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(WHIMSICAL MUSIC)
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Subtitles by explosiveskull
www.OpenSubtitles.org
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(RADIO FREQUENCY ADJUSTS)
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MALE REPORTER:
...promise from the authorities
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00:01:01,045 --> 00:01:04,152
that there would
be some change,
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00:01:04,184 --> 00:01:06,553
the pressure for reform
is gathering pace
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00:01:06,586 --> 00:01:09,340
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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WOMAN: We want another way
to reconstruct our society.
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(PEOPLE CHANT)
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FEMALE REPORTER: On the streets
of East German cities,
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00:01:23,754 --> 00:01:25,964
scores of people demanding
democratic reforms
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were dragged off by...
(STATIC CRACKLES)
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MALE REPORTER: 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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(PEOPLE SHOUT)
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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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00:02:02,325 --> 00:02:06,165
So I personally know the impact
this collapse had.
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I saw an economic and
social system
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in a complete state of failure.
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A political system that had
promised human emancipation,
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00:02:30,125 --> 00:02:32,565
but instead ended up
producing misery
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and incredible
political repression.
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00:02:57,805 --> 00:03:02,005
And when the fraud of the
communist promise was exposed
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00:03:02,045 --> 00:03:03,525
and it collapsed,
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00:03:03,565 --> 00:03:08,365
it greatly reinforced
the capitalist argument.
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The problem was that
it went too far.
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(LORDE'S 'ROYALS')
♪ Cristal, Maybach ♪
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00:03:11,478 --> 00:03:12,825
♪ Diamonds on your timepiece ♪
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♪ Jet planes, islands,
tigers on a gold leash ♪
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♪ We don't care ♪
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00:03:17,597 --> 00:03:20,095
♪ We aren't caught up
in your love affair ♪
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00:03:20,165 --> 00:03:22,205
The fall of the Soviet Union
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00:03:22,245 --> 00:03:26,285
led to infinite faith in the
deregulation of markets
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00:03:26,885 --> 00:03:28,805
accompanied by a new
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00:03:29,325 --> 00:03:31,525
glorification of
private property.
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00:03:32,285 --> 00:03:33,485
As a consequence,
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we're facing challenges
of rising inequality
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00:03:36,685 --> 00:03:40,525
and the rise of nationalism
and xenophobic tensions,
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like there was in the very
unequal world
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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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00:03:49,148 --> 00:03:50,877
♪ Trippin' in the bathroom ♪
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♪ Bloodstains, ball gowns,
trashing the hotel room ♪
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00:03:53,313 --> 00:03:55,235
♪ We don't care... ♪
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And I'm very scared for
the 21st century
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00:03:58,405 --> 00:03:59,925
because what I see
in the historical data
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00:03:59,965 --> 00:04:02,765
suggests we risk returning
to a capitalist system
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00:04:02,805 --> 00:04:05,724
similar to the highly unequal
world
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00:04:05,765 --> 00:04:07,525
of the 18th and 19th centuries.
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00:04:07,567 --> 00:04:10,674
- ♪ And we'll never be royals ♪
- ♪ Royals ♪
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00:04:10,706 --> 00:04:13,301
♪ It don't run in our blood ♪
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♪ That kind of lux
just ain't for us ♪
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♪ 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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(PEACEFUL, WHIMSICAL MUSIC)
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(TENSE, PERCUSSIVE MUSIC)
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In 18th century Europe,
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capital is concentrated
in the hands
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of a very small group of people.
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00:05:06,645 --> 00:05:09,925
The aristocracy represents
1% of the population.
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00:05:13,005 --> 00:05:16,405
The boundaries of money
limit social mobility,
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00:05:21,125 --> 00:05:23,085
and hard work and education
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00:05:23,125 --> 00:05:24,365
don't allow you
to climb very high.
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00:05:28,685 --> 00:05:30,685
Through the evocative
power of literature,
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film and popular culture
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we can see the importance
of capital throughout history.
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It's a story much darker
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00:05:42,365 --> 00:05:44,525
than the idyllic vision
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of a march towards
progress and light.
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(GRUNTS, OINKS)
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WOMAN: In the 18th century,
life for the poor is grim.
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00:05:54,971 --> 00:05:56,924
If you're lucky,
you might be a servant.
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00:05:56,956 --> 00:05:59,102
Everyone else is
a hand-to-mouth laborer,
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00:05:59,134 --> 00:06:01,858
moving from place to place,
following the work,
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00:06:01,889 --> 00:06:06,309
being treated by the landowners
exactly as they please.
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00:06:06,342 --> 00:06:07,783
And of course there
were no benefits,
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00:06:07,815 --> 00:06:10,538
there's no health service,
there's no free schooling,
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00:06:10,570 --> 00:06:12,972
there's absolutely nothing.
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00:06:14,318 --> 00:06:16,783
So poverty is a death sentence.
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00:06:18,322 --> 00:06:21,653
And what's very striking is
the average life expectancy
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00:06:21,685 --> 00:06:23,606
in the 18th century is 17.
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(CHILLING, DESPONDENT MUSIC)
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MAN: At the time, what capital
really looks like is
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money, money-lending
and land-owning.
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00:06:38,277 --> 00:06:42,794
You have a guy that sits in a
fort and basically claims taxes
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00:06:42,826 --> 00:06:45,133
on all the people
that work his land.
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And we sort of know
what that looks like
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00:06:46,926 --> 00:06:48,494
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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What about Roulet?
Has he paid his rent?
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Roulet died last week.
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(ECHOES) He died
with his rent unpaid.
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- What did he die of?
- Hunger.
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00:07:02,174 --> 00:07:04,544
Hunger is an indulgence
with these peasants.
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00:07:04,575 --> 00:07:05,921
Oh, I keep forgetting, Gabelle,
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00:07:05,953 --> 00:07:08,035
you're a humanitarian,
aren't you?
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00:07:08,067 --> 00:07:10,341
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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(BIRDSONG)
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WILLIAMS: For the rich,
inheritance is the obsession.
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It's a very strict code.
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The eldest son gets the capital.
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00:07:25,621 --> 00:07:27,223
He gets everything...
he gets the money,
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he gets the house,
he gets the land...
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00:07:29,208 --> 00:07:31,771
and that makes him
incredibly powerful,
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00:07:31,803 --> 00:07:35,102
just through
an accident of birth.
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00:07:35,134 --> 00:07:37,857
These land-owning men,
these first sons,
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00:07:37,889 --> 00:07:40,164
they also have a huge
amount of political power,
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00:07:40,195 --> 00:07:43,943
because a lot of them are
the MPs, they're elites.
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00:07:43,975 --> 00:07:46,634
And as a consequence,
they are driven by a desire
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00:07:46,666 --> 00:07:50,253
to protect their own income,
to protect their own world,
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00:07:50,286 --> 00:07:52,400
and it simply doesn't
occur to them
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that poor people deserve
some redistribution of wealth.
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Taxation, they resist
very strongly.
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00:07:57,974 --> 00:07:59,959
And this is the way that
the aristocracy worked,
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00:07:59,991 --> 00:08:03,098
not just in Britain,
but all through Europe,
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00:08:03,131 --> 00:08:06,974
and the aim is to conserve
the aristocratic power.
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00:08:07,006 --> 00:08:08,928
(PENSIVE MUSIC)
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The examples that
Thomas Piketty has
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00:08:15,110 --> 00:08:17,416
of Jane Austen and Balzac,
they're very fitting,
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00:08:17,449 --> 00:08:19,403
because when you read
Jane Austen,
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00:08:19,434 --> 00:08:21,197
it is all about money,
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00:08:21,229 --> 00:08:23,726
and this money is not
earned through work,
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00:08:23,759 --> 00:08:26,129
it's not earned through
owning businesses,
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00:08:26,161 --> 00:08:28,756
it's earned through land,
it's inherited land.
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00:08:28,788 --> 00:08:30,710
(JOVIAL FOLK TUNE PLAYS)
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00:08:35,707 --> 00:08:37,629
(LAUGHTER)
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00:08:40,512 --> 00:08:43,074
WILLIAMS: Mr. Darcy, for
example, in Pride and Prejudice,
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he has this huge estate.
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00:08:44,804 --> 00:08:46,278
He doesn't even
have to be there.
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This land just creates
money for him.
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00:08:49,609 --> 00:08:51,979
- How good of you to come.
- (ALL WHISPER)
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00:08:52,011 --> 00:08:53,453
LIZZIE: He looks miserable,
poor sod.
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00:08:53,485 --> 00:08:54,638
CHARLOTTE: Miserable he may be,
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00:08:54,670 --> 00:08:56,784
but poor he most certainly
is not.
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00:08:56,816 --> 00:08:58,642
- LIZZIE: Tell me.
- CHARLOTTE: 10,000 a year,
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00:08:58,674 --> 00:09:00,499
and he owns half of Derbyshire.
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00:09:00,532 --> 00:09:02,102
- The miserable half?
- (SNORTS SOFTLY)
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00:09:02,133 --> 00:09:04,055
(CHUCKLES)
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00:09:05,560 --> 00:09:06,970
WILLIAMS: Jane Austen
created a fantasy
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00:09:07,002 --> 00:09:08,476
that you could get your
hands on this wealth
155
00:09:08,508 --> 00:09:11,294
if you were just a bit
fun and a bit witty.
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00:09:11,326 --> 00:09:14,146
But the reality is there's
no way a Mr. Darcy would marry
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00:09:14,177 --> 00:09:15,683
girls like Lizzie Bennet,
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00:09:15,715 --> 00:09:19,495
who actually haven't got
a penny to their names.
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00:09:19,526 --> 00:09:22,954
He would marry an heiress,
possibly even a cousin,
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00:09:22,986 --> 00:09:25,325
and create this, sort of,
megalopolis estate.
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00:09:25,357 --> 00:09:28,143
(JOVIAL FOLK TUNE RESUMES)
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00:09:28,175 --> 00:09:33,076
WILLIAMS: Money marries money.
There's nothing to do with love.
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00:09:33,109 --> 00:09:34,934
And what we see now,
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00:09:34,966 --> 00:09:36,888
almost a cycling back
to the 18th century.
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(FUNKY VOGUE MUSIC)
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00:09:39,739 --> 00:09:43,550
In Britain, inherited wealth
is everything... again.
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00:09:43,583 --> 00:09:47,843
Nowadays, 1% of the population
owns 70% of our land.
168
00:09:47,875 --> 00:09:50,310
♪ I've been broke all my life ♪
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00:09:50,342 --> 00:09:51,527
♪ Now wonder ♪
170
00:09:51,559 --> 00:09:54,154
♪ How does it feel to be rich? ♪
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00:09:54,185 --> 00:09:56,139
♪ How does it feel to be rich? ♪
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00:09:56,172 --> 00:09:58,382
♪ Oh, I done worked
all my life ♪
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00:09:59,342 --> 00:10:00,912
♪ Now wonder ♪
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00:10:00,944 --> 00:10:03,186
♪ How does it feel
to just live? ♪
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00:10:03,218 --> 00:10:05,173
♪ How does it feel
to just live? ♪
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00:10:05,204 --> 00:10:08,760
WOMAN: There's always been an
elite, which is usually adept at
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00:10:08,792 --> 00:10:10,970
reproducing its privilege
through generations,
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00:10:11,002 --> 00:10:16,159
monopolizing both economic
and social and cultural capital.
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00:10:16,191 --> 00:10:19,235
The way the elite stays in power
and passes on their privilege
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00:10:19,266 --> 00:10:20,580
to the next generation
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00:10:20,611 --> 00:10:23,174
is also by shaping
the way that we think.
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♪ How does it feel to be rich? ♪
183
00:10:25,192 --> 00:10:27,659
♪ How does it feel
to be ri-i-ich? ♪
184
00:10:27,690 --> 00:10:29,837
♪ How does it feel
to just live? ♪
185
00:10:29,869 --> 00:10:31,790
♪ How does it feel
to just live? ♪
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00:10:31,823 --> 00:10:33,905
(CAR HORNS BLARE)
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00:10:33,937 --> 00:10:35,763
TETT: Traditionally,
economists have argued
188
00:10:35,795 --> 00:10:38,678
that inequality is
a very powerful driver
189
00:10:38,710 --> 00:10:41,176
of progress and innovation
190
00:10:41,208 --> 00:10:44,027
because the idea is that
competition, essentially,
191
00:10:44,059 --> 00:10:45,981
makes people try harder.
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00:10:47,807 --> 00:10:50,978
The problem is that
extreme inequality
193
00:10:51,010 --> 00:10:54,982
increasingly seems to be a
source of great economic stress,
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00:10:55,014 --> 00:10:58,505
social stress
and political stress.
195
00:10:58,538 --> 00:11:01,837
Because if you have
a situation where an elite
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00:11:01,869 --> 00:11:04,496
are so rigidly protective
of their ranks
197
00:11:04,527 --> 00:11:07,122
that nobody can ever rise,
there's no social mobility,
198
00:11:07,154 --> 00:11:09,205
you tend to end up with
a full-blown revolution.
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00:11:09,236 --> 00:11:11,158
(TENSE, DRAMATIC MUSIC)
200
00:11:18,045 --> 00:11:21,005
Life in the 18th century
is not static.
201
00:11:21,045 --> 00:11:23,885
We see the development
of new political ideas
202
00:11:23,925 --> 00:11:26,525
demanding equal rights
203
00:11:27,165 --> 00:11:30,605
and an end to privileges
linked to birth and nobility.
204
00:11:30,730 --> 00:11:32,652
(PEOPLE SHOUT)
205
00:11:34,286 --> 00:11:36,239
WILLIAMS: In the French
Revolution, the banner is
206
00:11:36,272 --> 00:11:39,058
"Liberté, égalité, fraternité."
207
00:11:39,090 --> 00:11:41,204
It's going to be brotherhood,
everyone's going to be free.
208
00:11:41,236 --> 00:11:43,735
(GUNFIRE)
209
00:11:43,766 --> 00:11:46,489
But yet within
a tiny amount of time,
210
00:11:46,522 --> 00:11:48,604
you have this
government of bankers,
211
00:11:48,636 --> 00:11:52,383
and what they do is start to
create the elites once more.
212
00:11:53,825 --> 00:11:56,196
♪ This is the land
that fought for liberty ♪
213
00:11:56,227 --> 00:11:58,982
♪ Now when we fight,
we fight for bread ♪
214
00:11:59,014 --> 00:12:01,480
♪ Here is the thing
about equality ♪
215
00:12:01,513 --> 00:12:04,396
♪ Everyone's equal
when they're dead ♪
216
00:12:04,429 --> 00:12:07,022
♪ Take your place,
take your chance ♪
217
00:12:07,054 --> 00:12:09,808
♪ Vive la France
Vive la France! ♪
218
00:12:09,841 --> 00:12:11,891
- (MEN YELL)
- ALL CHANT: Vive la France!
219
00:12:12,965 --> 00:12:15,485
It turns out the
French Revolution is based,
220
00:12:15,525 --> 00:12:18,245
in part, on hypocrisy.
With a vision of equality
221
00:12:18,285 --> 00:12:21,045
that is, at best, a little
optimistic or naive
222
00:12:21,085 --> 00:12:23,365
and at worst a little cynical.
223
00:12:25,565 --> 00:12:30,125
We imagine that equality
is going to occur naturally
224
00:12:30,165 --> 00:12:32,525
or spontaneously,
a bit like a fairy tale.
225
00:12:35,885 --> 00:12:38,685
But the reality is that we also
need political institutions,
226
00:12:38,925 --> 00:12:43,045
an education system,
health care, a transport system
227
00:12:43,925 --> 00:12:48,405
and a tax system that targets
the highest incomes.
228
00:12:49,125 --> 00:12:52,965
But none of this was
put in place
229
00:12:53,005 --> 00:12:55,245
after the French Revolution.
230
00:12:56,031 --> 00:12:58,017
(DARK, DESPONDENT MUSIC)
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00:13:03,302 --> 00:13:04,776
WILLIAMS: What we see
in the late 18th
232
00:13:04,808 --> 00:13:07,499
and early 19th centuries
is the Industrial Revolution.
233
00:13:07,530 --> 00:13:10,670
It replaces the work
of people's hands with machines,
234
00:13:10,702 --> 00:13:13,264
so you bring in machines to
make wool, to make cotton,
235
00:13:13,296 --> 00:13:15,891
to make all kinds
of commodities.
236
00:13:15,923 --> 00:13:18,998
This makes goods faster,
it standardizes them,
237
00:13:19,030 --> 00:13:21,817
and this makes more profit.
238
00:13:21,849 --> 00:13:25,982
Capital's no longer this fixed
thing that's your land
239
00:13:26,014 --> 00:13:29,601
or even your ability
to lend money.
240
00:13:29,632 --> 00:13:34,598
You finally figure out that
you can expand your own factory
241
00:13:34,630 --> 00:13:38,538
by, kind of, selling stuff,
keeping the profits,
242
00:13:38,570 --> 00:13:42,446
then reinvesting those profits
in expanding your factory.
243
00:13:42,478 --> 00:13:45,616
And that's kind of what
capitalism in its modern form
244
00:13:45,648 --> 00:13:48,595
really lets us do... is that
capital becomes this thing
245
00:13:48,628 --> 00:13:51,478
that can, kind of,
perpetually expand.
246
00:13:51,511 --> 00:13:53,433
(PENSIVE MUSIC)
247
00:13:55,386 --> 00:13:58,718
But the gap between wages and
productivity is substantial,
248
00:13:58,750 --> 00:14:01,570
and you have these kind of
feudal legacies of labor
249
00:14:01,601 --> 00:14:04,932
persisting very, very
late into the game.
250
00:14:04,964 --> 00:14:07,174
British master and servant law
meant that it was a crime
251
00:14:07,206 --> 00:14:10,505
for you to quit your employer
without permission.
252
00:14:12,523 --> 00:14:14,637
And, you know, this is
getting actively used
253
00:14:14,670 --> 00:14:17,969
in the mid-19th century, during,
like, the heyday of capitalism
254
00:14:18,002 --> 00:14:20,789
in England... the most advanced
country in the world...
255
00:14:20,821 --> 00:14:22,807
and they're throwing
workers in jail,
256
00:14:22,838 --> 00:14:24,729
and they're being beaten
257
00:14:24,760 --> 00:14:27,547
because it's a crime
to go on strike.
258
00:14:29,852 --> 00:14:31,774
(DOG BARKS IN DISTANCE)
259
00:14:33,633 --> 00:14:35,555
(POIGNANT MUSIC)
260
00:14:54,326 --> 00:14:58,105
MAN: This whole idea developed
around escaping the Old World
261
00:14:58,138 --> 00:15:02,589
and setting up a new,
more egalitarian society.
262
00:15:02,622 --> 00:15:05,505
When the new world countries
were being set up...
263
00:15:05,536 --> 00:15:07,586
so New Zealand,
Australia, Canada...
264
00:15:07,619 --> 00:15:11,366
these places were being set up
by these refugees, essentially,
265
00:15:11,398 --> 00:15:13,064
fleeing Europe
266
00:15:13,095 --> 00:15:16,460
at a time that capitalism
was really taking hold.
267
00:15:18,157 --> 00:15:20,976
And that's why a lot of these
people wanted to get out
268
00:15:21,008 --> 00:15:25,748
of these countries...
they wanted a flatter society.
269
00:15:25,781 --> 00:15:30,361
It was this idea of moving
beyond the class system,
270
00:15:30,393 --> 00:15:33,180
but it was done largely
in a laissez-faire way.
271
00:15:33,212 --> 00:15:37,152
It wasn't a political movement,
by and large.
272
00:15:37,184 --> 00:15:40,099
And very quickly it was the
wealthy that started dominating
273
00:15:40,131 --> 00:15:41,989
right from the start.
274
00:15:43,495 --> 00:15:46,121
NAIDU: If you're a white man
in sort of, like, 1800-ish,
275
00:15:46,154 --> 00:15:47,819
Australia and the US...
276
00:15:47,850 --> 00:15:51,215
these places are, like,
the best places for you to go.
277
00:15:51,247 --> 00:15:54,673
You've got this wide-open
frontier; it's filled with land.
278
00:15:54,706 --> 00:15:56,659
But the big constraint
on your production
279
00:15:56,693 --> 00:15:59,672
is your ability
to mobilize labor.
280
00:15:59,703 --> 00:16:01,690
So if you're
a small family farmer,
281
00:16:01,721 --> 00:16:03,675
the only labor you can
mobilize on to the frontier
282
00:16:03,708 --> 00:16:05,821
is your kids.
283
00:16:07,870 --> 00:16:10,434
But if you're a slave owner, you
can basically go to New Orleans,
284
00:16:10,466 --> 00:16:12,708
you can take out a loan,
use that loan
285
00:16:12,739 --> 00:16:16,104
to buy a bunch of slaves in
the New Orleans slave market,
286
00:16:16,136 --> 00:16:18,954
then take them out to
the Alabama frontier
287
00:16:18,987 --> 00:16:21,292
and start clearing land
and growing cotton.
288
00:16:22,670 --> 00:16:24,592
(SOLEMN MUSIC)
289
00:16:33,241 --> 00:16:36,316
And you're again able to
take the profits from that
290
00:16:36,348 --> 00:16:39,582
and expand, buy more slaves,
buy more land,
291
00:16:39,614 --> 00:16:42,369
and so you can again now
think of the slave economy
292
00:16:42,401 --> 00:16:46,309
as participating in this
circuit of accumulation.
293
00:16:50,377 --> 00:16:53,357
But also being a slave owner
didn't just mean that you had
294
00:16:53,390 --> 00:16:55,982
access to the labor
of your slaves,
295
00:16:56,015 --> 00:16:59,922
it also meant you had
increased access to capital,
296
00:16:59,955 --> 00:17:03,574
because you can use
your slaves as collateral.
297
00:17:10,046 --> 00:17:12,832
So if you, basically, are
looking to lend to somebody
298
00:17:12,864 --> 00:17:15,588
and they can offer
an equivalent amount of
299
00:17:15,619 --> 00:17:17,445
slave collateral versus land,
300
00:17:17,477 --> 00:17:19,046
you'd prefer the
slave collateral
301
00:17:19,078 --> 00:17:22,057
because it's much easier
to move them around
302
00:17:22,089 --> 00:17:24,651
or resell them or
something like that.
303
00:17:24,684 --> 00:17:26,606
(SOLEMN MUSIC)
304
00:17:27,965 --> 00:17:32,765
The 19th century is
when the division of labour,
305
00:17:33,245 --> 00:17:37,085
inequality and power are
established worldwide -
306
00:17:39,165 --> 00:17:41,565
first with slavery,
307
00:17:41,605 --> 00:17:44,445
and then with incredibly
violent colonial domination.
308
00:17:45,087 --> 00:17:47,235
(MILITARY SNARE DRUM ROLLS)
309
00:17:48,420 --> 00:17:50,342
(DRILL SERGEANT YELLS)
310
00:17:52,565 --> 00:17:57,085
It's very difficult to say how
much of European wealth today
311
00:17:57,125 --> 00:17:59,605
comes from their colonial past.
312
00:18:00,645 --> 00:18:03,045
But what is clear is that
the crucial advantage
313
00:18:03,085 --> 00:18:05,885
won at the time of the
Industrial Revolution
314
00:18:05,925 --> 00:18:09,565
was closely linked
with military force.
315
00:18:10,298 --> 00:18:12,220
(BUGLE CALL BLARES)
316
00:18:14,334 --> 00:18:15,871
MAN: Attack!
317
00:18:15,903 --> 00:18:17,568
(HORSES HOOVES THUNDER,
BLADES RING)
318
00:18:17,600 --> 00:18:19,972
(PEOPLE SCREAM, SOLDIERS YELL)
319
00:18:20,708 --> 00:18:21,830
(WOMAN GROANS)
320
00:18:21,861 --> 00:18:24,263
(CHILD SCREAMS, BLADE RINGS)
321
00:18:25,352 --> 00:18:26,858
(BUGLE CALL BLARES)
322
00:18:27,205 --> 00:18:30,965
From 1870 to 1914,
the United Kingdom and France,
323
00:18:31,285 --> 00:18:34,325
who are the two main
colonial empires,
324
00:18:34,365 --> 00:18:37,285
own so much around
the rest of the world
325
00:18:37,765 --> 00:18:40,325
and it brings them
so much profit,
326
00:18:40,565 --> 00:18:42,325
interest, dividends, rents
327
00:18:43,045 --> 00:18:46,085
that they can afford
to keep on investing
328
00:18:46,125 --> 00:18:48,525
and become owners
of more of the world.
329
00:18:50,885 --> 00:18:52,365
So the rest of the world
works for them.
330
00:18:54,374 --> 00:18:56,295
(DARK, TENSE MUSIC)
331
00:19:01,165 --> 00:19:02,925
WILLIAMS: It's no good
speeding up production
332
00:19:02,959 --> 00:19:05,745
if there's no one to buy
the stuff.
333
00:19:05,776 --> 00:19:10,101
So fashion fuels the
Industrial Revolution.
334
00:19:10,134 --> 00:19:13,625
By the 19th century, the cult
of fashion is all-encompassing.
335
00:19:13,657 --> 00:19:15,708
It's come down even
to the working classes.
336
00:19:15,739 --> 00:19:20,480
Even working class women
are trying to stay in fashion.
337
00:19:20,512 --> 00:19:24,067
The idea that, "You can't wear
that. That's from last season,"
338
00:19:24,100 --> 00:19:27,175
that will be very strange to
a 16th or 17th century person.
339
00:19:27,206 --> 00:19:29,193
They think,
"Well, it's still working,
340
00:19:29,224 --> 00:19:33,164
it's still hard-wearing.
I'll wear the same outfit."
341
00:19:33,197 --> 00:19:35,310
(INTRIGUING MUSIC)
342
00:19:38,738 --> 00:19:40,500
And the industry that
accelerates the fastest
343
00:19:40,532 --> 00:19:43,286
in the 19th century is
the industry about Christmas.
344
00:19:43,319 --> 00:19:45,241
(ROUSING MUSIC)
345
00:19:51,134 --> 00:19:52,896
In the 18th and 17th century,
346
00:19:52,929 --> 00:19:55,074
Christmas was
a very low-key affair.
347
00:19:55,107 --> 00:19:57,894
It was usually about drinking
with your friends and relations.
348
00:19:57,926 --> 00:19:59,912
It wasn't really
about present-giving;
349
00:19:59,943 --> 00:20:03,435
that was perhaps in New Year.
350
00:20:03,467 --> 00:20:05,837
But by the mid-19th century,
we have the Christmas cracker,
351
00:20:05,870 --> 00:20:07,727
the Christmas card,
the Christmas tree.
352
00:20:07,759 --> 00:20:09,553
People are bankrupting
themselves
353
00:20:09,585 --> 00:20:13,013
to have a yearly Christmas,
and it really was seized upon
354
00:20:13,045 --> 00:20:16,823
by the manufacturers as a way
to make a huge amount of money.
355
00:20:20,220 --> 00:20:22,077
NAIDU: Just as you were getting
all these new technologies
356
00:20:22,110 --> 00:20:25,344
like the railroad and the
telegraph and mass production
357
00:20:25,376 --> 00:20:27,362
and the corporation...
all of these new innovations,
358
00:20:27,394 --> 00:20:28,645
all of this additional
production...
359
00:20:28,676 --> 00:20:31,751
and inequality
becomes very, very large.
360
00:20:33,641 --> 00:20:36,076
It's actually this period
of enormous conflicts,
361
00:20:36,108 --> 00:20:39,822
where you have open wars
in the mines in Colorado
362
00:20:39,854 --> 00:20:44,212
between strikers and armed
militia hired by capitalists.
363
00:20:45,845 --> 00:20:48,152
(PEOPLE YELL)
364
00:20:48,183 --> 00:20:51,867
And the overwhelming use
of the US Federal Army
365
00:20:51,900 --> 00:20:55,101
in this period
is strike-breaking.
366
00:20:55,134 --> 00:20:57,345
(GUNFIRE POPS, PEOPLE SHOUT)
367
00:21:03,239 --> 00:21:05,161
(TRAIN WHEELS CLACK)
368
00:21:10,221 --> 00:21:12,143
(ELECTRICITY WHIRRS)
369
00:21:20,856 --> 00:21:24,156
And similarly, today,
we have this whole
370
00:21:24,187 --> 00:21:26,142
transformation of
the economy happening,
371
00:21:27,806 --> 00:21:30,017
both with trade
and with technology,
372
00:21:30,049 --> 00:21:32,579
that exactly have the
sort of same property of
373
00:21:32,611 --> 00:21:34,822
creating lots of monopolies.
374
00:21:34,854 --> 00:21:37,769
(RADIO STATIC CRACKLES,
PHONES BEEP)
375
00:21:39,050 --> 00:21:40,717
And so it's generating, again,
376
00:21:40,748 --> 00:21:43,439
a small class of very,
very wealthy people.
377
00:21:43,471 --> 00:21:44,528
- 22...
- 43 million.
378
00:21:44,560 --> 00:21:45,809
- 75 million.
379
00:21:45,841 --> 00:21:48,468
$107 million. (HITS GAVEL)
Sold.
380
00:21:49,909 --> 00:21:51,830
(TENSE MUSIC)
381
00:21:57,085 --> 00:21:59,765
Around 1914, in Paris,
382
00:22:00,285 --> 00:22:05,605
1% of the population
owns 70% of all assets.
383
00:22:07,565 --> 00:22:11,285
And in contrast, two-thirds
of the population
384
00:22:11,325 --> 00:22:13,325
die without any assets.
385
00:22:15,125 --> 00:22:18,285
You have this rise in
nationalism and competition
386
00:22:18,325 --> 00:22:19,765
between European countries,
387
00:22:19,805 --> 00:22:22,405
partly due to very strong
social tensions
388
00:22:22,445 --> 00:22:24,725
linked to the stagnant
standard of living
389
00:22:24,765 --> 00:22:28,405
and very high levels
of inequality.
390
00:22:32,165 --> 00:22:35,445
And competition between
countries, nationalism,
391
00:22:35,485 --> 00:22:38,125
is often used by elites
392
00:22:38,565 --> 00:22:41,605
to make people
forget class conflict
393
00:22:41,645 --> 00:22:44,765
and instead focus on
national identity.
394
00:22:54,365 --> 00:22:58,045
And all this contributes to
the arrival of
395
00:22:58,085 --> 00:23:02,485
the First World War
in the summer of 1914.
396
00:23:02,654 --> 00:23:05,088
ARCHIVE: In Berlin,
the Germans know the hour
397
00:23:05,121 --> 00:23:07,266
of glory is at hand.
398
00:23:07,299 --> 00:23:09,061
(TRIUMPHANT MARCHING BAND MUSIC)
399
00:23:09,092 --> 00:23:11,335
NAIDU: There's like a cultural
militarism that's happening
400
00:23:11,366 --> 00:23:14,089
on the Continent, and they're
competing with each other
401
00:23:14,122 --> 00:23:17,453
over both imperial territory
and trade routes.
402
00:23:17,485 --> 00:23:19,823
ARCHIVE: The warlord is
ceaseless, indefatigable,
403
00:23:19,855 --> 00:23:22,802
as he makes the rounds
of his armies.
404
00:23:22,834 --> 00:23:25,141
WILLIAMS: The British Empire
was so powerful;
405
00:23:25,172 --> 00:23:26,646
they had a quarter of
the world's population.
406
00:23:26,678 --> 00:23:28,856
The other countries wanted
a piece of the cake.
407
00:23:28,888 --> 00:23:32,732
And Germany, in particular,
wanted a piece of the cake.
408
00:23:34,942 --> 00:23:37,537
NAIDU: A lot of these
new capitalists
409
00:23:37,569 --> 00:23:40,516
are still, kind of, basically
feudal in their outlook.
410
00:23:40,548 --> 00:23:43,559
So particularly in Germany,
you have these Junkers
411
00:23:43,591 --> 00:23:45,352
that are these
big industrialists,
412
00:23:45,385 --> 00:23:47,243
but they also think there's
nothing better for society
413
00:23:47,274 --> 00:23:48,396
than a good fight.
414
00:23:48,427 --> 00:23:50,349
(EXPLOSION POPS)
415
00:23:56,788 --> 00:23:59,126
WILLIAMS: Britain and the Allied
powers take on Germany
416
00:23:59,158 --> 00:24:02,233
in what they think is going
to be a short, sharp shock
417
00:24:02,266 --> 00:24:03,835
over in a few months' time.
418
00:24:03,867 --> 00:24:05,853
(CANNONS FIRE, MEN SCREAM)
419
00:24:09,409 --> 00:24:11,555
(EXPLOSIONS WHISTLE, BOOM)
420
00:24:16,295 --> 00:24:20,428
Instead, it goes on for years
and decimates both populations.
421
00:24:20,460 --> 00:24:22,382
(LOUD EXPLOSION)
422
00:24:24,687 --> 00:24:26,609
(FLIES BUZZ)
423
00:24:28,051 --> 00:24:29,973
(MELANCHOLY MUSIC)
424
00:24:35,258 --> 00:24:38,974
World War I is, at its base,
a fight over capital.
425
00:24:40,704 --> 00:24:44,484
And we see this massive
post-war economic crash.
426
00:24:46,790 --> 00:24:49,224
So, you have this new
idea after World War I,
427
00:24:49,257 --> 00:24:52,075
basically born out of the fact
that the government is bankrupt,
428
00:24:52,107 --> 00:24:55,567
that tax is not bad,
that it actually could be good.
429
00:24:55,598 --> 00:24:57,008
And the only way you're
going to get money
430
00:24:57,040 --> 00:24:59,346
is by taxing the aristocracy.
431
00:24:59,379 --> 00:25:01,589
(FIRE WHOOSHES, CRACKLES)
432
00:25:01,621 --> 00:25:04,087
There is nothing in the working
class and the middle class
433
00:25:04,119 --> 00:25:06,009
left to tax.
434
00:25:06,041 --> 00:25:09,404
So you see the beginning of
the drop in aristocratic power.
435
00:25:11,070 --> 00:25:14,242
And also what you see in the
'20s is the growth of the power
436
00:25:14,273 --> 00:25:16,740
of women and also
of the working classes...
437
00:25:16,772 --> 00:25:18,918
both of them, essentially,
are saying to the government,
438
00:25:18,950 --> 00:25:21,513
"Look, we worked really
hard for you in this war.
439
00:25:21,544 --> 00:25:24,364
We sacrificed. You need
to give us something back."
440
00:25:24,396 --> 00:25:27,566
So suddenly the whole principle
that the working classes
441
00:25:27,599 --> 00:25:31,154
and women must sit there and put
up with the way that society is,
442
00:25:31,187 --> 00:25:33,365
is completely
overturned in the '20s.
443
00:25:33,397 --> 00:25:35,959
(CAR HORNS HONK, CHEERING)
444
00:25:35,991 --> 00:25:37,785
ARCHIVE: All of the crowds
of the Empire City,
445
00:25:37,817 --> 00:25:39,931
the wonder city, the windy city,
the passion city,
446
00:25:39,963 --> 00:25:41,468
the people, yes.
447
00:25:41,501 --> 00:25:44,576
(GINGER ROGERS'
'WE'RE IN THE MONEY')
448
00:25:44,607 --> 00:25:48,451
♪ Gone are my blues,
and gone are my tears ♪
449
00:25:48,484 --> 00:25:52,359
♪ I've got good news
to shout in your ears ♪
450
00:25:52,391 --> 00:25:55,915
♪ The long-lost dollar
has come back to the fold ♪
451
00:25:55,947 --> 00:25:59,022
♪ With silver, you can
turn your dreams to gold! ♪
452
00:25:59,054 --> 00:26:00,976
♪ Oh, we're in the money ♪
453
00:26:01,969 --> 00:26:03,699
♪ We're in the money ♪
454
00:26:03,731 --> 00:26:08,375
♪ Let's lend it, spend it,
send it rolling around ♪
455
00:26:08,408 --> 00:26:09,881
ARCHIVE: All of the crowd
get the big money...
456
00:26:09,913 --> 00:26:12,412
2 million, 5 million...
make a pile and raise a pile.
457
00:26:12,444 --> 00:26:14,750
WOMAN: The '20s was maybe
irrational exuberance.
458
00:26:14,782 --> 00:26:16,767
ARCHIVE: Watch us grow!
What am I bid? Going up!
459
00:26:16,800 --> 00:26:18,562
WOMAN: There was a boom
in stock prices,
460
00:26:18,593 --> 00:26:22,022
but people kept bidding
into the stock market,
461
00:26:22,053 --> 00:26:25,768
because people always think
there's magic in Wall Street.
462
00:26:25,801 --> 00:26:28,620
You know, we have a mythology
in this country, in particular,
463
00:26:28,651 --> 00:26:30,990
that what's good for Wall Street
is good for Main Street,
464
00:26:31,022 --> 00:26:33,393
but that's really
never been true.
465
00:26:33,424 --> 00:26:36,339
♪ We're in the money,
I'll say we're in the money ♪
466
00:26:36,372 --> 00:26:40,119
♪ We've got a lot of what
it takes to get along ♪
467
00:26:40,151 --> 00:26:43,419
A lot of banks were selling
products that they knew
468
00:26:43,451 --> 00:26:46,173
were absolutely no good.
469
00:26:46,205 --> 00:26:50,753
There were dodgy bankers
doing dodgy deals knowingly.
470
00:26:50,786 --> 00:26:52,740
There weren't a lot of
regulations in place.
471
00:26:52,772 --> 00:26:55,687
It was a real free-for-all
of capital.
472
00:26:57,193 --> 00:26:59,370
MAN: The bubble of the 1920s
473
00:26:59,402 --> 00:27:01,869
was characteristic of
many other bubbles...
474
00:27:01,901 --> 00:27:04,143
a kind of euphoria that happens.
475
00:27:04,175 --> 00:27:06,641
Stocks go up, you can
borrow against that stock.
476
00:27:06,674 --> 00:27:08,404
You use that money
to buy more stock,
477
00:27:08,436 --> 00:27:13,016
the price goes up even more,
and everybody's feeling giddy.
478
00:27:13,048 --> 00:27:14,970
(BELL RINGS)
479
00:27:19,550 --> 00:27:21,441
FOROOHAR: At the same time,
you've got tremendous
480
00:27:21,472 --> 00:27:23,971
dislocation going on
in the job market...
481
00:27:24,003 --> 00:27:25,573
a lot of people
getting very rich,
482
00:27:25,604 --> 00:27:27,367
but a lot of workers
at the bottom,
483
00:27:27,398 --> 00:27:29,448
not enough in the middle.
484
00:27:29,481 --> 00:27:34,317
Credit was then being offered to
kind of paper over that divide.
485
00:27:39,347 --> 00:27:43,030
STIGLITZ: That credit cycle
fed this bubble,
486
00:27:43,062 --> 00:27:45,881
and like every other bubble,
487
00:27:45,913 --> 00:27:47,002
it broke.
488
00:27:47,034 --> 00:27:48,860
(PEOPLE SHOUT, JEER)
489
00:27:48,892 --> 00:27:50,366
FOROOHAR: This time around,
490
00:27:50,397 --> 00:27:53,601
a number of bankers
actually went to jail,
491
00:27:53,632 --> 00:27:56,163
and there really were some
regulatory changes, you know,
492
00:27:56,196 --> 00:27:58,598
like, in particular the
Glass-Steagall Depression-era
493
00:27:58,630 --> 00:28:00,552
legislation that actually
fixed the banking system
494
00:28:00,585 --> 00:28:04,684
and made it safer...
until it was overturned in 1989.
495
00:28:12,820 --> 00:28:14,999
(SOLEMN MUSIC)
496
00:28:15,031 --> 00:28:18,265
After the financial crash,
countries all around the world
497
00:28:18,298 --> 00:28:20,988
also ended up getting
in a trade war.
498
00:28:21,020 --> 00:28:22,365
There were tariffs
that were imposed,
499
00:28:22,398 --> 00:28:24,255
and that created
a snowball cycle,
500
00:28:24,287 --> 00:28:26,753
which led to more pain globally,
501
00:28:28,164 --> 00:28:31,943
and that helped to provoke
the Great Depression.
502
00:28:32,775 --> 00:28:34,154
(SOLEMN MUSIC)
503
00:28:35,205 --> 00:28:37,445
If you read John Steinbeck's
Grapes of Wrath,
504
00:28:37,485 --> 00:28:41,045
you realise the extent
of the shock caused by
505
00:28:41,085 --> 00:28:43,685
the complete collapse of
economic activity.
506
00:28:45,397 --> 00:28:46,646
They told me to
tell you to get off,
507
00:28:46,678 --> 00:28:48,183
and that's what I'm telling ya.
508
00:28:48,215 --> 00:28:50,073
You mean get off of my own land?
509
00:28:50,105 --> 00:28:52,091
Don't go to blaming me,
it ain't my fault.
510
00:28:52,123 --> 00:28:53,245
Whose fault is it?
511
00:28:53,276 --> 00:28:54,654
You know who owns the land...
512
00:28:54,686 --> 00:28:56,672
the Shawnee Land
and Cattle Company.
513
00:28:56,703 --> 00:28:58,529
And who's the Shawnee
Land and Cattle Company?
514
00:28:58,561 --> 00:29:00,420
It ain't nobody! It's a company.
515
00:29:00,451 --> 00:29:01,990
They got a president,
ain't they?
516
00:29:02,022 --> 00:29:04,455
They got somebody knows what
a shotgun's for, ain't they?!
517
00:29:04,487 --> 00:29:05,481
What's the use
of pickin' on him?
518
00:29:05,512 --> 00:29:07,242
He ain't nothin'
but the manager.
519
00:29:07,274 --> 00:29:09,100
And he's half crazy hisself
tryin' to keep up
520
00:29:09,132 --> 00:29:10,382
with his orders from the East.
521
00:29:10,413 --> 00:29:13,488
- Then who do we shoot?
- Brother, I don't know.
522
00:29:13,522 --> 00:29:15,218
- If I did, I'd tell ya.
- (CAR ENGINE STARTS)
523
00:29:15,251 --> 00:29:17,173
I just don't know
who's to blame.
524
00:29:17,204 --> 00:29:19,351
I'm right here to tell you,
mister, there ain't nobody
525
00:29:19,383 --> 00:29:21,273
gonna push me off my land!
526
00:29:21,305 --> 00:29:24,732
My grandpa took up
this land 70 years ago.
527
00:29:24,763 --> 00:29:27,806
My pa was born here.
We was all born on it!
528
00:29:27,839 --> 00:29:30,241
And some of us was killed on it!
529
00:29:33,316 --> 00:29:35,238
(SOLEMN MUSIC)
530
00:29:47,965 --> 00:29:50,125
Banks fail one after another,
531
00:29:50,165 --> 00:29:52,765
which results in
everyone losing their savings.
532
00:29:52,805 --> 00:29:56,245
And this decreases in
demand in other areas,
533
00:29:56,285 --> 00:29:58,325
causing a cascading phenomena
of bankruptcy and unemployment.
534
00:30:04,388 --> 00:30:06,310
(SOLEMN PIANO MUSIC)
535
00:30:29,725 --> 00:30:33,085
The crisis of the 1930s creates
such a strong trauma
536
00:30:33,125 --> 00:30:36,165
that leads to the
public and politicians
537
00:30:36,565 --> 00:30:39,645
holding capitalism accountable.
538
00:30:40,104 --> 00:30:42,345
(TENSE, PERCUSSIVE MUSIC)
539
00:30:56,856 --> 00:30:58,778
(PEOPLE SHOUT)
540
00:31:01,885 --> 00:31:03,806
(GUNSHOT POPS)
541
00:31:04,703 --> 00:31:06,625
(ALL CHANT, SHOUT)
542
00:31:07,298 --> 00:31:08,900
(GUNFIRE)
543
00:31:10,630 --> 00:31:14,313
MAN: The pain in the United
States had become so great,
544
00:31:14,345 --> 00:31:19,726
so grave... absolute poverty...
and as a consequence of that,
545
00:31:19,759 --> 00:31:22,258
the willingness to
make political solutions
546
00:31:22,290 --> 00:31:24,883
that were severe.
547
00:31:24,916 --> 00:31:29,400
ROOSEVELT: This nation is asking
for action and action now.
548
00:31:30,939 --> 00:31:34,430
BREMMER: Price-fixing, massive
change in labor rates...
549
00:31:34,461 --> 00:31:37,119
all of these things under FDR
550
00:31:37,152 --> 00:31:40,227
was something that Americans
hadn't seen before,
551
00:31:40,259 --> 00:31:43,174
and absolutely that led to
massive infrastructure build
552
00:31:43,206 --> 00:31:45,961
and it led to extraordinary
redistribution.
553
00:31:47,275 --> 00:31:49,293
The existence
of a communist alternative
554
00:31:49,325 --> 00:31:53,776
scared the capitalist world
into thinking that if it didn't
555
00:31:53,809 --> 00:31:56,885
at least address some of
the basic inequality issues,
556
00:31:56,917 --> 00:31:59,703
that they would lose
the battle for ideas.
557
00:31:59,735 --> 00:32:01,657
(LOUD EXPLOSION)
558
00:32:05,534 --> 00:32:08,126
In the New Deal itself,
Roosevelt actually borrowed
559
00:32:08,159 --> 00:32:11,395
some ideas... the heavy state
involvement in the economy;
560
00:32:11,427 --> 00:32:13,540
heavy regulation.
561
00:32:15,655 --> 00:32:19,019
There was a clear recognition
that unless the state tried to
562
00:32:19,050 --> 00:32:20,780
do something about jobs
563
00:32:20,813 --> 00:32:24,784
and do enough redistribution
to keep people from starving,
564
00:32:24,816 --> 00:32:28,275
that you wouldn't have
basic social stability.
565
00:32:30,486 --> 00:32:32,408
(GLASS SHATTERS)
566
00:32:36,156 --> 00:32:38,078
(DARK, OMINOUS MUSIC)
567
00:32:51,402 --> 00:32:53,453
WILLIAMS: The Wall Street crash
creates poverty in America,
568
00:32:53,486 --> 00:32:54,894
it creates poverty in Britain,
569
00:32:54,926 --> 00:32:56,783
but it has a massive
effect on Germany,
570
00:32:56,816 --> 00:33:00,691
because Germany is already poor.
After World War I,
571
00:33:00,723 --> 00:33:03,095
they were given these very
punitive reparations...
572
00:33:03,127 --> 00:33:05,945
they had to give huge amounts
of money to the other countries.
573
00:33:05,978 --> 00:33:08,443
And what you have is
this horrific inflation
574
00:33:08,475 --> 00:33:09,693
in the Weimar Republic...
575
00:33:09,726 --> 00:33:11,583
Germany as it was known in
the 1920s...
576
00:33:11,615 --> 00:33:13,312
in which, basically,
at one point,
577
00:33:13,344 --> 00:33:17,637
a whole barrel of banknotes
cannot buy you a loaf of bread.
578
00:33:20,840 --> 00:33:23,786
We can absolutely link, as tight
as that, the rise of fascism
579
00:33:23,819 --> 00:33:27,023
in Europe in the 1930s
and extreme poverty.
580
00:33:29,041 --> 00:33:30,963
(TENSE, SOMBER MUSIC)
581
00:33:43,487 --> 00:33:45,377
And you can see
how seductive it is
582
00:33:45,409 --> 00:33:47,907
when someone like Adolf Hitler
comes up and says,
583
00:33:47,939 --> 00:33:51,175
"I'll make Germany great again.
We'll be powerful again."
584
00:33:51,206 --> 00:33:53,128
And really what he's saying is,
585
00:33:53,161 --> 00:33:56,044
"The reason why we're so poor in
Germany is because of Britain,
586
00:33:56,076 --> 00:34:00,560
is because of America, is
because of the rest of Europe."
587
00:34:00,592 --> 00:34:02,579
(SOMBER MUSIC CONTINUES)
588
00:34:12,284 --> 00:34:15,326
These downtrodden people
were so open, so vulnerable
589
00:34:15,359 --> 00:34:18,146
to the rise of fascism
and the call of racism,
590
00:34:18,178 --> 00:34:19,650
the call of exclusionism
591
00:34:19,682 --> 00:34:22,630
and the call of
invading other countries.
592
00:34:22,662 --> 00:34:24,584
(UNSETTLING MUSIC)
593
00:34:32,965 --> 00:34:36,365
We want to see no more
class divisions.
594
00:34:37,845 --> 00:34:40,245
We want to be one people.
595
00:34:40,765 --> 00:34:45,565
And you, my youth,
are to be this people.
596
00:34:47,454 --> 00:34:49,280
(TRIUMPHANT, PATRIOTIC MUSIC)
597
00:34:49,311 --> 00:34:53,669
ARCHIVE: One American
airplane factory... one of many.
598
00:34:53,702 --> 00:34:56,488
One bomber...
thousands on the way...
599
00:34:58,024 --> 00:35:00,268
an angel of death.
600
00:35:00,300 --> 00:35:02,798
NAIDU: What really gets rid of
the Depression is transforming
601
00:35:02,829 --> 00:35:04,687
the economy into World War II.
602
00:35:04,719 --> 00:35:07,026
And the scale of this is just
something that humanity
603
00:35:07,059 --> 00:35:08,917
had never seen before.
604
00:35:09,749 --> 00:35:11,639
(CLICKING, WHIRRING)
605
00:35:11,671 --> 00:35:13,690
The governments of all
the societies involved
606
00:35:13,721 --> 00:35:15,804
just kind of take
over production,
607
00:35:15,835 --> 00:35:17,501
and this is an industrial war,
608
00:35:17,534 --> 00:35:20,608
so production is, kind of,
the terms under which,
609
00:35:20,640 --> 00:35:23,810
in the long run,
this will be won or lost.
610
00:35:25,221 --> 00:35:27,143
(TENSE MUSIC)
611
00:35:30,058 --> 00:35:32,812
The labor movement
got a lot of political power.
612
00:35:32,845 --> 00:35:34,605
Like, if you're
producing for the war,
613
00:35:34,638 --> 00:35:39,281
you have to automatically
recognize a union.
614
00:35:39,314 --> 00:35:41,493
And then just also raising
the money to pay for that
615
00:35:41,525 --> 00:35:43,735
just involved raising taxes.
616
00:35:45,144 --> 00:35:48,060
This period was the
last gasp of feudalism,
617
00:35:48,091 --> 00:35:51,007
and it took this to finally
purge the influence
618
00:35:51,038 --> 00:35:54,242
of the aristocracy
in advanced countries.
619
00:35:55,011 --> 00:35:56,933
(OMINOUS MUSIC)
620
00:36:02,730 --> 00:36:04,652
(ENGINES HUM)
621
00:36:07,599 --> 00:36:09,649
(OMINOUS MUSIC CONTINUES)
622
00:36:12,244 --> 00:36:14,166
(AIR RAID SIREN WAILS)
623
00:36:15,223 --> 00:36:17,145
(TORPEDOES WHISTLE)
624
00:36:20,539 --> 00:36:22,014
(EXPLOSIONS BOOM)
625
00:36:22,046 --> 00:36:24,383
(RAPID GUNFIRE, BOMBS BOOM)
626
00:36:28,612 --> 00:36:30,534
(PROPELLER WHIRRS)
627
00:36:32,456 --> 00:36:34,378
(BOMBS WHISTLE, BOOM)
628
00:36:36,556 --> 00:36:38,478
(EXPLOSIONS BOOM)
629
00:36:41,265 --> 00:36:43,187
(JARRING MUSIC)
630
00:36:46,614 --> 00:36:48,536
(MUSIC FADES)
631
00:36:49,882 --> 00:36:51,804
(RESONATING RUMBLING)
632
00:37:00,516 --> 00:37:02,438
(WATER LAPS GENTLY)
633
00:37:10,541 --> 00:37:11,951
(QUIET, MELANCHOLY MUSIC)
634
00:37:21,565 --> 00:37:25,325
The wars themselves
are used to destroy capital.
635
00:37:27,085 --> 00:37:31,525
Firstly, there are bombings
that destroy entire cities.
636
00:37:31,565 --> 00:37:32,485
But at the same time,
637
00:37:32,525 --> 00:37:36,205
this only accounts for a third
of the total loss of capital.
638
00:37:37,965 --> 00:37:40,845
So where do the other
two-thirds come from?
639
00:37:40,885 --> 00:37:44,765
A third is from inflation that
destroys the public debt,
640
00:37:44,805 --> 00:37:48,965
which was lent by the
citizens to finance the war.
641
00:37:49,805 --> 00:37:53,045
And then there is a third
from new rules,
642
00:37:53,325 --> 00:37:54,885
like rent controls,
643
00:37:54,925 --> 00:37:56,765
nationalisations and
financial regulations.
644
00:37:58,485 --> 00:38:02,405
But this collapse of capital is
not necessarily a bad thing
645
00:38:02,445 --> 00:38:05,085
because the power relationships
within society are transformed.
646
00:38:05,669 --> 00:38:08,744
(ELLA FITZGERALD'S
'DON'T FENCE ME IN')
647
00:38:12,556 --> 00:38:15,407
♪ Oh, give me land,
lots of land ♪
648
00:38:15,439 --> 00:38:18,065
♪ Under starry skies above ♪
649
00:38:18,097 --> 00:38:21,140
♪ Don't fence me in ♪
650
00:38:21,173 --> 00:38:24,215
♪ Let me ride through
the wide open country... ♪
651
00:38:24,485 --> 00:38:27,405
Everyone is equal
in the face of death.
652
00:38:28,485 --> 00:38:32,725
Wars, with their
death and despair,
653
00:38:32,965 --> 00:38:37,645
are also moments when
humanity is found in us all.
654
00:38:38,118 --> 00:38:42,473
♪ Let me be my myself
in the evening breeze ♪
655
00:38:42,506 --> 00:38:46,286
♪ Listen to the murmur
of the cottonwood trees... ♪
656
00:38:47,085 --> 00:38:50,845
This new political context
will ultimately lead
657
00:38:51,245 --> 00:38:55,165
to a realisation of the spirit
of the Enlightenment
658
00:38:56,125 --> 00:38:58,285
and of equality proclaimed
in the 18th century.
659
00:38:58,842 --> 00:39:07,939
♪ Don't fence me in ♪
660
00:39:11,174 --> 00:39:13,801
The social landscape
is completely different
661
00:39:13,833 --> 00:39:15,531
in the aftermath
of World War II.
662
00:39:15,563 --> 00:39:18,830
You see the biggest shift in
attitudes that you ever see.
663
00:39:18,862 --> 00:39:21,264
Bit different from
what it used to be,
664
00:39:21,297 --> 00:39:22,610
I can tell ya.
665
00:39:23,475 --> 00:39:25,076
(PENSIVE PIANO MUSIC)
666
00:39:25,108 --> 00:39:27,671
ARCHIVE: There will be sickness
and unemployment benefits,
667
00:39:27,703 --> 00:39:30,266
retirement pensions,
industrial injuries benefits,
668
00:39:30,298 --> 00:39:32,989
guardians allowances, widows'
benefits, maternity grants.
669
00:39:33,020 --> 00:39:35,326
WILLIAMS: It's a move towards
creating a benefit system.
670
00:39:35,359 --> 00:39:37,825
We have the idea
of sickness pay, holiday pay.
671
00:39:37,857 --> 00:39:39,907
In Britain they created
the National Health Service...
672
00:39:39,939 --> 00:39:42,566
free service from
cradle to grave.
673
00:39:43,078 --> 00:39:45,192
(PENSIVE MUSIC)
674
00:39:50,126 --> 00:39:52,464
It's a move towards
nationalization of industry,
675
00:39:52,496 --> 00:39:54,449
it's a move towards
taxation of inheritance,
676
00:39:54,482 --> 00:39:56,340
taxation of property and wealth.
677
00:39:56,371 --> 00:39:59,062
I'm telling you,
it works out fine.
678
00:39:59,095 --> 00:40:00,920
ARCHIVE: Television, with its
promise of endless hours
679
00:40:00,952 --> 00:40:04,957
of enjoyment, entertainment,
was part of the peacetime green.
680
00:40:04,988 --> 00:40:08,480
Television... an unparalleled
blending of private incentive
681
00:40:08,511 --> 00:40:10,882
and public service.
682
00:40:10,914 --> 00:40:12,324
WILLIAMS: In America
in the '50s,
683
00:40:12,355 --> 00:40:14,054
you see capital restrained also.
684
00:40:14,085 --> 00:40:16,199
You have rent controls
on apartments,
685
00:40:16,232 --> 00:40:17,993
you have limits on landowners.
686
00:40:18,025 --> 00:40:20,524
Capital can't just roam free,
it can't just increase itself.
687
00:40:20,556 --> 00:40:23,791
Capital must be harnessed
like some wild horse.
688
00:40:23,823 --> 00:40:26,161
TV: This is the land
of the thoroughbred.
689
00:40:26,194 --> 00:40:28,981
WILLIAMS: There is a very clear
vision that capital needs to be
690
00:40:29,012 --> 00:40:31,607
helping the people, that
actually the whole principle
691
00:40:31,639 --> 00:40:33,945
in which the rich do whatever
they want with their capital
692
00:40:33,977 --> 00:40:35,547
and that's good for the nation,
693
00:40:35,579 --> 00:40:38,045
well, that's being challenged
across the world.
694
00:40:38,078 --> 00:40:40,448
♪ I wish I had
a castle in the sky ♪
695
00:40:42,145 --> 00:40:45,861
♪ A way up high where
bluebirds like to fly ♪
696
00:40:45,893 --> 00:40:49,192
The new vision is that the '50s
is going to be the age in which
697
00:40:49,224 --> 00:40:50,730
everyone can have wealth.
698
00:40:50,762 --> 00:40:52,684
♪ ...with a hundred
rooms or more... ♪
699
00:40:52,716 --> 00:40:54,093
...some day...
700
00:40:54,125 --> 00:40:57,040
♪ With stars for windows,
clouds for rugs ♪
701
00:40:57,072 --> 00:40:59,379
♪ A rainbow for a door ♪
702
00:40:59,411 --> 00:41:02,262
People who are born
just after World War II
703
00:41:02,294 --> 00:41:05,560
had a life that no child
before them could ever imagine.
704
00:41:05,593 --> 00:41:08,124
WOMAN: I just wish
I had a decent kitchen.
705
00:41:08,155 --> 00:41:10,365
(BELLS RING, PEOPLE EXCLAIM)
706
00:41:11,999 --> 00:41:13,248
WILLIAMS: For the first time,
707
00:41:13,281 --> 00:41:16,099
hard work and study
can get you to the top.
708
00:41:16,131 --> 00:41:18,053
(CHEERING, APPLAUSE)
709
00:41:19,687 --> 00:41:21,513
- Hello, Mrs. Thatcher.
- Nice to see you.
710
00:41:21,544 --> 00:41:24,396
- Have a seat.
- (CHEERING, APPLAUSE)
711
00:41:26,253 --> 00:41:29,265
My father left school
at 12 or 13,
712
00:41:29,296 --> 00:41:31,026
and didn't have some
of the chances
713
00:41:31,058 --> 00:41:33,524
that you and I have
to go on to college.
714
00:41:33,557 --> 00:41:35,959
And I think you'll find
when you're a parent,
715
00:41:35,991 --> 00:41:39,194
what you're always trying to do
is to give your children
716
00:41:39,227 --> 00:41:41,661
the sort of chances
you didn't have.
717
00:41:41,693 --> 00:41:44,351
Would you like to see
a woman prime minister?
718
00:41:44,384 --> 00:41:46,722
I think it depends upon
who the person is.
719
00:41:46,754 --> 00:41:49,605
I don't think that there will
be a woman prime minister
720
00:41:49,637 --> 00:41:51,302
in my lifetime.
721
00:41:52,743 --> 00:41:54,442
WILLIAMS: What you see in
Margaret Thatcher's life
722
00:41:54,473 --> 00:41:57,004
is incredible social mobility.
723
00:41:57,037 --> 00:41:59,022
An ordinary shopkeeper's
daughter from the North,
724
00:41:59,054 --> 00:42:01,425
she went to grammar school,
she went to Oxford,
725
00:42:01,456 --> 00:42:03,570
and became the first
female prime minister,
726
00:42:03,603 --> 00:42:04,756
and, of course, wealthy.
727
00:42:04,788 --> 00:42:07,414
And that is simply
through this new society
728
00:42:07,447 --> 00:42:11,002
in which social mobility
was actually possible.
729
00:42:11,034 --> 00:42:14,237
And what you have is this real
surge of the middle classes
730
00:42:14,270 --> 00:42:16,640
and the lower middle classes
into positions of power.
731
00:42:16,671 --> 00:42:18,593
(PENSIVE MUSIC)
732
00:42:23,845 --> 00:42:26,245
If you look at the
development of inequality
733
00:42:26,285 --> 00:42:29,845
through the 20th century,
the most striking transformation
734
00:42:29,885 --> 00:42:34,805
is the growth of an
extremely strong middle class.
735
00:42:36,165 --> 00:42:39,565
Until 1914, the
middle class doesn't exist.
736
00:42:40,285 --> 00:42:43,405
Or more accurately, they're
almost as poor as the poorest.
737
00:42:47,285 --> 00:42:49,325
The decades after the war -
738
00:42:49,365 --> 00:42:51,965
30 years that saw glorious
economic growth -
739
00:42:52,005 --> 00:42:56,125
are marked by a steep increase
in purchasing power,
740
00:42:56,565 --> 00:42:59,845
especially for lower and
middle-class workers
741
00:42:59,885 --> 00:43:04,645
who can buy consumer goods,
improve their standard of living
742
00:43:04,685 --> 00:43:08,605
and save money to buy
a house and acquire capital.
743
00:43:09,109 --> 00:43:10,518
And we'll have the
kitchen right here,
744
00:43:10,550 --> 00:43:12,920
so we can see the children
playing in the yard.
745
00:43:12,952 --> 00:43:14,938
Children?! How many
you planning on?
746
00:43:14,970 --> 00:43:16,892
Not more than six, I hope.
747
00:43:18,206 --> 00:43:20,031
(CHILDREN CHATTER)
748
00:43:20,925 --> 00:43:25,365
They're a group who are neither
very rich nor completely poor,
749
00:43:25,405 --> 00:43:28,165
but still have a substantial
share of national capital.
750
00:43:30,250 --> 00:43:32,235
(UNSETTLING PIANO MUSIC)
751
00:43:40,805 --> 00:43:42,205
But in recent decades,
752
00:43:42,245 --> 00:43:45,645
the share of wealth
owned by the middle class
753
00:43:45,685 --> 00:43:48,685
has started to decline
sharply in the US
754
00:43:48,965 --> 00:43:50,565
and a little less
sharply in Europe.
755
00:43:54,605 --> 00:43:57,525
Clearly we've taken
a very different direction,
756
00:43:57,565 --> 00:44:01,325
which can be quite disturbing if
we look into the 21st century.
757
00:44:03,645 --> 00:44:06,245
One of the greatest
challenges for the future
758
00:44:06,285 --> 00:44:09,205
is whether the middle class
will continue to shrink,
759
00:44:09,245 --> 00:44:11,805
with the risk of returning to an
impoverished middle class
760
00:44:11,845 --> 00:44:14,365
like we had a century ago.
761
00:44:16,376 --> 00:44:18,650
(UNSETTLING MUSIC CONTINUES)
762
00:44:22,238 --> 00:44:24,383
(BIRDSONG, CHILDREN SHOUT)
763
00:44:27,427 --> 00:44:29,893
FUKUYAMA: The decades
immediately after World War II
764
00:44:29,925 --> 00:44:31,847
were quite remarkable.
765
00:44:33,064 --> 00:44:35,658
There was a high degree
of social consensus
766
00:44:35,691 --> 00:44:39,310
that really sprang out
of the whole war effort.
767
00:44:40,784 --> 00:44:43,732
It was so...
You had a solidarity,
768
00:44:43,764 --> 00:44:47,576
but it was on the basis of
a pretty stratified society.
769
00:44:49,176 --> 00:44:51,098
There were other forms
of inequality that existed
770
00:44:51,130 --> 00:44:52,828
in that period.
771
00:44:52,860 --> 00:44:55,070
But that began to change
after the civil rights movement
772
00:44:55,102 --> 00:44:58,561
in the 1960s and then all
of the other social movements
773
00:44:58,594 --> 00:45:00,420
that occurred thereafter.
774
00:45:00,451 --> 00:45:02,373
- ♪ You better think ♪
- ♪ Think! ♪
775
00:45:02,405 --> 00:45:04,231
♪ Think about what
you're trying to do to me ♪
776
00:45:04,263 --> 00:45:07,338
The negro still is not free.
777
00:45:07,370 --> 00:45:08,749
♪ ...let yourself be free ♪
778
00:45:08,780 --> 00:45:11,118
- ♪ Oh, freedom ♪
- ♪ Freedom! ♪
779
00:45:11,150 --> 00:45:13,072
- ♪ Some freedom ♪
- ♪ Freedom! ♪
780
00:45:13,104 --> 00:45:14,930
♪ Oh, freedom ♪
781
00:45:14,962 --> 00:45:17,300
♪ Yeah, freedom! ♪
782
00:45:17,333 --> 00:45:19,255
FUKUYAMA: I think that,
politically,
783
00:45:19,287 --> 00:45:22,553
having a broad middle class
is quite important.
784
00:45:22,585 --> 00:45:24,475
It's part of what's
called modernization
785
00:45:24,507 --> 00:45:26,462
through this idea that
as your income rises,
786
00:45:26,493 --> 00:45:29,665
you develop a middle class
that are better educated,
787
00:45:29,697 --> 00:45:33,702
and therefore they will demand
a higher level of participation.
788
00:45:33,734 --> 00:45:36,359
- ♪ Oh, freedom ♪
- ♪ Freedom! ♪
789
00:45:36,392 --> 00:45:38,153
- ♪ Some freedom ♪
- ♪ Freedom! ♪
790
00:45:38,185 --> 00:45:41,260
♪ Oh, freedom!
Yeah, freedom! ♪
791
00:45:41,293 --> 00:45:43,790
WOMEN CHANT: We have
been victims for so long.
792
00:45:43,823 --> 00:45:45,777
- ♪ Freedom ♪
- ♪ Oh, freedom ♪
793
00:45:45,808 --> 00:45:48,595
- ♪ Freedom ♪
- ♪ Give me some freedom ♪
794
00:45:48,628 --> 00:45:51,542
♪ Oh, freedom! ♪
795
00:45:51,574 --> 00:45:54,617
- ♪ Whoo! To the ball, baby ♪
- ♪ To the ball ♪
796
00:45:56,155 --> 00:45:59,230
Then that kind of all
unravels in the '70s.
797
00:45:59,262 --> 00:46:02,945
ANCHOR: This is NBC Nightly
News, Wednesday October 17th.
798
00:46:02,978 --> 00:46:05,445
Good evening. The Middle East
war produced developments
799
00:46:05,477 --> 00:46:07,303
all over the world today.
800
00:46:07,335 --> 00:46:09,832
The oil-producing countries
of the Arab world
801
00:46:09,865 --> 00:46:12,652
decided to use their oil
as a political weapon.
802
00:46:12,684 --> 00:46:14,414
REPORTER: There was an
announcement in Kuwait
803
00:46:14,445 --> 00:46:16,559
that prices for Arab oil
were going up...
804
00:46:16,592 --> 00:46:19,506
a huge increase voted
in an overnight meeting
805
00:46:19,538 --> 00:46:23,062
until Israeli forces leave
occupied Arab land.
806
00:46:23,094 --> 00:46:25,016
(TENSE MUSIC)
807
00:46:27,547 --> 00:46:31,006
NAIDU: This oil shock hits
all of the advanced economies,
808
00:46:31,038 --> 00:46:33,633
and oil was an input
into everything.
809
00:46:35,107 --> 00:46:37,189
REPORTER: It was announced
today that gasless Sundays
810
00:46:37,221 --> 00:46:40,071
will go into effect
as of next month.
811
00:46:40,104 --> 00:46:41,737
REPORTER: The price
of foreign oil
812
00:46:41,769 --> 00:46:44,299
had jumped from $3
to $12 a barrel.
813
00:46:45,837 --> 00:46:49,488
NAIDU: Quadrupling the price of
oil translated into this period
814
00:46:49,522 --> 00:46:52,083
where, like, prices
started to increase
815
00:46:52,115 --> 00:46:55,094
and wages weren't keeping pace,
816
00:46:55,126 --> 00:46:57,337
but then unions and workers
started demanding
817
00:46:57,369 --> 00:47:00,636
even higher wages to
keep pace with prices,
818
00:47:00,667 --> 00:47:02,878
and then what firms would do
is then increase prices
819
00:47:02,910 --> 00:47:05,986
even further to pass on
the effects of wages,
820
00:47:06,017 --> 00:47:09,637
and so you got what's
called a wage-price spiral.
821
00:47:09,669 --> 00:47:13,960
And so you had this period of
high inflation and low growth,
822
00:47:13,993 --> 00:47:17,068
so that's why it got
called stagflation.
823
00:47:18,254 --> 00:47:20,720
(OCEAN LAPS)
824
00:47:20,751 --> 00:47:22,673
(PLANE ENGINE WHINES)
825
00:47:25,077 --> 00:47:27,095
FOROOHAR: Globalization
is starting to happen.
826
00:47:27,127 --> 00:47:30,425
The emerging markets are
coming online in the world.
827
00:47:30,457 --> 00:47:31,804
Europe is back on its feet,
828
00:47:31,836 --> 00:47:33,726
Germany is becoming
a producer again,
829
00:47:33,758 --> 00:47:36,351
a number of European nations
are becoming more competitive.
830
00:47:36,383 --> 00:47:38,305
(DOLLY PARTON'S '9 TO 5')
831
00:47:40,388 --> 00:47:42,053
FOROOHAR: The global
picture is changing.
832
00:47:42,085 --> 00:47:44,167
American capital
suddenly doesn't have
833
00:47:44,199 --> 00:47:45,736
the world to itself anymore.
834
00:47:45,768 --> 00:47:47,787
♪ Tumble outta bed and I
stumble to the kitchen ♪
835
00:47:47,819 --> 00:47:50,030
♪ Pour myself
a cup of ambition... ♪
836
00:47:50,062 --> 00:47:52,431
FOROOHAR: But another thing
that's happening in the 1970s
837
00:47:52,463 --> 00:47:55,795
is you see a very kind
of siloed, financialized
838
00:47:55,828 --> 00:47:58,774
way of thinking about how to run
a corporate balance sheet...
839
00:47:58,807 --> 00:48:01,112
cut costs,
marshal your capital,
840
00:48:01,143 --> 00:48:03,451
treat labor as a cost,
not an asset.
841
00:48:03,483 --> 00:48:05,565
♪ Working 9 to 5 ♪
842
00:48:05,597 --> 00:48:08,063
♪ What a way to make a living ♪
843
00:48:08,095 --> 00:48:10,081
♪ Barely gettin' by ♪
844
00:48:10,113 --> 00:48:12,292
♪ It's all takin'
and no givin' ♪
845
00:48:12,324 --> 00:48:14,214
♪ They just use your mind ♪
846
00:48:14,246 --> 00:48:16,616
♪ And you never get the credit ♪
847
00:48:16,647 --> 00:48:20,523
♪ It's enough to drive you
crazy if you let it ♪
848
00:48:20,556 --> 00:48:22,509
FOROOHAR: Companies are not
investing in their workers,
849
00:48:22,541 --> 00:48:23,823
they're not raising wages,
850
00:48:23,855 --> 00:48:26,128
so you start to really
get that big 'X'
851
00:48:26,161 --> 00:48:29,909
where Wall Street's going here,
Main Street's going down here.
852
00:48:29,941 --> 00:48:32,119
♪ It's a rich man's game ♪
853
00:48:32,150 --> 00:48:34,041
♪ No matter what they call it ♪
854
00:48:34,072 --> 00:48:38,877
♪ And you spend your life
puttin' money in his wallet ♪
855
00:48:38,910 --> 00:48:40,160
♪ 9 to 5... ♪
856
00:48:40,191 --> 00:48:41,697
(MACHINERY WHIRRS)
857
00:48:43,394 --> 00:48:45,637
FOROOHAR: Germany and Japan
took a different model...
858
00:48:45,669 --> 00:48:48,134
a model in which workers sat
on the boards of companies,
859
00:48:48,167 --> 00:48:50,249
had more of a say.
860
00:48:50,281 --> 00:48:52,396
This actually gave them
a big advantage.
861
00:48:52,429 --> 00:48:54,061
They were able to use
that expertise
862
00:48:54,093 --> 00:48:55,375
and increase their efficiency,
863
00:48:55,407 --> 00:48:58,065
and eventually gain market share
from US companies.
864
00:48:58,096 --> 00:48:59,730
(SINISTER MUSIC)
865
00:48:59,762 --> 00:49:03,062
ARCHIVE: When it started,
America was unprepared.
866
00:49:03,095 --> 00:49:04,984
From across the ocean,
they came...
867
00:49:05,017 --> 00:49:09,436
little cars determined to change
the buying habits of a nation.
868
00:49:09,469 --> 00:49:12,191
It's a great-looking car.
What do you call it?
869
00:49:12,223 --> 00:49:14,337
- Isuzu.
- Gesundheit.
870
00:49:14,369 --> 00:49:16,259
Road-hugging, heart-pounding,
871
00:49:16,291 --> 00:49:18,277
hood-soaring, deck-sloping...
872
00:49:18,310 --> 00:49:20,488
♪ We are... ♪
873
00:49:20,520 --> 00:49:23,275
♪ Cadillacs drive Subaru ♪
874
00:49:23,307 --> 00:49:25,357
MAN: Reagan for president.
875
00:49:26,829 --> 00:49:29,073
Japanese production
of automobiles is almost
876
00:49:29,104 --> 00:49:32,885
twice as great per worker
as it is in America.
877
00:49:32,917 --> 00:49:35,318
We were once the greatest
producer of automobiles,
878
00:49:35,350 --> 00:49:38,778
producing more than all the
rest of the world combined.
879
00:49:38,810 --> 00:49:40,508
That is no longer true.
880
00:49:40,685 --> 00:49:43,925
Every country feels the
need to tell a story about
881
00:49:43,965 --> 00:49:48,285
why it's richer than another
or why it has become poorer.
882
00:49:48,765 --> 00:49:52,765
And it's this story that
Reagan and Thatcher tell
883
00:49:53,205 --> 00:49:55,765
the American and British public.
884
00:49:56,107 --> 00:49:58,638
- (PEOPLE CHANT)
- Thank you very much.
885
00:49:58,670 --> 00:50:00,624
(HORN SOUNDS)
886
00:50:00,657 --> 00:50:03,732
Can anyone look at our reduced
standing in the world today
887
00:50:03,763 --> 00:50:07,126
and say, "Let's have four
more years of this"?
888
00:50:07,158 --> 00:50:09,880
CROWD: No!
889
00:50:09,912 --> 00:50:13,052
For those who've abandoned hope,
we'll restore hope
890
00:50:13,085 --> 00:50:15,678
and we'll welcome them
into a great national crusade
891
00:50:15,710 --> 00:50:19,779
- to make America great again.
- (CHEERING, APPLAUSE)
892
00:50:20,485 --> 00:50:22,845
In the United States
there was a feeling
893
00:50:22,885 --> 00:50:25,205
that Germany was catching up,
894
00:50:25,245 --> 00:50:27,085
that Japan was catching up -
895
00:50:27,125 --> 00:50:29,645
these countries
that lost the war.
896
00:50:29,685 --> 00:50:33,605
And Reagan, and also
Thatcher to a certain extent,
897
00:50:33,645 --> 00:50:36,725
use this ideological
argument to say,
898
00:50:36,765 --> 00:50:39,045
"Look, these countries
are catching up.
899
00:50:39,085 --> 00:50:42,765
"Something needs to change.
What could we change?
900
00:50:42,805 --> 00:50:45,725
"Ah, it's because
of the welfare state
901
00:50:46,445 --> 00:50:49,565
"that was put in place
following the New Deal.
902
00:50:49,605 --> 00:50:51,445
"That's what's made us soft.
903
00:50:51,485 --> 00:50:54,045
"And so we must return to
the mythical capitalism
904
00:50:54,085 --> 00:50:57,525
"of the 19th century. That's how
we're going to re-energise."
905
00:50:58,346 --> 00:51:00,236
(CROWDS JEER)
906
00:51:00,268 --> 00:51:02,446
BRITISH REPORTER: Here comes
the Prime Ministerial Rover,
907
00:51:02,478 --> 00:51:04,655
bearing now Mrs. Thatcher.
908
00:51:04,687 --> 00:51:06,161
AMERICAN REPORTER:
Enter Margaret Thatcher,
909
00:51:06,194 --> 00:51:09,140
a grocer's daughter educated
among the privileged classes
910
00:51:09,173 --> 00:51:10,550
at Oxford University.
911
00:51:10,581 --> 00:51:12,888
(OFFICERS SPEAK INDISTINCTLY)
912
00:51:12,921 --> 00:51:15,900
There is now work to be done.
913
00:51:15,931 --> 00:51:18,302
In deciding that, actually,
what we need to do
914
00:51:18,334 --> 00:51:22,530
is increase the value of assets
in order to increase investment,
915
00:51:22,562 --> 00:51:25,061
some of the thinking
behind what would happen
916
00:51:25,093 --> 00:51:28,200
when you let capital free,
917
00:51:28,232 --> 00:51:31,146
you had to suppress
the power of labor.
918
00:51:32,523 --> 00:51:34,927
(PENSIVE MUSIC)
919
00:51:34,958 --> 00:51:38,224
REPORTER: This 12-foot-high pile
is part of two weeks' rubbish
920
00:51:38,257 --> 00:51:40,339
piled outside the
local refuse depot.
921
00:51:40,372 --> 00:51:41,589
Like others in Central London,
922
00:51:41,621 --> 00:51:43,319
it's been closed
now for two weeks
923
00:51:43,351 --> 00:51:45,080
because of the dustmen's
indefinite strike.
924
00:51:45,111 --> 00:51:47,002
REPORTER: The teachers' union
are today putting forward
925
00:51:47,033 --> 00:51:50,206
a pay claim. 33,000 school
children are out of school
926
00:51:50,238 --> 00:51:52,383
in the worst-affected London
borough of Haringey.
927
00:51:52,416 --> 00:51:53,760
REPORTER: Cancelled operations
928
00:51:53,793 --> 00:51:55,747
meant empty beds
up on the wards,
929
00:51:55,779 --> 00:51:57,957
which would otherwise
have been used.
930
00:51:57,990 --> 00:51:59,751
SHAHEEN: You have to remember,
at those times,
931
00:51:59,783 --> 00:52:03,756
there were issues about strikes;
the public were upset about
932
00:52:03,787 --> 00:52:07,599
the way some labor unions
were acting in that time.
933
00:52:07,631 --> 00:52:10,129
I'm going to boil everything
because the sewage men,
934
00:52:10,162 --> 00:52:12,468
I understand,
are still on strike,
935
00:52:12,500 --> 00:52:16,280
and so it'll be polluted,
so you can get typhoid,
936
00:52:16,311 --> 00:52:18,106
can't you?
937
00:52:18,137 --> 00:52:20,092
SHAHEEN: There was a mandate
to do something about
938
00:52:20,124 --> 00:52:22,206
the power of labor
against capital.
939
00:52:22,238 --> 00:52:24,960
And it certainly is a tricky job
trying to get that right.
940
00:52:24,993 --> 00:52:28,580
This government has rolled back
the frontiers of the state
941
00:52:28,612 --> 00:52:31,687
and will roll them back
still further.
942
00:52:31,719 --> 00:52:34,378
Millions have already
become shareholders
943
00:52:34,410 --> 00:52:38,414
in British Gas, British Airways,
British airports.
944
00:52:42,803 --> 00:52:46,101
(INDISTINCT RADIO CHATTER,
ENGINES WHINE)
945
00:52:48,792 --> 00:52:50,009
WOMAN:
Attention, all passengers.
946
00:52:50,041 --> 00:52:53,597
Flight 307 is cancelled
until further notice.
947
00:52:53,630 --> 00:52:55,679
NAIDU: This incredible
hostility to unions
948
00:52:55,711 --> 00:52:58,594
starts in the '80s
and is really crystallized
949
00:52:58,626 --> 00:53:03,335
when Reagan fires all
these air traffic controllers.
950
00:53:03,367 --> 00:53:05,768
REAGAN: I must tell those
who fail to report for duty
951
00:53:05,800 --> 00:53:10,158
this morning, if they do not
report for work within 48 hours,
952
00:53:10,190 --> 00:53:14,802
they have forfeited their jobs
and will be terminated.
953
00:53:14,834 --> 00:53:16,500
End of statement.
954
00:53:16,532 --> 00:53:18,870
NAIDU: That's kind of
seen as like a greenlight
955
00:53:18,902 --> 00:53:20,664
to a whole industry.
956
00:53:20,696 --> 00:53:22,458
(MICROPHONE FEEDBACK)
957
00:53:22,490 --> 00:53:25,277
Good evening. This afternoon,
President Reagan started firing
958
00:53:25,309 --> 00:53:28,064
the strikers, and the government
claimed it was ready to rebuild
959
00:53:28,095 --> 00:53:29,857
the whole system without them.
960
00:53:29,890 --> 00:53:31,812
(MEN SHOUT)
961
00:53:34,245 --> 00:53:35,975
By this evening,
federal judges had sent
962
00:53:36,008 --> 00:53:38,538
five local union leaders
to jail.
963
00:53:38,570 --> 00:53:40,492
(PENSIVE MUSIC)
964
00:53:45,457 --> 00:53:48,051
SHAHEEN: What we've seen over
time... and this is fundamental
965
00:53:48,084 --> 00:53:51,094
to understanding why
inequality has worsened...
966
00:53:51,127 --> 00:53:54,971
is that the share of all the
money that's made in the economy
967
00:53:55,002 --> 00:53:57,725
is going less and less to the
workers, so that is declining...
968
00:53:57,758 --> 00:53:59,903
the wage share...
969
00:53:59,936 --> 00:54:03,394
and the profit share,
essentially what those that own
970
00:54:03,426 --> 00:54:05,861
the capital will get,
is growing.
971
00:54:08,198 --> 00:54:12,011
And that is essentially
about power.
972
00:54:12,042 --> 00:54:13,997
(MICROPHONE FEEDBACK)
973
00:54:14,030 --> 00:54:16,783
Well, I, uh... I appreciate the
opportunity you're giving me,
974
00:54:16,815 --> 00:54:20,019
Mr. Cromwell, as the single
largest shareholder
975
00:54:20,052 --> 00:54:22,038
in Teldar Paper, to speak.
976
00:54:24,536 --> 00:54:27,098
America has become
a second-rate power.
977
00:54:28,476 --> 00:54:29,885
Now, in the days
of the free market,
978
00:54:29,918 --> 00:54:33,119
when our country was
a top industrial power,
979
00:54:33,152 --> 00:54:36,644
there was accountability
to the stockholder.
980
00:54:36,676 --> 00:54:38,246
The Carnegies, the Mellons,
981
00:54:38,277 --> 00:54:40,936
the men that built this
great industrial empire,
982
00:54:40,968 --> 00:54:44,619
made sure of it because it
was their money at stake.
983
00:54:45,837 --> 00:54:47,823
The point is,
ladies and gentlemen,
984
00:54:47,855 --> 00:54:51,795
that greed... for lack
of a better word...
985
00:54:51,828 --> 00:54:53,621
is good.
986
00:54:53,653 --> 00:54:55,447
Greed is right.
987
00:54:55,478 --> 00:54:57,465
Greed works.
988
00:54:57,496 --> 00:54:59,195
And greed...
989
00:54:59,835 --> 00:55:01,982
you mark my words...
990
00:55:02,013 --> 00:55:04,223
will not only save Teldar Paper,
991
00:55:04,256 --> 00:55:08,131
but that other malfunctioning
corporation called the USA.
992
00:55:08,164 --> 00:55:10,726
- Thank you very much.
- (APPLAUSE)
993
00:55:10,758 --> 00:55:12,904
TETT: When Gordon Gekko
was seen on film saying,
994
00:55:12,936 --> 00:55:17,420
"Greed is good," that was
intended to be a howl of protest
995
00:55:17,453 --> 00:55:18,926
against the system.
996
00:55:18,958 --> 00:55:21,809
But such had the
cultural fabric changed,
997
00:55:21,841 --> 00:55:24,340
that actually for some people
coming through universities
998
00:55:24,372 --> 00:55:26,358
applying to join
investment banks,
999
00:55:26,390 --> 00:55:29,112
that phrase "Greed is good"
actually became a license
1000
00:55:29,145 --> 00:55:30,971
to pursue riches.
1001
00:55:31,002 --> 00:55:33,854
(KIM WILDE'S 'KIDS IN AMERICA')
1002
00:55:39,619 --> 00:55:42,405
TETT: The era of
the yuppie came to rule.
1003
00:55:42,438 --> 00:55:45,225
♪ Friday night and
everyone's moving ♪
1004
00:55:45,256 --> 00:55:49,517
♪ I can feel the heat, but it's
soothing, heading down ♪
1005
00:55:49,549 --> 00:55:52,015
TETT: It began to become very
cool to be an entrepreneur,
1006
00:55:52,047 --> 00:55:53,584
to be riding that boom,
1007
00:55:53,617 --> 00:55:57,781
and the idea of arguing for
high taxes and redistribution
1008
00:55:57,813 --> 00:55:59,863
began to seem
very out of fashion.
1009
00:55:59,895 --> 00:56:02,618
- ♪ We're the kids in America ♪
- ♪ Whoa ♪
1010
00:56:02,650 --> 00:56:05,437
- ♪ We're the kids in America ♪
- ♪ Whoa ♪
1011
00:56:05,468 --> 00:56:08,607
♪ Everybody live for
the music-go-round ♪
1012
00:56:10,882 --> 00:56:13,605
The new mantra of
deregulation took hold,
1013
00:56:13,637 --> 00:56:17,481
and so financial services
were deregulated dramatically,
1014
00:56:17,512 --> 00:56:19,338
bankers began to
get paid a lot more,
1015
00:56:19,371 --> 00:56:21,004
and then market forces
were unleashed,
1016
00:56:21,037 --> 00:56:24,111
which made capitalists
a lot richer.
1017
00:56:25,585 --> 00:56:27,507
♪ Hot-shot... ♪
1018
00:56:28,468 --> 00:56:30,390
(MUSIC FADES)
1019
00:56:31,959 --> 00:56:33,881
(WHOOSHING)
1020
00:56:35,547 --> 00:56:38,782
STIGLITZ: The big reforms
of the Reagan-Thatcher era
1021
00:56:38,814 --> 00:56:43,106
were lower the tax
rates on the rich
1022
00:56:43,139 --> 00:56:46,854
on the assumption it would
trickle down. Didn't happen.
1023
00:56:46,886 --> 00:56:48,039
(CAR HORN BLARES)
1024
00:56:48,071 --> 00:56:50,218
When they adopted
these kinds of policies,
1025
00:56:50,249 --> 00:56:54,029
it was very clear that they
would increase inequality.
1026
00:56:54,062 --> 00:56:57,520
The promise was that
the pie would be bigger,
1027
00:56:57,553 --> 00:57:01,364
you would be getting
a smaller percentage
1028
00:57:01,397 --> 00:57:05,112
of a bigger pie, and your
slice would get bigger.
1029
00:57:06,362 --> 00:57:08,284
So in some sense,
1030
00:57:09,565 --> 00:57:11,839
there was no surprise
1031
00:57:11,871 --> 00:57:13,889
that there was
a growth in inequality.
1032
00:57:13,921 --> 00:57:16,772
But the magnitude of
the increase in inequality
1033
00:57:16,804 --> 00:57:18,501
was much larger.
1034
00:57:18,534 --> 00:57:21,737
When we look at the numbers,
we can see it very vividly.
1035
00:57:21,769 --> 00:57:26,253
The bottom 90% have experienced
near-stagnation.
1036
00:57:26,286 --> 00:57:30,322
Most of the growth
has gone to the top 10%.
1037
00:57:30,353 --> 00:57:34,293
Median income for a typical
American household is roughly
1038
00:57:34,326 --> 00:57:36,920
at the level it was
a quarter century ago.
1039
00:57:36,952 --> 00:57:40,188
Real wages, adjusted for
inflation, at the bottom
1040
00:57:40,219 --> 00:57:42,942
are at the level they were
60 years ago.
1041
00:57:46,850 --> 00:57:50,310
In fact, life expectancy
has been declining.
1042
00:57:51,782 --> 00:57:55,242
These are dramatic statistics
that shows the economy
1043
00:57:55,274 --> 00:57:58,413
has not been working
for most Americans.
1044
00:57:58,446 --> 00:58:00,368
(EDGY, TENSE MUSIC)
1045
00:58:06,774 --> 00:58:09,849
By the 1990s, American banks
really became the exporters
1046
00:58:09,881 --> 00:58:12,315
of American capitalism,
and they went everywhere...
1047
00:58:12,348 --> 00:58:14,718
they went to Europe,
they went to Asia.
1048
00:58:16,383 --> 00:58:20,196
And everyone was sold our
version of a trickle-down,
1049
00:58:20,227 --> 00:58:23,302
laissez-faire
deregulate capitalism.
1050
00:58:25,000 --> 00:58:26,922
(JARRING TECHNO MUSIC)
1051
00:58:29,645 --> 00:58:33,456
Life seemed to get
better in the 1990s,
1052
00:58:33,489 --> 00:58:35,955
because the globalization
of the system
1053
00:58:35,987 --> 00:58:39,830
made things for ordinary
people for a while cheaper,
1054
00:58:39,863 --> 00:58:42,233
but then on top of that,
you get credit.
1055
00:58:42,265 --> 00:58:44,187
(EDGY, TECHNO MUSIC)
1056
00:58:45,404 --> 00:58:47,359
When the credit boom took off,
1057
00:58:47,390 --> 00:58:49,889
suddenly ordinary people
could get credit.
1058
00:58:49,921 --> 00:58:51,395
MAN: Master the moment.
1059
00:58:51,427 --> 00:58:55,014
Suddenly, extraordinarily poor
people could get credit.
1060
00:58:55,046 --> 00:58:57,000
- You can apply...
- ...right over the phone.
1061
00:58:57,032 --> 00:58:59,819
People with terrible credit
histories could get credit.
1062
00:58:59,851 --> 00:59:01,677
MAN: There is
absolutely no risk.
1063
00:59:01,709 --> 00:59:04,784
People who in no way
should be given a mortgage
1064
00:59:04,815 --> 00:59:07,571
could get a mortgage.
1065
00:59:07,602 --> 00:59:10,422
And the investment banks
created ever more exotic
1066
00:59:10,454 --> 00:59:15,034
credit derivatives... ways of
parceling up your bad debt
1067
00:59:15,066 --> 00:59:17,597
and disguising its badness.
1068
00:59:17,629 --> 00:59:21,568
That's what kept the system
going for as long as it did.
1069
00:59:21,601 --> 00:59:23,523
And 2008 was where that blew up.
1070
00:59:24,964 --> 00:59:27,334
Wall Street
in panic mode this morning.
1071
00:59:27,367 --> 00:59:28,680
How did this happen?
1072
00:59:28,712 --> 00:59:31,274
22% of homeowners are underwater
on their mortgage...
1073
00:59:31,307 --> 00:59:32,524
Millions of American
homeowners...
1074
00:59:32,556 --> 00:59:34,221
- Homeowners defaulting...
- Greed.
1075
00:59:34,253 --> 00:59:36,783
The essence of the American
Dream could be threatened.
1076
00:59:36,816 --> 00:59:39,218
- Sub-prime lending...
- Higher interest rates...
1077
00:59:39,251 --> 00:59:41,909
Let's see here, uh,
balloon payment,
1078
00:59:41,941 --> 00:59:44,664
37% interest compounded
every minute,
1079
00:59:44,696 --> 00:59:46,745
not understanding
the contract fee,
1080
00:59:46,778 --> 00:59:48,860
da, da, ba, da, ba, ba-da, bow.
1081
00:59:48,892 --> 00:59:50,558
And here's your
new monthly payment.
1082
00:59:50,589 --> 00:59:51,743
(BOTH GASP)
1083
00:59:51,775 --> 00:59:53,569
Listen, you, when
you gave me that money,
1084
00:59:53,601 --> 00:59:56,452
you said I wouldn't have
to repay it till the future.
1085
00:59:56,484 --> 00:59:59,335
This isn't the future!
It's the lousy, stinkin' now!
1086
00:59:59,366 --> 01:00:04,236
Now, calm down. This country
takes care of its middle class.
1087
01:00:04,267 --> 01:00:06,189
(SOMBER MUSIC)
1088
01:00:07,823 --> 01:00:09,489
Ah, don't be sore at the banks.
1089
01:00:09,520 --> 01:00:12,916
Hell, we fired our CEO and he
barely got out with $50 million.
1090
01:00:12,948 --> 01:00:14,613
(BELL RINGS)
1091
01:00:14,646 --> 01:00:16,632
REPORTER: Banks are afraid
to lend money to each other.
1092
01:00:16,664 --> 01:00:18,521
We're seeing a freezing
of the credit market.
1093
01:00:18,554 --> 01:00:19,674
- ...credit markets.
- ...credit markets.
1094
01:00:19,707 --> 01:00:21,212
REPORTER: The fear is rising.
1095
01:00:21,244 --> 01:00:24,512
The fear was, and I think it was
a well-founded fear,
1096
01:00:24,544 --> 01:00:27,779
that the availability of
credit would disappear,
1097
01:00:27,810 --> 01:00:29,861
and perhaps our ability
to even transact,
1098
01:00:29,893 --> 01:00:31,943
to even be able to access
cash to make payments,
1099
01:00:31,975 --> 01:00:33,769
use a credit card,
use a debit card.
1100
01:00:33,801 --> 01:00:36,140
Perhaps that would
break down also.
1101
01:00:36,172 --> 01:00:38,670
REPORTER: Worst week
since the crash of 1929.
1102
01:00:38,702 --> 01:00:40,431
- ...global sell-off.
- ...the Dow tumbled...
1103
01:00:40,463 --> 01:00:42,706
- ...hoarding cash.
- Japan down nearly 10%.
1104
01:00:42,737 --> 01:00:46,358
REPORTER: The British government
blamed American bankers.
1105
01:00:46,389 --> 01:00:48,279
When it starts to unravel,
then you start to worry...
1106
01:00:48,311 --> 01:00:50,555
how broadly will this
spread around the world
1107
01:00:50,586 --> 01:00:53,373
and are we on the verge of
another Great Depression?
1108
01:00:53,405 --> 01:00:57,504
American taxpayers woke up this
morning to learn their money
1109
01:00:57,537 --> 01:00:58,817
makes up most of a...
1110
01:00:58,850 --> 01:01:01,061
Big package, because
it was a big problem.
1111
01:01:01,093 --> 01:01:02,758
Too big to fail.
1112
01:01:02,790 --> 01:01:06,602
REPORTER: The Fed loaned
the banks some $7.7 trillion.
1113
01:01:06,634 --> 01:01:09,292
Global markets soared at the
news of the US rescue plan.
1114
01:01:09,325 --> 01:01:12,303
With the bail-out news,
the stock rebounded nearly 60%.
1115
01:01:12,335 --> 01:01:14,514
...Hong Kong more than 8%.
London's FTSE...
1116
01:01:14,546 --> 01:01:16,019
REPORTER: Stokes rose
15% in one hour...
1117
01:01:16,051 --> 01:01:17,462
the largest single bounce
in FTSE history.
1118
01:01:17,493 --> 01:01:19,735
Those companies
came to us and said,
1119
01:01:19,766 --> 01:01:21,624
"Uh, if you don't
give us $700 billion,
1120
01:01:21,657 --> 01:01:23,131
everything you love and
hold dear in this world
1121
01:01:23,163 --> 01:01:25,405
- will turn to (BLEEP)."
- (LAUGHTER)
1122
01:01:25,436 --> 01:01:29,248
And in return for this
in no way ransom money...
1123
01:01:29,280 --> 01:01:30,562
(LAUGHTER)
1124
01:01:30,593 --> 01:01:33,412
...the American people would now
be the proud owner
1125
01:01:33,445 --> 01:01:35,431
of these bales of (BLEEP).
1126
01:01:37,929 --> 01:01:41,293
JOHNSON: The collapse didn't
occur. The system was preserved
1127
01:01:41,324 --> 01:01:44,368
and the opportunity to
substantially reform the system
1128
01:01:44,400 --> 01:01:46,834
was set aside. The stock
market went down sharply,
1129
01:01:46,865 --> 01:01:50,742
and then it came back up sharply
as a result of these measures.
1130
01:01:50,774 --> 01:01:53,240
In addition, wealthy people,
rich people,
1131
01:01:53,272 --> 01:01:54,875
have a lot of exposure
to the stock market,
1132
01:01:54,906 --> 01:01:57,340
so they kept their jobs,
they kept their bonuses,
1133
01:01:57,373 --> 01:01:59,070
the businesses they
were in were not
1134
01:01:59,102 --> 01:02:02,177
substantially disrupted,
and they made more money
1135
01:02:02,209 --> 01:02:03,843
through stock appreciation
1136
01:02:03,875 --> 01:02:05,765
and through dividends and
through expected dividends
1137
01:02:05,797 --> 01:02:07,975
than they had in the
last couple of years.
1138
01:02:08,006 --> 01:02:09,897
REPORTER: Bloomberg
estimates the banks made
1139
01:02:09,928 --> 01:02:12,652
a $13 billion profit
on the spread.
1140
01:02:12,684 --> 01:02:15,406
REPORTER: 73 executives
from the unit that engineered
1141
01:02:15,438 --> 01:02:18,577
the company's downfall
all just got bonus checks
1142
01:02:18,610 --> 01:02:22,550
- worth a million or more.
- ...$1.6 billion in bonuses.
1143
01:02:24,023 --> 01:02:26,362
JOHNSON: Wall Street and
the views of Wall Street
1144
01:02:26,393 --> 01:02:28,315
had taken over policy.
1145
01:02:29,949 --> 01:02:31,871
That's the quiet coup.
1146
01:02:32,416 --> 01:02:34,529
(TENSE MUSIC)
1147
01:02:38,757 --> 01:02:41,737
FUKUYAMA: Democracies in
general are susceptible to this
1148
01:02:41,769 --> 01:02:43,691
capture by elites.
1149
01:02:45,806 --> 01:02:49,936
And unless the democracy
is renewed by the non-elites
1150
01:02:49,969 --> 01:02:52,051
every now and then rising up,
1151
01:02:52,083 --> 01:02:55,702
the democracy will continue
to move in this direction
1152
01:02:55,735 --> 01:03:00,892
where power and wealth are
more and more concentrated.
1153
01:03:00,924 --> 01:03:04,736
All across the world, you now
have this layer of oligarchs
1154
01:03:04,767 --> 01:03:08,547
that use their money
to buy political influence.
1155
01:03:09,445 --> 01:03:11,366
(POP! LAUGHTER)
1156
01:03:12,103 --> 01:03:14,025
(SIREN WAILS)
1157
01:03:14,165 --> 01:03:16,965
When you have too strong
a concentration of capital
1158
01:03:17,005 --> 01:03:21,405
it leads to excessive
influence over the media,
1159
01:03:21,445 --> 01:03:25,405
and also financing of political
campaigns and political parties
1160
01:03:25,445 --> 01:03:28,285
that are in their own
best interests.
1161
01:03:28,525 --> 01:03:33,285
But this logic of 'one dollar,
one vote' is completely opposed
1162
01:03:33,525 --> 01:03:37,365
to the democratic logic of
'one person, one vote'.
1163
01:03:38,337 --> 01:03:40,388
(DREAMY, WHIMSICAL MUSIC)
1164
01:03:49,901 --> 01:03:52,495
MAN: Rationally speaking,
it would make sense that
1165
01:03:52,527 --> 01:03:54,930
the more of something you have,
maybe the more inclined
1166
01:03:54,963 --> 01:03:57,750
you would be to share it
with other people.
1167
01:03:57,782 --> 01:04:01,112
But that's not what our research
and what a lot of other research
1168
01:04:01,143 --> 01:04:03,130
seems to find.
1169
01:04:03,162 --> 01:04:06,526
We brought strangers
into the lab in pairs of two;
1170
01:04:06,558 --> 01:04:08,288
with a flip of a coin determined
1171
01:04:08,320 --> 01:04:09,921
who was going to be
a rich player
1172
01:04:09,952 --> 01:04:12,260
and was going to
be a poor player.
1173
01:04:12,292 --> 01:04:14,118
(INTRIGUING MUSIC)
1174
01:04:15,814 --> 01:04:19,370
The rich player got two times
as much money to play the game,
1175
01:04:19,402 --> 01:04:21,484
they got to roll both dice
instead of one,
1176
01:04:21,517 --> 01:04:23,470
so they got to move around
the board a lot quicker,
1177
01:04:23,502 --> 01:04:25,777
and that mattered because when
they moved around the board
1178
01:04:25,810 --> 01:04:27,444
and passed 'Go, '
1179
01:04:27,475 --> 01:04:30,902
they would collect $200,
whereas the poor person,
1180
01:04:30,933 --> 01:04:33,401
they'd collect $100.
1181
01:04:33,433 --> 01:04:35,419
The inequality's almost
immediately apparent
1182
01:04:35,451 --> 01:04:37,213
to the players.
How couldn't it be?
1183
01:04:37,245 --> 01:04:40,960
But within a couple of minutes,
dynamics start to crystallize.
1184
01:04:46,565 --> 01:04:49,577
And the rich player started
to behave a little differently.
1185
01:04:49,609 --> 01:04:51,338
Rich players become
more dominant.
1186
01:04:52,717 --> 01:04:55,918
Rich players eat more pretzels.
1187
01:04:55,951 --> 01:05:00,660
When moving their piece around
the board, they become louder.
1188
01:05:00,691 --> 01:05:04,152
They start smacking the
board with their piece.
1189
01:05:05,945 --> 01:05:08,508
And the rich players
were significantly ruder.
1190
01:05:10,589 --> 01:05:13,858
They were far more likely
to showcase and talk about
1191
01:05:13,889 --> 01:05:16,708
how well they're doing
1192
01:05:16,741 --> 01:05:20,520
and to belittle the plight
of those poor players.
1193
01:05:22,378 --> 01:05:25,293
So they became
less compassionate.
1194
01:05:25,325 --> 01:05:28,176
These are patterns that we're
observing consistently over
1195
01:05:28,208 --> 01:05:29,969
hundreds of different
individuals.
1196
01:05:31,891 --> 01:05:35,382
You see people who are winning
because of the flip of a coin
1197
01:05:35,414 --> 01:05:38,200
start to act as if they
actually deserve to win.
1198
01:05:41,244 --> 01:05:45,313
One of the questions we ask is
"Why did you win the game?"
1199
01:05:45,345 --> 01:05:47,331
And you can imagine the
rich players would say,
1200
01:05:47,363 --> 01:05:49,253
"Well, I won the game because
of that flip of the coin
1201
01:05:49,285 --> 01:05:52,615
and I had two times
the advantage."
1202
01:05:52,647 --> 01:05:56,683
But none... not one...
of the rich players
1203
01:05:56,716 --> 01:06:00,753
attributed their inevitable
success in this game
1204
01:06:00,784 --> 01:06:05,717
to that force of luck
that randomly got them
1205
01:06:05,750 --> 01:06:09,305
that privileged position
in the first place.
1206
01:06:10,906 --> 01:06:14,142
And when we watch patterns
of human interactions,
1207
01:06:14,174 --> 01:06:17,793
people who feel entitled and
deserving of their own success
1208
01:06:17,825 --> 01:06:20,900
are more willing to privilege
their own interests
1209
01:06:20,933 --> 01:06:22,694
above the interests
of other people
1210
01:06:22,726 --> 01:06:25,191
and often engage in
ways that undermine
1211
01:06:25,224 --> 01:06:28,588
other people's welfare
so that they can get ahead.
1212
01:06:28,621 --> 01:06:32,624
And that's a fairly pernicious
social consequence.
1213
01:06:34,354 --> 01:06:37,076
But it's not about
people who are rich,
1214
01:06:37,109 --> 01:06:40,663
but rather that the experience
of being relatively better off
1215
01:06:40,695 --> 01:06:43,610
than someone seems
to affect everyone,
1216
01:06:43,643 --> 01:06:46,077
or would affect everyone,
in the same way.
1217
01:06:47,486 --> 01:06:49,215
Yes, we won the lottery!
1218
01:06:49,248 --> 01:06:51,459
(LIGHT-HEARTED BRASS MUSIC)
1219
01:06:52,741 --> 01:06:54,630
(METAL CLUNKING)
1220
01:06:54,662 --> 01:06:57,385
Peter, my God, what the
hell are you wearing?!
1221
01:06:57,417 --> 01:07:00,428
It's a solid gold tuxedo, Lois.
I had to fight three rappers
1222
01:07:00,460 --> 01:07:02,318
down at the Nonsense Store
for this.
1223
01:07:02,350 --> 01:07:04,143
Look, Peter,
this is not who we are.
1224
01:07:04,176 --> 01:07:06,098
I'm worried the money
is changing this family,
1225
01:07:06,130 --> 01:07:07,795
and not the way you hoped.
1226
01:07:07,827 --> 01:07:09,974
Well, I was hoping it would make
you shut up, so you're right.
1227
01:07:10,005 --> 01:07:12,921
PIFF: When we, in experiments,
get actually poor people
1228
01:07:12,952 --> 01:07:15,354
or we make poor people
feel rich,
1229
01:07:15,386 --> 01:07:17,373
again, same pattern of results.
1230
01:07:17,405 --> 01:07:18,686
Lois, don't you understand?
1231
01:07:18,718 --> 01:07:20,608
We don't got any of our
old problems anymore.
1232
01:07:20,640 --> 01:07:22,241
We don't have to worry
about paying bills,
1233
01:07:22,274 --> 01:07:24,484
we don't have to worry
about saving dough.
1234
01:07:24,516 --> 01:07:26,918
All we gotta do is
enjoy ourselves.
1235
01:07:26,950 --> 01:07:28,808
Interested?
1236
01:07:28,839 --> 01:07:30,281
(GASPS)
1237
01:07:30,314 --> 01:07:32,491
Oh my God!
1238
01:07:33,966 --> 01:07:36,945
Peter, it's beautiful.
Is it a blood diamond?
1239
01:07:36,976 --> 01:07:38,706
Ah, the bloodiest.
1240
01:07:38,738 --> 01:07:41,140
The two kids who found it were
forced to murder each other.
1241
01:07:41,172 --> 01:07:43,062
Oh, Peter, I love it!
1242
01:07:43,094 --> 01:07:46,362
We translate perceptions
and experiences
1243
01:07:46,394 --> 01:07:49,277
of being better off
than others materially
1244
01:07:49,309 --> 01:07:52,031
to being better than others.
1245
01:07:52,064 --> 01:07:54,209
The mind makes that
translation, it seems.
1246
01:07:54,242 --> 01:07:56,164
(ENGINE ROARS)
1247
01:08:00,840 --> 01:08:02,762
(INTRIGUING MUSIC)
1248
01:08:09,135 --> 01:08:11,475
MASON: Once you get people
whose entire life is lived
1249
01:08:11,507 --> 01:08:14,805
on a kind of plane,
you know, in First Class,
1250
01:08:14,837 --> 01:08:17,080
in the bubble of
the security system,
1251
01:08:17,113 --> 01:08:19,323
and your villa in three
or four different countries
1252
01:08:19,355 --> 01:08:22,493
you can move to if things
get a bit unpleasant,
1253
01:08:22,525 --> 01:08:24,672
what happens to taxation?
1254
01:08:24,704 --> 01:08:28,708
What happens is large amounts
of wealth are moved offshore.
1255
01:08:28,741 --> 01:08:30,662
(INTRIGUING MUSIC)
1256
01:08:33,352 --> 01:08:37,037
For decades, individuals
and companies have moved
1257
01:08:37,069 --> 01:08:41,040
their legal selves
in order to avoid paying tax
1258
01:08:41,073 --> 01:08:44,052
that benefits the people
who work for them.
1259
01:08:45,717 --> 01:08:48,087
So that when you come out
of the HQ of one of these
1260
01:08:48,119 --> 01:08:50,810
giant trendy IT companies,
1261
01:08:50,843 --> 01:08:53,533
you fall over,
you hit your head,
1262
01:08:53,565 --> 01:08:55,839
and you're lying on the pavement
in a pool of blood,
1263
01:08:55,871 --> 01:08:58,210
an ambulance arrives
1264
01:08:58,241 --> 01:09:00,931
that has not been paid for
in any way, shape or form
1265
01:09:00,963 --> 01:09:02,918
by the taxes of that company.
1266
01:09:02,950 --> 01:09:04,872
(MONITOR BEEPS, OXYGEN PUFFS)
1267
01:09:04,905 --> 01:09:07,884
That's a very new system
in capitalism.
1268
01:09:09,710 --> 01:09:12,080
And it is unsustainable
1269
01:09:12,111 --> 01:09:14,353
because to make it work,
1270
01:09:14,385 --> 01:09:17,333
the state must have
access via taxation
1271
01:09:17,365 --> 01:09:19,639
to the incomes of the rich.
1272
01:09:19,671 --> 01:09:21,529
(BABY CRIES)
1273
01:09:21,561 --> 01:09:23,355
(RESOUNDING BOOM)
1274
01:09:23,387 --> 01:09:25,405
REPORTER: The EU has ordered
the Irish government
1275
01:09:25,437 --> 01:09:29,217
to recover almost $15 billion
of unpaid taxes from Apple.
1276
01:09:29,248 --> 01:09:31,939
REPORTER: $15 billion is
more than the four years
1277
01:09:31,971 --> 01:09:34,918
of annual austerity cuts
imposed by the Irish government.
1278
01:09:34,951 --> 01:09:37,609
WOMAN: Amazon's tax
benefits are illegal.
1279
01:09:37,641 --> 01:09:39,915
REPORTER: Facebook paid
less UK corporation tax
1280
01:09:39,948 --> 01:09:41,453
than your average teacher.
1281
01:09:41,485 --> 01:09:43,631
90,000 come from zero
corporation tax.
1282
01:09:43,663 --> 01:09:45,649
- Scrutinize...
- ...the rich avoiding taxes.
1283
01:09:45,681 --> 01:09:47,250
(VOICES OVERLAP)
Google, Microsoft...
1284
01:09:47,283 --> 01:09:48,436
- McDonald's...
- Facebook...
1285
01:09:50,294 --> 01:09:53,145
(OMINOUS WHOOSHING)
1286
01:09:53,176 --> 01:09:55,355
FOROOHAR: It just works
much better for the holders
1287
01:09:55,386 --> 01:09:59,967
of capital than it does
for people on the ground.
1288
01:09:59,999 --> 01:10:02,754
In particular, the giant
cash-rich tech firms
1289
01:10:02,786 --> 01:10:05,861
can put people and money
wherever they want to put them.
1290
01:10:05,894 --> 01:10:10,506
They just fly 35,000 feet
above national concerns.
1291
01:10:10,538 --> 01:10:13,677
They create far fewer jobs
than big industrial companies
1292
01:10:13,709 --> 01:10:17,329
of the past, yet they
make vastly more money.
1293
01:10:17,361 --> 01:10:19,987
(ATMOSPHERIC ELECTRONIC MUSIC)
1294
01:10:24,696 --> 01:10:26,939
The great irony here is
that everything that makes
1295
01:10:26,970 --> 01:10:29,308
a smart phone smart...
1296
01:10:29,341 --> 01:10:31,711
the internet, GPS,
touchscreen technology...
1297
01:10:31,743 --> 01:10:35,394
all that was our taxpayer money
going into federal agencies
1298
01:10:35,427 --> 01:10:38,021
like DARPA that
created this stuff,
1299
01:10:38,054 --> 01:10:41,800
and yet the wealth doesn't
flow back into the ecosystem.
1300
01:10:41,833 --> 01:10:46,573
Irish guys pay a fee to
Google Netherlands Holding BV.
1301
01:10:46,605 --> 01:10:48,176
Is that to save withholding tax?
1302
01:10:48,207 --> 01:10:49,585
That's my understanding.
1303
01:10:49,617 --> 01:10:51,699
It therefore goes to
Google Holdings Ireland?
1304
01:10:51,731 --> 01:10:53,493
- That's correct.
- Which is registered in Ireland
1305
01:10:53,525 --> 01:10:55,318
but administered from Bermuda?
1306
01:10:55,351 --> 01:10:57,753
- That's correct.
- So if that happens,
1307
01:10:57,785 --> 01:10:59,579
your profits actually
go to Bermuda?
1308
01:10:59,611 --> 01:11:01,181
(THE WEEKND'S 'THE MORNING')
1309
01:11:01,213 --> 01:11:04,575
♪ All that money,
the money is the motive ♪
1310
01:11:04,608 --> 01:11:08,419
♪ All that money,
the money is the motive ♪
1311
01:11:08,452 --> 01:11:12,231
♪ All that money,
the money she be folding ♪
1312
01:11:12,263 --> 01:11:13,993
♪ Girl put in work ♪
1313
01:11:14,026 --> 01:11:16,075
♪ Girl, girl, put in work ♪
1314
01:11:16,107 --> 01:11:17,774
♪ Girl put in work ♪
1315
01:11:17,805 --> 01:11:19,919
♪ Girl, girl, put in work ♪
1316
01:11:19,951 --> 01:11:21,361
♪ Girl put in work... ♪
1317
01:11:21,485 --> 01:11:26,085
In 2015, Google Alphabet
reported making $15.5 billion
1318
01:11:26,125 --> 01:11:29,365
profit in Bermuda.
1319
01:11:30,005 --> 01:11:33,285
But nothing actually
happens in Bermuda.
1320
01:11:33,325 --> 01:11:35,685
This is the first way countries
1321
01:11:36,165 --> 01:11:38,805
steal the tax base from
each other.
1322
01:11:39,725 --> 01:11:44,045
The other way is through the
industry of wealth management,
1323
01:11:44,085 --> 01:11:47,165
which has developed
in many countries.
1324
01:11:47,205 --> 01:11:51,725
This industry sells shell
companies and numbered accounts
1325
01:11:51,765 --> 01:11:55,445
protected by bank secrecy
to wealthy families.
1326
01:11:56,500 --> 01:11:58,646
♪ All that money ♪
1327
01:11:58,678 --> 01:12:00,696
- ♪ The money is the motive ♪
- ♪ The money is the motive ♪
1328
01:12:00,728 --> 01:12:04,092
♪ All that money,
the money she be folding ♪
1329
01:12:04,123 --> 01:12:05,501
♪ Girl, put in work... ♪
1330
01:12:05,565 --> 01:12:08,405
You can't tax what you can't
measure.
1331
01:12:08,511 --> 01:12:09,665
♪ Girl put in work ♪
1332
01:12:09,697 --> 01:12:11,619
♪ Girl, girl, put in work ♪
1333
01:12:14,925 --> 01:12:18,485
And so we live in an
incredible statistical fog
1334
01:12:19,045 --> 01:12:23,245
about who owns wealth, who owns
real estate in New York,
1335
01:12:24,205 --> 01:12:25,405
who owns real estate in Paris.
1336
01:12:26,845 --> 01:12:29,125
We check the records
and we see shell companies.
1337
01:12:32,792 --> 01:12:35,130
(TRAFFIC HUMS, HORNS BLARE)
1338
01:12:36,187 --> 01:12:38,109
(STIRRING MUSIC)
1339
01:12:51,085 --> 01:12:56,445
The key to effectively fighting
tax havens is pretty simple.
1340
01:12:57,725 --> 01:13:00,005
We need sanctions
against territories
1341
01:13:00,045 --> 01:13:02,285
that enable tax evasion.
1342
01:13:02,325 --> 01:13:05,285
And we have to change
the way we calculate
1343
01:13:05,325 --> 01:13:07,885
taxable profits in each country.
1344
01:13:08,845 --> 01:13:10,725
Let's take Apple.
1345
01:13:10,765 --> 01:13:17,205
Imagine Apple made $50 billion
in global profits last year
1346
01:13:17,245 --> 01:13:21,405
and 10% of its worldwide
sales were in France.
1347
01:13:22,885 --> 01:13:28,925
Then France could say,
"10% of Apple's global profit,
1348
01:13:29,925 --> 01:13:33,205
"so $5 billion,
should be taxed in France."
1349
01:13:34,005 --> 01:13:36,525
The beauty of this
system is that
1350
01:13:36,565 --> 01:13:40,285
multinationals can manipulate
the location of their profits,
1351
01:13:40,325 --> 01:13:43,125
but they cannot manipulate
the location of their customers.
1352
01:13:43,165 --> 01:13:44,925
Their customers are
in France, in Germany,
1353
01:13:44,965 --> 01:13:46,405
in England,
in the United States.
1354
01:13:46,445 --> 01:13:48,325
You cannot send them to Bermuda.
1355
01:13:50,246 --> 01:13:51,815
(POP!)
1356
01:13:51,847 --> 01:13:54,185
(SIRENS WAIL, TRAFFIC HUMS)
1357
01:13:56,203 --> 01:13:59,086
BREMMER: Globalization has
opened a global community up
1358
01:13:59,118 --> 01:14:00,399
to each other,
1359
01:14:00,431 --> 01:14:03,763
but it's also meant that
in the developed world,
1360
01:14:03,795 --> 01:14:07,863
corporations were able
to take jobs and move them
1361
01:14:07,895 --> 01:14:10,426
and make a lot
of money out of it.
1362
01:14:10,457 --> 01:14:12,475
(PENSIVE MUSIC)
1363
01:14:12,508 --> 01:14:15,391
And on the other hand,
the working and middle classes
1364
01:14:15,422 --> 01:14:18,722
that were doing quite well
have lost quality of life
1365
01:14:18,754 --> 01:14:20,548
and opportunities.
1366
01:14:22,085 --> 01:14:25,897
And their governments
and their corporations
1367
01:14:25,929 --> 01:14:30,093
have done very little... in some
cases, really nothing at all...
1368
01:14:30,125 --> 01:14:32,047
to address that.
1369
01:14:35,475 --> 01:14:38,486
The United States and Europe
are vastly more divided
1370
01:14:38,517 --> 01:14:39,863
because of globalization.
1371
01:14:39,896 --> 01:14:43,322
India, The Philippines,
China are not.
1372
01:14:43,355 --> 01:14:45,277
(INTRIGUING MUSIC)
1373
01:14:49,761 --> 01:14:53,829
Chinese people, they believe
that if they work hard,
1374
01:14:53,861 --> 01:14:55,622
their kids are gonna
have better lives,
1375
01:14:55,655 --> 01:14:57,384
and that's probably true.
1376
01:14:57,417 --> 01:15:00,011
But in the United States,
that's just not true anymore.
1377
01:15:00,043 --> 01:15:02,382
(DRAMATIC, STIRRING MUSIC)
1378
01:15:06,514 --> 01:15:11,126
If you go to Beijing
or Shenzhen or Shanghai
1379
01:15:11,158 --> 01:15:13,785
or Guangzhou or
any of these sort of
1380
01:15:13,816 --> 01:15:16,347
wealthier cities in China
that have made it...
1381
01:15:16,381 --> 01:15:18,942
Shanghai,
where per capita income
1382
01:15:18,974 --> 01:15:22,818
is higher than Portugal... you
will meet middle class Chinese,
1383
01:15:22,850 --> 01:15:24,772
and I mean global
middle class Chinese;
1384
01:15:24,804 --> 01:15:27,494
I don't mean middle class
from the Chinese context.
1385
01:15:27,526 --> 01:15:31,050
And that is a very different
China from what you saw
1386
01:15:31,082 --> 01:15:33,004
even 10 years ago.
1387
01:15:36,399 --> 01:15:38,994
China's now almost the largest
economy in the world;
1388
01:15:39,026 --> 01:15:41,269
within the next
decade it will be,
1389
01:15:41,300 --> 01:15:44,216
but it will still be
state capitalist.
1390
01:15:44,248 --> 01:15:46,586
(DRAMATIC, STIRRING MUSIC)
1391
01:15:49,757 --> 01:15:53,793
State capitalism is where
state-owned enterprises
1392
01:15:53,825 --> 01:15:57,957
are the most important
actors in the economy.
1393
01:15:57,989 --> 01:16:00,167
These corporations are,
in principle,
1394
01:16:00,199 --> 01:16:02,825
trying to make money
and build themselves,
1395
01:16:02,858 --> 01:16:04,876
and sometimes they do
compete against each other
1396
01:16:04,908 --> 01:16:07,567
in a fairly controlled fashion.
1397
01:16:07,598 --> 01:16:11,378
But the other important Chinese
actors are what you'd call
1398
01:16:11,411 --> 01:16:13,525
privately owned
national champions.
1399
01:16:13,556 --> 01:16:16,728
So, in other words, they are
actively supported by the state,
1400
01:16:16,760 --> 01:16:18,554
even though they're
privately held,
1401
01:16:18,586 --> 01:16:20,572
and they benefit accordingly.
1402
01:16:20,604 --> 01:16:22,526
(PLANE ENGINE ROARS)
1403
01:16:24,544 --> 01:16:27,203
Also you have hundreds
of millions of people
1404
01:16:27,234 --> 01:16:29,317
who are quite poor,
1405
01:16:29,349 --> 01:16:31,046
but they want state capitalism.
1406
01:16:31,078 --> 01:16:34,441
It's fine for them, as long as
they can make enough money
1407
01:16:34,474 --> 01:16:37,549
to ensure that their
kids will do better.
1408
01:16:38,574 --> 01:16:41,168
(INDISTINCT TRAIN ANNOUNCEMENTS)
1409
01:16:42,005 --> 01:16:45,685
The average income in
China since the late 1970s
1410
01:16:46,165 --> 01:16:48,245
has increased by 800%.
1411
01:16:49,965 --> 01:16:51,965
800% is huge.
1412
01:16:52,645 --> 01:16:58,845
But the income of the richest 1%
increased by 2000%.
1413
01:16:59,165 --> 01:17:03,525
So it is a country
that is growing,
1414
01:17:03,845 --> 01:17:06,485
but this growth
is highly unequal.
1415
01:17:07,210 --> 01:17:09,132
(TENSE, STIRRING MUSIC)
1416
01:17:16,179 --> 01:17:19,255
FUKUYAMA: China does show what
freeing up capital will do to
1417
01:17:19,287 --> 01:17:21,657
income distribution.
1418
01:17:21,688 --> 01:17:24,956
Capital really has to be
regulated much, much more
1419
01:17:24,988 --> 01:17:28,319
strictly than things
in the real economy.
1420
01:17:29,568 --> 01:17:31,202
(TENSE MUSIC)
1421
01:17:31,234 --> 01:17:34,630
There's a fundamental difference
between liberalization
1422
01:17:34,663 --> 01:17:36,359
of capital markets
1423
01:17:36,392 --> 01:17:40,429
and liberalization of trade
and goods and services.
1424
01:17:40,460 --> 01:17:44,784
This was one of the big lessons
of the Great Depression.
1425
01:17:46,769 --> 01:17:49,941
FOROOHAR: Modern capitalism
is all about the free movement
1426
01:17:49,974 --> 01:17:51,960
of global capital,
1427
01:17:51,992 --> 01:17:54,875
and the financial system
itself has changed
1428
01:17:54,906 --> 01:17:56,668
over the last 40 years.
1429
01:17:56,701 --> 01:17:59,648
The financial industry has about
doubled in size as a percentage
1430
01:17:59,679 --> 01:18:02,627
of the economy, and that's
actually created slower growth,
1431
01:18:02,658 --> 01:18:05,414
not faster growth.
1432
01:18:05,445 --> 01:18:08,103
When Adam Smith,
the father of modern capitalism,
1433
01:18:08,135 --> 01:18:11,018
was thinking up the idea
of the free market system,
1434
01:18:11,050 --> 01:18:12,780
he was living in
a very different world.
1435
01:18:12,811 --> 01:18:14,894
Hey, why not? My own business.
1436
01:18:14,926 --> 01:18:18,289
All you need's a little capital,
a little push and an idea.
1437
01:18:18,321 --> 01:18:20,628
FOROOHAR: Small and mid-sized
family-owned businesses
1438
01:18:20,659 --> 01:18:21,782
were the norm.
1439
01:18:21,813 --> 01:18:23,510
I wouldn't wear that hat
to a dog fight.
1440
01:18:23,542 --> 01:18:25,657
WOMAN: Why, there isn't a decent
hat in the entire village.
1441
01:18:25,690 --> 01:18:29,438
Why not? Women's hats!
My own business!
1442
01:18:29,469 --> 01:18:31,263
FOROOHAR: He believed that
the financial markets
1443
01:18:31,295 --> 01:18:33,952
were just an intermediary...
they were supposed to take
1444
01:18:33,985 --> 01:18:36,708
everyone's savings,
hold them as bank deposits,
1445
01:18:36,739 --> 01:18:41,384
and then lend them out to the
hairdresser down the street.
1446
01:18:41,416 --> 01:18:43,466
Not to be too cliché,
but it's kind of the
1447
01:18:43,499 --> 01:18:46,639
"It's a Wonderful Life"
model of banking.
1448
01:18:48,207 --> 01:18:50,097
I think if Adam Smith
time-warped,
1449
01:18:50,129 --> 01:18:54,133
he would have no idea what to
make of a "too big to fail" bank
1450
01:18:54,165 --> 01:18:56,759
or a giant multinational
company that's doing business
1451
01:18:56,792 --> 01:18:58,234
in 120 different countries,
1452
01:18:58,266 --> 01:19:00,859
all of which have different
regulatory systems.
1453
01:19:00,892 --> 01:19:02,781
It's a completely
different world.
1454
01:19:02,814 --> 01:19:04,800
(TENSE ELECTRONIC MUSIC)
1455
01:19:12,295 --> 01:19:17,293
Statistics today show
that only 15% of money
1456
01:19:17,324 --> 01:19:19,822
coming out of the largest
financial institutions
1457
01:19:19,855 --> 01:19:22,738
is actually going to that kind
of productive lending.
1458
01:19:22,769 --> 01:19:25,173
So what's the other 85% doing?
1459
01:19:25,205 --> 01:19:27,799
It's just moving around
this closed loop
1460
01:19:27,830 --> 01:19:29,464
of the financial system...
1461
01:19:29,496 --> 01:19:32,924
its assets being bought
and sold by the same people;
1462
01:19:32,957 --> 01:19:35,744
their value going up,
up, up, up, up.
1463
01:19:38,337 --> 01:19:42,470
MASON: For the rich, it's easier
to keep your wealth away
1464
01:19:42,502 --> 01:19:44,871
from productive, risky activity,
1465
01:19:44,904 --> 01:19:47,979
and this is producing
a new social story.
1466
01:19:50,541 --> 01:19:53,712
It's easier to build a property,
1467
01:19:53,745 --> 01:19:55,634
and maybe you don't
fill that property,
1468
01:19:55,667 --> 01:19:58,454
maybe all the apartments in
the property aren't filled,
1469
01:19:58,485 --> 01:20:00,729
but you know in five years' time
that property will be worth
1470
01:20:00,760 --> 01:20:05,244
so much more, that your business
is really to sit on assets
1471
01:20:05,276 --> 01:20:07,807
and hope their value rises,
1472
01:20:07,838 --> 01:20:10,657
rather than to try and make
money by risking your money
1473
01:20:10,690 --> 01:20:15,047
in activities like open a
factory or invent something new.
1474
01:20:17,993 --> 01:20:20,331
EDWARDS: If you own a house,
you're making capital gains
1475
01:20:20,363 --> 01:20:23,566
out of that far in excess
of what people get
1476
01:20:23,600 --> 01:20:25,522
through just regular jobs.
1477
01:20:25,553 --> 01:20:28,179
Therefore, people have
become property speculators.
1478
01:20:28,211 --> 01:20:32,087
And this changes the whole way
the housing situation operates.
1479
01:20:33,337 --> 01:20:35,738
And, essentially,
it starts dividing.
1480
01:20:37,085 --> 01:20:38,781
This housing crisis
that's happening
1481
01:20:38,814 --> 01:20:40,479
really throughout the West
is something
1482
01:20:40,511 --> 01:20:44,611
that particularly
affects the young.
1483
01:20:44,643 --> 01:20:48,777
Most people view this as some
sort of generational fight.
1484
01:20:48,808 --> 01:20:51,274
The baby boomers benefited
from buying houses
1485
01:20:51,306 --> 01:20:53,132
when they were relatively cheap,
1486
01:20:53,164 --> 01:20:56,336
and therefore have a very nice
nest egg for their retirement,
1487
01:20:56,368 --> 01:21:01,045
and it's the young people
that can't even rent cheaply.
1488
01:21:01,077 --> 01:21:03,862
Those at the bottom,
I think, are quite polarized...
1489
01:21:03,896 --> 01:21:06,489
angry, in fact.
1490
01:21:06,521 --> 01:21:09,532
These houses, essentially,
earn more money than they do,
1491
01:21:09,565 --> 01:21:11,550
and they have to rent them.
1492
01:21:12,705 --> 01:21:14,627
(SIREN WAILS)
1493
01:21:20,456 --> 01:21:22,954
MASON: It transmits to the poor
or middle class person
1494
01:21:22,985 --> 01:21:26,637
that the best thing they can do
is to hope that their home
1495
01:21:26,669 --> 01:21:28,208
rises so much in value
1496
01:21:28,239 --> 01:21:30,513
that it offsets all the other
problems in their life,
1497
01:21:30,545 --> 01:21:32,052
like that their pension
was destroyed
1498
01:21:32,083 --> 01:21:33,524
or that they lost their job
1499
01:21:33,556 --> 01:21:36,375
or that their kids
are gonna be poor.
1500
01:21:36,407 --> 01:21:38,329
(EDGY, TENSE MUSIC)
1501
01:21:45,952 --> 01:21:49,669
SHAHEEN: Young people
are naturally more hopeful.
1502
01:21:49,700 --> 01:21:52,519
But they are aware,
they are acutely aware,
1503
01:21:52,551 --> 01:21:55,050
that they've been
given a raw deal.
1504
01:21:56,941 --> 01:21:58,958
You know, why is it,
to educate yourself,
1505
01:21:58,990 --> 01:22:03,314
you have to get yourself
into £50,000 of debt?
1506
01:22:03,346 --> 01:22:06,933
And a lot of young
people feel infantiled.
1507
01:22:06,966 --> 01:22:10,522
Why does my incredibly smart
26-year-old brother-in-law
1508
01:22:10,554 --> 01:22:12,220
still have to live at home?
1509
01:22:12,252 --> 01:22:15,806
He's asking that,
my in-laws are asking that.
1510
01:22:17,568 --> 01:22:19,490
(TRAIN HUMS)
1511
01:22:28,170 --> 01:22:30,221
(BRAKES SQUEAL)
1512
01:22:30,253 --> 01:22:33,873
What we've told people is that,
"You're not poor;
1513
01:22:33,904 --> 01:22:35,411
you're a millionaire-in-waiting.
1514
01:22:35,443 --> 01:22:37,909
And because of that,
don't worry about inequality,
1515
01:22:37,940 --> 01:22:39,734
just focus on how
hard you're working
1516
01:22:39,766 --> 01:22:43,194
and trying to run, run,
run, run up that hill,"
1517
01:22:45,693 --> 01:22:50,690
which is ironic, because
societies that are more unequal
1518
01:22:50,723 --> 01:22:52,772
have less social mobility.
1519
01:22:55,238 --> 01:22:57,577
The rungs of the ladder
grow apart,
1520
01:22:57,609 --> 01:23:02,158
people have the money to make
sure they stay at the top,
1521
01:23:02,190 --> 01:23:05,680
and it means it's harder
for people to climb.
1522
01:23:05,712 --> 01:23:10,005
That's something that you find
again and again in the data.
1523
01:23:10,838 --> 01:23:13,432
The system is rigged.
1524
01:23:13,464 --> 01:23:17,244
And people aren't stupid...
they recognize that.
1525
01:23:19,743 --> 01:23:21,856
(SOMBER MUSIC)
1526
01:23:23,299 --> 01:23:25,221
(SIREN WAILS)
1527
01:23:27,463 --> 01:23:29,704
(PULSING, BROODING MUSIC)
1528
01:23:31,788 --> 01:23:33,806
TETT: Essentially, what's
happening is that you're
1529
01:23:33,837 --> 01:23:36,527
getting an economy which
is more and more productive,
1530
01:23:36,560 --> 01:23:39,859
but where the gains of those
productivity increases
1531
01:23:39,891 --> 01:23:44,280
are going into the hands of
a very small number of people.
1532
01:23:44,312 --> 01:23:45,976
And where there is job growth
1533
01:23:46,008 --> 01:23:47,611
is at the lower end
of the spectrum,
1534
01:23:47,643 --> 01:23:51,070
which is often low-paid,
fairly unsatisfactory work.
1535
01:23:51,103 --> 01:23:53,025
(UPBEAT, EDGY MUSIC)
1536
01:23:57,604 --> 01:24:00,455
Our labor market is shifting.
1537
01:24:00,487 --> 01:24:04,524
More and more, it classifies
people as "self-employed."
1538
01:24:04,556 --> 01:24:06,798
And what that means is that
companies won't owe them
1539
01:24:06,830 --> 01:24:10,482
holiday pay,
won't owe them a pension,
1540
01:24:10,514 --> 01:24:13,493
and those individual workers
have to make sure
1541
01:24:13,525 --> 01:24:16,311
that they can look after
themselves if they're sick,
1542
01:24:16,344 --> 01:24:18,745
if they want to take a holiday.
1543
01:24:19,867 --> 01:24:21,789
(MUSIC CONTINUES)
1544
01:24:23,071 --> 01:24:25,311
MASON: You know what,
when Piketty says
1545
01:24:25,344 --> 01:24:28,452
that the future for capitalism
is this highly illegal,
1546
01:24:28,484 --> 01:24:33,128
highly socially immobile future,
it's already happening.
1547
01:24:34,378 --> 01:24:36,364
(EDGY, TENSE MUSIC FADES)
1548
01:24:38,925 --> 01:24:41,073
TETT: America's about to see
the biggest wealth transfer
1549
01:24:41,104 --> 01:24:44,981
in history take place, as
the generation which made money
1550
01:24:45,013 --> 01:24:46,742
after World War II
1551
01:24:46,774 --> 01:24:50,296
is passing that wealth on
to their children.
1552
01:24:50,329 --> 01:24:52,251
(PLAYFUL MUSIC)
1553
01:24:59,202 --> 01:25:01,445
Something in the order
of $12 trillion or more
1554
01:25:01,477 --> 01:25:03,431
is going to be passed on
to the next generation
1555
01:25:03,463 --> 01:25:06,250
in the next 10 to 15 years.
1556
01:25:06,281 --> 01:25:09,837
And that will be invested in a
way that it creates more wealth.
1557
01:25:12,080 --> 01:25:15,732
(INTRIGUING MUSIC)
1558
01:25:16,805 --> 01:25:18,845
It's very likely that
in the 21st century
1559
01:25:18,885 --> 01:25:21,405
inheritance will return
to playing a role
1560
01:25:21,445 --> 01:25:25,685
as significant as in
19th century England and France.
1561
01:25:28,125 --> 01:25:32,245
Inheritance allows a small
portion of the population
1562
01:25:32,565 --> 01:25:35,045
to lead a very opulent lifestyle
1563
01:25:36,085 --> 01:25:40,125
because inherited wealth
produces an income.
1564
01:25:42,805 --> 01:25:45,845
In fact, the rate of return on
capital throughout history
1565
01:25:45,885 --> 01:25:47,965
has almost always been higher
1566
01:25:48,005 --> 01:25:50,725
than the rate
of economic growth.
1567
01:25:57,725 --> 01:25:59,805
If we look back to 1700,
1568
01:25:59,845 --> 01:26:02,925
which is the very beginning
of Industrial Revolution,
1569
01:26:02,965 --> 01:26:07,005
until today, 2018, the growth
rate of the world economy
1570
01:26:07,045 --> 01:26:09,965
is 1.6% per year
over three centuries.
1571
01:26:11,765 --> 01:26:15,205
This is much less than
the rate of return on capital,
1572
01:26:15,245 --> 01:26:17,245
which is around 4% to 5%
a year over the same period.
1573
01:26:22,645 --> 01:26:25,605
But is it catastrophic?
No, not necessarily.
1574
01:26:25,645 --> 01:26:28,925
If everyone owned
a portion of the capital,
1575
01:26:29,285 --> 01:26:31,805
so if everyone owned
an apartment
1576
01:26:31,845 --> 01:26:33,285
and shares in a pension fund,
1577
01:26:33,325 --> 01:26:36,085
it wouldn't be so bad that the
return on capital
1578
01:26:36,125 --> 01:26:38,485
is higher than the growth rate.
1579
01:26:38,805 --> 01:26:42,565
The problem is
concentration of ownership
1580
01:26:42,605 --> 01:26:44,205
and therefore
also of power within society,
1581
01:26:47,325 --> 01:26:51,365
which leads to a reproduction
of social hierarchies
1582
01:26:52,365 --> 01:26:55,005
and rising tensions among the
working and middle classes.
1583
01:26:58,682 --> 01:27:00,604
(TENSE MUSIC)
1584
01:27:04,640 --> 01:27:07,971
There's now research showing
that in advanced economies,
1585
01:27:08,004 --> 01:27:11,335
that two-thirds of the
population is now on track
1586
01:27:11,366 --> 01:27:13,641
to be poorer than their parents,
1587
01:27:13,673 --> 01:27:16,459
which is a huge, huge
mega political trend.
1588
01:27:16,492 --> 01:27:18,926
(EXPLOSION BOOMS,
GLASS SHATTERS)
1589
01:27:18,958 --> 01:27:20,784
(SIREN WAILS)
1590
01:27:21,713 --> 01:27:24,051
(PEOPLE YELL INDISTINCTLY)
1591
01:27:29,401 --> 01:27:32,284
MASON: People on the streets
are starting to say, "Enough"...
1592
01:27:32,845 --> 01:27:37,365
Disperse yourselves
or we will have to use force.
1593
01:27:37,665 --> 01:27:40,868
...enough of the inequality
and enough of not having a story
1594
01:27:40,900 --> 01:27:43,655
about how this
ever gets better.
1595
01:27:43,687 --> 01:27:45,256
And people are reaching out
1596
01:27:45,288 --> 01:27:47,147
for the nearest thing
they can cling to,
1597
01:27:47,178 --> 01:27:49,325
and often that is their
identity, their ethnicity,
1598
01:27:49,357 --> 01:27:51,439
their religion.
1599
01:27:51,470 --> 01:27:53,392
(TENSE MUSIC)
1600
01:27:58,070 --> 01:28:01,240
And they lash out against the
nearest enemy they can find.
1601
01:28:01,272 --> 01:28:03,579
BORIS JOHNSON: Vast amounts
of unskilled labor
1602
01:28:03,611 --> 01:28:05,372
coming into this country.
1603
01:28:05,405 --> 01:28:07,711
DONALD TRUMP: They're bringing
drugs, they're bringing crime,
1604
01:28:07,743 --> 01:28:08,832
they're rapists.
1605
01:28:09,325 --> 01:28:12,045
Behind mass immigration
is Islamism.
1606
01:28:12,085 --> 01:28:14,756
Behind mass immigration
is terrorism.
1607
01:28:14,790 --> 01:28:17,289
But ultimately,
none of that will work.
1608
01:28:17,320 --> 01:28:21,164
Blaming your neighbor
doesn't make you any richer.
1609
01:28:22,285 --> 01:28:23,845
There are always politicians
1610
01:28:23,885 --> 01:28:27,925
tempted to exploit
the rising inequality.
1611
01:28:30,805 --> 01:28:32,765
And you could see this
very clearly
1612
01:28:32,805 --> 01:28:35,445
in the world before 1914.
1613
01:28:36,645 --> 01:28:39,205
And I'm very afraid at the
beginning of the 21st century
1614
01:28:39,245 --> 01:28:41,045
that because we feel we cannot
1615
01:28:41,085 --> 01:28:43,285
regulate international
capitalism,
1616
01:28:43,325 --> 01:28:47,245
we cannot properly tax
multinationals and billionaires,
1617
01:28:47,285 --> 01:28:51,845
instead we vent our anger
on immigrants.
1618
01:28:51,885 --> 01:28:54,605
It's safer than attacking
multinationals.
1619
01:28:55,118 --> 01:28:57,232
(SIREN WAILS)
1620
01:28:59,805 --> 01:29:01,365
But the truth is,
1621
01:29:01,405 --> 01:29:04,805
to solve the rise and
persistence of inequality,
1622
01:29:04,845 --> 01:29:07,685
we need a progressive
tax on capital.
1623
01:29:09,925 --> 01:29:13,805
And also, ownership rights
cannot be eternal.
1624
01:29:15,005 --> 01:29:17,525
The moment capital is inherited
by the next generation,
1625
01:29:17,565 --> 01:29:20,765
and also each year if
you own a lot of capital,
1626
01:29:20,805 --> 01:29:24,685
you have to return to the
community 1%, 2%, 3%,
1627
01:29:24,725 --> 01:29:28,325
or why not 5% or 10% if you
own billions and billions?
1628
01:29:28,365 --> 01:29:32,445
And if you continue to
invest your capital usefully,
1629
01:29:32,685 --> 01:29:36,245
with high returns, you
can continue to prosper.
1630
01:29:36,285 --> 01:29:39,165
But if financial markets allow
you to have a high return
1631
01:29:39,205 --> 01:29:41,685
without doing anything,
1632
01:29:41,725 --> 01:29:46,885
then tax rates are set to
erode this mechanism.
1633
01:29:49,829 --> 01:29:51,751
(POIGNANT MUSIC)
1634
01:29:54,285 --> 01:29:56,765
This means we'll be able to
control
1635
01:29:56,805 --> 01:29:58,565
some of the concentration of
capital,
1636
01:29:58,605 --> 01:30:00,125
and therefore political power,
1637
01:30:02,685 --> 01:30:05,445
and also access to property
for the middle class.
1638
01:30:07,831 --> 01:30:09,753
(STIRRING MUSIC)
1639
01:30:20,885 --> 01:30:24,405
A lot of people are not
ready to discuss the merits
1640
01:30:24,445 --> 01:30:28,245
of strong taxation rates on
revenue and inheritance.
1641
01:30:28,285 --> 01:30:30,845
But without this to
regulate capitalism,
1642
01:30:30,885 --> 01:30:33,765
there will be disastrous
consequences for everyone.
1643
01:30:35,442 --> 01:30:37,364
(MUSIC CONTINUES)
1644
01:30:45,244 --> 01:30:47,198
BREMMER: You know, if you wanna
think about what the longer term
1645
01:30:47,230 --> 01:30:50,882
implications are, I mean, the
truly dystopian implications,
1646
01:30:50,914 --> 01:30:52,644
you think about horses.
1647
01:30:53,925 --> 01:30:56,712
I mean, we used to
have a lot of horses.
1648
01:30:57,673 --> 01:30:59,306
End of the 19th century, right,
1649
01:30:59,339 --> 01:31:02,766
I mean, horses were critical
for industrialization.
1650
01:31:02,798 --> 01:31:05,104
And then they weren't,
1651
01:31:05,136 --> 01:31:07,443
because you have all these
industrial processes
1652
01:31:07,475 --> 01:31:11,030
that are much more efficient
than horses are.
1653
01:31:12,471 --> 01:31:15,354
And, you know, for all
of the technophiles
1654
01:31:15,386 --> 01:31:19,582
that are saying, "Technology
has always created more jobs,
1655
01:31:19,615 --> 01:31:21,472
and so it will continue to,"
1656
01:31:21,504 --> 01:31:24,547
I say, "Technology has always
created more jobs,
1657
01:31:24,580 --> 01:31:29,256
as long as you had things
that human beings could do."
1658
01:31:34,670 --> 01:31:37,969
But when technology
starts actually getting at
1659
01:31:38,001 --> 01:31:41,140
the basic functionality
of a human being,
1660
01:31:43,831 --> 01:31:48,475
then human beings start becoming
the equivalent of horses.
1661
01:31:50,493 --> 01:31:52,223
And that doesn't mean
1662
01:31:52,255 --> 01:31:55,331
that we can no longer
have meaningful lives,
1663
01:31:55,362 --> 01:31:57,380
but it means that you
have to change your model
1664
01:31:57,413 --> 01:32:01,032
because capitalism is
no longer about labor.
1665
01:32:02,089 --> 01:32:04,011
(STIRRING MUSIC)
1666
01:32:05,677 --> 01:32:09,040
And the problem is this is
coming soon, soon, soon.
1667
01:32:10,450 --> 01:32:13,556
You look at driverless
technologies.
1668
01:32:13,589 --> 01:32:17,849
Driving is, by the way, the
single largest or second largest
1669
01:32:17,882 --> 01:32:21,981
employer of people in every
one of the 50 US states,
1670
01:32:22,013 --> 01:32:25,537
and within 10 years,
most of those jobs are gone.
1671
01:32:28,195 --> 01:32:33,225
So you will address capital,
because if you don't, right,
1672
01:32:33,257 --> 01:32:36,748
you are going to have
very serious problems.
1673
01:32:37,965 --> 01:32:39,887
(OMINOUS MUSIC)
1674
01:32:43,250 --> 01:32:45,236
(TRAFFIC HUMS, DOGS BARK)
1675
01:32:48,344 --> 01:32:50,459
(INDISTINCT CHATTER)
1676
01:32:50,490 --> 01:32:52,412
(VEHICLES WHIRR)
1677
01:32:55,711 --> 01:32:57,249
NAIDU: We're leaving
an industrial economy
1678
01:32:57,281 --> 01:33:00,516
and going to
a post-industrial economy.
1679
01:33:00,547 --> 01:33:02,758
And we have to make choices
1680
01:33:02,790 --> 01:33:05,352
about which future
we wind up in.
1681
01:33:07,595 --> 01:33:11,470
You can have abundance that
is very unequally distributed,
1682
01:33:11,503 --> 01:33:15,058
where we have the robots
that can do anything,
1683
01:33:15,090 --> 01:33:17,845
but the only people that own
the robots are a very small
1684
01:33:17,877 --> 01:33:19,799
segment of society,...
1685
01:33:21,561 --> 01:33:24,092
basically like Elysium,
where a bunch of people
1686
01:33:24,124 --> 01:33:26,589
live in ecologically
protected spaces
1687
01:33:26,622 --> 01:33:30,851
and everyone else is living in,
like, a hot, putrid mess.
1688
01:33:33,605 --> 01:33:36,359
And so it's
a political problem.
1689
01:33:45,965 --> 01:33:50,165
The challenges today of
creating a more equal society
1690
01:33:50,445 --> 01:33:52,485
are obviously different
from the 20th century.
1691
01:33:53,205 --> 01:33:57,045
But the important point
I want to stress is that
1692
01:33:58,325 --> 01:34:00,805
it's not technically
impossible;
1693
01:34:00,845 --> 01:34:02,645
it's primarily a political
and intellectual challenge.
1694
01:34:06,885 --> 01:34:08,605
And the good news is that
1695
01:34:08,645 --> 01:34:11,325
we can also find reasons
from history to be optimistic.
1696
01:34:15,845 --> 01:34:19,965
History shows us that if we
want society to be cohesive
1697
01:34:20,005 --> 01:34:22,125
in a peaceful and
harmonious way,
1698
01:34:22,165 --> 01:34:25,445
we must prevent inequality
from becoming too high.
1699
01:34:29,565 --> 01:34:33,685
I am for controlling capital
to go beyond capitalism,
1700
01:34:36,365 --> 01:34:40,405
with ways that are more
democratic, more inclusive,
1701
01:34:40,885 --> 01:34:44,645
and finally allow us to project
ourselves into the 21st century.
1702
01:34:48,175 --> 01:34:50,097
(REFLECTIVE MUSIC)
1703
01:34:55,213 --> 01:35:00,213
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