1 00:00:00,572 --> 00:00:04,472 My favorite quotation is from the Marquis of Condorcet, 2 00:00:05,792 --> 00:00:09,312 18th century, who said that, "Power 3 00:00:10,332 --> 00:00:14,872 and the secret of oppression lies not in the armour 4 00:00:15,052 --> 00:00:17,872 of the oppressor, but in the mind of the oppressed." 5 00:00:20,412 --> 00:00:23,709 So consenting to authority is 6 00:00:23,792 --> 00:00:25,472 what makes authority sustainable. 7 00:00:32,012 --> 00:00:35,792 No regime has the capacity constantly to coerce, 8 00:00:35,902 --> 00:00:38,592 through physical means, a population. 9 00:00:38,982 --> 00:00:43,512 This is, therefore, the role of ideology in 10 00:00:44,042 --> 00:00:48,849 convincing the many that a system that is designed 11 00:00:48,932 --> 00:00:50,472 to exploit them, to oppress them, 12 00:00:51,012 --> 00:00:54,272 and to serve the few, is the natural order of things. 13 00:02:15,762 --> 00:02:19,849 Given the financial damage to date, I cannot see 14 00:02:19,932 --> 00:02:23,019 how we can avoid a significant rise in 15 00:02:23,102 --> 00:02:24,752 layoffs and unemployment. 16 00:02:40,822 --> 00:02:45,152 Over and over again, ideology trumped governance. 17 00:02:45,732 --> 00:02:49,912 Our regulators became enablers rather than enforcers. 18 00:02:50,562 --> 00:02:53,912 Their trust in the wisdom of the markets was infinite. 19 00:02:54,652 --> 00:02:58,432 The mantra became, "government regulation is wrong, 20 00:02:59,232 --> 00:03:00,892 the market is infallible." 21 00:03:01,472 --> 00:03:04,969 You found a flaw in the reality... 22 00:03:05,052 --> 00:03:06,119 The flaw in the model 23 00:03:06,202 --> 00:03:09,599 that I perceived is the critical functioning structure 24 00:03:09,682 --> 00:03:12,649 that defines how the world works, so to speak. 25 00:03:12,732 --> 00:03:16,129 In other words, you found that your view of the world, 26 00:03:16,212 --> 00:03:19,212 your ideology, was not right. It was not working. 27 00:03:19,352 --> 00:03:22,492 Precisely. No, that's precisely the reason 28 00:03:23,092 --> 00:03:25,852 I was shocked because I had been going for 40 years 29 00:03:26,032 --> 00:03:28,649 or more with very considerable evidence 30 00:03:28,732 --> 00:03:30,572 that it was working exceptionally well. 31 00:03:31,252 --> 00:03:34,812 I don't blame my fellow economists for pulling the trigger 32 00:03:35,402 --> 00:03:38,529 that created so much devastation in 2008, 33 00:03:38,612 --> 00:03:39,852 and before that and after that. 34 00:03:40,312 --> 00:03:43,149 But I blame them for providing the economic, 35 00:03:43,232 --> 00:03:46,852 the mathematical models, the sermons, a theoretical 36 00:03:47,192 --> 00:03:49,932 and ideological cover, which steadied the hand 37 00:03:50,152 --> 00:03:51,769 of the financiers, 38 00:03:51,852 --> 00:03:54,089 and allowed them to believe that 39 00:03:54,172 --> 00:03:57,039 what they were doing was perfectly okay, consistent 40 00:03:57,122 --> 00:04:00,969 with science, provable mathematically that it was 41 00:04:01,052 --> 00:04:02,329 riskless and therefore 42 00:04:02,412 --> 00:04:06,052 allowed them the mental 43 00:04:06,512 --> 00:04:08,989 and emotional strength 44 00:04:09,072 --> 00:04:11,612 to do a lot more damage than they would've done otherwise. 45 00:04:12,182 --> 00:04:14,972 Economists had been claiming 46 00:04:15,242 --> 00:04:20,132 with extreme arrogance that they 47 00:04:20,562 --> 00:04:22,989 completely understood how to control 48 00:04:23,072 --> 00:04:24,612 and manage an economy. 49 00:04:25,142 --> 00:04:27,492 There were fundamental principles like the 50 00:04:28,012 --> 00:04:32,292 efficient market hypothesis, rational expectations, 51 00:04:32,592 --> 00:04:35,689 and anyone who didn't accept this was dismissed 52 00:04:35,772 --> 00:04:38,812 as some strange kind of moron. 53 00:04:39,392 --> 00:04:41,172 The whole system collapsed. 54 00:04:41,832 --> 00:04:44,572 The whole intellectual edifice collapsed 55 00:04:45,232 --> 00:04:46,852 in a most amazing fashion 56 00:04:47,432 --> 00:04:49,052 and had no effect on the profession. 57 00:04:49,632 --> 00:04:52,932 None at all. We have a moral 58 00:04:53,152 --> 00:04:56,972 and political duty to empower ourselves 59 00:04:57,552 --> 00:05:02,132 and our children to speak authoritatively about the economy, 60 00:05:03,472 --> 00:05:07,049 to become acquainted with the ways of capitalism. 61 00:05:07,132 --> 00:05:09,332 This is the system, the economic system we live in. 62 00:05:10,912 --> 00:05:14,252 So as to prevent economists from fooling us about 63 00:05:14,472 --> 00:05:15,492 how capitalism works. 64 00:05:19,192 --> 00:05:22,812 So economics is to modern capitalism 65 00:05:23,242 --> 00:05:26,052 that which theology was to the Middle Ages. 66 00:05:28,252 --> 00:05:32,452 A body of ideology and very complicated logic, 67 00:05:32,722 --> 00:05:35,372 because you have to remember that theology was very logical, 68 00:05:35,562 --> 00:05:38,909 very Aristotelian during the Middle Ages, the purpose 69 00:05:38,992 --> 00:05:43,652 of which is to legitimise the existing power structures 70 00:05:43,912 --> 00:05:45,612 and the existing status quo. 71 00:05:53,912 --> 00:05:57,969 The moment economics entered the universities in the 19th century, 72 00:05:58,052 --> 00:06:00,932 it had to be sanitised. 73 00:06:06,872 --> 00:06:10,629 The inventor of utilitarianism, Jeremy Bentham, wanted 74 00:06:10,712 --> 00:06:13,689 to prove that redistribution 75 00:06:13,772 --> 00:06:17,172 of income was an important aspect of any good society. 76 00:06:17,872 --> 00:06:19,289 So he came up 77 00:06:19,372 --> 00:06:22,972 with a scientific sounding concept. 78 00:06:23,632 --> 00:06:25,452 The concept of marginal utility. 79 00:06:26,072 --> 00:06:29,132 So he said, "Okay, suppose you're thirsty. 80 00:06:29,832 --> 00:06:32,532 You drink a glass of water and you feel very happy. 81 00:06:34,192 --> 00:06:35,169 If you're still thirsty 82 00:06:35,252 --> 00:06:37,092 and you drink a second one, you'll be happier. 83 00:06:38,112 --> 00:06:39,329 But the additional utility 84 00:06:39,412 --> 00:06:42,849 that the second glass gives you is much less than the one 85 00:06:42,932 --> 00:06:44,172 that the first glass gave you." 86 00:06:46,532 --> 00:06:50,772 Diminishing marginal utility for him was a law of society. 87 00:06:52,232 --> 00:06:55,369 He said, "Okay, let's agree that the more we have 88 00:06:55,452 --> 00:06:57,889 of something that we like, the less the contribution 89 00:06:57,972 --> 00:06:59,892 to our wellbeing, to our utility." 90 00:07:00,862 --> 00:07:03,772 Which means that if you take a stinking rich person 91 00:07:04,302 --> 00:07:05,412 who's got lots of pounds 92 00:07:06,872 --> 00:07:09,252 and a very, very poor person who's got one pound or none, 93 00:07:10,232 --> 00:07:12,692 and you take one pound from the rich person 94 00:07:13,752 --> 00:07:15,719 and you give it to the poor person, 95 00:07:15,802 --> 00:07:17,812 average utility will rise. 96 00:07:18,072 --> 00:07:22,772 Why? Because the loss of utility to the rich person is tiny 97 00:07:24,132 --> 00:07:26,172 compared to the gain in utility of the poor person. 98 00:07:28,032 --> 00:07:31,289 So, if we agree that the good society is the one 99 00:07:31,372 --> 00:07:34,769 that allows the greatest happiness for the largest number 100 00:07:34,852 --> 00:07:37,252 of people, we need to redistribute income. 101 00:07:40,992 --> 00:07:44,429 Now, of course, that would never allow Bentham, 102 00:07:44,512 --> 00:07:47,692 or somebody like Bentham, to get a chair at the University 103 00:07:47,892 --> 00:07:51,849 of Cambridge, at the University of Durham, at the University 104 00:07:51,932 --> 00:07:55,132 of Glasgow if he was peddling those views, 105 00:07:55,932 --> 00:07:57,692 because back then you had to have a sponsor. 106 00:07:58,012 --> 00:07:59,412 Somebody had to pay for your chair. 107 00:08:00,072 --> 00:08:03,249 As if you would find a rich person to pay 108 00:08:03,332 --> 00:08:05,452 for a mathematical model that was 109 00:08:06,822 --> 00:08:10,012 concluding, at the end of it, after the proof, 110 00:08:10,642 --> 00:08:14,012 that his money had to be taxed and given to the poor. 111 00:08:20,032 --> 00:08:22,732 But at the same time, this mathematical reasoning 112 00:08:23,432 --> 00:08:27,012 was crucial for getting economics into the universities. 113 00:08:27,512 --> 00:08:30,452 So what do they do? They introduce one assumption, 114 00:08:31,282 --> 00:08:33,492 that my utility cannot be compared to yours. 115 00:08:34,402 --> 00:08:36,852 Mine is personal, strictly private, so is yours. 116 00:08:37,832 --> 00:08:39,669 So suddenly we can no longer say 117 00:08:39,752 --> 00:08:40,992 we need to redistribute income. 118 00:08:43,672 --> 00:08:46,772 So, you see how, once it enters the universities, 119 00:08:46,992 --> 00:08:49,692 an axiom is introduced to depoliticise it. 120 00:08:50,512 --> 00:08:53,009 And of course, nothing is more political than a 121 00:08:53,092 --> 00:08:54,639 depoliticised model of society 122 00:08:54,722 --> 00:08:55,649 because it means 123 00:08:55,732 --> 00:08:58,732 that it becomes the greatest defender of the status quo. 124 00:09:04,552 --> 00:09:07,932 I'm not a climate change denier. I love science. 125 00:09:08,292 --> 00:09:12,509 I believe that if we need to build a bridge, we need experts 126 00:09:12,592 --> 00:09:16,492 to build it. It would be stupid to build it democratically. 127 00:09:17,952 --> 00:09:21,009 If we all have a view as to what to do 128 00:09:21,092 --> 00:09:22,852 to build a bridge, the bridge will collapse, 129 00:09:23,472 --> 00:09:26,092 and we are going to be responsible for many, many deaths. 130 00:09:27,472 --> 00:09:30,252 But the economy is not like civil 131 00:09:30,612 --> 00:09:32,492 engineering projects. 132 00:09:33,512 --> 00:09:37,092 The economy is society. It's you and me. It's everything. 133 00:09:37,202 --> 00:09:40,332 Anybody who tells you economics is a science is either fool 134 00:09:40,632 --> 00:09:42,212 or is trying to fool you. 135 00:09:44,152 --> 00:09:45,892 As the United States and Great Britain 136 00:09:45,992 --> 00:09:47,732 and other free nations have prospered, 137 00:09:48,272 --> 00:09:51,209 we have seen an almost Newtonian revolution in the 138 00:09:51,292 --> 00:09:52,412 science of economics. 139 00:09:53,472 --> 00:09:55,372 We are learning that the way to prosperity 140 00:09:56,072 --> 00:09:59,092 is not more bureaucracy and redistribution of wealth, 141 00:09:59,632 --> 00:10:02,972 but less government and more freedom for the entrepreneur 142 00:10:03,352 --> 00:10:05,052 and for the creativity of the individual. 143 00:10:05,392 --> 00:10:09,169 The manner in which loony economics 144 00:10:09,252 --> 00:10:10,329 of the right spread out 145 00:10:10,412 --> 00:10:14,132 and became the dominant paradigm, which was essential 146 00:10:14,232 --> 00:10:16,092 for financialisation to emerge, 147 00:10:16,682 --> 00:10:18,172 that effectively took over the world. 148 00:10:18,952 --> 00:10:21,609 It was fascinating to watch. 149 00:10:21,692 --> 00:10:26,569 You and I are living through a revolution. Over the centuries 150 00:10:26,652 --> 00:10:27,932 of European history, 151 00:10:28,892 --> 00:10:31,772 revolutionary change has sometimes brought freedom 152 00:10:32,192 --> 00:10:33,732 and sometimes servitude, 153 00:10:34,712 --> 00:10:38,092 but what we're witnessing now is a revolution 154 00:10:38,272 --> 00:10:42,252 of conservative values, of free enterprise 155 00:10:42,592 --> 00:10:44,732 and of fervent national pride. 156 00:10:46,352 --> 00:10:50,412 My great regret as a young man 157 00:10:51,672 --> 00:10:53,829 who was engaging in the debates of the left 158 00:10:53,912 --> 00:10:58,452 and also looking in awe at the amazing 159 00:10:59,012 --> 00:11:00,172 capacity of the right 160 00:11:00,312 --> 00:11:03,212 to impose their own dominant paradigm on everybody else, 161 00:11:03,952 --> 00:11:05,689 my great regret was that we 162 00:11:05,772 --> 00:11:08,172 of the left no longer spoke about liberty. 163 00:11:08,672 --> 00:11:11,052 We allowed the enemies of liberty 164 00:11:11,632 --> 00:11:13,292 to appropriate the mantle of freedom. 165 00:11:18,952 --> 00:11:20,092 But, in reality, 166 00:11:23,562 --> 00:11:24,529 capitalist relations 167 00:11:24,612 --> 00:11:27,692 of production are not in sync with liberty. 168 00:11:32,302 --> 00:11:35,892 Theft has always been part of human relations... 169 00:11:37,552 --> 00:11:40,232 Bullying, the powerful 170 00:11:40,672 --> 00:11:43,032 imposing their will on the powerless... 171 00:11:44,252 --> 00:11:45,472 But with capitalism, 172 00:11:47,802 --> 00:11:49,712 theft becomes consented to. 173 00:11:50,052 --> 00:11:52,352 And this is a very simple comparison to make. 174 00:11:54,232 --> 00:11:58,852 Before commodification of land, the land belonged nominally 175 00:11:59,032 --> 00:12:02,929 to the landlord, but the peasants worked the land generation 176 00:12:03,012 --> 00:12:04,369 after generation. It was their land. 177 00:12:04,452 --> 00:12:07,452 It was a common land. That it was nominally owned 178 00:12:07,672 --> 00:12:08,812 by the landlord 179 00:12:08,912 --> 00:12:12,489 simply gave the landlord the right to send the sheriff in 180 00:12:12,572 --> 00:12:14,132 and take his cut of the harvest. 181 00:12:16,472 --> 00:12:19,612 And when the sheriff would take 50% of the produce, 182 00:12:19,702 --> 00:12:23,369 let's say, on behalf of the landlord, this was a clear act 183 00:12:23,452 --> 00:12:24,772 of appropriation, of theft. 184 00:12:25,562 --> 00:12:26,612 Everybody saw it. 185 00:12:27,632 --> 00:12:31,132 It could be legitimised on the basis that God had 186 00:12:31,242 --> 00:12:33,292 decided that the Lord would have that right, 187 00:12:33,672 --> 00:12:37,212 but it was still a violent removal of corn, 188 00:12:37,732 --> 00:12:42,652 whatever, you could see it. Contrast this now 189 00:12:43,272 --> 00:12:45,252 to what happened after land was commodified. 190 00:12:45,672 --> 00:12:49,319 You take the peasants, you throw them off the land. 191 00:12:49,402 --> 00:12:51,972 What do they do? They head for the nearest village 192 00:12:52,472 --> 00:12:53,509 and they knock on the door 193 00:12:53,592 --> 00:12:56,492 and they say, "We'll do anything for a loaf of bread." 194 00:12:59,652 --> 00:13:02,812 Suddenly they are the proponents of a trade. 195 00:13:04,132 --> 00:13:06,332 I will give you my labor, you give me a loaf of bread. 196 00:13:07,212 --> 00:13:10,492 A legitimate market transaction. Okay. 197 00:13:10,712 --> 00:13:13,492 And they sign a contract. It is all voluntary. 198 00:13:13,912 --> 00:13:18,132 We will work for, you know, 22 hours a day. 199 00:13:18,792 --> 00:13:21,849 We will drop dead, and we will receive a loaf 200 00:13:21,932 --> 00:13:23,852 of bread at the end of the week, voluntarily. 201 00:13:25,872 --> 00:13:29,012 So everything depends on consent. 202 00:13:31,162 --> 00:13:33,892 That is the liberal legitimisation 203 00:13:34,352 --> 00:13:35,572 of the capitalist process. 204 00:13:40,402 --> 00:13:42,452 What can we say to their argument 205 00:13:43,042 --> 00:13:46,012 that capitalism is based on consent? 206 00:13:49,762 --> 00:13:53,612 What exactly constitutes a voluntary transaction? 207 00:13:58,072 --> 00:14:01,132 If I say, "You have this diamond and I have a gun, 208 00:14:02,232 --> 00:14:04,172 and I'm going to point it to your head 209 00:14:04,552 --> 00:14:08,049 and I'm going to propose the following trade: I'm not going 210 00:14:08,132 --> 00:14:09,749 to pull the trigger and you'll give me the diamond." 211 00:14:09,832 --> 00:14:11,709 Is this a fair transaction, voluntary transaction? 212 00:14:11,792 --> 00:14:13,649 No, it's not, because of the bullet 213 00:14:13,732 --> 00:14:15,879 that would go into your head and so on, the external force. 214 00:14:15,962 --> 00:14:20,109 Okay, but let's take this a little bit further. 215 00:14:20,192 --> 00:14:22,332 You are lost in the desert, in the Sahara, 216 00:14:23,392 --> 00:14:24,932 and you're about to die of thirst. 217 00:14:25,512 --> 00:14:29,132 And I come up to you, you know, I'm a Bedouin. I have a camel 218 00:14:29,432 --> 00:14:32,892 and I have a glass of water, or a bottle of water, 219 00:14:33,272 --> 00:14:35,269 and I come to you and say, "Well, would you like that?" 220 00:14:35,352 --> 00:14:36,992 And you say, "Oh, yes please, I'm dying." 221 00:14:37,552 --> 00:14:39,972 I say, "Okay, well, here's a document, a contract. 222 00:14:40,152 --> 00:14:43,692 You give me everything you own, your house, your car, 223 00:14:43,842 --> 00:14:45,372 your bank account, everything. 224 00:14:45,872 --> 00:14:47,472 And I'll give you that bottle of water." 225 00:14:48,072 --> 00:14:50,892 Now, what's wrong with that? I was entrepreneurial. 226 00:14:51,252 --> 00:14:53,052 I was in the Sahara with water. You were not. 227 00:14:54,392 --> 00:14:56,572 You are consenting to it. I'm not forcing you. 228 00:14:57,192 --> 00:14:58,729 The fact that you will die if you don't take 229 00:14:58,812 --> 00:14:59,889 my water is not my business. 230 00:14:59,972 --> 00:15:00,972 It's your business. 231 00:15:05,272 --> 00:15:08,009 It is clear to, I think, the vast majority 232 00:15:08,092 --> 00:15:10,412 of people out there, that this is no different 233 00:15:10,992 --> 00:15:12,932 to pointing a gun at someone. 234 00:15:13,712 --> 00:15:17,852 So, suddenly, the freedom of a transaction, 235 00:15:18,872 --> 00:15:21,772 the degree to which a transaction is genuinely voluntary, 236 00:15:22,042 --> 00:15:25,729 depends on the alternatives you have when somebody is 237 00:15:25,812 --> 00:15:30,492 presenting a contracts with you, Which means 238 00:15:30,852 --> 00:15:34,749 a fair distribution of property rights, of artifacts, 239 00:15:34,832 --> 00:15:38,769 of food, of shelter, basic goods, is necessary 240 00:15:38,852 --> 00:15:41,492 before you can have consent, before you can have freedom. 241 00:15:59,292 --> 00:16:00,532 Property rights are everything. 242 00:16:00,912 --> 00:16:05,692 Who owns what? That determines who does what to whom. 243 00:16:14,392 --> 00:16:17,892 Now, in capitalism, property rights are by definition 244 00:16:18,832 --> 00:16:20,172 asymmetrically distributed. 245 00:16:20,792 --> 00:16:24,052 The very few own the means of production... 246 00:16:24,712 --> 00:16:27,852 The Googles of the world, the Volkswagens of the world, 247 00:16:28,072 --> 00:16:30,012 the farmland — the very few. 248 00:16:33,192 --> 00:16:35,932 And the very many who are propertyless 249 00:16:36,762 --> 00:16:37,972 only own their own labour, 250 00:16:38,312 --> 00:16:40,252 and they have to sell it in order to survive. 251 00:16:43,392 --> 00:16:45,132 And that creates capitalist dynamics. 252 00:16:48,992 --> 00:16:51,479 In other words, most of property, especially capital, 253 00:16:51,562 --> 00:16:54,732 belongs to the very few who own but do not work. 254 00:16:54,872 --> 00:16:56,892 And everybody else works but does not own. 255 00:16:57,632 --> 00:17:01,972 And money comes to you to the extent that you have 256 00:17:02,832 --> 00:17:07,292 the power to extract value that others have created. 257 00:18:27,092 --> 00:18:29,472 The greatest and most toxic lie at the heart 258 00:18:29,572 --> 00:18:31,669 of the society we live in is 259 00:18:31,752 --> 00:18:35,789 that wealth is produced individually by each one 260 00:18:35,872 --> 00:18:39,232 of us separately, and then somehow the state comes along 261 00:18:39,452 --> 00:18:42,192 and collectivises it through the tax system. 262 00:18:44,132 --> 00:18:48,872 In reality, everything, every single item on this planet 263 00:18:49,812 --> 00:18:53,832 is collectively produced and then privately appropriated. 264 00:18:56,012 --> 00:18:58,312 The steam engine. Okay, it was James Watt 265 00:18:58,902 --> 00:18:59,992 that invented it, 266 00:19:02,212 --> 00:19:06,089 but he was standing on the shoulders of thousands 267 00:19:06,172 --> 00:19:08,832 of thinkers, inventors, physicists, 268 00:19:09,232 --> 00:19:10,752 engineers, to produce that. 269 00:19:13,702 --> 00:19:16,632 When it comes to our smartphones, when it comes to our wifi, 270 00:19:17,142 --> 00:19:19,949 when it comes to satellites, when it comes to all the things 271 00:19:20,032 --> 00:19:24,712 that today Elon Musk is using in order to go to Mars, 272 00:19:24,852 --> 00:19:26,752 create electric cars and so on, 273 00:19:27,002 --> 00:19:30,032 every single one of those technologies was the result 274 00:19:30,212 --> 00:19:31,392 of a state investment. 275 00:19:32,142 --> 00:19:33,952 Some state grant. 276 00:19:40,972 --> 00:19:45,789 So every smartphone consists of little inventions 277 00:19:45,872 --> 00:19:48,512 that were invented by state-run 278 00:19:48,772 --> 00:19:50,952 and state-funded laboratories. 279 00:19:54,092 --> 00:19:56,032 For instance, wifi was produced in Australia 280 00:19:56,412 --> 00:19:59,952 by the CSIRO, a state research organisation. 281 00:20:00,302 --> 00:20:01,392 They gave it away for free 282 00:20:02,412 --> 00:20:03,429 and, in the end, 283 00:20:03,512 --> 00:20:06,912 the Australian state got not one penny for wifi. 284 00:20:07,422 --> 00:20:09,912 Imagine if a company had developed something like wifi! 285 00:20:10,462 --> 00:20:11,389 They would be one 286 00:20:11,472 --> 00:20:13,712 of the biggest corporations in the history of the world. 287 00:20:38,692 --> 00:20:43,319 There is nothing easier for the human mind than 288 00:20:43,402 --> 00:20:47,732 to start developing the conviction that one 289 00:20:48,252 --> 00:20:53,212 deserves all the goodies that one has; to consider 290 00:20:54,772 --> 00:20:56,239 whatever it is that we have accumulated, 291 00:20:56,322 --> 00:20:59,692 whether it's a few records in our record collection 292 00:21:00,152 --> 00:21:03,412 or a few trillion dollars, to consider this to be 293 00:21:05,132 --> 00:21:06,172 deservedly ours. 294 00:21:07,912 --> 00:21:09,249 And it is very easy at the same time, 295 00:21:09,332 --> 00:21:10,572 if you don't have any property, 296 00:21:11,592 --> 00:21:13,052 to begin to hate those who do. 297 00:21:16,122 --> 00:21:18,012 Firstly, we don't deserve what we have. 298 00:21:18,552 --> 00:21:20,649 If you have something — I say to my daughter... 299 00:21:20,732 --> 00:21:23,212 You have an iPhone, you have a laptop, you have this and that, 300 00:21:23,442 --> 00:21:25,332 it's the accident of birth. 301 00:21:26,232 --> 00:21:27,329 If you were born in a different 302 00:21:27,412 --> 00:21:28,812 family, you wouldn't have anything. 303 00:21:29,242 --> 00:21:33,092 It's got nothing to do with your deserving that. 304 00:21:35,912 --> 00:21:40,049 At the same time, hating those 305 00:21:40,132 --> 00:21:42,692 who actually have a lot more than you do 306 00:21:43,032 --> 00:21:44,172 is to miss the point. 307 00:21:45,192 --> 00:21:47,132 And the point is that we live in a society 308 00:21:48,122 --> 00:21:51,292 that is grossly inefficient at distributing 309 00:21:53,082 --> 00:21:54,932 bits of the pie that we collectively produce. 310 00:21:55,752 --> 00:22:00,572 It is grossly inefficient in terms of maintaining a balance 311 00:22:01,042 --> 00:22:02,229 between human beings 312 00:22:02,312 --> 00:22:03,952 and between humanity and the environment. 313 00:22:04,992 --> 00:22:07,332 So effectively we live in a stupid world. 314 00:22:08,192 --> 00:22:09,729 And if we want 315 00:22:09,812 --> 00:22:12,649 to be angry at something, we should not be angry at those 316 00:22:12,732 --> 00:22:14,092 who want to take away what we have 317 00:22:14,672 --> 00:22:16,729 or those who have a lot than more than we have, 318 00:22:16,812 --> 00:22:18,852 we should be angry at the stupidity of the system. 319 00:22:19,472 --> 00:22:21,972 We should be working together to design a better system, 320 00:22:22,412 --> 00:22:27,169 a system which is more in sync with the natural ebb 321 00:22:27,252 --> 00:22:29,212 and flow of the human spirit. 322 00:22:35,452 --> 00:22:38,862 What made you into this searing critic 323 00:22:39,402 --> 00:22:40,622 of the capitalist model? 324 00:22:41,332 --> 00:22:42,379 Well, to begin with, I believe 325 00:22:42,462 --> 00:22:45,369 that we should always be critical of the world we live in. 326 00:22:45,452 --> 00:22:47,979 Whether you live under feudalism or in ancient Athens, 327 00:22:48,062 --> 00:22:50,819 or you know, in China, you should always be critical because 328 00:22:50,902 --> 00:22:53,782 unless you're critical, there is no scope for improvement. 329 00:22:57,162 --> 00:22:59,262 The legitimising story 330 00:22:59,812 --> 00:23:02,299 that I was taught when I was a young man, 331 00:23:02,382 --> 00:23:06,599 before neoliberalism took over, the liberal story is founded 332 00:23:06,682 --> 00:23:10,742 on Adam Smith, the original political economist 333 00:23:11,042 --> 00:23:12,582 who legitimised capitalism. 334 00:23:14,652 --> 00:23:19,342 Adam Smith put forward the argument that 335 00:23:20,512 --> 00:23:22,339 while greed is truly sinful 336 00:23:22,422 --> 00:23:26,462 and horrible, in the context of capitalism 337 00:23:26,602 --> 00:23:27,729 it can be harnessed. 338 00:23:27,812 --> 00:23:31,222 It's like raw energy that can be harnessed 339 00:23:31,882 --> 00:23:34,342 and put in the service of the public. 340 00:23:35,212 --> 00:23:38,102 Because society does not need sermons. 341 00:23:38,442 --> 00:23:41,422 It doesn't need moralising. It doesn't need 342 00:23:41,932 --> 00:23:43,382 more prayers. 343 00:23:43,572 --> 00:23:47,772 What it needs is more food, more shelter, more goods, 344 00:23:48,922 --> 00:23:50,809 that will lift people out 345 00:23:50,892 --> 00:23:52,452 of abject poverty and starvation. 346 00:23:55,472 --> 00:23:58,892 Yes, capitalism is a place full of selfish, 347 00:23:59,512 --> 00:24:04,252 greedy individuals who nevertheless and in spite of themselves, 348 00:24:04,592 --> 00:24:06,612 are producing the good society, 349 00:24:07,032 --> 00:24:10,732 as long as their greed is kept in check through competition 350 00:24:11,872 --> 00:24:14,492 due to the miracle of the market. 351 00:24:15,512 --> 00:24:19,412 The market, like an invisible hand behind their backs, 352 00:24:19,622 --> 00:24:22,492 takes their greed and converts into virtue. 353 00:24:24,432 --> 00:24:28,982 Now, this is the propaganda. What is the reality? 354 00:24:36,042 --> 00:24:38,319 The market system that Adam Smith was 355 00:24:38,402 --> 00:24:39,822 envisioning doesn't exist. 356 00:24:41,322 --> 00:24:44,702 His view was that this only works. Greed becomes good, 357 00:24:45,052 --> 00:24:49,422 only if you've got tiny little family owned enterprises 358 00:24:50,762 --> 00:24:53,622 in complete competition with one another. 359 00:24:54,052 --> 00:24:58,182 None of them has any capacity to change prices 360 00:24:59,132 --> 00:25:02,822 through monopoly, oligopoly, cartel-like behaviour. 361 00:25:03,482 --> 00:25:05,302 He was indeed against the corporation. 362 00:25:05,522 --> 00:25:08,062 He was against public limited companies. 363 00:25:08,682 --> 00:25:11,182 He was against the idea of shareholders. 364 00:25:12,122 --> 00:25:15,379 So, his view of capitalism, has nothing to do with 365 00:25:15,462 --> 00:25:17,542 what we understand as capitalism today. 366 00:25:20,042 --> 00:25:22,382 The notion of competitive capitalism 367 00:25:22,612 --> 00:25:26,939 that Adam Smith was referring to died in 368 00:25:27,022 --> 00:25:28,822 around 1870, 1880. 369 00:25:30,482 --> 00:25:33,862 So the idea of the brewer, the baker, and the butcher goes 370 00:25:34,122 --> 00:25:37,582 and is replaced by Edison, by General Electric, 371 00:25:37,682 --> 00:25:41,159 by Ford... today, by Google, Facebook, and Amazon and so on. 372 00:25:41,242 --> 00:25:44,422 That is not competitive capitalism. 373 00:25:45,012 --> 00:25:48,222 It's a market of monopolists. 374 00:25:49,052 --> 00:25:53,022 What we now have is a gigantic concentration 375 00:25:53,402 --> 00:25:56,302 of market power in very, very few corporations 376 00:25:56,402 --> 00:25:58,849 and very few shadowy financial firms 377 00:25:58,932 --> 00:26:00,182 that control the corporations. 378 00:26:29,422 --> 00:26:32,562 Is there a conflict between democracy and capitalism? 379 00:26:37,022 --> 00:26:40,079 The one thing I learned during my political life, 380 00:26:40,162 --> 00:26:42,562 which is fairly recent, since 2015, 381 00:26:43,392 --> 00:26:45,492 is when a bill comes to parliament, 382 00:26:47,802 --> 00:26:51,652 somewhere in it you will find, if you follow the money, 383 00:26:52,442 --> 00:26:56,092 some vested interest that has created circumstances 384 00:26:56,752 --> 00:26:59,692 for the corrupt enrichment of some oligarch. 385 00:27:00,712 --> 00:27:05,092 If you follow the money, you will find the essence 386 00:27:05,352 --> 00:27:08,052 of corrupt power of oligarchy 387 00:27:09,012 --> 00:27:12,012 embedded in the DNA of what passes 388 00:27:12,352 --> 00:27:14,452 as really existing capitalism. 389 00:27:25,432 --> 00:27:29,932 So if you're Goldman Sachs, effectively you have 390 00:27:30,092 --> 00:27:32,692 a society-given right to print your own money. 391 00:27:33,362 --> 00:27:35,909 When you have that capacity, it's so easy 392 00:27:35,992 --> 00:27:37,372 to buy political power. 393 00:27:38,072 --> 00:27:41,409 To buy political influence. All you need 394 00:27:41,492 --> 00:27:45,852 to do is just fund the various political parties, the media, 395 00:27:46,352 --> 00:27:49,529 the think thanks campaigning for the policies that ensure 396 00:27:49,612 --> 00:27:51,009 that your ATM in your living room 397 00:27:51,092 --> 00:27:52,612 will continue to produce money. 398 00:28:01,472 --> 00:28:03,652 We have captains of industry 399 00:28:03,792 --> 00:28:06,892 and masters of finance that accumulate war chests 400 00:28:07,282 --> 00:28:09,932 with which, effectively, to buy politics. 401 00:28:13,392 --> 00:28:17,042 Democracy and capitalism are natural enemies. 402 00:28:19,292 --> 00:28:23,922 Think about it. In democracy, you have one vote 403 00:28:25,002 --> 00:28:26,562 independently of your means. 404 00:28:29,702 --> 00:28:31,732 Capitalism is all about power 405 00:28:32,322 --> 00:28:35,172 that is proportional to money. 406 00:28:36,162 --> 00:28:39,852 Whether you're in the shops, on Amazon, in the internet, 407 00:28:40,192 --> 00:28:43,212 or in a shareholders meeting, the more money you have, 408 00:28:43,992 --> 00:28:45,289 the more decision-making power 409 00:28:45,372 --> 00:28:46,732 you have, the more votes you have. 410 00:28:47,112 --> 00:28:51,492 So exploitative power, extractive power, the power 411 00:28:51,592 --> 00:28:54,729 to make other people do things against their will on your 412 00:28:54,812 --> 00:28:59,012 behalf is what in capitalism gives you more votes. 413 00:29:00,202 --> 00:29:04,052 Democracy should be and can only be conceived as 414 00:29:04,872 --> 00:29:09,292 a process, a political project of ending the capacity 415 00:29:09,432 --> 00:29:11,929 of the haves to make the have-nots do 416 00:29:12,012 --> 00:29:13,172 things on their behalf. 417 00:29:29,592 --> 00:29:30,592 Once upon a time, 418 00:29:32,412 --> 00:29:34,802 power was one 419 00:29:35,502 --> 00:29:37,522 sphere, one realm. 420 00:29:38,742 --> 00:29:42,892 The lord of the land, the baron, the king 421 00:29:44,272 --> 00:29:49,212 in medieval Europe, let's say, had all the power. Capitalism 422 00:29:49,812 --> 00:29:52,852 ruptured this unitary realm of power, 423 00:29:53,342 --> 00:29:55,652 split it into two different realms, 424 00:29:56,112 --> 00:29:57,452 the political and economic. 425 00:30:01,672 --> 00:30:05,129 And as it did, the political sphere was 426 00:30:05,212 --> 00:30:06,612 increasingly democratised. 427 00:30:06,952 --> 00:30:09,249 Why? Because all the important decisions were 428 00:30:09,332 --> 00:30:10,532 moving to the economic sphere. 429 00:30:11,802 --> 00:30:16,129 This democratisation was only accepted by the proponents 430 00:30:16,212 --> 00:30:18,652 of liberalism to the extent that all the 431 00:30:19,202 --> 00:30:23,372 important decisions were migrating from the political sphere 432 00:30:23,672 --> 00:30:25,932 as the political sphere was democratised. 433 00:30:28,392 --> 00:30:31,332 Let me remind you that in the 19th century, liberalism 434 00:30:32,072 --> 00:30:34,132 was against the idea of democracy. 435 00:30:34,642 --> 00:30:37,932 John Stewart Mill, the archetypal liberal, 436 00:30:38,432 --> 00:30:39,532 was an anti-democrat. 437 00:30:44,282 --> 00:30:46,892 More recently, we had another split. 438 00:30:47,072 --> 00:30:51,172 The economic sphere was dissected between 439 00:30:52,302 --> 00:30:54,932 industrial power and financial power. 440 00:30:55,592 --> 00:30:57,852 So the banker acquired power 441 00:30:58,472 --> 00:31:00,292 and not the Henry Fords of the world. 442 00:31:01,432 --> 00:31:03,212 So this is what has been happening. 443 00:31:04,632 --> 00:31:07,852 We are now in a world where the financial realm 444 00:31:08,452 --> 00:31:09,452 controls our lives. 445 00:31:10,342 --> 00:31:12,892 Industrial power is second. 446 00:31:13,832 --> 00:31:16,732 And the political sphere has lost all power. 447 00:31:17,002 --> 00:31:18,249 Democracy is confined 448 00:31:18,332 --> 00:31:20,759 to the least powerful sphere, the political sphere. 449 00:31:20,842 --> 00:31:25,412 This is why this fragile flower is being crushed. 450 00:31:26,642 --> 00:31:29,209 When I was six, the secret police broke down our front 451 00:31:29,292 --> 00:31:30,412 door and abducted my father. 452 00:31:31,472 --> 00:31:33,452 I'm not a great friend of the state, 453 00:31:34,792 --> 00:31:38,572 but I am equally not a great friend 454 00:31:38,872 --> 00:31:43,452 of any privateer with excessive power over other citizens. 455 00:31:44,512 --> 00:31:48,292 The only guarantee we have, the only weapon we have against 456 00:31:48,812 --> 00:31:51,692 concentrated power, is democracy. 457 00:31:54,232 --> 00:31:56,572 And allow me to finish off by reminding you 458 00:31:56,992 --> 00:31:58,972 of Aristotle's definition of democracy. 459 00:31:59,512 --> 00:32:04,452 It is a system of government in which the poor govern 460 00:32:04,642 --> 00:32:07,732 because, by definition, the poor are in the majority. 461 00:32:11,482 --> 00:32:15,212 What we are experiencing today is an oligarchy 462 00:32:15,402 --> 00:32:18,492 that is pushing us towards an ecological catastrophe. 463 00:32:40,492 --> 00:32:42,812 A capitalist system predicated upon profits, 464 00:32:43,312 --> 00:32:44,412 is driven by profits. 465 00:32:44,552 --> 00:32:46,299 That's a tautology, but it's also the truth 466 00:32:46,382 --> 00:32:47,412 about capitalism. 467 00:32:48,352 --> 00:32:52,092 So economic activity is being channeled into the areas 468 00:32:52,782 --> 00:32:54,092 where there's money to be made. 469 00:32:55,112 --> 00:32:57,212 Now moneymaking 470 00:32:58,072 --> 00:33:00,409 and serving human interests are not 471 00:33:00,492 --> 00:33:02,092 necessarily one and the same thing. 472 00:33:02,542 --> 00:33:05,732 Right now, we are facing a man-made disaster 473 00:33:06,592 --> 00:33:07,932 of global scale. 474 00:33:09,672 --> 00:33:13,932 Our greatest threat in thousands of years: climate change. 475 00:33:16,192 --> 00:33:17,652 If we don't take action. 476 00:33:18,432 --> 00:33:20,452 The collapse of our civilisations 477 00:33:21,752 --> 00:33:23,889 and the extinction of much 478 00:33:23,972 --> 00:33:26,852 of the natural world is on the horizon. 479 00:33:29,642 --> 00:33:33,372 This is all wrong. People 480 00:33:33,512 --> 00:33:36,212 are suffering, people are dying. 481 00:33:37,272 --> 00:33:40,052 Entire ecosystems are collapsing. 482 00:33:40,752 --> 00:33:43,812 We are in the beginning of a mass extinction, 483 00:33:44,112 --> 00:33:46,452 and all you can talk about is money 484 00:33:46,872 --> 00:33:49,732 and fairy tales of eternal economic growth. 485 00:33:50,632 --> 00:33:51,632 How dare you? 486 00:34:00,812 --> 00:34:03,892 GDP is an atrocious measure of progress. 487 00:34:06,952 --> 00:34:11,852 All you need to know is that a bushfire increases GDP. 488 00:34:14,902 --> 00:34:18,332 There is absolutely no correlation between 489 00:34:19,262 --> 00:34:21,932 prosperity, genuine human 490 00:34:22,762 --> 00:34:25,372 enjoyment, and GDP growth. 491 00:34:28,072 --> 00:34:32,452 But at the same time, GDP is the only metric 492 00:34:33,392 --> 00:34:35,972 of the success of capitalism in capitalist terms. 493 00:34:36,672 --> 00:34:37,872 And the reason is very simple: 494 00:34:38,782 --> 00:34:40,932 capitalism is a process of accumulation. 495 00:34:42,842 --> 00:34:44,972 It's all about growing capital. 496 00:34:46,832 --> 00:34:51,212 But for GDP to grow, for capital to accumulate, 497 00:34:52,392 --> 00:34:55,172 you need an ever expanding realm of the marketplace. 498 00:34:58,312 --> 00:35:02,972 Living creatures, biodiversity, when they have no 499 00:35:03,902 --> 00:35:06,932 protection from the steady encroachment 500 00:35:07,072 --> 00:35:09,652 of the market, they get wasted. 501 00:35:09,962 --> 00:35:13,872 They get used up, they're chewed up and spat out. 502 00:35:16,842 --> 00:35:21,619 And it is this which brings together the natural tendency 503 00:35:21,702 --> 00:35:23,422 of capital to accumulate under capitalism 504 00:35:23,972 --> 00:35:27,142 with the physical depletion of the planet. 505 00:35:30,722 --> 00:35:33,982 We need to make one evolutionary step beyond capitalism. 506 00:35:34,482 --> 00:35:36,502 We need to democratise economic life, 507 00:35:38,092 --> 00:35:40,012 democratize the way corporations are, run, 508 00:35:40,732 --> 00:35:43,829 democratise finance, in order to save democracy, in order 509 00:35:43,912 --> 00:35:47,059 to save liberalism, in order to save hope for the world. 510 00:35:47,142 --> 00:35:48,142 Thank you. 511 00:35:51,782 --> 00:35:55,092 Capitalism is consistent neither with democracy, 512 00:35:56,192 --> 00:36:00,212 nor with the survival of the human species upon this plant. 513 00:36:00,432 --> 00:36:03,849 To put it bluntly, either we move 514 00:36:03,932 --> 00:36:06,092 beyond capitalism or we die. 515 00:36:50,952 --> 00:36:55,132 The market will always create profits for the corporations 516 00:36:55,632 --> 00:36:57,829 by depleting the natural resources 517 00:36:57,912 --> 00:37:00,092 to which the market will always assign a zero price. 518 00:37:09,032 --> 00:37:13,412 So the question is, how can you ameliorate for this drive? 519 00:37:22,832 --> 00:37:23,832 Can the state do it? 520 00:37:29,192 --> 00:37:30,332 No, the state cannot do it. 521 00:37:40,432 --> 00:37:42,713 Our states, our democracies, have completely been usurped 522 00:37:42,912 --> 00:37:44,112 by the concentration of money. 523 00:37:52,242 --> 00:37:55,109 Effectively, our politics has been purchased by those 524 00:37:55,192 --> 00:37:58,329 who have an interest in depleting the natural resources 525 00:37:58,412 --> 00:37:59,412 of the planet.