17/06/2014 Newsnight

If you thought Middle East politics were complicated, they just got a

whole lot more complicated. At what point do figures who have a common

enemy, like these three, become effectively allies. We will hear

from the Deputy Prime Minister of the newly-enlarged Kurdistan.

Remember when this signified the end of history? We hear someone who

still thinks that. You have heard of offshore banking,

the Isle of Man is now doing offshore space programmes. How does

that work again? It's pure coincidence of course that

the Foreign Secretary today announced the time was right to

reopen the British Embassy in Tehran, but having spent so much

blood and treasure taking part in George W Bush's invasion of Iraq,

both London and Washington are keen to find any friends they can in the

Middle East, no matter how unexpected they might seem. The

catastrophe sweeping through northern Iraq seems to be remaking

the map of that part of the world. Our diplomatic editor's report has

some flashing images. The swift advance of Sunni militants in

northern Iraq is seen as game changer. How does it change things,

for some the significant point means this sudden victory creates

opportunity for strategic partnership between the US and Iran.

I do think the time has come that people are beginning to waken to

that Iran is the most stable country in south-west Asia, Iran is demo

graphically, militarily, national cohesion-wise, probably the best

ally that anyone could have in the region if one were able to achieve

that. It is clear now that Iran and the United States, which has moved

its carrier group to the gulf, have a common interest in the survival of

the Nouri Al-Maliki Government in Baghdad. But you could add others to

this coalition of the apparently irreconcilable. Israel and the Sunni

monarchy in Jordan both also strongly identify ISIS as a

strategic threat. And the question now is if they can all agree that

the movement is a problem in its advances in Iraq, what's their

attitude going to be to ISIS in Syria.

Here is the man who ran the Foreign Office Syria desk until last year

and now advises the Syrian opposition. I don't think that there

is any alternative than to maintain the current policy, posture with

respect to the Assad regime. I don't think it is a viable policy to

recalibrate in the way that you are suggesting. I have heard this, I

don't think it is something that western Governments would consider

seriously. I think there is only one viable option in Syria, which is to

continue bolstering and reinforcing the efforts of the moderate Syrian

opposition forces on the ground in Syria who have been fighting the

extremist threat in Syria for the past year and continue to do so. And

while even the Israeli leader, who has visited Syrian war wounded being

treated in his country, has apparently decided that even Assad

would be better than a ISIS victory, he and many others in the region are

all too aware that doesn't necessarily make their enemies

enemy, Iran, their friend. Iran is playing it like a chess game and its

objective is the jackpot which is the control of Syria, Iraq and

Lebanon, through its militias that it has on the ground. The United

States is playing it more like a poker game, aiming for a quick win

without looking at the larger strategic picture. In places like

this suburb of Damascus, the Free Syrian Army has local truces with

Assad's forces. But as a BBC team there discovered, even that is a

fragile arrangement. How well is the ceasefire holding here? (Gunfire)

TRANSLATION: Not very well, you can hear the clashes. Moderate Syrian

groups like this are fighting ISIS as well as the regime. Increasing

aid to the FSA could be the most likely western response to Jihadist

games, rather than cosying up to President Assad. The moderate forces

on the ground have been fighting on two months now for some time. They

are doing that with limited capabilities. I think the time has

come now to redouble those efforts. And the signs are in some of what

has been happening over the last few months with western and Arab policy

is there is a recognition that more needs to be done with those moderate

forces. And certainly redoubling those efforts, stepping up those

efforts is the way to go. But the success of President Assad in

holding on to power, and the failure of the international diplomatic

process designed to ease him from office does beg questions of western

policy. While open alliance will remain too distasteful for Britain

or America, a resumption of some secret co-operation with Iran and

Syria is quite possible. Let's try to make a little more sense of this

now with my guests, a fellow in the Middle East Chatham House, and a

journalist and author of The Road from Damascus. I suppose all bets

are off now aren't they in the Middle East? It is a good sign now

that the west is seriously considering talking with Iran,

specifically on the Iraqi file. The Americans and Iranians share

strategic interests in Iraq, they both support the demographic process

and the Iraqi Government, they share a common enemy in ISIS. The recent

developments are encouraging I think. It will also open up the

discussions over the nuclear file and broader Middle East. It is a

funny situation when Iran is a potential ally in Iraq and

continuing enemy in Syria? Well, if it is an enemy in Syria I think the

west is very confused at the moment about what it is doing. It seems, I

don't think there should have been sanctions on Iran in the first

place. But it does seem very upsetting that there is a

reroachment with Iran over ISIS. In Syria Iran has militias on the

ground supporting the regime slaughtering the people, and in Iraq

itself where it has encouraged the most sectarian instincts of the

Al-Maliki Government. What we have seen in Iraq is not the success of

ISIS, which is a weak group, it is the failure of the Iraqi state and

of course the collapse of the Syrian state. Iran, along with other

countries too, but Iran is very complicit in that collapse in both

countries. I think it would be, in the short-term, maybe beneficial to

deal with Iran. I can see why people want to because Iran has an

organised military, and it is an organised country and they can go

in, they could establish order if they wanted to in Iraq. In the

medium and long-term it is a disaster because Sunni Arab

communities are going to be more enraged and become maybe the

sectarian backlash that has been overexaggerated which will be bigger

if they see Iran walking over Syrian and Iraqi sovereignty. I don't think

it is fair to compare Syria with Iraq, the Prime Minister unlike with

Syria isn't a dictator that has inherited because of his father. It

is unfair to portray ISIS as Sunni, they are also killing Sunnis as well

as Shias. This uneasy relationship between ISIS and other insurgent

groups won't last forever. They are strange bed fellows and it is a

marriage of convience. In coming weeks we will see Syria with

infighting between the rebels, you will have ba'athist insurgents and

Sunni and Shia all fighting each other as well as the Iraqi

Government. It is important to stress something people don't

realise since January it was a grey area which side ISIS is on. Since

January there is no excuse for the greyness, all of the Syrian

opposition group, the Islamist and Islamic front, even the victory

front that is Al-Qaeda linked, all of these groups have been fighting

against ISIS. So ISIS is a common enemy of everybody, it seems, but it

is helping Assad really, . But that means President Assad is on the same

side as much of the west? In fighting ISIS? Well he is producing

the chaos in which ISIS thrives. Whenever he has been following a

scourged earth policy in Syria, any part of the country which he can't

control he has been devastating, from aerial bombardment and other

means, sieges and so on. That means there are massive refugees flowing

out of the country. It means that there are no schools, no hospitals

working, no economy going. Into this chaos it is very easy for, and

sometimes with the help of neighbouring states, we were talking

about Turkey earlier, it is very easy for international Jihad

tourist, psychopaths and kneelists to come -- nihilists to come in. It

has got so strained in Iraq that they have been able to come back in.

These people come wherever there is a chaos. Assad has created a chaos

in Syria by committing a near genocide and massive "ethnic

cleansing". This ref news in Syria started -- revolution in Syria

started and continues as a fight for democracy and freedom and freedom of

expression, it was remarkable that it wasn't sectarian for the whole of

2011 and then under the strain of Assad's war it began to come down.

There is no question that Assad created the chaos, but ISIS is a

monster of its own. There is a seemingly endless supply of funds

coming from western allies, Saudi Arabia and Qatar and Kuwait. From

private donors absolutely. The Governments are doing very little to

combat. One viable policy of the west, if it doesn't want to get

engaged militarily in Syria is to do more to stop its allies, to do more

to pressure its allies to stop ISIS getting funds from these private

donors? I agree absolutely, it is very important too. But I think

making a deal with Iran is the wrong idea. Make the Saudis or pressure

them and other gulf countries the UAE and the Kuwait, make them

pressure private donors, who may be important people to stop donating,

they are not helping the Syrians. Even the Syrian Islamists don't want

the ISIS people there. They are obviously not helping the Iraqis,

they are confusing the issues and actually making it more difficult

for Sunni Arabs to get their rights. The Iranians are a reality on the

ground in Iraq. If the west seriously wants to combat ISIS it is

about time to start talking with Iranians on Iraq. I'm happy to see

Barack Obama saying he won't take action until Al-Maliki changes his

approach to the Sunni-Arab issue. I hope he's also leaning on the

Iranians, they need their military security help to face this monster

that has just exploded, the reason this monster has exploded is because

of the sectarianism, you are quite right, the democratically elected

Iraqi Government and because of the genocide going on in Syria which

Iran is supporting which, is radicalising Sunnis around the

world. It takes two to Tango, Iran is not operating out of a vacuum in

Iraq, there is the Saudis, Qatar, and other states involved in Iraq,

and variously in domestic affairs. Thank you very much. Sandwiched amid

all of this is the autonomous region of Kurdistan which stretches across

Syria and into Iraq and Iran. The in coming Deputy Prime Minister spoke

to me shortly before coming on air. I asked him whether he thought Prime

Minister Nouri Al-Maliki was capable of holding the country together?

Prime Minister Al-Maliki's policies to date have not done a good job of

keeping this country together. His sectarian ways have really caused a

sectarian response from many parts of the country. So unless there is a

rapid change of policies coming out of the federal Government I'm afraid

this country is facing more and more crises. Do you think it will break

up? It has the risk of breaking up unless there is a serious dialogue

with a serious change in attitude from the federal Government. Because

this country has not been able to govern in a way that's made

everybody feel part of this country, we in Kurdistan have had our

complaints. Clearly many in the centre and west of the country have

had their grievances. They are now showing their grievances in a very

different way. Do you fear ISIS? ISIS is a real threat, it is a real

threat to Iraq, it is a threat to stability and some of what we have

seen over the last few days have caused us much concern, so we're

very concerned about the current situation and we're hopeful that

through our efforts and through the efforts of others we can calm the

situation and we can try to live in a stable country. It is a very odd

situation, isn't it, from an outsiders point of view, you look in

and you see Mr Al-Maliki, President Assad, President Obama, the Kurdish

authorities, all effectively on the same side? Well, sometimes people's

national interests and strategic interests sometimes you know

overcome internal differences, but obviously there is all kinds of

complication to this, there is not a zero sum game, there are threats

caused byies circumstance but there are also major disappointments in

the way that Prime Minister Al-Maliki's Government has

functioned to date. It is not a black and white situation Jeremy. At

the end of all of this of course Kurdistan could end up leaving Iraq,

couldn't it? I think it is more likely that Iraq could end up

leaving Kurdistan. We have done everything we can to make this

country successful, we have done everything we can to make this

country look very different to what it used to look like during Saddam's

days and prior to that. But regrettably politics has failed in

Iraq, and people have not stuck to the principles that formed the

post-Saddam Iraq. We have continued to stick to the principles that we

fought so hard for during the days when we were in the opposition and

when we drafted the constitution of the country, we have committed to

that constitution, but if others are not committed to that constitution

then ultimately it will lead to more chaos and potentially the break up

of the country. Thank you very much for joining us. My pleasure.

The Queen was wheeled out, military bands played, speeches were made and

human rights protesters were ignored. It was another visit from a

Chinese notable today, no mention was made of supression of dissidents

and that sort of thing, because today Britain was busy oiling up to

the Chinese premier in the hope of getting some business. But while

Chinese growth is often seen as an unstoppable force, there are growing

worries about just what is happening in its property market. Our

economics correspondent weighs it up.

In Britain we love to talk about house prices. It is an obsession.

Recently we have begun fretting about another bubble. But the

property market we should be worrying about is not in London or

the south-east of England, it is at the other end of the world, in

China. There are rising fears that China has become consumed in a

credit and property bubble that dwarves anything in Britain or the

west. I think Chinese real estate is probably the most important sector

in the world economy. Because so much of what China has imported over

the last five-to-fifteen years, actually, which is consistent with

its remarkable and perhaps unique economic success and construction

has really driven a lot of the world's economy. Something happens

to China real estate, we will all feel a little bit of that news. As

the Chinese premier continues his visit to the UK, it is the Chinese

property market that is keeping people awake at night. When the

global crisis hit, China launched its on stimulus, banks were told to

lend, state-owned companies were instructed to invest and it worked.

Whilst the US and Europe languished in recession, China's economy grew

strongly. But what really drove that growth was a huge increase in

construction, much of it funded by debt. House building soared from

around six million units a year before 2008 to over ten million a

year recently. Here in leafy North London it is quite hard to build new

houses and so prices are rising. Over in China though they have the

opposite problem. Too many houses have been built, supply is

outstripping demand, and in some urban areas one in five properties

are now standing vie cannot. Chinese growth has finally begun to slow,

property prices are falling and the big fear is a housing slowdown will

hit the rest of the economy. The debate now is between those who

think China can achieve a soft landing and those who think it is

heading for a hard one. A hard landing, in which the property and

credit bubbles burst and growth collapses would have a huge impact

on the global economy. One investment bank has estimated it

would mean world GDP would be 2. 5% lower in 2016. That's almost $2

trillion. But not everyone is running scared of the hard landing

just yet. Urban populations their demands for housing are mostly met,

but there is a large contingent of rural population that doesn't have

housing yet. It is very much in the Chinese dream to own a property in

urban areas, so there will still be pent-up demand for housing coming

from the rural population. I think the medium-term horizon is enough

demand for housing. China's property market is looking distinctly ropey.

No country is ever experiencing this kind of build-up in debt without it

ending in tears. If something is unsustainable it will eventually

end. But that eventually could be further away than many seem to

assume. Time and time again in the last two decades, China's economic

performance has confounded its critics. Whether or not it can avoid

a property market crash is one of the really big questions in global

economics. It probably makes more sense to worry about condough prices

in Nanjing than the cost of a semi, in Dorking. There were interesting

inflation figures out today? As interesting as inflation gets. These

were very interesting? They are of interest to those who are not

economists. Inflation has fallen all the way down to 1. 1.5%. That is the

lowest inflation has been in five years. What is interesting about

that is this isn't really supposed to happen. The last few years the

economy hasn't been, until very recently, the economy wasn't growing

very strongly and inflation was high. Now the economy is growing

very strongly indeed and inflation is low. Usually it would be the

other way around. And alongside this, very low price rises, but

quite big moves in house prices, 10% across the country. Almost 20% in

London. But most of us have got accustomed to being told by

politicians that inflation is the enemy and eats up people's savings

and the like, surely very low inflation is a good thing? You might

think that, but what you really want is it is like Goldilock's porridge,

not too hot and not too cold, just right. The Bank of England has a

target of 2%, it is not low it is 2%, at the moment inflation is below

target. This is confusing analysts out in the City. Only last week the

Governor of the Bank of England, Mark Carney, stood up and said we

might have to raise interest rates, the reason you raise interest rates

is because inflation is too high. Today we find out it is a bit too

low. You are not seriously suggesting there might be an attempt

to stoke up inflation a little bit? It seems unlikely that we might try

to stoke up inflation, we might get to that point, that is the point the

European Central Bank are at. The reason the Bank of England can't do

that is because of what is happening in the housing market. You can't cut

interest rates when the housing market is up 20%. They might use

some of their new tools. What is the outlook for inflation, if you asked

people in Whitehall they are looking at what we covered in the top of the

programme. They are looking at the Middle East and Ukraine. And they

are thinking back to early 2011 during the Arab Spring when unrest

in the Middle East, the oil price goes up and pulls up inflation, very

bad for the economy and for consumers. Thank you. Ed Miliband,

what's he for? The question that bedevils modern politics may finally

get an answer over the next few weeks. The Labour Party has set up a

number of inquiries to tell it what it ought to do with itself. What was

once done by core conviction and block votes at Labour Party

Conferences, is now the businesses of think tanks and policy wonks. The

first inquiry into what it ought to promise in social policy reports the

day after tomorrow. Chris Cook reads this sort of stuff for fun. Radical.

Radical. Radical. Radical. Radical. It is clear what word Ed Miliband

would use about himself, and we're about to find out if it is true.

John Cruddus, his policy thinker has commissioned three big reports, the

first from IPPR, comes out this week, Labour will have to decide

which bits of it make it to the manifesto. A lot of people in the

Labour Party think that Ed Miliband needs to promise to build a bold new

design for Britain. To come up with what they call "the big offer". They

feel if he will win back blue collar voters in particular and match the

popularity for his promise to freeze gas prices, he needs a range of

other radical policies. I think there is big policy ideas out there

that attract a lot of popular support, like common ownership of

railways. But there is also ideas like contribution in welfare and

contribution in the boardroom as well as the benefits office, that if

Labour embraces in terms of policy will have more effect in persuading

voters we are on their side. Labour can't spend big so one of the ideas,

to use the jargon, that more investments matched by less

entitlement. That means spending money on things that will cut

benefits spending later. We pay ?24 billion in housing benefit and we

pay ?1 billion to build new houses, it plays into the hands of landlords

putting up the rents and all your money is getting swallowed in terms

of what you send out to your landlord. That is not straight

forward. Let's say you want to spend less on housing benefit because you

are going to build more house, that's fine, but you have got to

build the houses first. Before people can live in them. So in the

short-term that means spending more and that opens Labour up to

accusations of profligacy. We will send out the questions of whether

people can trust politicians, frankly the people who got us in the

mess in the first place we have spent the last four years getting

out of. There is a real credibility problem with those who made the

mistakes, haven't apologised for them and shown no signs of learning

lessons. That is one of the strong messages we will repeat now and

through to the election. Their policies don't match up to the big,

bold radical network they have been espousing for the last few years. In

short voters might feel that what they actually get from Labour

doesn't quite match up to what's on the box. Scars of old Labour defeats

on credibility, particularly 1992, run deep through the party. Talk for

example of nationalised railways will set nerves on the party's right

jangling. So there is a quiet debate going on about all of this inside

the machine. There is a difference of opinion between weather the

Labour Party should simply hope for a small technical win, presuming

that if we just hold on to the foot that we got in 2010 and get some

Liberal Democrats over, Ed Miliband can become Prime Minister. But there

is another path open to us, it is harder and more ambition, and that

is to -- ambitious, that is to speak to voters left behind by politics,

who may have stopped voting or considering UKIP these days. That

will require big policy ideas and big changes in the way we organise

as a party. So the argument isn't really about radicalism or not,

restoring the contributory principle to welfare, for example, is radical

but uncontroversial. The real question is whether Labour dares to

be radical in areas where it opens them up to attack. The real test

will be where it must spend money, like on social care and housing, and

on contentious areas like the public ownership of rail or energy.

So the Prime Minister polished his shoes for the Chinese premier today

while the Foreign Secretary said it was time to reopen the embassy in

Iran. How the world turns? The speed with which an apparently pacified

Iraq has collapsed into Civil War is another warning not to take anything

for granted. It is 25 years now since the events of a revolutionary

year. The Berlin wall, a physical symbol of the Cold War was torn

down. A wave of protests spread across Eastern Europe from Poland to

Romania. In China, students faced death whilst protesting in Tiananmen

Square. And a brilliant young American political scientist,

Francis Fukiama, said the end of communism might bring the end of

history, he added a question mark in the original version. What do we

make of it now. He joins me from Stamford university, author of The

End Of His treatment we are joined by Simon Sharman and Melissa Lane,

from Princeton is here in the studio. It didn't end did it? You

have to understand the term "end" properly. End meant not termination,

the question was in the grand philosophical sense of the evolution

of human societies in what direction was history pointing? And for 100

years progressive intellectuals believed it was pointing towards a

communist utopia. I made the simple observation in 1989 that it didn't

look like we were going to get there. If we were going to end up at

any place it would be something like liberal democracy and the market

economy, and I think that still is the most likely termination point of

the whole modernisation process, 25 years later. Melissa Lane what do

you think? The professor suggested that we couldn't judge his thesis

yet, we weren't at the end, we could just see the end in the future. The

thesis didn't explore the tensions between liberal democracy and

capitalism. Those are the tensions we are seeing ever more alive today.

Simon Sharma? Well I think actually what really happened, which is

extraordinary, is that a small obstinate, violent, vicious little

terrier bit us in the leg while we were looking at the great

philosophical horizon. That was religious fanaticism. What the model

did not predict was the massive return of systems of belief. Partly

it was hopeless at predicting it, and it is hopeless talking about it

now. I wonder how many in your magnificent 25 years, how many

nights you have spent on Newsnight with people talking about religion

and spirituality and mass allegiance. We are still hopeless at

constructing an argument for liberal tolerant society. We need to go back

to Locke, Jeff Jefferson, and others. Those in the grip of

fundamentalism is simply a plutocratic device for getting more

and more consumers goods unless you are starving to death in the middle

of a miserable desert somewhere in Asia or Africa. So what the end of

history failed to predict was that history was looking backwards

towards religion, ethnicity, tribalism and nationalism, and that

is what we have to deal with. History does tend to look backwards?

I think that overstates the importance of religion in the

contemporary world. We need a little perspective here. In the 40 years

between the 1970s and the crisis of 2008, we went from 35 democracies in

the world to 120. A lot of them are very, very imperfect, for the last

few years a lot of them have been backsliding, Turkey, Nicaragua,

Burma, that is a positive case though. So there have been setbacks,

but the world is a very, very different place than it was two

generations ago. I think democracy has become the norm. I think even in

the Middle East, where you have the centre of this kind of religious

low-based politics, very many people do not want ISIS, this kind of

radical Jihadism, they want Governments that are responsive and

actually a lot of the calls for Sharia Law are due to the fact that

the Governments there are so authoritarian and unresponsive and

unconstrained, that they actually do want something like the rule of law

to reduce corruption. So I think this popular mobilisation for more

responsive Government still remains extremely powerful force all over

the world. But there is an alternative future being sketched

out by these people. Whether or not you agree with them they are

sketching out an alternative future, aren't they? Some of them are the

jury is still out on how many people will flock to the standard. It is

interesting how many people in t Muslim world are not flocking to

that standard and the Arab Spring was pulling in the opposite

direction. We don't know what it will be. It was a colossal failure.

The Arab Spring was a colossal failure. Not in Tunisia. The party

it brought to power were the Muslim Brotherhood who have been replaced

by an authoritarian antidemocratic regime. I was speaking about Tunisia

not Egypt. Well that doesn't suggest to me that the Arab Spring, a moment

of brief honeymoon euphoria was any kind of template for what is

unfolding now. The trouble is we talk about terrorism, we talk about

terrorism and that is a lazy way to describe immense communities gripped

by systems of belief. Burma is not an encouraging case. Burma is the

case where you actually have Buddhism on the violent March

against Muslims. That is not a particularly encouraging situation.

Can we explore this other area that you mentioned earlier which is this

tension between liberal democracy and market capitalism which seems to

be evident now? I think it is all the way back to Greek society and

Greek ideas that you have to have political equality. And the question

is can you have that with economic inequality. With rising economic

inequality I think the cause of political equality is becoming

fragile and more and more difficult to be confident that democracies can

maintain that in a meaningful way. If you add to that the constraints

caused by environmental pressures I think liberal democracy and

capitalism as a recipe for the future is looking increasingly under

strain. What do you make of that argument? Well I agree with Melissa

completely that the rising degree of unequality in countries like the

United States and Britain is a very major challenge. Because if you

don't have a broad middle-class I don't think you will have the kind

of broad support for democracy that the system needs. I'm not sure it is

capitalism per say is producing this. One of the highest rates of

inequality anywhere is the only half marketised China. It is the progress

of technology itself that is destroying a lot of middle-class

jobs. It is not clear to me there is an alternative system out there that

will produce the kind of wealth we have come to expect from modern

economies that is actually going to solve this problem of middle-class

decline. Do you think the world has become a safer place though in the

last 25 years? No. Not really. I think I agree with the last point of

both Francis and Melissa, but I think one extra turn of the knife is

the slow death of the planet. The wars we have not yet seen as wars,

they are wars for water resources, for example. Melissa and Francis are

quite right to suggest that for example the nasty surprise of

massive pollution in China has put an incredible dent in the way in

which the entire authority of the country legitimises itself. And over

the next 25 years, over the next 50 years, without being sanctimonious

about having to face climate change, it will have both a political and

economic impact. For teeth of that particular difficulty it is starting

to bite. You were nodding vigorously there Melissa? I think that is

absolutely right. If we go back to the end of history thesis, part of

the thesis was we had to restore, consciousness, ideas, ideology as

the driving moators of history, not material forces. But the environment

is a major weak-up call from the material forces. We need now to

intergrate the role of forces, and that is something that the history

thesis didn't fully do. You don't feel then that the world has become

a much safer place? I think there are different time horizons of

safety, and if we are looking 20, 30, 50 years down the road. It is

far from safer. That is because you worry about resource wars is it?

Resource wars, and simply climate change. Global warming. You know

dirty bombs. Hang on. Let's give Francis a little bit of a chance to

get a word in edgeways here. Come on. Look I do think that a little

bit of impericim would help. If you look at the levels of violence they

are going down. A lot of political scientists follow this exactly. The

possibility of a major war between two big industrialised countries,

which is what we experienced in the two world wars in the 20th century,

the chance of that is vanishingly small. So I think you know

responding to the headlines you get the impression there is ever

increasing chaos in the world, but in fact we live in a world knit

together through a system of globalised trade and investment that

has produced a tremendous amount of prosperity and quite a lot of piece

throughout very much of the world. You were trying to say something? I

have to say that is the view from Palo Alto, which is a beautiful

place. The view from the Democratic Republic of Congo, or the view from

south Sudan, the view from the hellish low intensity wars that go

on and on and on and on. Massive violence against women and children.

When in the last 100 years couldn't you have picked examples of this.

But as I said, if you do this on a really empirical basis, I think

there is no question that the number of conflicts and their intensity has

fallen over the last two generations. The last word Melissa?

The yes of the end of history was really whether the ideas had come to

an end. I think actually as we see all the challenges we face we

realise we need new ideas and we can't rest completely with the old

ones. Thank you very much. The Kennedy

Space Centre, the CosmoDrome and now the Isle of Man, 45 years after

Armstrong and Aldrin became the first men to walk on the moon, the

conquest of space has changed out of recognition. Armstrong may have come

in peace for all mankind, but space today is more about commerce. We

report now on the rival to NASA to be found in the middle of the Irish

Sea. I think there is a real space treasure in here. This is fan it is

a tickets I have always wanted to see one of these.

These Russian-built spacecraft were designed back in the 1970s, but they

have proved themselves in space. American lawyer here has bought them

with the idea of putting space tourists into space. It will cost

upwards of ?50 million to do it. This This last been in space. There

is hardly any leg room at all. But I would do it. I mean even though it

is not comfortable, I would pay the money and get out there. What I find

slightly freaky is I'm sitting in a Russian space capsule in a hanger in

the Isle of Man. Who would have thought it, it is quite bizarre.

Those spaceships are part of a space revolution on this tiny island. It

is 32 miles long with a total population of only 85,000 people.

But it is prosperous, because it is not part of the EU or the UK. Which

means it can set low taxes and give generous Government grants. There

are 30 space-related companies on the island. Including four of the

world's top ten satellite organisations. Together with experts

in space finance, regulation and law, this builds up to a $300

million a year industry. The island's Government has a history of

chasing new areas of business. Hello, lovely to see you in the Isle

of Man. The space breakthrough came in 2001. At that time we were

looking for new things for the Isle of Man to do. We have a very

successful ship registry here. Very successful aircraft registry and the

Government had the vision to get involved in acquiring things like

orbital farming slots. Satellites sweep around the earth in their own

protected volume of space, a firing spot. What gives it an advantage is

satellite operators have to apply for them in the country, even the

Isle of Man. It attempts the island's attempt to capitalise on

the third era of space. Space exploration started in the 1950s as

a competition. A race to be the first into orbit and the first to

the moon. . By the 170s the race was over and collaboration was the key.

Apollo, and Soyuez astronauts shook hands in space in 1979. By the 21st

century the space station was a multinational project. But still

dominated by nation states. I believe we're entering the third era

of space, and it is an era of commercialisation. We are launching

more and more satellites every day. Space tourism is taking off

literally. The global space industry is booming, especially here on the

Isle of Man. It looks small scale but this company is part of that new

era. His team built space optics for NASA's Mars Rover. The Isle of Man

has links to the international space university in Strasbourg. 60 of

their graduates work on the island. And the unemployment rate here is

just 2%. There are also the advantages of the Isle of Man, it is

a very stable and low-crime environment. If you look around you

here there is lots of expensive equipment and we know we can lock

the company on a Friday or Saturday and come back on the Monday morning

and everything will be in its place. Now I don't want to exaggerate the

Isle of Man's toe hold on the growing commercialisation of space.

But it has formed a whole new industry for the Isle of Man to

exploit. Especially in satellite operations. This is the type of a

cube satellite, they do simple experiments in space, but they need

to get into space, to do that they piggy back on the launch speaks of

other big satellites. You might get one big one and 25 of these. Once

they are out there, that means there is a who collection of things

orbiting the earth every 90 minutes, faster than a speeding bullet. If

they collide it causes chaos. To sort out the resulting financial

chaos, you need people like Chris. Wherever there is money there is

regulation, and space is one of the most regulated industries in the

world. Space law, how can it be enforced, it is out there? It was

put in there to prevent people claiming Celestial bodies in space.

You can't land on the moon and say it is yours. It is from maritime

law, it belongs to none and belongs to all. From that noble start space

law has grown to cover everything, orbiting the earth. It is complex

and comprehensive. It is almost the space version of car insurance. A

lot of the companies come here probably, I hate to say it, for the

most boring part of space. For us we are excited by this, this is the

business of space. In a world gone mad the Isle of Man, and Britain,

were seen as the safe, stable bit. The Isle of Man's success brings

home the economic opportunities that have been created now that space

exploration is moving from a state-funded model to a commercial

business. That's about it for tonight. Here is what the producer

insists is a quick peek at tomorrow's show. Show you how

delightful it is to cycle in London. It is not delightful, it is a bloody

nightmare. It is wonderful. This is the most difficult machine I have

tried to cycle on, but Newsnight procured it. I'm going over this

way, all right. Before we go tonight, a reminder of a momentous

week for fans of the selfie, Twitter unveiled a drony account for sell

fees taken on cameras mounted on drones. Their first posting was a

slick-looking shot of Patrick Stewart at Cannes. We thought of

something else. A lot of dry weather to come through

the rest of the week, that said it will be a dull and damp start to the

day across many parts of England and Wales tomorrow morning. Hopefully

things will brighten up. The best of the sunshine will be across Northern

Ireland and Scotland. Another