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Subtitles by explosiveskull
www.OpenSubtitles.org
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...promise from the authorities
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that there would
be some change,
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00:01:03,984 --> 00:01:06,353
the pressure for reform
is gathering pace
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00:01:06,386 --> 00:01:09,140
and is gathering support.
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Differences between capitalism
and communism is so strong
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that only concrete and barbed
wire could hold them...
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We want another way
to reconstruct our society.
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On the streets
of East German cities,
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00:01:23,554 --> 00:01:25,764
scores of people demanding
democratic reforms
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were dragged off by...
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00:01:27,430 --> 00:01:29,576
Security
police dragged individuals
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from the crowd, beating
them over the head,
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and throwing them into
the back of waiting lorries.
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I was born in 1971.
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I turned 18 in 1989, when
the Berlin Wall came down.
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I remember being glued to
my radio
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listening to the fall of
the communist regime.
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As a student, I travelled to
Romania, Hungary and Russia.
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00:02:02,125 --> 00:02:05,965
So I personally know the impact
this collapse had.
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I saw an economic and
social system
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00:02:16,125 --> 00:02:18,485
in a complete state of failure.
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A political system that had
promised human emancipation,
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but instead ended up
producing misery
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00:02:32,405 --> 00:02:34,125
and incredible
political repression.
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00:02:57,605 --> 00:03:01,805
And when the fraud of the
communist promise was exposed
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00:03:01,845 --> 00:03:03,325
and it collapsed,
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00:03:03,365 --> 00:03:08,165
it greatly reinforced
the capitalist argument.
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00:03:08,205 --> 00:03:10,045
The problem was that
it went too far.
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00:03:10,189 --> 00:03:11,246
♪ Cristal, Maybach ♪
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♪ Diamonds on your timepiece ♪
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♪ Jet planes, islands,
tigers on a gold leash ♪
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00:03:15,251 --> 00:03:17,365
♪ We don't care ♪
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00:03:17,397 --> 00:03:19,895
♪ We aren't caught up
in your love affair ♪
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00:03:19,965 --> 00:03:22,005
The fall of the Soviet Union
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00:03:22,045 --> 00:03:26,085
led to infinite faith in the
deregulation of markets
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00:03:26,685 --> 00:03:28,605
accompanied by a new
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00:03:29,125 --> 00:03:31,325
glorification of
private property.
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00:03:32,085 --> 00:03:33,285
As a consequence,
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00:03:33,325 --> 00:03:36,445
we're facing challenges
of rising inequality
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00:03:36,485 --> 00:03:40,325
and the rise of nationalism
and xenophobic tensions,
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like there was in the very
unequal world
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00:03:43,165 --> 00:03:44,125
before World War I.
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♪ We didn't come from money ♪
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♪ But every song's like
gold teeth, Grey Goose ♪
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♪ Trippin' in the bathroom ♪
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00:03:50,710 --> 00:03:53,081
♪ Bloodstains, ball gowns,
trashing the hotel room ♪
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00:03:53,113 --> 00:03:55,035
♪ We don't care... ♪
49
00:03:55,405 --> 00:03:58,165
And I'm very scared for
the 21st century
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00:03:58,205 --> 00:03:59,725
because what I see
in the historical data
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00:03:59,765 --> 00:04:02,565
suggests we risk returning
to a capitalist system
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00:04:02,605 --> 00:04:05,524
similar to the highly unequal
world
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00:04:05,565 --> 00:04:07,325
of the 18th and 19th centuries.
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00:04:07,367 --> 00:04:10,474
- ♪ And we'll never be royals ♪
- ♪ Royals ♪
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♪ It don't run in our blood ♪
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00:04:13,133 --> 00:04:15,823
♪ That kind of lux
just ain't for us ♪
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00:04:15,855 --> 00:04:17,906
♪ We crave a different
kind of buzz ♪
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- ♪ Let me be your ruler ♪
- ♪ Ruler ♪
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♪ You can call me Queen B ♪
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♪ And, baby, I'll rule ♪
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♪ I'll rule, I'll rule,
I'll rule ♪
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♪ Let me live that fantasy ♪
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In 18th century Europe,
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00:04:58,525 --> 00:05:01,365
capital is concentrated
in the hands
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00:05:01,605 --> 00:05:03,765
of a very small group of people.
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00:05:06,445 --> 00:05:09,725
The aristocracy represents
1% of the population.
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00:05:12,805 --> 00:05:16,205
The boundaries of money
limit social mobility,
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00:05:20,925 --> 00:05:22,885
and hard work and education
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00:05:22,925 --> 00:05:24,165
don't allow you
to climb very high.
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00:05:28,485 --> 00:05:30,485
Through the evocative
power of literature,
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00:05:30,525 --> 00:05:32,525
film and popular culture
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00:05:32,565 --> 00:05:37,005
we can see the importance
of capital throughout history.
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It's a story much darker
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00:05:42,165 --> 00:05:44,325
than the idyllic vision
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00:05:44,365 --> 00:05:46,125
of a march towards
progress and light.
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00:05:51,342 --> 00:05:54,738
In the 18th century,
life for the poor is grim.
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00:05:54,771 --> 00:05:56,724
If you're lucky,
you might be a servant.
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00:05:56,756 --> 00:05:58,902
Everyone else is
a hand-to-mouth laborer,
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00:05:58,934 --> 00:06:01,658
moving from place to place,
following the work,
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00:06:01,689 --> 00:06:06,109
being treated by the landowners
exactly as they please.
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00:06:06,142 --> 00:06:07,583
And of course there
were no benefits,
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there's no health service,
there's no free schooling,
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00:06:10,370 --> 00:06:12,772
there's absolutely nothing.
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So poverty is a death sentence.
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And what's very striking is
the average life expectancy
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00:06:21,485 --> 00:06:23,406
in the 18th century is 17.
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00:06:30,774 --> 00:06:33,913
At the time, what capital
really looks like is
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00:06:33,945 --> 00:06:38,046
money, money-lending
and land-owning.
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00:06:38,077 --> 00:06:42,594
You have a guy that sits in a
fort and basically claims taxes
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00:06:42,626 --> 00:06:44,933
on all the people
that work his land.
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00:06:44,964 --> 00:06:46,694
And we sort of know
what that looks like
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from all kinds of movies.
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Really, with what I get
from these peasants,
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I can hardly afford
to pay my perfume bills.
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00:06:52,332 --> 00:06:55,021
What about Roulet?
Has he paid his rent?
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Roulet died last week.
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00:06:56,720 --> 00:06:59,475
He died
with his rent unpaid.
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- What did he die of?
- Hunger.
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00:07:01,974 --> 00:07:04,344
Hunger is an indulgence
with these peasants.
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00:07:04,375 --> 00:07:05,721
Oh, I keep forgetting, Gabelle,
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you're a humanitarian,
aren't you?
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00:07:07,867 --> 00:07:10,141
You think that one person
is as good as another...
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a naive notion
so contradicted by the facts.
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00:07:19,398 --> 00:07:21,449
For the rich,
inheritance is the obsession.
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00:07:21,481 --> 00:07:23,403
It's a very strict code.
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00:07:23,435 --> 00:07:25,389
The eldest son gets the capital.
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00:07:25,421 --> 00:07:27,023
He gets everything...
he gets the money,
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00:07:27,054 --> 00:07:28,976
he gets the house,
he gets the land...
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00:07:29,008 --> 00:07:31,571
and that makes him
incredibly powerful,
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00:07:31,603 --> 00:07:34,902
just through
an accident of birth.
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00:07:34,934 --> 00:07:37,657
These land-owning men,
these first sons,
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00:07:37,689 --> 00:07:39,964
they also have a huge
amount of political power,
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00:07:39,995 --> 00:07:43,743
because a lot of them are
the MPs, they're elites.
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00:07:43,775 --> 00:07:46,434
And as a consequence,
they are driven by a desire
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00:07:46,466 --> 00:07:50,053
to protect their own income,
to protect their own world,
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00:07:50,086 --> 00:07:52,200
and it simply doesn't
occur to them
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that poor people deserve
some redistribution of wealth.
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00:07:55,083 --> 00:07:57,741
Taxation, they resist
very strongly.
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00:07:57,774 --> 00:07:59,759
And this is the way that
the aristocracy worked,
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00:07:59,791 --> 00:08:02,898
not just in Britain,
but all through Europe,
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00:08:02,931 --> 00:08:06,774
and the aim is to conserve
the aristocratic power.
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00:08:13,053 --> 00:08:14,878
The examples that
Thomas Piketty has
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00:08:14,910 --> 00:08:17,216
of Jane Austen and Balzac,
they're very fitting,
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00:08:17,249 --> 00:08:19,203
because when you read
Jane Austen,
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00:08:19,234 --> 00:08:20,997
it is all about money,
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00:08:21,029 --> 00:08:23,526
and this money is not
earned through work,
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00:08:23,559 --> 00:08:25,929
it's not earned through
owning businesses,
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00:08:25,961 --> 00:08:28,556
it's earned through land,
it's inherited land.
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00:08:40,312 --> 00:08:42,874
Mr. Darcy, for
example, in Pride and Prejudice,
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he has this huge estate.
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00:08:44,604 --> 00:08:46,078
He doesn't even
have to be there.
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This land just creates
money for him.
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00:08:49,409 --> 00:08:51,779
How good of you to come.
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00:08:51,811 --> 00:08:53,253
He looks miserable,
poor sod.
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00:08:53,285 --> 00:08:54,438
Miserable he may be,
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00:08:54,470 --> 00:08:56,584
but poor he most certainly
is not.
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00:08:56,616 --> 00:08:58,442
- Tell me.
- 10,000 a year,
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00:08:58,474 --> 00:09:00,299
and he owns half of Derbyshire.
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00:09:00,332 --> 00:09:01,902
The miserable half?
140
00:09:05,360 --> 00:09:06,770
Jane Austen
created a fantasy
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00:09:06,802 --> 00:09:08,276
that you could get your
hands on this wealth
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00:09:08,308 --> 00:09:11,094
if you were just a bit
fun and a bit witty.
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00:09:11,126 --> 00:09:13,946
But the reality is there's
no way a Mr. Darcy would marry
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00:09:13,977 --> 00:09:15,483
girls like Lizzie Bennet,
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00:09:15,515 --> 00:09:19,295
who actually haven't got
a penny to their names.
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00:09:19,326 --> 00:09:22,754
He would marry an heiress,
possibly even a cousin,
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00:09:22,786 --> 00:09:25,125
and create this, sort of,
megalopolis estate.
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00:09:27,975 --> 00:09:32,876
Money marries money.
There's nothing to do with love.
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00:09:32,909 --> 00:09:34,734
And what we see now,
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00:09:34,766 --> 00:09:36,688
almost a cycling back
to the 18th century.
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00:09:39,539 --> 00:09:43,350
In Britain, inherited wealth
is everything... again.
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00:09:43,383 --> 00:09:47,643
Nowadays, 1% of the population
owns 70% of our land.
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00:09:47,675 --> 00:09:50,110
♪ I've been broke all my life ♪
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00:09:50,142 --> 00:09:51,327
♪ Now wonder ♪
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00:09:51,359 --> 00:09:53,954
♪ How does it feel to be rich? ♪
156
00:09:53,985 --> 00:09:55,939
♪ How does it feel to be rich? ♪
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00:09:55,972 --> 00:09:58,182
♪ Oh, I done worked
all my life ♪
158
00:09:59,142 --> 00:10:00,712
♪ Now wonder ♪
159
00:10:00,744 --> 00:10:02,986
♪ How does it feel
to just live? ♪
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00:10:03,018 --> 00:10:04,973
♪ How does it feel
to just live? ♪
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00:10:05,004 --> 00:10:08,560
There's always been an
elite, which is usually adept at
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00:10:08,592 --> 00:10:10,770
reproducing its privilege
through generations,
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00:10:10,802 --> 00:10:15,959
monopolizing both economic
and social and cultural capital.
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00:10:15,991 --> 00:10:19,035
The way the elite stays in power
and passes on their privilege
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00:10:19,066 --> 00:10:20,380
to the next generation
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00:10:20,411 --> 00:10:22,974
is also by shaping
the way that we think.
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00:10:23,006 --> 00:10:24,961
♪ How does it feel to be rich? ♪
168
00:10:24,992 --> 00:10:27,459
♪ How does it feel
to be ri-i-ich? ♪
169
00:10:27,490 --> 00:10:29,637
♪ How does it feel
to just live? ♪
170
00:10:29,669 --> 00:10:31,590
♪ How does it feel
to just live? ♪
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00:10:33,737 --> 00:10:35,563
Traditionally,
economists have argued
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00:10:35,595 --> 00:10:38,478
that inequality is
a very powerful driver
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00:10:38,510 --> 00:10:40,976
of progress and innovation
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00:10:41,008 --> 00:10:43,827
because the idea is that
competition, essentially,
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00:10:43,859 --> 00:10:45,781
makes people try harder.
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00:10:47,607 --> 00:10:50,778
The problem is that
extreme inequality
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00:10:50,810 --> 00:10:54,782
increasingly seems to be a
source of great economic stress,
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00:10:54,814 --> 00:10:58,305
social stress
and political stress.
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00:10:58,338 --> 00:11:01,637
Because if you have
a situation where an elite
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00:11:01,669 --> 00:11:04,296
are so rigidly protective
of their ranks
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00:11:04,327 --> 00:11:06,922
that nobody can ever rise,
there's no social mobility,
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00:11:06,954 --> 00:11:09,005
you tend to end up with
a full-blown revolution.
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00:11:17,845 --> 00:11:20,805
Life in the 18th century
is not static.
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00:11:20,845 --> 00:11:23,685
We see the development
of new political ideas
185
00:11:23,725 --> 00:11:26,325
demanding equal rights
186
00:11:26,965 --> 00:11:30,405
and an end to privileges
linked to birth and nobility.
187
00:11:34,086 --> 00:11:36,039
In the French
Revolution, the banner is
188
00:11:36,072 --> 00:11:38,858
"Liberté, égalité, fraternité."
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00:11:38,890 --> 00:11:41,004
It's going to be brotherhood,
everyone's going to be free.
190
00:11:43,566 --> 00:11:46,289
But yet within
a tiny amount of time,
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00:11:46,322 --> 00:11:48,404
you have this
government of bankers,
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00:11:48,436 --> 00:11:52,183
and what they do is start to
create the elites once more.
193
00:11:53,625 --> 00:11:55,996
♪ This is the land
that fought for liberty ♪
194
00:11:56,027 --> 00:11:58,782
♪ Now when we fight,
we fight for bread ♪
195
00:11:58,814 --> 00:12:01,280
♪ Here is the thing
about equality ♪
196
00:12:01,313 --> 00:12:04,196
♪ Everyone's equal
when they're dead ♪
197
00:12:04,229 --> 00:12:06,822
♪ Take your place,
take your chance ♪
198
00:12:06,854 --> 00:12:09,608
♪ Vive la France
Vive la France! ♪
199
00:12:09,641 --> 00:12:11,691
Vive la France!
200
00:12:12,765 --> 00:12:15,285
It turns out the
French Revolution is based,
201
00:12:15,325 --> 00:12:18,045
in part, on hypocrisy.
With a vision of equality
202
00:12:18,085 --> 00:12:20,845
that is, at best, a little
optimistic or naive
203
00:12:20,885 --> 00:12:23,165
and at worst a little cynical.
204
00:12:25,365 --> 00:12:29,925
We imagine that equality
is going to occur naturally
205
00:12:29,965 --> 00:12:32,325
or spontaneously,
a bit like a fairy tale.
206
00:12:35,685 --> 00:12:38,485
But the reality is that we also
need political institutions,
207
00:12:38,725 --> 00:12:42,845
an education system,
health care, a transport system
208
00:12:43,725 --> 00:12:48,205
and a tax system that targets
the highest incomes.
209
00:12:48,925 --> 00:12:52,765
But none of this was
put in place
210
00:12:52,805 --> 00:12:55,045
after the French Revolution.
211
00:13:03,102 --> 00:13:04,576
What we see
in the late 18th
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00:13:04,608 --> 00:13:07,299
and early 19th centuries
is the Industrial Revolution.
213
00:13:07,330 --> 00:13:10,470
It replaces the work
of people's hands with machines,
214
00:13:10,502 --> 00:13:13,064
so you bring in machines to
make wool, to make cotton,
215
00:13:13,096 --> 00:13:15,691
to make all kinds
of commodities.
216
00:13:15,723 --> 00:13:18,798
This makes goods faster,
it standardizes them,
217
00:13:18,830 --> 00:13:21,617
and this makes more profit.
218
00:13:21,649 --> 00:13:25,782
Capital's no longer this fixed
thing that's your land
219
00:13:25,814 --> 00:13:29,401
or even your ability
to lend money.
220
00:13:29,432 --> 00:13:34,398
You finally figure out that
you can expand your own factory
221
00:13:34,430 --> 00:13:38,338
by, kind of, selling stuff,
keeping the profits,
222
00:13:38,370 --> 00:13:42,246
then reinvesting those profits
in expanding your factory.
223
00:13:42,278 --> 00:13:45,416
And that's kind of what
capitalism in its modern form
224
00:13:45,448 --> 00:13:48,395
really lets us do... is that
capital becomes this thing
225
00:13:48,428 --> 00:13:51,278
that can, kind of,
perpetually expand.
226
00:13:55,186 --> 00:13:58,518
But the gap between wages and
productivity is substantial,
227
00:13:58,550 --> 00:14:01,370
and you have these kind of
feudal legacies of labor
228
00:14:01,401 --> 00:14:04,732
persisting very, very
late into the game.
229
00:14:04,764 --> 00:14:06,974
British master and servant law
meant that it was a crime
230
00:14:07,006 --> 00:14:10,305
for you to quit your employer
without permission.
231
00:14:12,323 --> 00:14:14,437
And, you know, this is
getting actively used
232
00:14:14,470 --> 00:14:17,769
in the mid-19th century, during,
like, the heyday of capitalism
233
00:14:17,802 --> 00:14:20,589
in England... the most advanced
country in the world...
234
00:14:20,621 --> 00:14:22,607
and they're throwing
workers in jail,
235
00:14:22,638 --> 00:14:24,529
and they're being beaten
236
00:14:24,560 --> 00:14:27,347
because it's a crime
to go on strike.
237
00:14:54,126 --> 00:14:57,905
This whole idea developed
around escaping the Old World
238
00:14:57,938 --> 00:15:02,389
and setting up a new,
more egalitarian society.
239
00:15:02,422 --> 00:15:05,305
When the new world countries
were being set up...
240
00:15:05,336 --> 00:15:07,386
so New Zealand,
Australia, Canada...
241
00:15:07,419 --> 00:15:11,166
these places were being set up
by these refugees, essentially,
242
00:15:11,198 --> 00:15:12,864
fleeing Europe
243
00:15:12,895 --> 00:15:16,260
at a time that capitalism
was really taking hold.
244
00:15:17,957 --> 00:15:20,776
And that's why a lot of these
people wanted to get out
245
00:15:20,808 --> 00:15:25,548
of these countries...
they wanted a flatter society.
246
00:15:25,581 --> 00:15:30,161
It was this idea of moving
beyond the class system,
247
00:15:30,193 --> 00:15:32,980
but it was done largely
in a laissez-faire way.
248
00:15:33,012 --> 00:15:36,952
It wasn't a political movement,
by and large.
249
00:15:36,984 --> 00:15:39,899
And very quickly it was the
wealthy that started dominating
250
00:15:39,931 --> 00:15:41,789
right from the start.
251
00:15:43,295 --> 00:15:45,921
If you're a white man
in sort of, like, 1800-ish,
252
00:15:45,954 --> 00:15:47,619
Australia and the US...
253
00:15:47,650 --> 00:15:51,015
these places are, like,
the best places for you to go.
254
00:15:51,047 --> 00:15:54,473
You've got this wide-open
frontier; it's filled with land.
255
00:15:54,506 --> 00:15:56,459
But the big constraint
on your production
256
00:15:56,493 --> 00:15:59,472
is your ability
to mobilize labor.
257
00:15:59,503 --> 00:16:01,490
So if you're
a small family farmer,
258
00:16:01,521 --> 00:16:03,475
the only labor you can
mobilize on to the frontier
259
00:16:03,508 --> 00:16:05,621
is your kids.
260
00:16:07,670 --> 00:16:10,234
But if you're a slave owner, you
can basically go to New Orleans,
261
00:16:10,266 --> 00:16:12,508
you can take out a loan,
use that loan
262
00:16:12,539 --> 00:16:15,904
to buy a bunch of slaves in
the New Orleans slave market,
263
00:16:15,936 --> 00:16:18,754
then take them out to
the Alabama frontier
264
00:16:18,787 --> 00:16:21,092
and start clearing land
and growing cotton.
265
00:16:33,041 --> 00:16:36,116
And you're again able to
take the profits from that
266
00:16:36,148 --> 00:16:39,382
and expand, buy more slaves,
buy more land,
267
00:16:39,414 --> 00:16:42,169
and so you can again now
think of the slave economy
268
00:16:42,201 --> 00:16:46,109
as participating in this
circuit of accumulation.
269
00:16:50,177 --> 00:16:53,157
But also being a slave owner
didn't just mean that you had
270
00:16:53,190 --> 00:16:55,782
access to the labor
of your slaves,
271
00:16:55,815 --> 00:16:59,722
it also meant you had
increased access to capital,
272
00:16:59,755 --> 00:17:03,374
because you can use
your slaves as collateral.
273
00:17:09,846 --> 00:17:12,632
So if you, basically, are
looking to lend to somebody
274
00:17:12,664 --> 00:17:15,388
and they can offer
an equivalent amount of
275
00:17:15,419 --> 00:17:17,245
slave collateral versus land,
276
00:17:17,277 --> 00:17:18,846
you'd prefer the
slave collateral
277
00:17:18,878 --> 00:17:21,857
because it's much easier
to move them around
278
00:17:21,889 --> 00:17:24,451
or resell them or
something like that.
279
00:17:27,765 --> 00:17:32,565
The 19th century is
when the division of labour,
280
00:17:33,045 --> 00:17:36,885
inequality and power are
established worldwide -
281
00:17:38,965 --> 00:17:41,365
first with slavery,
282
00:17:41,405 --> 00:17:44,245
and then with incredibly
violent colonial domination.
283
00:17:52,365 --> 00:17:56,885
It's very difficult to say how
much of European wealth today
284
00:17:56,925 --> 00:17:59,405
comes from their colonial past.
285
00:18:00,445 --> 00:18:02,845
But what is clear is that
the crucial advantage
286
00:18:02,885 --> 00:18:05,685
won at the time of the
Industrial Revolution
287
00:18:05,725 --> 00:18:09,365
was closely linked
with military force.
288
00:18:14,134 --> 00:18:15,671
Attack!
289
00:18:27,005 --> 00:18:30,765
From 1870 to 1914,
the United Kingdom and France,
290
00:18:31,085 --> 00:18:34,125
who are the two main
colonial empires,
291
00:18:34,165 --> 00:18:37,085
own so much around
the rest of the world
292
00:18:37,565 --> 00:18:40,125
and it brings them
so much profit,
293
00:18:40,365 --> 00:18:42,125
interest, dividends, rents
294
00:18:42,845 --> 00:18:45,885
that they can afford
to keep on investing
295
00:18:45,925 --> 00:18:48,325
and become owners
of more of the world.
296
00:18:50,685 --> 00:18:52,165
So the rest of the world
works for them.
297
00:19:00,965 --> 00:19:02,725
It's no good
speeding up production
298
00:19:02,759 --> 00:19:05,545
if there's no one to buy
the stuff.
299
00:19:05,576 --> 00:19:09,901
So fashion fuels the
Industrial Revolution.
300
00:19:09,934 --> 00:19:13,425
By the 19th century, the cult
of fashion is all-encompassing.
301
00:19:13,457 --> 00:19:15,508
It's come down even
to the working classes.
302
00:19:15,539 --> 00:19:20,280
Even working class women
are trying to stay in fashion.
303
00:19:20,312 --> 00:19:23,867
The idea that, "You can't wear
that. That's from last season,"
304
00:19:23,900 --> 00:19:26,975
that will be very strange to
a 16th or 17th century person.
305
00:19:27,006 --> 00:19:28,993
They think,
"Well, it's still working,
306
00:19:29,024 --> 00:19:32,964
it's still hard-wearing.
I'll wear the same outfit."
307
00:19:38,538 --> 00:19:40,300
And the industry that
accelerates the fastest
308
00:19:40,332 --> 00:19:43,086
in the 19th century is
the industry about Christmas.
309
00:19:50,934 --> 00:19:52,696
In the 18th and 17th century,
310
00:19:52,729 --> 00:19:54,874
Christmas was
a very low-key affair.
311
00:19:54,907 --> 00:19:57,694
It was usually about drinking
with your friends and relations.
312
00:19:57,726 --> 00:19:59,712
It wasn't really
about present-giving;
313
00:19:59,743 --> 00:20:03,235
that was perhaps in New Year.
314
00:20:03,267 --> 00:20:05,637
But by the mid-19th century,
we have the Christmas cracker,
315
00:20:05,670 --> 00:20:07,527
the Christmas card,
the Christmas tree.
316
00:20:07,559 --> 00:20:09,353
People are bankrupting
themselves
317
00:20:09,385 --> 00:20:12,813
to have a yearly Christmas,
and it really was seized upon
318
00:20:12,845 --> 00:20:16,623
by the manufacturers as a way
to make a huge amount of money.
319
00:20:20,020 --> 00:20:21,877
Just as you were getting
all these new technologies
320
00:20:21,910 --> 00:20:25,144
like the railroad and the
telegraph and mass production
321
00:20:25,176 --> 00:20:27,162
and the corporation...
all of these new innovations,
322
00:20:27,194 --> 00:20:28,445
all of this additional
production...
323
00:20:28,476 --> 00:20:31,551
and inequality
becomes very, very large.
324
00:20:33,441 --> 00:20:35,876
It's actually this period
of enormous conflicts,
325
00:20:35,908 --> 00:20:39,622
where you have open wars
in the mines in Colorado
326
00:20:39,654 --> 00:20:44,012
between strikers and armed
militia hired by capitalists.
327
00:20:47,983 --> 00:20:51,667
And the overwhelming use
of the US Federal Army
328
00:20:51,700 --> 00:20:54,901
in this period
is strike-breaking.
329
00:21:20,656 --> 00:21:23,956
And similarly, today,
we have this whole
330
00:21:23,987 --> 00:21:25,942
transformation of
the economy happening,
331
00:21:27,606 --> 00:21:29,817
both with trade
and with technology,
332
00:21:29,849 --> 00:21:32,379
that exactly have the
sort of same property of
333
00:21:32,411 --> 00:21:34,622
creating lots of monopolies.
334
00:21:38,850 --> 00:21:40,517
And so it's generating, again,
335
00:21:40,548 --> 00:21:43,239
a small class of very,
very wealthy people.
336
00:21:43,271 --> 00:21:44,328
- 22...
- 43 million.
337
00:21:44,360 --> 00:21:45,609
- 75 million.
338
00:21:45,641 --> 00:21:48,268
$107 million.
Sold.
339
00:21:56,885 --> 00:21:59,565
Around 1914, in Paris,
340
00:22:00,085 --> 00:22:05,405
1% of the population
owns 70% of all assets.
341
00:22:07,365 --> 00:22:11,085
And in contrast, two-thirds
of the population
342
00:22:11,125 --> 00:22:13,125
die without any assets.
343
00:22:14,925 --> 00:22:18,085
You have this rise in
nationalism and competition
344
00:22:18,125 --> 00:22:19,565
between European countries,
345
00:22:19,605 --> 00:22:22,205
partly due to very strong
social tensions
346
00:22:22,245 --> 00:22:24,525
linked to the stagnant
standard of living
347
00:22:24,565 --> 00:22:28,205
and very high levels
of inequality.
348
00:22:31,965 --> 00:22:35,245
And competition between
countries, nationalism,
349
00:22:35,285 --> 00:22:37,925
is often used by elites
350
00:22:38,365 --> 00:22:41,405
to make people
forget class conflict
351
00:22:41,445 --> 00:22:44,565
and instead focus on
national identity.
352
00:22:54,165 --> 00:22:57,845
And all this contributes to
the arrival of
353
00:22:57,885 --> 00:23:02,285
the First World War
in the summer of 1914.
354
00:23:02,454 --> 00:23:04,888
In Berlin,
the Germans know the hour
355
00:23:04,921 --> 00:23:07,066
of glory is at hand.
356
00:23:08,892 --> 00:23:11,135
There's like a cultural
militarism that's happening
357
00:23:11,166 --> 00:23:13,889
on the Continent, and they're
competing with each other
358
00:23:13,922 --> 00:23:17,253
over both imperial territory
and trade routes.
359
00:23:17,285 --> 00:23:19,623
The warlord is
ceaseless, indefatigable,
360
00:23:19,655 --> 00:23:22,602
as he makes the rounds
of his armies.
361
00:23:22,634 --> 00:23:24,941
The British Empire
was so powerful;
362
00:23:24,972 --> 00:23:26,446
they had a quarter of
the world's population.
363
00:23:26,478 --> 00:23:28,656
The other countries wanted
a piece of the cake.
364
00:23:28,688 --> 00:23:32,532
And Germany, in particular,
wanted a piece of the cake.
365
00:23:34,742 --> 00:23:37,337
A lot of these
new capitalists
366
00:23:37,369 --> 00:23:40,316
are still, kind of, basically
feudal in their outlook.
367
00:23:40,348 --> 00:23:43,359
So particularly in Germany,
you have these Junkers
368
00:23:43,391 --> 00:23:45,152
that are these
big industrialists,
369
00:23:45,185 --> 00:23:47,043
but they also think there's
nothing better for society
370
00:23:47,074 --> 00:23:48,196
than a good fight.
371
00:23:56,588 --> 00:23:58,926
Britain and the Allied
powers take on Germany
372
00:23:58,958 --> 00:24:02,033
in what they think is going
to be a short, sharp shock
373
00:24:02,066 --> 00:24:03,635
over in a few months' time.
374
00:24:16,095 --> 00:24:20,228
Instead, it goes on for years
and decimates both populations.
375
00:24:35,058 --> 00:24:38,774
World War I is, at its base,
a fight over capital.
376
00:24:40,504 --> 00:24:44,284
And we see this massive
post-war economic crash.
377
00:24:46,590 --> 00:24:49,024
So, you have this new
idea after World War I,
378
00:24:49,057 --> 00:24:51,875
basically born out of the fact
that the government is bankrupt,
379
00:24:51,907 --> 00:24:55,367
that tax is not bad,
that it actually could be good.
380
00:24:55,398 --> 00:24:56,808
And the only way you're
going to get money
381
00:24:56,840 --> 00:24:59,146
is by taxing the aristocracy.
382
00:25:01,421 --> 00:25:03,887
There is nothing in the working
class and the middle class
383
00:25:03,919 --> 00:25:05,809
left to tax.
384
00:25:05,841 --> 00:25:09,204
So you see the beginning of
the drop in aristocratic power.
385
00:25:10,870 --> 00:25:14,042
And also what you see in the
'20s is the growth of the power
386
00:25:14,073 --> 00:25:16,540
of women and also
of the working classes...
387
00:25:16,572 --> 00:25:18,718
both of them, essentially,
are saying to the government,
388
00:25:18,750 --> 00:25:21,313
"Look, we worked really
hard for you in this war.
389
00:25:21,344 --> 00:25:24,164
We sacrificed. You need
to give us something back."
390
00:25:24,196 --> 00:25:27,366
So suddenly the whole principle
that the working classes
391
00:25:27,399 --> 00:25:30,954
and women must sit there and put
up with the way that society is,
392
00:25:30,987 --> 00:25:33,165
is completely
overturned in the '20s.
393
00:25:35,791 --> 00:25:37,585
All of the crowds
of the Empire City,
394
00:25:37,617 --> 00:25:39,731
the wonder city, the windy city,
the passion city,
395
00:25:39,763 --> 00:25:41,268
the people, yes.
396
00:25:44,407 --> 00:25:48,251
♪ Gone are my blues,
and gone are my tears ♪
397
00:25:48,284 --> 00:25:52,159
♪ I've got good news
to shout in your ears ♪
398
00:25:52,191 --> 00:25:55,715
♪ The long-lost dollar
has come back to the fold ♪
399
00:25:55,747 --> 00:25:58,822
♪ With silver, you can
turn your dreams to gold! ♪
400
00:25:58,854 --> 00:26:00,776
♪ Oh, we're in the money ♪
401
00:26:01,769 --> 00:26:03,499
♪ We're in the money ♪
402
00:26:03,531 --> 00:26:08,175
♪ Let's lend it, spend it,
send it rolling around ♪
403
00:26:08,208 --> 00:26:09,681
All of the crowd
get the big money...
404
00:26:09,713 --> 00:26:12,212
2 million, 5 million...
make a pile and raise a pile.
405
00:26:12,244 --> 00:26:14,550
The '20s was maybe
irrational exuberance.
406
00:26:14,582 --> 00:26:16,567
Watch us grow!
What am I bid? Going up!
407
00:26:16,600 --> 00:26:18,362
There was a boom
in stock prices,
408
00:26:18,393 --> 00:26:21,822
but people kept bidding
into the stock market,
409
00:26:21,853 --> 00:26:25,568
because people always think
there's magic in Wall Street.
410
00:26:25,601 --> 00:26:28,420
You know, we have a mythology
in this country, in particular,
411
00:26:28,451 --> 00:26:30,790
that what's good for Wall Street
is good for Main Street,
412
00:26:30,822 --> 00:26:33,193
but that's really
never been true.
413
00:26:33,224 --> 00:26:36,139
♪ We're in the money,
I'll say we're in the money ♪
414
00:26:36,172 --> 00:26:39,919
♪ We've got a lot of what
it takes to get along ♪
415
00:26:39,951 --> 00:26:43,219
A lot of banks were selling
products that they knew
416
00:26:43,251 --> 00:26:45,973
were absolutely no good.
417
00:26:46,005 --> 00:26:50,553
There were dodgy bankers
doing dodgy deals knowingly.
418
00:26:50,586 --> 00:26:52,540
There weren't a lot of
regulations in place.
419
00:26:52,572 --> 00:26:55,487
It was a real free-for-all
of capital.
420
00:26:56,993 --> 00:26:59,170
The bubble of the 1920s
421
00:26:59,202 --> 00:27:01,669
was characteristic of
many other bubbles...
422
00:27:01,701 --> 00:27:03,943
a kind of euphoria that happens.
423
00:27:03,975 --> 00:27:06,441
Stocks go up, you can
borrow against that stock.
424
00:27:06,474 --> 00:27:08,204
You use that money
to buy more stock,
425
00:27:08,236 --> 00:27:12,816
the price goes up even more,
and everybody's feeling giddy.
426
00:27:19,350 --> 00:27:21,241
At the same time,
you've got tremendous
427
00:27:21,272 --> 00:27:23,771
dislocation going on
in the job market...
428
00:27:23,803 --> 00:27:25,373
a lot of people
getting very rich,
429
00:27:25,404 --> 00:27:27,167
but a lot of workers
at the bottom,
430
00:27:27,198 --> 00:27:29,248
not enough in the middle.
431
00:27:29,281 --> 00:27:34,117
Credit was then being offered to
kind of paper over that divide.
432
00:27:39,147 --> 00:27:42,830
That credit cycle
fed this bubble,
433
00:27:42,862 --> 00:27:45,681
and like every other bubble,
434
00:27:45,713 --> 00:27:46,802
it broke.
435
00:27:48,692 --> 00:27:50,166
This time around,
436
00:27:50,197 --> 00:27:53,401
a number of bankers
actually went to jail,
437
00:27:53,432 --> 00:27:55,963
and there really were some
regulatory changes, you know,
438
00:27:55,996 --> 00:27:58,398
like, in particular the
Glass-Steagall Depression-era
439
00:27:58,430 --> 00:28:00,352
legislation that actually
fixed the banking system
440
00:28:00,385 --> 00:28:04,484
and made it safer...
until it was overturned in 1989.
441
00:28:14,831 --> 00:28:18,065
After the financial crash,
countries all around the world
442
00:28:18,098 --> 00:28:20,788
also ended up getting
in a trade war.
443
00:28:20,820 --> 00:28:22,165
There were tariffs
that were imposed,
444
00:28:22,198 --> 00:28:24,055
and that created
a snowball cycle,
445
00:28:24,087 --> 00:28:26,553
which led to more pain globally,
446
00:28:27,964 --> 00:28:31,743
and that helped to provoke
the Great Depression.
447
00:28:35,005 --> 00:28:37,245
If you read John Steinbeck's
Grapes of Wrath,
448
00:28:37,285 --> 00:28:40,845
you realise the extent
of the shock caused by
449
00:28:40,885 --> 00:28:43,485
the complete collapse of
economic activity.
450
00:28:45,197 --> 00:28:46,446
They told me to
tell you to get off,
451
00:28:46,478 --> 00:28:47,983
and that's what I'm telling ya.
452
00:28:48,015 --> 00:28:49,873
You mean get off of my own land?
453
00:28:49,905 --> 00:28:51,891
Don't go to blaming me,
it ain't my fault.
454
00:28:51,923 --> 00:28:53,045
Whose fault is it?
455
00:28:53,076 --> 00:28:54,454
You know who owns the land...
456
00:28:54,486 --> 00:28:56,472
the Shawnee Land
and Cattle Company.
457
00:28:56,503 --> 00:28:58,329
And who's the Shawnee
Land and Cattle Company?
458
00:28:58,361 --> 00:29:00,220
It ain't nobody! It's a company.
459
00:29:00,251 --> 00:29:01,790
They got a president,
ain't they?
460
00:29:01,822 --> 00:29:04,255
They got somebody knows what
a shotgun's for, ain't they?!
461
00:29:04,287 --> 00:29:05,281
What's the use
of pickin' on him?
462
00:29:05,312 --> 00:29:07,042
He ain't nothin'
but the manager.
463
00:29:07,074 --> 00:29:08,900
And he's half crazy hisself
tryin' to keep up
464
00:29:08,932 --> 00:29:10,182
with his orders from the East.
465
00:29:10,213 --> 00:29:13,288
- Then who do we shoot?
- Brother, I don't know.
466
00:29:13,322 --> 00:29:15,018
If I did, I'd tell ya.
467
00:29:15,051 --> 00:29:16,973
I just don't know
who's to blame.
468
00:29:17,004 --> 00:29:19,151
I'm right here to tell you,
mister, there ain't nobody
469
00:29:19,183 --> 00:29:21,073
gonna push me off my land!
470
00:29:21,105 --> 00:29:24,532
My grandpa took up
this land 70 years ago.
471
00:29:24,563 --> 00:29:27,606
My pa was born here.
We was all born on it!
472
00:29:27,639 --> 00:29:30,041
And some of us was killed on it!
473
00:29:47,765 --> 00:29:49,925
Banks fail one after another,
474
00:29:49,965 --> 00:29:52,565
which results in
everyone losing their savings.
475
00:29:52,605 --> 00:29:56,045
And this decreases in
demand in other areas,
476
00:29:56,085 --> 00:29:58,125
causing a cascading phenomena
of bankruptcy and unemployment.
477
00:30:29,525 --> 00:30:32,885
The crisis of the 1930s creates
such a strong trauma
478
00:30:32,925 --> 00:30:35,965
that leads to the
public and politicians
479
00:30:36,365 --> 00:30:39,445
holding capitalism accountable.
480
00:31:10,430 --> 00:31:14,113
The pain in the United
States had become so great,
481
00:31:14,145 --> 00:31:19,526
so grave... absolute poverty...
and as a consequence of that,
482
00:31:19,559 --> 00:31:22,058
the willingness to
make political solutions
483
00:31:22,090 --> 00:31:24,683
that were severe.
484
00:31:24,716 --> 00:31:29,200
This nation is asking
for action and action now.
485
00:31:30,739 --> 00:31:34,230
Price-fixing, massive
change in labor rates...
486
00:31:34,261 --> 00:31:36,919
all of these things under FDR
487
00:31:36,952 --> 00:31:40,027
was something that Americans
hadn't seen before,
488
00:31:40,059 --> 00:31:42,974
and absolutely that led to
massive infrastructure build
489
00:31:43,006 --> 00:31:45,761
and it led to extraordinary
redistribution.
490
00:31:47,075 --> 00:31:49,093
The existence
of a communist alternative
491
00:31:49,125 --> 00:31:53,576
scared the capitalist world
into thinking that if it didn't
492
00:31:53,609 --> 00:31:56,685
at least address some of
the basic inequality issues,
493
00:31:56,717 --> 00:31:59,503
that they would lose
the battle for ideas.
494
00:32:05,334 --> 00:32:07,926
In the New Deal itself,
Roosevelt actually borrowed
495
00:32:07,959 --> 00:32:11,195
some ideas... the heavy state
involvement in the economy;
496
00:32:11,227 --> 00:32:13,340
heavy regulation.
497
00:32:15,455 --> 00:32:18,819
There was a clear recognition
that unless the state tried to
498
00:32:18,850 --> 00:32:20,580
do something about jobs
499
00:32:20,613 --> 00:32:24,584
and do enough redistribution
to keep people from starving,
500
00:32:24,616 --> 00:32:28,075
that you wouldn't have
basic social stability.
501
00:32:51,202 --> 00:32:53,253
The Wall Street crash
creates poverty in America,
502
00:32:53,286 --> 00:32:54,694
it creates poverty in Britain,
503
00:32:54,726 --> 00:32:56,583
but it has a massive
effect on Germany,
504
00:32:56,616 --> 00:33:00,491
because Germany is already poor.
After World War I,
505
00:33:00,523 --> 00:33:02,895
they were given these very
punitive reparations...
506
00:33:02,927 --> 00:33:05,745
they had to give huge amounts
of money to the other countries.
507
00:33:05,778 --> 00:33:08,243
And what you have is
this horrific inflation
508
00:33:08,275 --> 00:33:09,493
in the Weimar Republic...
509
00:33:09,526 --> 00:33:11,383
Germany as it was known in
the 1920s...
510
00:33:11,415 --> 00:33:13,112
in which, basically,
at one point,
511
00:33:13,144 --> 00:33:17,437
a whole barrel of banknotes
cannot buy you a loaf of bread.
512
00:33:20,640 --> 00:33:23,586
We can absolutely link, as tight
as that, the rise of fascism
513
00:33:23,619 --> 00:33:26,823
in Europe in the 1930s
and extreme poverty.
514
00:33:43,287 --> 00:33:45,177
And you can see
how seductive it is
515
00:33:45,209 --> 00:33:47,707
when someone like Adolf Hitler
comes up and says,
516
00:33:47,739 --> 00:33:50,975
"I'll make Germany great again.
We'll be powerful again."
517
00:33:51,006 --> 00:33:52,928
And really what he's saying is,
518
00:33:52,961 --> 00:33:55,844
"The reason why we're so poor in
Germany is because of Britain,
519
00:33:55,876 --> 00:34:00,360
is because of America, is
because of the rest of Europe."
520
00:34:12,084 --> 00:34:15,126
These downtrodden people
were so open, so vulnerable
521
00:34:15,159 --> 00:34:17,946
to the rise of fascism
and the call of racism,
522
00:34:17,978 --> 00:34:19,450
the call of exclusionism
523
00:34:19,482 --> 00:34:22,430
and the call of
invading other countries.
524
00:34:32,765 --> 00:34:36,165
We want to see no more
class divisions.
525
00:34:37,645 --> 00:34:40,045
We want to be one people.
526
00:34:40,565 --> 00:34:45,365
And you, my youth,
are to be this people.
527
00:34:49,111 --> 00:34:53,469
One American
airplane factory... one of many.
528
00:34:53,502 --> 00:34:56,288
One bomber...
thousands on the way...
529
00:34:57,824 --> 00:35:00,068
an angel of death.
530
00:35:00,100 --> 00:35:02,598
What really gets rid of
the Depression is transforming
531
00:35:02,629 --> 00:35:04,487
the economy into World War II.
532
00:35:04,519 --> 00:35:06,826
And the scale of this is just
something that humanity
533
00:35:06,859 --> 00:35:08,717
had never seen before.
534
00:35:11,471 --> 00:35:13,490
The governments of all
the societies involved
535
00:35:13,521 --> 00:35:15,604
just kind of take
over production,
536
00:35:15,635 --> 00:35:17,301
and this is an industrial war,
537
00:35:17,334 --> 00:35:20,408
so production is, kind of,
the terms under which,
538
00:35:20,440 --> 00:35:23,610
in the long run,
this will be won or lost.
539
00:35:29,858 --> 00:35:32,612
The labor movement
got a lot of political power.
540
00:35:32,645 --> 00:35:34,405
Like, if you're
producing for the war,
541
00:35:34,438 --> 00:35:39,081
you have to automatically
recognize a union.
542
00:35:39,114 --> 00:35:41,293
And then just also raising
the money to pay for that
543
00:35:41,325 --> 00:35:43,535
just involved raising taxes.
544
00:35:44,944 --> 00:35:47,860
This period was the
last gasp of feudalism,
545
00:35:47,891 --> 00:35:50,807
and it took this to finally
purge the influence
546
00:35:50,838 --> 00:35:54,042
of the aristocracy
in advanced countries.
547
00:37:21,365 --> 00:37:25,125
The wars themselves
are used to destroy capital.
548
00:37:26,885 --> 00:37:31,325
Firstly, there are bombings
that destroy entire cities.
549
00:37:31,365 --> 00:37:32,285
But at the same time,
550
00:37:32,325 --> 00:37:36,005
this only accounts for a third
of the total loss of capital.
551
00:37:37,765 --> 00:37:40,645
So where do the other
two-thirds come from?
552
00:37:40,685 --> 00:37:44,565
A third is from inflation that
destroys the public debt,
553
00:37:44,605 --> 00:37:48,765
which was lent by the
citizens to finance the war.
554
00:37:49,605 --> 00:37:52,845
And then there is a third
from new rules,
555
00:37:53,125 --> 00:37:54,685
like rent controls,
556
00:37:54,725 --> 00:37:56,565
nationalisations and
financial regulations.
557
00:37:58,285 --> 00:38:02,205
But this collapse of capital is
not necessarily a bad thing
558
00:38:02,245 --> 00:38:04,885
because the power relationships
within society are transformed.
559
00:38:12,356 --> 00:38:15,207
♪ Oh, give me land,
lots of land ♪
560
00:38:15,239 --> 00:38:17,865
♪ Under starry skies above ♪
561
00:38:17,897 --> 00:38:20,940
♪ Don't fence me in ♪
562
00:38:20,973 --> 00:38:24,015
♪ Let me ride through
the wide open country... ♪
563
00:38:24,285 --> 00:38:27,205
Everyone is equal
in the face of death.
564
00:38:28,285 --> 00:38:32,525
Wars, with their
death and despair,
565
00:38:32,765 --> 00:38:37,445
are also moments when
humanity is found in us all.
566
00:38:37,918 --> 00:38:42,273
♪ Let me be my myself
in the evening breeze ♪
567
00:38:42,306 --> 00:38:46,086
♪ Listen to the murmur
of the cottonwood trees... ♪
568
00:38:46,885 --> 00:38:50,645
This new political context
will ultimately lead
569
00:38:51,045 --> 00:38:54,965
to a realisation of the spirit
of the Enlightenment
570
00:38:55,925 --> 00:38:58,085
and of equality proclaimed
in the 18th century.
571
00:38:58,642 --> 00:39:07,739
♪ Don't fence me in ♪
572
00:39:10,974 --> 00:39:13,601
The social landscape
is completely different
573
00:39:13,633 --> 00:39:15,331
in the aftermath
of World War II.
574
00:39:15,363 --> 00:39:18,630
You see the biggest shift in
attitudes that you ever see.
575
00:39:18,662 --> 00:39:21,064
Bit different from
what it used to be,
576
00:39:21,097 --> 00:39:22,410
I can tell ya.
577
00:39:24,908 --> 00:39:27,471
There will be sickness
and unemployment benefits,
578
00:39:27,503 --> 00:39:30,066
retirement pensions,
industrial injuries benefits,
579
00:39:30,098 --> 00:39:32,789
guardians allowances, widows'
benefits, maternity grants.
580
00:39:32,820 --> 00:39:35,126
It's a move towards
creating a benefit system.
581
00:39:35,159 --> 00:39:37,625
We have the idea
of sickness pay, holiday pay.
582
00:39:37,657 --> 00:39:39,707
In Britain they created
the National Health Service...
583
00:39:39,739 --> 00:39:42,366
free service from
cradle to grave.
584
00:39:49,926 --> 00:39:52,264
It's a move towards
nationalization of industry,
585
00:39:52,296 --> 00:39:54,249
it's a move towards
taxation of inheritance,
586
00:39:54,282 --> 00:39:56,140
taxation of property and wealth.
587
00:39:56,171 --> 00:39:58,862
I'm telling you,
it works out fine.
588
00:39:58,895 --> 00:40:00,720
Television, with its
promise of endless hours
589
00:40:00,752 --> 00:40:04,757
of enjoyment, entertainment,
was part of the peacetime green.
590
00:40:04,788 --> 00:40:08,280
Television... an unparalleled
blending of private incentive
591
00:40:08,311 --> 00:40:10,682
and public service.
592
00:40:10,714 --> 00:40:12,124
In America
in the '50s,
593
00:40:12,155 --> 00:40:13,854
you see capital restrained also.
594
00:40:13,885 --> 00:40:15,999
You have rent controls
on apartments,
595
00:40:16,032 --> 00:40:17,793
you have limits on landowners.
596
00:40:17,825 --> 00:40:20,324
Capital can't just roam free,
it can't just increase itself.
597
00:40:20,356 --> 00:40:23,591
Capital must be harnessed
like some wild horse.
598
00:40:23,623 --> 00:40:25,961
This is the land
of the thoroughbred.
599
00:40:25,994 --> 00:40:28,781
There is a very clear
vision that capital needs to be
600
00:40:28,812 --> 00:40:31,407
helping the people, that
actually the whole principle
601
00:40:31,439 --> 00:40:33,745
in which the rich do whatever
they want with their capital
602
00:40:33,777 --> 00:40:35,347
and that's good for the nation,
603
00:40:35,379 --> 00:40:37,845
well, that's being challenged
across the world.
604
00:40:37,878 --> 00:40:40,248
♪ I wish I had
a castle in the sky ♪
605
00:40:41,945 --> 00:40:45,661
♪ A way up high where
bluebirds like to fly ♪
606
00:40:45,693 --> 00:40:48,992
The new vision is that the '50s
is going to be the age in which
607
00:40:49,024 --> 00:40:50,530
everyone can have wealth.
608
00:40:50,562 --> 00:40:52,484
♪ ...with a hundred
rooms or more... ♪
609
00:40:52,516 --> 00:40:53,893
...some day...
610
00:40:53,925 --> 00:40:56,840
♪ With stars for windows,
clouds for rugs ♪
611
00:40:56,872 --> 00:40:59,179
♪ A rainbow for a door ♪
612
00:40:59,211 --> 00:41:02,062
People who are born
just after World War II
613
00:41:02,094 --> 00:41:05,360
had a life that no child
before them could ever imagine.
614
00:41:05,393 --> 00:41:07,924
I just wish
I had a decent kitchen.
615
00:41:11,799 --> 00:41:13,048
For the first time,
616
00:41:13,081 --> 00:41:15,899
hard work and study
can get you to the top.
617
00:41:19,487 --> 00:41:21,313
- Hello, Mrs. Thatcher.
- Nice to see you.
618
00:41:21,344 --> 00:41:24,196
Have a seat.
619
00:41:26,053 --> 00:41:29,065
My father left school
at 12 or 13,
620
00:41:29,096 --> 00:41:30,826
and didn't have some
of the chances
621
00:41:30,858 --> 00:41:33,324
that you and I have
to go on to college.
622
00:41:33,357 --> 00:41:35,759
And I think you'll find
when you're a parent,
623
00:41:35,791 --> 00:41:38,994
what you're always trying to do
is to give your children
624
00:41:39,027 --> 00:41:41,461
the sort of chances
you didn't have.
625
00:41:41,493 --> 00:41:44,151
Would you like to see
a woman prime minister?
626
00:41:44,184 --> 00:41:46,522
I think it depends upon
who the person is.
627
00:41:46,554 --> 00:41:49,405
I don't think that there will
be a woman prime minister
628
00:41:49,437 --> 00:41:51,102
in my lifetime.
629
00:41:52,543 --> 00:41:54,242
What you see in
Margaret Thatcher's life
630
00:41:54,273 --> 00:41:56,804
is incredible social mobility.
631
00:41:56,837 --> 00:41:58,822
An ordinary shopkeeper's
daughter from the North,
632
00:41:58,854 --> 00:42:01,225
she went to grammar school,
she went to Oxford,
633
00:42:01,256 --> 00:42:03,370
and became the first
female prime minister,
634
00:42:03,403 --> 00:42:04,556
and, of course, wealthy.
635
00:42:04,588 --> 00:42:07,214
And that is simply
through this new society
636
00:42:07,247 --> 00:42:10,802
in which social mobility
was actually possible.
637
00:42:10,834 --> 00:42:14,037
And what you have is this real
surge of the middle classes
638
00:42:14,070 --> 00:42:16,440
and the lower middle classes
into positions of power.
639
00:42:23,645 --> 00:42:26,045
If you look at the
development of inequality
640
00:42:26,085 --> 00:42:29,645
through the 20th century,
the most striking transformation
641
00:42:29,685 --> 00:42:34,605
is the growth of an
extremely strong middle class.
642
00:42:35,965 --> 00:42:39,365
Until 1914, the
middle class doesn't exist.
643
00:42:40,085 --> 00:42:43,205
Or more accurately, they're
almost as poor as the poorest.
644
00:42:47,085 --> 00:42:49,125
The decades after the war -
645
00:42:49,165 --> 00:42:51,765
30 years that saw glorious
economic growth -
646
00:42:51,805 --> 00:42:55,925
are marked by a steep increase
in purchasing power,
647
00:42:56,365 --> 00:42:59,645
especially for lower and
middle-class workers
648
00:42:59,685 --> 00:43:04,445
who can buy consumer goods,
improve their standard of living
649
00:43:04,485 --> 00:43:08,405
and save money to buy
a house and acquire capital.
650
00:43:08,909 --> 00:43:10,318
And we'll have the
kitchen right here,
651
00:43:10,350 --> 00:43:12,720
so we can see the children
playing in the yard.
652
00:43:12,752 --> 00:43:14,738
Children?! How many
you planning on?
653
00:43:14,770 --> 00:43:16,692
Not more than six, I hope.
654
00:43:20,725 --> 00:43:25,165
They're a group who are neither
very rich nor completely poor,
655
00:43:25,205 --> 00:43:27,965
but still have a substantial
share of national capital.
656
00:43:40,605 --> 00:43:42,005
But in recent decades,
657
00:43:42,045 --> 00:43:45,445
the share of wealth
owned by the middle class
658
00:43:45,485 --> 00:43:48,485
has started to decline
sharply in the US
659
00:43:48,765 --> 00:43:50,365
and a little less
sharply in Europe.
660
00:43:54,405 --> 00:43:57,325
Clearly we've taken
a very different direction,
661
00:43:57,365 --> 00:44:01,125
which can be quite disturbing if
we look into the 21st century.
662
00:44:03,445 --> 00:44:06,045
One of the greatest
challenges for the future
663
00:44:06,085 --> 00:44:09,005
is whether the middle class
will continue to shrink,
664
00:44:09,045 --> 00:44:11,605
with the risk of returning to an
impoverished middle class
665
00:44:11,645 --> 00:44:14,165
like we had a century ago.
666
00:44:27,227 --> 00:44:29,693
The decades
immediately after World War II
667
00:44:29,725 --> 00:44:31,647
were quite remarkable.
668
00:44:32,864 --> 00:44:35,458
There was a high degree
of social consensus
669
00:44:35,491 --> 00:44:39,110
that really sprang out
of the whole war effort.
670
00:44:40,584 --> 00:44:43,532
It was so...
You had a solidarity,
671
00:44:43,564 --> 00:44:47,376
but it was on the basis of
a pretty stratified society.
672
00:44:48,976 --> 00:44:50,898
There were other forms
of inequality that existed
673
00:44:50,930 --> 00:44:52,628
in that period.
674
00:44:52,660 --> 00:44:54,870
But that began to change
after the civil rights movement
675
00:44:54,902 --> 00:44:58,361
in the 1960s and then all
of the other social movements
676
00:44:58,394 --> 00:45:00,220
that occurred thereafter.
677
00:45:00,251 --> 00:45:02,173
- ♪ You better think ♪
- ♪ Think! ♪
678
00:45:02,205 --> 00:45:04,031
♪ Think about what
you're trying to do to me ♪
679
00:45:04,063 --> 00:45:07,138
The negro still is not free.
680
00:45:07,170 --> 00:45:08,549
♪ ...let yourself be free ♪
681
00:45:08,580 --> 00:45:10,918
- ♪ Oh, freedom ♪
- ♪ Freedom! ♪
682
00:45:10,950 --> 00:45:12,872
- ♪ Some freedom ♪
- ♪ Freedom! ♪
683
00:45:12,904 --> 00:45:14,730
♪ Oh, freedom ♪
684
00:45:14,762 --> 00:45:17,100
♪ Yeah, freedom! ♪
685
00:45:17,133 --> 00:45:19,055
I think that,
politically,
686
00:45:19,087 --> 00:45:22,353
having a broad middle class
is quite important.
687
00:45:22,385 --> 00:45:24,275
It's part of what's
called modernization
688
00:45:24,307 --> 00:45:26,262
through this idea that
as your income rises,
689
00:45:26,293 --> 00:45:29,465
you develop a middle class
that are better educated,
690
00:45:29,497 --> 00:45:33,502
and therefore they will demand
a higher level of participation.
691
00:45:33,534 --> 00:45:36,159
- ♪ Oh, freedom ♪
- ♪ Freedom! ♪
692
00:45:36,192 --> 00:45:37,953
- ♪ Some freedom ♪
- ♪ Freedom! ♪
693
00:45:37,985 --> 00:45:41,060
♪ Oh, freedom!
Yeah, freedom! ♪
694
00:45:41,093 --> 00:45:43,590
We have
been victims for so long.
695
00:45:43,623 --> 00:45:45,577
- ♪ Freedom ♪
- ♪ Oh, freedom ♪
696
00:45:45,608 --> 00:45:48,395
- ♪ Freedom ♪
- ♪ Give me some freedom ♪
697
00:45:48,428 --> 00:45:51,342
♪ Oh, freedom! ♪
698
00:45:51,374 --> 00:45:54,417
- ♪ Whoo! To the ball, baby ♪
- ♪ To the ball ♪
699
00:45:55,955 --> 00:45:59,030
Then that kind of all
unravels in the '70s.
700
00:45:59,062 --> 00:46:02,745
This is NBC Nightly
News, Wednesday October 17th.
701
00:46:02,778 --> 00:46:05,245
Good evening. The Middle East
war produced developments
702
00:46:05,277 --> 00:46:07,103
all over the world today.
703
00:46:07,135 --> 00:46:09,632
The oil-producing countries
of the Arab world
704
00:46:09,665 --> 00:46:12,452
decided to use their oil
as a political weapon.
705
00:46:12,484 --> 00:46:14,214
There was an
announcement in Kuwait
706
00:46:14,245 --> 00:46:16,359
that prices for Arab oil
were going up...
707
00:46:16,392 --> 00:46:19,306
a huge increase voted
in an overnight meeting
708
00:46:19,338 --> 00:46:22,862
until Israeli forces leave
occupied Arab land.
709
00:46:27,347 --> 00:46:30,806
This oil shock hits
all of the advanced economies,
710
00:46:30,838 --> 00:46:33,433
and oil was an input
into everything.
711
00:46:34,907 --> 00:46:36,989
It was announced
today that gasless Sundays
712
00:46:37,021 --> 00:46:39,871
will go into effect
as of next month.
713
00:46:39,904 --> 00:46:41,537
The price
of foreign oil
714
00:46:41,569 --> 00:46:44,099
had jumped from $3
to $12 a barrel.
715
00:46:45,637 --> 00:46:49,288
Quadrupling the price of
oil translated into this period
716
00:46:49,322 --> 00:46:51,883
where, like, prices
started to increase
717
00:46:51,915 --> 00:46:54,894
and wages weren't keeping pace,
718
00:46:54,926 --> 00:46:57,137
but then unions and workers
started demanding
719
00:46:57,169 --> 00:47:00,436
even higher wages to
keep pace with prices,
720
00:47:00,467 --> 00:47:02,678
and then what firms would do
is then increase prices
721
00:47:02,710 --> 00:47:05,786
even further to pass on
the effects of wages,
722
00:47:05,817 --> 00:47:09,437
and so you got what's
called a wage-price spiral.
723
00:47:09,469 --> 00:47:13,760
And so you had this period of
high inflation and low growth,
724
00:47:13,793 --> 00:47:16,868
so that's why it got
called stagflation.
725
00:47:24,877 --> 00:47:26,895
Globalization
is starting to happen.
726
00:47:26,927 --> 00:47:30,225
The emerging markets are
coming online in the world.
727
00:47:30,257 --> 00:47:31,604
Europe is back on its feet,
728
00:47:31,636 --> 00:47:33,526
Germany is becoming
a producer again,
729
00:47:33,558 --> 00:47:36,151
a number of European nations
are becoming more competitive.
730
00:47:40,188 --> 00:47:41,853
The global
picture is changing.
731
00:47:41,885 --> 00:47:43,967
American capital
suddenly doesn't have
732
00:47:43,999 --> 00:47:45,536
the world to itself anymore.
733
00:47:45,568 --> 00:47:47,587
♪ Tumble outta bed and I
stumble to the kitchen ♪
734
00:47:47,619 --> 00:47:49,830
♪ Pour myself
a cup of ambition... ♪
735
00:47:49,862 --> 00:47:52,231
But another thing
that's happening in the 1970s
736
00:47:52,263 --> 00:47:55,595
is you see a very kind
of siloed, financialized
737
00:47:55,628 --> 00:47:58,574
way of thinking about how to run
a corporate balance sheet...
738
00:47:58,607 --> 00:48:00,912
cut costs,
marshal your capital,
739
00:48:00,943 --> 00:48:03,251
treat labor as a cost,
not an asset.
740
00:48:03,283 --> 00:48:05,365
♪ Working 9 to 5 ♪
741
00:48:05,397 --> 00:48:07,863
♪ What a way to make a living ♪
742
00:48:07,895 --> 00:48:09,881
♪ Barely gettin' by ♪
743
00:48:09,913 --> 00:48:12,092
♪ It's all takin'
and no givin' ♪
744
00:48:12,124 --> 00:48:14,014
♪ They just use your mind ♪
745
00:48:14,046 --> 00:48:16,416
♪ And you never get the credit ♪
746
00:48:16,447 --> 00:48:20,323
♪ It's enough to drive you
crazy if you let it ♪
747
00:48:20,356 --> 00:48:22,309
Companies are not
investing in their workers,
748
00:48:22,341 --> 00:48:23,623
they're not raising wages,
749
00:48:23,655 --> 00:48:25,928
so you start to really
get that big 'X'
750
00:48:25,961 --> 00:48:29,709
where Wall Street's going here,
Main Street's going down here.
751
00:48:29,741 --> 00:48:31,919
♪ It's a rich man's game ♪
752
00:48:31,950 --> 00:48:33,841
♪ No matter what they call it ♪
753
00:48:33,872 --> 00:48:38,677
♪ And you spend your life
puttin' money in his wallet ♪
754
00:48:38,710 --> 00:48:39,960
♪ 9 to 5... ♪
755
00:48:43,194 --> 00:48:45,437
Germany and Japan
took a different model...
756
00:48:45,469 --> 00:48:47,934
a model in which workers sat
on the boards of companies,
757
00:48:47,967 --> 00:48:50,049
had more of a say.
758
00:48:50,081 --> 00:48:52,196
This actually gave them
a big advantage.
759
00:48:52,229 --> 00:48:53,861
They were able to use
that expertise
760
00:48:53,893 --> 00:48:55,175
and increase their efficiency,
761
00:48:55,207 --> 00:48:57,865
and eventually gain market share
from US companies.
762
00:48:59,562 --> 00:49:02,862
When it started,
America was unprepared.
763
00:49:02,895 --> 00:49:04,784
From across the ocean,
they came...
764
00:49:04,817 --> 00:49:09,236
little cars determined to change
the buying habits of a nation.
765
00:49:09,269 --> 00:49:11,991
It's a great-looking car.
What do you call it?
766
00:49:12,023 --> 00:49:14,137
- Isuzu.
- Gesundheit.
767
00:49:14,169 --> 00:49:16,059
Road-hugging, heart-pounding,
768
00:49:16,091 --> 00:49:18,077
hood-soaring, deck-sloping...
769
00:49:18,110 --> 00:49:20,288
♪ We are... ♪
770
00:49:20,320 --> 00:49:23,075
♪ Cadillacs drive Subaru ♪
771
00:49:23,107 --> 00:49:25,157
Reagan for president.
772
00:49:26,629 --> 00:49:28,873
Japanese production
of automobiles is almost
773
00:49:28,904 --> 00:49:32,685
twice as great per worker
as it is in America.
774
00:49:32,717 --> 00:49:35,118
We were once the greatest
producer of automobiles,
775
00:49:35,150 --> 00:49:38,578
producing more than all the
rest of the world combined.
776
00:49:38,610 --> 00:49:40,308
That is no longer true.
777
00:49:40,485 --> 00:49:43,725
Every country feels the
need to tell a story about
778
00:49:43,765 --> 00:49:48,085
why it's richer than another
or why it has become poorer.
779
00:49:48,565 --> 00:49:52,565
And it's this story that
Reagan and Thatcher tell
780
00:49:53,005 --> 00:49:55,565
the American and British public.
781
00:49:55,907 --> 00:49:58,438
Thank you very much.
782
00:50:00,457 --> 00:50:03,532
Can anyone look at our reduced
standing in the world today
783
00:50:03,563 --> 00:50:06,926
and say, "Let's have four
more years of this"?
784
00:50:06,958 --> 00:50:09,680
No!
785
00:50:09,712 --> 00:50:12,852
For those who've abandoned hope,
we'll restore hope
786
00:50:12,885 --> 00:50:15,478
and we'll welcome them
into a great national crusade
787
00:50:15,510 --> 00:50:19,579
to make America great again.
788
00:50:20,285 --> 00:50:22,645
In the United States
there was a feeling
789
00:50:22,685 --> 00:50:25,005
that Germany was catching up,
790
00:50:25,045 --> 00:50:26,885
that Japan was catching up -
791
00:50:26,925 --> 00:50:29,445
these countries
that lost the war.
792
00:50:29,485 --> 00:50:33,405
And Reagan, and also
Thatcher to a certain extent,
793
00:50:33,445 --> 00:50:36,525
use this ideological
argument to say,
794
00:50:36,565 --> 00:50:38,845
"Look, these countries
are catching up.
795
00:50:38,885 --> 00:50:42,565
"Something needs to change.
What could we change?
796
00:50:42,605 --> 00:50:45,525
"Ah, it's because
of the welfare state
797
00:50:46,245 --> 00:50:49,365
"that was put in place
following the New Deal.
798
00:50:49,405 --> 00:50:51,245
"That's what's made us soft.
799
00:50:51,285 --> 00:50:53,845
"And so we must return to
the mythical capitalism
800
00:50:53,885 --> 00:50:57,325
"of the 19th century. That's how
we're going to re-energise."
801
00:51:00,068 --> 00:51:02,246
Here comes
the Prime Ministerial Rover,
802
00:51:02,278 --> 00:51:04,455
bearing now Mrs. Thatcher.
803
00:51:04,487 --> 00:51:05,961
Enter Margaret Thatcher,
804
00:51:05,994 --> 00:51:08,940
a grocer's daughter educated
among the privileged classes
805
00:51:08,973 --> 00:51:10,350
at Oxford University.
806
00:51:12,721 --> 00:51:15,700
There is now work to be done.
807
00:51:15,731 --> 00:51:18,102
In deciding that, actually,
what we need to do
808
00:51:18,134 --> 00:51:22,330
is increase the value of assets
in order to increase investment,
809
00:51:22,362 --> 00:51:24,861
some of the thinking
behind what would happen
810
00:51:24,893 --> 00:51:28,000
when you let capital free,
811
00:51:28,032 --> 00:51:30,946
you had to suppress
the power of labor.
812
00:51:34,758 --> 00:51:38,024
This 12-foot-high pile
is part of two weeks' rubbish
813
00:51:38,057 --> 00:51:40,139
piled outside the
local refuse depot.
814
00:51:40,172 --> 00:51:41,389
Like others in Central London,
815
00:51:41,421 --> 00:51:43,119
it's been closed
now for two weeks
816
00:51:43,151 --> 00:51:44,880
because of the dustmen's
indefinite strike.
817
00:51:44,911 --> 00:51:46,802
The teachers' union
are today putting forward
818
00:51:46,833 --> 00:51:50,006
a pay claim. 33,000 school
children are out of school
819
00:51:50,038 --> 00:51:52,183
in the worst-affected London
borough of Haringey.
820
00:51:52,216 --> 00:51:53,560
Cancelled operations
821
00:51:53,593 --> 00:51:55,547
meant empty beds
up on the wards,
822
00:51:55,579 --> 00:51:57,757
which would otherwise
have been used.
823
00:51:57,790 --> 00:51:59,551
You have to remember,
at those times,
824
00:51:59,583 --> 00:52:03,556
there were issues about strikes;
the public were upset about
825
00:52:03,587 --> 00:52:07,399
the way some labor unions
were acting in that time.
826
00:52:07,431 --> 00:52:09,929
I'm going to boil everything
because the sewage men,
827
00:52:09,962 --> 00:52:12,268
I understand,
are still on strike,
828
00:52:12,300 --> 00:52:16,080
and so it'll be polluted,
so you can get typhoid,
829
00:52:16,111 --> 00:52:17,906
can't you?
830
00:52:17,937 --> 00:52:19,892
There was a mandate
to do something about
831
00:52:19,924 --> 00:52:22,006
the power of labor
against capital.
832
00:52:22,038 --> 00:52:24,760
And it certainly is a tricky job
trying to get that right.
833
00:52:24,793 --> 00:52:28,380
This government has rolled back
the frontiers of the state
834
00:52:28,412 --> 00:52:31,487
and will roll them back
still further.
835
00:52:31,519 --> 00:52:34,178
Millions have already
become shareholders
836
00:52:34,210 --> 00:52:38,214
in British Gas, British Airways,
British airports.
837
00:52:48,592 --> 00:52:49,809
Attention, all passengers.
838
00:52:49,841 --> 00:52:53,397
Flight 307 is cancelled
until further notice.
839
00:52:53,430 --> 00:52:55,479
This incredible
hostility to unions
840
00:52:55,511 --> 00:52:58,394
starts in the '80s
and is really crystallized
841
00:52:58,426 --> 00:53:03,135
when Reagan fires all
these air traffic controllers.
842
00:53:03,167 --> 00:53:05,568
I must tell those
who fail to report for duty
843
00:53:05,600 --> 00:53:09,958
this morning, if they do not
report for work within 48 hours,
844
00:53:09,990 --> 00:53:14,602
they have forfeited their jobs
and will be terminated.
845
00:53:14,634 --> 00:53:16,300
End of statement.
846
00:53:16,332 --> 00:53:18,670
That's kind of
seen as like a greenlight
847
00:53:18,702 --> 00:53:20,464
to a whole industry.
848
00:53:22,290 --> 00:53:25,077
Good evening. This afternoon,
President Reagan started firing
849
00:53:25,109 --> 00:53:27,864
the strikers, and the government
claimed it was ready to rebuild
850
00:53:27,895 --> 00:53:29,657
the whole system without them.
851
00:53:34,045 --> 00:53:35,775
By this evening,
federal judges had sent
852
00:53:35,808 --> 00:53:38,338
five local union leaders
to jail.
853
00:53:45,257 --> 00:53:47,851
What we've seen over
time... and this is fundamental
854
00:53:47,884 --> 00:53:50,894
to understanding why
inequality has worsened...
855
00:53:50,927 --> 00:53:54,771
is that the share of all the
money that's made in the economy
856
00:53:54,802 --> 00:53:57,525
is going less and less to the
workers, so that is declining...
857
00:53:57,558 --> 00:53:59,703
the wage share...
858
00:53:59,736 --> 00:54:03,194
and the profit share,
essentially what those that own
859
00:54:03,226 --> 00:54:05,661
the capital will get,
is growing.
860
00:54:07,998 --> 00:54:11,811
And that is essentially
about power.
861
00:54:13,830 --> 00:54:16,583
Well, I, uh... I appreciate the
opportunity you're giving me,
862
00:54:16,615 --> 00:54:19,819
Mr. Cromwell, as the single
largest shareholder
863
00:54:19,852 --> 00:54:21,838
in Teldar Paper, to speak.
864
00:54:24,336 --> 00:54:26,898
America has become
a second-rate power.
865
00:54:28,276 --> 00:54:29,685
Now, in the days
of the free market,
866
00:54:29,718 --> 00:54:32,919
when our country was
a top industrial power,
867
00:54:32,952 --> 00:54:36,444
there was accountability
to the stockholder.
868
00:54:36,476 --> 00:54:38,046
The Carnegies, the Mellons,
869
00:54:38,077 --> 00:54:40,736
the men that built this
great industrial empire,
870
00:54:40,768 --> 00:54:44,419
made sure of it because it
was their money at stake.
871
00:54:45,637 --> 00:54:47,623
The point is,
ladies and gentlemen,
872
00:54:47,655 --> 00:54:51,595
that greed... for lack
of a better word...
873
00:54:51,628 --> 00:54:53,421
is good.
874
00:54:53,453 --> 00:54:55,247
Greed is right.
875
00:54:55,278 --> 00:54:57,265
Greed works.
876
00:54:57,296 --> 00:54:58,995
And greed...
877
00:54:59,635 --> 00:55:01,782
you mark my words...
878
00:55:01,813 --> 00:55:04,023
will not only save Teldar Paper,
879
00:55:04,056 --> 00:55:07,931
but that other malfunctioning
corporation called the USA.
880
00:55:07,964 --> 00:55:10,526
Thank you very much.
881
00:55:10,558 --> 00:55:12,704
When Gordon Gekko
was seen on film saying,
882
00:55:12,736 --> 00:55:17,220
"Greed is good," that was
intended to be a howl of protest
883
00:55:17,253 --> 00:55:18,726
against the system.
884
00:55:18,758 --> 00:55:21,609
But such had the
cultural fabric changed,
885
00:55:21,641 --> 00:55:24,140
that actually for some people
coming through universities
886
00:55:24,172 --> 00:55:26,158
applying to join
investment banks,
887
00:55:26,190 --> 00:55:28,912
that phrase "Greed is good"
actually became a license
888
00:55:28,945 --> 00:55:30,771
to pursue riches.
889
00:55:39,419 --> 00:55:42,205
The era of
the yuppie came to rule.
890
00:55:42,238 --> 00:55:45,025
♪ Friday night and
everyone's moving ♪
891
00:55:45,056 --> 00:55:49,317
♪ I can feel the heat, but it's
soothing, heading down ♪
892
00:55:49,349 --> 00:55:51,815
It began to become very
cool to be an entrepreneur,
893
00:55:51,847 --> 00:55:53,384
to be riding that boom,
894
00:55:53,417 --> 00:55:57,581
and the idea of arguing for
high taxes and redistribution
895
00:55:57,613 --> 00:55:59,663
began to seem
very out of fashion.
896
00:55:59,695 --> 00:56:02,418
- ♪ We're the kids in America ♪
- ♪ Whoa ♪
897
00:56:02,450 --> 00:56:05,237
- ♪ We're the kids in America ♪
- ♪ Whoa ♪
898
00:56:05,268 --> 00:56:08,407
♪ Everybody live for
the music-go-round ♪
899
00:56:10,682 --> 00:56:13,405
The new mantra of
deregulation took hold,
900
00:56:13,437 --> 00:56:17,281
and so financial services
were deregulated dramatically,
901
00:56:17,312 --> 00:56:19,138
bankers began to
get paid a lot more,
902
00:56:19,171 --> 00:56:20,804
and then market forces
were unleashed,
903
00:56:20,837 --> 00:56:23,911
which made capitalists
a lot richer.
904
00:56:25,385 --> 00:56:27,307
♪ Hot-shot... ♪
905
00:56:35,347 --> 00:56:38,582
The big reforms
of the Reagan-Thatcher era
906
00:56:38,614 --> 00:56:42,906
were lower the tax
rates on the rich
907
00:56:42,939 --> 00:56:46,654
on the assumption it would
trickle down. Didn't happen.
908
00:56:47,871 --> 00:56:50,018
When they adopted
these kinds of policies,
909
00:56:50,049 --> 00:56:53,829
it was very clear that they
would increase inequality.
910
00:56:53,862 --> 00:56:57,320
The promise was that
the pie would be bigger,
911
00:56:57,353 --> 00:57:01,164
you would be getting
a smaller percentage
912
00:57:01,197 --> 00:57:04,912
of a bigger pie, and your
slice would get bigger.
913
00:57:06,162 --> 00:57:08,084
So in some sense,
914
00:57:09,365 --> 00:57:11,639
there was no surprise
915
00:57:11,671 --> 00:57:13,689
that there was
a growth in inequality.
916
00:57:13,721 --> 00:57:16,572
But the magnitude of
the increase in inequality
917
00:57:16,604 --> 00:57:18,301
was much larger.
918
00:57:18,334 --> 00:57:21,537
When we look at the numbers,
we can see it very vividly.
919
00:57:21,569 --> 00:57:26,053
The bottom 90% have experienced
near-stagnation.
920
00:57:26,086 --> 00:57:30,122
Most of the growth
has gone to the top 10%.
921
00:57:30,153 --> 00:57:34,093
Median income for a typical
American household is roughly
922
00:57:34,126 --> 00:57:36,720
at the level it was
a quarter century ago.
923
00:57:36,752 --> 00:57:39,988
Real wages, adjusted for
inflation, at the bottom
924
00:57:40,019 --> 00:57:42,742
are at the level they were
60 years ago.
925
00:57:46,650 --> 00:57:50,110
In fact, life expectancy
has been declining.
926
00:57:51,582 --> 00:57:55,042
These are dramatic statistics
that shows the economy
927
00:57:55,074 --> 00:57:58,213
has not been working
for most Americans.
928
00:58:06,574 --> 00:58:09,649
By the 1990s, American banks
really became the exporters
929
00:58:09,681 --> 00:58:12,115
of American capitalism,
and they went everywhere...
930
00:58:12,148 --> 00:58:14,518
they went to Europe,
they went to Asia.
931
00:58:16,183 --> 00:58:19,996
And everyone was sold our
version of a trickle-down,
932
00:58:20,027 --> 00:58:23,102
laissez-faire
deregulate capitalism.
933
00:58:29,445 --> 00:58:33,256
Life seemed to get
better in the 1990s,
934
00:58:33,289 --> 00:58:35,755
because the globalization
of the system
935
00:58:35,787 --> 00:58:39,630
made things for ordinary
people for a while cheaper,
936
00:58:39,663 --> 00:58:42,033
but then on top of that,
you get credit.
937
00:58:45,204 --> 00:58:47,159
When the credit boom took off,
938
00:58:47,190 --> 00:58:49,689
suddenly ordinary people
could get credit.
939
00:58:49,721 --> 00:58:51,195
Master the moment.
940
00:58:51,227 --> 00:58:54,814
Suddenly, extraordinarily poor
people could get credit.
941
00:58:54,846 --> 00:58:56,800
- You can apply...
- ...right over the phone.
942
00:58:56,832 --> 00:58:59,619
People with terrible credit
histories could get credit.
943
00:58:59,651 --> 00:59:01,477
There is
absolutely no risk.
944
00:59:01,509 --> 00:59:04,584
People who in no way
should be given a mortgage
945
00:59:04,615 --> 00:59:07,371
could get a mortgage.
946
00:59:07,402 --> 00:59:10,222
And the investment banks
created ever more exotic
947
00:59:10,254 --> 00:59:14,834
credit derivatives... ways of
parceling up your bad debt
948
00:59:14,866 --> 00:59:17,397
and disguising its badness.
949
00:59:17,429 --> 00:59:21,368
That's what kept the system
going for as long as it did.
950
00:59:21,401 --> 00:59:23,323
And 2008 was where that blew up.
951
00:59:24,764 --> 00:59:27,134
Wall Street
in panic mode this morning.
952
00:59:27,167 --> 00:59:28,480
How did this happen?
953
00:59:28,512 --> 00:59:31,074
22% of homeowners are underwater
on their mortgage...
954
00:59:31,107 --> 00:59:32,324
Millions of American
homeowners...
955
00:59:32,356 --> 00:59:34,021
- Homeowners defaulting...
- Greed.
956
00:59:34,053 --> 00:59:36,583
The essence of the American
Dream could be threatened.
957
00:59:36,616 --> 00:59:39,018
- Sub-prime lending...
- Higher interest rates...
958
00:59:39,051 --> 00:59:41,709
Let's see here, uh,
balloon payment,
959
00:59:41,741 --> 00:59:44,464
37% interest compounded
every minute,
960
00:59:44,496 --> 00:59:46,545
not understanding
the contract fee,
961
00:59:46,578 --> 00:59:48,660
da, da, ba, da, ba, ba-da, bow.
962
00:59:48,692 --> 00:59:50,358
And here's your
new monthly payment.
963
00:59:51,575 --> 00:59:53,369
Listen, you, when
you gave me that money,
964
00:59:53,401 --> 00:59:56,252
you said I wouldn't have
to repay it till the future.
965
00:59:56,284 --> 00:59:59,135
This isn't the future!
It's the lousy, stinkin' now!
966
00:59:59,166 --> 01:00:04,036
Now, calm down. This country
takes care of its middle class.
967
01:00:07,623 --> 01:00:09,289
Ah, don't be sore at the banks.
968
01:00:09,320 --> 01:00:12,716
Hell, we fired our CEO and he
barely got out with $50 million.
969
01:00:14,446 --> 01:00:16,432
Banks are afraid
to lend money to each other.
970
01:00:16,464 --> 01:00:18,321
We're seeing a freezing
of the credit market.
971
01:00:18,354 --> 01:00:19,474
- ...credit markets.
- ...credit markets.
972
01:00:19,507 --> 01:00:21,012
The fear is rising.
973
01:00:21,044 --> 01:00:24,312
The fear was, and I think it was
a well-founded fear,
974
01:00:24,344 --> 01:00:27,579
that the availability of
credit would disappear,
975
01:00:27,610 --> 01:00:29,661
and perhaps our ability
to even transact,
976
01:00:29,693 --> 01:00:31,743
to even be able to access
cash to make payments,
977
01:00:31,775 --> 01:00:33,569
use a credit card,
use a debit card.
978
01:00:33,601 --> 01:00:35,940
Perhaps that would
break down also.
979
01:00:35,972 --> 01:00:38,470
Worst week
since the crash of 1929.
980
01:00:38,502 --> 01:00:40,231
- ...global sell-off.
- ...the Dow tumbled...
981
01:00:40,263 --> 01:00:42,506
- ...hoarding cash.
- Japan down nearly 10%.
982
01:00:42,537 --> 01:00:46,158
The British government
blamed American bankers.
983
01:00:46,189 --> 01:00:48,079
When it starts to unravel,
then you start to worry...
984
01:00:48,111 --> 01:00:50,355
how broadly will this
spread around the world
985
01:00:50,386 --> 01:00:53,173
and are we on the verge of
another Great Depression?
986
01:00:53,205 --> 01:00:57,304
American taxpayers woke up this
morning to learn their money
987
01:00:57,337 --> 01:00:58,617
makes up most of a...
988
01:00:58,650 --> 01:01:00,861
Big package, because
it was a big problem.
989
01:01:00,893 --> 01:01:02,558
Too big to fail.
990
01:01:02,590 --> 01:01:06,402
The Fed loaned
the banks some $7.7 trillion.
991
01:01:06,434 --> 01:01:09,092
Global markets soared at the
news of the US rescue plan.
992
01:01:09,125 --> 01:01:12,103
With the bail-out news,
the stock rebounded nearly 60%.
993
01:01:12,135 --> 01:01:14,314
...Hong Kong more than 8%.
London's FTSE...
994
01:01:14,346 --> 01:01:15,819
Stokes rose
15% in one hour...
995
01:01:15,851 --> 01:01:17,262
the largest single bounce
in FTSE history.
996
01:01:17,293 --> 01:01:19,535
Those companies
came to us and said,
997
01:01:19,566 --> 01:01:21,424
"Uh, if you don't
give us $700 billion,
998
01:01:21,457 --> 01:01:22,931
everything you love and
hold dear in this world
999
01:01:22,963 --> 01:01:25,205
will turn to."
1000
01:01:25,236 --> 01:01:29,048
And in return for this
in no way ransom money...
1001
01:01:30,393 --> 01:01:33,212
...the American people would now
be the proud owner
1002
01:01:33,245 --> 01:01:35,231
of these bales of.
1003
01:01:37,729 --> 01:01:41,093
The collapse didn't
occur. The system was preserved
1004
01:01:41,124 --> 01:01:44,168
and the opportunity to
substantially reform the system
1005
01:01:44,200 --> 01:01:46,634
was set aside. The stock
market went down sharply,
1006
01:01:46,665 --> 01:01:50,542
and then it came back up sharply
as a result of these measures.
1007
01:01:50,574 --> 01:01:53,040
In addition, wealthy people,
rich people,
1008
01:01:53,072 --> 01:01:54,675
have a lot of exposure
to the stock market,
1009
01:01:54,706 --> 01:01:57,140
so they kept their jobs,
they kept their bonuses,
1010
01:01:57,173 --> 01:01:58,870
the businesses they
were in were not
1011
01:01:58,902 --> 01:02:01,977
substantially disrupted,
and they made more money
1012
01:02:02,009 --> 01:02:03,643
through stock appreciation
1013
01:02:03,675 --> 01:02:05,565
and through dividends and
through expected dividends
1014
01:02:05,597 --> 01:02:07,775
than they had in the
last couple of years.
1015
01:02:07,806 --> 01:02:09,697
Bloomberg
estimates the banks made
1016
01:02:09,728 --> 01:02:12,452
a $13 billion profit
on the spread.
1017
01:02:12,484 --> 01:02:15,206
73 executives
from the unit that engineered
1018
01:02:15,238 --> 01:02:18,377
the company's downfall
all just got bonus checks
1019
01:02:18,410 --> 01:02:22,350
- worth a million or more.
- ...$1.6 billion in bonuses.
1020
01:02:23,823 --> 01:02:26,162
Wall Street and
the views of Wall Street
1021
01:02:26,193 --> 01:02:28,115
had taken over policy.
1022
01:02:29,749 --> 01:02:31,671
That's the quiet coup.
1023
01:02:38,557 --> 01:02:41,537
Democracies in
general are susceptible to this
1024
01:02:41,569 --> 01:02:43,491
capture by elites.
1025
01:02:45,606 --> 01:02:49,736
And unless the democracy
is renewed by the non-elites
1026
01:02:49,769 --> 01:02:51,851
every now and then rising up,
1027
01:02:51,883 --> 01:02:55,502
the democracy will continue
to move in this direction
1028
01:02:55,535 --> 01:03:00,692
where power and wealth are
more and more concentrated.
1029
01:03:00,724 --> 01:03:04,536
All across the world, you now
have this layer of oligarchs
1030
01:03:04,567 --> 01:03:08,347
that use their money
to buy political influence.
1031
01:03:13,965 --> 01:03:16,765
When you have too strong
a concentration of capital
1032
01:03:16,805 --> 01:03:21,205
it leads to excessive
influence over the media,
1033
01:03:21,245 --> 01:03:25,205
and also financing of political
campaigns and political parties
1034
01:03:25,245 --> 01:03:28,085
that are in their own
best interests.
1035
01:03:28,325 --> 01:03:33,085
But this logic of 'one dollar,
one vote' is completely opposed
1036
01:03:33,325 --> 01:03:37,165
to the democratic logic of
'one person, one vote'.
1037
01:03:49,701 --> 01:03:52,295
Rationally speaking,
it would make sense that
1038
01:03:52,327 --> 01:03:54,730
the more of something you have,
maybe the more inclined
1039
01:03:54,763 --> 01:03:57,550
you would be to share it
with other people.
1040
01:03:57,582 --> 01:04:00,912
But that's not what our research
and what a lot of other research
1041
01:04:00,943 --> 01:04:02,930
seems to find.
1042
01:04:02,962 --> 01:04:06,326
We brought strangers
into the lab in pairs of two;
1043
01:04:06,358 --> 01:04:08,088
with a flip of a coin determined
1044
01:04:08,120 --> 01:04:09,721
who was going to be
a rich player
1045
01:04:09,752 --> 01:04:12,060
and was going to
be a poor player.
1046
01:04:15,614 --> 01:04:19,170
The rich player got two times
as much money to play the game,
1047
01:04:19,202 --> 01:04:21,284
they got to roll both dice
instead of one,
1048
01:04:21,317 --> 01:04:23,270
so they got to move around
the board a lot quicker,
1049
01:04:23,302 --> 01:04:25,577
and that mattered because when
they moved around the board
1050
01:04:25,610 --> 01:04:27,244
and passed 'Go, '
1051
01:04:27,275 --> 01:04:30,702
they would collect $200,
whereas the poor person,
1052
01:04:30,733 --> 01:04:33,201
they'd collect $100.
1053
01:04:33,233 --> 01:04:35,219
The inequality's almost
immediately apparent
1054
01:04:35,251 --> 01:04:37,013
to the players.
How couldn't it be?
1055
01:04:37,045 --> 01:04:40,760
But within a couple of minutes,
dynamics start to crystallize.
1056
01:04:46,365 --> 01:04:49,377
And the rich player started
to behave a little differently.
1057
01:04:49,409 --> 01:04:51,138
Rich players become
more dominant.
1058
01:04:52,517 --> 01:04:55,718
Rich players eat more pretzels.
1059
01:04:55,751 --> 01:05:00,460
When moving their piece around
the board, they become louder.
1060
01:05:00,491 --> 01:05:03,952
They start smacking the
board with their piece.
1061
01:05:05,745 --> 01:05:08,308
And the rich players
were significantly ruder.
1062
01:05:10,389 --> 01:05:13,658
They were far more likely
to showcase and talk about
1063
01:05:13,689 --> 01:05:16,508
how well they're doing
1064
01:05:16,541 --> 01:05:20,320
and to belittle the plight
of those poor players.
1065
01:05:22,178 --> 01:05:25,093
So they became
less compassionate.
1066
01:05:25,125 --> 01:05:27,976
These are patterns that we're
observing consistently over
1067
01:05:28,008 --> 01:05:29,769
hundreds of different
individuals.
1068
01:05:31,691 --> 01:05:35,182
You see people who are winning
because of the flip of a coin
1069
01:05:35,214 --> 01:05:38,000
start to act as if they
actually deserve to win.
1070
01:05:41,044 --> 01:05:45,113
One of the questions we ask is
"Why did you win the game?"
1071
01:05:45,145 --> 01:05:47,131
And you can imagine the
rich players would say,
1072
01:05:47,163 --> 01:05:49,053
"Well, I won the game because
of that flip of the coin
1073
01:05:49,085 --> 01:05:52,415
and I had two times
the advantage."
1074
01:05:52,447 --> 01:05:56,483
But none... not one...
of the rich players
1075
01:05:56,516 --> 01:06:00,553
attributed their inevitable
success in this game
1076
01:06:00,584 --> 01:06:05,517
to that force of luck
that randomly got them
1077
01:06:05,550 --> 01:06:09,105
that privileged position
in the first place.
1078
01:06:10,706 --> 01:06:13,942
And when we watch patterns
of human interactions,
1079
01:06:13,974 --> 01:06:17,593
people who feel entitled and
deserving of their own success
1080
01:06:17,625 --> 01:06:20,700
are more willing to privilege
their own interests
1081
01:06:20,733 --> 01:06:22,494
above the interests
of other people
1082
01:06:22,526 --> 01:06:24,991
and often engage in
ways that undermine
1083
01:06:25,024 --> 01:06:28,388
other people's welfare
so that they can get ahead.
1084
01:06:28,421 --> 01:06:32,424
And that's a fairly pernicious
social consequence.
1085
01:06:34,154 --> 01:06:36,876
But it's not about
people who are rich,
1086
01:06:36,909 --> 01:06:40,463
but rather that the experience
of being relatively better off
1087
01:06:40,495 --> 01:06:43,410
than someone seems
to affect everyone,
1088
01:06:43,443 --> 01:06:45,877
or would affect everyone,
in the same way.
1089
01:06:47,286 --> 01:06:49,015
Yes, we won the lottery!
1090
01:06:54,462 --> 01:06:57,185
Peter, my God, what the
hell are you wearing?!
1091
01:06:57,217 --> 01:07:00,228
It's a solid gold tuxedo, Lois.
I had to fight three rappers
1092
01:07:00,260 --> 01:07:02,118
down at the Nonsense Store
for this.
1093
01:07:02,150 --> 01:07:03,943
Look, Peter,
this is not who we are.
1094
01:07:03,976 --> 01:07:05,898
I'm worried the money
is changing this family,
1095
01:07:05,930 --> 01:07:07,595
and not the way you hoped.
1096
01:07:07,627 --> 01:07:09,774
Well, I was hoping it would make
you shut up, so you're right.
1097
01:07:09,805 --> 01:07:12,721
When we, in experiments,
get actually poor people
1098
01:07:12,752 --> 01:07:15,154
or we make poor people
feel rich,
1099
01:07:15,186 --> 01:07:17,173
again, same pattern of results.
1100
01:07:17,205 --> 01:07:18,486
Lois, don't you understand?
1101
01:07:18,518 --> 01:07:20,408
We don't got any of our
old problems anymore.
1102
01:07:20,440 --> 01:07:22,041
We don't have to worry
about paying bills,
1103
01:07:22,074 --> 01:07:24,284
we don't have to worry
about saving dough.
1104
01:07:24,316 --> 01:07:26,718
All we gotta do is
enjoy ourselves.
1105
01:07:26,750 --> 01:07:28,608
Interested?
1106
01:07:30,114 --> 01:07:32,291
Oh my God!
1107
01:07:33,766 --> 01:07:36,745
Peter, it's beautiful.
Is it a blood diamond?
1108
01:07:36,776 --> 01:07:38,506
Ah, the bloodiest.
1109
01:07:38,538 --> 01:07:40,940
The two kids who found it were
forced to murder each other.
1110
01:07:40,972 --> 01:07:42,862
Oh, Peter, I love it!
1111
01:07:42,894 --> 01:07:46,162
We translate perceptions
and experiences
1112
01:07:46,194 --> 01:07:49,077
of being better off
than others materially
1113
01:07:49,109 --> 01:07:51,831
to being better than others.
1114
01:07:51,864 --> 01:07:54,009
The mind makes that
translation, it seems.
1115
01:08:08,935 --> 01:08:11,275
Once you get people
whose entire life is lived
1116
01:08:11,307 --> 01:08:14,605
on a kind of plane,
you know, in First Class,
1117
01:08:14,637 --> 01:08:16,880
in the bubble of
the security system,
1118
01:08:16,913 --> 01:08:19,123
and your villa in three
or four different countries
1119
01:08:19,155 --> 01:08:22,293
you can move to if things
get a bit unpleasant,
1120
01:08:22,325 --> 01:08:24,472
what happens to taxation?
1121
01:08:24,504 --> 01:08:28,508
What happens is large amounts
of wealth are moved offshore.
1122
01:08:33,152 --> 01:08:36,837
For decades, individuals
and companies have moved
1123
01:08:36,869 --> 01:08:40,840
their legal selves
in order to avoid paying tax
1124
01:08:40,873 --> 01:08:43,852
that benefits the people
who work for them.
1125
01:08:45,517 --> 01:08:47,887
So that when you come out
of the HQ of one of these
1126
01:08:47,919 --> 01:08:50,610
giant trendy IT companies,
1127
01:08:50,643 --> 01:08:53,333
you fall over,
you hit your head,
1128
01:08:53,365 --> 01:08:55,639
and you're lying on the pavement
in a pool of blood,
1129
01:08:55,671 --> 01:08:58,010
an ambulance arrives
1130
01:08:58,041 --> 01:09:00,731
that has not been paid for
in any way, shape or form
1131
01:09:00,763 --> 01:09:02,718
by the taxes of that company.
1132
01:09:04,705 --> 01:09:07,684
That's a very new system
in capitalism.
1133
01:09:09,510 --> 01:09:11,880
And it is unsustainable
1134
01:09:11,911 --> 01:09:14,153
because to make it work,
1135
01:09:14,185 --> 01:09:17,133
the state must have
access via taxation
1136
01:09:17,165 --> 01:09:19,439
to the incomes of the rich.
1137
01:09:23,187 --> 01:09:25,205
The EU has ordered
the Irish government
1138
01:09:25,237 --> 01:09:29,017
to recover almost $15 billion
of unpaid taxes from Apple.
1139
01:09:29,048 --> 01:09:31,739
$15 billion is
more than the four years
1140
01:09:31,771 --> 01:09:34,718
of annual austerity cuts
imposed by the Irish government.
1141
01:09:34,751 --> 01:09:37,409
Amazon's tax
benefits are illegal.
1142
01:09:37,441 --> 01:09:39,715
Facebook paid
less UK corporation tax
1143
01:09:39,748 --> 01:09:41,253
than your average teacher.
1144
01:09:41,285 --> 01:09:43,431
90,000 come from zero
corporation tax.
1145
01:09:43,463 --> 01:09:45,449
- Scrutinize...
- ...the rich avoiding taxes.
1146
01:09:45,481 --> 01:09:47,050
Google, Microsoft...
1147
01:09:47,083 --> 01:09:48,236
- McDonald's...
- Facebook...
1148
01:09:52,976 --> 01:09:55,155
It just works
much better for the holders
1149
01:09:55,186 --> 01:09:59,767
of capital than it does
for people on the ground.
1150
01:09:59,799 --> 01:10:02,554
In particular, the giant
cash-rich tech firms
1151
01:10:02,586 --> 01:10:05,661
can put people and money
wherever they want to put them.
1152
01:10:05,694 --> 01:10:10,306
They just fly 35,000 feet
above national concerns.
1153
01:10:10,338 --> 01:10:13,477
They create far fewer jobs
than big industrial companies
1154
01:10:13,509 --> 01:10:17,129
of the past, yet they
make vastly more money.
1155
01:10:24,496 --> 01:10:26,739
The great irony here is
that everything that makes
1156
01:10:26,770 --> 01:10:29,108
a smart phone smart...
1157
01:10:29,141 --> 01:10:31,511
the internet, GPS,
touchscreen technology...
1158
01:10:31,543 --> 01:10:35,194
all that was our taxpayer money
going into federal agencies
1159
01:10:35,227 --> 01:10:37,821
like DARPA that
created this stuff,
1160
01:10:37,854 --> 01:10:41,600
and yet the wealth doesn't
flow back into the ecosystem.
1161
01:10:41,633 --> 01:10:46,373
Irish guys pay a fee to
Google Netherlands Holding BV.
1162
01:10:46,405 --> 01:10:47,976
Is that to save withholding tax?
1163
01:10:48,007 --> 01:10:49,385
That's my understanding.
1164
01:10:49,417 --> 01:10:51,499
It therefore goes to
Google Holdings Ireland?
1165
01:10:51,531 --> 01:10:53,293
- That's correct.
- Which is registered in Ireland
1166
01:10:53,325 --> 01:10:55,118
but administered from Bermuda?
1167
01:10:55,151 --> 01:10:57,553
- That's correct.
- So if that happens,
1168
01:10:57,585 --> 01:10:59,379
your profits actually
go to Bermuda?
1169
01:11:01,013 --> 01:11:04,375
♪ All that money,
the money is the motive ♪
1170
01:11:04,408 --> 01:11:08,219
♪ All that money,
the money is the motive ♪
1171
01:11:08,252 --> 01:11:12,031
♪ All that money,
the money she be folding ♪
1172
01:11:12,063 --> 01:11:13,793
♪ Girl put in work ♪
1173
01:11:13,826 --> 01:11:15,875
♪ Girl, girl, put in work ♪
1174
01:11:15,907 --> 01:11:17,574
♪ Girl put in work ♪
1175
01:11:17,605 --> 01:11:19,719
♪ Girl, girl, put in work ♪
1176
01:11:19,751 --> 01:11:21,161
♪ Girl put in work... ♪
1177
01:11:21,285 --> 01:11:25,885
In 2015, Google Alphabet
reported making $15.5 billion
1178
01:11:25,925 --> 01:11:29,165
profit in Bermuda.
1179
01:11:29,805 --> 01:11:33,085
But nothing actually
happens in Bermuda.
1180
01:11:33,125 --> 01:11:35,485
This is the first way countries
1181
01:11:35,965 --> 01:11:38,605
steal the tax base from
each other.
1182
01:11:39,525 --> 01:11:43,845
The other way is through the
industry of wealth management,
1183
01:11:43,885 --> 01:11:46,965
which has developed
in many countries.
1184
01:11:47,005 --> 01:11:51,525
This industry sells shell
companies and numbered accounts
1185
01:11:51,565 --> 01:11:55,245
protected by bank secrecy
to wealthy families.
1186
01:11:56,300 --> 01:11:58,446
♪ All that money ♪
1187
01:11:58,478 --> 01:12:00,496
- ♪ The money is the motive ♪
- ♪ The money is the motive ♪
1188
01:12:00,528 --> 01:12:03,892
♪ All that money,
the money she be folding ♪
1189
01:12:03,923 --> 01:12:05,301
♪ Girl, put in work... ♪
1190
01:12:05,365 --> 01:12:08,205
You can't tax what you can't
measure.
1191
01:12:08,311 --> 01:12:09,465
♪ Girl put in work ♪
1192
01:12:09,497 --> 01:12:11,419
♪ Girl, girl, put in work ♪
1193
01:12:14,725 --> 01:12:18,285
And so we live in an
incredible statistical fog
1194
01:12:18,845 --> 01:12:23,045
about who owns wealth, who owns
real estate in New York,
1195
01:12:24,005 --> 01:12:25,205
who owns real estate in Paris.
1196
01:12:26,645 --> 01:12:28,925
We check the records
and we see shell companies.
1197
01:12:50,885 --> 01:12:56,245
The key to effectively fighting
tax havens is pretty simple.
1198
01:12:57,525 --> 01:12:59,805
We need sanctions
against territories
1199
01:12:59,845 --> 01:13:02,085
that enable tax evasion.
1200
01:13:02,125 --> 01:13:05,085
And we have to change
the way we calculate
1201
01:13:05,125 --> 01:13:07,685
taxable profits in each country.
1202
01:13:08,645 --> 01:13:10,525
Let's take Apple.
1203
01:13:10,565 --> 01:13:17,005
Imagine Apple made $50 billion
in global profits last year
1204
01:13:17,045 --> 01:13:21,205
and 10% of its worldwide
sales were in France.
1205
01:13:22,685 --> 01:13:28,725
Then France could say,
"10% of Apple's global profit,
1206
01:13:29,725 --> 01:13:33,005
"so $5 billion,
should be taxed in France."
1207
01:13:33,805 --> 01:13:36,325
The beauty of this
system is that
1208
01:13:36,365 --> 01:13:40,085
multinationals can manipulate
the location of their profits,
1209
01:13:40,125 --> 01:13:42,925
but they cannot manipulate
the location of their customers.
1210
01:13:42,965 --> 01:13:44,725
Their customers are
in France, in Germany,
1211
01:13:44,765 --> 01:13:46,205
in England,
in the United States.
1212
01:13:46,245 --> 01:13:48,125
You cannot send them to Bermuda.
1213
01:13:56,003 --> 01:13:58,886
Globalization has
opened a global community up
1214
01:13:58,918 --> 01:14:00,199
to each other,
1215
01:14:00,231 --> 01:14:03,563
but it's also meant that
in the developed world,
1216
01:14:03,595 --> 01:14:07,663
corporations were able
to take jobs and move them
1217
01:14:07,695 --> 01:14:10,226
and make a lot
of money out of it.
1218
01:14:12,308 --> 01:14:15,191
And on the other hand,
the working and middle classes
1219
01:14:15,222 --> 01:14:18,522
that were doing quite well
have lost quality of life
1220
01:14:18,554 --> 01:14:20,348
and opportunities.
1221
01:14:21,885 --> 01:14:25,697
And their governments
and their corporations
1222
01:14:25,729 --> 01:14:29,893
have done very little... in some
cases, really nothing at all...
1223
01:14:29,925 --> 01:14:31,847
to address that.
1224
01:14:35,275 --> 01:14:38,286
The United States and Europe
are vastly more divided
1225
01:14:38,317 --> 01:14:39,663
because of globalization.
1226
01:14:39,696 --> 01:14:43,122
India, The Philippines,
China are not.
1227
01:14:49,561 --> 01:14:53,629
Chinese people, they believe
that if they work hard,
1228
01:14:53,661 --> 01:14:55,422
their kids are gonna
have better lives,
1229
01:14:55,455 --> 01:14:57,184
and that's probably true.
1230
01:14:57,217 --> 01:14:59,811
But in the United States,
that's just not true anymore.
1231
01:15:06,314 --> 01:15:10,926
If you go to Beijing
or Shenzhen or Shanghai
1232
01:15:10,958 --> 01:15:13,585
or Guangzhou or
any of these sort of
1233
01:15:13,616 --> 01:15:16,147
wealthier cities in China
that have made it...
1234
01:15:16,181 --> 01:15:18,742
Shanghai,
where per capita income
1235
01:15:18,774 --> 01:15:22,618
is higher than Portugal... you
will meet middle class Chinese,
1236
01:15:22,650 --> 01:15:24,572
and I mean global
middle class Chinese;
1237
01:15:24,604 --> 01:15:27,294
I don't mean middle class
from the Chinese context.
1238
01:15:27,326 --> 01:15:30,850
And that is a very different
China from what you saw
1239
01:15:30,882 --> 01:15:32,804
even 10 years ago.
1240
01:15:36,199 --> 01:15:38,794
China's now almost the largest
economy in the world;
1241
01:15:38,826 --> 01:15:41,069
within the next
decade it will be,
1242
01:15:41,100 --> 01:15:44,016
but it will still be
state capitalist.
1243
01:15:49,557 --> 01:15:53,593
State capitalism is where
state-owned enterprises
1244
01:15:53,625 --> 01:15:57,757
are the most important
actors in the economy.
1245
01:15:57,789 --> 01:15:59,967
These corporations are,
in principle,
1246
01:15:59,999 --> 01:16:02,625
trying to make money
and build themselves,
1247
01:16:02,658 --> 01:16:04,676
and sometimes they do
compete against each other
1248
01:16:04,708 --> 01:16:07,367
in a fairly controlled fashion.
1249
01:16:07,398 --> 01:16:11,178
But the other important Chinese
actors are what you'd call
1250
01:16:11,211 --> 01:16:13,325
privately owned
national champions.
1251
01:16:13,356 --> 01:16:16,528
So, in other words, they are
actively supported by the state,
1252
01:16:16,560 --> 01:16:18,354
even though they're
privately held,
1253
01:16:18,386 --> 01:16:20,372
and they benefit accordingly.
1254
01:16:24,344 --> 01:16:27,003
Also you have hundreds
of millions of people
1255
01:16:27,034 --> 01:16:29,117
who are quite poor,
1256
01:16:29,149 --> 01:16:30,846
but they want state capitalism.
1257
01:16:30,878 --> 01:16:34,241
It's fine for them, as long as
they can make enough money
1258
01:16:34,274 --> 01:16:37,349
to ensure that their
kids will do better.
1259
01:16:41,805 --> 01:16:45,485
The average income in
China since the late 1970s
1260
01:16:45,965 --> 01:16:48,045
has increased by 800%.
1261
01:16:49,765 --> 01:16:51,765
800% is huge.
1262
01:16:52,445 --> 01:16:58,645
But the income of the richest 1%
increased by 2000%.
1263
01:16:58,965 --> 01:17:03,325
So it is a country
that is growing,
1264
01:17:03,645 --> 01:17:06,285
but this growth
is highly unequal.
1265
01:17:15,979 --> 01:17:19,055
China does show what
freeing up capital will do to
1266
01:17:19,087 --> 01:17:21,457
income distribution.
1267
01:17:21,488 --> 01:17:24,756
Capital really has to be
regulated much, much more
1268
01:17:24,788 --> 01:17:28,119
strictly than things
in the real economy.
1269
01:17:31,034 --> 01:17:34,430
There's a fundamental difference
between liberalization
1270
01:17:34,463 --> 01:17:36,159
of capital markets
1271
01:17:36,192 --> 01:17:40,229
and liberalization of trade
and goods and services.
1272
01:17:40,260 --> 01:17:44,584
This was one of the big lessons
of the Great Depression.
1273
01:17:46,569 --> 01:17:49,741
Modern capitalism
is all about the free movement
1274
01:17:49,774 --> 01:17:51,760
of global capital,
1275
01:17:51,792 --> 01:17:54,675
and the financial system
itself has changed
1276
01:17:54,706 --> 01:17:56,468
over the last 40 years.
1277
01:17:56,501 --> 01:17:59,448
The financial industry has about
doubled in size as a percentage
1278
01:17:59,479 --> 01:18:02,427
of the economy, and that's
actually created slower growth,
1279
01:18:02,458 --> 01:18:05,214
not faster growth.
1280
01:18:05,245 --> 01:18:07,903
When Adam Smith,
the father of modern capitalism,
1281
01:18:07,935 --> 01:18:10,818
was thinking up the idea
of the free market system,
1282
01:18:10,850 --> 01:18:12,580
he was living in
a very different world.
1283
01:18:12,611 --> 01:18:14,694
Hey, why not? My own business.
1284
01:18:14,726 --> 01:18:18,089
All you need's a little capital,
a little push and an idea.
1285
01:18:18,121 --> 01:18:20,428
Small and mid-sized
family-owned businesses
1286
01:18:20,459 --> 01:18:21,582
were the norm.
1287
01:18:21,613 --> 01:18:23,310
I wouldn't wear that hat
to a dog fight.
1288
01:18:23,342 --> 01:18:25,457
Why, there isn't a decent
hat in the entire village.
1289
01:18:25,490 --> 01:18:29,238
Why not? Women's hats!
My own business!
1290
01:18:29,269 --> 01:18:31,063
He believed that
the financial markets
1291
01:18:31,095 --> 01:18:33,752
were just an intermediary...
they were supposed to take
1292
01:18:33,785 --> 01:18:36,508
everyone's savings,
hold them as bank deposits,
1293
01:18:36,539 --> 01:18:41,184
and then lend them out to the
hairdresser down the street.
1294
01:18:41,216 --> 01:18:43,266
Not to be too cliché,
but it's kind of the
1295
01:18:43,299 --> 01:18:46,439
"It's a Wonderful Life"
model of banking.
1296
01:18:48,007 --> 01:18:49,897
I think if Adam Smith
time-warped,
1297
01:18:49,929 --> 01:18:53,933
he would have no idea what to
make of a "too big to fail" bank
1298
01:18:53,965 --> 01:18:56,559
or a giant multinational
company that's doing business
1299
01:18:56,592 --> 01:18:58,034
in 120 different countries,
1300
01:18:58,066 --> 01:19:00,659
all of which have different
regulatory systems.
1301
01:19:00,692 --> 01:19:02,581
It's a completely
different world.
1302
01:19:12,095 --> 01:19:17,093
Statistics today show
that only 15% of money
1303
01:19:17,124 --> 01:19:19,622
coming out of the largest
financial institutions
1304
01:19:19,655 --> 01:19:22,538
is actually going to that kind
of productive lending.
1305
01:19:22,569 --> 01:19:24,973
So what's the other 85% doing?
1306
01:19:25,005 --> 01:19:27,599
It's just moving around
this closed loop
1307
01:19:27,630 --> 01:19:29,264
of the financial system...
1308
01:19:29,296 --> 01:19:32,724
its assets being bought
and sold by the same people;
1309
01:19:32,757 --> 01:19:35,544
their value going up,
up, up, up, up.
1310
01:19:38,137 --> 01:19:42,270
For the rich, it's easier
to keep your wealth away
1311
01:19:42,302 --> 01:19:44,671
from productive, risky activity,
1312
01:19:44,704 --> 01:19:47,779
and this is producing
a new social story.
1313
01:19:50,341 --> 01:19:53,512
It's easier to build a property,
1314
01:19:53,545 --> 01:19:55,434
and maybe you don't
fill that property,
1315
01:19:55,467 --> 01:19:58,254
maybe all the apartments in
the property aren't filled,
1316
01:19:58,285 --> 01:20:00,529
but you know in five years' time
that property will be worth
1317
01:20:00,560 --> 01:20:05,044
so much more, that your business
is really to sit on assets
1318
01:20:05,076 --> 01:20:07,607
and hope their value rises,
1319
01:20:07,638 --> 01:20:10,457
rather than to try and make
money by risking your money
1320
01:20:10,490 --> 01:20:14,847
in activities like open a
factory or invent something new.
1321
01:20:17,793 --> 01:20:20,131
If you own a house,
you're making capital gains
1322
01:20:20,163 --> 01:20:23,366
out of that far in excess
of what people get
1323
01:20:23,400 --> 01:20:25,322
through just regular jobs.
1324
01:20:25,353 --> 01:20:27,979
Therefore, people have
become property speculators.
1325
01:20:28,011 --> 01:20:31,887
And this changes the whole way
the housing situation operates.
1326
01:20:33,137 --> 01:20:35,538
And, essentially,
it starts dividing.
1327
01:20:36,885 --> 01:20:38,581
This housing crisis
that's happening
1328
01:20:38,614 --> 01:20:40,279
really throughout the West
is something
1329
01:20:40,311 --> 01:20:44,411
that particularly
affects the young.
1330
01:20:44,443 --> 01:20:48,577
Most people view this as some
sort of generational fight.
1331
01:20:48,608 --> 01:20:51,074
The baby boomers benefited
from buying houses
1332
01:20:51,106 --> 01:20:52,932
when they were relatively cheap,
1333
01:20:52,964 --> 01:20:56,136
and therefore have a very nice
nest egg for their retirement,
1334
01:20:56,168 --> 01:21:00,845
and it's the young people
that can't even rent cheaply.
1335
01:21:00,877 --> 01:21:03,662
Those at the bottom,
I think, are quite polarized...
1336
01:21:03,696 --> 01:21:06,289
angry, in fact.
1337
01:21:06,321 --> 01:21:09,332
These houses, essentially,
earn more money than they do,
1338
01:21:09,365 --> 01:21:11,350
and they have to rent them.
1339
01:21:20,256 --> 01:21:22,754
It transmits to the poor
or middle class person
1340
01:21:22,785 --> 01:21:26,437
that the best thing they can do
is to hope that their home
1341
01:21:26,469 --> 01:21:28,008
rises so much in value
1342
01:21:28,039 --> 01:21:30,313
that it offsets all the other
problems in their life,
1343
01:21:30,345 --> 01:21:31,852
like that their pension
was destroyed
1344
01:21:31,883 --> 01:21:33,324
or that they lost their job
1345
01:21:33,356 --> 01:21:36,175
or that their kids
are gonna be poor.
1346
01:21:45,752 --> 01:21:49,469
Young people
are naturally more hopeful.
1347
01:21:49,500 --> 01:21:52,319
But they are aware,
they are acutely aware,
1348
01:21:52,351 --> 01:21:54,850
that they've been
given a raw deal.
1349
01:21:56,741 --> 01:21:58,758
You know, why is it,
to educate yourself,
1350
01:21:58,790 --> 01:22:03,114
you have to get yourself
into £50,000 of debt?
1351
01:22:03,146 --> 01:22:06,733
And a lot of young
people feel infantiled.
1352
01:22:06,766 --> 01:22:10,322
Why does my incredibly smart
26-year-old brother-in-law
1353
01:22:10,354 --> 01:22:12,020
still have to live at home?
1354
01:22:12,052 --> 01:22:15,606
He's asking that,
my in-laws are asking that.
1355
01:22:30,053 --> 01:22:33,673
What we've told people is that,
"You're not poor;
1356
01:22:33,704 --> 01:22:35,211
you're a millionaire-in-waiting.
1357
01:22:35,243 --> 01:22:37,709
And because of that,
don't worry about inequality,
1358
01:22:37,740 --> 01:22:39,534
just focus on how
hard you're working
1359
01:22:39,566 --> 01:22:42,994
and trying to run, run,
run, run up that hill,"
1360
01:22:45,493 --> 01:22:50,490
which is ironic, because
societies that are more unequal
1361
01:22:50,523 --> 01:22:52,572
have less social mobility.
1362
01:22:55,038 --> 01:22:57,377
The rungs of the ladder
grow apart,
1363
01:22:57,409 --> 01:23:01,958
people have the money to make
sure they stay at the top,
1364
01:23:01,990 --> 01:23:05,480
and it means it's harder
for people to climb.
1365
01:23:05,512 --> 01:23:09,805
That's something that you find
again and again in the data.
1366
01:23:10,638 --> 01:23:13,232
The system is rigged.
1367
01:23:13,264 --> 01:23:17,044
And people aren't stupid...
they recognize that.
1368
01:23:31,588 --> 01:23:33,606
Essentially, what's
happening is that you're
1369
01:23:33,637 --> 01:23:36,327
getting an economy which
is more and more productive,
1370
01:23:36,360 --> 01:23:39,659
but where the gains of those
productivity increases
1371
01:23:39,691 --> 01:23:44,080
are going into the hands of
a very small number of people.
1372
01:23:44,112 --> 01:23:45,776
And where there is job growth
1373
01:23:45,808 --> 01:23:47,411
is at the lower end
of the spectrum,
1374
01:23:47,443 --> 01:23:50,870
which is often low-paid,
fairly unsatisfactory work.
1375
01:23:57,404 --> 01:24:00,255
Our labor market is shifting.
1376
01:24:00,287 --> 01:24:04,324
More and more, it classifies
people as "self-employed."
1377
01:24:04,356 --> 01:24:06,598
And what that means is that
companies won't owe them
1378
01:24:06,630 --> 01:24:10,282
holiday pay,
won't owe them a pension,
1379
01:24:10,314 --> 01:24:13,293
and those individual workers
have to make sure
1380
01:24:13,325 --> 01:24:16,111
that they can look after
themselves if they're sick,
1381
01:24:16,144 --> 01:24:18,545
if they want to take a holiday.
1382
01:24:22,871 --> 01:24:25,111
You know what,
when Piketty says
1383
01:24:25,144 --> 01:24:28,252
that the future for capitalism
is this highly illegal,
1384
01:24:28,284 --> 01:24:32,928
highly socially immobile future,
it's already happening.
1385
01:24:38,725 --> 01:24:40,873
America's about to see
the biggest wealth transfer
1386
01:24:40,904 --> 01:24:44,781
in history take place, as
the generation which made money
1387
01:24:44,813 --> 01:24:46,542
after World War II
1388
01:24:46,574 --> 01:24:50,096
is passing that wealth on
to their children.
1389
01:24:59,002 --> 01:25:01,245
Something in the order
of $12 trillion or more
1390
01:25:01,277 --> 01:25:03,231
is going to be passed on
to the next generation
1391
01:25:03,263 --> 01:25:06,050
in the next 10 to 15 years.
1392
01:25:06,081 --> 01:25:09,637
And that will be invested in a
way that it creates more wealth.
1393
01:25:16,605 --> 01:25:18,645
It's very likely that
in the 21st century
1394
01:25:18,685 --> 01:25:21,205
inheritance will return
to playing a role
1395
01:25:21,245 --> 01:25:25,485
as significant as in
19th century England and France.
1396
01:25:27,925 --> 01:25:32,045
Inheritance allows a small
portion of the population
1397
01:25:32,365 --> 01:25:34,845
to lead a very opulent lifestyle
1398
01:25:35,885 --> 01:25:39,925
because inherited wealth
produces an income.
1399
01:25:42,605 --> 01:25:45,645
In fact, the rate of return on
capital throughout history
1400
01:25:45,685 --> 01:25:47,765
has almost always been higher
1401
01:25:47,805 --> 01:25:50,525
than the rate
of economic growth.
1402
01:25:57,525 --> 01:25:59,605
If we look back to 1700,
1403
01:25:59,645 --> 01:26:02,725
which is the very beginning
of Industrial Revolution,
1404
01:26:02,765 --> 01:26:06,805
until today, 2018, the growth
rate of the world economy
1405
01:26:06,845 --> 01:26:09,765
is 1.6% per year
over three centuries.
1406
01:26:11,565 --> 01:26:15,005
This is much less than
the rate of return on capital,
1407
01:26:15,045 --> 01:26:17,045
which is around 4% to 5%
a year over the same period.
1408
01:26:22,445 --> 01:26:25,405
But is it catastrophic?
No, not necessarily.
1409
01:26:25,445 --> 01:26:28,725
If everyone owned
a portion of the capital,
1410
01:26:29,085 --> 01:26:31,605
so if everyone owned
an apartment
1411
01:26:31,645 --> 01:26:33,085
and shares in a pension fund,
1412
01:26:33,125 --> 01:26:35,885
it wouldn't be so bad that the
return on capital
1413
01:26:35,925 --> 01:26:38,285
is higher than the growth rate.
1414
01:26:38,605 --> 01:26:42,365
The problem is
concentration of ownership
1415
01:26:42,405 --> 01:26:44,005
and therefore
also of power within society,
1416
01:26:47,125 --> 01:26:51,165
which leads to a reproduction
of social hierarchies
1417
01:26:52,165 --> 01:26:54,805
and rising tensions among the
working and middle classes.
1418
01:27:04,440 --> 01:27:07,771
There's now research showing
that in advanced economies,
1419
01:27:07,804 --> 01:27:11,135
that two-thirds of the
population is now on track
1420
01:27:11,166 --> 01:27:13,441
to be poorer than their parents,
1421
01:27:13,473 --> 01:27:16,259
which is a huge, huge
mega political trend.
1422
01:27:29,201 --> 01:27:32,084
People on the streets
are starting to say, "Enough"...
1423
01:27:32,645 --> 01:27:37,165
Disperse yourselves
or we will have to use force.
1424
01:27:37,465 --> 01:27:40,668
...enough of the inequality
and enough of not having a story
1425
01:27:40,700 --> 01:27:43,455
about how this
ever gets better.
1426
01:27:43,487 --> 01:27:45,056
And people are reaching out
1427
01:27:45,088 --> 01:27:46,947
for the nearest thing
they can cling to,
1428
01:27:46,978 --> 01:27:49,125
and often that is their
identity, their ethnicity,
1429
01:27:49,157 --> 01:27:51,239
their religion.
1430
01:27:57,870 --> 01:28:01,040
And they lash out against the
nearest enemy they can find.
1431
01:28:01,072 --> 01:28:03,379
Vast amounts
of unskilled labor
1432
01:28:03,411 --> 01:28:05,172
coming into this country.
1433
01:28:05,205 --> 01:28:07,511
They're bringing
drugs, they're bringing crime,
1434
01:28:07,543 --> 01:28:08,632
they're rapists.
1435
01:28:09,125 --> 01:28:11,845
Behind mass immigration
is Islamism.
1436
01:28:11,885 --> 01:28:14,556
Behind mass immigration
is terrorism.
1437
01:28:14,590 --> 01:28:17,089
But ultimately,
none of that will work.
1438
01:28:17,120 --> 01:28:20,964
Blaming your neighbor
doesn't make you any richer.
1439
01:28:22,085 --> 01:28:23,645
There are always politicians
1440
01:28:23,685 --> 01:28:27,725
tempted to exploit
the rising inequality.
1441
01:28:30,605 --> 01:28:32,565
And you could see this
very clearly
1442
01:28:32,605 --> 01:28:35,245
in the world before 1914.
1443
01:28:36,445 --> 01:28:39,005
And I'm very afraid at the
beginning of the 21st century
1444
01:28:39,045 --> 01:28:40,845
that because we feel we cannot
1445
01:28:40,885 --> 01:28:43,085
regulate international
capitalism,
1446
01:28:43,125 --> 01:28:47,045
we cannot properly tax
multinationals and billionaires,
1447
01:28:47,085 --> 01:28:51,645
instead we vent our anger
on immigrants.
1448
01:28:51,685 --> 01:28:54,405
It's safer than attacking
multinationals.
1449
01:28:59,605 --> 01:29:01,165
But the truth is,
1450
01:29:01,205 --> 01:29:04,605
to solve the rise and
persistence of inequality,
1451
01:29:04,645 --> 01:29:07,485
we need a progressive
tax on capital.
1452
01:29:09,725 --> 01:29:13,605
And also, ownership rights
cannot be eternal.
1453
01:29:14,805 --> 01:29:17,325
The moment capital is inherited
by the next generation,
1454
01:29:17,365 --> 01:29:20,565
and also each year if
you own a lot of capital,
1455
01:29:20,605 --> 01:29:24,485
you have to return to the
community 1%, 2%, 3%,
1456
01:29:24,525 --> 01:29:28,125
or why not 5% or 10% if you
own billions and billions?
1457
01:29:28,165 --> 01:29:32,245
And if you continue to
invest your capital usefully,
1458
01:29:32,485 --> 01:29:36,045
with high returns, you
can continue to prosper.
1459
01:29:36,085 --> 01:29:38,965
But if financial markets allow
you to have a high return
1460
01:29:39,005 --> 01:29:41,485
without doing anything,
1461
01:29:41,525 --> 01:29:46,685
then tax rates are set to
erode this mechanism.
1462
01:29:54,085 --> 01:29:56,565
This means we'll be able to
control
1463
01:29:56,605 --> 01:29:58,365
some of the concentration of
capital,
1464
01:29:58,405 --> 01:29:59,925
and therefore political power,
1465
01:30:02,485 --> 01:30:05,245
and also access to property
for the middle class.
1466
01:30:20,685 --> 01:30:24,205
A lot of people are not
ready to discuss the merits
1467
01:30:24,245 --> 01:30:28,045
of strong taxation rates on
revenue and inheritance.
1468
01:30:28,085 --> 01:30:30,645
But without this to
regulate capitalism,
1469
01:30:30,685 --> 01:30:33,565
there will be disastrous
consequences for everyone.
1470
01:30:45,044 --> 01:30:46,998
You know, if you wanna
think about what the longer term
1471
01:30:47,030 --> 01:30:50,682
implications are, I mean, the
truly dystopian implications,
1472
01:30:50,714 --> 01:30:52,444
you think about horses.
1473
01:30:53,725 --> 01:30:56,512
I mean, we used to
have a lot of horses.
1474
01:30:57,473 --> 01:30:59,106
End of the 19th century, right,
1475
01:30:59,139 --> 01:31:02,566
I mean, horses were critical
for industrialization.
1476
01:31:02,598 --> 01:31:04,904
And then they weren't,
1477
01:31:04,936 --> 01:31:07,243
because you have all these
industrial processes
1478
01:31:07,275 --> 01:31:10,830
that are much more efficient
than horses are.
1479
01:31:12,271 --> 01:31:15,154
And, you know, for all
of the technophiles
1480
01:31:15,186 --> 01:31:19,382
that are saying, "Technology
has always created more jobs,
1481
01:31:19,415 --> 01:31:21,272
and so it will continue to,"
1482
01:31:21,304 --> 01:31:24,347
I say, "Technology has always
created more jobs,
1483
01:31:24,380 --> 01:31:29,056
as long as you had things
that human beings could do."
1484
01:31:34,470 --> 01:31:37,769
But when technology
starts actually getting at
1485
01:31:37,801 --> 01:31:40,940
the basic functionality
of a human being,
1486
01:31:43,631 --> 01:31:48,275
then human beings start becoming
the equivalent of horses.
1487
01:31:50,293 --> 01:31:52,023
And that doesn't mean
1488
01:31:52,055 --> 01:31:55,131
that we can no longer
have meaningful lives,
1489
01:31:55,162 --> 01:31:57,180
but it means that you
have to change your model
1490
01:31:57,213 --> 01:32:00,832
because capitalism is
no longer about labor.
1491
01:32:05,477 --> 01:32:08,840
And the problem is this is
coming soon, soon, soon.
1492
01:32:10,250 --> 01:32:13,356
You look at driverless
technologies.
1493
01:32:13,389 --> 01:32:17,649
Driving is, by the way, the
single largest or second largest
1494
01:32:17,682 --> 01:32:21,781
employer of people in every
one of the 50 US states,
1495
01:32:21,813 --> 01:32:25,337
and within 10 years,
most of those jobs are gone.
1496
01:32:27,995 --> 01:32:33,025
So you will address capital,
because if you don't, right,
1497
01:32:33,057 --> 01:32:36,548
you are going to have
very serious problems.
1498
01:32:55,511 --> 01:32:57,049
We're leaving
an industrial economy
1499
01:32:57,081 --> 01:33:00,316
and going to
a post-industrial economy.
1500
01:33:00,347 --> 01:33:02,558
And we have to make choices
1501
01:33:02,590 --> 01:33:05,152
about which future
we wind up in.
1502
01:33:07,395 --> 01:33:11,270
You can have abundance that
is very unequally distributed,
1503
01:33:11,303 --> 01:33:14,858
where we have the robots
that can do anything,
1504
01:33:14,890 --> 01:33:17,645
but the only people that own
the robots are a very small
1505
01:33:17,677 --> 01:33:19,599
segment of society,...
1506
01:33:21,361 --> 01:33:23,892
basically like Elysium,
where a bunch of people
1507
01:33:23,924 --> 01:33:26,389
live in ecologically
protected spaces
1508
01:33:26,422 --> 01:33:30,651
and everyone else is living in,
like, a hot, putrid mess.
1509
01:33:33,405 --> 01:33:36,159
And so it's
a political problem.
1510
01:33:45,765 --> 01:33:49,965
The challenges today of
creating a more equal society
1511
01:33:50,245 --> 01:33:52,285
are obviously different
from the 20th century.
1512
01:33:53,005 --> 01:33:56,845
But the important point
I want to stress is that
1513
01:33:58,125 --> 01:34:00,605
it's not technically
impossible;
1514
01:34:00,645 --> 01:34:02,445
it's primarily a political
and intellectual challenge.
1515
01:34:06,685 --> 01:34:08,405
And the good news is that
1516
01:34:08,445 --> 01:34:11,125
we can also find reasons
from history to be optimistic.
1517
01:34:15,645 --> 01:34:19,765
History shows us that if we
want society to be cohesive
1518
01:34:19,805 --> 01:34:21,925
in a peaceful and
harmonious way,
1519
01:34:21,965 --> 01:34:25,245
we must prevent inequality
from becoming too high.
1520
01:34:29,365 --> 01:34:33,485
I am for controlling capital
to go beyond capitalism,
1521
01:34:36,165 --> 01:34:40,205
with ways that are more
democratic, more inclusive,
1522
01:34:40,685 --> 01:34:44,445
and finally allow us to project
ourselves into the 21st century.
1523
01:34:55,013 --> 01:35:00,013
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