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tv   [untitled]  RT  July 19, 2010 5:31pm-6:01pm EDT

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if you can. follow in welcome to cross talk i'm teetotal about is there a new world order in the making in the wake of the worst financial crisis in generations our western ideas about economics trade and even democracy in the balance and what model of governance proved to be the most effective. and you can. discuss whether we're experiencing a paradigm shift i'm joined by princeton lyman in washington he's an adjunct senior fellow for african policy studies at the council on foreign relations in kiev we go to shawn roberts of the elliott school of international economics at the george washington university and here in the studio with me is but
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a common he's the director of global governance initiative of the american strategy program at the new american foundation and another member of our crosstalk team on the hunger all right gentlemen crosstalk rules in effect that means you can jump in anytime you want princeton i'd like to go to you first in washington it's been about twenty one months since the financial crisis hit has capitalism taken a major hit is it is it created doubts in the world that it can really pull itself out or is there just simply an indictment of neoliberal capitalism a certain model that has come out of the west during that say the reagan years. i think it's more of the latter if you look at the debate going on for example in the united states you find there's a lot of anger at the at the bad steps taken by big business but also a great deal of hesitation about heavy government involvement i think the general
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view is the system in principle wrong by the uni it needs regulation it needs oversight and frankly needs more ethics but i don't think there is a mood in the us for a fundamental change i think it's projected more debate abroad about models particularly because the world bank and the i.m.f. and the united states for a long time was projecting a particular model of voice you might call neo liberal economic policy and that's probably taken something of a hit internationally ok sean if i can go to you care of this is exactly where i want to go let's look at countries like the bric countries brazil russia india china. they're sitting on the fence the way i look at it is seeing if we're going to go into a job you are not they certainly see that the the west the the rich west didn't go through with their own policy economic policies of being more frugal be regulating
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their economies everybody else did it in more or less caught through this but at the west it didn't so i mean what kind of message if we could follow up what princeton had to say you know the rest of the world is there are growing doubts that maybe things can be done in a different way and i mean from every sense in this just not in finance and economics but even democracy and other issues like that. well i think i mean i agree fundamentally with princeton i do think that. this is an indictment of a certain economic model and it's not going to change immediately think we're going to see change gradually and i mean the one problem with our present. kind of mean it's very difficult for countries to just go down there so i think there's going to have to be some sort of global consensus what we may see is the countries you're speaking about may have much more see what their global consensus is but i don't think that it necessarily is going to change thoughts about the need for
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accountable governance and law because that's one of the only ways you're going to be able to get for the best maybe. you're nodding your head there i mean what do you think this is an example of my it's kind of a strong word maybe hypocrisy again you know the west had certain rules and regulations we look at the i.m.f. we look at the world bank and then they look at these countries like china that while a nominally communist country bailed out capitalism over the last twenty one months i mean what does this tell us about how the world should be run because we have a certain idea said but then we have a reality so we really need to backtrack just a minute because a lot of what shonen friends and said is absolutely correct however it's very very important to point out that the backlash quote unquote against the western driven capitalist model actually began ten years before this financial crisis remember the term asian values that was touted in the late ninety's as governments practiced
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capital controls and other types of things that that were scorn upon scoffed at by the us and they did those countries did take a beating in the asian financial crisis but there revival that's what i wanted to get to really began well before two thousand and eight people were speaking about the china model about state capitalism at the virtues of some of those systems export led growth would be to come back in certain circles before two thousand and eight so it's very important to remember that this debate preceded this financial crisis more seen as an extension of it also it's a big mistake to take the issue of waiting though the voted waiting in the i.m.f. or the world bank as proxies for a consensus that does not need to be the case countries like china or russia or career. pand others can use the i.m.f. from the w. cio and the world bank as they see fit as they gain shares in it and yet continue to practice mercantile ism on the side of the way china does so very important not to believe that just because china has joined the w t o just because china is seeking greater voice in the i.m.f. in the world and therefore it is going to play by western rules and we are going to
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be able to salvage some court kind of consensus a country like china can play both sides both and get away with it ok john if i can go back to you and care that's very interesting point can there be a global census but you still can keep your certain values the mercantile ism is mentioned here i mean well what i'm getting at is what does it mean to have a global consensus because as we just pointed out the chinese and other asian countries say well we told you so there were ten years before the crisis happened they had a different model different models of economics and even maybe global governance really has to be in play because global the global consensus determined by washington failed the world. well yeah i think it's one of the one of the problems is the idea of a consensus it sounds a lot more conspiratorial but it really you know washing consensus was not really senses sense of. group of people sitting around the table signing
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a document it's more of that. did the damage economic forum in the world that we're talking about and i think that's going to have to be kind of a give and take between various economic powers princeton if i could go to you. john was pointing out this global consensus but you know the and maybe there when we when i use the term on washington consensus maybe that is a bit of an exaggeration but from the outside of washington they do see that and i can you know i'm going all the way to about back to like bretton woods all the way up to the financial crisis that this was a financial lobel financial system built by the west to serve the interests of the west i'm saying that is what you hear in most of the world once we got to this crisis here a lot of people are saying we have to reshuffle the deck don't you think that's fair. well he has no i mean that consensus wasn't entirely. followed by everyone the consensus was around open more open
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economies and more open system countries that followed particularly an export oriented strategy south korea taiwan much of southeast asia and particularly china and now india have profited very well i think what's going to but the degrees of state involvement varied greatly within that consensus was more or less in force more on the poorer countries who are heavily dependent on the i.m.f. and world bank resources but i think what's going to change now is that the opportunities the system worked well when the west in particular the united states was an enormous consumer economy and export led growth paid off in very large terms we're going through a period now in the united states where we have to rethink if we can play that role anymore and even in europe there is going to be some concern about that and now i
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think one has to look at what are the strategies for countries and i think china is already beginning to look at that and india as well as to how much they have to build markets and build growth strategies that aren't heavily dependent on the consumer orientation of the u.s. and western europe and i think that's going to give rise to a lot of new thinking about growth models but if i go to you i mean it's look at where government policy and company policy corporate policy comes into play here because what one of the things we realized when this crisis is that get rich as fast as you possibly can use much money as you can and you know it a certain point when dysfunctional derivatives sub-prime and all of this i mean it is only short term short term somebody will pay for it eventually well we know what happened the u.s. government had to pay out hundred. billions of dollars other countries in the world had to do the same thing how do we get to a point where. there is more predictability where there's the
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a social recognition that there's a social cost for what the financial markets do i like to say nothing succeeds like success and so there are so many different models out there at this point in time and there is and again to go back to this consensus question there isn't really one model going forward we do see the countries that are investing in themselves that are going back to strong fundamentals when it comes to productivity export led growth and so forth asian countries are sitting very well right now high saving rate savings rates these kinds of things that called into question the western model in some ways therefore the west is learning from the east when you hear in washington talk about investing in infrastructure working on productivity gains moving more towards export driven growth i mean these are things that were actually criticized to some extent about asian economies so clearly you see if there's any consensus if there's any convergence it's a recognition that there were good and bad things happening on both sides of the ledger let's say and in different geographies at the same time and i think that's
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actually very interesting to observe so there is a fair dose of humility actually that's being practiced on all sides before we go to the break do you think do you think that in the western world learned some lessons from its second and third world friends emerging markets about how to organize your economy and financial markets because they were more conservative. well perhaps but i think also maybe they were first happy. then anything in. it to get to get to talk about after the break is is how much this model has encouraged inequality in a very certain kind of distribution of wealth because i think that is it the development maybe in the developing ok after a short break we'll continue after a short break we'll continue our discussion on new world order stay with our team. and. you could.
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say let's call it the same canary due to its high pitched whistle. this is something you can do to. want to cling to sleep. can be decoded. so. that started off. lasted for almost two susie. julie two superpowers. to choose. the space congress. party go. to.
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welcome back to cross talk on peter lavelle remind you we're talking about what the best model for economic and social development. but before let's see what russians think about this issue well the global economy in crisis many now pando what model of development will secure the future in the us many believe economic modernization based on market freedoms is a form of democrats is ation yet there is also the more centralized chinese model which is emerging from the crisis as a jan you know financial powerhouse the russian public opinion research center. gauge the edited of russians towards different political views thirty six percent opt for conservative ideals such as returning to traditions and moral values tested
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by time twenty four percent ed here to a democratic ideals such as human rights protected pretty those and another ten percent of the respondents chose liberal values such as the free market. ok princeton and i to go to you in washington before we went to the break sean was making a comment about how the west reacted to the global crisis are they did they earn a little or deserve some sorry rather experience a little bit of humility was pointed out earlier in the program and. is there more of a give or take both sides learn from each other. well i want to pick up on that intro on opening the door to the discussion of values here because certain models. particularly capitalist models produce at least in the short run some very sharp inequalities of income and the question is how do you mean that and deal with it i
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think in the united states right now there's a great deal of anger toward the very largest financial and surprises because a lot of people are suffering in unemployment and we don't know how to deal with that without changing the system or fundamentally i think the chinese model has many successes but it doesn't really emphasize economic and political freedoms and it has other shortcomings in dealing with the environment etc so i think in all these systems one has to look at the values that one wants to promote how much is the eradication of poverty the social safety net the sense of freedom rather than just looking at growth and and and the building up of foreign exchange reserves but if you want to jump in there just a slight correction on that what china has gotten a lot of credit for is in fact the promotion of economic freedom because they're promoting land reform they have brought of course tremendous economic growth ease
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of doing business acquiring a cell phone all these types of things by these measures china has promoted economic freedom even more than india it's the political freedom where clearly you're absolutely correct about china and it goes back to you know i point that princeton very early or that's completely right which is the degree of state involvement in the economy is going to vary drastically and there's not going to be a rulebook for that countries are rightly china has been praised not just for its for its large stimulus package but the fact that in the absence of a national social safety net this was an essential step towards protecting much a share of the population as it could from the dislocation of the crisis and there was no playbook that any other country could prescribe to to trying. time all right gentlemen i see it seems to me that we're all kind of skirting around the same issue here what about state capitalism is more of a model where you are in an expression when it comes to financial markets and it was pointed out. i think was prince then mentioned is that there is an enormous amount of anger at the financial institutions expression of the ones that were
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bailed out in the united states and then you have bad financial management in greece and they're better they're bailed out i mean there seems to be there's no limits to moral hazard here when it comes to financial markets and the in the financial reforms that are going to the u.s. senate many people criticized as being very very light what about state capitalism if i go to do you shine i mean again i do it sounds like it's a scary scary term but maybe to some elements of the economy should be this very heavy heavily regulated by the state and that includes financial markets going well you know i mean i think financial markets are. that's that's obvious from the crisis but i think the other issue that we often forget to talk about in this topic is from the neo liberal policies of the one nine hundred eighty s. u.s. u.k. what happened was a lot of deconstruction of the social service. sector of society in the
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privatization of that and then there was exported to a lot of developing countries and i really think that's one of the key issues to look at here and i don't know if it's state capitals but certainly some some there used are focused. equality the distribution of wealth the least insuring. rights in. princeton what do you think about that i mean it was very good point over the last thirty years been so much privatization of the state where that privatisation was purely for profit and we see a lot of social. differentiation in income and what not i mean is there a certain obligations the state should take and value and with the values that are attached to them i mean health care on a global basis education and it will global basis defense on an individual basis and we've seen all of these things privatized for profit. well you
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know i think this is a very interesting point i worry a little bit about the state capitalism model when it's applied to poor countries like it now for because i think that the experience there is that picking winners and losers by african governments has not had a good record at all and there needs to be a much more open system but they point out about protecting people about social systems i think is is very vital and europe of course is going through a very very painful debate about about having to. reduce the funding for the social welfare systems they've built up we're struggling with that in the united states as well and i think in some developing countries it's an even worse problem the issue is how do you build
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a proper social safety net that is affordable and sustainable and i think that's a big challenge and does the social good times you want to jump in here go ahead two points first of all on the state capitalism one of the things that we do need to worry about and princeton hinted at it when he was talking about about picking winners and losers and african governments not being very good at it he's absolutely correct one of the things we really need to watch out for in the next couple of months is the. governments that are declaring strategic assets and strategic sectors and you see that happening in the resource sector in other areas so countries are using the prominence of state capitalism today as an excuse basically to practice protectionism and other types of non-tariff barriers and so forth and that is not state capitalism as much as it is just sort of there is protectionism i know so it isn't necessarily strategic or clever but it is a reactionary conservative and might really undermine for. the global economy which can otherwise be
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a very good thing i think that's very important to watch out for the other thing is that really about europe europe is still a symbol of hope when it comes to how to have universal social welfare protections and pave israel as you can pay for it but it is still the model to which many countries turn when they want to talk about how to have a social democratic system i would argue that china today is still aspires to have that and is working towards it so just because europe is in trouble it doesn't mean that what europe has achieved to date over the last fifty years is not something we should aspire to remember that what america is trying to do with its health care bill is extremely european america is in some ways trying to become what europe has been it's very very important to remember that just because europe is down and out that it should not be held up in some ways as a model for what if you want to achieve those benefits for people if you want to have capitalism that looks after the people the only place you can look to for a good historical evidence is europe still ok if i go to you and care very
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interesting that what i was meant mentioning here a combination of china and europe that's a good good r.x. for the world economy interesting comment. yeah well i guess it depends on which perch take from europe which perch take a china. i mean i think it's a very fine. i mean i think i think he mentioned the the introduction that you also did want to talk about this issue of democracy and you know often there's a conflation between. economic democracy i don't think the two are necessarily hand in hand. in fact a lot of aspects of neoliberal economics. i would say somewhat anti-democratic you know who's making decisions on social services and so on and so i mean i think that there is there is still one important aspect of this. government accountability and rule of law. ok if i can go to princeton back in
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washington here i mean where where is the data and you know there's a lot of criticism of the west of it in its promotion of its its version of democracy in the world and again this is kind of match with economic models where we see. the united states for example under george w. bush pushing very very heavily for forced regime change in the name of democracy i mean does that give the devalue the currency of democracy when it is being forced upon another country and a lot of people say for geopolitical reasons for american interests or oil for example. i think people who genuinely have porked on behalf of democracy worldwide took quite a blow during the bush administration because it got so associated with regime change strategies in places like iraq etc and being challenged indeed in a country like afghanistan i think there is
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a strong sentiment and it gets back to the question of values about the value of democracy because it does relate only to accountability but it relates to human rights. and i think that that is still a strong sentiment it doesn't always relate one on one to economic growth and i think that for some countries but if you look at i do spend a lot of my time looking at africa the lack of accountability and rule of law and human rights is a drag on the economic development of africa and i think most africans feel that way as well ok but i'm going to ask you. in the studio here with me you've got twenty seconds what's the best our expert dealing with creating a new world order green new world order well i would set out not to create one but i would i would like to see a lot more learning across borders not like to see a lot more countries picking smartly from their successes and failures and learning
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from what other markets have done we have a lot of both out there to choose from and so there should be a bit more experimentation what's the title of your latest book the next book is actually called how to run the world how to run the world many thanks to my guest today but i shun robert's interest in layman and thanks to our viewers for watching us here dorothy see you next time and remember crosstalk. ft.
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and. as the world's richest nations plan to cut spending in the bottle against aids due to the financial crisis demonstrators at a huge international conference on the disease and cannot demand universal access to treatment. nobody knows that. nobody.
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corporal punishment in schools comes under scrutiny after the suicide of a thirteen year old boy reveals that the cane still has some classrooms despite the properties being banned in the country. and the docking that marks the dawn of a new era in the cold war such five years since face call from the soviet union and the us that in a bit. of news from russia and around the world this is all see with me you national thanks for joining us the united nations says plans by the walls wealthiest nations to cut spending and they could jeopardize recent progress made in fighting the disease a major aids conference is underway in vienna with twenty thousand delegates.


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