastardized. and has become instead a vehicle for providing material goods and naturally that is open to abuse it's open to abuse by indigenous people it's open to abuse by immigrants and eight he's one of the course is one of the many causes of ballooning state budgets people as you say in your question expect the state to provide for them and they regard the state as i take it to be somebody on our more so if we look at the history of political economy this is a relatively new phenomenon and it came about after the second world war we before that people didn't expect so much of the state you were lucky if you got basic education but nobody promised you would job nobody. promised you job opportunities it's gone too far it's got into the election cycle no. very few people

a few mavericks can fight it but most people just go along to get along i think that's right but i would probably be. the one the chief of the the welfare states after the second world war was that it did provide universal standards at the very least people were left say to me to die a horrible condition that was the whole reason why it was created in the first exactly so i think the idea of universal standards is still one not one shouldn't entirely abandon but i think it's the mode of delivering any kind of any kind of welfare we need to revisit and what was destroyed with the centralization of welfare was all the mutual it's the arrangements all the reciprocal arrangement among workers and then fact were quite advanced things like friendly societies things like hospices they were actually all community based or based on on professional association on guilds the sexually and if we not privatized welfare but turn into something community based use of race to the people can participate in the services that they receive then i think we're doing the right thing as you

know we're neither not looking at the state model we're here if you decide to say you look at your model which still exists in france for example you still have thousand pashto you think it's you could be linked to local government so it's not anti status it's just saying the central state doesn't know what we need local authorities and my it's regional authorities in some cases but especially to the community of users and providers that should really be empowered not some bureaucrats in london paris all or new york or washington d.c. good to see i would distinguish between a sense of entitlement and a sense of right and the difference is this entire treatment you say i want and nobody else is going to get it and i particularly want to because i don't usually take it you can't take it away from me is that a very important although i think a society of right simply means we should all have it but the curious thing is that we need to update life liberty and the pursuit of happiness because nobody says life liberty looks the suit of education but actually if you look at what's happened as society has progressed. one thing that's never happened is the leaving age for school has never gone down it's always gone out simple for opposing

universal education that's what the workforce of tomorrow will need to be like if it's going to produce the sort of stuff that we can sell and it's not by the way council posing the advance course of produce and services to the basic ones because basic infrastructure is needed in order that you can have those intellectual functioning the creative city has to be continually redesigned to be the locus the place where this sort of thing happens so actually you need this huge infrastructural investment and you need what i call social investment investment in civilization because it's going back through all of the streets right here in this is very empty q.s. i mean and almost to the point where it's a self-inflicted wound because who can afford to do huge infrastructure projects i know the united states the freeway system for example that really needs a lot of repair you can do privatized hopefully not but a lot of people you can have structures other than the central state and its

agencies you can have infrastructure banks and selling to local investment trusts and all sorts of ways you can deliver on the same goods and services we're talking about without involving either the central state or cartel capitalists or what we need to break is the collusion of the central state and big multinational corporations and essentially decentralized the economy we all believe in local democracy or at least most people we never believe in democracy when it comes to the economy we don't believe in local participation when it comes to economic decisions what i think we should use it is a simple question is the b.b.c. a state institution it's a public himself exactly that seven states probably thinks a shooting star of america ok but for the same you know the press one should rephrase yes the state has to come by put in a very diverse and one of the things we have to do is reinvent the state actually in the public realm based on entitlement based on the fact that if the private investors are going something else that is publicly. council is going to have to step in it doesn't have to be. all these two or all roads lead to rome but it's

about democracy too i mean when you have an election cycle you have to deliver the goods at least at a certain point you make promises that you can't keep ok and this is one of the problems that the industrialized west has because it has to give the pretense of making promises in entitlements and it's very short limited basis but when you have india brazil china russia they think very long term i mean everyone in russia talks about twenty twenty five projects ok and slowly but surely they're working away at it but there's a longer vision and it's not tied to the election cycle how much of the problems in the economy in the west is tied to elections the more the states provide some material goods and the more that it seems to be that then inevitably the more it will fall prey to election cycles but i want to use what we see what's been said about higher education and other social goods provided by the state to illustrate or to me seems to be a very disconcerting.